In Coimbatore and Tirupur, crucial manufacturing zones in South India, the policies of both state and central governments have drawn sharp criticism from Micro, Small, and Medium Enterprises ( MSMEs ). These enterprises, vital to the region’s economy, have faced significant challenges due to various government measures.
The implementation of demonetization and the introduction of GST by the central government have particularly impacted MSMEs in Coimbatore, often referred to as South India’s Manchester, and in Tirupur, known as the country’s knitwear hub. The recent decision by the DMK-led state government to raise electricity tariffs for commercial establishments has further exacerbated the situation.
Representatives of MSMEs in Coimbatore report that around 40% of businesses have shut down over the past seven years, with many entrepreneurs being forced to become laborers. The ongoing issues stemming from GST have also contributed to their struggles.
“While the state government has temporarily suspended peak hour charges following protests, MSME associations emphasize that this move doesn’t fully address their concerns,” stated a spokesperson for the Coimbatore Tirupur Districts Micro and Cottage Entrepreneurs Association. They are demanding a complete rollback of the electricity tariff hike and other favorable tariff adjustments to ensure the sustainability of their operations.
Similar sentiments are echoed in Tirupur, where MSMEs assert that the increase in electricity tariffs is their primary concern, overshadowing even the challenges posed by GST. With approximately 50% of MSMEs in the sector already closed due to previous economic measures, stakeholders are calling for concrete policies to revive the industry.
The President of Tirupur Exporters And Manufacturers Association ( TEAMA ) criticized the state government for reneging on its promises of support and instead imposing higher electricity costs. He emphasized the need for swift action to mitigate further losses, particularly in light of reduced consumer purchasing power.
Furthermore, MSME associations have expressed disappointment in the lack of advocacy from political representatives, including MPs from major parties in the region. Despite ongoing discussions and representations, they feel their concerns have not been adequately addressed.
As the issues continue to impact MSMEs profoundly, industry leaders urge both state and central governments to prioritize policies that support the sector’s recovery and sustainability.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
