The Telegraph
Tuesday , January 22 , 2013
Since 1st March, 1999
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Credit support to small firms

- Govt steps in to create 1.6 lakh jobs

Bhubaneswar, Jan. 21: The state government today decided to step up credit and marketing support to the micro, small and medium enterprises, setting a target to set up 32,000 units during the 12th Plan.

The newly created micro, small and medium enterprises department wants to create an employment potential for 1.6 lakh persons.

The blueprint, approved by chief minister Naveen Patnaik today, envisaged a 10 per cent annual growth in credit flow to the sector to facilitate arrest of industrial sickness.

The review revealed that though the sector had showed encouraging trend, sickness plagued it. As many as 1,690 units were identified sick at the end of 2010. However, the number of micro, small and medium enterprises has gone up from 87,861 in 2005-06 to 1,11,856 in 2010-11.

The government is considering a proposal to sanction a grant of Rs 40 crore to enable the state-run Odisha State Financial Corporation to clear its outstanding dues.

The corporation, which used to give credit support to small and medium-scale industries, owed Rs 129 crore to the Small Industries Development Bank of India. The credit flow by the state PSU ran into problems after the bank stopped refinance.

The bank is said to have agreed for a one-time settlement of Rs 42 crore. If the settlement is done, it will start refinance to the corporation, which, in turn, will extend credit to micro, small and medium enterprises. In the interest of the smaller enterprises, the government seems to be veering around to the view that it should extend a one-time grant to the corporation.

The government is also considering another proposal to reactivate the state-run Odisha Small Industries Corporation, which supplies raw materials to the micro, small and medium enterprises units. Following the mining scam, smaller units, which are depending on minerals, are facing shortage of raw material.

At the same time, the government is of the view that all the departments and agencies should be asked to purchase products of the micro, small and medium enterprises units, which would give a fillip to their market.

As part of the exercise, a micro, small and medium enterprises trade fair was held from January 1 to 5 this year here in which 200 enterprises took part. The trade fair generated Rs 2 crore business and Rs 20 crore trade inquiries.

The review meeting also decided that infrastructure facilities would be developed in the sector. Food processing industries will be promoted with the assistance under the National Mission of Food Processing. A draft food processing policy is awaiting clearance from the government.

Similarly, the government has been laying much emphasis on revival of khadi and handicraft institutions. A survey, conducted by the state government through Xavier Institute of Management, has suggested that if the government adopts right strategies, the sector could become independent and economically viable. Keeping the recommendations in view, it is considering a Rs 11.4-crore revival package for the khadi and village industrial units.

The government is trying to ensure support to this sector from the big industries.

The big challenge, however, is to ensure that big industries deliver on their promises in time and roadblocks in their way are removed promptly through official intervention. “We have seen how mega industries such as Posco have floundered for want of official support,” said a small-scale entrepreneur.