SCHEME FOR SETTING UP OF TESTING CENTERS
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| Circular | | | Form |
1. Title
Scheme for setting up of testing centres by industries associations & modernisation/ expansion of quality marking centers of State Governments-2001.
2. Preamble
A.
Govt. of India in the Ministry of Small Scale Industries And Agro And Rural Industries introduced a scheme in 1995 to render financial assistance to Industries Associations of SSIs for establishing quality counselling and common testing facilities, with a view to :
Encouraging the Industries Associations to establish and offer testing facilities in the area of testing of raw-materials/components and of finished products as per relevant standard specifications so that small scale units could be helped in improving quality of their products and become licensed users of ISI quality marking logo.
Offering consultancy services to SSI Units in improving quality, standardisation and providing necessary information relating to specifications of raw materials and finished products.
The financial assistance under this Scheme was equal to 50% of the cost of machinery and equipment, restricted to Rs. 20 lakhs in each case, provided the State Govt. also committed itself to release matching funds to the Association, and the Association provides fully developed infrastructure to accommodate testing centres and also meets the recurring cost of running the Centre. This Scheme has also been extended to States for modernisation and expansion of the existing Quality Marking Centres run by the Industries Department of the State Govts. since November, 1997.
During the past 5 years of its operation, the scheme has not shown the desired results for the reasons that:
Some of the State Govts. could not commit the matching contribution due to budgetary constraints,
the upper limit of Rs. 20 lakhs as Central assistance has not been found attractive enough,
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the procedural delay in releasing the funds to the Associations through States, and many of the Associations, in spite of Central/State financial assistance have not taken steps to obtain the accreditation either from BIS or the National Board of Accreditation for Laboratories and Calibration (NABL).
3. Modification in the Scheme
Govt. of India has therefore reviewed the scheme, and it has been decided to modify it by raising the upper limit of Central assistance from the existing Rs. 20 lakh to Rs. 50 lakh without any condition of matching contribution by the State Govt. This is also in tune with the package of incentives for SSIs announced by the Hon'ble Prime Minister while inaugurating the National Conference of SSIs on 30th August, 2000 at New Delhi. The package includes interalia one time capital grant equal to 50% of the cost of testing machinery and equipment restricted to Rs.50 lakh to the Industries Associations, which wish to set up and operate testing laboratories, provided such laboratories are of international standards.
4. Coverage of the modified Scheme
The modified scheme will cover the Testing Laboratories established by Industries Associations including Chambers of Commerce, Industrial co-operatives registered under the Societies (Registration) Act or under any statutory Act. It will also cover expansion/modernisation of the existing Centres under the aegis of State Governments, State Government funded autonomous bodies or by Industries Associations.
5. Objectives
The objective of the Scheme is to promote setting up of testing centers to offer facilities mainly to Industrial units including SSI units located in the state for testing the quality of raw-materials, components and the end products as per the relevant standard specifications within the ambit of testing facilities available at the Centres, with a view:-
To help the SSI units in obtaining ISI Marks for their products.
To offer consultancy services with a view to improve the quality of products.
To promote standardisation and provide necessary information in regard to material specifications and specifications for end products.
To extend quality assurance and assist promotional institutions and testing laboratories such as the Bureau of Indian Standards, Export Inspection Agency, National Productivity Council, and other Government and non-Governmental organizations.
To promote the total quality management concept among small scale sector industrial units and to assist the units in obtaining accreditation for ISO-9000/BIS 14000.
6. Eligibility Criteria
All Industry Associations including Chamber of Commerce and Industries and Industrial Co-operatives interested in availing one time grant-in-aid under this scheme have to be registered under the Societies Registration Act, 1860 or any other statute.
The applicant constitutes an exclusive Governing Council to look after the working of the testing Centre having representation from the concerned State Directorate of Industries, where testing laboratory is proposed to be set up .
All employees of the Testing Centre will have full functional freedom.
The Industry Associations will prepare a detailed project proposal (DPR) for setting up of the testing laboratory of international standards indicating the financial arrangements made by them for construction and electrification of building and for the matching contribution for the procurement of testing machinery and equipment financial viability of the project, and working capital etc. DPR should contain a statement showing cash flow of 5 to 6 years during which period laboratory should become self-sustaining.
In case the Associations/State Govts. have availed themselves of any other grant-in-aid from the State/Central Govt. for setting up of the testing centers including the assistance under the earlier Scheme they may indicate so and prepare a fresh project proposal for expansion of testing centers/modernisation of Quality Marking Centre to international standards and forward the same to the Office of the DC(SSI) through the Director of Industries of the State with their recommendation. However, before making themselves eligible under the present scheme, they will furnish the Utilisation Certificate in the prescribed form GFR19A, duly audited by the Chartered Accountant, for the entire amount received by them to Development Commissioner (SSI) through Director of Industries of state.
7. Maximum amount payable under the modified Scheme
A capital investment of Rs. 1 crore in the testing machinery & equipment is considered adequate for setting up of a testing laboratory with reasonable modern facilities for a few products. Therefore, maximum amount of Govt. of India grant- in-aid under this scheme would be 50% of the cost of testing equipment and machinery installed in the laboratory of the testing centre subject to an upper limit of Rs.50 lakh as one time grant-in-aid.
