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Tuesday, Jul 09, 2002

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Plea to raise turnover bar for SSIs to Rs 10 cr

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IN an era of global competition, the status of small-scale industries (SSIs) need to be redefined to ensure that the units with considerably high investments in modern technology and those that have significant scale of operation are brought under the ambit of the SSIs, the State Minister for Small Scale Industries, Mr R. Roshan Baig, has said.

It would thus be logical that units employing 500 persons and with a turnover of up to Rs 10 crore be declared as small-scale sector industries.

Making this suggestion at the meeting of the 47th SSI Board held in Delhi recently, the Minister said that the removal of quantitative restrictions and dereservation of several items coupled with global standards of quality and competitiveness would mean that a much larger investment than the defined limits of up to Rs 1 crore was essential to qualify as the SSI sector.

With the necessity to induct modern technologies, the sector would have to incur heavy expenditure on upgradation of its works facilities, products and processes and economies of scale with significant improvement in quality and lower tariffs, Mr Baig said adding that "it is suggested that all industrial units employing 500 persons and with a turnover of up to Rs 10 crore be declared as small-scale sector industries".

Mr Baig, who assumed charge of the Small Scale Industries portfolio in the recent State Cabinet reshuffle, highlighted the increasing pressure being faced by the SSIs in the light of the external competitive environment arising from the multilateral trade regime. He said special focus needed to be given for technology upgradation in the SSI sector for which he suggested that a sector-specific strategy for technology upgradation be prepared with institutional financing support to achieve the objective. He stressed the need for the Centre to create a technology upgradation fund to be used for the upgradation of products and processes in those sectors in which the country or States had strategic advantage.

Mr Baig also emphasised that the technology upgradation fund should be driven by the market needs of industries and also supported with funding by the State Governments.

Mr S. Babu, President of the Karnataka Small Scale Industries Association (KASSA), appreciated the Centre's step in providing the definition for tiny sector and felt that a similar initiative was needed for micro-credit and also for the medium scale industries. This would remove the ambiguities of the SSI's place in the economy. Mr Babu said there was a need for enacting Limited Partnership Act, as proposed by KASSIA. The statute will infuse greater confidence among the funding institutions to provide larger volume of assistance to SSIs for their upgradation.

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