MSME Ministry to meet industry representatives on Nov 24 to discuss impact of demonetization

Bengaluru, Nov 22 (KNN) The MSME Ministry is holding meeting with the MSME associations on November 23, 2016 in the national capital to discuss the impact of demonetization on different sectors.

Industry associations from across the country will attend the meeting being held by DC –MSME to give their representation on the issue.

The Karnataka Small Scale Industries Association (KASSIA) has appreciated the move taken by the Ministry and said, “KASSIA welcomes the bold step taken by Prime Minister Narendra Modi to demonetize 500 and 1000 rupee notes to counter the menace of black money, counterfeits and related issues of a parallel economy. This is indeed a bold decision which will hopefully yield good results in the coming days.”

In a letter to KK Jalan, Secretary, Ministry of MSME, KASSIA said, “However, in the wake of demonetization, we witness considerable confusion and dislocation in carrying out day to day financial transactions. It seems to have thrown MSMEs, particularly, micro and small enterprises into complete disarray.”

“The micro and small enterprises which by their very nature deal largely in cash for purchases as well as other transactions find it extremely difficult to cope in the absence of availability of ready cash in carrying their operations,” the letter added.

SMEs have also been facing difficulties in disbursing wages due to this sudden dislocation as many of them are not even allowed to draw their own money from the legitimate accounts in the banks due to the restrictions placed on withdrawals, KASSIA said.

The industry body has urged the Government to allow banks to allow customers to withdraw money from their current and cash credit accounts as these are legitimate instruments for transactions between banks and industry and business.

Placing restrictions on such accounts for withdrawal is completely uncalled for, KASSIA said.

In the letter, KASSIA has requested the Government to take immediate steps to ensure that the normal activity is not disrupted due to the logistical issues involved in supply and distribution of the new currency notes as this can cause considerable damage and loss to business operations. (KNN Bureau)