Introduction 

1.1 The Small Scale Industry Sector has emerged as India's engine of growth in the New Millennium. By the end of March 2000, the SSI sector accounted for nearly 40 per cent of gross value of output in the manufacturing sector and 35 per cent of total exports from the country. Through over 32 lakh units, the sector provided employment to about 18 million people. 

1.2 The on going programme of Economic Reforms based upon the principle of liberalisation, globalisation and privatisation and the changes at the  international economic scene including the emergence of World Trade Organisation (WTO), have brought certain challenges and several new opportunities before the SSI Sector. The most important challenge faced by the sector is that of growing competition both globally and domestically. At the sametime sector has also been facing some problems which relate to credit, infrastructure, technology, marketing, delayed payment hassels on account of so many rules and regulations etc. In order to enable this sector to avail the opportunities and play its role as an engine of growth, it is essential to address to these problems effectively and urgently. 

1.3 With a view to provide more focused attention on the development of SSI, the Government of India created a new Ministry of Small Scale Industries & Agro and Rural Industries in October 1999. Immediately after the formation of the Ministry, a Mission for the Millennium giving a blue print for small scale and village industries was announced. To carve out a road map for this sector in the New Millennium, the Hon'ble Prime Minister constituted a Group of Ministers under the Chairmanship of Shri L.K. Advani the Home Minister of India in June 2000. The background material for the consideration of the Group of Ministers was provided by the Interim Report of the S.P. Gupta Study Team constituted by the Planning Commission. 

1.4 The Group of Ministers considered the recommendations and came out with a comprehensive Policy Package for the Small Scale and Tiny Sector which was announced by the Hon'ble Prime Minister Shri Atal Bihari Vajpayee at first ever National Conference on the Small Scale Industries organised by the Ministry of SSI & ARI at Vigyan Bhavan, New Delhi on 30th August 2000. (Copy of speech at Annexure-I). While some components of the policy package were announced by the Hon'ble Prime Minister on 30th August 2000, some others including the Tiny Sector Policy Package were announced by the Ministry of SSI & AIR on 31st August 2000 in the meeting of the SCI Board. 

Policy Support  

2.1 The investment limit for the tiny sector will continue to be Rs. 25 lakhs. 

2.2 The investment limit for the SSI sector will continue to be at Rs. 1 crore. 

2.3 The Ministry of SSI will bring out a specific list of hi-tech and export oriented industries which would require the investment limit to be raised upto Rs. 5 crores to admit of suitable technology upgradation and to enable them to maintain their competitive edge. 

2.4 The Limited Partnership Act will be drafted quickly and get enacted. Attempt will be made to bring the Bill before the next session of the Parliament. 

Fiscal Support 

3.1 To improve the competitiveness of Small Scale Sector, the exemption for excise duty limit raised from Rs. 50 lakhs to Rs. 1 crore. (Annexure-ll). 

Credit Support 

4.1 The composite loans limit raised from Rs. 10 lakhs to Rs.25 lakhs. (Annexure-lll) 

4.2 The Small Scale Service and Business (Industry Related) Enterprises (SSSBEs) with a maximum investment of Rs. 10 lakhs will qualify for priority lending. (Annexure-IV). 

4.3 In the National Equity Fund Scheme, the project cost limit will be raised from Rs. 25 lakhs to Rs. 50 lakhs. The soft loan limit will be retained at 25 per cent of the project cost subject to a maximum of Rs. 10 lakhs per project. Assistance under the NEF will be provided at a service charge of 5 per cent per annum. 

4.4 The eligibility limit for coverage under the recently launched (August 2000) Credit Guarantee Scheme has been revised to Rs. 25 lakhs from the present limit of Rs. 10 lakhs. 

4.5 The Department of Economic Affairs will appoint a Task Force to suggest revitalisation/ restructuring of the State Finance Corporations. (Annexure-V) 

4.6 The Nayak Committee's recommendations regarding provision of 20 per cent of the projected turnover as working capital is being recommended to the financial institutions and banks. (Annexure-VI) 

Infrastructural Support 

5.1 The Integrated Infrastructure Development (IID) Scheme will progressively cover all areas in the country with 50 per cent reservation for rural areas. (Annexure-VI 1). 

