 Minutes of 47th SSI Board Meeting
SMALL SCALE INDUSTRIES BOARD
47TH MEETING VIGYAN BHAVAN
M I N U T E S
1.1 The 47th meeting of the Small Scale Industries (SSI) Board was held on 4th July 2002 at Vigyan Bhawan, New Delhi and was chaired by Smt. Vasundhara Raje, Hon'ble Minister of State (Independent Charge) for Small Scale Industries. The meeting was attended by Members of the SSI Board, including Ministers from State/Union Territories, Chairman of the Department Related Standing Committee, Chairman KVIC, officials from Central and State Governments, representatives from banks & financial institutions, NSIC, KVIC and a large number of SSI Associations from all over the country. The list of participants is at Annexure-I. 1.2 The Agenda & Notes for the meeting were circulated in advance to the Members of the Board. The Draft Law for Small Enterprises, suggested by the Administrative Staff College of India (ASCI) and the Executive Summary of the Working Group on Small Scale Industries for the 10th Plan formed part of the Agenda Notes. 1.3 The meeting commenced with a welcome address by the Member Secretary of the SSI Board, Shri Suresh Chandra, Development Commissioner (SSI). The meeting was inaugurated by Smt. Vasundhara Raje, MOS (SSI). Thereafter two presentations were made for the benefit of the Members of the Board. The first was by ASCI, Hyderabad on the Draft SSI Law and the second by the Chief Executive Officer of the Credit Guarantee Trust Fund for Small Industries on the Credit Guarantee Scheme. The deliberations of the Board were initiated on conclusion of these presentations. 1.4 During the Business Session, Ministers of various State Governments and representatives of Industry Associations put forward their views on issues concerning the sector. Towards the end of the day, the Secretary (SSI), Shri Ashok Pradhan, summed up the deliberations of the meeting.  2.1 Shri Suresh Chandra, DC (SSI), welcomed the Members and Special Invitees to the meeting of the Board. While highlighting the importance of the Board as a forum for debate, deliberation & coordination, he referred to the vision provided by the Study Group constituted under Dr. S.P. Gupta. Shri Chandra also invited suggestions on the Draft Law submitted by ASCI. 2.2 In her inaugural address, Smt. Vasundhara Raje, MOS (SSI), emphasized the need for collaboration between the Central Government, State Governments and SSI Associations for addressing the needs of the SSI Sector. She highlighted the initiatives taken by the Ministry in presenting before the stakeholders a Draft Law on the SSI Sector as well as the 3rd Census of SSI Units which was due to begin shortly. She sought assistance from all States/UT Governments and SSI Associations for the smooth conduct of the Census. She informed the house that the Ministry had targeted that the results of the Census be made available in the public domain by March 2003. Two presentations were made during the meeting. The first was by Dr. Gautam Pingle of ASCI on the Draft Small Enterprises Development Bill. ASCI had been commissioned by the Ministry of SSI to work on a Single Law for the SSI Sector. The presentation highlighted the various aspects of the Bill, redressal measures and the concerns sought to be addressed through the law. Shri N. Venkat Subramanyam, CEO of the Credit Guarantee Fund Trust for Small Industry, made a presentation on the Credit Guarantee Scheme, in which he highlighted the current status of the Scheme and also elaborated upon the emerging trends in mutual guarantees in the country. As per the data furnished by the CEO, 29 member lending institutions have now joined with the Trust and over 4900 cases have been guaranteed till June 2002, covering loans of over Rs. 51 crores. 4.1 A new format for sequencing speakers was operationalised this year. It was decided to go region-wise, beginning with the Association from a State followed by the Minister from that State. National Associations were slotted based on the location of their head offices. For the 47th meeting, it was decided to begin with the North-East and proceed in a clockwise direction. The 48th meeting would begin with the East and so on. Accordingly, MOS (SSI) invited the representatives from the North-East to present their views and suggestions. 