Business Bureau :
IN THIS ongoing worst scenario of COVID-19 pandemic, the micro units are bearing the burnt and are battling for survival. MSME Ministry should give some special stimilus package so that these units should come out of woods, demanded Mayank Shukla, Chairman of COSIA, Vidarbha Chapter. He said, there are more than 90 per cent of MSME industries which fall under micro level category.Their need though may be very limited but play a very vital role in manufacturing and service sector activities as they are complimentary to SME sector. “Industries having less than one crore of investment in plant and machinery, employment of less than 20 workforce and turnover below Rs 5 crore fall under micro level category,” Shukla said.
“Such industries many a times do not qualify to participate in open tender bid floated by public sector units (PSUs) or coporate sector, because of their limited resources and they are mostly dependent on SME sector,” he said. Small and medium scale industries procure their orders from PSUs and corporates and in turn outsource their requirements through these micro level industries who are experts in their specific field. The business and payments cycle of such micro level industries are totally dependent on bigger players (SME sector), he noted. CA Julfesh Shah,Vice-Chairman of COSIA, Vidarbha Chapter said, moreover such micro category industries are not equipped to fulfil statutory Government compliance requiremenrt at an appropriate time. In the supply chain small and medium scale industries who directly procure the orders through open tender system from public sector units (PSUs) or Government institutions may be termed as Tier 1 or Tier 2 suppliers and the micro level industries who are expert in their specific field may be termed as Tier 3 suppliers.
“Since such micro level industries are working and payment cycle is dependent on Tier 1 or Tier 2 suppliers to main customers their working is not recognised when it comes to procurement of loan, financial assistance or Goverment subsidy to MSME sector,” he pointed out. Although their contribution to manufacturing or service sector in terms of working or generating job opportunities is significant and their number is as high as more than 90 per cent in total MSME units, they are the most neglected lot.
“Therefore, there is need to form a separate cell to take care and protect these units,” opined Shah. COSIA, Vidarbha Chapter also demanded that as their volume is as high as more than 90 per cent and job creation ability is also significant, their financial need is less than 10 per cent of the total MSME sector needs. Therefore they should be financed at a much lower lending rates. Moreover, they should be protected under an umbrella to have a channelised payment cycle from Tier-1 and Tier 2 vendors. They have a significant workforce but are less in numbers in each unit. Such workforce needs to be covered under Group Social Security Act. All these things can be taken care only if there is a special separate cell for micro level industries within the MSME Ministry itself, COSIA suggested.