M.V. Ramesh Babu, President, CODISSIA participated in the Interaction Meeting with Chief Minister of Tamil Nadu M.K. Stalin held today at Residency Towers, Coimbatore. Representatives from sister Associations, Industrialists from Coimbatore participated in the interaction meeting.
Coimbatore: M.V. Ramesh Babu, President, CODISSIA participated in the Interaction Meeting with Chief Minister of Tamil Nadu M.K. Stalin held today at Residency Towers, Coimbatore. Representatives from sister Associations, Industrialists from Coimbatore participated in the interaction meeting.
M.V. Ramesh Babu, President, CODISSIA, submitted the following Memorandum on various MSME issues to the Hon’ble Chief Minister for his kind consideration:
Master Plan for Coimbatore
Master Plan of Coimbatore needs to be revised which is pending since 1994. The release of Revised Master Plan to be speeded up considering the present and future needs. Earmarking of unused lands, bare lands and Dry lands as vacant Industrial lands for priority sector projects in the City. Focus on land siting criteria to identify industrial lands located 500 meters away from all National Highways.
Single Window Clearance
Single window clearance to be introduced by a suitable software system for sanctioning of building approvals duly adopted by Director of Town and Country Planning, Local Planning Authority and Housing Department. This will facilitate Industrial Land Classification applications/ Licences/Approvals without any delay for supporting construction industries.
Banking & Financial Issues
Outstanding payment from PSUs and other Government Sector to be speeded up to MSMEs.
All concessions/subsidies which are at present being provided to the existing SIPCOT / SIDCO Industrial Estates should be extended to all the Industrial estates with full infrastructure facilities, for the development of industries.
Special capital subsidies up to 30% should be provided to all manufacturing industries (new or for expansion) which generate employment opportunities in Coimbatore.
25% Capital subsidy for thrust sector as per Tamil Nadu MSME Act to be sanctioned to -
Automobile
Solar panels
Leather industry
Electrical accessories manufacturing industry
Pump and Motor manufacturers and
Textile machinery parts manufacturing industries
This fund is being utilised in maximum by MSMEs in other Cities than in Coimbatore but large number of MSME industries are available in Coimbatore only. SIDBI has cleared the loan applications of MSMEs till March 2019 only and since many MSMEs are waiting for the loan to be disbursed, they refuse subsidy scheme for new term loan seekers.
Loans like Credit Linked Capital Subsidy Scheme to be implemented through Tamil Nadu Industrial Investment Corporation Limited, without any collateral security.
Recently the Interest subvention scheme discontinued by the Tamil Nadu Industrial Investment Corporation (TIIC), to be continued.
For availing loan subsidy from the Tamil Nadu Government, nowadays MSMES are insisted for ISO Certification requirement as compulsory. This condition should be removed immediately, since this is not practically possible for MSMEs.
MOD Charges: For availing Bank loans, the MOD Charges to be retained as Rs.5,000/- only.
Funding for Startups
New establishment, especially start-up companies, when they start business they start with their own funds, borrowed funds from families and availing jewel loans etc. to develop the business. It may take atleast 4 to 5 years for them to break even. When they develop a product, they are not sure if they would succeed.
Only when their business really kicks starts, at that time, they go for bank loans, willing to even mortgage their properties to the bank as collateral security or under CGTMSE Scheme, but banks are demand minimum three years’ profit showing Balance Sheet. In this stage, their Balance Sheet would not have made profits due to preoperative and development cost, but unfortunately Banks reject their applications straightaway as they have not generated profit during start of time even though they are ready to submit projected profitability Balance Sheet for the next five years.
If this mechanism prevails, not a single start-up company under the Start-up India can survive.
We request you to kindly advise Reserve Bank of India to relax the conditions of demand three years’ balance sheet from the start-up companies and kindly instruct them to introduce new loan schemes for start-up companies based on the above points.
Also extension of the limit of collateral free automatic loans for MSMEs to be provided to meet operational liabilities and restart businesses.
Agricultural Loans under SARFAESI Act
Agricultural loans are availed by farmers to fund seasonal agricultural operations or related activities such as purchase of land or agricultural tools.
When the farmer’s legal heirs approach banks for availing loans for their non- agricultural, MSME related business purposes, even though they are ready by giving their agricultural land as collateral security, they are unable to avail the facility. Even though they are ready to give an undertaking that the banks can acquire the property in case of non-payment of the loans availed.
