CHENNAI: Tamil Nadu’s interim budget has earmarked Rs 1,943 crore for the Micro, Small and Medium Enterprises (MSME) department, underscoring the state’s bid to deepen its industrial base and startup ecosystem.
Presenting the allocations, Finance Minister Thangam Thennarasu said the state-run Tamil Nadu Startup and Innovation Mission has rolled out flagship initiatives such as the Tamil Nadu Startup Seed Fund and a dedicated Space Technology Fund, while work is under way to establish a broader Fund of Funds to crowd in private capital.
Tamil Nadu, home to more than 4 million registered MSMEs, has seen bank credit of Rs 10.7 lakh crore flowing to the sector over the past five years. To expand industrial capacity, the Tamil Nadu Small Industries Development Corporation has developed 18 new industrial estates during this period, generating 3,735 jobs.
Support for traditional industries remains a parallel focus. Under the Kalaignar Kaivinai Thittam, nearly 23,900 artisans across 25 handicraft categories have received approvals, enabling Rs 405 crore in credit and Rs 83 crore in subsidies. The state has also begun work on a gold jewellery park in Coimbatore at a cost of Rs 81 crore.
To ease cash-flow constraints, Tamil Nadu has launched the TN TReDS platform, benefiting 1,461 enterprises through transactions worth Rs 5,171 crore so far.
C K Mohan, president of Tamil Nadu Small and Tiny Industries Association, the apex body of all district associations, Industrial Estate Associations and Product Manufacturers Associations of the state, said, “The MSME capital subsidy allocation has neither increased nor been released on time.
The Rs 150-crore provision is inadequate and should be raised to at least Rs 500 crore. Despite significant growth and investment in the sector, the MSME department’s overall allocation remains unchanged.”
Ramkumar Shankar, president, Madras Chamber of Commerce and Industry, said the focus on MSMEs and startups – through TANSIDCO industrial estates, TN TReDS platform, and the growing startup ecosystem supported by TANSIM – reinforces TN’s entrepreneurial strength.
Interim budget makes MSMEs feel small
Industrial operators from MSMEs said that the interim budget did not have any new announcement and the funds allocated to the sector continues to be meagre.
“With the upcoming assembly elections, it was widely expected that many attractive announcements would be made. But staying within the definition of an interim budget, the report, barring attractive announcements, is a continuation of the plans of previous years in an effort to maintain the relatively high growth achieved by Tamil Nadu,” said M Ravindran, an MSME industrialist from Coimbatore.
“The allocation of funds to MSMEs continues to be meagre – only Rs 1,943 crore which is not enough for the 40 lakh MSMEs in Tamil Nadu. This is much less than the allocations for other sectors,” he said, adding that the burning issues currently faced by small and medium enterprises, such as the uncontrollable rise in the prices of raw materials and increase in electricity bills have not been addressed.