5.2 Regarding upgrading the industrial estates, which are languishing, SSI Ministry will draw up a detailed scheme for the consideration of the Planning Commission. 

5.3 A plan scheme for cluster development will be drawn up. 

5.4 The funds available under the non-lapsable pool for the North-East will be made use of for Industrial Infrastructure Development, setting up of incubation centres, for cluster development and for setting up of IIDs in the North East including Sikkim. 

Technological Support and Quality Improvement 

6.1 Capital subsidy of 12 per cent for investment in technology in select sectors. An interministerial committee of experts will be set up to define the scope of technology upgradation and sectorial priorities. (Annexure-VIII) 

6.2 To encourage total quality management, the scheme of granting Rs.75,000/- to each unit for opting ISO-9000 certification will continue for the next six years i.e. till the end of the 10th plan. (Annexure-IX) 

6.3 Setting up of incubation centres in sunrise industries will be supported. 

6.4 The TBSE set up by SIDBI will be strengthened so that it functions effectively as a Technology Bank. It will be properly networked with NSIC, SIDO (SENET Programme) and APCTT. 

6.5 SIDO, SIDBI and NSIC will jointly prepare a compendium of available technologies for the R&D institutions in India and abroad and circulate among the industry associations for the dissemination of the latest technology related information. 

6.6 Commercial banks are being requested to develop schemes to encourage investment in technology upgradation and harmonise the same with SIDBI. 

6.7 One time capital grant of 50% will be given to Small Scale Associations who wish to develop and operate Testing Laboratories, provided they are of international standard. (Annexure-X) 

Marketing Support 

7.1 SIDO will have a Market Development Assistance (MDA) Programme, similar to one obtaining in the Ministry of Commerce. It will be a plan scheme. 

7.2 The Vendor Development Programme, Buyer-Seller Meets and Exhibitions will take place more often and in dispersed locations. 

Streamlining Inspections/Rules and Regulations 

8.1 To minimise harassment to Small Scale Sector a Group will be set up to recommend within 3 months, means of streamlining inspection. This will include repeal of laws and regulations applicable to the sector that have since become redundant. 
 

8.2 Self-certification will be progressively encouraged in lieu of inspections, which should be prescribed under the three following conditions: 

• On receipt of specific complaint; 
• Selection of unit for sample check (Say 10 per cent of total units); and 
• For audit and safety purposes. 

Entrepreneurship Development 

9.1 Capacity building in the SSI sector, both for entrepreneurs as well as workers will be given top priority. SSI Ministry and Labour Ministry will work out the strategy jointly. 

Facilitating Prompt Payment 

10.1 The Reserve Bank of India is being requested to appoint a Task Force to go into the question of how to strengthen and popularise factoring services, without recourse to the SSI suppliers. The Task Force shall give its report within six months of its constitution. 

10.2 RBI is being requested to take up with the banks the question of sub- allocating overall limits to the large borrowers specifically for meeting the payment obligations in respect of purchases from the SSIs, either on case basis or on bills basis. (Annexure-XI) 

Rehabilitation of sick units 

11.1 RBI is being requested to draw up revised guidelines for the rehabilitation of currently sick but potentially viable SSI units. Such guidelines should be detailed, transparent and non-discretionary. 

Promoting Rural Industries 

12.1 To support the Handloom Sector "Deendayal Hathkarga Protsahan Yojna" has been announced. The scheme has a total financial implication of Rs. 447 crores and will provide comprehensive financial and infrastructural support to weavers. 

12.2 The Government is working out new comprehensive package to strengthen Khadi and Village Industries that will further upgrade the skills of Khadi workers. (Annexure-XII) 

Improving Data Base 

13.1 A fresh Census of Small Scale Industries will be conducted covering inter-alia, the incidence of sickness and its causes. (Annexure-XIII) 

Marketing Support 

14.1 The investment limit for the tiny sector will continue to be Rs. 25 lakhs. 

14.2 Under the Prime Minister's Rozgar Yojna, which finances setting up of micro enterprises and generates employment for the educated unemployed, the family income eligibility limit of Rs. 24,000 is revised to Rs. 40,000 per annum. (Annexure-XIV) 

Credit Support 

15.1 The Nayak Committee's recommendations regarding provision of 20 percent of the projected turnover as working capital is being recommended to the financial institutions and banks. In respect of Tiny units also 20 per cent of the projected annual turnover would qualify for working capital loan. 

