MSMEs in flood-ravaged hills face losses

Total of 19,550 registered MSMEs have been set up in seven districts in Uttarakhand, entailing investments of Rs 531 cr

With Uttarakhand reeling under the monsoon deluge, micro, small and medium enterprises (MSME) face the spectre of losses, particularly in the hill regions.

According to the Industry Association of Uttarakhand (IAU), large numbers of MSME units have been affected by the heavy rains, floods and landslides in the worst-affected districts of Rudraprayag, Uttarkashi, Chamoli, Tehri, Pithoragarh, Almora and Pauri.

"Most of these MSMEs are facing financial and business losses mainly due to road blockades," said Pankaj Gupta, president of the IAU, an MSME promotional body. A total of 19,550 registered MSMEs have been set up in these seven districts, entailing investments of Rs 531 crore. Besides, there are large numbers of people who are doing business in the unorganised sector also.

In a letter to Prime Minister Manmohan Singh, Gupta has called for a special package for these MSMEs and increased targets under the Prime Minister Employment Generation Programme (PMEGP) in view of the calamity. Gupta has also sought a five per cent point cut in interest rates on loans for these enterprises for the next three years.

In 2010-11 too, the state had faced the fury of the monsoon, which adversely affected the investment scenario in the hills. After gaining momentum in the first two years of the Special Integrated Industrial Promotion Policy of 2008, investments nosedived due to heavy rains and floods.

This was confirmed by official statistics provided by the department of MSMEs. In 2009-10, the investments in the hills aggregated Rs 115.7 crore, with a total of 706 units being set up. But in 2010-11, when the monsoon rains wreaked havoc in the state, investments plunged to Rs 68.9 crore, mainly due to damaged roads.

Since the magnitude of the rains, floods and landslides this year is much bigger, Gupta said the investment scenario will also suffer badly in these areas. Significantly, the spectre of losing jobs is also looming over some 43,000 workers in these units, which are mainly in sectors like hospitality, adventure sports and food processing, among others.

However, according to the department of MSME here, the 18 mini-industrial estates in the hills have not suffered any damage due to floods or heavy rains, since they are situated in the lower reaches of the Himalayas.