Reviving the sick units: Priority for the government: Kalraj Mishra
Kalraj Mishra, the new minister for micro small & medium enterprises (MSMEs) mentioned that the Ministry is working on sweetening the bankruptcy pill for the sick units. The government is working on developing a bankruptcy framework to offer easier exit routes to the sick companies while helping to revive those with viable options.
It is asking the states to create land pools by listing out all unused land available with them. The ministry is also looking at the special economic zone (SEZ) space to derive benefits for the sector. Since there is a huge space available in the SEZ units of the country as there were no takers, those unused spaces can be used to revive the sick units. The ministry also has sought details on the availability of land in these duty free zones to be used by the small enterprises.
SMEs employ close to 40 per cent of India’s population and contribute more than 15 per cent to its gross domestic product. Unfortunately the slowdown in the Indian economy in the past two years has badly affected MSMEs. In the manufacturing sector the output contracted for the first time in more than two decades in 2013-14.
Kalraj Mishra stated that the government will first make efforts to revive units that have become sick. They will sit with the units and figure out those which are viable and help them revive. Of India’s 2.22 lakh sick units, 12,000 are viable, while feasibility of another 35,000 is being explored.
With land availability being a major constraint for setting up manufacturing units, the MSME ministry will focus on engaging with states.
Source- The Economic Times
Arun Jaitley, Budget 2014, budgets and budgeting, industry expectations, Kalraj Mishra, macro economics, MSME
