Southern States - Karnataka   

Package for small units soon: Thakur

By Our Special Correspondent

BANGALORE Sept. 13. The Union Minister for Small Scale Industry (SSI), C.P. Thakur, said today that the Union Government would announce a package for SSIs within a few days.

Speaking at the 9th annual general meeting of the Laghu Udyog Bharathi (LUB) here, Dr. Thakur said that his Ministry was preparing the package, and "something good will come out for the growth of SSIs''. The Prime Minister, A.B. Vajpayee, had asked him to prepare the package to enable the SSI sector to do well in the face of stiff competition. "We are discussing the package with the Prime Minister,'' he added.

Dr. Thakur noted the several problems of the SSI sector, and said round-table conferences would be arranged with the support of SSI associations in all States. There were a large number of sick units in States such as Uttar Pradesh and West Bengal, he said, and asked SSI entrepreneurs to unite to bargain effectively for incentives from the Government.

The Union Government had announced a Credit Guarantee Fund Scheme to release loans up to Rs. 25 lakh to SSIs without collateral security, Dr. Thakur said. But, unfortunately, financial institutions refused to grant loans under the scheme. Most banks were charging high rates of interest on loans for SSIs, he added.

To ensure cheap credit, it had been decided to limit the interest rate on loans to plus or minus two per cent of the prime lending rate of banks, he said.

Disparity in lending by banks to large and tiny industries was one of the major reasons for the closure of SSIs, Dr. Thakur said. Banks should release loans to SSIs at a lower rate of interest for activities such as upgrading and modernising technology, and purchase of raw materials. Small units could compete with MNCs if they constantly upgraded technology and supplied quality products, the minister said, and added that despite many obstacles, the SSI sector contributed 35 per cent of the total country's exports.

The BJP State unit President, H.N. Ananth Kumar, said more than two crore families were dependent on SSIs for their livelihood.

Listing out the problems that SSIs were facing in the State, he said the State Government had not released Rs. 425 crore as subsidy to SSIs in the past four years. More than 50 per cent of the three-lakh sick units in the country belonged to the tiny sector. Although large-scale industries were responsible for the growing non-performing assets of banks, the latter were not releasing loans to SSIs, Mr. Kumar said.

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