Excepting Tamil Nadu Agricultural Development Bank, no other bank is ready to give loan against agricultural land. Therefore, we request your goodself to kindly instruct the banks to sanction loans on agricultural land as a collateral security for MSME business purposes provided the banks can get an undertaking that if the person availing loan is unable to repay the loan, the land given as a collateral security for MSME business purposes can be taken by the Bank under SARFAESI Act.
Suitable instructions may please be given to the bankers not to consider the turnover achieved during the pandemic period since normally based on the turnover working capital loans are sanctioned.
To increase the working capital sanction limit to 40%
For the working capital limits like OCC, the margin requirement should be reduced from 25% to 10%.
VALUE ADDED TAX (VAT)
Practice of issuing notice under the VAT system and entry tax should be discontinued.
Entry Tax demand is made after the Supreme Court judgement after a period more than 20 years. This demand should not be raised because all the MSMEs are coming out of COVID Lockdown gradually. This entry tax will burden the MSME sector to a larger extent.
Tamil Nadu Sales Tax department should not demand Form C, since most of the other State Governments have stopped issuing Form C, even before the implementation of GST. The companies which have supplied materials against Form C are finding it very difficult to get Form C from the parties.
Solution: The Tamil Nadu State Government should announce an amnesty scheme where the registered dealers can give self-declaration for non- issuance of Form C.
GST
Tamil Nadu State Government should recommend and support to bring petrol and diesel under GST.
Tamil Nadu State Government should recommend GST Council to reduce the current GST slabs as 5%, 10% and 15%.
To drop the proposal to bring the offence of bill trading within the purview of the Goondas Act,1982.
Labour Laws
We request the Implementation of Small Factories Act at the earliest.
We propose a single social security tax in the place of ESI, PF etc. to be implemented for the welfare of the employees.
Single social security tax of 15 % (9.0 % by employer and 6.0% by Employee) should comprise both Provident Fund contribution and ESI contribution can be implemented for MSMEs, which will in turn improve the compliance of tax in MSME and will create employment opportunities at a greater scale.
Until the implementation of Single Social Security Tax, we request to amend the EPF rule as follows:
To permit MSMEs to engage Apprentices for a period of 18 months and to be exempted from EPF Act.
To restrict the total EPF contribution to 8%, both by employer and employee.
Statutory PF contribution for both employee and employer have to be reduced from 12% to NIL for all establishments covered by EPFO for 3 months.
As per Industrial Code 2021, Establishments employing less than 300 are exempted from Employment Standing Orders Act. Similarly, exemption to be extended for the Provisions of Lay Off and Retrenchment.
Consider paying the PF Contribution for 6 months and extend the benefit for all units employing up to 200 persons, without any ceiling.
EPF to be exempted for salaries being paid for more than Rs.15,000/- without any conditions and also not to enforce any pre-conditions to exempt from Provident Fund for employees employed more than 60 years of age.
Existing limit of PF eligibility for 20 people and more should not be reduced below 20 as it would affect most of the MSMEs to sustain in business.
Section 9A which prohibits an employer unilaterally alter the service conditions in respect of issues mentioned in the fourth schedule should be suspended for Three years.
Section 33 which restricts the employer to change the service conditions during the pendency of the conciliation proceedings before the conciliation office should be suspended for Three years.
The entire chapter V-B which bars layoff retrenchment and closure in respect of industry having 100 workmen on an average during the preceding 12 months should be suspended for Three Years.
Contract Labour Act
We request to allow MSMEs to engage contract labour for all production activities inside the factory to meet the temporary and unexpected volume of orders.
Strengthening the Labour Workforce in Tamil Nadu
Our State is heavily dependent on labour workforce from other states, mainly from North and North East. Industries almost comes to a standstill when other state labourers leave for their hometowns.
An appropriate mechanism for skilling the existing potential workforce inside the state has to be urgently identified and implemented in a phased approach for self-reliance.
Accordingly, existing schemes have to be revisited, new schemes have to be planned, and we shall be glad to collaborate and work with the Government in this regard.
Subsidies to be allowed for creating hostel/accommodation facility for migrant workers in the respective industrial premises.
Apprenticeship Act and Skill Development Centres
To set up Skill Development Centres to help MSMEs to absorb sufficient manpower with required skills.
To create Memorandum of Understanding between Rural Development, District Industries Centre and the relevant Association for developing Skill Development Centre through which rural labour can be trained in the above centre which will pave the way for MSMEs to absorb them.
