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Small
Scale Industries in the 1990 Policy
The
investment ceiling in plant & machinery for small scale
industries (fixed in 1985 at Rs. 35 lakhs) was raised to Rs.
60 lakhs and correspondingly, for ancillary units from Rs.
45 lakhs to Rs. 75 lakhs, and for Tiny units from Rs. 2 lakhs
to Rs. 5 lakhs. In order to enable small scale industries
to play an important role in the total export effort, such
of the small scale units which undertake to export at least
30 per cent of the annual production by the third year will
be permitted to step up their investment in plant & machinery
to Rs. 75 lakhs.
With
a view to improving competitiveness, the small entrprise would
be assisted in modernisation and upgradation of technology.
A number of technology ecntres, tool rooms, Process and Product
Development Centres, testing centres, etc. would be set up
under the umbrella of an apex Technology Development Centre
in Small Industries Development Organiasation.
A
special cell would be established in SIDO and State Directorates
of Industries to assist women entrepreneurs.
Special
marketing organisations at the Centre and State levels shall
be created to assist rural artisans in marketing their products
and also in supply of raw materials. Besides, providing concessional
credit, training facilities and free consultancy to groups
of artisans will also be provided
The sector has been substantially
delicensed. Further efforts would be made to deregulate and
debureaucratise the sector with a view to remove all fetters
on its growth, reposing greater faith in small and young entrepreneurs.
All statutes, regulations and
procedures would be reviewed to ensure that their operations
do not militate against the interests of the small and village
enterprises.
Investment limits in plant and
machinery of Small scale industries, Ancillary units, Tiny
units and Export – oriented units to Rs 60 Lakhs, Rs 75 Lakhs,
Rs. 5 Lakhs, and Rs 200 Lakhs respectively.
Service sub-sector is a fast
growing area that needs to be supported. All Industry-related
service and business enterprises will be recognised as small
scale industries and their investment ceilings would correspond
to those of Tiny enterprises.
‘Tiny’
enterprises would be eligible for additional support on a
continuing basis, including easier access to institutional
finance, priority in the Government Purchase Programme and
relaxation from certain provisions of labour laws.
Funding through National Equity
Fund Scheme will cover projects upto Rs. 10 Lakhs for equity
support (upto 15 per cent). Single Window Loan Scheme has
also been enlarged to cover projects upto Rs 20 Lakhs with
working capital margin upto Rs 10 Lakhs.
3.0 FINANCIAL SUPPORT MEASURES
Emphasis would shift from subsidised/cheap
credit, and efforts would be made to ensure adequate flow
of credit and the quality of its delivery.
Other industrial undertakings
may participate in upto 24% of the equity of an SSI.
A Limited Partnership Act would
be introduced to enhance the supply of risk capital to the
small scale sector. Such an Act would limit the financial
liability of the new and non-active partners/entrepreneurs
to the capital invested.
A beginning has been made towards
solving the problem of delayed payments to small industries
by setting up of ‘factoring’ services through Small Industries
Development Bank of India (SIDBI).
National Small Industries Corporation
(NSIC) would concentrate on marketing of mass consumption
items under common brand name and organic links between NSIC
and SSIDCs would be established.
Industry associations would
be encouraged to establish sub-contracting exchanges, in addition
to strengthening the existing ones under the SIDO. Emphasis
would also be laid on promotion of a viable and competitive
‘component’ market.
Industry Associations would
be encouraged and supported to establish quality counselling
and common testing facilities. Technology Information Centres
to provide updated knowledge on technology and markets would
be established.
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