15.2 The National Small Industries Corporation will continue to give composite loans upto Rs. 25 lakhs to the tiny sector and continue to charge one per cent concessional interest rate. 

15.3 SIDBI will continue to give concessional rate of refinance to the tiny sector which is now at 10.5 per cent as compared to 12 per cent for the SSI sector. This policy will continue. 

15.4 In the National Equity Fund Scheme, the project cost limit will be raised from Rs. 25 lakhs to Rs. 50 lakhs. The soft loan limit will be retained at 25 per cent of the project cost subject to a maximum of Rs. 10 lakhs per project. Assistance under the NEF will be provided at a service charge of 5 per cent per annum. Under the National Equity Fund Scheme, 30 per cent of the investment will be earmarked for the tiny sector. 

Infrastructure Support 

16.1 The Integrated Infrastructure Development (IID) Scheme will progressively cover all areas in the country with 50 per cent reservation for rural areas. Under this Scheme, 50 per cent of the plots will be earmarked for the tiny sector (as against 40 per cent done earlier). (Annexure-VII) 

16.2 Under the National Programme for Rural Industrialisation, cluster development is being taken up by KVIC, SIDO, SIDBI, and NABARD. The major beneficiaries of cluster development programme will be tiny sector units. The sponsoring organisation for each cluster will provide for design development, capacity building, technology intervention and consortium marketing. A cluster development fund will be created under the Plan. 

Technological Support 

17.1 Under the scheme of Capital subsidy of 12 per cent for investment in technology upgradation in select sectors, preference will be given to the tiny sector. 

Marketing Support 

Preference will be given to the tiny sector while organising buyer-seller meets, vendor development programmes and exhibitions. 

Speech of the Hon'ble Prime Minister 
Shri Atal Bihari Vajpayee 
At Conference on Small Scale Industries 
New Delhi, 30th August, 2000 

My Colleagues, Shri L.K. Advani and Smt Vasundhara Raje Representatives of Small Scale Industries Sector, Ladies and Gentlemen: 

It gives me great pleasure to be here with you today. Two years ago, Laghu Udyog Bharati had invited me to their conference in this very hall. Several measures were then suggested for strengthening the Small Scale sector. 

In these two years, various initiatives have been taken to address your concerns and strengthen the Small Scale Industries sector. These include the decision to lower investment limit to Rs. 1 crore from Rs. 3 crore and the setting up of a separate Ministry for Small Scale Industries. 

I am happy to note that the Small Scale sector has responded to our initiatives by improving their performance. The growth rate registered by you is higher than that of the overall industrial sector. 

No less important is the fact that the Small Scale sector has registered steady growth in employment generation. Indeed, this sector continues to lead the way in generation of employment opportunities. 

As you are aware, a Group of Ministers, headed by Shri L.K. Advani, was constituted by the Cabinet to recommend measures to strengthen Small Scale industries. 

I am glad to inform you that based on the recommendations of the Group of Ministers, Government has decided to implement a set of measures which will substantially strengthen the Small Scale sector. These include: 

• The Small Scale sector has suffered due to inadequate access to credit availability. We have, therefore, decided to raise the limit for composite loans from Rs. 10 lakhs to Rs. 25 lakhs. Entrepreneurs will now be able to secure term loans and working capital from the same agency. 
• Industry related service and business enterprises with a maximum investment of Rs. 10 lakhs will qualify for priority lending. These services are essential for the proper functioning of the Small Scale sector. These services also provide employment in rural and semi-urban areas 
• Bearing in mind the urgent need for technology upgradation, Government is happy to announce a capital subsidy of 12% for investment in technology in select sectors. We will set up an inter-ministerial committee of experts to define the scope of technology upgradation and sectoral priorities. 
• Government is alive to the grievance that frequent inspections by multiple agencies are a source of harassment to the Small Scale sector. We will set up a Group to recommend, within three months, means of streamlining inspections. These would include repeal of laws and regulations applicable to the sector that have since become redundant. I would urge you to submit your suggestions in this regard to the Ministry of Small Scale Industries. 
• The last census of Small Scale industries was conducted 12 years ago. For effective policy- making and implementation, we need to update our data. Therefore, we have decided to go in for a fresh census that will cover, inter-alia, the incidence of sickness and its causes. I request industry associations to cooperate with the census authorities so that a true picture emerges. 

