Team Herald
PANJIM: As the state battles with a depressed economy and looks to industry to invest and generate demand, the state of micro small and medium enterprises operating in Goa is not something that will make people very happy. Despite playing a important role in employment generation the proprietors of these MSME are not singing a happy tune.
The Micro Small and Medium enterprises (MSMEs) have been accepted as the engine of economic growth and play an important role in the equitable economic development of country. The major advantage of the sector is its employment potential at low capital cost.
The labour intensity of the MSME sector is much higher than that of the large enterprises. The MSMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports.
MSMEs have been established in almost all-major sectors in the Indian industry such as: food processing, agricultural inputs, chemicals and pharmaceuticals, engineering, electrical, electronics, electro-medical equipment, textiles and garments, leather and leather goods, meat products, bio-engineering, sports goods, plastics products, computer software, etc.
As per available statistics (4th census of MSME sector), this sector employs an estimated 59.7 million persons spread over 26.1 million enterprises. It is estimated that in terms of value, MSME sector accounts for about 45% of the manufacturing output and around 40% of the total export of the country. Goa today has over 7621 Small Scale Industrial units, 210 Large and Medium Scale Industries employing over 50,000 people.
According to Manguirish Pai Raikar, chairman and National Council of MSME felt a great deal of the problem was due to the absence of clarity due to the inability of the staff in the lower level of banks to explain the various products available.
He said “Either they don’t know or they will not inform the client of what is available. It is really very frustrating. The staff would like to protect their ratios or whatever internal calculations which keep them in the good books of their seniors.”
Ratan V Pai Panandiker of Electro Controls said the scheme which allowed MSME to take a loan under Rs 1 crore without collateral was not encouraged by banks in Goa. He said “Some of the bankers inform you that you are not eligible for it which is very frustrating. We have to keep our business running and finance is a constant requirement.”
Another businessman said payment by govt agencies was always delayed. Sometimes it would take a year to receive payment which then placed his business under tremendous pressure. Manguirish said the norm for payments was usually 60 days which was always extended creating problems. Another issue that needed to be sorted out was the entry tax levied on raw materials which meant companies in Goa had to usually also pay tax on the finished goods if it was being sent to a place where relevant taxes were present. Mumbai has an octroi tax which is levied on goods brought in.
Perhaps time will tell if these businessmen will have a different and happier tune to sing in the near future or perhaps it will be more of the same.
