Trade body KASSIA (Karnataka Small Scale Industries’ Association) on Friday urged the Centre to make use of the huge, unclaimed corpus of ₹1.3 lakh crore available under ESI and PF and extend financial support to 6.5 lakh micro, small and medium enterprises, over two million employees, and 2.5 crore dependents of these industries across Karnataka.
The Union government has been sitting on an unclaimed cash pile — ESI alone has a whopping ₹85,000 crore while PF has another ₹45,000 crore — and it should utilise this money, said KASSIA president R. Raju.
The trade body also demanded that the government announce a revival package for SMEs and MSMEs, as the sector will require some solid financial assistance until business operations resume. As per KASSIA, while the State government has offered support by way of some relief in power bills and removal of penalties, this was not adequate given the enormity of the crisis.
“If this situation continues, at least 25% to 30% of our industry units will wind up operations, which will lead to greater hardship for a large number of people in the State,” cautioned KASSIA. The Labour Department had recently issued notice to SMEs on non-payment/reduction of wages, and this has “demoralised” the entire sector, KASSIA said.
“We had taken up this issue with the Chief Minister, Industry Minister, and the Labour Minister, who promised us that necessary directions would be issued to the officials concerned not to issue notices. We are going through a very tough time and the government should not be doing anything that will destroy the harmony between employers and employees,” Mr. Raju said.
Relief package
Some States have announced relief packages to MSMEs. For example, Madhya Pradesh has announced that factories employing less than 50 workers would get relief from routine inspection. Uttar Pradesh has passed an ordinance to suspend some 13 labour clauses, in order to attract new companies to invest in the State amid the ongoing crisis. KASSIA urged the Karnataka government to explore the possibility to extending some such relief measures.
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