Chennai, Sept 28 (KNN)  To address the persisting problem of sick micro, small and medium enterprises (MSMEs), Tamil Nadu has constituted a State Level Rehabilitation Committee (SLRC) which will look into the problems and the extent of sickness among MSMEs, suggest and implement measures for their rehabilitation.
 
Tamil Nadu has the highest number of working MSMEs (14 lakh) in India but the state is also home to the largest concentration of units which are termed ‘sick’ as per the MSMED Act 2006.  According to the data provided by banking institutions, the number of sick enterprises exceeds 25,000 in the state.  
 
A unit may be said to have become sick, if (a) any of the borrowal account of the enterprise remains NPA (non-performing asset) for three months or more OR (b) there is erosion in the net worth due to accumulated losses to the extent of 50 per cent of its net worth during the previous accounting year.
 
The Committee headed by Secretary, Department of MSME of the State and having representations of associations will formulate and approve the package of incentive schemes to sick MSMEs and issue guidelines for their implementation.  It can also take over the assets of the sick MSMEs to discharge the liabilities thereof; reopen the closed enterprises; produce evidence of a suitable arrangement with the bankers in respect of repayment of outstanding dues of the taken-over enterprise. 
 
The Committee may also seek prior permission of the lenders and government before it sells any surplus land of the taken-over enterprise, and clear all arrear dues of the taken-over enterprise to workmen, statutory authorities, government, its agencies and banks.  The proceeds will be credited into an escrow account till the above clearances are confirmed to the extent the sale proceeds can cover in the above order.
 
The Committee will meet on a quarterly basis to review and monitor the implementation of the Rehabilitation Scheme of Sick Micro, Small and Medium Enterprises in the state.  (KNN/AB)