Rising fuel prices have added to business distress, says K. Bhasker Reddy
Banks remain uncomfortable lending to micro, small and medium-sized manufacturing enterprises despite the Centre’s unveiling of guidelines to improve access to credit for MSMEs affected by the pandemic, said the president of the Federation of Telangana Chambers of Commerce and Industry (FTCCI) K. Bhasker Reddy.
Since the pressure of non-performing assets (NPA) appears to be the source of banks’ reluctance, the Reserve Bank of India must provide guidelines that such loans will not be classified as NPA. “The banks are going [then] come and give, ”Reddy said in an interaction after he and Anil Agarwal were unanimously elected President and Senior Vice President of the Trade and Industry Bodies Co-ordinating Body for 2021-2022, respectively.
Noting that manufacturing MSMEs were badly affected in the second wave of the pandemic, he said that instead of implementing the COVID-19 relief programs through a few nationalized banks, the government should have done appeal to all banks and financial institutions. Access to bank credit, however, is not the only problem for manufacturing MSMEs, he said, adding that rising fuel prices have also added to their stress. The cascading effect necessitated the need for another round of relief measures for the industry, he said.
Founder and Managing Director of Creamline Dairy Products, a company that has since been part of Godrej Agrovet, Mr. Reddy was a member of the FTCCI Board of Directors for 15 years and in 2020-21 his Senior Vice President. Regarding his plans for the FTCCI, he said the focus would be on integrating more members and doubling their number to 6,000 in three years. Another area of interest would be to offer more services to members, in particular technology and data as well as support systems. The FTCCI would like to partner with a number of organizations, whether they are government sponsored institutions or industry organizations.
In terms of new facilities, it started working to set up an Alternative Dispute Resolution (ADR) center in partnership with NALSAR University and partnered with Telangana government to create a skills development center. In addition to 3,000 direct members, the FTCCI has 25,000 indirect members.
“We will work closely with the Telangana government to unleash the economic potential of the state and create skills development programs that generate jobs for overall growth and make the state the most desirable investment destination.” said Mr Reddy.