Leading industrialists and entrepreneurs owning micro, small and mini industrial units in South India in general and Tamil Nadu in particular are of the view that banks should show compassion and kindness towards them. This is in the backdrop of the coronavirus induced economic melt-down and setback suffered by industrial sector in Tamil Nadu.
“The industrialists are willing to take up any challenge to revive the economy and bring the country back to life. But we alone cannot do that. There is an ocean of opportunities waiting for us and we can make it happen with some help from the banking sector,” Hari Thiagarajan, head of Confederation of Indian Industries’ Tamil Nadu Council, told The Pioneer.
The export units in Tirupur, head quarters of India’s cotton knitwear industry, MSME units in Chennai and Coimbatore and major industrial houses are encountering a number of problems because of drying up of revenue sources, said Thiagarajan, executive director of Madurai based Thiyagarajar Mills Ltd. “Lot of export orders got cancelled because of the coronavirus pandemic. Whatever was cancelled has gone and there is no possibility of us getting it back in the near future. Moreover, we are burdened with the payment to the workers which we have to disburse in full. This was also the time for price negotiation with buyers for exporting the products,” said the CII Tamil Nadu chief.
He said it is going to be challenging times for all sectors except pharmacy, insurance companies and Information Technology units.
“They are in a unique position while others are not that fortunate. But we have a lot of opportunities. Given the right stimulus, Indian industry is ready to roar back into its pre-eminent position. Most of the new age industrialists are youngsters willing to take the gauntlets thrown up at them,” he said.
While industrialists were hitherto afraid to speak openly about the discrimination shown by Banks in disbursing loans, Sakthivel of Tirupur Exporters Association was blunt in admitting it openly. “The Reserve Bank reduces the Repo Rate (rate at which the RBI lends money to commercial Banks) with a directive to make cheap loans available to industrial units, the Banks seldom disburse loans to the needy. They (the Banks) use the gains made by the reduced Repo Rates to clean their books and we are always left in the lurch,” said Sakthivel.
The TEA and TANSTIA ( Tamil Nadu Small & Tiny Industry Association that employs 1.3 crore workers ) sent appeals to the Prime Minister and Finance Minister listing their grievances, they are yet to get even an acknowledgement from any of them. “Even the Secretary in charge of the MSME ministry has not responded to our pleas, said S Vasudevan, assistant secretary, TANSTIA . The TEA earns Rs 200 billion every year through exports (the Tirupur knitwear has a niche market in Europe and USA) needs all the assistance from the Banks to tide over the coronavirus generated crisis. The MSME units in Tamil Nadu numbering 2 million are the backbone of major industries in the country.
“The Finance Minister and the RBI Governor issue directives to the Banks for disbursing loans to the industrial units. The matter ends there because our Bankers are as good as our bureaucrats,” said Dr S Kalyanaraman, former Asian Development Bank director-turned-Indologist. He said there is no mechanism in the country to check whether the Bankers are disbursing loans to the right people. The Bankers and their staff should show some kind of commitment in nation building.
Dr Kalyanaraman said though the Prime Minister was fabulous in his address to the nation on Tuesday evening, he had his own doubts over how much of the promises made would turn into reality. “The experience till now was whatever is proposed by the political leadership is disposed by Bureaucrats and Bankers,” said Dr Kalyanaraman.