Government of IndiaMinistry of Finance Budget 97-98




Budget Speech - PART A

Small Scale Industry

  1. As Hon'ble Members are aware, government has recently enhanced the investment ceiling for plant and machinery of small scale industries (SSIs) to Rs.3 crore and of tiny units to Rs.25 lakhs. In order to ensure that credit is available to all segments of the now-enlarged SSI sector, the RBI is issuing instructions that out of the funds normally available to the SSI sector, 40% will be reserved for units with investment in plant and machinery upto Rs.5 lakhs, 20% for units with investment between Rs.5 lakhs and Rs.25 lakhs and the remaining 40% for other SSI units.

  2. Government also announced recently that it will examine carefully the other recommendations of the Abid Hussain Committee on the SSI sector. With a view to reduce wastage in agricultural commodities, improve quality and hygiene and promote exports, the Advisory Committee on reservation and dereservation has recommended that 14 items, now reserved for manufacture in the SSI sector, may be dereserved. 822 items would still remain reserved for production in the SSI sector. Government has accepted these recommendations. The dereserved items include rice milling, dal milling, poultry feed, vinegar, synthetic syrups, biscuits, ice cream, a variety of automobile parts and corrugated paper and boards. It is expected that new investment and improved technology will flow into these businesses.

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