The Hindu : `Rs. 400 cr. subsidy to SSIs pending'

Online edition of India's National Newspaper
Thursday, Feb 20, 2003

Southern States

Southern States - Karnataka

`Rs. 400 cr. subsidy to SSIs pending'

By Our Staff Correspondent

Udupi Feb. 19. The Convenor of the State Small Industries Forum, Bhadragiri Sarvottam Pai, on Wednesday said that the Government was yet to release subsidy of Rs.400 crores to small industries.

He told presspersons here that the governments in the State had failed to provide infrastructure for the development of small industries. As per the statement given by the Minister of State for Small Industries in the Assembly, the state of small industries was evident by the fact that nearly 60 per cent of them were sick and had closed down, while 25 per cent were on the verge of closure. Only 15 per cent of the small industries were doing well.

Mr. Pai said the Government had failed to create linkages between small industries and farmers, which could have been beneficial for the two. The Government was interested in improving the information technology and biotechnology sectors rather than the manufacturing sector, which had better scope in comparison. It had failed to remove regional imbalances. Instead of encouraging agro-processing industries, which had high employment potential, the Government had concentrated on small industries around towns.

Though the Government passed 30 orders for the development of small industries at a meeting attended by the Chief Minister, S.M.Krishna, on June 19, 2000, not one of them had been implemented so far. Had the Chief Minister's order no value? Small industries in the State were hit hard by the increasing power tariff. Nearly 40 per cent of small industries had been closed down due to power problems. Power was being supplied to small industries for three to five hours. The power supplied was of poor quality. The cost of the power supplied to small industries worked out to between Rs.14 to Rs.16 per unit.

The cross subsidy paid by HT consumers was Rs.387.59 crores, while Rs.194.82 crores were being paid by LT-5 consumers, and the balance was being borne by LT-3 consumers. Consumers using 40 HP and less were paying Rs.25 per HP as fixed charge per month, while those using between 40 HP to 50 HP were paying Rs.30 per HP. Consumers using 50 HP to 67 HP were paying Rs.55 per HP as fixed charge, while those using 67 HP to 100 HP were paying Rs.100 per HP as fixed charge per month. The Government should take immediate action to solve the problems being faced by the small industries.

Lauding the Union Government for taking a number of measures for the growth of small industries, he said the Centre had appointed the S.P.Gupta Committee to find solutions to the problems being faced by small industries. In its report, the Committee had suggested that the Centre provide all help to small industries sector, as it was the lifeline of the country.

The Centre intended to table the Small Enterprises Development Bill 2002 in the Budget session of Parliament. It had simplified the laws and regulations related to small industries. The Centre wanted the State governments to implement the VAT system to facilitate uniform taxes in the States, Mr. Pai said.

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`Rs. 400 cr. subsidy to SSIs pending'