Union Minister for Small Scale Industries C P Thakur has sought the restoration of the excise exemption for the small scale sector in order to enhance its growth and employment opportunities within it.
Thakur has written to Prime Minister Atal Bihari Vajpayee, Deputy Prime Minister L K Advani, Union Finance Minister Jaswant Singh and Deputy Chairman of the Planning Commission K C Pant about the withdrawal having an adverse effect on the small scale sector.
Thakur could be trying to convey to the Bharatiya Janata Party brass the political implications of withdrawing the exemption, as the small sector forms the party's core constituency.
Thakur has said he had to face the hostility of small scale industry owners from all over the country over this.
The decision to withdraw the exemption has badly hit units manufacturing dress-materials and saris.
Removal of the exemption, along with the opening of the market to foreign products, has made the survival of many small scale sector industries difficult.
Thakur has also raised the issue of the securitisation law on non-performing assets of banks. Representatives of small scale units have told the minister that banks are taking legal action against them at the slightest pretext, foreclosing options for their revival.
Thakur also favours the idea of restoring the excise exemption granted to cigarette manufacturing companies in the northeast, while initiating action against those claiming the exemption simply by setting up their packaging units there.
Thakur's letter is sure to find favour with the Sangh Parivar, which has said the government's economic policies are inimical to the growth of small scale industries.
Sources say the growing anti-BJP feeling in the small scale sector, a substantial section of the electorate, is bad news for the party, what with Assembly elections in the next six months and Lok Sabha elections due next year.
With the finance minister facing a revolt within the BJP over the value-added tax, Thakur's plea for the restoration of the excise exemption will accentuate the finance ministry's dilemma.
That Thakur's view conforms to the Sangh Parivar's position on the issue appears to be an indication that the minister is not going beyond his brief while articulating the issue within the government.
