Biscuit unit affected by de-reservation: govt

New Delhi, Mar 6: The arrival of imported goods and entry of big players in the areas till recently reserved for small scale production has affected biscuit manufacturing units.

About 39 per cent of all small scale units registered until March 2001, had closed down.

Giving this information to the Rajya Sabha today, Minister of State for Small Scale Industries and Agro and Rural Industries, Mahabir Prasad, said an evaluation of 15 de-reserved items revealed that only the units making one of them -- biscuits -- had been affected, though not seriously.

All other items have not been affected by de-reservation, he said replying to the members' concern over the adverse effect of the import of items so far reserved for small scale units.

When the members pointed out that thousands of small scale units were closing because of the arrival of cheap products from China and other countries, the Minister said the government was aware of the situation and was taking all steps to enable the indigenous small units to improve the quality to compete with imported goods.

''The government is taking counter measures and we have introduced a credit guarantee scheme to help the units improve their performance,'' said the Minister.

He said the reasons for the closure of 39 per cent of small units were: fall in demand for products of these units, use of outdated technology, difficulty in availability of working capital and raw material, constraints in electricity supply and management inadequacies.

UNI