Govt drafting enterprises Bill

Draft of small enterprises development bill, 2002, will be tabled in parliament this winter

The government is working on the draft of the Small Enterprises Development Bill, 2002, to be tabled in Parliament during the winter session. The draft has been circulated to all for comments.

The draft, put out by the Administrative Staff College of India (ASCI), emphasises on the abolition of the inspector raj in the sector and framing guidelines for financial institutions for credit availability.

Officials in the ministry of small-scale industries said the Bill seeks to abolish inspector raj in the sector with the government working on ways to streamline the system.

The Bill will seek to make it mandatory for inspectors to give a notice of 15 days prior to the inspection. It also recommends that no routine inspection should be carried out more than once in five years.

The draft also spells out rules for special inspection and procedures of complaint. The draft lays down guidelines for credit facilities.

"The Reserve Bank of India shall specify through such guidelines, norms regarding quantum, proportion, method of computation, completion of formalities, revival packages, margins, collateral security, timely disposal and other aspects that will ensure easy flow of credit, both long-term and working capital to the small enterprises," it said.

Different norms are proposed for separate categories of SSI units and different groups of financial institutions.

The draft recommends the small enterprise credit guidelines to be binding upon all financial guidelines.

It proposes the setting up of the National Small Enterprises Board that will advise the central government in the formulation of the small enterprises development policy. The board will recommend measures for improving the marketing of products and services of small enterprises in the country and abroad.

It will help the SSIs to increase their ability to export and combat competition from imports, by providing for measures for adjustments of custom rates and limitation of imports.

It must ensure that the interest of small business enterprises are adequately represented in bilateral and multilateral trade negotiations.

As a measure of trade protection, the procurement policy by state governments has also been spelt out in the draft.

Draft SSI Bill

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• Abolition of inspector raj in the SSI sector
• Inspectors should give 15 days notice prior to inspection
• No routine inspection to be carried out more than once in 5 years
• RBI to specify norms regarding revival packages, margins, collateral security, timely disposal to ensure easy flow of credit
• Different norms to be established with respect to different categories of SSIs
• Different groups of financial institutions, and different types of credit facilities
• The draft recommends the small enterprise credit guidelines to be binding upon all financial guidelines
• Draft proposes setting up of National Small Enterprises Board that will advise the Central government in the formulation of small enterprises development policy