HUBBALLI: Reeling under enormous losses owing to the lockdown imposed in the wake of Covid-19’s second wave, owners of micro, small and medium enterprises (MSMEs) in North Karnataka are struggling to pay instalments on their loans, and worse, unable to pay wages to their employees.
Cumulatively, the losses incurred by MSMEs in the region is estimated to be around Rs 1,000 crore, and driven to despair, these entrepreneurs are pinning their hopes on a bailout package from the state and central governments.
President of North Karnataka Small Scale Industries’ Association (NKSSIA) Ninganna Biradar told TOI, “We pay the highest amount for Goods and Services Tax (GST), property and income taxes, despite which the government has ignored us while rolling out financial packages.
We want the government waive interest on our loans for one year.
Collection of GST, property and income taxes should be deferred by a year.
Industries have been closed for the past month-and-a-half, and the losses we are incurring has turned us into defaulters on loans.
Karnataka State Financial Corporation is among those exerting pressure on us.
They want us to pay 14% interest on loans instead of 4% because many of us could not pay the instalment on time, that is, before the 10th of each month.” NKSSIA member JC Mathad said that the first quarter of 2021-22 had yielded no profit for MSMEs in the region.
“Nearly 99% of the industries were refused permission to function.
The government must allow MSMEs to pay loan instalments every three months, which it had done last year.
The government should also ensure that all industrialists and employees are vaccinated at the earliest, since it is the best interests of the country’s economic growth to do so,” Mathad said.
Minister for large- and medium-scale industries Jagadish Shettar was not available for comment.
Mounting lossesMSME sector stakeholders said that nearly 5,000 of the 22,000 units in North Karnataka had been forced to shut shop since March 2020.
The NKSSIA sources expressed fears of nearly 35% of the units closing down by December if the situation were not to improve.
“The sector has incurred losses of around Rs 1,000 crore, and it will only mount if the lockdown is extended till the end of the month,” a source said.