Tamil Nadu   

Plea for insurance scheme for small-scale entrepreneurs

Special Correspondent

Present Industrial Disputes Act laws are hostile

VELLORE: The Vellore District Small and Tiny Industries Association (VEDSTIA) has appealed to the Prime Minister Manmohan Singh to implement an insurance scheme for the benefit of the self-employed entrepreneurs in the small scale industries (SSI) in order to ensure a secured life for them.

In a memorandum sent to the Prime Minister, the VEDSTIA president, R. Amirthakatesan pointed out that the present rules and regulations in the Industrial Disputes Act appeared to threaten the existing entrepreneurs as well as those looking for self-employment.

Under these circumstances, it is necessary to implement an insurance scheme not only to protect the existing entrepreneurs but also to encourage technocrats and graduates to start small and tiny industries.

Securitisation Act

The association also appealed to the PM to ensure that the Securitisation Act was not implemented on SSI and tiny units having an investment of up to Rs.50 lakh, since the Act "hampered the growth of the SSI sector".

It also suggested that a one-time settlement scheme be implemented for the SSI and tiny units, as per the guidelines of the Reserve Bank of India to help to rehabilitate of the sick units.

It pointed out that the SSIs are not provided with adequate finance by the banks in time.

The VEDSTIA pleaded for the exemption of leather processing industries from the purview of service tax, as in the case of the textile industries.

It said that the small and tiny industries suffered on account of the implementation of the Service Tax Amendment Act. Most of the SSI industries were involved in manufacturing activity either wholly or partly.

Service tax

The conversion of raw leather to finished leather comprised various stages of activities, and if service tax was levied at each and every stage of the manufacturing process, it would boost the cost of the finished leather.

Hence, the small-scale leather industries would not be able to compete with their counterparts in countries like China and Pakistan.

The VEDSTIA also appealed to the PM to establish a separate body for promoting exports of the SSIs and tiny industries since they were unable to follow the existing export guidelines. The proposed body could procure orders from abroad and distribute them among the SSI units for supply.

After receipt of supply from the units, the body could export the products to the required buyers in the importing countries and collect the payment for distribution among the local suppliers.

The association wanted the above suggestions to be incorporated in the Small Enterprises Development Bill before its enactment in Parliament.

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