Proactive steps sought for SMEs' growth in AP

Industry representatives who participated in HMTV live discussion underscored the need for uninterrupted power supply and adequate credit for small and medium enterprises

Hyderabad: Representatives of various industries bodies have underscored the need for proactive initiatives from the governments for revival of the small and medium enterprises (SMEs) which have been reeling under severe power shortages and inadequate credit for the past two years. Participating in the HMTV live discussion on 'Revitalising SMEs in the Andhra Pradesh' on Saturday, they also said that the State government should monitor progress of SME sector periodically and create an exclusive ministry for the crucial sector with mandate to encourage its growth.

"Scores of SMEs have become sick in the past two years on account of power crisis. There was no power for three days in week for some time. Then the power cuts were increased to four days. Because of that all the SME suffered a lot and slipped in losses," said J Nageswara Rao, President, Federation of Andhra Pradesh Small Industries Association (Fapsia).

Pointing out that the bankers are not coming forward to extend finance for SMEs in the State, Rao said the issue of credit for SMEs should also be discussed at the State-Level Bankers' Committee (SLBC) meetings. Concurring with his views, A P K Reddy, President of the Federation of Small and Medium Enterprises of Andhra Pradesh (FSMEAP), said that the industrial growth has fallen in AP while that in other States like Tamil Nadu and Gujarat is racing ahead. "This is mainly because of power shortages. Therefore, we are not encouraging new people to set up industries in the State," he maintained.

Reddy, who underlined the need for the government to encourage more credit flow for SME sector, said that many industrial units are in the dock on account of 90-day period for NPA (Non-Performing Asset) categorization. "At present, an industry is categorized as an NPA if payment of loan installments is not done for three months. Earlier, the period used to be one year, but now it has been reduced to 3 months, causing untold miseries to the industrialists," he explained.

V Anil Reddy, Vice-President of the Federation of Andhra Pradesh Chambers of Commerce and Industry (Fapcci), observed that availability of continuous power is imperative for a healthy industrial growth. He called for separate power distribution company for the industrial sector. "This way, most of the power-related problems faced by the industry can be solved. The Discom will also be beneficial to the SMEs," he said. He also suggested that bankers and government should monitor the SME sector besides conducting training courses for new industrialists on a regular basis.

(From left) A P K Reddy, President of FSMEAP, V Anil Reddy, Vice-President of Fapcci, and J Nageswara Rao, President of Fapsia, participating in a discussion organised by HMTV on 'Revitalising SMEs in AP' on Saturday