New Delhi, April 15
THE Minister for Science and Technology, Mr Kapil Sibal, has ruled out the possibility of abolishing the list of reserved items for SMEs (small and medium enterprises).
He was addressing a seminar on `Business Opportunities for Small and Medium Entrepreneurs in Knowledge Based Industries', organised by the Associated Chambers of Commerce and Industry of India (Assocham), on Friday.
Mr Sibal said, "At a time when the focus is towards creation of employment, further pruning of the reserve list makes no sense as this sector contributes 40 per cent of domestic production and 50 per cent of total exports by India."
He added that the Ministry has cleared a draft policy that envisages 100-per cent FDI in the biotechnology sector through the automatic route.
Meanwhile, the board of Small Industries Development Bank of India (SIDBI) has decided to meet on April 18 to take a decision to hike its direct lending target limit for SMEs to Rs 5,000 crore during 2005-06, from Rs 3,000 crore last fiscal. It also plans to set up a separate credit rating agency.
In the seminar, the SIDBI Chairman and Managing Director, Mr N. Balasubramanian said, "The 100-per cent subsidiary credit rating agency of SIDBI will enable SMEs to incur finances from various commercial banks at a lower rate.
With this agency in place, the banks will have no hesitation to extend credit to SMEs as SIDBI too endorses the ratings, which will encourage the banking system to lend liberally."