I am happy to note that more and more Small Scale units are opting for ISO 9000 certification. To encourage total quality management, we have decided to continue, for the next six years, granting Rs 75,000 to each unit that obtains ISO 9000 certification. 

We have also decided to give one time capital grant of 50% to Small Scale associations who wish to develop and operate testing laboratories, provided they are of international standard. 

The SSI sector already enjoys some special fiscal incentives. However, for quite some time, this sector has been requesting for an increase in the limit for exemption from excise duty to improve its competitiveness and to help the units facing sickness. 

I am happy to announce that in response to your requests, we are increasing the exemption limit from Rs. 50 lakhs to Rs. 1 crore. 

This will be the second increase made by our Government, the first one having been in 1998 when the limit of Rs. 30 lakhs was increased to Rs. 50 lakhs. There are certain other requests relating to customs duties. The Finance Minister will be announcing suitable measures in due course. 

Development of Khadi and Village Industries is a critical component of the strategy to achieve a balanced and integrated development. This segment is an important link not only to the informal economy, but it fosters skills, promotes entrepreneurship at a micro level and is integral to our growth process. 

Khadi is environment friendly. It provides jobs to millions of people. With upgradation of skills and quality of Khadi products, it can be marketed globally. We are committed to further strengthening the viability of this sector. 

A rebate on sale of Khadi products has been continued. Beyond this, we are working out a new comprehensive package to strengthen Khadi and Village Industries that will further upgrade the skills of the Khadi workers. These will cover. 

• Provision for 20% of projected annual turnover to be given as working capital loan; 
• Continuation of concessional lending facilities; and, 
• Preference for loans for technology upgradation. 

The scheme, to be implemented by the Centre and States, has a total financial implication of Rs. 447 crores. This scheme provides comprehensive financial and infrastructural support to weavers and handloom organisations that will substantially strengthen this sector. 

I have broadly touched on some of the measures to strengthen the Small and Medium Industries. The Ministry of Small and Medium Industries will be separately announcing some other measures to further strengthen this sector. 

The global environment is changing rapidly. The Small Scale sector has an important contribution to make in enhancing the competitive strength of our industry, provide an avenue for new employment and harness the entrepreneurial skills available in abundance in this country. 

You must accept the challenge of globalisation and improve your product quality to effectively deal with the forces of competition. We will support your endeavours to meet this challenge on a sustainable basis. 

I congratulate today's prizewinners for their outstanding achievements. Small entrepreneurs, rural artisans and cottage industry have done the country proud in the last 50 years. They form one of the pillars of our national economy. 

Let us together strengthen this pillar so that our national economy can take off for newer heights. 

Thank you. 

Gazette Notification

Government of India 
Ministry of Finance 
(Department of Revenue) 
New Delhi, dated the 1st September, 2000 
10 Bhadrapada, 1922 (Saka) 

Notification

No. 47/2000-Central Excise 
Dated 1st September, 2000 

G.S.R.-(E)-ln exercise of the powers conferred by sub-section

(1) of section 5A of the Central Excise Act, 1944 (1 of 1944) the Central Government, being satisfied that it is necessary in the public interest so to do, hereby directs that each of the notifications fo the Government of India in the Ministry of Finance (Department of Revenue), specified in column

(2) of the Table hereto annexed shall be amended in the manner specified in column

(3) of the said Table.  

