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Small Industries Department
POLICY NOTE 2003-2004
Demand No. 42
The Small Scale and Tiny Sector play a vital role in the economy of our Country. There are 34 lakh SSI units providing employment to more than 192 lakh persons in the Country. The SSI sector contributes 40% of Industrial Production and 35% of National Exports. The fixed investment in this sector has been reckoned at Rs.84,329 Crores. In Tamil Nadu, there are 4.41 lakh SSI units having an investment of Rs. 13,000 crores providing employment to nearly 32.15 lakh persons.
As per the guidelines of the Government of India, an industry with investment on plant and machinery not exceeding Rs. 100 lakh is defined as a Small Scale Industry and those units with investment on plant and machinery not exceeding Rs. 25 lakh have been categorised as Tiny sector units. To protect the SSI Sector, the Government of India have reserved 674 items exclusively for manufacture in the SSI Sector and 358 items have been reserved for exclusive purchase by the Government from the SSI units under the SSI price and purchase preference policy.
This Government under the dynamic leadership of Hon'ble Chief Minister with a vision that Industrial growth and increased production could be achieved only when the small and tiny industries are given a fillip have formulated various policy decisions which have resulted in considerable industrial growth in this State.
Some of the significant policy decisions taken by this Government are detailed below:
RESTORATION OF PRICE AND PURCHASE PREFERENCE TO SSI UNITS
The growth registered in the small scale sector in earlier decades plummeted to a great extent due to the adverse impact of the cancellation of the time-honoured price and purchase preference offered to the Small Scale Industries in Tamil Nadu by G.O.Ms.No.75, Finance, dated 19.2.1997. This Government has cancelled the above order and amended the provisions of Tamil Nadu Transparency in Tenders Act 1998 restoring the price and purchase preference to SSI Sector as mentioned below :-
Price Preference
5% price preference shall be given to the domestic SSI units in Government purchases with effect from 1.12.2001
(ii) Purchase Preference
The policy of the Government of India on reservation of specified items for exclusive purchase from the SSI Sector shall also be followed by the State Government. Supply orders for 358 items shall be placed with domestic SSI units only through open tender with effect from 1.12.2001
TEA CRISIS
To overcome the crisis faced by the small tea growers in the Nilgiris District due to fall in price of green leaf tea in the country as a whole, this Government has taken a decision to introduce sale of 'Ooty Tea' through the Public Distribution System. The sale of Ooty Tea was 200 MTs per month initially and it has now stepped up to 280 MTs per month. This has helped the small tea growers by stabilising the price of made tea thereby fetching a fair price for the green leaves.
In addition to this, 'Teaserve', a Tea Auction Centre has been established at Coonoor with the approval of the Government of Tamil Nadu under cooperative fold to transact tea auction in a more transparent manner. This society was registered on 28.8.02 and has been granted with the necessary Licence by the Tea Board on 31.1.2003. Soon after establishing the required infrastructure this Centre will commence its business activities.
ONLINE REGISTRATION AND ISSUE OF PROVISIONAL SSI REGISTRATION CERTIFICATE THROUGH BROWSING CENTRES
Any new entrepreneur who proposes to set up a Small Scale Industry, shall get a provisional SSI Registration Certificate from the District Industries Centres to enable him to get bank finance, statutory clearance and power supply on priority basis. In this regard, to help the new entrepreneurs, Online Provisional SSI Registration Certificates are now being issued through approved Browsing Centres at Nominal service charges of Rs. 50/- per Certificate. The same has been inaugurated by the Hon'ble Chief Minister on 12.9.2002. So far, more than 12,231 online Provisional SSI Certificates have been issued through Browsing Centres.
EXPORT GUIDANCE CELL
To promote exports, and to motivate entrepreneurs to export, the Government have ordered in G.O.Ms.No. 53, Small Industries (SIF.I) Department, dated 5.12.2002 that an Export Guidance Cell will be formed in the District Industries Centres, to provide information on the existing export activities, the potential for further exports and to provide necessary assistance on procedural matters for export. The Export Guidance Cell under the Chairmanship of the District Collector in each District will suggest and initiate measures for development of exports in the District. An Export Promotion Cell is proposed at the state level to initiate measures for development of export in the State. The Cell at State Level will start functioning soon.
