The scheme seeks to resolve the problem of SSIs in providing adequate security to banks and to minimise the impact of removal of quantitative restrictions on them.

The scheme is proposed to be started with a corpus of Rs 125 crore, of which the government will contribute Rs 100 crore and Rs 25 crore by Small Industry Development Bank of India (SIDBI).

It envisages grant of loans up to Rs 10 lakh for new as well as existing manufacturing SSI units, including information technology and software, without any collateral including third party guarantee.

The budget had also dispensed with the collateral requiirement by banks up to Rs 5 lakh credit. In addition, term loan and working capital would be available to SSI units with a ceiling of Rs 10 lakh through a single window.

SIDBI has created a Rs 200-crore fund for technology upgradation and modernisation of the SSI sector. The scheme has since been extended for another three years.

The development commissioner for small-scale industry also provides incentives to small units to obtain ISO 9000 certificate by meeting 75 per cent of the expenditure incurred, subject to Rs. 75,000. Between April 1994 and November 1999, 497 units have been benefited by the scheme and a sum of Rs 271.42 lakh has been released.

Specific schemes like integrated technology upgradation and management programme by the small scale and agro and rural industries ministry aim at modernising industrial clusters. The scheme covers all aspects of modernisation. To help SSI units in marketing, 358 items are reserved for purchase from the sector under the government procurement policy, Under the scheme, national small industries corporation NSIC) operates a single-point registration scheme.

SSI units registered with NSIC are entitled to the availability of tender sets free of cost; exemption from paymnent of earnest money deposit; exemption from payment of security deposit; price preference up to 15 per cent over the last quotation of the large units provided technical specifications are met by small scale units.

Of the 812 items SSI reserved items, imports of as many as 576 items were already under open general licence (OGL) prior to current export and import policy announced on March 31, 2000. This means that these items could be imported freely without any licence.

Only 58 tariff lines comprising 67 items of SSI reserved list have been placed under OGL in the current exim policy. The bulk of SSI reserved items were therefore already under OGL even before March 31.