Scheme for capital subsidy for SSI units extended till Mar'07

New Delhi, Apr 30 (UNI) The government-funded scheme for technology upgradation for the Small Scale Industries (SSI) has disbursed only Rs 24.09 crore of the total corpus of Rs 600 crore till November 2005, official figures reveal.

According to Ministry of Small Scale Industries sources, tardy implementation and lack of takers for the Credit Linked Capital Subsidy Scheme (CLCSS), which provides upfront capital subsidy to SSI units for technology upgradation, has necessitated its amendment to allow greater take off of capital subsidy.

The duration of the scheme has also been extended till March 31, 2007, the sources said.

Launched on October one, 2000, the scheme was initially for a period of five years or till the sanction of capital subsidy reached Rs 600 crore, whichever was earlier.

Starting with disbursal of subsidy worth Rs 21.36 lakh to nine units in 2001-02, so far Rs 24.09 crore has been sanctioned to 935 units till April-November 2005, figures available show.

To accelerate the pace of implementation, the guidelines of the CLCSS have been revised by the Governing and Technology Approval Board (GTAB) to include more sub-sectors/products and improved technologies under the scheme.

In the light of experience gathered in implementing the scheme, the ongoing CLCSS has been amended raising the ceiling on loans under the scheme from Rs 40 lakh to Rs 1 crore and the rate of capital subsidy was raised from 12 per cent to 15 per cent, the sources said.

Further, it was decided to calculate the admissible capital subsidy with reference to the purchase price of plant and machinery, instead of the term loan disbursed to the beneficiary unit and do away with the practice of categorisation of SSI units into slabs on the basis of their present investment for determining the eligible subsidy.

SSI units, including agro and rural industry units, can avail of capital subsidy for modernisation of their production equipment (plant and machinery) and techology.

The 45 approved sub-sectors or products include auto parts and components, information technology, poultry hatcheries and cattle feeds, sewing machines and sports goods among others.

The Small Industries Development Bank of India (SIDBI) and the National Bank for Agriculture and Rural Development (NABARD) are the two nodal agencies for implementing this scheme with the credit being made available through Primary Lending Institutions (PLIs) such as scheduled commercial banks and eligible cooperative banks other than urban cooperative banks and Regional Rural Banks.

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