The Hindu Business Line : Plea to raise investment limit in SSIs to Rs 3 cr

THE Kerala State Small Industries Association (KSSIA) has urged the Union Government to enhance the present investment limit for small-scale industries from Rs 1 crore to Rs 3 crore.

It has also demanded that this benefit be extended to SSI units manufacturing products on other's brand without locational restrictions.

In a pre-Budget memorandum submitted to the Union Finance Minister, the association demanded that special policy initiatives be formulated so that foreign direct investment could flow to the SSI sector.

The Association President, Mr Xavier Thomas Kondody, asked the Government to implement the directions of the Standing Advisory Committee by RBI on review of SSI credit flow.

The Government should make it mandatory for all the banks to go in for the Credit Guarantee Fund Trust scheme for all fund-based loans up to Rs 50 lakh. The NPA norms for advances to SSI sector should be revised from the existing 90 days service period to 180 days and the NPA norms for manufacturing units of machineries and equipments should be relaxed. The Government should also set a specific target of 20 per cent for SSI credit flow alone out of the total deposit and the advance to the sector should be kept as a separate one from the present priority sector advance.

The association has also requested the Finance Minister to enact the proposed Small Industry Development Bill and Employment Relationship Act without any further delay.Referring to the implementation of value-added tax system, he said that VAT should be implemented with a uniform tax structure abolishing CST, entry tax, octroi and other inter-State levies at the national level from April.

The association demanded that a separate fund be created under budgetary support specifically for revival of viable sick units, which could be operated again through the Small Industries Development Bank of India , financial corporations and commercial banks or a sum targeted under the SME be allocated for sick unit revival alone.

According to the association, the recent announcement of exemption to SEZ units, for the initial five years, from ESI and Provident Fund should be extended to SSI sector also. The existing labour laws are inadequate for the growth of SMEs, it pointed out.

The KSSIA has also demanded a statute-backed `products purchase reservation policy' for compulsory sourcing by government sector.

Market development fund, price equalisation fund for export and an export promotion department at the State level need to be set up, the association said. It also sought the simplification of the Prevention of Food Adulteration Act, which has affected small producers in the food sector.

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