 

Sl. No.	Notification No. and date	Amendment
(1)	(2)	(3)
1.	8/2000-Central Excise dated the 1st March, 2000	In the said notification,-  (i) in the Table,-  (a) against SI. No. 1, in column (2),- (l) for the words "fifty lakh rupees", the words "one hundred lakh rupees" shall be substituted, (ll) the following proviso shall be inserted at the end namely, "Provided that if any clearances for financial year 2000- 2001, whether at nil rate or otherwise, the aggregate value of such clearances shall be taken into account for computing the limit of one hundred lakh rupees".  (b) Sl. No. 2 and the entries relating thereto shall be omitted;  (ii) after the Table, the following shall be inserted namely:-  Illustrations Regarding SI. No. 1 of the Table (In these Illustrations, "clearances" means clearances for home consumption).  Illustration 1.  As on the 31st day of August, 2000, a manufacturer has made clearances of an aggregate value of forty lakh rupees at nil rate of duty. He shall be entitled to additional duty free clearances upto an aggregate value of sixty lakh rupees, only in the remaining part of the financial year 2000-2001.  Illustration 2.  As on the 31st day of August, 2000, a manufacturer has made clearances of an aggregate value of sixty lakh rupees, comprising of fifty lakh rupees at nil rate of duty and ten lakh rupees at the concessional rate of duty at five per cent. He shall be entitled only to additional duty free clearances upto an aggregate value of forty lakh rupees only, during the remaining part of the financial year 2000-2001.  Illustration 3.  As on the 31st day of August, 2000, a manufacturer has made clearnces of an aggregate value of one hundred and ten lakh rupees, comprising of fifty lakh rupees at nil rate of duty, fifty lakh rupees at the concessional rate of duty of five per cent and ten lakh rupees at the normal rate of duty. He shall not be entitled to any additional clearances at nil rate of duty during the remaining part of the financial year 2000- 2001.  (iii) in the Explanation, after clause (H), the following clause shall be inserted, namely:" (1) refund of duty paid at the concessional rate of five per cent on any clearances made before the 1st day of September 2000 on the ground that such clearances are included in the aggregate value of clearances under SI. No. 1 of the Table, shall not be admissible."
2.	9/2000-the 1st March, 2000	Central Excise dated In the said notification,-  (i) in the Table,-  (a)againstSI. No. 1, in column (2),-  (l)for the words "fifty lakh rupees", the words "one hundred lakh rupees" shall be substituted;  (ll)the following proviso shall be inserted at the end namely,"Provided that if any clearances for home consumption have been made before the 1st day of September, 2000, whether at nil rate or otherwise, the aggregate value of such clearances shall be taken into account for computing the limit of one hundred lakh rupees". (b)Sl. No. 2 and the entries relating thereto shall be omitted;  (ii) after the Table, the following shall be inserted, namely:- Illustrations Regarding SI. No. 1 of the Table (In these Illustrations, "clearances" means clearances for home consumption).  Illustration 1.  As on the 31st day of August, 2000, a manufacturer made clearances of an aggregate value of sixty lakh rupees, comprising of fifty lakh rupees at the concessional rate of sixty per cent of normal duty and ten lakh rupees at the concessional rate of eighty per cent of normal duty. He shall be entitled to additional clearances upto an aggregate value of forty lakh rupees, at the concessional rate of sixty per cent of normal duty, during the remaining part of the financial year 2000-2001.  Illustration 2.  A manufacturer made clearances of an aggregate value of clearances of thirty lakh rupees at nil has made clearnces of an aggregate value of one hundred and ten lakh rupees, comprising of fifty lakh rupees at the concessional rate of sixty per cent of normal duty, fifty lakh rupees at the concessional rate of eighty per cent of normal duty and ten lakh rupees at the normal rate of duty. He shall not be entitled to any exemption under this notification during the remaining part of the financial year 2000-2001. (iii)in paragraph 2, Illustrations I, II, III and IV, shall be omitted.(iv) in the Explanation, after clause (H), the following clause shall be inserted, namely:" (1) refund of the difference between any duty paid on clearances made before the 1 st day of September, 2000 and the concessional rate of sixty per cent of normal duty on the ground that such clearances are included in the aggregate value of clearances under SI. No. 1 of the Table, shall not be admissible."

