Dimapur, October 3 (MExN): The Business Association of Nagas (BAN) today said that every effort must be given in supporting the State Government in implementing the SARFAESI Act 2002 in sync with provision of Article 371A(1)(a)(iv).
“While we have already missed the bus in oil exploration, yet we will continue to call on Government for taking up in seriousness for the cause of the present and future generation,” BAN stated in a press release from its President L Mongkum Jamir and General Secretary Dr Yan Murry.
In this regard, the association said that the “contentions” put forth by NBA (Nagaland Bar Association) against implementation of Act 2002 need “serious deliberation on the context of state’s economic condition.”
According to the BAN, under the banks may issue notices in writing to the defaulting borrower only after the account had been classified Non-Performing Assets where the borrower defaults payment for 90 days and only after which the borrower is served 60 days notice to discharge the liabilities.
The remedy of appeal to Debt Recovery Tribunal is available under section 17 and 18 of the Act, against notice for possession and enforcement of security interest, it pointed out.
While we respect NBA for its yeoman services, it is equally important to uplift the professions of businesses and entrepreneurs who are solely responsible for job creation while contributing to the economy of the state, it added.
In this regard, BAN contended that whatever it is putting forward, are purely on merit and on personal experiences. For too long, the State has been reeling under economic stress due to the unprecedented neglect of Naga businesses by the successive governments and Banks and financial institutions (BFIs), it highlighted.
BAN cannot afford to remain dormant and we can’t remain silent when our economic condition are been crumbling to rock bottom, it said.
According to the BAN, four engines to keep the economy going - consumption, investments, exports, and the government.
Of these, the government’s contribution has fiscal constraints and thus, finance is the main fuel of every business, no matter what size, it noted.
Influx of cash can be used for multiple purposes ranging from enhancing working capital, expansion, purchasing new assets, replenishing stock, hiring more staff or refinancing to pay off an existing debt, it said.
Absence of enough capital can be dire for businesses looking to grow and expand and enterprises opt for external funding to incorporate new technology and purchase assets, it said, adding, “Access to finance promotes the entry of new firms and innovative activities, thereby stimulating competition and efficiency.”
Entrepreneurs are always looking for opportunities to spread out while enterprises need finance to start up a business, run and expand their business, it highlighted.
Unfortunately many businesses, especially small establishments don’t have the resources to shoulder the expense and the consequence of not receiving a business loan for a firm is quite drastic, it said.
Without banks giving out any personal loans, business loans and financial assistance to their borrowers, the amount of money put into investments diminishes and the financial markets underperform, it added.
Hence, without finance there is no business and without business the economy is dead, BAN asserted.
According to the association banks’ failure to finance businesses results in two types of unemployment - directly as firms cannot hire more employees, and indirectly, due to low demand from the “newly unemployed consumers which leads to lower production from enterprises.”
The cyclical effect results in “demand-deficient unemployment,” a situation when an enterprise has to let go of its current employees or stop employing new individuals as demand for their product is low.
Accordingly, it contended that bank’s failure to finance enterprises has a significant ripple effect on a nation’s economy.
To keep the ship afloat and ensure that all the operations are running smoothly, businesses therefore need to have enough working capital, it said.
Implying that Nagaland is in a situation where the State Government doesn’t have enough revenue to support entrepreneurs and businesses on one hand, while banks are not extending loan because of non-implementation of SARFAESI Act, it asked, “Should our state continue to reel under salaried economy of government servant alone?
What about the economy? BAN posed. “Are we not indulging in systematically finishing the present and future entrepreneurs and businesses in Nagaland by trying to deny the main lifeline for businesses –which is Finance.”
To this end, BAN argued that Nagas are “too focused in Article 371(A)” and missed out the “larger picture which causes enormous losses to the state and we remain as what we are today with a free rider mentality.”
Hence, the association contended, “We cannot afford to miss the bus” on the SARFAESI ACT (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002).
