The growth of country’s economy may not gather pace, unless government resolve the serious issues faced by Small and Medium Enterprises (SMEs), warns industry experts. ‘We see the RBI and the government have failed to resolve the non performing assets (NPAs) issues faced by the SMEs today and it will have serious impact on the growth of the country’s economy. Nearly 35 percent of production of the country is contributed by SMEs, which had also created nearly 2.5 crore jobs across the country. SMEs also have whopping 40 percent share in the country’s exports,” Dr. Visswas, a former banker and founder of NPA Consultants told media persons here. NPA Consultants is dedicated towards the micro, small and medium enterprises (MSMEs) that are in financial mess and need help to get out of the clutches of the banks. The Modi government is keen on FDI from Multinational companies, but ignoring the SMEs, Visswas said. He further added Banks are under pressure to recover unpaid loans as their non-performing assets have been rising recently. Over the past seven years, there are fresh bad loans worth Rs 4.95 lakh crore only in PSBs, while during the same period, these lenders wrote off bad debts worth Rs1.4 lakh crore. Top four defaulters of state-run banks constitute Rs23,000 crore of NPAs. Dr. Visswas (Ex-Banker) has a profound professional experience with degree in B.Com, LL.B., M.A. (Eco.), A.C.S., A.I.I.A (USA), Ph.D. (UK) , Currently NPA Consultant(9987646574) and Advisor for All India MSME Association.

Despite its commendable contribution to the nation’s economy, SME sector does not get the required support from the concerned Government departments, banks, financial institutions and corporate, which is a handicap in becoming more competitive in the national and international markets and number of SME units have either closed down or on the verge of closing. SMEs face a number of problems – absence of adequate and timely banking finance, limited capital and  knowledge, non-availability of suitable technology, low production capacity, ineffective marketing strategy, identification of new markets, constraints on modernization & expansions, non availability of highly skilled labor at affordable cost, follow up with various government agencies to resolve problems etc. NPA (Non Performing Asset) is an industrial phenomenon which indicates industrial sickness. The national growth of a country particularly country like India depends upon the growth and health of SME’s. The so called banking reform are targeted towards killing the sick units rather than curing them. There has to be serious attempt on the part of the banks particularly for the SME sector to give them a special treatment before taking the recourse of SARFAESI ACT. Though at various places the state High Courts and Supreme Court has prescribed some guidelines but they are seldom followed, Dr. Visswas said. Financial sector reform in India has progressed rapidly on aspects like interest rate deregulation, reduction in reserve requirements, barriers to entry, prudential norms and risk-based supervision but changes required to tackle the NPA problem would have to span the entire gamut of judiciary, polity and the bureaucracy to be truly effective, Dr. Visswas said. Unfortunately the policy makers, the politicians and the bankers inspite of being aware of the facts are not paying due attention. It is not that the number of NPA cases should come down but what is more important is that how many NPA accounts are restructured and revived. That will improve the national wealth, Dr. Visswas said. Dr. Visswas pointed out that in most cases the borrowers are unaware about their basic rights and come under the clutches and pressure tactics of the bank. The borrower usually tries to convince the Banker not to take any immediate stringent action and to lend some time, however does not usually succeed. Dr. Visswas suggested to give SMEs some opportunities to revive. “Why do banks do not have a separate professional body to restructure such SME NPA accounts, asked Visswas and added that the courts must issue order to stop publishing photographs of defaulters in the newspapers, which increases agony to these small entrepreneurs.

If Entrepreneurial attitude is not nourished, protected & promoted how can a new breed of TATA’s & BIRLA’S be created? Excessively powered bankers have become ruthlessly coercive. Many helpless SME’s are dying everyday under the pressure of NPA. Thousands of people are becoming jobless. Lakhs of crores of assets are becoming unproductive and scrap causing great loss to the economy. A breed of entrepreneurs / job creators are being uprooted. Are we marching towards making the country a GLOBAL SLAVE for the foreign multinational companies?

Source :  Sachin Murdeshwar