Industrial Policy Resolutions and SSIs

In this post, you will be acquainted with the industry policy resolution and SSIs. Government’s approach and objective to industries in general and SSIs in specific are reflected in Industrial Policy Resolutions.

Industrial Policy Resolution, 1948

You must understand that the government stressed the part of SSIs for composed industrial growth. It was specified that SSIs are predominantly suited for the use of local resources and formation of employment prospects. The main accountability for emerging small industries by making organization has been provided to state governments. Central government surrounds the broad policies and organises the struggles of State Governments for the development of SSIs.

Industrial Policy Resolution, 1956

You must note that it is stated that other than enduring the policy support to cottage, village and small industries by differential taxation or direct-subsidies, the goal of state policy would be that the growth of this sector is combined with that of large scale industry. The emphasis was to recover the economic strength of SSIs. To attain these 128 items were completely held in reserve for production in SSIs, and 166 items were held in reserve for special acquisitions by government from this sector.

Industrial Policy Resolution, 1977

It is important to note that this highlights that whatever can be shaped by SSIs must only be so shaped. The main insertion of policy was actual raise of cottage, village and small industries extensively detached in rural areas and small towns. This rational specified the following things:

(a)     504 items were held in reserve for select production in the small-scale industries.

(b)     The concept of District Industries Centres (DICs) was familiarized so that in each region a single activity could meet all the supplies of SSIs under one roof.

(c)Technological up gradation was emphasised in traditional sector.

(d)     Special marketing preparations through the delivery of services, such as, product adjustment, quality control, market survey, were laid down.

Industrial Policy Resolution, 1980

It is important to note that the policy absorbed on the need of endorsing SSIs through combined industrial development between large and small sectors. Technologically backward districts were recognized for faster growth of existing network of SSIs.

Following measures were specified in the policy:

(a) Investment limit was elevated for tiny, small, and ancillary units to Rs. 2 lakh, Rs. 20 lakh, and Rs. 25 lakh, respectively.

(b) “Nucleus plants” in each technologically diffident district substituted the “district industries centers.” These were to focus on collecting the products of SSIs and to crop contributions needed by large number of small units.

(c) Reservation of items and marketing provision for small industries was to endure.

(d) Obtainability of credit to rising SS units was sustained.

(e) Buffer stocks of critical inputs were to continue.

(f) Agricultural base was to support by providing favoured treatment to agro based industries.

(g) An early cautioning system was to create to circumvent sickness and take suitable remedial measures.

Industrial Policy Resolution, 1990

You must note that the main features of this Resolution are as follows:

(a) It raised the asset maximum in plant and machinery for SSIs.

(b) It shaped dominant investment funding for this sector in rural and backward areas. Also, help was decided to women entrepreneurs for spreading the entrepreneurial base.

(c) Reservation of items to be formed by SSIs was amplified to 836.

(d) Small Industries Development Bank of India was recognized to safeguard satisfactory flow of credit to SSIs.

(e) Stress was repeated to upgrade skill to recover competitiveness.

(f) Special stress was placed on training of women and infancy under Entrepreneurial Development Programme.

(g) Activities of Khadi and Village Industries Commission and Khadi and Village Industries Board were to expand.

Industrial Policy Resolution, 1991

It is essential to know that the basic thrust of this resolution was to simplify regulations and procedures by delicensing, deregulating and decontrolling. Its salient features are:

(a) SSIs were released from certifying for all articles of manufacture.

(b) The investment boundary for tiny creativities was raised to Rs. 5 lakh regardless of location.

(c) Equity participation by other industrial activities was allowable up to a limit of 24 per cent of shareholding in SSIs.

(d) Factoring services were to presentation to resolve the problem of delayed payments to SSIs.

(e) Priority was rendered to small and tiny units in distribution of indigenous and raw materials.

(f) Market campaign of products was stressed through co-operatives, public institutions and other marketing actions and corporations.

Comprehensive Policy Package for SSIs and Tiny Sector, 2000

You should note that the main focus of this policy is as follows:

(a) The exception for excise duty limit raised from 50 lakh to Rs. 1 crore to recover the attractiveness.

(b) Credit related capital subsidy of 12% compared to loans for technology upgradation was provided in specified industries.

(c) The third census of small scale industries by the ministry of SSI was showed, which also enclosed sickness and its reasons in SSI’s.

(d) The limit of investment was enlarged in industry related service and business creativities from Rs. 5 lakh to Rs. 10 lakh.

(e) The pattern of granting Rs. 75000 to each small scale enterprise for gaining ISO 9000 documentation was continued till the end of 10th plan.

(f) SSI connotations were interested to develop and operate challenging laboratories. One time capital grant of 50% was given on repayment basis to each association.

(g) The limit of composite loan was improved from Rs. 10 lakh to Rs. 25 lakh.

(h) A group was established for rationalization of inspection and repeal of redundant laws and regulations.

