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Policy Note 2004 - 05 Demand No. 42
The Small Scale and Tiny Industrial Sector (SSI) is an important and vibrant constituent of the economic structure of the country. Our country has about 35.31 lakh SSI units providing employment to more than 199.65 lakh persons. 40% of Industrial Production and 35% of National Exports are contributed by the SSI sector. As on 31.3.2004, there are 4.75 lakh registered SSI units in Tamilnadu having an investment of Rs. 13,292 crore providing employment to 34.65 lakh persons. An industry with an investment on Plant and Machinery not exceeding Rs.100 lakh has been defined as a "Small Scale Industry" by the Government of India and industry with an investment not exceeding Rs. 25 lakh on plant and machinery has been categorised as " Tiny Industry". With a view to protect the SSI Sector, the Government of India have reserved 675 items exclusively for manufacture in the SSI Sector and 358 items exclusively for purchase by the Government from the SSI units under the price and purchase preference policy. This Government, under the dynamic leadership of Hon'ble Chief Minister, with a vision that small scale and tiny industries are the main stay of Tamilnadu’s Industrial Economy and that the economic viability of Tamilnadu’s small and tiny sector is critical for the continued dynamism of the State, have given a fillip to the small scale sector by formulating innovative policies to ensure significant industrial growth in the State. NEW ANNA MARUMALARCHI THITTAM The "New Anna Marumalarchi Thittam" introduced by Government of Tamilnadu on 28.6.2002 to generate rural employment, to fetch higher price for agricultural produce and to improve the rural economy, by promoting agro based / food processing industries was given impetus during 2003-04. In order to facilitate the NAMT entrepreneurs to avail collateral free loans under Credit Guarantee Fund Trust Scheme, the capital investment limit has been brought down from Rs.25 lakh to Rs.20 lakh. The Scheme provides a package of incentives which includes special capital subsidy of 15% on plant and machinery upto a maximum of Rs.15 lakh, additional capital subsidy of 5% upto a maximum of Rs.5 lakh for employing more than 50% women in their work force, Generator subsidy of 15% on the cost of the generator upto a maximum of Rs.5 lakh and Low Tension Power Tariff subsidy at the rate of 30%, 20% and 10% of energy charges for the first, second and third year respectively. The District Level Committees headed by the District Collectors provide escort support to the entrepreneurs in getting loans from financial institutions and in obtaining statutory clearances and power connection for the projects promoted under New Anna Marumalarchi Thittam. Under this scheme, 765 projects with a total cost of Rs. 532.26 crore covering all the 385 blocks in the State have been cleared by State Level Coordination Committee upto 31.3.2004. The projects cleared by the Committee include activities such as cashew processing, extraction of concentrate from flowers and herbs, Oleoresin from spices, vegetable and fruit processing, setting up of modern rice mill with colour sorter, cold storage plants, cattle and poultry feed, prawn culture, mushroom, starch and sago, activated carbon, coir pith block, coir fibre, coconut shell powder etc. As on 31.3.2004, 217 projects are under implementation out of which 160 are implemented with Bank / TIIC finance and 57 with own funds. 91 units with project cost of Rs.60.38 crore have commenced production. ONLINE REGISTRATION AND ISSUE OF PROVISIONAL SSI REGISTRATION CERTIFICATES THROUGH BROWSING CENTRES The Scheme of issue of Online Provisional SSI Registration certificates was inaugurated by the Hon'ble Chief Minister on 12.9.2002. Any new entrepreneur desirous of setting up a Small Scale Industrial unit, can get a provisional SSI Registration certificate through any of the 262 approved Browsing Centres at a nominal service charge of Rs. 50/- per certificate. This simplified procedure facilitates the new entrepreneurs to get provisional SSI certificates at their will and convenience. As on 31.3.2004, 38,236 online provisional SSI certificates have been issued. SMALL SCALE INDUSTRIES REGISTRATION - PERMANENT 26,545 SSI units were issued with permanent SSI certificates during the financial year 2003-04. These units, with