KOCHI: Xavier Thomas Kondody, former president of Kerala State Small Industries Association, has urged the State Government to formulate policies to facilitate manufacturing innovation, skill development and sustainability.

In a paper submitted to the Government, he said large investments in information technology, tourism and creation of special economic zones (SEZs) alone would not help the benefits of economic growth to reach equitably to all in society.

Rural and agriculture sectors would gain momentum in growth only if the Government was willing to invest more of its resources in an integrated way. A large pool of young people was unemployed or underemployed in the State. These groups needed knowledge and skill development.

The challenge was to enhance the intellectual capital, correct skill mismatches and create a qualitative human force.

He called for a mission to encourage non-resident Keralites, women and technocrats to participate in industrial capacity building. Special emphasis should be laid on qualitative competitiveness through technology upgrade. He also called for steps to encourage the cluster concept.

Mr. Kondody wanted the Government to appoint committees to identify areas of potential growth and study regulatory controls hindering the development of the small-scale sector.

He also demanded that the current land assignment policy to industrial enterprises be overhauled to ensure a free and transparent mode of title-deed transfer in a time-bound manner.

New industrial units should be exempted from building revenue tax from local bodies.

All small-scale industrial (SSI) units should be exempted from the present system of multi-tariff rates for the first five years of its establishment.

He suggested that a 10 per cent grant be provided for investments on energy saving measures.

Under the credit guarantee fund, credit should be provided without collateral security for industrial units up to a limit of Rs. 25 lakh. To support this initiative and improve credit flow to the SSI sector, a corpus might be created, matching the contribution made by the consortium of industries.

An existing agency, such as the KBIP, might be strengthened to prepare feasibility reports for viable and suitable projects for new entrepreneurs. All industrial raw materials, irrespective of schedules, should be brought under four per cent value-added tax. All products manufactured by SSI units inside the State might be scheduled under a lower rate of VAT of 4 per cent.

The State should impose appropriate tariff barriers against entry of products into the State by manufacturers in excise duty holiday zones and Union Territories, as entry of such products jeopardised the marketability of local products.

The Government might overhaul the entire licencing system from panchayats and municipalities for establishing micro and small industries, he said.

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