4.2 NORTH-EAST All Assam Small Scale Industries Association 4.2.1 Shri Dilip Phukan, President of the All Assam Small Scale Industries Association, raised the issue of opening of offices of certain Central agencies in the North-East. He submitted that the presence of these institutions was necessary to give service to small industries within the region. Presently the nearest offices are located at Kolkata or further away, which involves considerable travel time, harassment and costs. In particular, he requested for offices of the Director General -Quality Assurance (DGQA), Central Drug Standards Control Organisation (CDSCO) and the Central Food Technologies Research Institution (CFTRI). He also highlighted the problems of communication for the North-East as a result of which goods produced within the region were becoming uncompetitive and lacked access to markets. Government of Assam 4.2.2 Shri Bhubaneshwar Kalita, Minister of Industries, Government of Assam, began by thanking the Government of India for the industrial policy for the North-East, which he said had delivered tangible results. He sought extension of the transport subsidy scheme to 2007 and requested that one Industrial Growth Centre or an IID Centre be sanctioned for each district of the State with 100 per cent grant from Government of India. He submitted that the National Equity Fund and the Credit Guarantee Scheme had been non-starters in the State and concrete action was required to give them momentum. The low credit-deposit ratio in the state at 34% was a cause of concern and he suggested that SSI bank branches be set up in each district of the State. He highlighted the problem of sickness of small industries and the need to rehabilitate such sick units. Government of Arunachal Pradesh 4.2.3 Shri Tsering Gyurme, Minister of Industries, Government of Arunachal Pradesh, highlighted the need for a conducive environment for the spread of industrialization within Arunachal Pradesh. In particular, there was a need for the Government of India to work out special incentives for increasing generation of power within the State, for which there was considerable potential. Alongside a liberal credit regime, the establishment of bank branches in each district and sub-divisional headquarters of the State was of immense importance. He also brought up the issue of entrepreneurship and skill training which was extremely relevant for Arunachal Pradesh, since most entrepreneurial activity had been taken up by first generation entrepreneurs who required guidance and support. Government of Mizoram 4.2.4 Shri K. Thangzualla, Minister of Industries, Government of Mizoram, highlighted Mizoram's geographical location and the lack of basic infrastructure. This has imposed constraints on the rapid industrialization of the state. He raised certain issues for which he requested Hon'ble MOS (SSI) to use her good offices to expedite the matter with other Ministries/Agencies of Government of India. In particular, he referred to the Bamboo Processing Unit taken up by the State for which Rs. 1 crore had been received from the Planning Commission from the non-lapsable pool but subsequent instalments were yet to be released. Work on the Industrial Growth Centre, taken up within the State, had also come to a standstill. These issues required intervention of the MOS (SSI). Government of Nagaland 4.2.5 Shri I. Imkong, Minister of Industries, Government of Nagaland, highlighted various issues of concern to the State and its SSIs. He requested that SIDBI's Guwahati office expedite their appraisal of the proposals for IID Centres in the State of Nagaland. He mentioned that the strengthening of the Branch SISI at Dimapur is essential and once again requested that the Branch Institute be upgraded to a full SISI and a suitable compliment of staff provided for the office. He stated that the Government of Nagaland had already offered land for this purpose. Shri Imkong requested that loans extended by the State Industrial Development Corporations be made eligible for coverage under the Credit Guarantee Scheme and the funding pattern for the Testing Centres & Assistance to Entrepreneurship Development Institutes (both schemes run by SIDO) be changed from 50:50 to 90:10 for the North-East with 90% coming from the Government of India. This, he submitted, would be equitable & just and was on the lines of funding offered by the Ministry of Textiles. Government of Tripura 4.2.6 Shri Pabitra Kar, Minister of Industries, Government of Tripura, stated the intention of the State Government to set up a Mini Tool Room within Tripura and requested for early sanction of the proposal submitted by the Government of Tripura to SIDO in this regard. He highlighted the urgent need for strengthening of SISI Agartala in terms of manpower and infrastructure as well as the need for upgrading and strengthening the local offices of National Small Industries Corporation (NSIC) and NEDFi in Tripura. Conceding that credit flow to various States in the North-East, including Tripura, had remained a problem, he requested that the MOS (SSI) and the RBI take a meeting with banks in the region for augmenting credit flow. 4.3 EAST FOSMI 4.3.1 In his presentation to the Board, Shri J.K. Paul, President of Federation of Small & Medium Industries (FOSMI), brought up the issue of delay in payments to SSI vendors of large units which had been referred to the BIFR. Once a large unit is referred to the BIFR, all payments due from the unit are stopped and in this scenario the worst sufferers are the small scale units. He argued for formulation of sector-wise policies within the SSI sector. Shri Paul highlighted the substantial increase in the ISI Marking fees, which were causing concern to the SSI sector. Government