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Rediff.com  » Business » Auto parts, chemicals to go off SSI list

Auto parts, chemicals to go off SSI list

March 13, 2006 10:29 IST

Auto components, chemicals and transport equipment are among the 180 items being dereserved from the small scale sector. In addition, the small- scale industry ministry has hiked the investment limit to Rs 5 crore (Rs 50 million) from Rs 1 crore (Rs 10 million) for all drugs and pharmaceuticals manufactured by the SSI sector.

Officials said several organic chemical items and mechanical engineering goods were being removed from the list of items reserved for the sector. At present, there are 506 items in the sector, and that will be reduced to 326 once the removal of the 180 items is notified by the department of industrial policy and promotion.

Finance Minister P Chidambaram had, in his Budget speech, announced the decision to dereserve 180 items from the SSI list.

In addition to this, the ministry of small-scale industries has notified an increase in the investment to Rs 5 crore for 69 items, including bread, pickles and chutneys, PVC pipes, Azo dyes, glass and ceramics, dinner and tea sets, glass bangles, and auto components. It has also decided to enhance the limit for all items in the drugs and pharmaceuticals sector.

The ministry had earlier raised the investment limit for 71 items.

 "The decision to hike the limit for the items has been taken on the basis of recommendation recieved from the stakeholders," an official said, adding that once the Small and Medium Enterprises Development Bill is approved, the investment limit across the board for the SSI sector would automatically be enhanced to Rs 5 crore as the provision was contained in the Bill.

Officials said the ministry was in the process of finalising a consultant to carry out an independent evaluation of the existing schemes for the sector. Consultants such as A F Ferguson, National Productivity Council, NCAER, IIM (Bangalore), Crisil and JPS Associates are in the fray for the job.

"The studies are being conducted at the behest of the Planning Commission which had suggested an independent evaluation of the existing schemes to be conducted before new schemes are proposed for the Eleventh Plan period," an official said.

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Monica Gupta in New Delhi
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