Annexure-I

Speech of the

Hon'ble Prime Minister

Shri Atal Bihari Vajpayee

At Conference on Small Scale Industries

New Delhi, 30th August, 2000

My Colleagues, Shri L.K. Advani and Smt Vasundhara Raje

Representatives of Small Scale Industries Sector,

Ladies and Gentlemen:

It gives me great pleasure to be here with you today. Two years ago, Laghu Udyog Bharati had invited me to their conference in this very hall. Several measures were then suggested for strengthening the Small Scale sector.

In these two years, various initiatives have been taken to address your concerns and strengthen the Small Scale Industries sector. These include the decision to lower investment limit to Rs. 1 crore from Rs. 3 crore and the setting up of a separate Ministry for Small Scale Industries.

I am happy to note that the Small Scale sector has responded to our initiatives by improving their performance. The growth rate registered by you is higher than that of the overall industrial sector.

No less important is the fact that the Small Scale sector has registered steady growth in employment generation. Indeed, this sector continues to lead the way in generation of employment opportunities.

As you are aware, a Group of Ministers, headed by Shri L.K. Advani, was constituted by the Cabinet to recommend measures to strengthen Small Scale industries.

I am glad to inform you that based on the recommendations of the Group of Ministers, Government has decided to implement a set of measures which will substantially strengthen the Small Scale sector. These include:

l The Small Scale sector has suffered due to inadequate access to credit availability. We have, therefore, decided to raise the limit for composite



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loans from Rs. 10 lakhs to Rs. 25 lakhs. Entrepreneurs will now be able to secure term loans and working capital from the same agency.

l Industry related service and business enterprises with a maximum investment of Rs. 10 lakhs will qualify for priority lending. These services are essential for the proper functioning of the Small Scale sector. These services also provide employment in rural and semi-urban areas.

l Bearing in mind the urgent need for technology upgradation, Government is happy to announce a capital subsidy of 12% for investment in technology in select sectors. We will set up an inter-ministerial committee of experts to define the scope of technology upgradation and sectoral priorities.

l Government is alive to the grievance that frequent inspections by multiple agencies are a source of harassment to the Small Scale sector. We will set up a Group to recommend, within three months, means of streamlining inspections. These would include repeal of laws and regulations applicable to the sector that have since become redundant. I would urge you to submit your suggestions in this regard to the Ministry of Small Scale Industries.

l The last census of Small Scale industries was conducted 12 years ago. For effective policy-making and implementation, we need to update our data. Therefore, we have decided to go in for a fresh census that will cover, inter-alia, the incidence of sickness and its causes. I request industry associations to cooperate with the census authorities so that a true picture emerges.

I am happy to note that more and more Small Scale units are opting for ISO 9000 certification. To encourage total quality management, we have decided to continue, for the next six years, granting Rs 75,000 to each unit that obtains ISO 9000 certification.

We have also decided to give one time capital grant of 50% to Small Scale associations who wish to develop and operate testing laboratories, provided they are of international standard.

The SSI sector already enjoys some special fiscal incentives. However, for quite some time, this sector has been requesting for an increase in the



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limit for exemption from excise duty to improve its competitiveness and to help the units facing sickness.

I am happy to announce that in response to your requests, we are increasing the exemption limit from Rs. 50 lakhs to Rs. 1 crore.

This will be the second increase made by our Government, the first one having been in 1998 when the limit of Rs. 30 lakhs was increased to Rs. 50 lakhs. There are certain other requests relating to customs duties. The Finance Minister will be announcing suitable measures in due course.

Development of Khadi and Village Industries is a critical component of the strategy to achieve a balanced and integrated development. This segment is an important link not only to the informal economy, but it fosters skills, promotes entrepreneurship at a micro level and is integral to our growth process.

Khadi is environment friendly. It provides jobs to millions of people. With upgradation of skills and quality of Khadi products, it can be marketed globally. We are committed to further strengthening the viability of this sector.

A rebate on sale of Khadi products has been continued. Beyond this, we are working out a new comprehensive package to strengthen Khadi and Village Industries that will further upgrade the skills of the Khadi workers. These will cover.

l Provision for 20% of projected annual turnover to be given as working capital loan;

l Continuation of concessional lending facilities; and,

l Preference for loans for technology upgradation.

Government is conscious of the problems faced by the Handloom sector. This sector represents a rich heritage and craftsmanship that needs to be protected and promoted.

I am happy to announce that yesterday, Government has approved a Deendayal Hathkargha Protsahan Yojana. This is a scheme aimed at supporting the handloom sector through finance, design and marketing inputs.



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The scheme, to be implemented by the Centre and States, has a total financial implication of Rs. 447 crores. This scheme provides comprehensive financial and infrastructural support to weavers and handloom organisations that will substantially strengthen this sector.

I have broadly touched on some of the measures to strengthen the Small and Medium Industries. The Ministry of Small and Medium Industries will be separately announcing some other measures to further strengthen this sector.

The global environment is changing rapidly. The Small Scale sector has an important contribution to make in enhancing the competitive strength of our industry, provide an avenue for new employment and harness the entrepreneurial skills available in abundance in this country.

You must accept the challenge of globalisation and improve your product quality to effectively deal with the forces of competition. We will support your endeavours to meet this challenge on a sustainable basis.

I congratulate today's prizewinners for their outstanding achievements. Small entrepreneurs, rural artisans and cottage industry have done the country proud in the last 50 years. They form one of the pillars of our national economy.

Let us together strengthen this pillar so that our national economy can take off for newer heights.

Thank you.



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Annexure-II

Speech of the

Hon'ble Minister of State (Independent Charge) SSI & ARI

Smt. Vasundhara Raje

At National Conference on Small Scale Industries

New Delhi, 30th August, 2000

Respected Prime Minister, Hon'ble Home Minister,

This is a momentous and a memorable occasion. It marks the SSI family's first National Conference. Our immediate focus is on the Small-Scale Entrepreneur. It is a cherished endeavour to convert our dreams and aspirations into reality. By his venerable presence, our Hon'ble Prime Minister has abundantly endorsed and re-affirmed his commitment to the SSI entrepreneur and the SSI movement. Sir, I take this opportunity to welcome you and our distinguished guests on behalf of the entire SSI family.

The Small Scale Sector has over the years developed a momentum of its own. It has demonstrated an extraordinary resoluteness and resilience for growth. Interestingly, over the past decade or so, this sector has enjoyed higher overall growth rate than the large industrial and manufacturing sectors as you have just seen in the audio-visual presentation that preceeded this. This in itself is no mean achievement and time to reason that the SSI sector be deemed to represent the corner stone of our country's economic foundation. The target growth rate we have set ourselves and which we consider well within achievable limits is 9% for the coming fiscal year. I would like to emphasis here that SSI development is an affirmed and assured policy of the NDA Government. The common man is the sector's most valuable resource. His ingenuity and enterprise is most precious contribution, his toil and labour our guarantee of success. The Nation salutes these untiring economic warriors. Their heroic efforts have convincingly established our country on the global economic map, a map charted by the global demand of the New Millennium. This saga is replete with varied instances of



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entrepreneurs transorming into the large scale sector from roots firmly entrenched in the SSI movement. Some of today's most glorious corporate names-Videocon, Nirma, Hero Honda Cycles and many many more have humble SSI beginnings. These and others of their ilk deserve our gratitude for their pioneering efforts. They have shown the light and the path to larger goals. We are small, but small is not only beautiful, it is very vital. It is also increasingly large corporations that are sourcing essential accessories and inputs from the SSI.

We must not forget that the small-sector is the second largest employer after agriculture. Our thrust is to provide micro-credit to women entrepreneurs and educated unemployed youth living below the poverty line, also in creating employment opportunities for the disadvantaged. This Ministry through the Prime Minister's Rozgar Yojana has succeeded in generating employment for 17.84 lakh individuals at the amazingly economic cost of just 5,000/- rupees per person by way of direct subsidy assistance from the Government. Thus a minimum of 2.20 lakh educated unemployed per year are granted the chance to participate in nation building.

We pay continuous homage to the Father of the Nation's philosophy by emphasizing the continued relevance of the Khadi and the Rural Industries Sector. Khadi represents not just a product but an essential way of life, appropriate not only to the historical past but increasingly to the exciting future. KVIC promotes self-reliance amongst the people. It tries to create a powerful community base. It extends financial assistance through grants, through subsidies to institutions who in turn assist the rural entrepreneur. These institutions subsequently impart necessary training and through the cluster approach it ensures that benefits of the economies of scale reach the rural destinations.

The Coir Board has contributed immensely to the promotion and worldwise development of brown fiber. The Board, through its untiring R&D efforts has developed and continued to refine an extensive range of utility items. These are not just aesthetically beautiful but environmentally friendly


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and contemporary. Some as the Coir geo-textiles and coir-pith are especially mentionable. The imperative here is the access to inexpensive and timely credit. A credit scheme with an initial corpus of 125 crores rupees has been established. This will facilitate easier accessibility of credit to small producers, by-passing difficult collateral requirements. This scheme becomes operational today. Technology, the contemporary mantra of progress, has to be made available at the appropriate cost in time. We are upgrading industries by the cluster approach. By this strategy critical initiative will be infused cluster-wise to provide impetus where required. Currently, two project documents for the Toy and the Stone industries, have been signed with UNIDO to augment the already established industries. Essentially, the aim is to provide technological upgradation, establishment of common facilities and market linkages. We realize that there are road blocks in our path to success. Rationalization of the tax structure is a case in point. Reforms are under way, but need more attention. Today the single man unit contends with 37 inspections, 52 laws and is expected to maintain all of 116 forms and registers. Nevertheless efforts are in progress to rationalize and streamline these procedures to obviate unnecessary delays and impediments in a time bound framework.

There has been much speculation about the impact of globalization and liberalization on the SSI. But the enormous indigenous SSI industrial base representing manufacture, processing, assembling, jobbing, servicing and repairing are well entrenched and not easily substitutable nor replaceable in a cost-effective manner. We are not afraid of competition, rather we will seek to take full advantage of the opportunities available. SSI's forte of adaptability and the ability to undertake small and special orders for specific products are unmatchable. In export terms, SSI has climbed from 16.25% in 1974-75 to an impressive 35% in 1998-99. So there should be no apprehensions. Since SSI units are competitive abroad it only stands to reason that we will be more than competitive domestically. Quality is the catchword. If it be maintained, the phenomenon of globalization will actually benefit the SSI as India's strength lies in her entrepreneurship. Technological upgradations, state-of-the-art adaptations coupled with scientific marketing practices will



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render our products unbeatable in the world markets. The removable of quantitative restrictions has not witnessed any untoward increase in imports. Nevertheless, should the occasion arise, necessary safeguard measures will be put in place.

However rosy the picture, we must guard against complacency. Constant endeavours must be undertaken to gain foreign exposure through the medium of international fairs and exhibitions, besides aggressive brand imaging, formation of marketing consortia, establishing trading agreements with like minded countries, promoting sub-contracting and vendor development schemes and providing WTO compliant measures of support. The NSIC are undertaking the task of popularizing the SSI products both internationally and domestically. We must achieve an export growth of between 9% and 10% and to reach this target a level playing field is a prerequisite. The Hon'ble Prime Minister has assured us that no efforts will be spared in removing obstacles from the path of sustainable development nor in pursuing a proactive policy towards export promotion. Towards this end and on his initiative, a group of ministers was formed headed by Shri L.K. Advani, our Home Minister, and under his able guidance this group has displayed an anormous amount of interest and empathy for the SSI sector. A very favorable package of recommendations has emerged which will surely add tremendous movement and momentum to the movement. I take this opportunity to thank all members of this committee, individually, for their forbearance and for their basket of recommendations forwarded to the Prime Minister.

