Chennai, June 8 (KNN) Tamil Nadu's Rural Industries Minister P Benjamin has made a revelation that the employment generation in Micro, Small and Medium Enterprises has declined by whopping 5-19 lakh in financial year 2017-18.

Moving the debate on demand for grants for the Micro, Small and Medium Enterprises department, Benjamin who said that the sector contributed to about 40% of exports, admitted to a dip in the number of new ventures in the last financial year.

Comparing the numbers with the previous year, only 2.17 lakh new MSMEs had registered in 2017-18, which was 49,329 less than the previous year.

Given the previous instance when job generation in the sector saw a marginal fall was in 2013-14 when the sector managed to create only 4.94 lakh new jobs, nearly 98,000 jobs less than in the 2012-13 fiscal.

Highlighting the growth trend of MSMEs for the last decade in the policy note for MSMEs department, it was observed that the new investments in MSMEs fell by Rs 10,848.66 crore to Rs 25,373.12 crore in 2017-18 fiscal, against the Rs 36,221 crore in 2016-17 fiscal. The state generated only 13.78 lakh jobs in the sector last year, against the 18.97 lakh jobs in the year before.

The Minister informed the House that the total investment in MSMEs increased manifold from Rs 32,000 crore in 2010-11 to Rs 1.93 lakh crore in 2017-18.

Taking through the investment cycle of the last few years and their impact on job creation, Benjamin added that 5,442 of the 10,073 MSMEs which had signed MoUs worth Rs 16,532 crore with the state government during the first edition of Global Investors Meet in September 2015, have commenced production at an estimated cost of Rs 6,304 crore, thereby creating 73,528 jobs as on April 2018.

According to Tamil Nadu Small and Tiny Industries Association, the latest ban on select plastic materials will add to MSME woes.

CK Mohan, General Secretary, TANSTIA says at least 20,000 units involved in plastics would be affected.

He is of the view that the move is welcome if there is a concerted effort to phase it out rather than impose a blanket ban.

Attributing the factors that have impacted MSMEs in the economy, it was observed that the due to twin affect of demonetization and GST, MSMEs have been suffering a major loss.

Only 10% of the MSMEs could avail the bank credit and rest of them depends on un-organized finance. Not only this, cash flows have been affected

There are at least over two lakh units in TN with less than Rs 20 lakh turnover, most of which are not computerized and therefore, the e-way bill mechanism owing to the GST requirements, are not being fulfilled. Adapting to the new process will increase costs.

Other reason responsible for the slowdown is political instability in the state.