SMEs should tap BIS marking scheme
Quality and safety of products, it is obvious, are important for the consumer, and thus for manufacturers who want to increase their market size in a competitive economy. It is, therefore, strange that one institution that is the torch-bearer of quality and safety standards, the Bureau of Indian Standards (BIS), has not been at the centre stage of attempts to modernize and upgrade Indian industry, especially small-scale industries (SSIs), in the post-reform period since 1991.
In fact, BIS standards have been used more for negative purposes in the past decade of "globalisation" -- as a non-tariff barrier to imports in the present low tariff regime -- than for promotion of standardization within the country.
Though BIS has been involved, in the case of both small and large sectors, as one of the certifiers of the ISO-9000 quality system, its role has not been fully tapped to enable more and more manufacturers to achieve prescribed product standards, which is a more basic objective. BIS standards cover both mandatory standards applicable to goods having serious implications for consumer safety and health -- like electrical products and appliances, LPG cylinders and valves, foods, chemicals -- and non-mandatory standards. It is perhaps time that the leadership of small industry as also the SSI policy-making establishment undertook initiatives for improved adoption of and compliance with both types of standards, and for necessary changes in the operation of the BIS as an institution and a process.
The BIS, the successor to the Indian Standards Institution, operates the system of evolving and fixing product standards, which requires a high level of technical competence and inputs relevant to different sectors of industry, and grant of Indian product standard certification (ISI marking) for both mandatory and non-mandatory standards.
With its headquarters in Delhi and regional offices, it also operates schemes for grant of Ecolabels/marks and HACCP (Hazard Analysis and Critical Control Point certification of the European Union). Noida-based National Institute of Training for Standardisation (NITS), established by the BIS, imparts training to government enforcement officials as also industry in matters relating to standards.
Considering the tasks involved in standardization, including testing, monitoring and enforcement, the fee charged by the BIS in most cases is nominal.
Given the scope that the Bureau of Indian Standards Act 1986 and rules thereunder give for interaction of the BIS with different segments of industry, the low level of interest in the small industry sector in standardization is surprising. The Act and rules provide that two representatives of small industry association and two SSI entrepreneurs with an operating BIS certification shall be included in the Bureau of the BIS for two-year terms.
Similarly, there are allotted slots for SSI association leadership and small entrepreneurs with BIS certification in the Certification Advisory Committee of the bureau. The BIS also established an SSI cell in 1997. All these provisions should have enabled the BIS to achieve its mandate of "establishment, publication and promotion of Indian standards".
A real test of the success in promotion of Indian standards is not the extent to which the standards serve as a non-tariff barriers to exports motivated by protectionism but to the extent to which manufacturers, particularly in the small and medium sectors, look upon achievement of BIS marking as a gateway to consumer acceptance and competitiveness in the marketplace. A consumer should have the same confidence that he has in a BIS-marked product as is evoked by "CE", the certification mark of the European Union.
Since standardisation involves safety and health of users, the policy framework has to include both the carrot and the stick. There is a need for greater incentives (than in the case of the ISO quality certification system) to nudge enterprises to adopt BIS standards, even where they are not mandatory. At the same time, the penal provisions of the BIS Act, at present involving imprisonment of a maximum of one year and a maximum fine of Rs 50,000 for violation of important sections of the law, should be enhanced.
The Act provides for appeal to the government against orders of the BIS and the government’s decision as to whether a particular aspect is a matter of "policy" shall be final and binding. Hundreds of cases relating to BIS orders are pending before high courts and lower courts for a decade and more. It may be worth considering whether a specialized tribunal, as in matters like intellectual property, should be set up to deal with and dispose of standardization disputes expeditiously.
Though the BIS at present uses the services of some approved private laboratories and auditing agencies in carrying out its work, the level of public-private partnership (PPP) should be enhanced. Greater visibility and role for an institution like the BIS would, in the present market environment, serve the interests of manufacturers, including small and medium enterprises, within the country. The likely proliferation of free trade agreements (FTAs) will warrant that the BIS should enter into mutual recognition agreements with its counterparts in India’s major trade partners.-
SSIs : A review