The annual small scale industries board meeting slated for May 31 will deliberate on issues including single law for the sector, enhancement of the investment limit from Rs 1 crore to Rs 5 crore and the policy of reservation of items.
Top government sources told Business Standard that factors such as credit flow, adverse implications of the WTO system on the small scale sector and the issue of continuing with the reservation policy will be taken up during the 46th board meeting to be chaired by Union minister for small scale industries and agro and rural industries Vasundhara Raje.
The meeting also assumes significance in the wake of the report submitted by the task force on small scale enterprises headed by Planning Commission member S P Gupta.
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The task force had, among other things, recommended that the government should go in for phased dereservation of the SSI sector.
It was also of the view that complete dismantling of QRs will have an adverse impact on the sector and some 1 crore jobs may be lost as a result of liberalised imports.
The report also said that about 4 lakh units had shut shop since the process of liberalisation started in 1991. Officials, however, said that employment level in the small scale sector has actually increased along with the number of SSI units.
While Federation of Indian micro and small & enterprises (FISME) has been demanding dereservation of the sector while Indian council of small industries (ICSI) has asked for strenghtheing of the policy, official sources said.
Currently, there are 811 items in the reservation list. However due to WTO obligation 643 items in the reservation list have been brought on Open General Licence (OGL).
However, on the policy front, most of the small industries associations have called for formulation of a single basic law and enhancement of investment limit from Rs one crore to Rs 5 crore for the sector.
SSI board consists of Chief Executive Officer (CEO) of Khadi and Village Industries Commission (KVIC), Chairman and Managing Directors of Small Industries Development Bank (SIDBI) and National Small Industries Corporation (NSIC), Development Commissioner in SSI ministry and representatives from the state governments and associations.
On the marketing front, most associations have urged the government to create marketing development fund for SSI and take affective steps for protection of the sector from the adverse implications of WTO regime.