To allocate 90% funds for Skill Development by the State Government and request for supporting in identifying/mobilizing the candidates with minimum education (10th pass or school drop outs) for skill training.
For training the rural employees, stipend and accommodation to be allotted for the training period.
Employees working under the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) which guarantees for 100 days of employment in a financial year, to be made available for the labour work in the industries located in cities. The industry looks at manpower flexibility to run the operations.
Candidates registered in District Employment Centre should be channelized to Industries for skill training and after the training, Certificates may be issued to them jointly by the concerned industry and the Government.
Hands on learning and training techniques to be incorporated as an integral part of our teaching strategy in our academic programs during under graduation, which should be a functional part of every lesson plan, to familiarize students with the models and materials they will use later in either professional, post-graduate employment or research positions. Industry exposure for students from their first year of under
graduation will motivate and encourage them to become an entrepreneur in future.
Amendment in Minimum Wages Act
Micro and Small Industries are also now in the category of General Engineering industries for the purpose of determining the quantum of minimum wages whereas these industries shall be exempted from the Category of General Engineering and to follow National Floor Level Wages. We bring to your kind notice that there are no minimum wages to textile Industry. Therefore, we request for suitable amendments to be made under Minimum Wages Act notified under Payment of Wages code 2020.
Provident Fund Contribution to MSME shall be 10% instead of 12%
Under Section 6 of EPF Act 1952, considering the nature and financial position of MSMEs, the contribution payable by the employer and employees should be fixed as 10% as applicable to Industries having employees less than 20 nos., Sick industries, Beedi industry, Jute industry, Brick industry and Guar gum.
Therefore, we request fixing of 10% PF contribution instead of existing 12% which will be very much helpful in this tough financial crisis.
Auto Generation of EPF and ESI Codes by ROC Portal
We bring to your kind notice that when any entrepreneur registers their Company under Companies Act, the ROC portal generates the Codes for ESI and EPF Act automatically. The Companies registered under ROC, need not employ more than 10 employees immediately and also in the same jurisdiction of the Code allotted. Since already applicability and allotment of ESI code will be under purview of Employee State Insurance Act 1948 and EPF code will be under purview of Employee Provident Fund Act 1952.
We request your goodself to eliminate the auto generation of ESI and EPF Code numbers with immediate effect and help the entrepreneurs in this regard.
Occupational Safety, Health and Working Conditions Code 2020
The occupational safety health and working conditions code 2020 in the clause 14 ie.) Right of employee to be modified in such a manner that genuineness of the employee complaint to be verified with the employer before taken up the matter for consideration.
Special Economic Zone required for electronic manufacturing:
Computers and its peripheral equipment such as desktops, servers and printers, electronic appliances manufacturing should be encouraged for which a Special Economic Zone (SEZ) is required in Coimbatore. Tamil Nadu being the one of the major electronics exporting states in the country to the tune about US$ 1.27 billion, a Special Economic Zone (SEZ) is required for electronic manufacturing, which will further earn foreign exchange apart from generating more and more direct and indirect employment opportunities.
Defence
About 400 acres of land has been identified by TIDCO in Sulur, Coimbatore for development of defence industrial park. This needs to be speeded up.
In order to kick start the activities of the Southern Defence Corridor in an effort towards Atma Nirbhar Bharat, Tamil Nadu Government should support the MSMEs by getting orders from Public Sector Undertakings. To bridge the gap between PSUs and MSMEs, a special IAS Officer needs to be appointed to ensure that Orders are given to MSMEs at the maximum possible extent.
State Government must support MSMEs / Start-ups with 100% subsidiary for defence and aerospace products testing certifications (NABL, CEMILAC, DGQA, DGAQA Etc) and boost Tamil Nadu defence corridor Initiatives.
Extension of Subsidies for National and Quality Certifications. The limit should be extended up to Rs.50 lakhs for international certification.
Defence Testing Infrastructure Scheme (DTIS)
Department of Defence production has requested an Expression of Interest for setting up a Defence testing Center in the Tamil Nadu Defence corridor under the Defence Testing Infrastructure Scheme (DTIS) with an outlay of Rs. 400 crores for creating state of the art testing infrastructure for the Defence sector and Coimbatore is an ideal destination to start such testing facility.
