The Hindu Business Line : New tech upgrade scheme for SSIs

TO bolster the technology and competitive strengths of the small-scale industries (SSIs) in the country, the Union Ministry of SSI, has decided to aggressively push its Credit Linked Capital Subsidy Scheme (CLCSS), which has a corpus of Rs 600 crore.

It has identified 30 sectors, which include frontier areas such as biotechnology, information technology, as well as traditional ones such as fans, wire and cable, poultry, plastic, food processing and those exposed to intense foreign competition such as toys and bicycle etc to provide attractive terms of credit for technology upgradation.

Under the scheme, up to 12 per cent capital subsidy would be provided for the induction of well-established and improved technologies (plant and machinery), which would help enhance the productivity, efficiency and competitiveness of the products manufactured in the marketplace.

According to a set of revised guidelines issued by the Ministry of SSI, the Governing and Technology Approval Board constituted would approve and monitor the implementation of the scheme.

The fresh guidelines firmed up in October 2003 and released recently also identified the Small Industries Development Bank of India and the National Bank for Agriculture and Rural Development as the nodal agencies for the implementation of the scheme.

The CLCSS would be open to all existing SSI units registered with the State Directorate of Industries and those who wish to upgrade technology. Even those units which have been covered under the Refinance Scheme for Technology Modernisation Fund of SIDBI are also eligible if they meet the criteria.

The revised guidelines have virtually doubled the sectors eligible for the technology upgrade funding and have been done to accelerate the utilisation of the funds, which would be available up to September 2005 or full utilisation of the Rs 600 crore, whichever was earlier. The scheme has retained the 12 per cent credit with a cap of Rs 4.80 lakh as maximum subsidy.

In the case of tiny units with investment in plant and machinery (P&M) less than Rs 10 lakh, the maximum ceiling of loan eligible for support would be Rs 8 lakh and the maximum subsidy under CLCSS would be Rs 0.96 lakh. For units with investment in P&M between Rs 10 to Rs 25 lakh, the loan ceiling would be Rs 20 lakh and subsidy cap Rs 2.40 lakh. The capital subsidy would not be admissible for loan amount exceeding the limits determined.

The Director of the Small Industries Service Institute, under the Ministry of SSI, here, Mr G.M. Ambhore, said that the revised guidelines have been sent to all the banks and promotional agencies in Andhra Pradesh for quick implementation. Similar exercise was undertaken in the entire country.

The eligible primary lending institutions are the co-operative banks, regional rural banks, National Small Industries Corporation, State Financial Corporations and North-Eastern Development Financial Institutions.