Number of sick medium units up 44% in FY'12

NEW DELHI: There was a sharp 44 per cent spurt in the number of medium firms that became sick during 2011-12, although micro and small units witnessed a decline of 5 per cent, Parliament was informed today.

The number of sick units in the medium category rose to 3,044 in 2011-12, from 2,117 units in the previous year, Minister of State (Independent Charge) for Micro, Small and Medium Enterprises K H Muniyappa said in a written reply to the Rajya Sabha.

Delhi registered 660 cases of sick units in the medium category during 2011-12, followed by Madhya Pradesh - 430, West Bengal - 297, Punjab - 186 and Chhattisgarh - 168.

Although reasons for the rising sickness in the medium units category was not provided, according to industry officials they expanded rapidly in the past 6 years and are finding it difficult to sustain and repay loans.

Referring to the Reserve Bank data, Muniyappa said the number of sick micro and small units declined to 85,591 in 2011-12, compared to 90,141 enterprises a year-ago.

Among the states which have registered maximum number of sick units in this category, Maharashtra topped the list with 10,136 such units, followed by West Bengal - 8,816, Tamil Nadu - 8,301, Gujarat - 6,257 and Odisha - 5,899, he said.

The contribution of MSMEs to overall exports has declined to 36 per cent from 40 per cent earlier owing to less demand from domestic as well as global markets.

The sector contributes over 8 per cent to the country's Gross Domestic Product ( GDP) and accounts for 45 per cent of the manufacturing sector. There are around 3.6 crore such enterprises, employing over 8 crore people.