The projects under the Scheme will be provided with up to 75% funding from the Central Government in the form of ‘Grant-in-Aid’. We request the State Government to provide 25% financial assistance for setting up a Defence Testing Centre of total project cost Rs. 400 crores, which will cater for the testing of system and component for the Indian forces - Air Force, Navy and Army.
Large scale industries, MSMEs and start-ups will utilise this testing facility to validate and get their products certified for the defence supply. The equipment/systems tested will be certified as per appropriate certification agencies like CEMILAC, NABL, DGQA, etc.
Tamil Nadu being declared as one of the defence industrial corridors in India, we suggest that large industries to be considered for setting up their manufacturing units in Coimbatore for defence supplies.
TANGEDCO
It is necessary to simplify the procedures for giving ELECTRICAL connections
a) As per Tamilnadu Combined Development and Building Rules 2019 which insist for Completion Certificate from LPA for obtaining electrical connection for new buildings. This can be implemented with stringent measures without violating the following major points.
Parking requirements
Side & Front offsets
Allowable FSI.
Building height
Apart from the above some internal minor changes can be relaxed for issuing completion certificate by LPA
b) Allowable maximum height of “Non High rise building” as per Tamil nadu combined Development and Building Rules 2019”, is 18.30 metres. At present, connection for newly constructed buildings is denied by TANGEDCO claiming that it as a High rise building, which needs to be relaxed.
It is a major relief to many small and medium scale industries that the Tamil Nadu Electricity Regulatory Commissioner (TNERC) has notified the amendment to the electricity supply code which allows consumers to have an option to avail up to 150 KW under the LT category, compared to an earlier limit of 112 KW. We welcome the above move from TNERC, but without the applicable charges being maintained at the same tariff for 112 KW, this will be a heavy expenditure to the industries and will be of no use.
For HT Industries, in the recent months, the entire cost of installation of Distribution Transformer with associated equipment/accessories viz. AB Switch, HG Fuse, DT Structure, Pole are at the cost of the Licensee at the Licensee’s cost. Any Gazette notification is binding all the concerned. The licensee deliberately not communicating the amendments made to DC thereby the consumers are affected. Whenever the tariff is approved by TNERC, the Licensee is able to implement and communicate it to its officials immediately.
To ensure availability of 24x7 Power for Industries.
Withdrawal of appointment of Qualified Coordinating Agency (QCA) for forecasting Since the wind/solar generators are already paying several charges such as Open Access, O&M and Transmission Charges to TANGEDCO, it is very difficult to forecast such naturally available energy which is purely based on weather conditions, instructions may please be issued to the concerned authorities to withdraw appointment of QCA and further proceedings in this regard.
Payments to Wind Energy Generators (WEG) / Solar Energy Generators To clear all pending payments since April 2018 for the energy purchased since April 2018 by TANGEDCO and ensure clearance of payments without any delay
Foundry Industry
Since the foundry sand is non-hazardous and required tests and trials were conducted successfully for recycling the same for road construction and making of solid block and pavers, we request the support of Tamil Nadu Government to promote the same.
Foundry being a Core Sector Industry mostly comprising of MSMEs in the State, is essentially dependent on Human Resources and Technology Modernization. Given the size and structure of Foundries in Coimbatore, a common Foundry Excellence Centre for Human Resources Training and Technology Development will help in job creations for Youth from across the social spectrum.
Airport Expansion
Coimbatore is ranked 2nd biggest airport in Tamil Nadu and 20th biggest in the country. It is the 13th biggest cargo in our country and it has the potential to grow if the infrastructure could be created. A good airport infrastructure can be created only with sufficient land availability. Coimbatore requires about 650 acres of land for airport expansion. We request the Government to speed up the acquisition and expansion process at war footing.
Most of the operators like Indigo, Spice Jet, Singapore Airlines, Air Lank, Air Arabia and Emirates are ready to operate to various International Destinations. Once our Coimbatore Airport runway is expanded, wide bodied international operational aircraft can land and take off. There will be a huge revenue if Coimbatore Airport is getting expanded soon.
Infrastructure:
Focused Infrastructure upgradation in tier II and tier III cities will attract large industries and medium scale industries, lead to balanced Economy and industrial growth in the city. These Large industries can be complimented with existing MSME supply chain and workforce available.
All the damaged roads, especially after the recent incessant rains, to be relayed immediately and the roads should not be heightened further, to be maintained uniformly.
A Mega Industrial Estate of about 3000 acres in Coimbatore to be promoted by SIDCO/TIDCO.