an investment of nearly Rs.760 crore provide additional employment to 1,91,920 persons. EXPORT GUIDANCE CELL The Government have established Export Guidance Cells during 2002-03, in the District Industries Centres, to promote exports by motivating entrepreneurs. The Export Guidance Cells provide information on the existing export activities, the potential for further exports and to provide necessary assistance on procedural matters for export. The Export Promotion Cell at the District Level under the Chairmanship of the District Collector has also been constituted to counsel the prospective exporters on export formalities and procedures, provide details of export market intelligence, addresses of foreign buyers etc., and advise on export documentation. An Export Promotion Cell at the State Level under the chairmanship of Industries Commissioner and Director of Industries and Commerce has been constituted to initiate measures for development of export in the State. ENTREPRENEURSHIP DEVELOPMENT PROGRAMME The Department of Industries and Commerce has targeted to train 1,25,000 women at the rate of 25,000 per year from 2001-02 to 2005-06 under the Entrepreneurship Development Programme for five lakh women scheme. During 2003-04, 11,172 women from Self Help Groups, 8828 women who are technically qualified (ITI/Diploma) and 5137 women under PMRY, totaling 25137 women were trained to set up micro enterprises. Besides, Entrepreneurship training including Resource Management Techniques have been introduced during 2003-04 for NAMT entrepreneurs and so far about 80 entrepreneurs have been trained. BACK-ENDED INTEREST SUBSIDY TO SMALL SCALE INDUSTRIES: The new scheme of Back-ended Interest Subsidy to SSI units for the term loans obtained from Banks and financial institutions for technology upgradation / modernization, term loan and working capital loan obtained under Credit Guarantee Fund Trust Scheme (CGFTS), term loan obtained under National Equity Fund Scheme (NEFS), term loan obtained for obtaining ISO Certification, Research and Development resulting in registration of Patent Rights, Intellectual Property Rights, Composite Term loan (CTL) obtained from National Small Industries Corporation and National Small Industries Corporation -Tamil Nadu Small Industries Development Corporation Consortium has been introduced during 2003-04 to reduce interest burden to Small Scale Industries. The quantum of back-ended interest subsidy is 3% over and above the Prime Lending Rate (PLR) or the excess of actual rate of interest over the PLR whichever is less. In cases where PLR is not followed by any of the financial institutions, the excess of the actual rate of interest over 10.5% subject to a maximum of 3% is allowed as subsidy. This subsidy is sanctioned by way of quarterly reimbursements to the financial institutions for a maximum period of 5 years irrespective of the period of repayment of loan and the maximum amount of subsidy payable per loan is Rs. 15 lakh. INDUSTRIAL INFRASTRUCTURE UPGRADATION SCHEME In the present WTO scenario, the SSI units can survive only if they produce good quality products in bulk at competitive rates. The capability of SSI units can be improved only by adopting Cluster approach. Under the Public Private Partnership concept, the Government of Tamilnadu is taking speedy and effective action besides participating along with Government of India in the development of industrial clusters in Tamilnadu under Industrial Infrastructure Upgradation Scheme. Under this scheme, the State Government have forwarded their recommendations to the Government of India for six Detailed Project Reports viz., Leather Cluster - Ambur, Pump, Motor, Foundry and Allied Industries Cluster - Coimbatore, Auto Ancillary Cluster - Chennai, Coir and Allied Composite Products - Tamil Nadu, Cereals, Pulses and Staples (CPS) Milling Cluster - Madurai and Mango Pulp Cluster - Krishnagiri. The Government of India have given in- principle clearance for Pump, Motor, Foundry and Allied Industries Cluster, Coimbatore and approved Auto Ancillary Cluster, Chennai. The Government of India have also released Rs.25 crore as first instalment for the Textile Cluster at Tiruppur. DEVELOPMENT OF RURAL INDUSTRIAL CLUSTER To boost the rural economy by creating more employment avenues for the rural youth in the non-farm sector and to slow down the migration of the rural artisans