Sd-/- 
(Vivek Johri) 
Deputy Secretary to the Government of India F.No. 354/142/2000-TRUNote: 

1. Notification No. 8/2000-Central Excise, dated 1st March, 2000 was published in the Gazette of India, Extraordinary, vide G.S.R. 186 (E), dated the 1st March, 2000 and was last amended by Notification No. 1/2000-Central Excise, dated the 31st March, 2000 [G.S.R. 291 (E), dated the 31st March, 2000. 

2. Notification No. 9/2000-Central Excise, datedist March, 2000 was published in the Gazette of India, Extraordinary, vide G.S.R. 186 (E), dated the 1st March, 2000 and was last amended by Notification No. 31/2000-Central Excise, dated the 31st March, 2000 [G.S.R. 291 (E), dated the 31st March, 2000. 

Reserve Bank of India

Rural Planning & Credit Department 
Central Office 
Central Office Building, 13th Floor, Fort, 
Mumbai-400001 
Rpcd Plnfs no. BC. 25/06.02.31/2000-1   October 10,2000 

All Scheduled commercial banks (including RRBs)
 
Dear Sir, 

Flow of Credit to SSI-Enhancement in composite loan limit. 

The composite loan limit for providing working capital and term loan through a single window was raised from Rs. 5 lakh to Rs. 10 lakh vide our circular RPCD PLNFS NO. BC. 65/06.02.31/99-2000 dated 3 march 2000. Persuant to the policy announcements made by the Prime Minister in the National Conference on SSI held on 30 August 2000 as also the decisions taken by the Group of Ministers on SSI in its meeting, held on 16 August 2000 it has been decided to raise the above limit from Rs. 10 lakh to Rs. 25 lakh. We shall be glad if you will please take immediate steps to implement the above decision and issue necessary instructions  to your controlling offices/branches for appropriate action. 

2. Please acknowledge receipt. 

Yours Faithfully 
Sd/- 
(V.M.Mathew) 
Dy. General Manager 

Office of the Development Commissioner (SSI)

Ministry of SSI, Agro & Rural Industries 
Govt. of India 

Nirman Bhavan (South Wing), 7th Floor 
Maulana Azad Road, New Delhi-110011 
No. 4(5)/2000-SSI Bd. & Policy 
September, 2000 

The Secretary/Commissioner of Industries 
Director of industries 
(All States/Union Territories) 

The Director, 
All Small Industries Service Institutes 
Subject: Small Scale Service & Business (Industry Related) Enterprises (SSSBEs)-enhancement of investment limit reg. 

Sir, 

Kindly refer to this office letter No: 2(3) 91-SSI Bd dated 30th September, 1991, wherein the investment limit for Small Scale Service & Business (Industry Related) Enterprises (SSSBEs) was prescribed. The Government have now decided that Industry Related Service and Business Enterprises with investment upto Rs. 10.00 Lakhs in fixed assets, excluding land and building, will be eligible for benefits as small Scale Service & Business (Industry Related) Enterprises (SSSBE) as against Rs. 5.00 lakhs at present. Other conditions shall remain unchanged. 

An illustrative list of activities which presently qualify as SSSBEs and those which do not may be seen at Annexure I & II respectively. A revised illustrative list is under finalisation and will follow. 

This may be brought to the notice of all concerned. 

Encl: As above. Yours faithfully, 

Sd/- 
(Pankaj Jain) 
Director (SSI Bd. & Pol.) 
Tel: 3012694 

Copy for information and further action to: 

(1) Shri A. V. Sardesai, Chief General Manager, Rural Planning and Credit Department, Reserve Bank of India, Central Office, 5, Carumichal Road, Mumbai-400026. 
(2) All as per mailing list. 
(3) The Deputy Director (SENET), O/o The DC (SSI)-New Delhi, for inclusion in Website. 
(4) The Deputy Director (Facilitation Counter)-O/o The DC (SSI)-New Delhi. 

Encl: As above. 
Sd/- 
(Pankaj Jain) 
Director (SSI Bd. & Pol.) 

