CONSSIA hails policy package

Special Correspondent

MADURAI: The Confederation of Southern Small Industries Associations (CONSSIA) has hailed the policy package, announced recently by Union Finance Minister P. Chidambaram for small and medium enterprises as a "welcome measure."

In a statement issued here, the CONSSIA president, A. Selvaraj, recalled that the small scale sector had been clamouring for improvement in credit delivery mechanism of public sector banks for long and said the announcement that flow of credit would be doubled from the current level of Rs.67,600 crores to Rs.1,35,000 crores by 2009-10, envisaging an annual growth of at least 20 per cent, was heartening.

The package, he said, was "more inclusive and sensitive" to the aspirations of the small-scale sector. The small-scale sector had been demanding a transparent rating system to enable the banks to decide on the interest rates to be availed by the SSI units. The package had now agreed in principle that the SSI sector also needed to be treated like corporate entities. The lending agencies, Small Industries Development Bank of India (SIDBI) and Credit Information Bureau India (CIBI), should expedite the setting up of a credit rating agency to rate the small and medium enterprise borrowers, at the earliest, Dr. Selvaraj said.

However, the CONSSIA felt that though the policy package was positive in its outlook towards the SMEs, it should not lose sight of the fact that 90 per cent of small units in the country were `tiny' in nature. Their investment limit was less than Rs.25 lakhs but they were capable of providing huge employment opportunities in rural areas. Their aspirations on credit flow should also be met effectively, he said and urged the Finance Minister to come out with a separate policy package for the tiny sector.

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