Date:08/08/2006 URL: http://www.thehindu.com/2006/08/08/stories/2006080811620500.htm

Karnataka - Bangalore

Minister to go on tour to study problems of small industries

Staff Reporter

Entrepreneurs urged to set up units outside the big cities in the State

Naik says small industries sector faces a majority of the problems

Government has released Rs. 70 crore subsidy amount

ELICITING VIEWS: Minister for Small Scale Industries Shivanand N. Naik (centre) along with KASSIA president Hareesh P. Hegde (right) and Azeezulla Baig, Managing Director of KSSIDC, at an interaction in Bangalore on Monday. — Photo: K. Gopinat han

Bangalore: Small Scale Industries (SSI) Minister Shivanand N. Naik said he would tour all districts in the State to understand the problems of the small-scale sector.

Mr. Naik was speaking at an interaction organised by the Karnataka Small Scale Industries' Association (KASSIA) here on Monday.

He said among the industries, the small-scale sector faced the majority of problems. Attempts at solving them started with the Government releasing Rs. 70 crore as subsidy.

The previous Government had not released Rs. 420 crore as subsidy, he said.

Mr. Naik urged entrepreneurs to set up small industries in districts apart from Bangalore, Hubli and Mangalore. The Government had invested Rs. 600 crore in developing the infrastructure.

KASSIA president Hareesh P. Hegde said a large number of small industries could not take advantage of the one-time settlement (OTS) scheme because they could not get the exact figures of how much they owed to Karnataka State Small Industries Development Corporation (KSSIDC). Banks did not give funds for OTS schemes to small entrepreneurs on time, he said.

If OTS was restored, it would help entrepreneurs raise additional loans from banks. This would help in capacity expansion and upgrading of enterprises, he said. Mr. Hegde said the stamp duty concession for registration of sheds and plots allotted by Karnataka Industrial Area Development Board (KIADB) and KSSIDC should be extended for two years because many SSIs could not use the facility.

Repaying seed capital and penal interest incurred on it had become difficult for entrepreneurs.

A permanent solution was needed in terms of starting an OTS so that entrepreneurs could repay and close the account, said Mr. Hegde.

Several industrialists from throughout the State submitted memorandums to the Minister.

An industrialist from Shimoga said entrepreneurs had not received their 4 per cent subsidy and were being asked to pay tax on that amount.

Another entrepreneur said the SSIs were not able to supply to government undertakings because of the Transparency Act. A few others asked for the early establishment of industrial estates in their districts so as to encourage SSIs.