Single legislation for SSIs recommended

By S. K. Ramoo

BANGALORE, MAY 20. Lack of access to institutional credit, marketing bottlenecks, compliance with cumbersome procedures, technological obsolescene, harassment by inspecting functionaries, outdated labour laws and operational inflexibility, are some of the major problems facing the small- scale industries in Karnataka. This is revealed in a policy paper formulated by the Federation of Karnataka Chamber of Commerce and Industry (FKCCI).

The paper has provided a number of inputs to enable the Government to formulate a comprehensive policy on SSIs. One of its key recommendations is that the policy shift should be in favour of self- regulation rather than on control mechanism. It has recommended a single legislation for the SSI sector.

An important recommendation is a ``cluster approach'' by locating a group of SSIs in specific industrial belts to enable them to obtain technological upgradation, supportive infrastructure, bank branch network, market share and personnel. It has felt that examples set by Italy, Denmark, Finland, Phillipines, Chile and South Korea, are worthy of emulation.

The paper is of the view that common facility centres (CFCs) should be established for a cluster of SSIs to enable individual units to have access to specialised facilities such as input quality control, in- process and end product quality check, tool room facilities, quality certification, packaging and labelling. It has favoured their establishment in the private sector and functioning on commercial basis with the support of the Government. They can also have common warehousing facility. Such approach is ideal for electronics, automobile, textiles and defence-related industries.

It is amazing but true that SSIs in Karnataka have to grapple with 52 legislations and it is estimated that about 70 per cent of the entrepreneur's precious time is spent in fulfilling cumbersome statutory requirements.

The policy paper has drawn attention to the fact that the SSIs lack representation on the State Level Bankers' Committee (SLBCs), although they are contributing 40 per cent of the total value of commercial transactions. It has favoured setting up of a finance and legal adviser exclusively for the SSI sector in the Industries and Commerce Department.

The SSIs should have easy access to industrial credit and working capital at reasonable interest rates, the paper has said and recommended the SIDBI to charge interest rates less than two per cent above PLR. It has felt that the bank credit system should be transparent so that entrepreneurs with good track record can secure greater benefits.

The SSI sector in Karnataka is serving fields such as space, aeronautics, defence, automobile, electronics and electrical, machine tools, watch-making, consumer durables, cosmetics, mining and telecommunication. It is exporting gems, jewellery, textiles and garments.

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Section  : Southern States
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