TN unveils measures to help MSMEs recover from recent floods

In a boost to the MSME sector and small traders hit by the recent deluge, Tamil Nadu Chief Minister Jayalalithaa has unveiled various steps, including loan moratorium, interest-free lendings and relaxation of norms for unemployed educated youth for self-employment ventures.

The chief minister ordered a moratorium on repayment of the principal component of loans taken by MSMEs from Tamil Nadu Industrial Investment Corporation Limited upto two years on need basis. They will be given loans to help them repay interest for six months. Also, additional loans sans new security will be provided to repair and replace equipment, procure raw material and stock up inventory. The time frame to repay working capital loans would also be extended, she said in an official release in Chennai.

Flood-hit firms that had repaid loans as per schedule till December 31, 2015 would be exempted from penalty interest clause till they fully restart their ventures or till six months, whichever is earlier. "I have ordered refurbishment of basic infrastructure in industrial estates under the Tamil Nadu Small Industries Development Corporation Limited at a cost of Rs 25 crore," she said.

She also waived the fee of replacement of electricity consumption meters affected in floods for MSMEs. The meter fee of Rs 26,000 for high tension consumers and Rs 3,500 for low tension users will be borne by Tamil Nadu Generation and Distribution Corporation. For small traders, hawkers selling flowers, fruits and vegetables on roadsides and petty shop owners, the CM announced interest-free loans upto Rs 5,000 through cooperative banks.

After repayment of such loans in 25 weeks, they would be provided the loan again with reduced interest rate of four per cent. "The beneficiaries will be selected in special camps to be conducted by cooperative banks for ten days," it said. For unemployed educated youth in flood-hit districts, she ordered relaxation of 'training' norms to avail loans upto Rs five lakh with a 25 per cent capital subsidy to launch self employment ventures under an ongoing state-scheme.