Small scale units seek big concessions from FinMin

Our Economic Bureau

New Delhi, Jan 7: Small scale industry (SSI) associations have asked the finance minister Yashwant Sinha for a slew of concessions in Budget 2002-03, including enhancement of exemption limit for excise duty to Rs 2 crore, raising basic exemption limit for income tax to Rs 75,000 and 100 per cent exemption for exports from income tax for all SSI units.

Union finance minister Yashwant Sinha with his deputy Vikhe Patil at a pre-Budget meeting with small scale industrialists in New Delhi on Monday

In their pre-Budget meeting with Mr Sinha on Monday, the representatives from all over the country suggested that the government should frame a policy which would allow reasonable differential between customs duty on raw materials and components. To get over the problem of lack of adequate funds for small units, the delegation said that special bank branches should be established in each state for providing finance and other help to the sector. The delegation added that the need for collateral security for loans even from financial institutions should be abolished as in the case of commercial banks.

To help units fight competition from foreign players, the delegation said that the government should establish special institutions to provide infrastructure support, market devlopment and technology upgradation. The focus should also be on developing clusters to promote credit availability and technology upgradation, said the associations. They stressed that a specified minimum proportion of government procurement should be sourced from the sector, and SSI dereservation should be pursued gradually in consultation with the industry associations.

The participants asked the government to take measures to improve accessibility of the sector to the capital markets, and introduce single rate or brand rates for duty drawbacks to ensure simplicity and better tax administration.

Special exit policy for SSI units, simplification of labour laws, and special concessions for sick textile units were among other demands of the SSI representatives.