KOCHI: Kerala State Small Industries Association (KSSIA) has suggested that tiny and SSI credit portfolios should be treated as separate priority sector advances and that a sub-target of 40 per cent for tiny sector and 20 per cent for the SSIs should be set out of the total money that can be lent by commercial banks.

The suggestions were made in a representation made by KSSIA before the Parliamentary Standing Committee. The Association has made several suggestions to improve credit flow to the small and medium-sized industry sector as a whole. For example, it has suggested that there should be district-wise targets for growth. The KSSIA pointed out that so far only seven districts had specialised SSI branches in the State and that the remaining districts should also be provided with specialised SSI branches and these branches should handle only SSI accounts.

KSSIA also demanded that budget hotels in the tourism sector be given industry status. The Association suggested that all the present guidelines of Reserve Bank of India (RBI) in the SSI credit flow system should be strictly followed, particularly by SSI branches. KSSIA is of the opinion that regional rural banks should also be brought into financing SMEs as a policy guideline.

The Association said that it welcomed the C.S. Murthy report in full and that each State-level Association should get a representation in the RBI Standing Advisory Committee meetings.

The KSSIA also felt that State-level inter-institutional committee meeting must be held on a tri-monthly basis. The Association in its representation to the Parliamentary Standing Committee had pointed out that only 35.28 per cent of the total SSI advances has gone to units with Rs.5 lakh or below in investments in plant and machinery.

Besides, said the KSSIA, only 13.36 per cent of the total priority sector lending advances outstanding is in the SSI sector.

The KSSIA representation also said that 59.63 per cent of the total SSI advances outstanding in the State was to small units that had investments in plant and machinery at less than Rs.25 lakhs.

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