of West Bengal 4.3.2 Shri Bansagopal Chaudhuri, Minister of Industries, Government of West Bengal, highlighted the pressing need for upgradation of existing industrial estates, many of which were today in a state of considerable decay. He requested that the Ministry of SSI make provisions for upgradation of such estates. He also sought intervention of MOS (SSI) for liberalizing the provisions of the ESI Act since these were causing considerable hardship to small businesses. He suggested that the Census of SSIs be held regularly every 10 years. Orissa Small Scale Industries Association 4.3.3 Shri Bimal Kishore Mohapatra, President of Orissa Small Scale Industries Association, highlighted the need for different policies for better off and poor States within the Union, with less developed States being given greater say in national/local advisory boards. He argued that the NSIC must emerge as a nodal marketing promotion agency. Sub-contracting exchanges must be allowed to form consortia for participation in tenders. He also requested that punitive provisions be brought into the Delayed Payments Act. Government of Orissa 4.3.4 Shri Kanak Vardhan Singh Deo, Minister of Industries, Government of Orissa, brought up the need for sector-specific interventions in the SSI sector. He suggested that the service sector be covered under the Technology Development & Modernisation Fund and Export-Oriented SSI units be allowed a higher investment ceiling of Rs. 3 crores. The permissible limits under the Mahila Udyam Nidhi Scheme should be raised to Rs. 50 lakhs. Coverage under the Credit Guarantee Scheme must be for all commercial banks and State Financial Institutions (SFCs). At the same time, the revival of SFCs is necessary so that credit to the SSI sector becomes available on easier terms. He recommended private participation in ESI Hospitals. Jharkhand Small & Tiny Industries Association 4.3.5 Shri G.P. Dalmia, President of the Jharkhand Small & Tiny Industries Association, brought out certain issues concerning the Government of Jharkhand and requested the Minister of Industries of Jharkhand to address these issues. He also submitted that the infringement of the policy of reservation by medium & large industries needs to be checked effectively. In his opinion, taxation related measures would go a long way in discouraging such illegal production. He also submitted that some of the benefits envisaged under the Purchase & Price Preference Policy, such as supply of tender documents free of cost, waiver of earnest money deposit and a 15% price preference should be included in the Single Law for the SSI Sector. He further requested that the Government take effective steps to increase availability of credit to the SSI sector in a phased manner to bring it to the level of 20% of production. Government of Jharkhand 4.3.6 Shri Pashupati Nath Singh, Minister of Industries, Government of Jharkhand, in his intervention mentioned that it was imperative that the natural resources available in abundance within the State of Jharkhand are utilized for the benefit of the people at the earliest. In this context, the State had already formulated its first industrial policy in 2001and notified the same in August 2001 itself. He enumerated the various steps taken by the State Government to improve infrastructure availability as well as other services for SSIs in the State. He submitted that SIDBI's schemes for the SSI sector could be more successful if the issue of refinance from SIDBI could be sorted out. He also requested for strengthening the infrastructure at SISI Ranchi and Branch SISI Dhanbad. Finally, Shri Singh requested that the PMRY target for Jharkhand be restored to the level of 9000 allowed for 2001-02. Bihar Industries Association (Special Invitee) 4.3.7 Mr. K.P.S. Kesari of the Bihar Industries Association, highlighted the large scale sickness prevalent in SSIs in Bihar. He recommended that a diagnostic study be conducted within the State of Bihar on sickness. In respect of National Equity Fund, he submitted that since the scheme was tied to SIDBI's refinance it has not picked up to the desired extent. He also requested that the associations from the State should be given due representation when the SSI Board is next constituted. Indian Council of Small Industries 4.3.8 Shri S.S. Singhania, President of Indian Council of Small Industries, made a brief intervention through which he drew attention to a meeting held with various associations on the previous day and the resolutions adopted by them. These resolutions highlighted the concerns of the sector and were being sent separately to the MOS (SSI). 