On the flip side, the incidence of the SSIs unit sickness is a pressing issue. At the end of March 1999, approximately 3 lakh units were sick. A majority of these are not potentially viable. They want a clear exit route. Concerted effort and expertise of various concerned agencies are needed in order to stem the tide of sickness. The State Level Inter Institutional Committees are being reinforced and strengthened, and States have been requested to establish industry Facilitation Councils and till date, 19 States are on stream.



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My grateful thanks to Shri Yashwant Sinha for providing a one time relief package to sick industries with NPAs upto 5 crores. This scheme was announced by the RBI on July 27, 2000. The Finance Minister has been a pillar of strength and understanding and we shall be knocking on his door for future assistance. His unqualified support has been a crucial factor in the overall development of the SSI sector. The 21st century belongs to the SSI sector. The future must be redefined in our terms. We must consolidate our strength and make an effort to get over our weaknesses. The new anthems are operational efficiency, quality standardization and harmonization between the large and the small sectors. Reorienting operation strategies, strengthening and building relevant institutions, collaboration between industry associations, establishment of common facilities, determination of the critical and crucial information and technology, proactive marketing strategies, easily accessible and available advisory services at affordable cost. These are the key to the accelerated growth requirements of the SSI sector.

The Ministry of the SSI & ARI for its part pledges to fashion itself into a dedicated organization, to function primarily as a facilitator, friendly and easily accessible partner in progress, single-mindedly devoted to the advancement of the SSI industries in India. We resolve to contribute our mite and evaluating India that will emerge on the world stage at a position of predominance and preeminence in the current century. I take this opportunity to also congratulate the awardees and encourage them to greater achievements in the future. Finally, in conclusion I wish to thank from the bottom of my heart, the Hon'ble Prime Minister, my cabinet colleagues, members of the Group of Ministers, Mr. Pant, Mr. Kanshi Rama Rana, Hon'ble Ministers from the States, Cabinet Secretary Mr. Prabhat Kumar, Officers of the Central and the State Governments, friends from the media, distinguished guests and our vast and numerous SSI family. I must add here that SSI policy cannot be fashioned sitting at the desk. We at the Ministry of SSI & ARI have travelled the length and breath of this country over a period of many months and have interacted with our friends in the various small scale associations, many of you whom I can see are sitting here today, whether



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it is Mr. Narsimhan of FASSI or Mr. Chakradhari of WASME or Mr. Sudarshan Sarin of Laghu Udyog Bharati or Mr. Crasta of KASSIA, Mr. Vijay Kalantri and Mr. Samadri from export organization, Mrs. Ela Bhatt and Mr. Magan Bhai Patel, Mr. Sanjay Modi, Mr. Dalmia, ladies Rama Deviji and Rajni Agarwal, Mr. Dadi Mistry and the friends on the CII, ASSOCHEM, FICCI and also of course our friends of the Swadeshi Jagran Manch.

I thank you all and many many other friends. This has been a huge exercise in our Ministry to reflect the hopes and the aspirations and the fears of all of you in this new SSI policy. I intend to interact closely with all of you concerned and all those who are worrying about the implementation part of this. I would like to ally all your fears and tell you here that this would be the thing we would also monitor very closely. I also want to thank many unsung heroes of this Ministry who have toiled over the last so many months to convert all these hopes into reality. Secretary Mr. Bagchi, Additional Secretary Mr. Tuteja and the rest of my team, thank you all from the bottom of my heart. Thanks also to all of those who have assembled here, Ambassadors, Secretaries, people from all over the various parts of the States. Thank you very much all of you. I again conclude with the lines that sum up the theme of today's conference.

The dawn beckons towards a new tomorrow

It's rays enkindle hope

To toil, to create, and to achieve

A feeling to surge towards the sun

I see glory on the horizon.

Yehin hai hamari unde ki Asha.

Thank you all very much for being here today.



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Annexure-III

No. 12/4/95-SSI (P)

Government of India

Ministry of Industry

Department of Small Scale Industries and

Agro and Rural Industries

Udyog Bhavan, New Delhi-11

Dated the 24th December, 1997

To

The Secretary/Commissioner (Industries)

Director of Industries

All States and Union Territories

Subject :Tiny Enterprises _ Investment Limit _ regarding

Sir,

The Central Government in exercise of the powers conferred by Sub-section (i) of Section 11 B and Sub-section (i) of Section 19B of the Industries (Development & Regulation) Act, 1951 has notified vide its Notification No.857 (E) dated 10.12.97 that an Industrial Undertaking having investment in fixed assets in plant and machinery upto Rs. 300 lakhs, will be accorded the status of a Small Scale Industrial Undertaking. Such investment limit in respect of "Tiny Enterprises" now stands increased from the present level of Rs. 5 lakhs to Rs. 25 lakhs, irrespective of the location of the unit.

All existing guidelines with regard to registration etc. for tiny units with the enhanced limit of Rs. 25 lakhs will remain unchanged.

Yours faithfully

Sd/-

(S. Nayak)

Director



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Annexure-IV

Gazette Notification

Extraordinary

Part II-Section 3-Sub-section (ii)

New Delhi, Friday, December 24, 1999

PAUSA 3, 1921

Ministry of Commerce and Industry

(Department of Industrial Policy and Promotion)

New Delhi, the 24th December, 1999

Order

S.O. 1288 (E)-Whereas the Central Government considers it necessary with a view to ascertain which ancillary and small scale industrial undertakings need supportive measures, exemption or other favourable treatment under the Industries (Development and Regulation) Act, 1951 (65 of 1951) (hereinafter referred to as the said Act) to enable them to maintain their viability and strength so as to be, effective in-

  • (a) promoting in a harmonious manner, the industrial economy of the country and casing the problem of unemployment, and
  • (b) securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common goods;

And whereas the Central Government considers it necessary to amend the order of the Government of India in the erstwhile Ministry of Industry (Department of Industrial Policy and Promotion) Number S.O. 857 (E), dated the 10th December, 1997 for the said purpose:

And whereas a copy of the said Amendment of the notified Order in draft was laid before each House of Parliament for a period of thirty days as required under sub-section (3) of section 11B of the said Act;



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And whereas no modification in the draft of the proposed notified Order has been suggested by both the Houses of Parliament;

Now, therefore, in exercise of the powers conferred by sub-section (1) of Section 11B and sub-section (1) of Section 29B of the Industries (Development and Regulation) Act, 1951 (65 of 1951), the Central Government hereby makes the following amendments in the Order of the Government of India in the erstwhile Ministry of Industry, Department of Industrial Policy and Promotion number S.O. 857 (E), dated the 10th December, 1997, namely:-

In the said Order-

  • (a) in the paragraph relating to Small Scale Industrial Undertakings, for the words "rupees three crores", the words "rupees one crore" shall be substituted and
  • (b) in the paragraph relating to Ancillary Industrial Undertaking, for the words "rupees three crores", the words "rupees one crore" shall be substituted.
  • (No. 10(6)/97-1P)
  • Sd/-
  • (Ashok Kumar)
  • Jt. Secy.

Note : The principal notified Order was published in the Gazette of India, PartII, Section 3, sub-section (ii), Extraordinary dated the 11th December, 1997.



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Annexure-V

Government of India

Ministry of Finance

(Department of Revenue)

New Delhi, dated the 1st March, 2001

10 Phalguna, 1922 (Saka)

Notification

No. 8/2001-Central Excise

Dated 1st March, 2001

G.S.R.-(E)-In exercise of the powers conferred by sub-section (1) of Section 5A of the Central Excise Act, 1944 (1 of 1944) and in supersession of the notifications of the Government of India in the Ministry of Finance (Department of Revenue) No. 8/2000-Central Excise, dated the 1st March, 2000, published in the Gazette of India vide number G.S.R. 186(E), dated the 1st March, 2000, except as respects things done or omitted to be done before such supersession, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts clearances, specified in column (2) of the Table below (hereinafter referred to as the said Table) for home consumption of excisable goods of the description specified in the Annexure appended to this Notification (hereinafter referred to as the specified goods), from so much of the aggregate of:-

  • (i) the duty of excise specified thereon in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); and
  • (ii) the special duty of excise specified thereon in the Second Schedule to the said Central Excise Tariff Act,

as is in excess of the amount calculated at the rate specified in the corresponding entry in column (3) of the said Table:-



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  • 2. The exemption contained in this Notification shall apply subject to the following conditions, namely:-
  • (i) A manufacturer has the option not to avail the exemption contained in this Notification and instead pay the normal rate of duty on the goods cleared by him. Such option shall be exercised before effecting his first clearances at the normal rate of duty. Such option shall not be withdrawn during the remaining part of the financial year.
  • (ii) While exercising the option under condition (i), the manufacturer shall inform in writing to the Deputy Commissioner or Assistant Commissioner of Central Excise with a copy to the Superintendent of Central Excise, giving the following particulars, namely:-
  • (a) name and address of the manufacturer;
  • (b) location/locations of factory/factories;
  • (c) description of specified goods produced;
  • (d) date from which option under this Notification has been exercised;
  • (e) aggregate value of clearances of specified goods (excluding the value of clearances referred to in paragraph 3 of this Notification) till the date of exercising the option;
  • (iii) The manufacturer shall not avail the credit of duty on inputs under rule57AB or rule 57AK of the Central Excise Rules, 1944, paid on inputs used in the manufacture of the specified goods cleared for home consumption, the aggregate value of first clearances of which, as calculated in the manner specified in the said Table, does not exceed rupees one hundred lakhs.
  • (iv) The manufacturer also does not utilise the credit of duty on capital goods under rule 57AB or rule 57AK of the said rules, paid on capital goods, for payment of duty, if any, on the aforesaid clearances, the aggregate value of first clearances of which does not exceed rupees one hundred lakhs, as calculated in the manner specified in the said Table.
  • (v) Where a manufacturer clears the specified goods from one or more factories, the exemption in his case shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each factory.


