The biggest concern for MSME, presently faced while restarting their units, can be divided into Money, Manpower and Material, according to Mr. K.E. Raghunathan, former National President of All India Manufacturers Organisation (AIMO).
In Money the concerns are, collections from supplies made, additional loan from banks, interest burden, handling of salary commitments, statuary concerns like PF / ESI, etc., securing Advances from new customer, settling old dues of suppliers. Regarding Manpower the concerns are salary payment (whether to give those who have not worked or not), loss of migrant labour, reduction in staff strength due to non availability of new orders, replacement of key workers who are unable to return. The concerns of Material are non availability of materials in the market from traders, higher cost, demand of immediate down payments, longer delivery times, uncertainty of transport duration in transit, quality of raw materials.
According to Mr. Raghunathan, AIMO had triggered of all these predicaments to the Government as early as April 15 itself to be prepared. One of the key advice on solutions from AIMO was on Money – Immediate settlement of payments due from Government (both Central and State – announced on May 15 that it will be cleared in 45 days), ad-hoc raise of working capital limit (announced on May 15 – an amount of Rs. 3 lakhs crores towards this but concern is eligibility and time frame and banks willingness to support needy units), exemption from all Government payments such as GST, PF, ESI, EB (Government exempted PF with certain conditions and reduced PF for others, GST pushed till June, etc.), pushing EMI payments both principal and interest for one year (Government gave moratorium for 6 months but interest must be paid), reduction in bank interest to 6% for MSME, salary subsidy, according to Mr. Raghunathan as what was sought and what was offered.
For Manpower, AIMO had suggested, State Governments to immediately pay Rs. 5,000 as cash to migrant labourers, than bearing cost of their return. If they had given this as a choice to choose from, may be almost 50% of the migrant labour force, would have preferred staying black.
Regarding Material, Mr. Raghunathan said that AIMO had suggested MSME Ministry to immediately strengthen National Small Industries Corporation (NSIC) to roll out a card system like PDS ration card to MSME (atleast those situated in industrial estates and EPZ) and ensure supply of essential raw material at reasonable price, smaller quantity and if possible on credit. Now we have entered the phase of restart and all of these issues are evident and crucial. It is a well known fact that, prevention is better than cure and the advise of trade bodies and experts must be taken seriously by Government, both at Centre and State in handling ground level issues in time, emphasizes Mr. Raghunathan, who also runs a MSME for the last 35 years.