The raise in investment ceiling in plant and machinery is with a purpose of bringing modern technology to the sector, said official sources. They, however, refused to divulge the sectors that have been targeted by the Prime Minister.

The SP Gupta committee, whose report was recently discussed by the committee of secretaries, and the GoM under home minister LK Advani, had suggested that the limit be raised in the sectors with export and employment generation potential. The committee had suggested the following sectors for the this: leather products, readymade garments, hosiery, hand tools, toys, packaging material, auto components, pharmaceuticals, food process, etc.

The Gupta committee had also recommended "dereservation of some export thrust items" as the country is losing foreign exchange by production of low value-added items by using low-grade technology. "Production of reserved items could be allowed to be taken up by non-SSI items, subject to minimum export obligation of 30 per cent to be achieved in first three years.

Thereon 30 per cent export each is to be achieved. Presently, it is 50 per cent," the committee had recommended.

The committee of secretaries has accepted this recommendation, and this is likely to be part of the Prime Minister's package. For dereservation per se, the government wants to prepare a long-term road map in consultation with the representatives of SSIs, experts and other concerned people.

The Gupta committee had suggested the setting up of a integrated infrastructure development scheme to cover all areas of the country with 50 per cent reservation for backward and rural areas. The government has accepted this recommendation and the Prime Minister is expected to announce such a scheme.

For factoring services, the Gupta committee had recommended the setting up of a task force to encourage it. The government has accepted this, and a task force is likely to be set up by the RBI.

The Gupta committee's recommendation pertaining to the defining the medium sector, however, has been rejected. The committee had recommended a three-tier definition: the tiny sector, with Rs 10 lakh investment in plant and machinery; the SSI unit, with Rs 10-100 lakh investment; and medium units, with Rs 1-10 crore investment.