Another Gimmick? Cabinet Ordinance For MSMEs Fails to Consider Bank Loan Documentations

Thursday, 26 November 2020


Another Gimmick? Cabinet Ordinance For MSMEs Fails to Consider Bank Loan Documentations

G Plus News | July 04, 2020 15:30 hrs

A slight recapitulation of the claims made by the Minister of Industries and Commerce, Chandra Mohan Patowary, would bring to the mind the Namami Brahmaputra. 

The tall claim then was that the Brahmaputra would be dredged from Sadiya to Dhubri; national highways would be constructed on the banks of the mighty river. Experts had then and even now rubbished the claim terming such an exercise impossible. Claims were again made during Advantage Assam leading the people of Guwahati to have visions of river taxis dropping people off at the airport. 

It is no wonder now that Patowary’s latest claims on industrial development in the state since 2016 are mostly looked at as nothing but gimmicks.

His latest recent move which has created a controversy in the state is a cabinet ordinance which allows use (and conversion) of land for micro, small, and medium (MSME) enterprises to set up industries on the basis of just a self-declaration — without the requirement of any “permission, clearance or licence” for three years. The ordinance is yet to be notified or receive the Governor’s assent. 

But the announcement has drawn criticism from the Opposition as well as from various other organisations in the state. Though the decision raised questions regarding environmental hazards and indigenous land rights, the main question that arises is whether the ordinance will help the people of Assam in any manner?

Activist and senior journalist, Manjit Mahanta talking to G Plus said, “It is another nautanki of the Assam government. They might have come up with this ordinance but how will the people of Assam get finance to start their industries? Has any thought been given to that?” 

Mahanta said that a self-declaration might help them avoid seeking permissions from the various government departments but the banks will surely require all these documents and permissions to sanction their loans. 

A city-based bank manager, talking to G Plus under condition of anonymity, said that the banks will require all the documents and collaterals for providing loans. He said that as the ordinance is not yet notified, the banks are unaware of it to that extent. But even if it is notified, the banks follow a particular process for providing loans and they cannot compromise on their documentation processes. 

Reacting to this issue, cabinet minister Chandra Mohan Patowary, during a press conference held on Friday last said that he can just ask the banks to provide loans to the Assamese entrepreneurs.  

Allegations have apparently now surfaced mainly from organisations opposing the ordinance that the minister has taken a U-Turn on certain factors of the ordinance after protests broke out across the state.  

Manjit Mahanta said that initially when the ordinance was announced Patowary had claimed that lands held by indigenous people could be given to outsiders and with a self-declaration, MSME industries could be set up. But during the press conference held on 3rd July, the minister said that only land owners of Assam could set up industries. Patowary also said, “Land cannot be sold and agricultural land cannot be used for setting up industry.” He also claimed that heavy industries cannot be set up with a simple self-declaration. 

Till 3rd July, these things found no mention. Thus it is surmised that Patowary has taken a U-Turn after witnessing state-wide protests against the ordinance. 

A person has to self-declare that he is setting up an industry at a particular location owned by him. The applicant has to file the declaration in the form of an application either online or physically to the office of the Commissioner of Industries. 

“After checking the application, the Commissioner of Industries will acknowledge the self-declaration. That acknowledgement letter will itself be a license to start the industry,” said Patowary adding that after three years the owner of that industry will get a time of 6 months to procure all the permissions and documents which are otherwise required.  

On enquiring why the ordinance was passed so hurriedly and during a time when people are suffering because of the pandemic in the state, the minister said that because of the pandemic many people who were working outside have returned to their native places. Such people might think of settling down here and starting a business or a small industry. This ordinance, according to him, will help them. 

There might be opposition about environmental hazards and indigenous land rights because of the ordinance but the main question remains is where will people get finance to start the MSME industries? 

Will banks not require the documents or other collaterals before providing loans for the purpose? Will the government answer these questions or keep promoting schemes and ordinances which are mostly being viewed as gimmicks for the upcoming assembly election? 

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