Tamil Nadu’s move to attract small and medium enterprise

On 9th May 2007, the Government of India (Allocation of Business) rules, 1961 was amended by the President of India to merge the Ministry of Agro and Local industries and Ministry of small scale industries into Ministry of micro, small and medium enterprises (MSME).

MSME has been accepted as the reason for economic growth and sustainable development. One of the main advantages of this ministry is its employment potential at low cost.

SIPCOT involvement:

The Tamil Nadu government is making steps to allot around 1,500 acres of land to help MSME to set up their units in different districts in Tamil Nadu. The State Industrial Promotional Corporation of Tamil Nadu has allocated 20% of the total amount of the huge land base it owns.

Tamil Nadu at present has about 8.51 lakhs MSMEs all over the state and they provide about 59 lakhs people employment. The revenue generated by MSME is around 48,000 crores which is 10% of the state gross domestic product.

Surveys point out that 93.7% use their own capital, 5.2 % use credit from institutions while 2.1% use non-institutional credit to set up their units. If this trend continues it will land the whole sector in a troublesome position. MSME should take advantage of the public procurement policy.

Effects on Real estate:

Real estate is going to have an adverse effect as a result of this new policies and changes adopted by the MSME and SIPCOT. It would have positive and negative impacts. The positive impact would be the development of new residential localities around the allotted land by the Government to house the employees in these units. It could also give opportunities for the development of commercial activities around this residential hub. The negative impact would be the migration of the existing population in the nearby allotted land fearing pollution and other nuisances to other places.