The Hindu Business Line : Lack of demand hits Bengal small sector

ABOUT 43 per cent of a total of 1.25 lakh permanent registered small-scale units covering various industry segments, have remained un-operative in West Bengal due to lack of demand for their products.

Among these units, a section of them are seasonal in nature. This was revealed here on Friday by Ms Mira Pandey, Principal Secretary in the State's Department of Cottage & Small Scale Industries.

Although 57 per cent of the total permanent registered units are operating, Ms Pandey observed that many of them might find it difficult to compete once WTO regime becomes fully operative from mid-2005. She said that the State had two types of registration procedure, one permanent and the other provisional. Taking into account both categories, the number of registered small units in the State would be about 3.25 lakh.

She said that most of the small-scale units were independent in nature. At the most, a total of 125 units in Durgapur and Asansol industrial belts operate as ancillary to large industries in that belt. There was a strong possibility of these units being revived as more jobs were expected to be generated by large-scale units in the same area.

Speaking at an interactive session on `Small-Scale Industries in West Bengal: Problems & Prospects', Ms Pandey said local small-scale units were facing restricted buying support because they did not maintain quality, cost and the despatch schedule. She advised promoters of these units to modernise their plant so that they could produce at competitive cost and improve productivity.

She said metal-based industries were doing well in the small-scale sector. There were about 11,000 registered companies in this category in the State. Fresh investments were coming in a big way into sponge iron and foundry projects. Similarly, food processing units, hosiery and garment sectors were well poised to leap forward because many units in these sectors were modernising.

Under the small-scale sector, the State has a total of 7,249 food-processing units and 5,123 hosiery/garment manufacturing units.

Her department is convinced that the maximum limit of capital outlay for a small-scale unit should be revised to the range of Rs 5 crore instead of Rs 1 crore now. She felt the knowledge-based industries should be treated as small-scale industry, de-listing them from service sector. The State Government has already taken up the matter with the Union Finance Ministry and the Reserve Bank of India.

The Calcutta Chamber of Commerce, which organised the interactive session, has pleaded that there should be a single legislation covering all labour matters and the enactment may be called "Small Scale & Tiny Industries Regulation Act". On the contrary, the RBI has been urged to examine the feasibility of fixing the share of SSI, tiny and village industries in the total bank credit and term loans from the financial institutions and banks.