4.4 SOUTH ALEAP 4.4.1 Smt. K Rama Devi, President of Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP), spoke about the need to bring statutory obligations into the proposed Single Act. This, she felt, would go a long way in providing quality service to the SSI sector. She also highlighted the need for easy access to data on sources of machinery & technology. She requested that Government may consider exemption of import duty on specified machineries. In respect of women entrepreneurs, NSIC may look into the possibilities of reducing delay in processing of cases. Tax concessions for large units for sourcing from small would go a long way in promoting ancillarisation. Skill upgradation programmes, particularly in respect of garments, were necessary. Government of Andhra Pradesh 4.4.2 Shri B. Gopalakrishna Reddy, Minister for Small Scale Industries, Government of Andhra Pradesh, informed the House about sector-specific industrial estates developed by the State Government in the State. He stressed that more efforts should be directed for the development of IT and Bio-technology sectors. He also pointed out that various departments are pursuing with their own programmes and convergence of these programmes is required. He appreciated Government of India's decision to conduct the 3rd Census of SSIs and suggested that the parameters for sickness, employment generation and the number of days the units remain closed should be covered in the Census. He raised the issue of guarantees being sought for under schemes like PMRY and sought intervention of Government of India in this respect. Chattisgarh Laghu & Sahayak Udyog Sangh 4.4.3 Shri Harish Kedia, President of Chattisgarh Laghu & Sahayak Udyog Sangh, complimented the MOS (SSI) for regular conduct of SSI Board meetings and the leadership provided to the SSI sector as a whole. He brought up the issue of old cases of delayed payments which were not covered by the current Delayed Payments Act and requested for suitable amendments so that these cases could be covered. He also suggested that a conference of Labour Ministers be called at Delhi for debating SSI related issues. Government of Chattisgarh 4.4.4 Shri Mahendra Karma, Minister of Industries, Government of Chattisgarh, described the Small Enterprises Development Bill as a milestone in the development of SSI sector. He highlighted various initiatives taken by the Government of Chattisgarh for promoting small scale industries. Apart from developing industrial estates, a significant step taken by the Government is the stipulation that 60% of Government purchases must be from local sources. This, the State Government feels, would go a long way in promoting local industries within the State. In addition, penal provisions for delayed payments are envisaged. The Hon'ble Minister requested that the Government of India support various institutions for the SSI sector in the three new States and the North-East. KASSIA 4.4.5 Shri S. Babu, President of Karnataka Small Scale Industries Association (KASSIA), advocated the need for early enactment of Limited Partnership Act so that increased opportunities for funding become available to SSIs. While welcoming the Draft Bill on the SSI Sector, he recommended that the role of industry associations must be specified in the Bill. Associations must receive direct funding from Government to take up various activities. A statutory role for associations would, in his opinion, go a long way in strengthening the SSI sector. TANSTIA 4.4.6 Shri A. Selvaraj, President of Tamil Nadu Small & Tiny Industries Association (TANSTIA), stressed on the need for a public-private partnership for small scale development. He argued that in the Draft SSI Bill, the role of SSI associations must be brought in clearly and unambiguously. Registration of SSI units should be made through associations and financial assistance be provided for associations by the Government. For this purpose benchmarking of associations may be done. In respect of sickness and default by borrowers in the SSI sector, Shri Selvaraj pleaded for safeguards in respect of attachment of property so as to exclude the residential house of the SSI owner. Government of Tamil Nadu 4.4.7 Shri R. Vilvanathan, Minister for Rural Industries, Government of Tamil Nadu, highlighted the package of incentives offered by the State for promoting industrial investment in each of the Panchayat Union areas in the State. The State Government has also announced a focused training programme for imparting training in entrepreneurship development to a large number of women entrepreneurs. He sought assistance from the Government of India in this endeavour. Shri Vilvanathan also sought monitoring of the schemes announced as part of the Comprehensive Policy Package so that a beneficial impact is seen in the State. He highlighted the problems of the match industry in the State, requesting rationalization of excise limits with SSI limits. He also sought preference for tea made in the cooperative sector in the Tamil Nadu in tenders issued by the Ministry of Defence. Finally, he welcomed the introduction of the Small Enterprises Development Bill. Government of Karnataka 4.4.8 Shri Roshan Baig, Minister for Small Scale Industries, Government of Karnataka, raised the issue of definition of the small scale sector in the context of rapid changes in the overall business environment. He suggested a move away from