(i) The coverage of on-going Integrated Infrastructure Development (IID) was improved to protection all areas in the country with 50% arrangement for rural areas and 50% allocating of plots for tiny sector.

(j) The family income eligibility limit of Rs. 24000 was enhanced to Rs. 40000 per annum under the Prime Minister Rozgar Yozna (PMRY).

Industrial Policy Package for SSI, 2001-02

You need to take into consideration that this policy emphasises the following:

(a) The investment limit was enhanced from Rs. 1 crore to Rs. 5 crore for units in hosiery and hand tool sub sectors.

(b) The corpus fund set up under the Credit Guarantee Fund Scheme was increased from 125 crore to 200 crore.

(c) Credit Guarantee cover was provided in contradiction of a collective credit of Rs. 23 crore till December 2001.

(d) 14 items were de-reserved in June 2001 related to leather goods, shoes and toys.

(e) Market Development Assistant Scheme was thrown wholly for SSI sector.

(f) Four UNIDO assisted projects were ordered during the year under the Cluster Development Programme.

Industrial Policy on SSIS, 2003-04

You must understand that the following are the highlights of this endeavour:

(a) 73 items held in reserve for high-class manufacture in the SSI sector were de-reserved in June 2003. These comprise chemical and their products, leather and leather products, laboratory reagents, etc.

(b) Selective improvement of speculation in plant and apparatus from Rs. 1 crore to Rs. 5 crore. It was for 13 items in motionless sector and 10 items of drugs and pharmaceuticals sector, from June 2003.

(c) Banks were absorbed to deliver credit to SSI sector within a notice rate band of 2 per cent above and below their Prime Lending Rates (PLR).

(d) The complex loan limit for SSI was raised up from Rs. 25 lakh to Rs. 50 lakh.

(e) The limit of allowance of collateral condition was raised from Rs. 15 lakh to Rs. 25 lakh on the basis of good path record and financial position of the unit.

(f) The lower limit of Rs. 5 lakh on loans enclosed under the Credit Guarantee Scheme was detached. All loans up to Rs. 25 lakh were made qualified for guarantee cover under the Credit Guarantee Scheme.

(g) 417 specialised bank branches were made working for SSIs.

(h) Third all India census for SSI was conducted throughout the country and its final results were released on January 17, 2004.

(i) 60 clusters were recognized in July 2003 for focused progress.

(j) Small and Medium Enterprise (SME) fund of Rs. 10000 crore was set up under SIDBI to resolve the problematic of insufficient finance for SSIs.

(k) Laghu Udyami Credit Card Scheme was liberalized. In this scheme, the credit perimeter was improved to Rs. 10 lakh from Rs. 2 lakh. But, it was only for borrowers with acceptable track record.

Policy Initiatives on SSI, 2004-05

You must note that the policy initiatives for this year are as follows:

(a) The national command on Enterprises in the Un-organised/Informal Sector was set up in September 2004. It recommended events measured essential for development in the output of these enterprises, compeers of large scale employment prospects, bond of the sector to institutional outline in areas such as credit, raw material supply, infrastructure, technology up gradation, marketing amenities and skill development by training.

(b) 85 items were de-reserved in October 2004.

(c) The speculation limit in plant and equipment was raised from Rs. 1 crore to Rs. 5 crores in October 2004, in reverence of seven items of sports goods to assist in upgrading the technology and improve competitiveness.

(d) The Small and Medium Enterprise (SME) fund of Rs. 10000 crore was started by SIDBI since April 2004, with 80% of the giving for SSI units. The interest rate was 2% below the prevailing Prime Lending Rate (PLR) of the SIDBI.

(e) The reserve Bank of India raised the composite loan limit from Rs. 50 lakh to Rs. 1 crore.

(f) Promotional Package for small enterprises was initiated.

Policy Package for SME, 2005-06

It is essential to note that this policy package covers the following points:

(a) The Ministry of Small-Scale Industries has recognised 180 items for de-reservation.

(b) Small and Medium Enterprises were accepted in the services sector, and were preserved on par with SSIs in the industrialised sector.

(c) The corpus of the Credit Guarantee Fund was upraised from Rs. 1132 crore in March 2006 to Rs. 2500 crore in five years.

(d) Credit Guarantee Trust for Small Industries (CGTSI) was directed to cut short the one time promise fee from 2.5 per cent to 1.5 per cent for all loans.

(e) Insurance cover was prolonged to around 30,000 borrowers, recognised as chief promoters, under the CGTSI. The certain sum would be Rs. 200000 per beneficiary and the best will be paid by CGTSI.

(f) The stress was placed on Cluster Development model not only to endorse manufacturing but also to reintroduce industrial towns and build new industrial townships. The model is now being executed, in nine sectors including khadi and village industries, textiles, handicrafts, handlooms, agricultural products and medicinal plants. Task Prepare a short report on industrial pattern and the Five Year Plans.

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