The Small Scale Industries and Agro and Rural Industries sector  is one of the  vibrant sectors of the  Indian economy in terms of employment generation, its share in industrial production and exports.   Over 40 per cent of India’s gross industrial production and 35 per cent of  its exports, are generated by the small and medium sector.  With over 3.20 million units in the country, it has been recognised that the rapid growth of this sector will help India in securing a prime position among growing economies.

De-Reservation of  SSI Items

With a view to providing the SSI sector opportunities for technological upgradation and  promotion of exports, items reserved for exclusive manufacture by SSI have been de-reserved from time to time. 

The de-reservation process involves extensive consultation with all the stakeholders.  Based on the consultations with the stakeholders and on the recommendations of  the Advisory Committee,  various  items have been de-reserved from the exclusive list of SSI. Accordingly, the Ministry of Small Scale Industries issued a notification on  March 28, 2005, de-reserving 108 items (including ten sub items), ranging from  textile products to agricultural implements, from the list of items reserved for exclusive manufacture in the small scale sector.   In the Budget Speech of 2006-07, the  Finance Minister Shri P.Chidambaram, announced a further de-reservation of  180 items  from the list.  With this the number of items  reserved for the SSI sector  will be  326.

            The objective of the de-reservation is to enhance competitiveness of the manufacturing of these products by freeing  these items from  the limitations of investment etc. 

Performance and  Credit Rating Scheme

The Government took some policy initiatives during the first year itself  to help promote and develop the SSI sector. A new Scheme on Performance and   Credit Rating of  Small Scale Industries was launched on April 7, 2005.  The basic objective of the Scheme was to sensitise   the SSI Sector to the need for credit rating and encourage the SSI Units to maintain good financial track record, thereby helping them earn higher rating for their credit requirements when they approach the financial institutions for their working capital and investment requirements. 

The Scheme was launched by the  Finance Minister, Shri P.Chidambaram, and the Union Minister of Small Scale  Industries and Agro & Rural  Industries, Shri Mahabir Prasad, in New Delhi.

SMED Bill, 2005

The Small and Medium Enterprises Development (SMED) Bill, 2005 was introduced in the Lok Sabha on May 12, 2005.  In the Bill, a ‘small enterprise’ is defined, in case of manufacturing enterprises, as an enterprise with investment in plant and machinery not exceeding Rs. 5 crore and, in case of enterprises engaged in providing of services, as an enterprise with investment in equipment not exceeding Rs.2 crore.

            The Bill seeks to provide a legal framework for the promotion and development of small and medium enterprises and for enhancing their competitiveness. The Bill was  referred to the Department  related Parliamentary  Standing Committee on Industry for examination.   The report of the Standing Committee was submitted to Parliament on  August 4, 2005, with a number of recommendations.  Most of the   recommendations were accepted.  Accordingly, amendments to the SMED Bill 2005 were proposed.  The proposed amendments were considered by the Cabinet at its meeting held on August 18, 2005, and the Cabinet decided to refer it to a Group of Ministers, chaired by Shri  Pranab Mukherjee, Union Defence Minister. The Bill is now likely to be taken up in Parliament.

KVIC (Amendment)  Bill, 2005

The UPA Government, in its National Common Minimum Programme (NCMP), had declared that the functioning of the Khadi and Village Industries Commission (KVIC) would be revamped. Towards these objectives the Government dissolved the KVIC.  

The Khadi and Village Industries Commission (Amendment) Bill, 2005 was introduced in Lok Sabha on August 22, 2005. It was referred to the Department-related Parliamentary Standing Committee on Industry, headed by Shri Santosh Bagrodia, M.P., for examination and report. The Committee submitted its report to Parliament on December 13, 2005, recommending amendments to four clauses of the Bill and  the Union Cabinet gave its approval on February 1, 2006,  for moving  amendments to the Bill.

NCEUS

The National Commission on Enterprises in  the  Unorganised Sector    (NCEUS), headed by Dr. Arjun Sengupta, was  constituted in September 2004, to examine the problems of enterprises in the unorganised sector  and suggest measures to overcome them.  The Government asked the Commission  to examine the draft Unorganized Sector Workers Bill, 2004, and come up with appropriate alternatives.  In response to this, the Commission submitted two draft Bills, one on the Unorganized Sector Workers Social Security Bill, 2005, and the other on Unorganised Sector Workers (Conditions of Work and  Livelihood Promotion) Bill, 2005.  These draft Bills are now in an advanced stage of discussions within the Government.  On May 5, 2006, the Commission handed over a report  and recommendations on National Policy on Urban Street Vendors to the Ministry of  Urban Employment and Poverty Alleviation.  

SFURTI

The Ministry of SSI and ARI has launched a scheme named “SFURTI”(Scheme of Fund for Regeneration of Traditional Industries) with a budget of 100 crore rupees for the holistic development of traditional clusters.  It is proposed to take up 100 clusters for development over the next five years.  The scheme would benefit artisans, weavers, potters, and other workers engaged in traditional industrial activities.

 

SIDO

The Small Industry Development Organisation (SIDO), an apex body under the Ministry  of Small Scale Industries and Agro & Rural Industries   implemented various schemes and programmes to assist the promotion and growth of small enterprises.  It organised several Motivational Campaigns and Entrepreneurship Development Programmes in various States during the last two years.

NSIC

The National Small Industries Corporation (NSIC) conducted various Buyer-Seller meets during the last two years to provide assistance and support to Small Scale Industries.  These meets resulted in  larger number of SSI Units becoming suppliers to Public Sector Undertakings and Government Departments, by registering such Units under NSIC’s  Single Point Registration Scheme during the Meets.

Autonomous Institutes

The three autonomous institutes under the Ministry, viz. the National Institute of Small Industry Extension Training  (NISIET) at Hyderabad, the National  Institute of Entreneurship and Small Business Development (NIESBUD) at  New Delhi and the Indian Institute of Entrepreneurship (IIE) at Guwahati also undertook various  research and  training programmes for entrepreneurship development in the SSI sector.

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