Illustrative List of Small Scale Service and and Business (Industry Related) Enterprises (SSSBEs) 

(Ref: 2(3)/91-SSI. BD. Dt. 30.9.91 for Sl. 1 to 27) 

1. Advertising Agencies 

2. Marketing Consultancy (extended to All "Marketing, Industrial Consultancy and Advertising 
Agencies vide letter of even number 27.8.92 

3. Industrieal Consultancy 

4. Equipment Rental & Leasing 

5. Typing Centres 

6. Zeroxing 

7. Industrial R&D Labs. 

8. Industrial Testing Labs. 

9. Industrial Testing Labs. 

10. Computerised Design and Drafting 

11. Creation of databases suitable for foreign/Indian markets 

12. Software development 

13. Auto repair, services and garages. 

14. Documentary Films on themes like Family Planning, Social forestery, energy conservation and commercial advertising 

15. Laboratories engaged in Testing of Raw Materials, Finished Products 

16. "Servicing Industry" Undertakings engaged in maintenance, repair, testing or electronic/ electrical 
equipment/instrument i.e. measuring/control instruments servicing of all types of vehicles and machinery of any description including, televisions, tape recorders, VCRS, Radios Transformers, Motors, Watches, etc. 

17. Laundry and Dry Cleaning 

18. X-Ray Clinic

19. Tailoring 

20. Servicing of agriculture farm equipment e.g. Tractor, Pump, Rig, Boring Machine, etc. 

21. Weight Bridge 

22. Photogrpahic Lab 

23. Blue printing and enlargement of drawing/designs facilities 

24. ISD/STD Booths for industries (extended to all ISD/STD Booths vide this office letter of even number dated 27.6.92) 

25. Teleprinter/Fax Services (Software Servicing & Data Processing (including computer graphics) and Printing Press which were earlier registerable as SSSBEs have since been recognised as industrial activity registerable as Small Scale Industry (SSI) vide this office letter of even number dated 3.1.1992) 

26. Sub-contracting Exchanges (SEXs) Ref: letter of even number established by Non-Government Dt. 3.1.92 Industry Associations 

27. EDP Institutes established by Ref: letter of even number Voluntary Associations/ Dt. 3.1.92 Non-Government Organisations 

28. Coloured, and Black and White Ref: letter of even number Studios equipped with Dt. 27.8.92 processing laboratory 

29. Ropeways in hilly areas Ref: letter of even number Dt. 10.8.93 

30. Installation and operation Ref: letter No. 2 (3)/93-SSI. of Cable TV Network Bd & Pol. Dt. 1.2.94 

31. Operating EPABX underfranchises Ref: 2(3)(1)/92-SSI Bd. (3) Dt. 10.6.94 

32. Beauty Parlours and Creches Ref: 2(3)/94-SSI Bd. & Pol. Dt. 26.10.94 

Illustrative List of Activities Which Are Not Recognised As Small Scale Industry/Business (Industry Related) Enterprises (SSSBEs)

• Transportation. 
  
• Storage (except cold storage which is recognised as SSI). 
  
• Retail/Wholesale Trade Establishments. 
  
• General Merchandized Stores. 
  
• Sale Outlets for industrial components. 
  
• Health Services including pathological laboratories. 
  
• Legal Services. 
  
• Educational Services. 
  
• Social Services. 
  
• Hotels. 

F.No. 6(7)2000-IF. II 
Government of India 
Ministry of Finance (Banking Division) New Delhi, the 5th September, 2000. 

Order

The activities, coverage and overall performance of State Financial Corporations (SFCs) have expanded considerably over the years. However, with the passage of time, their operations have thrown up several problems connected with the organization, management, resource mobilization, operational efficiency and overall financial health. Some of the SFCs have eroded their net worth and their operations have become moribund. With the introduction of financial sector reforms, the business environment of SFCs alongwith other financial institutions is becoming increasingly competitive. To enable SFCs to adapt themselves to the emerging environment and promote the growth of the small scale and tiny industries sector in the desired manner, Government has recently enacted amendments to State Financial Corporations Act. 1951, with a view to enlarge their shareholders base, provide them with greater functional autonomy and operational flexibility and consequent ability to respond to the needs of the changing financial system. Along with the amendments to SFCs Act, 1951 a need has also been felt to restructure the SFCs for strengthening and revitalising them. 

