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Job generation in TN's MSME sector dipped by 5.19 lakh in 2017-18

MSMEs (Micro, small, medium enterprises) have not had a great run last year as job generation in the sector fell by a whopping 5.19 lakh in financial year 2017-18. The revelation related to the slump in employment generation was made by state Rural Industries Minister P Benjamin in the Assembly on Thursday.

Job generation in TNs MSME sector dipped by 5.19 lakh in 2017-18


Moving the debate on demand for grants for the Micro, Small and Medium Enterprises department, Benjamin who said that the sector contributed to about 40% of exports, admitted to a dip in the number of new ventures in the last financial year.

Only 2.17 lakh new MSMEs had registered in 2017-18, which was 49,329 less than the previous year. The previous instance when job generation in the sector saw a marginal fall was in 2013-14 when the sector managed to create only 4.94 lakh new jobs, nearly 98,000 jobs less than in the 2012-13 fiscal.

Growth trend of MSMEs for the last decade presented in the policy note for MSMEs department in the House on Thursday morning showed that new investments in MSMEs fell by Rs 10,848.66 crore to Rs 25,373.12 crore in 2017-18 fiscal, against the Rs 36,221 crore in 2016-17 fiscal. The state generated only 13.78 lakh jobs in the sector last year, against the 18.97 lakh jobs in the year before.

The Minister informed the House that the total investment in MSMEs increased manifold from Rs 32,000 crore in 2010-11 to Rs 1.93 lakh crore in 2017-18.

Benjamin also added that 5,442 of the 10,073 MSMEs which had signed MoUs worth Rs 16,532 crore with the state government during the first edition of Global Investors Meet in September 2015, have commenced production at an estimated cost of Rs 6,304 crore, thereby creating 73,528 jobs as on April 2018.

Plastics ban will add to MSME woes: TANSTIA

According to Tamil Nadu Small and Tiny Industries Association, the latest ban on select plastic materials is yet another example of how the MSME landscape will get affected. CK Mohan, General Secretary, TANSTIA says at least 20,000 units involved in plastics would be affected. He is of the view that the move is welcome if there is a concerted effort to phase it out rather than impose a blanket ban.

Factors that have impacted MSMEs

DeMon: Only 10 per cent of the MSMEs avail of bank credit, the rest depend on unorganised finance. Post demonetisation, cash flows have been affected.

GST: There are at least over two lakh units in TN with less than Rs 20 lakh turnover, most of which are not computerised. Therefore, the e-way bill mechanism owing to the GST requirements, are not being fulfilled. Adapting to the new process will increase costs.

Political instability: The fiasco surrounding the Thoothukudi copper smelting plant and other ongoing protests have led to the flight of capital to other states, thereby taking the sheen off Tamil Nadu’s industrial status.

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