8. Fund requirement
SIDO HQ Office will prepare the estimates of grant-in-aid to be disbursed to eligible Associations every year, and to start with the budget provision of Rs. 0.50 crore for the financial year 2001-02 has been made. A fund of Rs 1.00 crore has been year marked in BE for the year 2006-07.
9. Implementation of the Scheme
A. Registered Associations will appoint a Cheif Executive Officer (CEO) and other required staff to establish the testing centers for products manufactured by their member units.
B. Project
Detailed project report indicating the land and building requirements, the testing machinery and equipments required along with their cost, working capital requirement and financial arrangements, personnel requirement and viability etc. will be submitted by the Industry Association/Quality Marking Center to the respective State Directorate of Industries for their examination.
For examination of DPR and verifications of expenditure details, a Committee under the Chairmanship of Commissioner/Director of Industries and Director of concerned Regional Testing Centers will be formed. The Committee may co-opt any other representative to assist it.
Director of Industries of State Govt., after scrutiny of the proposal, will forward the same with his recommendations to the Office of the DC (SSI), Nirman Bhavan, New Delhi.
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The recommended applications received from the Directorate of Industries of the respective States will be considered by a Screening Committee under the Chairmanship of AS&DC(SSI) and will comprise of members from Deptt. of Science & Technology (DST), BIS, IF Wing of the Ministry of SSI&ARI, IA(MODN.) in the Office of DC(SSI), Director of Industries of the concerned States, Director, RTC in the Office of DC(SSI) will be Member Secretary. The Committee will approve the proposal to be assisted in future in principle.
After completion of the civil construction and electrification, and the placement of supply orders for testing equipment and machinery, the Association/ quality marking center of the State Govt. will subsequently furnish proof of having placed the orders for the procurement of machinery and testing equipment for the laboratory indicating the schedule of arrival along with relevant documents, invoice etc to the Directorate of Industries for verification of the details while requesting for the release of grant-in-aid. The Committee formed for verification as indicated at Para 9 b (ii) will forward the applications to the Office of the Development Commissioner,(Small Scale Industries) for further processing and will enclose a certificate confirming the fact that the Association/Quality Marking Centre has incurred the expenditure from its own resources amounting to 50% of the share or more towards the cost of machinery and testing equipment.
The Central Govt. grant-in-aid of the 50% of the value limiting to Rs.45 lakh will be released in two installments of Rs. 22.50 lakh each to the Association/ quality marking center of the concerned State Govt. depending upon the purchase progress made by these Agencies.
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The release of subsequent installment by the Central Govt. will be subject to the submission of the Utilisation Certificate by the Industry Associations/ State Govts. in GFR -19 A for the already released amount of Govt. of India's grant-in-aid in their favour duly certified by the Directorate of Industries of the concerned State Govt.
The final installment of the Govt. of India approved grant-in-aid limited to maximum of Rs. 5 lakhs and will be released only after the testing laboratory of the Industry Association/ State Govt. obtains accreditation from BIS/NABL/any other reputed international Organisations or their authorized representatives and submits Photostat copies of the accreditation certificate, the details of expenditure etc. duly certified by a Chartered Accountant and submission of utilization certificate on quarterly basis. for the entire amount of grant in aid received by the Association/Quality Marking Center of the State Govt.
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The Utilisation Certificate for the last installment of Govt. of India grant-in-aid released to the Association/ State Govt. shall be submitted in the prescribed form GFR - 19 A within a period of one year from the date of release of installment of the Central grant-in-aid.
For inviting applications under the Scheme, the Regional Testing Centre Division at HQ Office of DC(SSI) will advertise in the leading newspapers periodically and send copies of the paper cuttings to all Commissioner/Director of Industries.
10. Conditions for the release of Funds
Grant-in-aid from the Govt. of India to the maximum amount of Rs.50 lakh or 50% of the cost of the testing machinery and equipments, whichever is less, shall be considered for release if the following conditions are satisfied:
The Industry Association will constitute the Governing Council comprising executive members of the Association. State Government will also be given representation in this Governing Council.
The Industry Association will not dispose of any of the assets created out of the grant-in-aid received from the Central Government without Government's written permission.
In case, the Association fails to abide by this condition, necessary proceedings to recover the same as land revenue will be initiated against it and its office bearers. An undertaking in this regard will be given by the Industries Association in the prescribed form.
The Industry Association/ State Govt. will submit the duly certified Utilisation Certificate to the Directorate of Industries of the concerned State Govt. The Directorate of Industries of the concerned State Govt. after certifying the Utilisation Certificate will forward the same to the Office of the DC(SSI) New Delhi.
Central Government grant-in-aid is only towards the cost incurred for the purchase of testing machinery and equipment and will not be utilized to meet the recurring expenditure or any other expenditure of capital nature.
11. Duration
The Scheme will be in operation for an initial period of 5 years w.e.f. 2001-2002 and extension thereafter will be decided taking into consideration, the performance of the scheme and its success. After launch of this Scheme, the existing scheme as mentioned in para 1 will be subsumed in the modified scheme, and shall cease to be in operations.
12. Budget Head
The expenditure on the scheme during 2002-07 will be debitable to Budget Head 2851.54.00.31 grant-in-aid under Demand No. 71
- Ministry of SSI&ARI of Govt. of India.