2. Considering the above facts and circumstances, the Government has decided to set up a Committee under the Chairmanship of Shri G.P. Gupta, Chairman & Managing Director, Industrial Development of Bank of India to look into the functioning of State Financial Corporations (SFCs) and to make recommendations for their restructuring and revitalisation. The Committee shall consist of the following:  

 

1.	Shri G.P. Gupta, CMD, IDBI	Chairman of the Committee
2.	Shri S.S. Kohli, CMD, SIDBI	Member
3.	Shri S.K. Tuteja, Development Commissioner (SSI)	Member
4.	Shri l.D.Aggarwal, ED, RBI	Member
5.	Shri V. Trivedi, MD, MPFC	Member
6.	Shri P.V. Rajaraman, Principal Secretary (Finance), Tamil Nadu	Member
7.	Shri B.D. Jethra, Adviser, Planning Commission	Member
8.	Shri A.K.D. Jadhav, M.D. SICOM Limited (Maharashtra)	Member
9.	Dr. Amitava Mukherjee, Ph. D	Member

Ex-Banker & Management Consultant 

3. The terms of reference of the Committee are as under: 

• Identification of the role and status of SFCs in the emerging Indian Financial System; 
• Suggestion for operational, financial and organisational restructuring of SFCs to provide them with greater functional autonomy and operational flexibility; 
• composition and adequacy of capital structure particularly with reference to capital adequacy ratio of SFCs; 
• Financial restructuring, recapitalisation and revitalisation of SFCs; 
• Identification of sources through which restructuring and recapitalisation shall be funded; 
• The desirability and feasibility of potential mergers and amalgamation of various state level financial institutions; 
• Measures for containment of non-performing assets; 
• Profile of business and change of business mix; 
• To make any other recommedndation as may be appropriate to enable SFCs to develop a proper strategy and plan of action that will go towards improving their viability and competitive position in the emerging financial system. 

4. The Committee shall submit its report to the Government within a period of three months. 

Sd/- 
(Shekhar Agarwal) 
Joint Secretary to The Government of India 
  

1.	Shri G.P. Gupta, CMD, IDBI	Chairman of the Committee
2.	Shri S.S. Kohli, CMD, SIDBI	Member
3.	Shri S.K. Tuteja, Development Commissioner (SSI)	Member
4.	Shri l.D.Aggarwal, ED, RBI	Member
5.	Shri V. Trivedi, MD, MPFC	Member
6.	Shri P.V. Rajaraman, Principal Secretary (Finance), Tamil Nadu	Member
7.	Shri B.D. Jethra, Adviser, Planning Commission	Member
8.	Shri A.K.D. Jadhav, M.D. SICOM Limited (Maharashtra)	Member
9.	Dr. Amitava Mukherjee, Ph. D	Member

Copy forwarded for information to Managing Directors of all State Financial Corporations. 
Copy to: Secretary-General, COSIDICI, New Delhi. 

Annexure-VI

Reserve Bank of India

Rural Planning & Credit Department 

Central Office 
Central Office Building, 13th Floor, Mumbai-400 001 

Ref.No.RPCD.PLNFS.BC.16/06.02.31/2000-01. 15th September 2000 

All Scheduled Commercial Banks 

Dear Sir, 

Flow of Credit to SSI Sector- Decision of the Group of Ministers 

Please refer to our Circular RPCD.PLNFS.No.BC.73/06.02.31/98-99 dated 1st March 1999, in terms of which Banks were advised of the enhancement in the limit from Rs. 4 crore to Rs. 5 crore for computation of the aggregate working capital requirements of SSI units on the basis of minimum 20% of their projected annual turnover. 

2. The issue has been discussed recently at the meeting of the Group of Ministers on Small Scale Industries held on 16th August 2000 under the Chairmanship of Hon'ble Home Minister. In this connection we reiterate the instructions contained in our Circular dated 1 st March 1999 and advise that you may ensure the provision of working capital to the SSI units on the basis of the norms specified therein. 

3. Further, it was also observed by the Group that the banks should develop schemes to encourage investment by SSI units in technology upgradation and harmonize the same with SIDBI schemes. We shall be glad if you please take necessary steps in this regard 

4. Please acknowledge receipt and advise us the action taken by you in this regard. 

Yours faithfully 
Sd/- 
(A.D. Rane) 
General Manager 

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