Flood-ravaged Uttarakhand MSMEs seek restructuring of bank loans

From Swati Dayal
Dehradun, Jul 25 (KNN)  Thousands of micro, small and medium enterprises which were ravaged in the recent Uttarakhand floods have approached banks to restructure their loans and asked the state government to build new industrial estates with adequate facilities.

Their plea has been taken to the banks and the Uttarakhand government by the Industries Association of Uttarakhand (IAU). The total loss for the small and tiny units is estimated to be Rs 1,000 crore.

“We are trying to work with the banks to restructure the loans given to the MSMEs. We are taking June-15, a day before the devastating flood came and rocked the state, as the cut-off date for the loans restructuring,” IAU, President, Pankaj Gupta told KNN.

“We have asked banks to convert their loans to term loans and make them payable in easy instalments over a period of at least seven years,” he added.

The association had a meeting with the state level banking committees in which the proposals were made earlier this week in New Delhi.

The demands will further be moved forward to the state and the central governments to get sanctioned.

Other than bank officials and industry bodies, Secretary MSME, Additional secretaries MSME and Director of Industries were present at the meeting.

The devastating floods of Uttarakhand on June 16-17 have left their mark on thousands of people dead, leaving many more homeless.

In order to help the small industrialists re-establish their businesses, the industry association has also demanded that they be given a second loan without any collateral and processing fees.

“The state government should waive off their stamp duty as well. This will help them to restart their businesses,” said Gupta.

Referring to the high cost of power, they have also sought deferment of electricity bills.

Those hardest hit were the small enterprises in the districts of Rudraprayag, Uttarkashi, Chamoli, Tehri, Pithoragarh, Almora and Pauri, whose economies depend on the Char Dham season.

Most of the MSMEs, according to Gupta, are facing financial and business losses mainly due to road blockades and infrastructure loss.   

As per official statistics, there are about 19,590 registered micro and small enterprises besides many unregulated and unorganized enterprises in the affected area.  All these enterprises have been badly hit and have suffered huge property, business and financial losses.
 
There were approximately 43,099 people employed in those enterprises which have suffered an estimated loss of Rs 531.20 crore.  Besides, there are a large number of people who do business in the unorganised sector as well.

According to an assessment done by the PHD Chamber of Commerce and Industry (PHDCCI), the state has lost revenue of about Rs 12,000 crore solely from its tourism sector.

Close to 11 per cent of the state’s Gross Domestic Product (GDP) has been ruined in terms of prospective tourism earnings.

Reconstruction will be a big burden on the MSMEs in the wake of rising input costs of cement, iron, and labour.

“We have urged the government to provide alternate land to the entrepreneurs who have lost their lands in the floods. We are also urging the government to create infrastructure for the MSMEs in the disaster hit industrial areas. The damage is so bad that we want the government to build completely new infrastructure with new technologies rather than rebuild them,” said IAU President.

The industry associations and the banks are hand-holding the small entrepreneurs to start their livelihoods again.

They are also starting vocational training and skill development programmes for the MSMEs. “We are asking the MSME ministry to create tool room along with design and training centres in order to provide trainings. We will even have entrepreneurship development programme for 10, 000 people,” said Gupta.

The state of Uttarakhand is administratively divided into 13 districts, and geographically into two regions - Garhwal (in the west, sharing border with the state of Himachal Pradesh) and Kumaon (in the east, sharing border with Nepal).

The 'Char Dham' or four sacred places for Hindu pilgrims are located in Garhwal, which happens to have borne the brunt of the flooding since June 16, 2013.  The floods caused maximum damage in the areas of Kedarnath, Rambada and Gaurikund in Rudraprayag district, Joshimath and Pandukeshwar in Chamoli district all of which are in the Garhwal region of the state which comprises of seven districts in total. (KNN)

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