NEW ANNA MARUMALARCHI THITTAM
To promote agro based and food processing industries and thereby create employment opportunities for rural masses and to improve rural economy, the Government of Tamilnadu have introduced a new scheme called, "New Anna Marumalarchi Thittam" in G.O.Ms.No.32, Small Industries Department, dated 28.6.2002 with minimum capital investment of Rs. 1 crore and above, in each of the 385 blocks of the State with special package of incentives and escort support utilising the locally available agricultural produce. Each block can have a maximum of 4 units, each with a minimum investment of Rs.25 lakhs to satisfy the Rs.1 crore norm for each block. So far, 363 projects have been cleared by the State Level Committee involving 240 blocks covering innovative activities such as bio fuel from Jetropha, Ethyl alcohol from Tapioca etc., Coir pith block, flower extraction, herbal extracts and export oriented industries such as vegetable and fruit processing, cashew processing, activated carbon, coconut shell powder etc. As on 31.3.2003 loans for 43 projects have been sanctioned by banks / TIIC and another 9 projects are being implemented with own funds, totalling 52 units in all, out of which 12 units have already commenced production. These projects will provide employment to a sizeable rural population and in effect make the villages in Tamil Nadu economically more vibrant and prosperous.
NEW INDUSTRIAL COOPERATIVE SOCIETIES
Silk Cotton Growers Industrial Cooperative Society, Theni District
This new Industrial Cooperative Society has been established in Thangammalpuram in Theni District and has commenced its business with effect from 21.6.2002. As the activity is seasonal, this society has procured Silk Cotton pods and effected sales for Rs.15.66 lakhs so far, and 416 members are benefited by this scheme. Construction of a godown for storing the silk cotton pods at a cost of Rs. 64.70 lakhs has commenced.
Cashew Processing Service Industrial Cooperative Society, Theni District
This new Industrial Cooperative Society in Thangammalpuram in Theni District was registered and commenced its business on 21.6.2002. 274 members have been enrolled.
Gold Jewellery Manufacturing Industrial Cooperative Society, Coimbatore
This new Industrial Cooperative Society was registered on 27.2.2002 and the fixing up of work sheds and market outlets is in progress.
Cashew Processing Industrial Cooperative Society at Jayamkondam in Perambalur District
This new Industrial Cooperative Society was registered on 27.1.2003 and enrolment of members is in progress.
Copper Jewellery Manufacturing Industrial Cooperative Society, Chidhambaram
A society for the benefit of Copper Jewels manufacturing Industrial Cooperative society was registered on 17.3.1999 at Chidambaram in Cudalore District with 103 members and with a Share Capital of Rs.1.16 lakhs. A scheme for setting up a Chain Cutting Unit as an expansion programme was sanctioned by the Govt. vide G.O.No.55, Small Industries (SIA) Dept. dt. 20.12.2002 and a sum of Rs.2.00 lakhs was sanctioned to the society towards Government share participation. As approved in the schemes, action is being taken to purchase the machinery and to commence production soon.
PRESENT STATUS OF THE SSI UNITS IN THE WTO SCENERIO
Due to globalisation, liberalisation and privatisation under WTO regime, the SSI units have to face the challenges of growing competition both globally and domestically. A lot of products have already started coming to India without any restriction.
Hence, to survive and compete in the global market, the SSI units should manufacture quality products at competitive rates. To improve quality and productivity, the small scale industries are left with no other options but to throw away the obsolete technologies and adopt modern technologies that are available locally and internationally, duly adding quality testing and R & D facilities. In addition to this, the skills of the existing workers will have to be developed by providing necessary training to improve productivity.
In view of the above, to create awareness among the SSI units,and thereby enhance competitiveness, it is essential to provide necessary additional Common infrastructure facilities/ services. The Government of Tamil Nadu shall play the role of facilitator with intervention mechanisms in the areas of technology upgradation, modernisation, quality testing, product display centres, marketing information and data base, marketing assistance, capacity building for Human Resources Development etc., The Government of Tamilnadu have therefore committed to extend all help, in the following areas of growth :-.
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Strengthening of existing infrastructure in Industrial Estates under Public Private Partnership Concept
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Promotion of Industrial Clusters both in urban and rural areas
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Creation of common amenities
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Encouragement to technology upgradation and modernisation
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Human resources and skill development
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Market Development Assistance
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Strengthening of existing laboratory facilities
In this direction, the schemes mentioned in the Annexure are proposed to be implemented during 2003-2004 as Part II Schemes.
