The Hindu : Tamil Nadu News : `Small industry definition must include turnover limit'

Online edition of India's National Newspaper
Monday, Sep 27, 2004

Tamil Nadu

Tamil Nadu

`Small industry definition must include turnover limit'

By Our Special Correspondent

CHENNAI, SEPT. 26. The Tamil Nadu Small and Tiny Industries Association (TANSTIA) has demanded imposition of limits on turnover along with the existing investment limits in the definition of small-scale industry (SSI).

While calling for new SSI policy by the Central and State Governments, the annual convention of the association STICON 2003-04, held here yesterday wanted an annual turnover limit of Rs.1 crore for the tiny sector, Rs.10 crores for the SSI sector, Rs. 100 crores for medium industry, Rs.1,000 crores for large industry, and a minimum of Rs. 1,000 crores for mega industries.

The convention called upon the Reserve Bank of India (RBI) to impose an obligatory minimum share (in terms of percentage) for SSI and tiny sector financing within priority sector lending by banks.

Expressing concern over "artificial increases" in the prices of raw materials such as steel, aluminium, copper and PVC (which it attributed to the emergence of "oligarchies" as a result of mergers and acquisitions of manufacturing units), the convention called for setting up regulatory bodies for raw materials and financing State promotional units for distribution of at fair prices.

Single labour law

It wanted a single labour law enacted for the SSI sector and a single contribution made by SSIs towards workers' welfare, which could be apportioned by the authorities among provident fund, medical insurance and other schemes.

The STICON called upon the Central and State Governments to introduce "honourable exit policies" for entrepreneurs. It wanted a single tax to replace excise, service tax and sales tax to reduce the workload on compliance by industries.

As for the State, the convention said entry tax should not be levied on raw materials, and where levied, manufacturers should be allowed to set it off the tax against tax payable on their sales.

It wanted enforcement of either the law on industrial townships (which has not been notified) or an alternative scheme to ensure that industries were not taxed by different authorities without giving them the benefit of infrastructure and maintenance of facilities.

The Government should set up a mechanism to monitor and enforce purchase and price preference for SSIs and resume support to traditional industries such as engineering, even while implementing the New Anna Marumalarchi Thittam (NAMT) meant to promote agro-industries.

Rameshram Mishra, Tamil Nadu Industries Secretary, favoured the concept of a single SME (small and medium enterprises) sector to encourage SSIs to grow vertically and expand without losing policy incentives.

Earlier, P.Valarmathi, Minister for Rural Industries, defended the priority given to units under the NAMT in allocation of resources on the ground of creation of employment in rural areas, especially for women.

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