‘Recession,upcoming polls may spell doom for SMEs’

“With elections round the corner,the political circles have turned a blind eye to the problems faced by the industry. Also,the unskilled workforce,which caters to our set-ups,will be weaned away from work and that will pose a major threat for us,” he said.

According to figures released by the Chamber,the current loan default for the sector is 4 per cent and is set to cross 6 per cent in the next few months.

There are more than 12 lakh micro,tiny and medium-scale enterprises in the country,which contribute 8.3 per cent of the national GDP. Around 65 per cent of the set-ups cater to the manufacturing sector,which have been badly hit due to the recession. More than 7 crore people find employment in the sector across the country.

“Despite being an important segment of the economy,our sector is riddled with problems. As per the studies of the chambers,85 per cent of small- and medium-scale enterprises are deprived of loans and financial literacy and management is the need of the hour for the sector. Another issue plaguing the sector is that of the delay in payments from the bigger companies. To give an example,in the last six months,more than 62 companies have complained to the sector about a delay in payment,” he said.

In order to resolve such issues,Salunkhe suggested the formation of an independent arbitation board. “Our members do not want to got the courts,as it would ruin their relationships forever but delay in payment hampers their doing business,” he said. The arbitration board suggested by Salunkhe would deal with such issues and help in resolving them.

Maharashtra and Gujarat are the states,which according to Salunkhe has the most conducive environment for the sector,while states like Harayana,Karnataka,Andhra Pradesh require sprucing up of their policies. “The recent troubles in Andhra Pradesh have had a crippling effect on the sector,with many of them closing down,” he said.

While the industrial policy of Maharashtra was right in spirit,Salunkhe says much more attention is required towards its implementation.

“Around 500 companies have shifted from Nashik,Sangli Kolhapur to Gujarat,Karnataka and Madhya Pradesh respectively,due to repressive tax regime,” Salunkhe said.