an investment linked definition to a turnover/employment driven definition, suggesting that units employing upto 500 persons and with a turnover of Rs. 10 crores be declared as SSIs. There was a need for preparing sector-specific strategies for technology upgradation since this is an area which has suffered during the recent past. Similarly, infrastructure needs to be upgraded at sector-specific locations. He welcomed the effort made by ASCI in preparing a Single Law for the sector. He also highlighted the various steps taken by the Government of Karnataka for assisting SSIs. 4.5 WEST Goa Small Scale Industries Association 4.5.1 Shri Keshav Kamath, President of the Goa Small Scale Industries Association, suggested that the investment limit for SSIs should be restored to Rs. 3 crores. He also pleaded that the excise exemption limit of Rs. 1 crore be raised to Rs. 3 crores. He stressed on the importance of building up a national brand for the SSI sector to assist in marketing of their goods. Government of Goa 4.5.2 Shri Ramrao G. Dessai, Minister for Industries, Government of Goa, raised the need for an adequate policy framework for rehabilitation of sick units. He highlighted the various steps taken by the Government of Goa for promoting SSIs within the State. He requested that the Government of India take suitable measures for complete implementation of the report of Dr. S.P. Gupta Committee. Supporting the Draft Small Enterprises Development Bill which, in his opinion, had a number of welcome features, he cautioned that the role of the Central Government in respect of the new legislation should be strictly that of a facilitator. Gujarat State Small Industries Federation 4.5.3 Shri Maganbhai H. Patel, President of Gujarat State Small Industries Federation, brought out the need for greater focus on technology upgradation in the sector. He also mentioned that skill development is a priority and must be taken up in right earnest so that an impact can be made in respect of productivity. All India Stainless Steel Association 4.5.4 Shri K.D. Chiniwala, President of All India Stainless Steel Association, raised the issue of denial of registration to a large number of units in the stainless steel industry. He submitted that no exemption was available in respect of pollution clearance in respect of new units and this was hampering the growth of the industry. Government of Madhya Pradesh 4.5.5 Shri Narendra Nahata, Minister for Commerce & Industries, Government of Madhya Pradesh, was of the opinion that while meetings of the SSI Board are a welcome step, it was also necessary to have meetings at the regional level where greater time and opportunity become available for interaction on region specific issues. In particular, there is a need to review the credit-deposit ration (CD Ratio) at the State level as the flow of credit needs to be augmented. He informed the House about the initiative taken by the Government of Madhya Pradesh in making available all employment related schemes under one roof at the district level. On a request by the MOS (SSI), Smt. Vasundhara Raje, Shri Nahata agreed to send the details of the same to her office. Laghu Udyog Bharati 4.5.6 Shri S.S. Agarwal, President of Laghu Udyog Bharati, highlighted the need for amendments in the Partnership Act to make it SSI-friendly. He highlighted the problem in respect of recognition of land as collateral. He sought teeth for the Delayed Payments Act since large businesses had begun using the Act as an excuse to even deny job work. Raising the issue of service tax, he referred to Ministry of Finance's decision to collect the same and sought intervention of MOS (SSI) in this regard. In respect of excise, Shri Agarwal stressed the need to remove inconsistencies as well as the need for a uniform policy in respect of excise, which should be based on the announcement made by the Prime Minister on 30th August 2000. Government of Maharashtra 4.5.7 Shri Patangrao Shirpatrao Kadam, Minister for Industries, Trade & Commerce, Government of Maharashtra, highlighted the various measures taken by the State Government for promoting SSIs in the State. In particular, he highlighted the dismantling of the Inspector Raj in the State. In the context of the problem of dumping of foreign goods, which was affecting SSI units, he sought removal of hurdles for the sector through easier availability of credit, lesser electricity charges and incentives for technological upgradation. He suggested that Government of India take up with RBI the effective monitoring of credit flow to the SSI Sector. The high refinance rates of SIDBI affect the ability of State Financial Corporations (SFCs) to loan to SSIs at reduced rates and this needs to be addressed. Government of Rajasthan 4.5.8 Dr. Chandra Bhan, Minister of Small Scale Industries, Government of Rajasthan, thanked the MOS (SSI) for her efforts in ensuring duty exemption on marble and granite industries. He submitted that while SSIs may want protection, the focus must now be on promotion. He