MSMEs wait for more than a year for government subsidies

Micro, Small and Medium-scale Enterprises (MSMEs) in Tamil Nadu that have applied to the District Industries Centres (DICs) for government subsidies have been waiting for more than a year to get the benefit.

In Coimbatore district, units that applied for subsidy under self employment schemes till the end of 2023 only have received the subsidy. In Tiruppur district, applications received till April 2024 have got the subsidy.

“We estimate that in Coimbatore district, subsidy worth nearly ₹100 crore is yet to be disbursed,” claimed J. James, president of the Tamil Nadu Association of Cottage and Tiny Enterprises. The DIC officials take six months or more to inspect and approve the applications. While the amount is yet to be released for applications approved two years ago, there are applications that are pending approval at the district level, he claimed.

Official sources said allocations made for backward districts went up at one point of time However, it is Chennai, Tiruvallur, Kanchipuram, Coimbatore that require additional allocation because of the industrial base in these districts. Further, Tamil Nadu government is yet to notify the MSME redefinition as announced by the Union government. If that is done, the amount required for subsidies will increase, they say.

The amount remaining with the districts is now used to clear the dues for the pending applications. But, what the State needs is higher allocation for subsidies for the MSMEs, the officials said.

Tamil Nadu gives capital subsidies under five State government and two Central government self-employment schemes apart from the NEED scheme and interest subvention schemes. If the State government gives about ₹300 crore, the subsidy arrears can be cleared, they added.

S. Vasudevan of the Tamil Nadu Small and Tiny Industries Association (TANSTIA) said the State government should increase the budget allocation for the MSME sector to ₹3,000 crore annually from the current ₹1,800 crore.