Vishakhapatnam-based small entrepreneur P Anand Rao and thousands across India can finally breathe easy. The government has finally decided to come up with the much-awaited exit policy for sick and closed industrial units in the small and medium enterprises (SME) sector.
After Rao’s unit became sick and he failed to clear his bank dues, his accounts turned into non-performing assets (NPAs) or bad loans. Debt-ridden, Rao is now knows as the “defaulter”.
The policy may help such entrepreneurs to get rid of the “defaulter” tag. The policy will give sick and closed SMEs an exit route to get rid of their statutory dues, bank liabilities and money owed to creditors.
The ministry of micro, small and medium enterprises (MSME) is working on the final draft of the exit policy, sources said.
“The policy will give specific time to sick units for settling their issues and should create a win-win situation both for the entrepreneur and the bank,” a senior ministry official told HT.
“There is a need of a single institutional mechanism to deal with multiple agencies and if this policy comes into effect, it'll help an entrepreneur to get free from increasing debts,” said VK Agarwal, president, Federation of Indian Micro & Small and Medium Enterprises (FISME).