sought liberalization of the provisions of the SSI-MDA Scheme to cover new exporters. He requested that in the context of removal of QRs and dumping of foreign goods, there was a crying need for a level playing field for SSI units. The definition adopted by SIDO for small scale units must be applied across the board in agencies like Central Excise, Factories Act, Provident Fund Act, banks and labour laws. Dr. Chandra Bhan submitted that it was necessary to define clearly the medium sector, the large sector and the mega sector so that a correct picture becomes available. Laghu Udyog Bharati, Jaipur Unit (Special Invitee) 4.5.9 Shri O.P. Mittal, National Vice-President of Laghu Udyog Bharati (Jaipur Unit), highlighted the issue of Railways giving priority to load defined in rakes rather than in wagon loads. He submitted that a rake comprised of over 50 wagons and it was virtually impossible for any SSI unit to supply a complete rake load to the Railways for transport. Considering their scale of operations, SSIs were in a position to give load in terms of wagons but were suffering now on account of this. He sought the intervention of the MOS (SSI) to sort out this problem. 4.6 NORTH Administrator, Chandigarh 4.6.1 His Excellency, Lt. General (Retd.) J.F.R. Jacob, Administrator of the Union Territory of Chandigarh, in his presentation, brought out the emerging potential of Chandigarh as an investment destination. He mentioned that the Administration had been giving priority to high-tech industries in the IT sector. As the hub of the North-West, Chandigarh has a significant presence on the IT map. Almost Rs. 100 crores of exports of software is originating from Chandigarh. This is being assisted by the plan of the Administration for an optical wired city, which will provide high speed bandwidth. He welcomed the proposed Small Enterprises Development Bill 2002. Federation of Punjab Small Industries Association 4.6.2 Shri V.P. Chopra, President of Federation of Punjab Small Industries Association, highlighted the dangers inherent in the proposals of the Employees Provident Fund organisation to reduce its threshold limit from 20 to 10 and to cover even temporary and part-time workers. He stressed that there was a need for SSI units to upgrade their technology and for this they require guidance. He sought encouragement to the private sector for developing industrial estates. Government of Punjab 4.6.3 Shri Ashwin Sekhri, Minister of Industries, Government of Punjab, informed the House about the rapid increase in the number of SSI units in the State of Punjab. He highlighted the special problems of the border State of Punjab in general and three border districts in particular, which have also been affected by the recent tensions on the border. In his opinion, a special package was necessary to compensate the entrepreneurs on the pattern of Jammu & Kashmir. The Government of Punjab has already initiated the process of simplification of procedures for SSI units. He highlighted the need for restructuring of SFCs for which financial support from SIDBI and Government of India was necessary. State focal points needed to be strengthened to assist in international partnerships. FIWE 4.6.4 Smt. Rajni Aggarwal, President of Federation of Indian Women (FIWE), brought up the need for formation of marketing consortium of SSI units. She submitted that that the Comprehensive Policy Package of August 2000 had nothing on women entrepreneurs and the same lacuna had continued even in the Draft SSI Bill prepared by ASCI. Special emphasis needs to be laid on export efforts and higher Government purchases from the SSI sector. If need be, 50% of purchases should be earmarked from SSIs. WASME 4.6.5 Shri V.N. Prasad, Sr. Economic Advisor of World Association for Small & Medium Enterprises (WASME) submitted that there was a need of a separate target for the SSI Sector within the priority sector lending programme of banks. Mutual guarantee societies should be encouraged and SSIs trained in the use of Intellectual Property Rights (IPRs) in the emerging knowledge-based economy. In his opinion, the DC(SSI) should function on the lines of the Small Business Administration of USA and this should be made possible through the Small Enterprises Development Bill. IIA, Uttar Pradesh 4.6.6 Shri Ramji Suneja, President of Indian Industries Association (IIA), Uttar Pradesh, began by offering his comments on the Draft Law of ASCI. He felt that registration is an activity best performed by industry association and not the General Manager (DIC) or the Director of Industries. The issue of sickness had not been tackled in the proposed law and it was necessary that an exit policy find place in the law. He also felt that the Director of Industries in a State would be too junior to implement the provisions of trade protection envisaged in the Draft Law. In respect of delayed payments, Shri Suneja requested for amendments in Section 227(A) of the Companies Act, so that the Auditor's Report reflects payments outstanding to