The small and medium scale units at the Adityapur industrial area on Thursday. Picture by Animesh Sengupta
Finance minister Arun Jaitley’s statement of creating a “conducive ecosystem for venture capital in the MSME (micro, small, medium enterprises) sector” with a proposal to establish a Rs 10,000 crore fund to catalyse private investors by way of equity and soft loans has not cut ice with Adityapur industrial area.
President of Singhbhum Industries Association (SIA) Pramod Singh said Adityapur, suffering from land crunch, wouldn’t gain much.
“The land-blocked area lacks scope to set up new industries though many applications of medium scale units are pending with Adityapur Industrial Area Development Authority,” he said.
Grappling with economic slowdown for years, Adityapur’s small and medium enterprises were more disappointed at not getting a stimulus package from the Union finance minister’s maiden budget, being forced instead to fall back on hopes of long-term gains from big-ticket road and mining investments.
“Though the budget seems optimistic, we expected special stimulus for the ailing small and medium enterprises that was not there,” said R.K. Sinha, industrialist and former president of Adityapur Small Industries Association (ASIA), one of the state’s oldest and largest industrial outfits.
Investments on 8,500km road projects to the tune of Rs 38,000 crore would help them in the long run, Sinha hoped.
“Infrastructure projects of road construction and mining rev up demand for heavy vehicles. We are optimistic that road projects will push sale of Tata Motors commercial trucks. This way, the 600-odd ancillary units of Tata Motors in Adityapur will also gain with more orders for auto components,” Sinha, also the MD of Adityapur Auto Cluster Limited (AACL), said.
Hailing Jaitley for extending the 4 per cent excise duty slash from 12 to 8 per cent on heavy and medium commercial vehicles till March 2015 — announced by the UPA government’s interim budget — he said it would revive demand for Tata Motors vehicles, helping Adityapur ancillary units in turn.
Industrialist Bikash Mukherjee, who owns an ancillary unit of Tata Motors in Adityapur, said: “The SME sector is dependent on heavy industries that play a key role in the infrastructure development. But the budget did not focus much on industry growth. It is a reproduction of the previous one and won’t make much difference to the Adityapur industrial area,” he added.
“The finance minister seems to have had very little resources. The budget should have been more growth oriented but there seems to be a resource crunch,” said Bharat Vasani, vice-president of Singhbhum Chamber of Commerce and Industry (SCCI), Kolhan’s leading trade outfit, which organised live telecast of the Union budget at Chamber Bhavan in Bistupur. Vasani added direct and indirect tax proposals were on expected lines.
But even he said they were disappointed that the small and medium industry sector did not get a stimulus package.
“This sector is going through a critical stage and needs special attention. The Union budget did not announce any sop,” he said.
The SCCI vice-president welcomed customs duty cut on limestone and dolomite from 5 to 2.5 per cent. “This will help slash steel prices because both limestone and dolomite are key raw materials for the steel making industry,” he said.