NEW DELHI: The Cabinet Committee on Economic Affairs (CCEA) on Thursday approved an increase in the subsidy for small scale industries (SSIs) from 12 to 15 per cent to make the sector competitive. Alongside it raised the ceiling on loans under the Credit Linked Capital Subsidy Scheme (CLCSS) for modernisation and technology upgradation from the current Rs. 40 lakh to Rs. 1 crore. The validity period of the scheme has been extended to March 31, 2007.

Basis to be changed

In addition, another amendment in the scheme approved by the committee is that the capital subsidy is to be calculated with reference to the purchase price of plant and machinery instead of the term loan disbursed to the beneficiary SSI unit.

The CCEA cleared an increase in the ad hoc subsidy on `single super phosphate' (SSP) to Rs. 975 from Rs. 650 a tonne with effect from September 1 on the recommendation of the Committee of Secretaries (CoS) to help poor and marginal farmers.

To revive industry

The increase in subsidy is to help revive the SSP industry as also reduce the pressure on the Government from international suppliers of phosphoric acid and DAP manufacturers.

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