More SSI products may be dereserved

The finance ministry has sought a list of products reserved for the small-scale industry to be permitted for manufacturing by units investing over Rs 1 crore.

The ministry of small-scale industry and agro and rural industries is, however, yet to identify the items for dereservation.

Officials told Business Standard the committee on dereservation under the Development Commissioner (SSI), Suresh Chandra, would hold discussions with the industries concerned to firm up a list of products to be dereserved. At present, 570 items are reserved for units with a maximum investment of Rs 1 crore.

The National Democratic Alliance government had removed a series of items, including ready-made garments, from the reserved list and had simultaneously enhanced the investment level to Rs 5 crore from Rs 1 crore for a large number of sectors where manufacturers had opposed dereservation.

The government had drawn up a plan to dereserve the items over a period of five-six years. The ministry has also made a case for enhanced credit flow to the sector. It has also sought that the net bank credit to the small-scale and tiny sectors be increased 15 per cent annually.

Finance Minister P Chidambaram recently announced a package of measures to increase the flow of credit to the farm sector by 30 per cent during the current fiscal and double it over the next three years.

Officials said the budgetary allocation for the employment generation schemes in the sector was likely to be enhanced keeping in view the United Progressive Alliance's thrust on employment generation.

The schemes are likely to be reworked to make them more effective with training and loan appraisal procedures to be improved.

The government was also expected to revamp the Khadi & Village Industries Commission, as indicated in the Common Minimum Programme, officials said.

The promotional package structured for the SSI sector is likely to boost investment and exports in the sector.

In the interim Budget, the government had allocated Rs 428 crore to the SSI ministry. It had allocated Rs 176.29 crore for the Credit Guarantee Scheme, but the scheme is yet to take off since the government has not streamlined the procedures.