The Hindu : Business : 180 dereserved items notified

Online edition of India's National Newspaper
Wednesday, May 31, 2006

Business

Business

180 dereserved items notified

Special Correspondent

To enable domestic producers to achieve economies of scale

CHENNAI: Thirty-six products in the category of auto parts/components, ancillaries and garage equipment are among the 180 items dereserved this year for purposes of production by non-SSI sector.

According to a notification issued by the Union Ministry of Small Industry, 21 products in the chemicals category and 47 in the "other chemicals and chemical products" category have been dereserved. In the category of "mechanical engineering (excluding transport equipment", a total of 76 products have been dereserved.

The Union Finance Minister, P.Chidambaram, had in his budget speech announced that a total 180 items had been identified for dereservation but the notification of the items was made only on May 16. Last year, 108 items were dereserved.

The government has been combining a policy of substantive dereservation, started on a regular basis since 2002, with granting higher investment limits for select product lines in the reserved list.

This is intended to enable domestic manufacturers to achieve economies of scale and technological modernisation to compete with products being imported under a falling import duty regime. Earlier, between 1997 and 2001, only 39 products were removed from the reserved list.

With the latest announcement, the list of items reserved for production in the SSI sector has come to about 300, compared to nearly 800 at the turn of the century.

However, reserved products can be produced by large sector enterprises provided they undertake to export at least 50 per cent of their installed capacity.

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