Govt focus on large industries leaving MSMEs high and dry

Ease of doing business means timely release of subsidies promised by the government for MSMEs, which has not improved, instead today even large units are getting incentives - M Babu Rao, MD, GSB Forge Pvt Ltd

Hyderabad: The thrust of the government is on improving productivity of large industries. The schemes earlier meant to support the growth of MSMEs is now going into increasing manufacturing capacity of large units. PLI (product linked incentive) scheme has been mainly introduced to benefit large industries, said former president of Forging Industry Association of India.

“It has been 40 years since I started my enterprise. I was in the first batch of APIDC (Andhra Pradesh Industrial Development Corporation) and IDBI Entrepreneur Development Policy to receive seed capital for setting up my first unit. Ease of doing business means timely release of subsidies promised by the government for MSMEs, which has not improved, instead today even large units are getting incentives,” M Babu Rao, the Managing Director of GSB Forge Pvt Ltd told Bizz Buzz.

According to him incentives were previously introduced by the government for micro and small units to share their burden and encourage more entrepreneurs to establish units. Nearly Rs 2,000 crore is pending with the State government, in the form of incentives, which has to be released to these MSMEs.

“During my period, the ecosystem for MSMEs was conducive for their growth. We did not face any major challenge, but today for new units the environment is not supportive. There have been discussions around government rate for one acre land at the new industrial estate costing Rs 4 crore. If anybody wants to set up an industry on four or five acres it is beyond capacity for MSMEs. This pricing has been quoted targeting large industries,” Rao pointed out.

Rao further informed that a member of industry body has suggested the government to provide industrial estate land to MSMEs at the actual acquisition rate combined with development cost, instead of the market rate.

For the Central government to take note of the challenges faced by MSMEs, Rao highlighted steep increase in input costs and deferring Finance Bill 2023 latest amendment. He explained, “Increase in steel and petroleum products input cost over the last three years has pushed up the working capital requirement drastically, affecting several MSMEs. The Centre should take note and bring in some relief for MSMEs. Another major setback for micro and small units is postponement of the amendment to next financial year. If rolled out, the payment cycle of 45-days would have come down to 15 days. However, latest reports indicate that a trader’s body has protested against the amendment exerting pressure on Centre.”