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Call for infrastructure development fund for SSEs

Ch. Prashanth Reddy

HYDERABAD, July 16

THE Study Group on Policy for Small-Scale Industries (SSIs), headed by Mr S.P. Gupta, Member of the Planning Commision, has recommended setting up of an Infrastructure Development Fund of the order of Rs 2,000 crore for small-scale enterprises.

This fund was sought to be utilised to help the States and Union Territories in creating, revamping and upgrading the industrial infrastructure for SSIs, including upgrading the infrastructure in the existing industrial estates.

According to the study group, non-availability of adequate and proper infrastructure facilities makes it difficult for entrepreneurs to set up new SSI units. This, it states, can be observed from the fact that industrially progressive States and regions are facing congestion while industrially backward States and regions are unable to attract SSI entrepreneurs.

The members of the study group, which submitted its recommendations to the Union Government in March, this year, included representatives of the Small Industries Development Bank of India (SIDBI), National Small Industries Corporation, non-government org anisations and the Development Commissioner of SSIs apart from academicians.

The group also recommended creation of an Incubation Infrastructure Development Fund of Rs 1000 crore for setting up adequate number of incubation centres in the 10th Five Year Plan. These centres were sought for helping skilled entrepreneurs to start th eir own ventures with all required facilities including computers, video conferencing and e-commerce facilities.

Stating that the centres should also provide an ``address'' to the entrepreneurs for a period of three years, the report said that the corpus could be created with assistance from the Union Government, the State Governments, SIDBI, NGOs IITs and Regional Engineering Colleges.

Pointing out that technology obsolescence was one of the major problems of tiny units, the group had recommended creation of a separate Rs 1000-crore fund for technology upgradation and modernisation. The benefit of this fund, it said, should be made ava ilable primarily to tiny units and should be confined to selected products having export potential and those of high-tech nature.

Emphasising the need for providing an exit route sick SSIs, the group stated that the Government should come out with a ``Samadhan'' scheme to facilitate one time settlement.

It wants the liability of sick units, including the interest, to be limited to double the principal amount. And, if possible, the recovery process should be completed within a fixed time period so as to free the entrepreneurs from liabilities and help th em to start their careers afresh.

At a time when employment in the agricultural sector was stagnant and large industry sector was passing through ``zero employment growth'', the SSI sector has added nearly 45.3 lakh new jobs during 1990-98 registering a growth rate of 4 per cent per annu m.

``In a labour surplus economy like India, the need for policies and programmes to promote employment generation is of prime importance,'' the report cited.