Tamil Nadu MSMEs have Rs 14,032-cr credit potential

The credit potential for Micro, Small and Medium Enterprise (MSMEs) sector in the state of Tamil Nadu is estimated at Rs 14,032.35 crore in 2012-13, according to the National Bank for Agriculture and Rural Development (Nabard).

The ground level credit (GLC) flow to this sector in the state has over the years shown steady growth, which is evident from the fact that the GLC was Rs 8,260.98 crore in 2008-09, increasing to Rs 9,437.08 crore in 2009-10 and further to Rs 10,421.84 crore in 2010-11. A target of Rs 12,582.48 crore has been set for 2011-12, according to Nabard.

Tamil Nadu houses more MSMEs than any other state in the country, accounting for 15.07 per cent of the national total. The sector has the potential to generate substantial employment opportunities.

The MSME sector in the state is dominated by a variety of industries — powerloom, handloom, agro-based industries, leather-based activities, general engineering, plastics, gem-cutting, electricals and electronics, chemicals industry, handicrafts, hotel and restaurants.

At the end of 2008-09, there were around 5.89 lakh MSMEs, generating employment for 42.40 lakh people in the state. The role of MSMEs in the state will continue to be high, as the capacity of the agricultural sector to absorb a growing population is shrinking in the wake of farm mechanisation and a change in the cropping pattern in favour of labour-saving crops.

To encourage these sectors, the Central and state governments have asked banks to meet the credit requirements of these sectors, which are highly labour-intensive.

According to Nabard, there are a few infrastructure gaps and constraints. For instance, in respect of weavers’ cooperative societies, a scheme of reactivation and rehabilitation of potentially viable societies may be evolved. Upgradation of skills through training programmes and improvement in product quality and productivity are also needed.

Publicity campaigns and exhibitions for sale of stocks have to be taken up and technology transfer centres need to be established in the districts for providing guidance and technical know-how to entrepreneurs, according to Nabard.

It suggested that district industries centres must be equipped with modern systems and converted into one-stop information and data bases for MSMEs. District-level marketing centres need to be set up to enable better marketing of products for micro and small enterprises. Nabard’s other suggestions include ensuring adequate and regular power supply to give a boost to the MSME sector.