Yogi Adityanath to revive sick industrial units to boost investment in UP

The state had more than 77,000 sick units with loan outstanding of Rs 25 billion at end March 2015

Taking a multipronged approach to boost industrialisation and attract investment, the Yogi Adityanath government is now working on a policy to revive sick industrial units in the state.

While, the government has already announced its industrial and investment policy apart from similar policy frameworks in other key sectors, including textiles, tourism, electronics manufacturing and food processing, a slew of complementary policies viz. sick units policy and general start-up policy are also in the wings.

According to the union ministry of Micro, Small and Medium Enterprises (MSME), there were 77,761 sick units in UP with a total loan outstanding amount of almost Rs 25 billion at the end of March 2015. The corresponding figures at end March 2013 and March 2014 stood at 19,104 with Rs 15.70 billion and 63,355 units Rs 68.47 billion respectively. This clearly shows there had been marked deterioration in the state industrial sector during 2013-14, which had manifested in he rising number of sick units, clocking an increase of over 300 per cent.

With the Adityanath government having signed Memorandum of Understanding (MoU) worth almost Rs 4.68 trillion during and after the recently held UP Investors Summit on 21-22 February, the state is working at the ground level to improve the ‘doing business’ environment for indigenous companies.

UP has a mammoth MSME base estimated at over 5 million, which contributes 60 per cent to its annual industrial output. The sector directly employs about 40 million people and generates direct economic activity of almost Rs 1.50 trillion annually. The government has even termed the MSME entrepreneurs as the ‘brand ambassadors’ of the state industrial space.

Yesterday, Adityanath directed top officials for speedy follow-up of all MoUs, so that they fructify in right earnest by meeting timelines and meeting all promised sops. The CM was apprised that while the policy draft of aerospace and defence manufacturing, pharmaceutical and electric vehicles had been prepared, the drafts of sick industrial units and general start-up policy was being framed.

Meanwhile, the CM has also instructed officials to prepare for the proposed Global Investors Summit to be held by the end of this calendar or early next year. He also stressed on finding suitable industrial grade land at the earliest for allocation to the private companies as mentioned in the MoUs.

UP has already signed a MoU with the National Stock Exchange (NSE) for enhancing financing opportunities for SMEs by listing on its SME platform, NSE Emerge. The government is encouraging the SME sector to measure up to the rising competition and technology upgradation.

Historically, the SMEs in UP have preferred to be privately owned rather than raising funds from the capital market. However, in recent times, there has been interest among these concerns to list on stock exchange and brace up for future challenges brought about by globalisation and opening of the domestic markets.

Currently, SME Emerge has 3 listed entities from UP, including Reliable Data Services Limited (Noida), Jalan Tran Solutions (Ghaziabad) and Jet Knitwears (Kanpur). Recently, another Kanpur based company Tasty Dairy Specialities had also raised capital for listing on the NSE SME platform.