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  • (vi) Where the specified goods are cleared by one or more manufacturers from a factory, the exemption shall apply to the aggregate value of clearances mentioned against each of the serial numbers in the said Table and not separately for each manufacturer.
  • (vii) The aggregate value of clearances of all excisable goods for home consumption by a manufacturer from one or more factories, or from a factory by one or more manufacturers, does not exceed rupees three hundred lakhs in the preceeding financial year:
  • 3. For the purposes of determining the aggregate value of clearances for home consumption, the following clearances shall not be taken into account, namely:-
  • (a) clearances, which are exempt from the whole of the excise duty leviable thereon (other than an exemption based on quantity or value of clearances) under any other notification or on which no excise duty is payable for any other reason;
  • (b) clearances bearing the brand name or trade name of another person, which are ineligible for the grant of this exemption in terms of paragraph 4;
  • (c) clearances of the specified goods which are used as inputs for further manufacture of any specified goods within the factory of production of the specified goods;
  • (d) clearances of strips of plastics used within the factory of production for weaving of fabrics or for manufacture of sacks or bags made of polymers of ethylene or propylene.
  • 4. The exemption contained in this Notification shall not apply to specified goods bearing a brand name or trade name, whether registered or not, of another person, except in the following cases:-
  • (a) where the specified goods, being in the nature of components or parts of any machinery or equipment or appliances, are cleared for use as original equipment in the manufacture of the said machinery or equipment or appliances by following the procedure laid down in Chapter X of the Central Excise Rules, 1944. Manufacturers, whose aggregate value of clearances of the specified goods for use as original


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  • equipment does not exceed rupees one hundred lakhs in the financial year 2000-2001 as calculated in the manner specified in paragraph 1, may submit a declaration regarding such use instead of following the procedure laid down in Chapter X of the said Rules;
  • (b) where the specified goods bear a brand name or trade name of:-
  • (i) the Khadi and Village Industries Commission; or
  • (ii) a State Khadi and Village Industry Board; or
  • (iii) the National Small Industries Corporation; or
  • (iv) a State Small Industries Development Corporation; or
  • (v) a State Small Industries Corporation;
  • (c) where the specified goods are manufactured in a factory located in a rural area.
  • 5. This Notification shall come into force on the 1st day of April, 2001.
  • Explanation - For the purposes of this Notification:-
  • (A) "brand name" or "trade name" means a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that persons;
  • (B) where the specified goods manufactured by a manufacturer bear a brand name or trade name, whether registered or not, of another manufacturer or trader, such specified goods shall not, merely by reasons of that fact, be deemed to have been manufactured by such other manufacturer or trader;
  • (C) "value" means:-
  • (i) in respect of specified goods which have been notified under Section 4A of the Central Excise Act 1944 (1 of 1944), the value as determined in accordance with the provisions of that section, and


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  • (ii) in respect of specified goods other than those referred to in sub clause (i), the value as determined in accordance with the provisions of Section 4 of the Central Excise Act, 1944 (1 of 1944), or the tariff value fixed under Section 3 of the said Act;
  • (D) in the determination of the value of clearances of Chinaware or Porcelainware or both, where a manufacturer gets Chinaware or Porcelainware or both fired in a kiln belonging to or maintained by a Pottery Development Centre run by the Central Government or a State Government or by the Khadi and Village Industries Commission, the value of the Chinaware or Porcelainware or both, belonging to the said manufacturer and fired in such kiln, shall be taken into account;
  • (E) where the specified goods are manufactured in a factory belonging to or maintained by the Central Government or by a State Government, or by a State Industries Corporation, or by a State Small Industries Corporation or by the Khadi and Village Industries Commission, then the value of excisable goods cleared from such factory alone shall be taken into account;
  • (F) "normal rate of duty" means the aggregate of duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and the special duty of excise specified in the Second Schedule to the said Central Excise Tariff Act read with any relevant notification (other than this notifiation or a notification in which exemption is based on the value or quantity of clearance) issued under sub-section (1) of Section 5A of the said Central Excise Act, 1944;
  • (G) "clearances for home consumption", wherever referred to in this Notification, shall include clearances for export to Bhutan and Nepal.
  • (H) "rural area" means the area comprised in a village as defined in the land revenue records, excluding.
  • (i) the area under any municipal committee, municipal corporation, town area committee, cantonment board or notified area committee, or
  • (ii) any area that may be notified as an urban area by the Central Government or a State Government.


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ANNEXURE

All goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely:-

  • (i) all goods which are chargeable to nil rate of duty or are exempt from the whole of the duty of excise leviable theron;
  • (ii) all goods falling under heading No. 09.02;
  • (iii) all goods falling under heading No. 21.06 and sub-heading Nos. 2101.10 and 2101.20;
  • (iv) all goods falling under Chapter 24 of the First Schedule (other than unbranded chewing tobacco and preparations containing chewing tobacco, falling under heading No. 24.04);
  • (v) all goods falling under heading No. 25.04;
  • (vi) sandalwood oil;
  • (vii) all goods falling under heading No. 36.05;
  • (viii) all goods falling under heading Nos. 37.01, 37.02, and sub-heading No. 3703.10;
  • (ix) strips of plastics intended for weaving of fabrics or sacks, polyurethane foam and articles of polyurethane foam; falling under Chapter 39 of the First Schedule;
  • (x) all goods falling under Chapter 51 of the First Schedule other than those falling under sub-heading Nos. 5105.30 and 5105.40 and heading Nos. 51.06, 51.07, 51.08, 51.09, 51.10 and 51.11 (except woven fabrics of wool falling under heading Nos. 51.10 or 51.11) and 51.21;
  • (xi) all goods falling under Chapter 52 of the First Schedule other than goods falling under heading No. 52.04;
  • (xii) all goods falling under Chapter 53 of the First Schedule except goods falling under heading Nos. 53.01, 53.02, 53.04, 53.05, 53.08 (other than goods falling under sub-heading No. 5308.14), 53.11 (other than woven fabrics of ramie);


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  • (xiii) all goods falling under Chapter 54 of the First Schedule except goods falling under heading Nos. 54.01;
  • (xiv) all goods falling under Chapter 55 of the First Schedule except goods falling under heading Nos. 55.05, 55.08 and shoddy yarn manufactured from used or new rags falling under heading No. 55.09 or 55.10;
  • (xv) all goods falling under Chapter 56 of the First Schedule except goods falling under heading Nos. 56.01, 56.02. 56.03. 56.04. 56.05 (other than of manmade filaments), chenille yarn falling under sub-heading No.5606.00, 56.07 (other than of jute), 56.08 and 56.09;
  • (xvi) all goods falling under Chapter 57 of the First Schedule;
  • (xvii) all goods falling under Chapter 58 of the First Schedule except goods falling under heading Nos. 58.03, 58.06, 58.07, 58.08, uncut grey (unprocessed) woven weft pile fabrics of cotton manufactured from grey unprocessed cotton yarn falling under sub-heading No. 5801.21, unprocessed woven pile fabrics of cotton falling under sub-heading No. 5801.21 and unprocessed woven pile fabrics of man-made fibres falling under sub-heading No. 5801.31, fabrics of cotton or man-made fibres falling under sub-heading No. 5802.51, and unprocessed cotton terry towelling fabrics falling under sub-heading No. 5802.21;
  • (xviii) all goods falling under Chapter 59 of the First Schedule except goods falling under Heading Nos. 59.01, 59.05, 59.06, 59.08, 59.09, 59.10, 59.11 and textile fabrics coated or laminated with preparations of lowdensity polyethylene;
  • (xix) all goods falling under Chapter 60 of the First Schedule except goods falling under sub-heading No. 6002.10 and fabrics of cotton man-made fibres not subjected to any process falling under heading Nos. 60.01 or 60.02;
  • (xx) all goods falling under Chapter 62 of the First Schedule;
  • (xxi) blankets of wool falling under Chapter 63 of the First Schedule;
  • (xxii) aluminium circles, whether or not trimmed, falling under Chapter 76 of the First Schedule;


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  • (xxiii) (A) All goods falling under:-
  • (a) heading No. 74.03, excluding the following goods falling under sub-heading No. 7403.21, namely:-
  • (i) cast brass bars/rods of a length not exceeding three feet;
  • (ii) cast brass bars/rods of a length not exceeding ten feet used in the factory of production for making wires falling under sub-heading No. 7408.29;
  • (iii) cooper flats of a weight not exceeding two kilograms used for making copper strips falling under heading No. 74.09;
  • (iv) brass billets weighing upto five kilograms;
  • (b) heading No. 74.09 (excluding copper strips produced from copper flats of a weight not exceeding two kilograms);
  • (c) sub-heading Nos. 7407.11, 7407.12, 7408.11, 7408.21; and
  • (B) copper circles, whether or not trimmed;
  • (xxiv) ball or roller bearings falling under Chapter 84 of the First Schedule;
  • (xxv) all goods falling under heading Nos. 87.01, 87.02, 87.03, 87.05, 87.06 and 87.11 [other than powered cycles and powered cycle rickshaw ("powered cycle" or "powered rickshaw" means a mechanically propelled cycle or, as the case may be, mechanically propelled cycle rickshaw, which may also be peddled, if any necessity arises for so doing)];
  • (xxvi) all goods falling under heading Nos 91.01 or 91.02;
  • (xxvii) all goods falling under Chapter 93 of the First Schedule;
  • (xxviii) all goods falling under sub-heading No. 9605.10.

F.No. 334/1/2001-TRU

Sd/-

(T.R. Rustagi)

Joint Secretary to the Government of India



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Annexure-VI

Reserve Bank of India

Rural Planning & Credit Department

Central Office

Central Office Building, 13th Floor, Fort,

Mumbai-400 001

Rpcd Plnfs No. BC. 25/06.02.31/2000-1 October 10, 2000

All Scheduled Commercial Banks

(including RRBs)

Dear Sir,

Flow of Credit to SSI _ Enhancement in Composite Loan Limit

The composite loan limit for providing working capital and term loan through a single window was raised from Rs. 5 lakh to Rs. 10 lakh vide our circular RPCD PLNFS No. BC. 65/06.02.31/99-2000 dated 3 March 2000. Persuant to the policy announcements made by the Prime Minister in the National Conference on SSI held on 30 August 2000 as also the decisions taken by the Group of Ministers on SSI in its meeting, held on 16 August 2000 it has been decided to raise the above limit from Rs. 10 lakh to Rs. 25 lakh. We shall be glad if you will please take immediate steps to implement the above decision and issue necessary instructions to your controlling offices/branches for appropriate action.

2.Please acknowledge receipt.

Yours faithfully

Sd/-

(V.M. Mathew)

Dy. General Manager



Page 30 of 79


Annexure-VII

Office of the

Development Commissioner (SSI)

Ministry of Small Scale Industries

Government of India

Nirman Bhavan (South Wing), 7th Floor

Maulana Azad Road, New Delhi-110011

No.4(5)/2002-SSI Bd.& Pol Dated, the 18th February, 2002

The Secretary/Commissioner of Industries

Director of Industries

(All States/Union Territories)

The Director,

All Small Industries Service Institutes

Subject : Small Scale Service & Business (Industry Related) Enterprises (SSSBEs) - Illustrative list regarding.

Sir,

Kindly refer to this office letter No.2(3)/91-SSI Bd. Dated 30th September, 1991 and 4(5)/2000-SSI Bd.& Policy dated 19th September, 2000 on the above subject. The list of activities eligible for registration as Small Scale Service & Business (Industry Related) Enterprises (SSSBEs) has been revised and is enclosed at Annexure I for ready reference. Activities which are not eligible for registration as SSSBEs may be seen at Annexure II.

Yours faithfully,

Encl: As above

(Pankaj Jain)
Director (SSI Bd. & Pol.)
Tel: 3012694
Fax: 3016726

Copy for information to all as per Mailing List.



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ANNEXURE-I

ILLUSTRATIVE LIST OF SMALL SCALE SERVICE AND BUSINESS (INDUSTRY RELATED) ENTERPRISES (SSSBEs) AS ON 1st January, 2002

recognised as SSSBE vide this office letter No.5(1)/2001-SSI Bd.& Pol. dated 10th Sept.,2001

1. Advertising Agencies

2. Marketing Consultancy

3. Industrial Consultancy

4. Equipment Rental & Leasing

5. Typing Centres

6. Photocopying Centres (Zeroxing)

7. Industrial photography

8. Industrial R&D Labs.

9. Industrial Testing Labs.

10. Desk Top publishing

11. Internet Browsing/Setting up of Cyber Cafes

12. Auto Repair, services and garages

13. Documentary Films on themes like Family Planning, Social forestry, energy conservation and commercial advertising

14. Laboratories engaged in testing of raw materials, finished products

15. "Servicing Industry" Undertakings engaged in maintenance, repair, testing or electronic/electrical equipment/instruments i.e. measuring/control instruments servicing of all types of vehicles and machinery of any description including televisions, tape recorders, VCRs, Radios, Transformers, Motors, Watches, etc.

