‘Industrial climate is poor in State’
Members of the Micro, Small and Medium Enterprises (MSME) across Tamil Nadu have expressed concerns about the deteriorating condition of the sector and are worried that if the government does not prescribe the right measures many units would shift to neighbouring States.
In his letter to Chief Minister Edappadi K. Palaniswami on Saturday, K.V. Kanakambaram, president of The Industrial Estate Manufacturers Association, said: “We are facing a grave situation where many investments which were supposed to come to Tamil Nadu have moved to other States.”
He added that these States were offering special incentives and packages to set up industries there. He requested the government to figure out how to promote large industries, because without big firms the MSME sector would die.
Another industrialist at Ambattur said that many small-scale firms were purchasing land in States like Andhra Pradesh, Telangana and Kerala. “Real estate cost is high in Tamil Nadu when compared to neighbouring States. Infrastructure is becoming a major concern too,” he added.
Experts tracking the sector said that there was no data on the number of units moving out but the trend was quite evident now.
C.K. Mohan, general secretary, Tamil Nadu Small and Tiny Industries Association (Tanstia), said Tamil Nadu had a good policy in place for this sector but implementation was a concern. “The State government has been doing a lot of work but it is time they think of competitors who are luring companies from here.”
According to Tanstia president C. Babu, the biggest challenge for this sector is that banks are very reluctant to give loans, and the entrepreneurs have to depend on private financiers.
“They eventually end up closing their units due to financial issues,” he said.
Mr. Babu said: “The trend of firms moving to neighbouring States requires immediate attention. The government should ensure that they bring in more big ticket investments, which will help ancillary units in the MSME space.”
Tamil Nadu has over 17.20 lakh registered Micro, Small and Medium Enterprises (MSME) units.
These units produce various products for sectors, including automobile, electronics, engineering, textiles and chemicals.
From December 2015, this sector has been facing several issues – more than 14,000 units suffered losses during the floods.
The following year, many small units in Tamil Nadu were damaged due to Cyclone Vardah. And more recently demonetisation and GST hampered their businesses.