Karnataka - Bangalore

KASSIA outlines 13-point plan to help small units

Bangalore: The Karnataka Small Scale Industries Association (KASSIA) has said the twin problems of power outages and lack of demand for exports has pushed small units to a corner.

A press release issued by KASSIA president Arvind Burji said that manufacturing units were in distress as “orders have not been to the expected level.” Orders have been either reduced or cancelled. Lower capacity utilisation and the resulting increase in the cost of production have further aggravated the situation, he added.

“Banks”, Mr. Burji said, “are cautious in advancing credit to small industries.” These units, which now need more working capital to tide over the situation caused by delayed receipts and the rising operational costs, find that “adequate finance is not readily forthcoming.” Mr. Burji said many units were not able to pay their statutory dues such as Value Added Tax, electricity charges and Employees’ Provident Fund contributions. The “erratic supply of power” had worsened the situation, he added. Mr. Burji said there was “inordinate delay in payments” by large and medium-sized industries, including public sector companies.

KASSIA, Mr. Burji said, had worked out a 13-point programme to help small units “tide over the crisis.” It had demanded that 20 per cent of priority sector credit be earmarked for small units and that the rate of interest should be 2 per cent lower than the prime lending rate (PLR). It demanded that banks, should release 40 per cent of a unit’s turnover as working capital.

It has also sought the implementation of legislation which would ensure that dues to small units were settled within 60 days. It also sought a relaxation of banks’ Non Performing Asset (NPA) norms applicable to small units.

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