16. Laundry and Dry Cleaning

Contd. page/2-.



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17. X-Ray Clinic

18. Tailoring

19. Servicing of agriculture farm equipment e.g. Tractor, Pump, Rig, Boring Machines etc.

20. Weigh Bridge

21. Photographic Lab

22. Blue printing and enlargement of drawing/designs facilities

23. ISD/STD Booths

24. Teleprinter/Fax Services

25. Sub-contracting Exchanges (SCXs) established by Industry Associations.

26. EDP Institutes established by Voluntary Associations/Non-Government Organisations

27. Coloured or Black and White Studios equipped with processing laboratory.

28. Ropeways in hilly areas.

29. Installation and operation of Cable TV Network:

30. Operating EPABX under franchises

31. Beauty Parlours and Creches

(Computer Design and Drafting, Creation of databases suitable for foreign/Indian markets and Computer Software Development which were hitherto being registered as SSSBE vide entries 10 to 12 Annexure I of this office letter No.4(5)/2000-SSI Bd.& Policy dated 19.9.2000 have been deleted from the list as Computer Software Development and Software Services (including Computer Graphics, Engineering Design, computerized design and drafting have since been recognized as industrial activities eligible for registration as Small Scale Industries vide this office circular letter No.5(1)/2001-SSI Bd. & Pol. dated 10.9.2001.



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ANNEXURE-II

ILLUSTRATIVE LIST OF ACTIVITIES WHICH ARE NOT RECOGNISED AS SMALL SCALE INDUSTRY/BUSINESS (INDUSTRY RELATED) ENTERPRISES (SSSBEs)

1. Transportation.

2. Storage (except cold storage which is recognised as SSI).

3. Retail/Wholesale Trade Establishments.

4. General Merchandized Stores.

5. Sale Outlets for industrial components.

6. Health Services including pathological laboratories.

7. Legal Services.

8. Educational Services.

9. Social Services.

10. Hotels.



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Annexure-VIII

Small Industries Development Bank of India

10/10, Madan Mohan Malviya Marg, Lucknow-226 001

December 26, 2000

Circular No. Fl. 19/2000-2001

The Chief Executives of all eligible State Financial Corporations

Twin Function Industrial Development Corporations

Scheduled Commercial Banks

Scheduled Urban Cooperative Banks and State Cooperative Banks

Dear Sir,

Refinance-Modifications in the National Equity Fund (NEF) Scheme

Please refer to our circular No. Fl.6/2000-2001 dated May 19, 2000 advising enhancement in the project cost ceiling under NEF Scheme from Rs. 10 lakh to Rs. 25 lakh and soft loan assistance at 25% of the project cost, subject to a ceiling of Rs. 6.25 lakh per project. In line with the announcement made by the Hon'ble Prime Minister, while declaring the SSI Policy on August 30,2000, it has now been decided to further modify the Scheme as under:

  • i Project Cost Ceiling
  • The project cost ceiling stands enhanced from Rs. 25 lakh to Rs. 50 lakh.
  • ii Soft Loan Component
  • The extent of soft loan assistance will be 25% of the project cost subject to a maximum of Rs. 10 lakh per project.
  • iii Service Charge
  • The service charge of 5% p.a. as against 1% p.a. at present will be charged on the soft loan component. Of which, while PLIs would continue to retain service charge of 1% p.a., remaining 4% p.a. should be passed on to SIDBI.

All other terms and conditions under the Scheme shall remain unchanged. The above modifications will be applicable in respect of loans sanctioned by Primary Lending Institutions on or after December 21, 2000.

The contents of the circular may please be brought to the notice of all your offices and meanwhile please acknowledge receipt.

Yours faithfully,

Sd/-

(S. Gunasegaran)

General Manager



Page 35 of 79


Annexure-IX

Credit Guarantee Fund Trust For Small Industries

14th Floor, Nariman Bhawan, Nariman Point, Mumbai-400021

CGTSI/(16)/72 September 29, 2000

All Scheduled Commercial Banks

Dear Sir,

Credit Guarantee Fund Scheme for Small Industries (CGFSI)

Please refer our Chairman's letters dated August 8, 2000 and September27, 2000 on the subject. We inform that the observations/suggestions received from banks and sent by IBA on the New Guarantee Scheme were deliberated by the Board of Trustees of CGTSI at its meeting held on September 26, 2000.

As already explained certain basic features of the Guarantee Scheme outlined by GOI viz; eligibility of borrowers, quantum of guarantee cover, ceiling on rate of interest to be levied by the lending institutions to the eligible borrowers etc. would remain. Other suggestions made by the IBA and Banks to bring about operational flexibility were taken into account. Accordingly, the draft of the Undertaking to be executed by the lending institution and the Guarantee Scheme have been suitably modified to make it simpler to operate. We forward herewith the modified draft of the Undertaking to be executed by the lending institutions as also the Guarantee Scheme.

The important modifications considered and agreed to are:-

4 As per recent GOI directions, the eligible credit limit for guarantee cover has been enhanced from Rs. 10 lakh to Rs. 25 lakh and consequently the maximum guarantee cap stands enhanced from Rs.7.50 lakh to Rs. 18.75 lakh.

4 As suggested by IBA & most of the Banks, the credit facilities extended to a single eligible borrower jointly by multiple lending institutions will not be entertained. In other words, a single lending institution should finance the entire credit facilities of a borrower for obtaining guarantee cover under the Scheme. Incidentally, GOI have since taken



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decision to enhance the composite loan (both term loan and working capital) to SSIs up to Rs. 25 lakh.

4 In terms of the Scheme, the Trust shall pay 75 per cent of the guaranteed amount on preferring of eligible claim by the lending institution within 30 days subject to the claim being otherwise found in order and complete in all respects. Keeping in view the suggestion made by IBA and other banks, a view has been taken that the Trust shall pay to the lending institution interest on the eligible claim amount at the prevailing Bank Rate in case of dealy, if any, beyond the specified period of 30 days.

4 Payment of annual service fee by the lending institution to the Trust even after settlement of 75% of the guaranteed amount has since been deleted.

4 The cost of inspection to be borne by the lending institution, has since been deleted.

In the Draft of Undertaking, Clauses 5, 11 and 15 have been suitably modified keeping in view the suggestions made by IBA.

We also clarify that there is no minimum amount of loan which can be covered under guarantee scheme though the maximum eligible credit facility per borrower to be covered is Rs. 25 lakh.

IBA would be constituting a Review Forum from its member-banks for periodical interaction with the Trust. We are sure such a Forum will facilitate better working relationship between the Trust and the Member-Banks.

We hope, the above modifications/changes in the Draft of Undertaking and the Guarantee Scheme will now make the Scheme more attractive and simple to operate. You are requested to register the name of your Bank with the Trust by executing the Undertking in favour of the Trust and start availing the guarantee cover in respect of their collateral free advances up to Rs. 25 lakh to the eligible borrowers.

Thanking you,

Yours faithfully,

Sd/-

(S.N. Sadhwani)

Deputy General Manager



Page 37 of 79


Annexure-X

F.No. 6(7)2000-IF. II

Government of India

Ministry of Finance

(Banking Division)

New Delhi, the 5th September, 2000

Order

The activities, coverage and overall performance of State Financial Corporations (SFCs) have expanded considerably over the years. However, with the passage of time, their operations have thrown up several problems connected with the organization, management, resource mobilisation, operational efficiency and overall financial health. Some of the SFCs have eroded their net worth and their operations have become moribund. With the introduction of financial sector reforms, the business environment of SFCs alongwith other financial institutions is becoming increasingly competitive. To enable SFCs to adapt themselves to the emerging environment and promote the growth of the small scale and tiny industries sector in the desired manner, Government has recently enacted amendments to State Financial Corporations Act, 1951, with a view to enlarge their shareholders base, provide them with greater functional autonomy and operational flexibility and consequent ability to respond to the needs of the changing financial system. Along with the amendments to SFCs Act, 1951 a need has also been felt to restructure the SFCs for strengthening and revitalising them.

2. Considering the above facts and circumstances, the Government has decided to set up a Committee under the Chairmanship of Shri G.P. Gupta, Chairman & Managing Director, Industrial Development Bank of India to look into the functioning of State Financial Corporations (SFCs) and to make recommendations for their restructuring and revitalisation. The Committee shall consist of the following:

1. Shri G.P. Gupta, CMD, IDBI, - Chairman of the Committee

2. Shri S.S. Kohli, CMD, SIDBI - Member

3. Shri S.K. Tuteja, Development - Member

Commissioner (SSI)



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4. Shri I.D. Aggarwal, ED, RBI - Member

5. Shri V. Trivedi, MD, MPFC - Member

6. Shri P.V. Rajaraman, Principal

Secretary (Finance), Tamil Nadu - Member

7. Shri B.D. Jethra, Advisor, Planning - Member

Commission

8. Shri A.K.D. Jadhav, M.D. SICOM - Member

Limited (Maharashtra)

9. Dr. Amitava Mukherjee, Ph.D. - Member

Ex-Banker & Management Consultant

3.The Terms of Reference of the Committee are as under:

(1) Identification of the Role and Status of SFCs in the emerging Indian Financial System;

(2) Suggestions for operational, financial and organisational restructuring of SFCs to provide them with greater functional autonomy and operational flexibility;

(3) Composition and adequacy of Capital Structure particularly with reference to Capital Adequacy Ratio of SFCs;

(4) Financial restructuring, recapitalisation and revitalisation of SFCs;

(5) Identification of sources through which restructuring and recapitalisation shall be funded;

(6) The desirability and feasibility of potential Mergers and Amalgamation of various state level financial institutions;

(7) Measures for containment of Non-Performing Assets;

(8) Profile of Business and change of Business Mix;

(9) To make any other recommendation as may be appropriate to enable SFCs to develop a proper strategy and plan of action that will go towards improving their viability and competitive position in the emerging financial system.

4.The Committee shall submit its report to the Government within a period of three months.

Sd/-

(Shekhar Agarwal)

Joint Secretary to the Government of india



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1. Shri G.P. Gupta, CMD, IDBI, - Chairman of the Committee

2. Shri S.S. Kohli, CMD, SIDBI - Member

3. Shri S.K. Tuteja, Development - Member

Commissioner (SSI)

4. Shri I.D. Aggarwal, ED, RBI - Member

5. Shri V. Trivedi, MD, MPFC - Member

6. Shri P.V. Rajaraman, Principal - Member

Secretary (Finance), Tamil Nadu

7. Shri B.D. Jethra, Advisor, Planning - Member

Commission

8. Shri A.K.D. Jadhav, M.D. SICOM - Member

Limited (Maharashtra)

9. Dr. Amitava Mukherjee, Ph. D. - Member

Ex-Banker & Management Consultant

Copy forwarded for information to Managing Directors of all State Financial Corporations.

Coy to: Secretary-General, COSIDICI, New Delhi.



Page 40 of 79


Annexure-XI

Reserve Bank of India

Rural Planning & Credit Department

Central Office

Central Office Building, 13th Floor, Mumbai-400 001

Ref.No.RPCD.PLNFS.BC.16/06.02.31/2000-01 15th September 2000

All Scheduled Commercial Banks

Dear Sir

Flow of Credit to SSI Sector _ Decision of the Group of Ministers

Please refer to our Circular RPCD.PLNFS.No.BC.73/06.02.31/98-99 dated 1st March 1999, in terms of which Banks were advised of the enhancement in the limit from Rs. 4 crore to Rs. 5 crore for computation of the aggregate working capital requirements of SSI units on the basis of minimum 20% of their projected annual turnover.

