The Tamil Nadu Small and Tiny Industries Association (TANSTIA) has implemented several significant initiatives to promote the growth and sustainability of MSMEs in the state. One such initiative is training and skill development, where TANSTIA has collaborated with the Tamil Nadu Skill Development Corporation to identify sectors with high employment potential. Under this initiative, the association conducts training programs in various districts through local experts, enabling entrepreneurs to acquire the necessary knowledge and skills. Thus, this initiative helps entrepreneurs learn new skills and successfully manage their businesses.
Additionally, TANSTIA also guides entrepreneurs in securing financial assistance. They have partnered with banks to organize training programs that provide MSMEs with information about funding options and processes. Alongside this, the association is actively working with both state and central governments to address industry challenges. They regularly communicate for policy changes and promote these policies among their associations and entrepreneurs, ensuring that they can understand and benefit from them effectively.
The association is also taking steps to ensure timely payments. They have raised their voices for large corporates to make payments within 45 days and supported policies under MSME Act 43BH, which mandates companies to disclose MSME creditors in their balance sheets. Furthermore, TANSTIA organizes programs and seminars in local languages so that small and medium entrepreneurs can easily understand and apply the new policies and procedures in their businesses. In this way, TANSTIA plays a crucial role in empowering the growth of MSMEs in Tamil Nadu. Through these initiatives, TANSTIA supports the MSME sector, promoting their stability and economic development, thereby providing a strong platform for the state's small industries.
Tamil Nadu Small and Tiny Industries Association (TANSTIA), President C.K. Mohan highlighted the importance of adapting to new technologies and changes for every entrepreneur. It depends on their ability to learn new things and invest in them. While older entrepreneurs may not see these changes as necessary, the newer, more educated generation finds it easier to understand. Three things are essential for this: awareness, proper training, and the capacity to invest. Additionally, there should be demand in the market. Together, these factors help an entrepreneur make the right decisions.
Discussing the training program, Mohan mentioned that as an association, they have already partnered with the Tamil Nadu Skill Development Corporation and identified areas with high demand. Employment opportunities depend on where demand is high. They provide training in those areas throughout the state. In all districts, they conduct training with experts from the field to share knowledge.
Similarly, they also teach entrepreneurs how to secure financing for their endeavours. They conduct extensive training in collaboration with bankers. This continuous effort is ongoing. While the initial percentage may be low, Mohan estimates that everything will change at least within the next five years.
When asked how the association is helping to convey the benefits from the government to the industry, Mohan explained that this is the primary role of all associations. It starts with the formulation of policies; for example, today, they communicate the difficulties faced by state governments, the central government, and banks, and request changes in policies to benefit the industry. Once this is done, they bring these policies back into the industry and disseminate them among their other associations in their own language, as understanding is crucial. While it is easy to hold a large seminar, participants might not grasp the concepts. Therefore, they personally visit various locations to explain the benefits of these policies and how they can be adopted effectively.
Regarding delayed payments, he explained that it is a lengthy process. The Indian government has made several attempts in this regard. Initially, an MSME Facilitation Council was established, but it lacked significant authority or judicial power. Some benefits were achieved, but not to the extent required. Afterward, the government introduced the TReDS (Trade Receivables Discounting System) platform; however, this has not been entirely successful in the past ten years, as it is a platform where companies receive discounts on their payments.
Whenever I go to discount my bills, the buyer's consent is essential. Herein lies the problem: large corporates are unwilling to agree to make payments through the TReDS platform. Therefore, it is necessary to make this mandatory. Initially, they mandated this for companies with a turnover of 500 crores, which we stated was insufficient. It should be made completely mandatory. Now, they have reduced this to 250 crores. They are trying, but it is still inadequate.
This is an ongoing process where we continuously inform them that even with a turnover of 10 crores, companies should participate in this platform. Payment should be mandatory within 45 days. Another issue is income tax. Recently, an amendment was introduced in 43BH, requiring large companies to show which creditors they have in their balance sheets. This means that payments to MSME creditors must be identifiable. Here, due to GST identification, they will be able to see if payments exceed 45 days. If so, it will not be considered an expense but rather income, for which they will have to pay tax. This is also a good deterrent to ensure that large corporates do not delay payments. These methods are being developed and worked upon, but further improvements are necessary. As I mentioned, small businesses also harm one another. Therefore, mandatory payments are essential. Until this is achieved, the problem will persist.
Conclusion
The Tamil Nadu Small and Tiny Industries Association (TANSTIA) has undertaken several significant initiatives to promote the growth and sustainability of MSMEs in the state, including training and skill development, collaboration in financial assistance, and policy improvements. Through these initiatives, TANSTIA provides entrepreneurs with essential knowledge, financial guidance, and support to ensure timely payments. They also ensure awareness campaigns are conducted in local languages to inform small and medium entrepreneurs about new policies. Thus, TANSTIA is making a significant contribution to the economic growth of Tamil Nadu by empowering the MSME sector.