SSIs. IIA, Uttranchal 4.6.7 Shri Pankaj Gupta, Chairman of Indian Industries Association (IIA), Uttranchal, highlighted the spread over PLR charged by banks which has increased significantly in recent times. He requested that VAT be introduced and CST withdrawn. In respect of the Draft SSI Bill, he submitted that this Bill should supercede all other acts applicable to the SSI sector. Toy Association of India 4.6.8 Shri Vishnu Swaroop Agarwal, President of the Toy Association of India, welcomed the initiative of the Ministry of SSI in launching a national programme for development of toy industry. He regretted that while a number of positive steps had been taken for the toy industry, the imposition of excise duty in the current Budget was retrograde. The fact that branded toys were not eligible for excise exemption, if manufactured in urban areas, meant that there was a greater burden on the industry. He also highlighted the problems in respect of electronic toys where 12% tax was payable. Association of Small & Medium Electronic Industries 4.6.9 Shri Nalin Kohli, President of Association of Small & Medium Electronic Industries, stressed on the need for a simpler process of registration for SSIs on the lines applicable to DGTD units. A holistic policy on services was necessary and a threshold limit in respect of service tax needed to be defined. Venture capital for small knowledge based industries needed to be given priority. He suggested that the Ministry of SSI should set up Special Economic Zones (SEZs) exclusively for SSI exporters, since those SEZs established till date have not proved to be useful for SSIs. Confederation of Indian Industry 4.6.10 Shri A.K. Kaul, Chairman of CII Delhi State Small Industries Council, congratulated the Ministry of SSI on the Draft SSI Bill and suggested that measures to facilitate reorganization of businesses and a chapter on technology upgradation should find place in the Bill. Hand Tools Manufacturers Association 4.6.11 Shri Sukhdev Raj, President of Hand Tools Manufacturers Association, thanked the Ministry of SSI for enhancement of investment ceiling to Rs. 5 crores which had fulfilled a longstanding demand of the sector. This was facilitating technology upgradation in the sector. He submitted that the 12% subsidy admissible under the Credit Linked Capital Subsidy Scheme which is presently capped at Rs. 4.8 lakhs may be increased to Rs. 12 lakhs. He requested that the NSIC should come forward with information on machines and suppliers for identified clusters such as those of Hand Tools. Federation of Tiny & Small Industries of India 4.6.12 Shri Joginder Kumar, President of Federation of Tiny & Small Industries of India, regretted the imposition of Central Excise on the bicycle industry. He highlighted the problems created by the calculation of monthly interest by banks and recommended that this be withdrawn. He pointed out that the sale of DPEB licenses was attracting sales tax in the State of Punjab. He requested that SIDO, SISIs and DICs put their efforts together to develop clusters on bicycle industries. FIEO 4.6.13 Shri Ranjit Lall, Director General of Federation of Indian Exports Organisation (FIEO), informed the House that 30% of the member of FIEO were SSIs and it has been their experience that it was necessary that the integration of SMEs into larger trading houses be encouraged. In this respect, he highlighted the potential offered by a private label fair identified by FIEO where matchmaking between large overseas buyers and Indian SMEs in respect of items which could be sold across the counter could be encouraged. This fair is held twice a year and FIEO would facilitate participation of Indian SMEs in the event. FISME 4.6.14 Shri Anil Bhardwaj, Secretary General of Federation of Indian Micro and Small & Medium Enterprises (FISME), complimented the MOS (SSI) for the dereservation of 51 items and the selective increase in investment limit. He suggested that MOS (SSI) may convene a meeting of the State Ministers to resolve problems in respect of the functioning of Industry Facilitation Councils. The SSI-MDA Scheme should encourage group tours rather than limit itself to individual tours. Complementing the Ministry for the SIDO Portal, he suggested that information in respect of marketing initiatives, especially with regard to trade fair participation, be made available on the Portal. SSI representation on the Export Promotion Councils needed to be ensured. The scheme for reimbursement in respect of ISO 9000 should be extended to ISO 14000 and HACCP. The definition of SSI needed to be reviewed in the context of changing times. FASII 4.6.15 Shri J.M. Pawar, President of Federation of Association of Small Industries of India, complimented the Minister for her initiative in bringing together the Ministry and various associations. In respect of the Draft SSI Bill, he appreciated the efforts put in and highlighted the fact that this had been a long standing demand of FASII and it had itself presented a draft act many years