The Hindu Business Line : `Relax NPA norms for small sector': TANSTIA

A POLICY for small-scale industries, Centre's assistance in infrastructure development in industrial estates and a raw material regulatory commission are some of the measures needed to promote small-scale sector, according to the Tamil Nadu Small and Tiny Industries Association (TANSTIA).

These are mentioned in a representation by TANSTIA to the Centre. It called for a reduction in interest rates and permission to let industrial clusters take foreign loans from institutional and private sources.

Banks, which should set targets for lending to SSIs within priority sector, should relax norms for non-performing assets and implement a new one-time settlement scheme that should release the borrower from credit if the principal is repaid.

The capital subsidy scheme and interest free sales tax deferral schemes should also be revived.

To rehabilitate sick units, the Centre should implement a scheme that addresses the cause of sickness. All India Census of SSIs shows that constraints in working capital, marketing, raw material and power are the major cause for failure. Non-viable units should be allowed to exit without any hassles.

The raw material regulatory commission should monitor and report price details and recommend duty free imports when needed. Tenders by the Government agencies should allow for increase in raw material cost, according to TANSTIA.

The State and Central Governments should evolve a comprehensive policy for SSIs and a special institution should monitor it, the association said.

The governments should address pollution-free technologies rather than focus on pollution control. Clearances to set up units should be given at the State level and a one-time consent fee collected instead of the present system of periodic collection.

More Stories on : SSI | Non-Performing Assets | Tamil Nadu

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