Sick SMEs knock on Telangana government door to turn black

Thousands of units turned sick mainly due to the power holidays imposed in undivided AP between 2008 and 2014.

Hyderabad: Over 15,000 sick small and medium enterprises (SMEs) in the Telangana state are waiting for a helping hand from the government under its Telangana Industrial Health Clinic Ltd (TIHCL), launched last June.

The government granted a corpus of Rs 100 crore to TIHCL, which is not enough to support those industries. The debt burden of sick units was pegged at Rs 19,000 crore due to which banks were declaring them as NPAs and putting them up for auction. Each unit had an average debt burden of Rs 4.5 lakh.

Most such units could be revived if loans of Rs 5 lakh to Rs 20 lakh were extended as they had the potential to create jobs for 30,000 people.

TIHCL was registered with the Reserve Bank of India as a non-banking financial company to mobilise funds from the Centre, the state government, financial institutions, high net worth individuals and industry for revival of sick units. TIHCL is yet to mobilise funds and launch operations on a full scale.

Thousands of units turned sick mainly due to the power holidays imposed in undivided AP between 2008 and 2014. After the formation of Telangana state in June 2014, the government resolved the power crisis in six months and provided 24x7 power to all sectors, but the sick units could not recover.

With this, banks declared them as NPAs, seized their assets and machinery and put them up for auction. Even after auction, there were 15,774 units which were under lock by banks.


The government launched undertake a study to revive the small and medium units and provide subsidised loans and marketing and branding support.

“The revival scheme is applicable only for units engaged in the manufacturing sector. Wilful loan defaulters will not be considered. Units that turned sick due to genuine reasons are eligible. The clinic will provide loan up to Rs 5 lakh for 3 per cent interest rate for each unit which should be repaid in six months.

The revived units will be considered as new units and the government will provide subsidies and incentives for three years,” said an official in the industries department.

Sources added that Chief Minister K. Chandrasekhar Rao and industries minister K.T. Rama Rao recently approved norms and the government would soon issue orders brining the revival scheme into operation.

( Source : Deccan Chronicle. )
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