The Hindu : Enhance subsidy for small units: confederation

Online edition of India's National Newspaper
Friday, Feb 14, 2003

Southern States

Southern States - Pondicherry

Enhance subsidy for small units: confederation

By Our Staff Reporter

Pondicherry Feb. 13. The Confederation of Southern Small Industries Associations has appealed to the Union Finance Minister to spare the small units with below Rs. one crore investment from the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002.

The association secretary, K. Parthasarathy, in a memorandum to the Minister, told reporters here on Wednesday that the prime lending rate should be fixed at or below ten per cent as it would benefit the tiny industries. The quantum of subsidy given for their modernisation should also be increased to 50 per cent from 12 per cent.

A separate law for small units should be enacted and a flat remittance at ten per cent of the wages of employees deducted from their salaries coupled with equal contribution from the employers would also enable covering welfare measures.

Seeking support for marketing their products, the memorandum pleaded that Government should purchase a minimum of 30 per cent of products from small industries.

The memorandum also said with the Value Added Tax (VAT) coming into being from April this year certain tax reforms became inevitable from standpoint of small units.

The Central Sales tax (CST) should be abolished when the VAT came into force. If the CST was to be phased out over a period of time it should be made vatable till then. Entry tax, octroi and other inter-State levies should be abolished.

The memorandum also sought IT exemption for first three years for small units extendable to five years for those in backward areas, abolition of the Minimum Alternate Tax and raising the compulsory tax audit to Rs 1 crore and replacement of all labour laws with single small scale industries legislation.

State level associations of small industries should be provided with one time grant ranging between Rs 25 lakhs and Rs. 1 crore depending on their size for installing infrastructure.

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