2. The issue has been discussed recently at the meeting of the Group of Ministers on Small Scale Industries held on 16th August 2000 under the Chairmanship of Hon'ble Home Minister. In this connection, we reiterate the instructions contained in our Circular dated 1stMarch 1999 and advise that you may ensure the provision of working capital to the SSI units on the basis of the norms specified therein.

3. Further, it was also observed by the Group that the banks should develop schemes to encourage investment by SSI units in technology upgradation and harmonize the same with SIDBI schemes. We shall be glad if you please take necessary steps in this regard.

4. Please acknowledge receipt and advise us the action taken by you in this regard.

Yours faithfully

Sd/-

(A.D. Rane)

General Manager


Page 41 of 79


Annexure-XII

Office of the

Development Commissioner (SSI)

Ministry of SSI, Agro & Rural Industries

Govt. of India

Nirman Bhavan (South Wing), 7th Floor

Maulana Azad Road, New Delhi-110011

No. 18(57)/2000-11D Dated, the 19th September 2000

To,

The Secretary (Industries),

All States/UTs

The CMD, SIDBI, Lucknow

Subject :Package for the Development of Small Scale Sector _ regarding

Sir,

You are aware that with a view to strengthening the small scale sector, a number of policy decisions were announced by the Prime Minister while addressing the National Conference of Small Enterprises on 30th August, 2000. Amongst others, these decisions included two major modifications in the on-going Scheme of Integrated Infrastructural Development (IID). These modifications are:

- The IID Scheme will progressively cover all areas in the country with 50% reservation for the rural areas.

- Under the IID Scheme, 50% of the plots developed will be earmarked for the tiny sector (as against 40% done earlier).

It is requested that the above modifications may please be noted and that new proposals for setting up IID Centres may please be formulated keeping in view the above modifications. A copy of the IID Scheme as notified and circulated vide this Office F. No.2(1)/90-Plg. dated 7th March, 1994 is also enclosed for ready reference.

Yours faithfully

Sd/-

(K.S. Ludu)

Encl. : As above Addl. Development Commissioner


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F. No. 2(1)/90-Plg.

Government of India

Ministry of Industry

(Department of Small Scale Industries

& Agro and Rural Industries)

Udyog Bhavan

New Delhi, 7th March, 1994

Office Memorandum

Sub:- Scheme of Integrated Infrastructural Development (including technological back-up services for small scale industries in rural/backward areas)

Pursuant to Policy Measures for promoting and strengthening small, tiny and village enterprises announced on 6th August, 1991, the Scheme of Integrated Infrastructural Development (IID) (including technological back-up services) for small scale industries in rural/backward areas has been prepared. The said Scheme has since been approved by the Government of India. The details of the Scheme of IID as finalised are given below:-

2.Objectives of the Scheme

(i) To Set up about 50 IID Centres in backward districts/rural areas in the country excluding those districts covered under the Scheme of Growth Centres.

(ii) To promote clusters of small scale and tiny units with a view to create employment opportunities and develop exports.

(iii) To promote stronger linkages between agriculture and industry.

(iv) To provide common service facilities and technological back-up services in the selected Centres.

(v) Creation/upgradation of infrastructural facilities like power, water, communication etc. in the new/existing centres/industrial areas.


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3.Criteria for Selection of IID Centres

Following criteria shall be followed for selection of the IID Centres:-

(a) The selection of Centres should be preceeded by a comprehensive industrial potential survey of the area. Potentiality for small scale and tiny industries be clearly established with organic linkages between agriculture and industry.

(b) The location of the Centres should be close to district/block/ taluka headquarters or any other developing Centres with access to the following basic facilities:-

(i) Proximity to railway stations/state highways to facilitate transportation of raw material to, and finished material from the Centre.

(ii) Availability of water supply.

(iii) Proximity to adequate source of power.

(iv) Tele-communication facilities.

(v) The location selected should not create any ecological imbalance by disturbing the environment.

(vi) The workers in the Centre should not be made to travel for more than 8-10 kilometres from their dwelling places.

(vii) The land to be made available for the purpose of IID Centres should be suitable for the Centre and that the cost of the development work on the land should be the least.

4.Activities and Work Items Admissible

(a) Development of land/plots.

(b) Construction of Roads within the project area and to nearest main road/rail head.

(c) Drainage facilities.


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(d) Provision of water supply.

(e) Power distribution network within the industrial areas.

(f) Effluent treatment and disposal system.

(g) Tele-communication facilities like telephones. etc.

(h) Common facilities/amenities such as built up accommodation for Administrative Office, Bank, Post office, Conference Hall and First Aid Centre.

(i) Raw material depot and marketing outlets.

(j) Build up structure for setting up Common Services Centre including technological back-up services.

(k) Improving/upgrading the deficient infrastructural facilities to increase the productivity and optimum utilisation of capacity in the existing Centres/clusters in backward/rural areas.

The approximate cost of each item of work is indicated in Appendix.

5.Financing Pattern

The IID Scheme is a Central Sector Scheme. The Scheme has been included in the 8th Five Year Plan proposals of the Department of SSI&ARI. The total cost envisaged to cover 50 IID Centres (at 1990-91 prices) during 8th Five Year Plan is to the tune of Rs. 250 crores consisting of Rs. 100 crores as grant by Central Government and the balance of Rs. 150 crores as loan from Small Industries Development Bank of india (SIDBI). The Central Government and SIDBI will contribute to each Centre an amount not exceeding Rs. 5 crores in the ratio of 2:3 (The ratio for North-Eastern Region is 4:1) and the cost in excess of Rs 5 crores per Centre will be met by the State/UT Governments. The State/UT Governments will provide suitable land for the Centres the cost of which may be recovered from the project authorities. SIDBI will advance funds to the extent of Rs. 5 crores to the implementing agencies in instalments and claim simultaneously 40% thereof subject to ceiling of Rs. 2 crores from DC (SSI) as grant. A sum of Rs. 1 crore will be sanctioned to SIDBI


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as imprest advance for sanctioning grant funds to the agencies on pari passu basis alongwith the instalments of loan to be released by them. This advance could be recovered once the amount of original imprest advance is utilised by SIDBI. For the purpose of upgrading deficient infrastructural facilities the financing pattern will be the same as mentioned therein; i.e. 40% by way of grant and 60% by way of loan by SIDBI.

6.Implementing Agencies

State/UT Governments will be entrusted with the task of implementing the proposed Scheme through an appropriate agency which has a good track record. Such agencies may be a public sector corporation or a corporate body or a good NGO having a sound financial position as is evident from their balance sheets.

The State/UT Governments will prepare bankable projects and send them to SIDBI under intimation to O/o the DC (SSI). The State/UT Governments will furnish guarantee for SIDBI loan. Each proposal will be appraised and considered on merit. State/UT Governments may also prepare projects for upgrading deficient infrastructural facilities of existing industrial clusters/centres to improve the efficiency and optimum utilisation of the capacity in backward areas on a selective basis. Such proposals will be considered within the resources available under the Scheme.

7.Procedure for Approval of the Individual Projects

Small Industries Development Bank of India (SIDBI) will undertake techno-economic appraisal of the proposals submitted by the State/UT Governments. SIDBI will send the appraised Projects to O/o the Development Commissioner (Small Scale Industries) for formal approval of Government of India. A High Powered Committee shall consider the projects recommended by SIDBI for sanction. SIDBI will release funds on the lines indicated in para 4 after the High Powered Committee approves the projects. The O/o the Development Commissioner (Small Scale Industries) will be the apex body for coordinating and overseeing the progress of the projects under the Scheme. A State Level Committee under the Chairmanship of the Secretary (Industries) with the representatives of O/o the DC (SSI), SIDBI and lead Bank will be constituted in each State/UT to closely supervise and monitor the project.


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8. Monitoring and Evaluation

Concurrent and post facto Evaluation Studies will be conducted, from time to time, to take corrective measures. It is also envisaged to take up Evaluation Studies of some of the industrial estates and the Centres under "No Industry Districts Scheme" to find out the deficiencies and drawbacks in the implementation of such Schemes and also to find out ways and means to improve the administration, maintenance and efficiency of future Centres.

9. Training/Reservation etc.

In the new Centres SC/ST, women entrepreneurs will be encouraged. Wherever necessary, a well designed Entrepreneurship Development Programme will be conducted to ensure sound and viable new units. In the case of units in the existing centres/clusters, an appropriate package will be worked out to upgrade their technology, management and allied disciplines to improve the productivity. The technology support needed for IID Centre will be provided by the Research Centres, Small Industries Service Institutes, National Small Industries Corporation, Common Service Facility Centres may be entrusted to Industry Associations or any other agencies to run on a commercial basis.

10. An illustrative list of small scale units which could be set up in the IID Centres is at Annexure. However, implementing agencies may include more units depending upon the potentiality of the areas.

Sd/-

(S.B. Mohapatra)

Joint Secretary

Chief Secretary, State Governments


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APPENDIX


Page 48 of 79




Page 49 of 79


5. Location Criteria of IID

(i) Suitable land of the requisite size endowed with infrastructural facilities like water, electricity, communication and nearness to "mandis" should be selected.

(ii) Potentiality Surveys should precede the location of the Centres so that the Centres can be functional or cluster based and viable.

(iii) IID Centres should be close to Taluk/Block headquarters/dwelling places to minimise the travel distance of workers.

(iv) Only one IID Project will be sanctioned in a district.

(v) There should be forward and backward linkages between Agriculture and Industry.

(vi) Efforts should be made to use local resources both men and material.

(vii) Project location should facilitate marketing linkages including the export.

6. Eligible Items for Financing

(i) Land Development

(ii) Water Supply

(iii) Electricity Distribution Network

(iv) Provision of Roads and Drainage

(v) Testing and Common Facility Centre (Technological back- up service)

(vi) Storage Facility (Depots) for raw material and finished goods

(vii) Effluent Treatment Facility

(viii) Tele-communication, Post Office etc

(ix) In order to improve the viability of the projects, implementing agencies may earmark a portion of the project for the purpose of commercial establishments.

7. (i) Agency for Implementing the Scheme

The State Government shall nominate an organisation which shall implement the projects. Such agency could be a State Public Sector Undertaking or Corporate Body or a good NGO. Such agencies


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should have good track record and sound financial position as evident from their audited balance sheets.

(ii) Formulation of Project Report

(a) Since each project has to be bankable, the project reports should be carefully prepared, preferably, by a reputed consultancy organisation. Emphasis should be laid on employment and export while formulating the projects.

(b) Projects under the Scheme shall be submitted to Small Industries Development Bank of India for techno-economic appraisal, under intimation to O/o the Development Commissioner (SSI). SIDBI will, in turn, send such projects to O/o the DC (SSI) for formal approval by the High Powered Committee, constituted under the Scheme.

8. State/UT Governments may also prepare projects to upgrade the deficient infrastructural facilities in backward/rural areas to improve the efficiency/productivity and boost employment and export/in the existing centres/clusters for the benefit of small scale industries within the cost of Rs. 5 crores per Centre. Cost sharing in such cases will be on the pattern prescribed at (4) above. Such proposals also will be appraised by SIDBI and sanctioned by the High Powered Committee.

