PM announces incentives for SSI

AUG 30: Prime Minister Atal Behari Vajpayee today announced a slew of incentives for Small Scale Industries (SSI) including raising excise...

AUG 30: Prime Minister Atal Behari Vajpayee today announced a slew of incentives for Small Scale Industries (SSI) including raising excise duty exemption limit from Rs 50 Lakh to Rs one crore, a Rs 447 crore financial package for the handloom sector and steps to dismantle inspector raj.

“You must accept the challenge of globalisation and improve your product quality to effectively deal with forces of competition,” Vajpayee told the first National Conference on Small Scale Industries. Congratulating the entrepreneurs for their achievement, he said the small scale sector has responded to government’s initiatives by registering a higher growth rate than that of overall industrial sector.

Acknowledging that the sector had suffered due to inadequate access to credit availability, Vajpayee said the government has decided to raise the limit for composite loans from Rs 10 lakh to Rs 25 lakh. “Entrepreneurs will now be able to secure term loans and working capital from the same agency,” he said, adding the industry related service and business enterprises with a maximum investment of Rs 10 lakh would qualify for priority lending.

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Vajpayee also announced setting up of an experts group to streamline inspections including repeal of laws and regulations applicable to the sector that have since become redundant. The group would present its recommendations within three months, he said.

In her address, the Minister of state for small scale industries, Vasundhara Raje, pointed out that “even today the single-man unit is subjected to a minimum of 37 inspections, 52 laws and 116 forms and registers.”

The Minister appealed for a single legislation for the small scale sector which would reduce procedural hassles and do away with the “inspectorism”. In this context, Vajpayee invited suggestions from the industry to ameliorate their problems.

Bearing in mind the urgent need for technology upgradation, Prime Minister also announced a capital subsidy of 12 per cent for investment in technology in select sectors. The Prime Minister said the government will set up an inter-ministerial committee of experts to define the scope of technology upgradation and sectoral priorities.

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To encourage total quality management, he said the government would continue for the next six years, granting of Rs 75,000 to each unit that obtains ISO 9000 Certification. A one time capital grant of 50 per cent to small scale associations who wish to develop and operate testing laboratories would be granted provided they were of international standards, Vajpayee said.

Extolling the performance of the khadi industries, Vajpayee said the government is working out a new comprehensive package to strengthen Khadi and Village Industries that will further upgrade the skills of these workers. This included provision of 20 per cent of projected annual turnover to be given as working capital loan, continuation of concessional lending facilities and preference for loans for technology upgradation.

Vajpayee said the government has also approved the Rs 447 crore Deendayal Hathkargha Protsahan Yojana to be jointly implemented by Centre and States for supporting the handloom sector. The scheme provides a comprehensive financial and insfrastructural support to weavers and handloom organisations.

Vajpayee who gave away awards to SSI entrepreneurs turning in impressive performance said the government is committed to supporting their endeavours to meet the challenge of globalisation. “Small entrepreneurs, rural artisans and cottage industry have done the country proud in the last 50 years,” he said adding they formed one of the pillars of the national economy.