The Hindu Business Line : `Khadi sector must focus on new tech, enhancing production'

Khadi version
Government is committed to enhancing the corpus of the credit guarantee fund
Stress on roping in private sector to source, market SSI products

SMALL INITIATIVE: The Union Finance Minister, Mr P. Chidambaram, with the Minister for Small Scale Industries & Agro and Rural Industries, Mr Mahabir Prasad (2nd left) at a stall in the `National Expo of Small, Khadi, Village and Coir Industries' in the Capital on Wednesday. — Kamal Narang

New Delhi , Oct. 4

The Finance Minister, Mr P. Chidambaram, on Wednesday urged the Khadi and Village Industries Commission (KVIC) and the Coir Board to focus attention on bringing in new technology and enhancing production capacity for their products across the country.

At the same time, he also stressed the need for the Government agencies to rope in the private sector to source and market SSI products.

"Where Government agencies fail is their inability to take upon themselves the marketing of products. What drives production is sales and what drives sales is the reach to customers," Mr Chidambaram said in his inaugural address at the National Expo of Small, Khadi, Village and Coir Industries.

The Finance Minister pointed out that the private sector has demonstrated capacity to market products in a decentralised manner.

Credit guarantee fund

Mr Chidambaram also said that the Government was committed to enhancing the corpus of the credit guarantee fund to Rs 2,500 crore. As on end-March 2006, the credit guarantee fund had a corpus of Rs 1,132 crore.

The credit guarantee scheme was introduced in the year 2000 with the objective of helping small-scale industries to access credit from eligible institutions without the hassles of collateral security.

The Finance Minister also said that the Government was in the process of constituting an empowered group of ministers to lay down the policy on cluster development and to oversee its implementation.

He maintained that this move would bring better coordination among ministries and was not intended to take away responsibility from one ministry and give it to another. Mr Chidambaram said that several ministries were implementing cluster development programmes as such an approach was considered to be an effective form of intervention.

The Coir Board Chairman, Dr A.C. Jose, urged the Finance Minister to impress upon the empowered committee of State Finance Ministers on VAT to exempt coir products such as carpets from state-level VAT.

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