9. The O/o the Development Commissioner (Small Scale Industries) will be the apex authority for coordinating and overseeing the progress of the Scheme.

10. Evaluation of the Scheme will be taken up, from time to time, to facilitate mid-course correction, future policy formulation, etc.

11. Illustrative lists of likely small scale industries under different groups of industries that could be set up in IID Centres are annexed. States/UTs may modify these lists depending upon the potentialities.

12. State/UT Governments may constitute State level Committees to coordinate and monitor the progress of implementation of the Projects sanctioned by the Governement of India. In such Committees, a representative each from, O/o the DC (SSI), SIDBI and lead Bank may also be included.

13. There should be a well designed Entrepreneurship Development/Skill Upgradation Programme to synchronise with the project work to obviate any idle capacity or low occupancy in the projects required assistance/expertise may be drawn from SISIs, NSIC, etc.


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Illustrative list of small Scale units that could be

set up under the scheme of IID depending upon local requirements and resource endowments

I. Agro-Forest Based and Food Preservation

1. Fruit and Vegetable Preservation/Processing/Dehydration

2. Oil Mills/Expellers

3. Animal/Poultry Feeds

4. Processing of Spices

5. Cereal Processing

6. Bakery and Confectionary Products

7. Dairy Products Processing

8. Hatcheries/Nurseries

9. Cold Storage

10. Meat and Fish Processing

11. Pickles/Squashes/Juices etc.

12. Leaf Plates/Cups

13. Soap Nut Powder

14. Handmade Paper

15. Extraction of Essential Oils

16. Herbs Collection/Processing

17. Mushroom Production/Processing

18. Potato/Tomato Products

19. Starch

20. Brushes/Brooms

21. Silk Worm Rearing & Silk Processing

22. Papad & Vadi

23. Bee-keeping


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II. Chemical/Plastic/Rubber Products

1. Soap & Detergents

2. Dhoop & Agarbatti

3. Paints/Varnishes/Distemper

4. Chalk Crayons

5. Candles

6. Hydrated Lime

7. Allopathic/Ayurvedic Medicine Formulations

8. HDPE/PVC Rigid Pipe/Polythene Pipes

9. Plastic Sheets

10. Plastic Bags

11. P.P. Granules

12. Plastic Container/Storage Tanks

13. Consumer Plastic Products

14. Plastic Shoes/Chappals/Hawai Chappals

15. Rubber Footwear

16. Thermoplastic Rubber Products

17. FRP Products

18. Injection Moulding Plastic Products

19. Consumer Rubber Products

20. Hair Oils

21. Gums/Resins

22. Charcoal

23. Plastic Ropes

III. Leather Products

1. Leather Shoe Uppers Closed

2. Leather Shoe (Indian type-Desi jute)

3. Leather Sandals/Chappals

4. Leather-cum-Rubber Chappals/Sandals

5. Leather/Rexin Handgloves


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6. Leather Suitcases and other products

7. Handbags & Purses (Leather/Rexin)

8. Leather Straps/Belts

9. Chrome Tents/Sole

10. Village Leather Processing

11. Leather Garments

12. Leather Washers and Laces

13. Leather Travel Goods

IV. Mechanical Engineering Industries

1. Agriculture/Horticulture Implements

2. Fabrication Unit

3. Storage Bins/Sheet Metal Products

4. Ploughs

5. Hoes

6. Mowers

7. Hand Pumps

8. Hand Shovels

9. Kudalis

10. Persian Wheels

11. Chaff Cutters

12. Disc Harrows

13. Levellers

14. Insecticides Sprayers

15. Seed Bins

16. Wheat & Rice Threshers

17. Seed Drills

18. Winnowers

19. Ghamelas

20. Seed Cleaners

21. Harvester Grader


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22. Oil Crusher

23. Shell Huskers

24. Dal Mill

V. Electronics and Electrical Products

1. AM/FM Radio

2. Audio Tape Recorder and Combination with Radio

3. Public Address Amplifier

4. Assembly of Loud Speakers

5. TV Booster Amplifiers

6. Electronic Fan Regulators

7. Electronic Gas Lighter

8. Electronic Lantern/Emergency Lamp

9. Battery Eliminator/Power Packs

10. Electronic Calculators

11. Assembly of Audio Cassette (Blank)

12. Monochrome T.V. Receivers

13. Colour T.V. Receivers

14. Assembly of Blank Video Cassette

15. Invertors & Convertors

16. Solid state Voltage Stablizers

17. Moisture Meter (Electronics)

18. Soil Testing Meter

19. Water Analyser

20. Electronic Milk Analyser

21. CRT, DATA/Display Monitor (Monochrome/Colour)

22. G.L.S. Lamps

23. Auto Lamps

24. Lamp Fittings

25. Miniature Lamps

26. Conductors, Cables & Wires


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27. Electrical Measuring Instruments

28. Small Transformers

29. Household Electrical Appliances

30. Room Coolers/Desert Coolers

31. Electrical Wiring Accessories

32. Plugs, Sockets and Switches

VI. Hosiery and Textile

1. Powerloom

2. School Bags/Holdals/Shopping Bags

3. Cotton Durries

4. Ready made Garments

5. Cotton Hosiery :

(i) Vests/Knitted

(ii) Socks

(iii) Under Garment

6. Woollen Hosiery :

(i) Socks, Shawls, Muffler, Pullovers, Blankets

7. Nylon Socks

8. Rain Coats

9. Bed Sheets

10. Canvas Shoes

11. Shoe Laces

12. Tags/Wicks

13. Surgical Bandage

14. Canvas Shoes

15. Pranda/Ribbon

16. Cotton Niwar


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Annexure-XIII

Office of the

Development Commissioner (SSI)

Ministry of SSI, Agro & Rural Industries

Govt. of India

Nirman Bhavan (South Wing), 7th Floor

Maulana Azad Road, New Delhi-110011

No. 18(57)/2000-11D Dated, the 5th December 2000

To,

The Secretary Industries,

Govts. of Assam, Meghalaya, Nagaland, Tripura, Mizoram,

Arunachal Pradesh, Manipur, Sikkim

Subject :Integrated Infrastructural Development (IID) Scheme of the Central Government _ Regarding

Sir,

You may be aware that Government of India launched the Integrated Infrastructural Development (IID) Scheme in 1994 for Small Scale Industries in rural/backward areas. Now this Scheme extends to all areas in the country with 50% reservation for the rural areas. The Scheme aims at creation of basic infrastructure on cluster basis for small scale sector. The estimated cost to set up an IID Centre is Rs. 5.00 crore (excluding cost of land) which is shared between Government of India and Small Industries Development Bank of India (SIDBI) in the ratio of 4:1 (2:3 in case of states other than NE). The share of the Central Government is in the form of grant and that of SIDBI as a loan.

There has been good response from some of the States and Centre has sanctioned IID projects in these states. It has, however, been noticed that all proposals from the State Governments were for setting up of new IID Centres, whereas the scheme also provides for strengthening/upgradation of infrastructural facilities like power, water, communication, etc. in the existing Centres/Industrial Areas.


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So far, as demanded by State Government of Assam and State Government of Manipur, only 3 IID projects could be sanctioned. Out of them, only in the case of IID projects in Assam, Central Grant as admissible could be released for commencing the work. No request for funds has been received from Manipur yet. It may be pointed out that Central Government has earmarked at least 10% of the plan funds for the Plan Schemes in the States in NE region.

Keeping in view the relaxed funding pattern and coverage, it is felt that your Government may like to take benefit of IID Scheme for promotion and setting up of small scale units in your State. It will be appreciated, if necessary proposals are sent to SIDBI for appraisal and submission to the Central Government for consideration.

Yours faithfully

Sd/-

(C.S. Kaushik)

Dy. Director (Plg.)

Copy to :- Shri Pankaj Jain, Director, (SSI Board & Policy) with reference to point No. 29 of Annexure-II related to status on Major Policy Decisions as on 14th November, 2000.


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Annexure-XIV

Office of the

Development Commissioner (SSI)

Ministry of SSI, Agro & Rural Industries

Govt. of India

Nirman Bhavan (South Wing), 7th Floor

Maulana Azad Road, New Delhi-110011

22/CLTUC/Governing Bd./2000 17.10.2000

OFFICE MEMORANDUM

Sub : Credit Linked Capital Subsidy Scheme for Technology Upgradation of Small Scale Industries _ Constitution of a Governing & Technology Approval Board

Govt. of India have approved the Credit Linked Capital Subsidy Scheme for Technology Upgradation of SSIs, under which 12% back ended capital subsidy is admissible on the loans advanced by the scheduled commercial banks/designated SFCs to SSIs for technology upgradation in certain selected sectors. The objective of the scheme is to encourage small scale industrial units to adopt latest technologies with a view to improve the quality of their products so as to withstand competition in the national and international markets. Small Industries Development Bank of India (SIDBI) has been designated as the Nodal Agency of the Scheme, which is scheduled to come into operation w.e.f. 1.10.2000.

In order to monitor the Scheme and also to identify the new technologies to be covered under the Scheme, from time to time, Govt. hereby constitutes a Governing & Technology Approval Board with the following Members:

1. Secretary (SSI&ARI) Chairman

2. AS & FA (Industry) Member

3. Advisor (IM), Planning Commission Member

4. Representative of Banking Division, Member

D/o Economic Affairs, M/o Finance

(not below the rank of Joint Secretary)

5. Representative of Deptt. of Science & Member

Technology (not below the rank of

Jt. Secretary)

6. Rep. of Council of Scientific Member

& Industrial Research (not below DDG)


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7. Rep. of Indian Council of Agricultural Member

Research (Not below DDG)

8. Chairman, National Small Industries Member

Corporation

9. CMD, Small Industries Development

Bank of India Member

10. Executive Director, Reserve Bank of India Member

11. CMD, Punjab National Bank Member

12. CMD, State Bank of India Member

13. President, FASII Member

14. President, FISME Member

15. President, Laghu Udyog Bharti Member

16. President, CII SME Committee Member

17. CMD, N.R.D.C. or his rep. Member

(not below E.D.)

18. AS & DC (SSI) Member-Secretary

The Governing & Technology Approval Board shall

(a) lay down the policy guidelines and give necessary directions for smooth functioning of the Scheme.

(b) monitor and review the functioning of the Scheme.

(c) identify the new technologies which will be covered under Credit Linked Capital Subsidy Scheme for Technology Upgradation of SSIs.

The Governing & Technology Approval Board will have powers

(i) to co-opt any other member/members if considered necessary; and

(ii) to set up sub-committees to identify new technologies in specific products/sectors.

The Board shall meet as and when required but not less than 3 times in a year.

The non-official members of the Board shall be entitled to draw TA/DA for attending meetings of the Board, as per Govt. Rules.

Sd/-

(S.K. Tuteja)

AS & DC (SSI)

To

1. All Members (alongwith a copy of the Scheme).

2. I.F.W. D/o IPP, Udyog Bhawan, New Delhi w.r.t. their

U.O. No. 1487/F-1/2000dated 5.10.2000


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Annexure-XV

41(8)/ISO/Electx./2000

Office of the

Development Commissioner (SSI)

Ministry of SSI, Agro & Rural Industries

Govt. of India

Nirman Bhavan (South Wing), 7th Floor

Maulana Azad Road, New Delhi-110011

Dated : 9th October, 2000

1.The Secretary (SSIs), All State Govts/UTs

2.Commissioner/Director of Industries, All State Govts/UTs

3.Directors, All SISIs.