to towns / cities, a new scheme of National Programme on Rural Industrialisation (NPRI) was announced by the Government of India to set up new / existing rural industrial clusters in the Country. The Government of India provides a grant of Rs. 5 lakh to meet the expenditure towards the diagnostic study, demonstration, development of modern tools and kits and other technical inputs including design, market linkages, seminars, workshops, study visits and consultancy etc., under this Scheme. The State Government is working towards getting grant under this Scheme from Government of India for the development of rural clusters namely Tamarind Processing, Coconut Fibre and Coir Rope in Erode District, Soap and Readymade garments in Madurai District, wood craft in Villupuram District, Bell Metal in Thanjavur District, Fire Proof and Long Lasting Coconut thatches in Thiruvarur District, Grass Weaving in Tirunelveli District and Arecanut Leaf Cups/ Plates in Salem District. PRIME MINISTER'S ROZGAR YOJANA SCHEME Towards solving the unemployment problem through self employment, the Centrally sponsored PMRY Scheme was launched on 2nd October 1993. Since then the scheme is being successfully implemented in the State. Those who have been trained by Government recognised / approved institutions (ITI etc.) are given preference under this scheme. The Scheme also takes care of the welfare of Scheduled caste / Scheduled Tribe candidates and Other Backward Classes candidates by providing reservation of 22.5% and 27% respectively. During the year 2003-04, against a target of 20000, the State has achieved 20016 loan sanctions to the tune of Rs.83.04 crore. SINGLE WINDOW CLEARANCE The Government of Tamilnadu have formulated a single window clearance scheme, for speedy clearances by the statutory authorities viz., Pollution Control Board, Tamil Nadu Electricity Board, Local Body, Town and Country Planning, Fire Service Department and Public Health Department, etc., for setting up industries. A common application form has been prescribed to apply to the above agencies to get clearances through District Industries Centres. The District Industries Centre acts as a nodal agency. The single window clearance committee under the chairmanship of the District Collector meets once in every month to help the entrepreneurs to speed up all the clearances and solve the problems in implementation of their projects. During the year 2003-04, 1061 applications were received and cleared by the single window committees. To speed up the issue of statutory clearances, and power connection to the agro based units to be set up under NAMT, the Government have issued orders to include Deputy Director of Town and Country Planning, District Environmental Engineer of Tamil Nadu Pollution Control Board and Superintending Engineer of Tamil Nadu Electricity Board as Members in the District Level Committee constituted by the Government for the approval of projects under NAMT. This has benefited the NAMT entrepreneurs to get orders on re-classification of land use within 21 days, Pollution Control Board clearance within 7 days and power connection on priority basis without delay. REGIONAL INDUSTRIAL FACILITATION COUNCIL Under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act 1993, the Government of Tamilnadu have constituted four Regional Industrial Facilitation Councils under the chairmanship of Industries Commissioner and Director of Industries and Commerce with headquarters at Chennai, Tiruchirapalli, Madurai and Coimbatore. These councils render facilitation services to help the seller units in realising the dues from the buyer units for the goods supplied to them. The Councils meet once in three months. During 2003-04, 131 cases involving Rs.343.56 lakh have been facilitated by these councils. SSI BOARD A State Level Small Scale Industries Board has been constituted with Hon'ble Minister for Rural Industries as Chairman, Chief Secretary to Government as Vice Chairman, Industries Commissioner and Director of Industries and Commerce as Member-Secretary, Officials of other Departments and representatives of Small and Tiny Industries Association as Members. The representations received from the Member Associations are placed before the Board and its recommendations are sent to Government for necessary action. ELECTRICAL AND ELECTRONIC ESTATES To facilitate industrial growth in the field of electrical and electronics, 8 functional estates with required infrastructure have been developed at the following locations:- 1) Dr. Vikram Sarabhai Instronic Estate, Chennai. 