FICO demands New Technology Center for Ludhiana from Director (Technical) Ministry of MSME
Also put forward burning issues of the industry
Ludhiana: Today, a delegation of Federation of Industrial & Commercial Organization, popularly known as FICO comprising Mr. Gurmeet Singh Kular President along with Mr. Manjinder Singh Sachdeva Senior Vice President and Mr. Rajeev Jain General Secretary met Mr. Vinamra Mishra, Director (Technical & Projects), Ministry of MSME, Government of India and demanded New Technology Center for Ludhiana. Mr. A.P. Sharma General Manager, Central Tool Room, Ludhiana. FICO also put forward the undernoted burning issues of the industry.
Technology & Incubation Centre in Ludhiana:
There is an arising need for technological assistance, where the industry can get technical assistance to improve their product & productivity. The Technology & Incubation Centre at Ludhiana is the need of the hour at Ludhiana, as the Industry is working on the old principles, whereas the technology went very advanced, and industry at Ludhiana need to update their technology in order to compete in international market. Also, the need for the technology transfer it the need of the hour as there are many products of steel which has been replaced with the plastic.
Credit Link Capital Subsidy Scheme:
Credit Link Capital Subsidy Scheme was to facilitate technology up-gradation in MSMEs by providing an upfront capital subsidy of 15 percent (on institutional finance of up to Rs.1 crore availed by them) for induction of well-established and improved technology. Government of India has suspended the scheme, and reintroduced till 31st March 2020 only. We demand that Credit Link Capital Subsidy Scheme should be made permanent as it is the only scheme for the upgradation of the MSME industry & it provides the subsidy on the Bank Interest.
Availability of bank credit without the hassles of collaterals / third party guarantees would be a major source of support to the first-generation entrepreneurs to realize their dream of setting up a unit of their own Micro and Small Enterprise (MSE). To operationalize the scheme, Government of India and SIDBI set up the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Maximum up to 200 lakh, can be covered under Credit Guarantee Scheme of CGTMSE. The Previous Government used to bear the credit grantee fee @ 0.50 bps but now fee has been increased by four times to 2% & fee is debited to client account therefore MSME gets 2% costlier loan. It is requested that the additional burden should not be put on the MSMEs, rather government should bear this fee.
Rationalize the Steel Prices
With the opening of the lockdown, the industry is operational at around 40% of its capacity, due to social distancing and other government SOP’S. Though the demand of the items has increased, but the production capacity of the industry has not increased. Whereas, the steel prices have increased from 8000 - 10000 per ton in last 45 days which is totally unacceptable to the industry and the consumers, as the source of income has gone down, the prices of the finished goods have started increasing, which is a direct burden on common man. It is the humble request to the government should intervene and form a steel price regulatory committee and regulate the steel price and rationalize them, so that Indian industry can produce the products as the market viable rates and can compete with china, Taiwan and other manufacturing countries in the world. Now it is an opportunity for the Indian industry to expand their base in the international market, if the rates are competitive this will fulfil the dreams of make in India & Atam Nirbhar Bharat. The prices of the steel should be brought down as it is being handle by the few big industries by making a cartel, which is greatly affecting the MSME sector.
Decriminalize cheque bounces
This is in context to Central Govt's proposal to decriminalize the offence of cheque bounce and make it a Civil offence. In the business world today, a cheque is widely used method of payment and postdated cheques are frequently used in various transactions to provide a certain accommodation to drawer of the cheque and ensure that they do not abuse the trust and accommodation given. As also the prosecution and recovery mechanism under Section 138 of Negotiable Instrument Act is only weapon with the objective for enhancing credibility of cheque issuance in business to deter dishonest drawer having intention to defraud. It is well known that in most of the country’s cheque bouncing is a serious punishable offence with a jail term, fine or both and a benchmark in calculation of credit score from CIBIL which is updated on site to debar the defaulter for any assistance from any financial institutions. But with this weapon gone, anybody can simply walk away by issuing dud cheques as the Civil Court cases may not be on a fast track in deliverance of justice as normally the course of action consumes years to settle civil cases. Furthermore, there is a stigma attached with a person appearing in a criminal court and applying for bail, and if the stigma goes then people will start issuing dud cheques with impunity and without any fear of law. Hence we are with a prayer that in this prevailing times of Covid-19 pandemic and economic distress, Section 138 of Negotiable Instrument Act will be a stealth to control the surge in financial failures and will act as a catalyst to maintain transparency in the business community for better understanding and escalating healthy business ethics.
The government of India, should introduce a Banking System that will cater only the MSME Sector of the industry, and provide them with Loans & Credit at the Annual Interest Rate Not More than 7.5 % with a simplified procedure & documentation. As MSME sector needs funds, the process of getting credit from the current banking system is very cumbersome and the rate of interest is also on higher side. So there should be a MSME Bank with simplified approach, so as to facilitate the MSME Sector.
Exemption of Import & Custom Duty on Machinery
As technology transfer is the need of the hour, the import duty and the custom duty on import of machinery should be abolished, as we believe that getting the technology for manufacturing a product is more beneficial for the country’s economy, rather than importing a product. Also to encourage the Make in India & Atam Nirbhar Bharat vision of our Prime Minister, the duties should be exempted for import of machinery.