Subject : Continuation of the on-going Scheme of Reimbursement of ISO-9000 Certification Expenses to small scale/ancillary industries upto 10th Five Year Plan

Sir,

Please refer to this office letter No. 31(77)/2000-Ex. & EI. Dated1.2.2000 intimating the simplification of reimbursement norms and continuation of the Scheme of reimbursement of ISO-9000 certification till the end of the 9th Plan ending on 31.3.2002.

As a part of the package of incentives for the development of SSI announced by the Prime Minister at the National Conference on Small Scale Industries held at New Delhi on 30th Aug'2000, it has been decided to continue the on-going Scheme of Reimbursement of ISO-9000 Certification Expenses till the end of the 10th Five Year Plan.

Accordingly, I am directed to convey the approval of the Govt. of India for the continuation till 31.3.2007 of the on-going scheme of reimbursement of the cost of acquiring ISO-9000 certification (or its equivalent) by SSI/ancillary units upto 75% of the total cost limited to Rs. 75,000/- in each cash.

This issues with the concurrence of IFW vide their U.O.No. 1471/F.1/2000 dt, 4.10.2000.

This may be brought to the notice of all concerned.

Yours faithfully,

Sd/-

(P.P. Malhotra)

Industrial Adviser (Elex.)


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Copy to :

1. Planning Commissioner (VSI Div.), Yojana Bhavan, New Delhi.

2. I.F. Wing, Ministry of SSI & ARI, Udyog Bhavan, New Delhi-110011

3. Director of Audit, Civil & Services Ministries, AGCR Bldg. I.P. Estate, New Delhi.

4. D.G., BIS, Manak Bhavan, Bahadur Shah Zafar Marg, New Delhi-110002.

5. D.G., STQC, Ministry of Information Technology, Electronic Niketan, CGO Complex, New Delhi-110003.

6. PPS to MOS (SSI & ARI)

7. PPS to Secretary (SSI & ARI)

8. PS to AS&DC (SSI)

9. A.D.C. (EA)/A.D.C. (Plg.)

10. JDC/IA (Modn.)/IA(Anc.)/IA (Chem.)

11. All Directors at the Hqrs.


Page 62 of 79


Annexure-XVI

No. 6(6)TU/TM/2001

Office of the

Development Commissioner (SSI)

Ministry of SSI, Agro & Rural Industries

Govt. of India

Nirman Bhavan (South Wing), 7th Floor

Maulana Azad Road, New Delhi-110011

Dated : 4th February, 2001

S.K. Tuteja

Additional Secretary & Development Commissioner (SSI)

Dear Sh. Nair,

During the National Convention on Small Scale Industries held on 30.8.2000 at New Delhi, the Prime Minister announced for setting up of Incubation Centres in Sunrise Industries for the benefit of the Small Scale Sector.

Sectors such as Bio-technology, Information Technology, Tele-communications, Electronics, Non-Conventional Energy Sources etc. may be regarded as the areas where such support is required to the SSI units. Small Scale Units, with their limited resources, do not have much access to these new technologies. The establishment of an Incubation Centre under your Ministry may be of great help in the development of the SSI units.

In view of the above, I request you to kindly consider the setting up of an Incubation Centre under your Ministry as per the policy announcement of the Prime Minister. We would be too happy to provide any assistance in this regard.

With regards,

Yours sincerely

Sd/-

(S.K. Tuteja)

Shri P.M. Nair

Secretary

Ministry of Non-Conventional Energy Sources

Block 14, CGO Complex

Lodhi Road

New Delhi-110003


Page 63 of 79


List of the Addressees

Sh. Vinay Kohli

Secretary

Ministry of Information Technology

Electronics Niketan

C.G.O. Complex

New Delhi-110 003

Dr. Manju Sharma

Secretary

Department of Bio-Technology

Ministry of Science & Technology

Block 2, 7th Floor

C.G.O. Complex

Lodhi Road

New Delhi-110 003

Prof. V.S. Ramamurthy

Secretary

Department of Science & Technology

Ministry of Science & Technology

Technology Bhawan

New Mehrauli Road

New Delhi-110 016

Dr. R.A. Mashelkar

Secretary

Department of Scientific & Industrial Research

Ministry of Science & Technology

Technology Bhawan

New Mehrauli Road

New Delhi-110 016


Page 64 of 79


Dr. R.A. Mashelkar

Director General

Council of Scientific & Industrial Research

Ministry of Science & Technology

Technology Bhawan

New Mehrauli Road

New Delhi-110 016

Sh. Shyamal Ghosh

Secretary

Department of Tele-communications

Ministry of Communications

Room No. 210, 2nd floor

Sanchar Bhawan

20, Ashoka Road

New Delhi-110 001


Page 65 of 79


Annexure-XVII

Office of the

Development Commissioner (SSI)

Ministry of SSI, Agro & Rural Industries

Govt. of India

Nirman Bhavan (South Wing), 7th Floor

Maulana Azad Road, New Delhi-110011

scheme for setting up, modernisation/expansion of testing centres by industries associations & state governments - introducing some modifications

(Approved on 24.10.2000 and to be operative from 1.4.2001)

Introduction of Existing Scheme

In accordance with the Industrial Policy Statement for promoting and strengthening small scale and tiny industries announced in August, 1991, a Scheme for providing Central Government grant-in-aid to Industries Associations for establishing Quality Counselling and Common Testing Facilities was introduced in January, 1995 with a view to :

(i) to encourage the Industries Associations to establish and offer testing facilities in area of testing of raw-materials/components and of final products as per relevant standard specifications so that small scale units could be helped in improving quality of their products and become licensed users of ISI quality marking logo.

(ii) to offer Consultancy Services to SSI units in improving quality, standardization and provide necessary information relating to specifications of raw materials and final products.

2.Assistance Available

Under the above Scheme, one time Central Government grant-in-aid is given to the registered Associations to meet the expenditure on plant and machinery not exceeding Rs. 20 lakhs or 50% of the cost of machinery and equipments (whichever is lower) provided State Government also commits


Page 66 of 79


itself to release matching funds to the Associations. It is also stipulated under the Scheme that Associations will provide fully developed infrastructure to accommodate Testing Centres and will meet the recurring cost of running the Testing Centres. The above Scheme was modified to extend the benefit of this Scheme for modernisation and expansion of the existing Quality Marking Centres run by Industries Department of the State Governments.

3.Proposed Scheme

As part of the Comprehensive Policy Package for promotion and development of SSIs, the Prime Minister on 30th August, 2000 announced, "..........we have also decided to give one time capital grant of 50% to Small Scale Associations who wish to develop and operate testing laboratories, provided they are of international standards",

In pursuance to above announcement, the presently operative Scheme is being modified and will cover Testing Laboratories established by Industries Associations including Chambers of Commerce, Industrial Co-operatives representing the SSI and registered under the Societies (Registration) Act or under any statute and would be eligible to avail the benefits under the Scheme. The Scheme would provide for re-imbursement of the cost of the testing machinery and equipments purchased and installed at the testing laboratory. It will also cover expansion/modernisation of the existing Centres under the aegis of State Governments or State Government funded autonomous bodies. New Centres set up or existing Centres after modernisation would undertake testing as per international standards for which they will give an undertaking.

4.Objectives

The objective of the Testing Centres would be to establish and offer facilities mainly to the SSI units located in the state for testing quality of raw-materials, components and the end products as per the relevant standard specifications within the ambit of testing facilities available within the Centre.

_ To help the SSI units in obtaining ISI Marks for their products.

_ To offer Consultancy Services and improving the quality of products.

_ To promote standardisation and provide necessary information in regard to material specifications and specifications for end products.


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_ To extend quality assurance and assist the promotional institutions of testing laboratories such as the Bureau of Indian Standards, Export Inspection Agency, National Productivity Council, Govt. and Non-Governmental Organizations in the region.

_ To promote the Total Quality Management concept in the small scale sector units and to assist the units in obtaining accreditation for ISO-9000/BIS 14000.

5.Eligibility Criterian

All willing Industry Associations including Chambers of Industries and Industrial Co-operatives representing the Small Scale Industries interested in availing one time grant-in-aid under this Scheme would be registered under the Societies Registration Act, 1860 or any other statute.

i) The applicant constitutes an exclusive Governing Council to look after the working of the Testing Centre.

ii) All employees of the Testing Centre will have full functional freedom.

iii) The Testing Centre should have accreditation from any of the agencies viz; (i) Bureau of Indian Standards, (ii) National Accreditation Board of Laboratories and Calibration & (iii) Accreditation to any of the reputed international agencies or their authorized representatives. This accreditation should be valid atleast for a minimum period of 5years after release of grant-in-aid.

iv) The new Testing Centre would have been set up after 1.4.1998.

v) The beneficiary Association would not have availed any other Government grant-in-aid from State/Central Governments for the Testing Centre including assistance under the existing Scheme.

6.Maximum Amount Payable under Re-Imbursement

It is felt that with a cost of approximately Rs. 1 crore, a Testing Centre with reasonable modern facilities for a few products can be set up. Therefore, maximum amount to be re-imbursed under this Scheme would be 50% of the cost of equipment and machinery installed in the laboratories of the Testing Centre subject to an upper limit of Rs. 50 lakhs on one time grant basis.


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7.Implementation of the Scheme

The registered Associations will appoint Chief Executive Officer and other required staff to establish the Testing Centre for products manufactured by their member units and will extend to them full functional freedom. After installing and commissioning the equipments and machinery, the CEO will approach any one or more of the agencies to get the accreditation. After obtaining the accreditation, a request in the prescribed form will be submitted to the Office of the DC(SSI) to claim the 50% of the cost as re-imbursement. The request will accompany all the prescribed papers relating to cost of land, civil works, machinery etc. and photo copies of the documents, bills etc. showing the expenditure incurred to obtain accreditation. The cost incurred will be certified by a Chartered Accountant. The firm will also enclose a photostat copy of the accreditation.

8.Conditions for the Release of Funds

Re-imbursement in the form of grant-in-aid from the Govt. of India to the maximum amount of Rs. 50 lakhs or 50% of the cost whichever is less shall be considered for release if the following conditions are satisfied :

1. The Industry Association will constitute the Governing Council comprising Executive Members of the Association. State Government will also be given representation in this Governing Council.

2. Association will provide details of all the documents pertaining to the expenditure incurred to establish the Testing Centre and thereafter to acquire accreditation.

3. Association will not dispose of any of the assets created out of the grant-in-aid received from Government without the written permission of the Central Government. In case the Associations fail to abide by this condition, necessary proceedings to recover the same as land revenue will be initiated against it and its office bearers.

4. Central Government grant-in-aid is only for purchase of items of capital nature and will not be utilized to meet the recurring expenditure.


Page 69 of 79


Annexure-XVIII

No: 10(4)/2000-SSI Board & Policy

Government of India

Ministry of SSI & ARI

Office of the Development Commissioner

(Small Scale Industries)

Nirman Bhavan

New Delhi-110011

3rd October, 2000

OFFICE MEMORANDUM

Sub : Setting up of a Group under Cabinet Secretary for substituting routine inspections by self-certification _ Reg.

Government have decided to set up a Group under the Chairmanship of Cabinet Secretary to specifically recommend substituting routine inspections by self certification in the Small Scale Sector. The Group shall also recommend changes in State laws to be suggested to the State Governments.

