The Hindu Business Line : Small industry welcomes Govt decision on capital subsidy

Chennai, Feb. 24 The small-scale industry has welcomed the government’s decision to continue the ‘Credit Linked Capital Subsidy Scheme for Micro and Small Enterprises’ over the 12th Plan period. The scheme had ended on March 31, 2007.

Thanking the government for the decision, Mr D.E. Ramakrishnan, President, Industrial and Financial Reconstruction Association for Small and Tiny Enterprises, and Member, National Board for Micro, Small and Medium Enterprise, said that the move would result in additional employment generation.

In September 2005, the scheme was made more attractive by increasing the rate of subsidy from 12 per cent to 15 per cent, and also by raising the ceiling of the loan availed off by a MSE from Rs 40 lakh to Rs 1 crore, which enabled the scheme to become more popular. Between September 2005 and March 2007, more than about 2,400 units availed themselves of the subsidy, amounting to Rs 80 crore.

According to Mr Ramakrishnan, between March 31, 2007 and now, an additional 2,400 units have availed themselves of financial assistance of over Rs 830 crore from banks. These units would be eligible for subsidy, which works out to about Rs 115 crore. “It is our hope that this subsidy of Rs 115 crore would be released and disbursed before the end of the current financial year,” Mr Ramakrishnan said.

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