Kovai MSMEs, mills give thumbs up to stimulus

The Southern India Mills’ Association (SIMA) thanked the government for revising the definition of MSME, a long-pending demand for the industry by incorporating annual turnover and increasing the investment limits under the eligible criteria and increasing the turnover limit by up to Rs 100 crore and investment limit up to Rs 20 crore for medium-size units. 

“Since the textiles and clothing industry are predominantly MSME in nature, this will greatly benefit over 60 per cent of textile units across the textile value chain especially the garment and made-ups units,” said Ashwin Chandran, chairman of SIMA in a statement.    Announcements including allocation of Rs 3 lakh crores to extend collateral free loans for businesses including MSMEs and providing four year tenor with moratorium of 12 months on principal repayment, allocating Rs 20, 000 crore for stressed MSMEs and Rs.50, 000 crore for potentially viable MSME units were other welcome features.

 SIMA hoped that the government would consider industry’s dire demand of extending the moratorium for repayment of loans and interest already extended for three months from March 1, 2020 for another 10 months.  “There was also hope to consider and extend 25 per cent additional working capital without any collateral or margin money for all the categories of accounts other than MSMEs in the next financial relief package to be announced shortly. I also expect the government to soon announce a special package for boosting exports for all the textiles and clothing products including cotton yarn and fabric to grab the emerging opportunities,” he added.

 Ashwin Chandran made an appeal to the government to modify the MSME definition criteria as either investment or annual turnover to encourage technology upgradation in the MSME’s sector and also help capital intensive sectors like spinning, independent weaving and processing.