New Delhi: Majority of small and medium enterprises have demanded lowering cost of finance and additional fiscal support from the government to provide relief to the sector hit by the demand contraction in the global markets, a survey has said.
Over 90% of small and medium enterprises (SMEs) surveyed by industry body Ficci said that demand slowdown has badly impacted them.
“The participating companies indicated that they have lost most of their major markets primarily in Europe and United States and are struggling to find new markets for their products,” the survey based on responses of 116 units said.
SMEs “single point demand” is for better financial accommodation by the banks at lower interest rates, it said, adding about 90% of the units depend on banks to meet their finance needs.
“In order to provide some immediate respite for the SME sector, which is facing a lot of problems ... lowering cost of financing and having additional fiscal support from the government is the need of the hour,” it said.
The SMEs said the two per cent subsidy on interest rate announced for the units engaged in exports is not reaching the intended beneficiaries at the ground level, the survey said.
It also pointed that 87% of the units were not aware about the government’s schemes for the sector.
“An action programme for better communication of government initiatives for the SME sector is called for,” the chamber said.
The government has announced several steps including removal of fringe benefit tax, additional fund under Vishesh Krishi and Gram Udyod Yojna and extension of duty neutralization and interest subsidy schemes.
The sector, which contribute significantly to the country’s exports, wants faster processing of loans, government support in modernization, and better marketing support besides other incentives.
FICCI said the SMEs have to bear undue delay in receiving payments from other companies and public enterprises and it leads to blocking of funds for SMEs which affects their day-to-day operations.