Dr Singh was speaking at the convention of SSIs here on Monday. If policies of the past have not worked well, we should be prepared to discard them, he said.
The PM expressed dissatisfaction over the policy of reservations for SSIs, saying that it would not be enough to protect the small sector from global competition. It needs to be seen whether protection in the form of reservation of items for production in SSIs is an adequate mechanism to enable the sector to thrive, he said.
While reservation can protect from domestic competition, it will not protect them from international competition, he said.
On the proposed commission, Dr Singh said it would examine the problems facing enterprises in the unorganised sector. The commission would have a comprehensive mandate to examine and review existing institutional mechanisms for supporting small enterprises.
A number of measures such as the credit guarantee trust and a credit-linked capital subsidy scheme have been launched in recent years to promote SSIs, but availability of credit still remained a problem, he said.
There is an urgent need to address key issues of credit and marketing support, technology upgradation and infrastructure development in the SSI clusters, Dr Singh said. He regretted that the sector was not getting enough credit despite banks being flush with money.
Highlighting the significance of SSIs as key to our success in employment, he said, I understand that the ministry of SSI is working on a single law for the sector. Let us finalise this shortly and bring it before Parliament.
Given the future scenario of trade-driven competition, the efforts of all government agencies must to be towards enhancing the capabilities of SSI enterprises to face competition, he said. There is an urgent need to work out effective promotional measures which will enhance efficiency and productivity of these enterprises.
The policies, whether for technological upgradation, marketing support or credit support, must evolve approaches which are flexible enough to adjust to the requirement of each sector and cluster, the Prime Minister said.