The Hindu Business Line : Single law soon for SSIs, says PM

The Prime Minister, Dr Manmohan Singh, being welcomed by the Minister for Small-Scale, Agro & Rural Industries, Mr Mahavir Prasad, at a convention on small-scale industries in New Delhi on Monday. -- Shanker Chakravarty

New Delhi , Aug. 30

THE Prime Minister, Dr Manmohan Singh, has said that it would be the endeavour of his Government to create a positive environment in which the "animal spirits" of private enterprise would be unleashed to usher in a new era of entrepreneurial development.

Addressing the golden jubilee celebrations of the Small Industries Development Organisation (SIDO) here on Monday, Dr Singh said that the Government was currently contemplating more measures to aid and support the small-scale industries (SSI) sector.

"We will soon be setting up a National Commission to examine the problems facing enterprises in the unorganised, informal sector. This Commission will have a comprehensive mandate to examine and review existing institutional mechanisms for supporting small enterprises," Dr Singh said.

While emphasising that we were living in an increasingly globalised world, the Prime Minister said that there was a need to see whether protection in the form of reservation of items for production in the SSI sector continues to be an adequate mechanism to enable the sector to thrive.

"While reservation can protect SSI firms from domestic competition, it will not protect them from international competition. This is the reality one must reckon with. Trade is a substitute for domestic competition. And given this scenario of trade-driven competition, the efforts of all Government agencies must be towards enhancing the capabilities of small enterprises to face this onslaught of competition," Dr Singh said.

Once the focus shifted to promotion, Government agencies, the Prime Minister said, would need to start understanding the processes which determine the competitiveness of small enterprises and would also need to create new organisational and institutional mechanisms to facilitate their healthy growth.

"It is time for India to tap into the creative energies of the millions of small enterprises to boost growth and employment just as other countries have successfully done," Dr Singh said.

Turning his attention to problems faced by the SSI sector, including that of `Inspector raj', Dr Singh said that the Ministry of SSI was working on a single law for the sector which would be finalised and brought to Parliament soon.

While calling on bankers to pay heed to the "developmental dimensions" of lending to the sector when exercising their commercial judgment, Dr Singh noted that if there were to be more winners from the sector, then technology upgradation, marketing support and improved infrastructure would also be critical. Dr Singh said that the success of small units as suppliers of choice in the automobile and pharmaceutical sectors augured well for the organic growth of the industry and felt that this must be built upon. "This calls for innovative thinking on what small industry policy should be. If policies of the past have not worked well, we should be prepared to discard them and seek new ways of realising the goals of employment generation and entrepreneurial development," Dr Singh said.