Aatmanirbhar, a ray of hope for revival post-pandemic: KASSIA chief

Amid the deterioration of economy over the past six months due to the Covid-19 pandemic and also other reasons, Atmanirbhar Bharat looks like a ray of hope for revival of industries, trade, commerce and economy, said K B Arasappa, president of Karnataka Small Scale Industries Association (KASSIA).

Addressing a media conference, before a workshop on ‘New Industrial Policy (NIP) 2020-25 and Investment Opportunities’ organised in association with the District Industries Centre here, on Tuesday, Arasappa said, “The COVID crisis and the lockdown has caused around Rs 15,000 crore loss to the Micro, Small and Medium Enterprises (MSME). The NIP looks promising, but its success depends on its implementation.”

“Industries are negatively impacted by the pandemic, with disruption of supply chains, demand and credit. Small and Medium Enterprises (SME) find it difficult to service loans, over-draft and manage cash flows. Despite government’s measures to mitigate the problems, the prospects for industries looks bleak — both in short and medium terms. About 20% of MSMEs may not revive at all,” he said.

“The Centre has pumped-in liquidity, to enable industries to borrow from banks and financial institutions, under Emergency Credit Line Guarantee Scheme (ECLGS) with the state governments supporting through moratoriums on payments, waiver of certain payments such as fixed electricity charges and also easing compliance requirements. Cooperative banking institutions should be involved to extend ECLGS loans to enterprises,” Arasappa said.

Arasappa urged the governments to step up of expenditure on infrastructure, not only to create and improve infrastructure, but to generate employment and to increase demand for SME products and services.

“The government must inject cash into SMEs with direct pay roll support till the end of the financial year. The interest rate on bank loans should be reduced to 6% for a certain period. On the lines of PF payments made by the government, the Centre should pay ESI contributions on behalf of SMEs,” he said.

Arasappa said, “The GST rates should be reduced to at least 12% for SMEs. For smaller entrepreneurs, labour jobs, a nominal 1% or 2% GST should be imposed, just to ensure accountability. Moratoriums extended in view of the pandemic should be extended up this financial year end. No loan account of SMEs should be declared as NPA, under present norms.”

He said that Karnataka’s ranking in the latest ‘Ease of doing business survey-2019’ dropped from 8th to 17th position. “Those who want to start an industry need to get various licences and go through the ordeal of red-tapeism. In most of the districts, monthly meetings of single-window have not been held for years. The government should mandate the respective deputy commissioners to chair monthly meetings to solve the problems of investors and entrepreneurs,” he said.