5 lakh employees may lose jobs in MSMEs in Telangana

Hyderabad: Around five lakh employees of Micro, Small and Medium Enterprises (MSME) in Telangana are likely to lose their jobs as their units turn sick.

While the government says private firms have a greater potential for creating jobs than the government, the ground reality, however, appears to be different.

According to the Socio-Economic Outlook 2017, tabled in the Assembly by the government rec-ently,  there are around 69,120 micro, small and medium enterprises providing direct employment to 7,82,406 people. “Of this, 8,618 units may become sick as banks are not giving loans to revive these units.”

Investment in micro enterprises reached a high in 2011 and thereafter remained stable. Investment in small enterprises peaked in 2013-14 and then began a downward trend. Investment in medium industries has been stable thr-oughout this period.

The report says the decline in the growth rate of MSMEs is largely due to delay in payments by cash-strapped large companies and lack of redressal mechanism.

The report says that PSUs and the judiciary are not adequately responding to the arbitration mechanism of the MSME Facilitation Council.

Industrial sickness leads to unemployment, revenue loss to the state and central governments, and dampens the investment climate in the state.

Eighty per cent of the sick units have been declared non-viable units, and only seven per cent or 632 units are potentially viable units. In fact, there are more sick units than healthy ones.

In an attempt to address this issue, the report says that the government is now planning to set up Telangana Industrial Health Clinics.