Coimbatore needs to be developed as the major Industrial City and large-scale industries have to be brought within the radius of 100 kms. as Coimbatore is a hub of MSMEs.
Coimbatore-Madurai and Coimbatore-Hosur Industrial Corridors to be developed which will make Tamil Nadu to gain GDP double in three years.
To promote vertical/multi-storied Industrial Estates in Tamil Nadu for the benefit of Micro Industries.
To develop the Tamil Nadu Defence Corridor which will promote greater sourcing of spares and other services from the TNDIC nodes viz. Chennai, Coimbatore, Salem, Trichy and Hosur.
Suburban circular train service with Metro trains are the need of the hour for Coimbatore.
Infrastructures like Road, Drainage Water etc. to be rectified immediately and should be maintained appropriately forever.
Speeding up of all on-going projects, Flyovers, up gradation of stations, modernizing Goods Terminals and Handling is urgently required.
Formation of East and Western Bye-pass Road/Ring Road
Cochin Frontier Road - Palladam to Madukkarai Road needs to be widened and formed as a Four-Lane Road
Coimbatore to Karur 8 Lane Express Highway to be implemented.
Palladam to Chinthamanipudur Road to be widened and formed as a Four Lane Road
Sathyamangalam Road (NH 948) - An elevated road from Ganapathy (Textool) to Saravanampatti is very much essential. There is a proposal for new alignment of a single road from Saravanampatti to Bannari, which should be a 4 lane road up to Bannari which will be much useful for easy movement of vehicles going into Karnataka State.
Bus port project to be developed on priority basis to reduce the road traffic inside the city limits.
L&T Bypass road from Nilambur to Madukkarai (NH 544) six lane work to be initiated immediately.
Feasibility of introducing “Elevated Metro Rail Track” at another 6 metre higher level of the existing Fly over under construction from Goldwins to Upplipalayam (for which both HOUSING & HIGHWAYS secretaries to coordinate with NHAI, NH, Special project wing already executing the work & RITES central government consultants for MRTS.
To declare the already discussed formation of “Coimbatore-Tirupur Region Metropolitan Development Authority” soon, for the benefit of both Industrial District people of Coimbatore and Tirupur traveling to Chennai frequently for official purposes.
State policies on futuristic Technologies
State policies to be framed for promoting innovative product developments and manufacturing in the field of AI (Artificial Intelligence) & ML (Machine learnings), ESDM (Embedded System Design and Manufacturing), E-Vehicle Manufacturing, Green Energy technologies, Space startup missions. These policies will help us to attract world class technology-based industries and startups to tire II and III cities and help employment generation.
EDII-TN and Startup-TN centers at Tire II / III Cities
Entrepreneurship Development and Innovation Institute – TN and Startup -TN centre supports need to be extended to tire II / III cities. New employment generation and technology based early startups has to be supported and these facilitations are being done through EDII-TN and Startup-TN initiatives. If these centers can extend its operations at Tire II/III cities, it will empower the budding entrepreneurs.
Other suggestions:
Inspector Raj in MSEs to be eliminated and self-declarations by individual MSE unit should be honoured and accepted. CODISSIA requests the Implementation of Small Factories Act at the earliest. Industries having below 50 employees should not be under the purview of inspection by officials and those industries should not be bound under any other conditions.
Larger industries investment should happen in Tier II cities viz. Coimbatore, Salem, Trichy to be encouraged, which will improve the supply chain and also pave way for balanced industrial growth and economy.
Online marketing portal for MSMEs to be developed by Tamil Nadu Government.
We hope and wish the issues will be favourably considered by the Hon’ble Chief Minister of Tamil Nadu at the earliest possible for the benefit and survival of MSMEs and also for paving the way for increased entrepreneurship and employment generation.
Till such time the foundry sand reuse initiative unfolds itself to desirable levels, it is required to find ways and means to dispose of them. Given the non-hazardous nature of the sand, the best way is to use it for refilling abandoned wells and quarries. This has been the age old practice and it is proven that it does not result any harm to ecology and surroundings. Request suitable instructions to the concerned department for
necessary action.
One of the long pending requests of Industrialists, especially people in core sectors like Foundries and Engineering Manufacturing, it is required to create buffer zones around industries already accorded permission for conduct of business based on their respective classifications - like Red Followed by Orange, followed by white and then Green. This will help to avoid unnecessary and unwanted administrative hardships.