2) Developed Plots Estate at Perungudi, Chennai. 3) Kakkalur in Thiruvallur District 4) Coimbatore 5) Salem 6) Hosur 7) Tiruchirappalli 8) Madurai TESTING LABORATORIES The Department of Industries and Commerce is running Testing Laboratories for Electrical and Electronic items at Kakkalur in Thiruvallur District and Hosur in Krishnagiri district. This Department also runs Chemical Testing Laboratories at Chennai, Madurai, Coimbatore, Salem and Thoothukkudi. These Laboratories provide testing facilities to the Small Scale Industrial Units at concessional rates. From 2003-04, the entrepreneurs are also provided with training in testing and calibration of Electrical equipments at Kakkalur. INDUSTRIAL COOPERATIVES. Industrial Cooperative Societies provide services to their members in purchase and supply of raw materials, undertake production activities and marketing of the products. There are 318 Industrial Cooperative Societies, with a total membership of 61,775. During the year 2003-04, these Industrial cooperative societies achieved a sales turn over of Rs.332.89 crore providing employment to 1,10,852 persons. TEA SECTOR INDCOSERVE INDCOSERVE has 15 Industrial Cooperative Tea Factories with membership of 19,799 which help in improving the economy of the small tea growers of Nilgiris District. During the year 2003-04, these factories have manufactured 137.48 lakh kgs. of made tea and achieved a sales turn over of Rs. 42.44 crore. Considering the slump in the tea market, the Hon'ble Chief Minister of Tamilnadu introduced "OOTY TEA" on 28.8.2001 for sale through Public Distribution System so as to stabilise the price of Green tea leaves for small tea growers. A total quantity of 7836.186 M.Ts. of Ooty tea worth Rs.58.77 crore has been sold upto 31.3.2004. TEASERVE The Hon'ble Chief Minister of Tamil Nadu inaugurated an Electronic Tea Auction Centre 'TEASERVE', the first of its kind in the country on 13.9.2003 at Coonoor to transact Tea Auction in a more transparent manner and to fetch remunerative price to the tea growers. So far 80,67,294 kgs. of Tea to the value of Rs.26.76 crore has been transacted through this centre. This Centre removes all short comings prevailing in the conventional Auction Centres. In order to attract more buyers to 'TEASERVE' concessional rate of Sales Tax at 4% TNGST or 2% CST is collected for the tea sold through the 'TEASERVE' from 29.5.2003. SAGOSERVE Sagoserve is one of the most successful examples of Industrial Cooperatives in the State. During 2003-04, Sagoserve has achieved sales turn over of Rs.187.67 crore. The society supports about 700 small and medium sago and starch units which meet 80% of the national demand. The Government of Tamil Nadu have issued orders for collection of concessional rate of sale tax at 2% with effect from 7.5.2003 in respect of sale of sago and starch through Sagoserve, Salem. This concessional rate of sales tax has immensely helped in marketing the sago and starch manufactured by the members of Sagoserve to their best advantage. Sagoserve has earned a net profit of Rs.139.57 lakh during 2002-03 and a tentative profit of Rs.218.48 lakh during 2003-04. COIR INDUSTRIAL COOPERATIVES There are 66 Coir Industrial Cooperative Societies in the State with 9901 members. During the year 2003-04, the Coir Industrial Cooperative Societies have achieved a sales turn over of Rs.10.32 crore. Under the scheme of Market Development Assistance to Coir Industrial Cooperative Societies, the State Government have released a sum of Rs. 30.45 lakh during 2003-04. To promote Coir based industries, the Coir Board has prepared an action plan with an outlay of Rs.42.36 crore for implementation during 2004-06. The Government of Tamilnadu join this venture by contributing its share of Rs. 43.40 lakh during 2004-05 in implementing this action plan. TAMILNADU INDUSTRIAL COOPERATIVE BANK Tamilnadu Industrial Cooperative Bank Limited, established in 1961, caters to the financial needs of Industrial Cooperative Societies and SSI units. The Reserve Bank of India has recognised TAICO Bank to provide credit facilities to Industrial Cooperative Societies under NABARD's Refinance Scheme.
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