Telangana to clear backlog of subsidies
Telangana state government will clear most the pending incentives for the industry. Industry Secretary Jayesh Ranjan said that the state government has made a provision in the budget for clearing backlog of subsidies.
Hyderabad: Telangana state government will clear most the pending incentives for the industry. Industry Secretary Jayesh Ranjan said that the state government has made a provision in the budget for clearing backlog of subsidies.
Speaking after launching Telangana Industrial Health Clinic Ltd (TIHCL) here on Monday, Jayesh Ranjan said: “The enterprises are facing non-timely release of government benefits in the state. We’re facing huge backlog of subsidies but, in the recently introduced budget, there is relief for our industry as against a backlog of Rs1,800 cr, nearly Rs1,300 cr amount has been allocated in this budget. So, three-fourth of the backlog will be taken care this year.”
TIHCL is a fintech-driven non-banking finance company (NBFC) and will provide counselling and financial support system to the micro and small manufacturing firms in Telangana. An initiative for manufacturing MSEs, TIHCL has been promoted by Telangana government and anchored by Telangana State Industrial Infrastructure Corporation (TSIIC). TIHCL has received a grant of Rs 10 crore from Telangana government, while nearly Rs 3 lakh each has been collected from investors who are MSME units, and they plan to raise Rs 100 crore investment within the next three years.
M Sanjaya, CEO, TIHCL, said: “We will be operating based on fintech model, a MSME has to feed their data in the software which will take care of the objective information, later our consultant will meet them for looking into the subjective matter before the real analysis is done.”
He also added that, compared to financial basis, the non-financial reasons like demonetization, GST deduction, power problems, marketing and others have led to sick MSMEs. “There are more than 7,000 sick MSME units in Telangana, we are mentoring 54 units even before the launch and expect revival of 30 units with release of funds from government, which include 23 weaving units from Siricilla,” further adds Sanjaya.
The non-timely release of subsidies disturbs the financial cycle of the MSMEs due to which they start defaulting on their loan payments and they become sick enterprise. “Banks follow norms and they declare an asset as non-performing asset through standard acts and procedures. But, they are expected to help the MSME build an opportunity and continue its activity profitably so that the loan can be repaid and surplus anticipated can be met. Due to various reasons banks can’t conduct studies towards this, hence TICHL will be engaging consultants and agencies to get these studies done along with the banks which will help them to do this exercise,” added Ranjan.