MSME ministry for resuming production in unaffected zones

Coronavirus: Gadkari, however, stressed that the onus will be on the owners of MSME and construction units and contractors to ensure that their facilities are safe for workers and that there are provisions for food, shelter and healthcare.
People gather outside shuttered stores near Khari Baoli spice market in Delhi, India.(Bloomberg)
People gather outside shuttered stores near Khari Baoli spice market in Delhi, India.(Bloomberg)
Updated on Apr 12, 2020 04:23 AM IST
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Hindustan Times, New Delhi | By

Manufacturers should be allowed to resume operations in areas that aren’t classified as coronavirus disease (Covid-19) hotspots and where the virus hasn’t spread widely, subject to the condition that they strictly follow sanitation and social distancing norms to curb the spread of the outbreak, says the ministry micro, small and medium enterprises (MSME) .

The suggestion was put forward by the ministry to the Prime Minister’s Office for consideration. Nitin Gadkari, who is in charge of the MSME portfolio, said on Saturday that the ministry was also working out guidelines in collaboration with state governments on how to bring back migrant workers to restart production in the MSME sector. Tens of thousands of migrant workers have returned home to the countryside because of the coronavirus lockdown.

The minister, who also oversees road transport, highways and shipping, said in a video chat that his departments had responded positively to the suggestion that production as well as construction of roads and highways be resumed in areas that are not affected by the pandemic so that the impact of the lockdown is blunted.

Gadkari, however, stressed that the onus will be on the owners of MSME and construction units and contractors to ensure that their facilities are safe for workers and that there are provisions for food, shelter and healthcare.

“There are nearly 20 lakh migrant workers in government-run camps, many are stuck midway. We have to bring them back and district collectors will have to give permission for that. We are working to removed bottlenecks with the help of state governments; but the factory owners will have to ensure that workers are looked after,” the minister said.

He said over 600,000 MSMES had been restructured before March and he is hopeful that another 800,000-1 million more will be restructured in the coming months.

Since the nationwide lockdown was imposed on March 25 to check the spread of the coronavirus; only industries that are involved in the production of essential goods services are allowed to function.

The sector with 6.33 crore MSMEs that together employ an estimated 11 crore people is staring at an acute financial crisis after production came to a grinding halt and has urged the union government to announce a financial package similar to the PM-Kisan scheme, reopening industries where work from home is impossible and complete waiver of bank charges to help them recover.

The ministry of MSME is working on steps to get industries Covid-ready; which means making changes that will allow workers to resume work even as they stick to the norms of social distancing and do not violate the conditions laid down for maintaining hygiene.

On the financial front, the ministry has drawn up a proposal to expand the reach of its Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme that offers guarantee cover for the portion of credit facility not covered by collateral.

In the partial collateral security model, micro and small industries are allowed to obtain collateral security for a part of the credit facility. The remaining part of the credit facility, up to a maximum of Rs2 crore, can be covered by the credit guarantee scheme.

“So far Rs90,000 crore has been insured under the scheme by the trust that has a base capital of Rs10,000 crore,” said a government functionary.

“The revival plan will also look at how MSMEs can reinvent to improve productivity. The ministry is working out the details of how to help the productions units adapt to change and the challenges imposed by the pandemic. There could be consultations using IT-enabled platforms to help the MSMEs evaluate their productivity and make changes that can lead to growth and enhanced capacity. We can share best practices with them to help them meet global standards, produce cheap and world class products,” the person said.

Gadkari expressed the hope that manufacturing will pick up pace and India will be in a position to not just export more but also cut its dependence on China.

Also on the agenda is pacing the sanctions under the Scheme of Fund for Regeneration of Traditional Industries or SFURTI, that supports traditional village industries by offering financial assistance of up to Rs2 crore.

The ministry wants to alter the slow pace of getting projects off the ground under SFURTI; apart from relaxing norms such as doing away with the need for permission from the states to kick-start projects; it will put the onus on implementing agencies to cut delays.

“We will have more technological intervention and webcams on the site to see where delays are taking place. We are also making use of technological centres or tool rooms across the country where high-end machinery is installed that can be used by smaller producers or for skilling purposes. For instance the leather tool room in Chennai is being used to stitch PPEs {personal protective equipment} for healthcare workers,” the functionary cited above said.

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Thursday, May 26, 2022