ago. Sh. Gurpal Singh, CII (Special Invitee) 4.6.16 Shri Gurpal Singh of Confederation of Indian Industry (CII), reiterated the need for a hassle free environment for small businesses. He complimented the Ministry for bringing forth a Draft Small Enterprises Bill. Shri Sudarshan Sareen (Special Invitee) 4.6.17 Shri Sudarshan Sareen highlighted the need for effective action to dismantle Inspector Raj. He mentioned the initiatives recommended by the National Commission on Labour, which had submitted its report recently and felt that a Single Labour Act for the SSI Sector would be of great help. Shri V.S. Narasimhan (Special Invitee) 4.6.18 Shri V.S. Narasimhan advocated the need for sector-wise policies within the SSI arena. He felt there was a need to revitalize institutions supporting SSIs in the country. He submitted that the Credit Guarantee Scheme be promoted with increased vigour than in the past.
5.1 On hearing from State Governments and Industry Associations, the Chairperson, Smt. Vasundhara Raje, requested various agencies to respond to the concerns expressed by the Members. Reserve Bank of India 5.2 Shri Vepa Kamesam, Deputy Governor of RBI, in a detailed intervention listed out the actions taken by RBI in the recent past and dwelled on the overall credit scenario. The points made by him included:- MINISTRY OF LABOUR 5.3 Shri G.S. Ram, Labour & Employment Adviser, Ministry of Labour, highlighted the earlier attempts at simplification of labour laws for the SSI sector, beginning with the Act of 1988. He recalled the efforts made through the interaction between the Ministry of Labour and DC(SSI) last year and the issue of executive instructions through the MOS (SSI). This is now being supplemented through the report of the National Commission of Labour, which has recommended the enactment of a Bill called the "Small Enterprises Employment Relations Act". The 30th Session of the Indian Labour Conference shall be taking up the problems and challenges being faced by the small scale sector. The Steering Committee set up by the Planning Commission for the 10th Five Year Plan has also made specific recommendations with regard to small scale sector and simplification of forms. The Steering Committee has recommended the need for replacement of forms and inspections by self-certification, coupled with more stringent punishment in case mis-information or wrong information is furnished. Small Industries Development Bank of India 5.4 Shri P.B. Nimbalkar, CMD of SIDBI, while responding to the concerns of the various members of the Board, submitted that given SIDBI's reach, it alone cannot achieve much unless it works constructively with commercial banks. He submitted that there was a need for change of mindset for bankers in respect of collateral free loans under the Credit Guarantee Scheme. In respect of a sub-target within the priority sector lending for SSIs, he recommended the creation of a separate fund called "Small Industry Development Fund" on the lines of the Rural Industry Development Fund where shortfalls in meeting the target could be deposited. The amount in this fund could be utilized for infrastructure development. For improving the credit flow to the SSI sector, the revitalization of the SFCs on the recommendation of the Gupta Committee Report is essential. Responding to feedback on the National Equity Fund Scheme, the CMD stated that the scheme operates through SIDBI's refinance so as to allow SIDBI to monitor the accounts that are opting for NEF. SIDBI is also taking steps to convert the Technology Bureau of Small Enterprises (TBSE) into a technology bank. 6.1 On conclusion of the deliberations of the Board, Shri Ashok Pradhan, Secretary (SSI), summed up the day's deliberations. He categorized the various points raised by the Hon'ble Members into five broad categories. These are as under:- On the basis of the deliberations of the 47th meeting of the SSI Board and the issues that emerged, the following major decisions were taken:- 7.1 Sector-specific initiatives need to be taken within the overall SSI umbrella. 7.2 The revival of SFCs must be given priority so as to augment credit flow to SSIs. 7.3 The enactment of the Limited Partnership Act should be expedited. 7.4 While the Draft Small Enterprises Development Bill has been appreciated, Members are to respond with their commends/feedback by 15th August 2002. 7.5 Ministry of Finance be requested to review the excise duty imposed on toys & bicycles and extend excise exemption on branded goods to urban areas. 7.6 Credit Guarantee Scheme be given greater publicity and the Credit Linked Capital Subsidy Scheme be reviewed to ensure that they pick up momentum. 7.7 SIDBI be requested to expedite appraisal of proposals under the IID Scheme. 7.8 Ministry of SSI take up the issue of representation of SSIs on Export Promotion Councils. 7.9 SSI Board may meet more frequently or alternatively review meetings be conducted at regional level, involving State Governments, SSIs Associations and financial institutions.
|