The Group shall be constituted as under:

1. The Cabinet Secretary Chairman

Government of India

Cabinet Secretariat, Rastrapati Bhawan

New Delhi-110004

2. Secretary (SSI & ARI) Member

Ministry of Small Scale Industries

& Agro and Rural Industries

Udyog Bhawan

New Delhi-110011

3. Secretary (Labour) Member

Ministry of Labour

Shram Shakti Bhavan

New Delhi-110001


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4. Secretary (Environment) Member

Department of Environment & Forests

Paryavaran Bhawan, C.G.O. Complex

Lodhi Road

New Delhi-110003

5. Secretary (IPP) Member

Ministry of Commerce & Industry

Department of Industrial Policy & Promotion

Udyog Bhawan

New Delhi-110011

6. The Secretary Member

Finance & Revenue, Ministry of Finance

North Block

New Delhi-110001

7. The Secretary Member

Legal Affairs

Department of Legal Affairs

Ministry of Law, Justice and Company Affairs

Shastri Bhavan

New Delhi-110001

8. Principal Secretary (Industries) Member

Government of Andhra Pradesh

Chirag Ali Lane, Abids

Hyderabad-500001

9. Principal Secretary (Industries) Member

Government of Maharashtra

Mantralaya

Mumbai-382011

10. Commissioner & Director of Industries Member

Government of Uttar Pradesh

Udyog Bhawan, G.T. Road

Kanpur-208001


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11. Shri J.M. Pawar Member

President

Federation of Association of Small Industries

of India (FASII), 23 B/2, Guru Govind Singh Marg

New Rohtak Road, New Delhi-110005

Stationed at : Nasik (Maha.)

12. Shri Sudershan Sareen Member

President

Laghu Udyog Bharti (LUB)

1E/11, Swami Ram Tirath Nagar

Jhandewalan Extension, New Delhi-110055

13. The Additional Secretary & Member-Secretary

Development Commissioner (SSI)

Nirman Bhawan

New Delhi-110011

Terms of Reference

The Group shall go into the Acts, Rules, Regulations, etc. applicable to the Small Scale Sector and recommend specifically regarding substituting routine inspections by self-certification

The Group shall make specific recommendations on deletion/repeal of all such Acts, Rules, Laws/Regulations, Orders, etc. which have become redundant so as to make laws more useful and simple to abide.

The Group shall submit its final report with specific recommendations within three months of its constitution.

TA/DA will be payable to Non-Official Members, as per rules.

Sd/-

(Pankaj Jain)

Director (SSI Bd. & Pol.)

Tel : 3012694

To

All concerned


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Sub-allocation of working capital limit Annexure-XIX

for payments to SSI units

Reserve Bank of India

Industrial & Export Credit Department

Central Office

Central Office Building

Post Bag 10030

Mumbai - 400 001

IECD. No. 5/08.12.01/2000-01 October 16, 2000

The Chairmen/Chief Executives of

all Commercial Banks

Dear Sirs,

Flow of Credit to SSI Sector- Decision of the Group of Ministers

As you are aware, the Group of Ministers on Small-Scale Industries under the Chairmanship of Hon'ble Home Minister, in its meeting held on August 16, 2000, deliberated on the issues regarding flow of credit to the SSI Sector. In this context, the Group has recommended the mechanism of sub-allocation of limits, within the overall working capital limits sanctioned to their corporate borrowers, for meeting their payment obligations to SSI units.

2.In the light of the decision taken by the Group of Ministers, banks are advised to take following measures with immediate effect:

(i) Banks may, while sanctioning/renewing credit limits to their large corporate borrowers (i.e. borrowers enjoying working capital limits of Rs. 10 crore and above from the banking system), fix separate sub-limits, within the overall limits, specifically for meeting payment obligations in respect of purchases from SSIs either on cash basis or on bill basis.


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(ii) The size of such sub-limits may be decided taking into account the projected purchases by corporate borrowers from the SSIs during a year in relation to their total purchases and other relevant factors.

(iii) Further, with a view to ensuring availability of adequate balance in the account for meeting the payment obligations to SSI units, banks may ensure that sale proceeds/other receipts of the borrower are credited to this account on a pro rata basis.

3.The above arrangement is expected to ensure availability of adequate funds for making timely payment by the corporate borrowers of banks to their SSI creditors. However, banks should closely monitor the operations in the sub-limits, particularly with reference to their corporate borrowers' dues to SSI units. For the purpose, banks may ascertain periodically from their corporate borrowers, the extent of their dues to SSI suppliers and ensure that the corporates pay off such dues before the appointed day/agreed date as defined/indicated in Section 2(b) and 3 of the Interest on Delayed Payments to Small Scale and Ancillary Undertakings Act, 1993 (32 of 1993) by using the balance available in the sub-limit so created. If, at any time, the sub-limit is exhausted there is no bar on such payments being made from the other segment of the working capital limit. Similarly, if no payments are due to SSI suppliers, and the sub-limit remains unutilised/partly utilised, banks may allow their corporate borrowers to operate this limit for meeting other working capital expenses.

4.Please acknowledge receipt and also advise us of the action taken in the matter.

Yours faithfully,

Sd/-

(S.S. Gangopadhyay)

Chief General Manager


Page 74 of 79


Annexure-XX

Reserve Bank of India

Rural Planning & Credit Department

Central Office

Central Office Building, 13th Floor, Fort

Mumbai - 400 001

D.O.RPCD.PLNFS NO. 569/06.04.01(Committee)/2000-01

November 28, 2000

Memorandum

Reserve Bank of India hereby appoints a Working Group to review the existing guidelines and to recommend the revision of guidelines making them transparent and non-discretionary for the rehabilitation of current sick and potentially viable SSI units.

Composition of Working Group

1. Shri S.S. Kohli Chairman

Chairman

Indian Banks' Association

Stadium House

81-83 Veer Nairman Road

Mumbai-400 020

2. Shri Vepa Kamesan Member

Managing Director

State Bank of India

Central Office, Mumbai

3. Dr. A.K. Khandelwal Member

Executive Director

Bank of Baroda

Central Office

3, Walchand Hirachand Marg

Ballard Pier

Mumbai-400 001

4. Shri O.N. Singh Member

Executive Director

Bank of India

Express Towers

14 floor, Nariman Point

Mumbai-400 021


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5. Shri R.P. Gupta Member

Executive Director

Canara Bank

Head Office

12, J.C. Road

Bangalore-560 002

6. Shri S.K. Tuteja Member

Development Commissioner (SSI)

Ministry of SSI & ARI

Government of India

Nirman Bhawan

7th floor, Maulana Azad Road

New Delhi-110 011

7. Shri S.S. Gangopadhyaya Member

Chief General Manager

Industrial Export and Credit Dept.

Central Office

Reserve Bank of India

Mumbai-400 001

8. Shri A.V. Sardesai Member-Secretary

Chief General Manager

Rural Planning and Credit Dept.

Central Office

Reserve Bank of India

Mumbai-400 001

Terms of reference

  • a) to review the existing guidelines in regard to rehabilitation of sick units in the small scale industrial sector, and
  • b) to recommend the revision of guidelines making them transparent and non-discretionary for the rehabilitation of current sick and potentially viable SSI units.

The Secretariat of the Committee will be provided by the Rural Planning and Credit Department, Central Office, Reserve Bank of India, Mumbai-400 001.

Sd/-

(Jagdish Capoor)

Deputy Governor


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Annexure-XXI

Ministry of Small Scale Industries and Agro & Rural Industries

Minister Announces New Package for Khadi And Village Industries in India

New Delhi, 14 May 2001: The Hon'ble Minister of State for Small Scale Industries and Agro & Rural Industries, Smt. Vasundhara Raje, today unveiled an innovative New Package for the Khadi and Village Industries Sector in India, that is bound to enormously boost the existing sector.

The Package was announced as part of the Government endeavour to further an expand the role of the Sector in the national economy. The Package has been devised in accordance with the Government's prime objectives of creating more jobs in rural areas and empowering the women and backward classes in India. It will also help ensure that people in rural areas live with dignity and self-respect.

Speaking on the occasion, Smt. Vasundhara Raje said, "This package is being unveiled to further strengthen the sector and boost the village industries, that form an integral part of the Indian society. As envisaged by Mahatma Gandhi, the Father of the Nation, our government is totally committed to this cause and has now decided to position and market Khadi and Village Industries products as a natural, handmade and an economical products, that are synonymous to our heritage, culture nd national pride".

The measures announced in this Package, are as per the recommendations of the Pant Committee, a High-powered Committee which was constituted under the Chairmanship of Shri. K.C. Pant, Dy. Chairman, Planning Commission, to suggest suitable meaures for strengthening the Khadi and Village Industries Sector with a view to make the sector viable and vibrant in the new era of globalisation.

The Package addresses the following issues that were identified as a hindrance to the overall growth of the sector:

  • l Absence of long term policy
  • l Bunching of special rebate leading to seasonal sale, large inventories

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  • l Inadequacy of working capital
  • l Poor marketing infrastructure
  • l Inadequate protection to artisans

To ensure that the Package was totally committed to the cause, it was prepared after nationwide extensive deliberations with institutions of Khadi and Village Industries, officials, bankers and others with a view to create large scale employment opportunities for rural masses.

Being natural and eco-friendly, Village Industries products can meet the new demand for non-synthetic and non-artificial products specially health and body and food products. But this would require infusion of inputs in the form of technology upgradation, quality control, marketing through publicity and advertisement, renovation and modernisation of sales outlets.

The main features of the new Khadi and Village Industries Package are:

  • l Rebate Policy for Five Years

Hitherto, rebate policy was announced on a year-to-year adhoc basis. Now the rebate policy would be for a period of five years. Under the new policy, while there would not be any change in the normal rebate of 10% throughout the year, the special rebate, which used to be given @ 10% for a period of 90 days only has been extended to 108 days on staggered basis i.e., 7 days in each month and for the whole month of October.

  • l Options of Rebate and MDA

As a measure of giving the incentives to institutions for producing innovative designs and marketable products, a new scheme of Market Development Assistance (MDA) @ 20% of the Annual turnover has been introduced as an option in place of rebate.

  • l Additional Working Capital

To tackle the problem of lack of credit (working capital), the term loan of Rs. 300 crores given to Khadi Institutions is being converted into working capital. Further, a fresh line of credit of Rs. 250 crores as working capital would be provided to those institutions that are willing to switch from Rebate Scheme to MDA Scheme.


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  • l Insurance Cover to Khadi Artisans

The provision of insurance cover for khadi artisans against death, disability and disease.

  • l Quality

In order to make the marketing of khadi products attractive, the focus henceforth would be on quality. The quality of products of this sector will be certified through labs accredited by NABL.

  • l Creation of Packaging and Design Facilities
  • l Brand Building Exercise, in the form of Heritage Khadi, standard logo and standard design of sales outlets.
  • l Marketing Blitz and campaigns through the use of multimedia and sustained publicity
  • l Cluster Development Programme

Strengthening of rural sector by development of natural clusters. Creation of common facilities for innovation, technology upgradation, packaging, processing, testing and e-commerce.

  • l Focus on Core Areas

Earmarking of an amount of Rs. 275 crores for a few selected areas where we have competitive advantage, namely herbal cosmetics and medicines, honey, organic foods, edible oils and essential oils to begin with.

For further information and assistnce, please contact:

Shri Shankar Aggarwal

Joint Secretary

Ministry of Small Scale Industries and Agro & Rural Industries

Room No. : 122, Udyog Bhawan

New Delhi-110 011

Tel : 011 - 23016336, 23010152

Fax : 91 - 3010886


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