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'Govt. committed to financing small units under WTO-compatible schemes'

By Our Special Correspondent

CHENNAI, MAY 25. The State government is committed to financing development of small scale industries (SSIs) under schemes, which are compatible with the World Trade Organisation (WTO) regime, such as cluster development and upgrading of infrastructure, according to D.Rajendran, Secretary (Small Industries).

The SSIs should put forth proposals for common facilities such as laboratories, testing facilities and certification schemes for location-specific or product/activity-specific clusters, so that the government could contribute its mite, Mr. Rajendran said, delivering the valedictory address at a seminar on `Emerging Needs of SSI', organised by the Federation of Associations of Small Industries of India (FASII) today.

The Secretary cited the decision of the government to contribute Rs. 2 crores, matching the Central grant of Rs 2 crores, for a special purpose vehicle (SPV) under a Rs 10-crore scheme for upgrading of infrastructure on the Guindy Industrial Estate. Infrastructure programmes would also be taken up at Hosur and Thuvakudi.

While Mr. Rajendran expressed concern over the reluctance of banks to finance about 265 schemes recommended by the government under the New Anna Marumalarchi Thittam (NAMT) for setting up agro-industries and food processing industries in rural areas, he was silent on the concern expressed by SSI leaders over total stoppage of all subsidies to units falling outside the NAMT.

Clarifications and decisions announced by representatives of various statutory agencies during the seminar included the following: The State Pollution Control Board will not insist on past dues of consent fee from SSIs, except for the last one year. It intends to reduce the periodicity of renewal of consents by SSIs, in effect reducing the fee. It is also working out a self-certification scheme for small units.

"Construction" activity is not included in the scope of the Factories Act, except for shipbuilding. The government has instructed that SSIs be inspected only once in five years, except in case of fatal accidents, complaints by workers and non-payment of licence fees. Prosecution would be launched only after studying the response of any unit found in violation of the law. Though there is the Small Establishments Act 1987 in Tamil Nadu, under which only one annual return and a simplified Form A are obligatory under the Factories Act for SSIs with less than twenty employees, this has not been taken advantage of by many. The Chief Inspectorate of Factories has introduced electronic returns, which should be accepted by its inspectors.

The National Small Industries Corporation (NSIC), which has taken up quality improvement programmes in pumps cluster in Coimbatore and furniture cluster in Pondicherry, proposes to reintroduce its bill discounting scheme.

Leaders of FASII, including D.V.K.Rama Rao, vice-president, V.S.Narasimhan, former president, and T.V.Hariharan, secretary, presented a memorandum addressed to the State and Central governments, calling for a separate policy for the SSI sector, exemption from the Factories Act for SSIs with 50 employees (and using power) and 100 employees (without use of power), lowering of bank interest on SSIs on a par with that charged on housing loans with collateral, easy exit for sick units and contribution to a unified single national scheme of social security for workers.

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