The schemes presently being implemented in the department are given below :-
ENTREPRENEURSHIP DEVELOPMENT PROGRAMME
The Government have ordered the Department of Industries and Commerce to train 1,25,000 women from 2001-2002 to 2005-2006 at the rate of 25,000 women per year under the 5 lakhs women EDP Scheme.
During 2002-2003, it is programmed to train 11000 women under Self Help Group and 9000 Technically Qualified Women (ITI/Diploma) to set up their micro enterprises, besides training 5,000 women under PMRY. So far, in the current financial year, 22500 women have benefited in this scheme.
PRIME MINISTER'S ROZGAR YOJANA SCHEME
The Centrally sponsored PMRY Scheme for educated unemployed youth was launched on 2nd October 1993.
Preference is given to those who have been industrially trained by any Government recognised / approved institutions (ITI etc.) The Scheme envisages 22.5% reservation for SC/ST candidates and 27% for candidates from Other Backward Classes.
A target of 20000 cases has been fixed for our State for the year 2002-2003. A total number of 35,024 applications were recommended to Banks and 14,765 cases were sanctioned assistance to the tune of Rs.66 crores.
ENTREPRENEURSHIP DEVELOPMENT INSTITUTE
The Entrepreneurship Development Institute was established in Chennai in the year 2001 to act as a centre of excellence on the subject of Industrial Research and Development. It provides training to selected entrepreneurs under PMRY scheme, Women EDP and other schemes.
RAINING INSTITUTES
The Industries and Commerce Department runs training Institutions at Dindigul, Guindy and Virudhachalam for training in the specialized fields of Tool Engineering, Refrigeration and Glass,and Ceramics respectively.
FACILITIES FOR ENTREPRENEURS
SINGLE WINDOW CLEARANCE COMMITTEE
To alleviate the plight of the small scale entrepreneurs in obtaining clearances from the statutory authorities viz., Pollution Control Board, Local body, Town and Country Planning Department, Fire Service Department, Public Health Department, Electricity Board etc., for setting up their industries, a single window clearance scheme has been formulated by the Govt. of Tamil Nadu. Under this scheme, single window clearance committees have been set up in each district under the chairmanship of the District Collector. These committees meet once in every month to help the entrepreneurs to speed up all the clearances and solve the problems faced by them in implementation of their projects.
During the current financial year, 776 applications were received by the single window committees out of which 676 applications have been cleared so far.
RECOVERY OF DUES FROM BUYER UNITS UNDER DELAYED PAYMENTS ACT
To facilitate the early recovery of dues to seller SSI units from the buyer units, Regional Facilitation Councils headed by the Director of Industries and Commerce have been constituted at Coimbatore, Trichy, Madurai and Chennai. Delays in payments to Seller-Small Scale Industries are adjudicated by this council under the terms of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings(Amendment) Act, 1988. During 2002-2003, 107 cases involving Rs.406.45 lakhs were adjudicated by the Department.
ELECTRICAL AND ELECTRONIC ESTATE
There are 8 functional Estates for Electrical and Electronic Industries situated at the following locations, for providing developed plots and work sheds to the needy entrepreneurs
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Dr. Vikram Sarabhai Instronic Estate, Chennai-41
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Developed Plot Estate at Perungudi,Chennai-96
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Kakkalur, Thiruvallur
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Coimbatore
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Salem
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Hosur
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Trichy
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Madurai
TESTING LABORATORIES
Private Testing Laboratories charge exorbitant rates, when Small Scale Industries approach them for testing their raw materials, products and processed materials in accordance with statutory requirements. To help Small Industries for better testing, on concessional rates, this department is running various testing laboratories in electrical and electronics, at Kakkalur near Thiruvallur and Hosur and Chemical Testing laboratories at Chennai, Madurai, Coimbatore, Salem and Thoothukudi.
SSI Board
To redress the grievances of the SSI units and suggest measures for development of the SSI sector, a Small Scale Industries Board is functioning in the State under the Chairmanship of Hon’ble Minister for Rural Industries. The Chief Secretary acts as the Vice Chairman. The SSI Associations and the officials of various departments serve as Members in the Board. The Board meets once in six months to discuss policy issues on SSIs and their grievances and their redressals are recommended to the Government.
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