The Government announced its policy towards the small sector on 6th August 1991. The main features of the Policy were: The Small-Scale Industrial Sector has emerged as a dynamic and vibrant sector of the economy during the eighties.
The primary objective of the Small Sector Industrial Policy during the nineties was to impart more vitality and growth impetus to the sector to enable it to contribute its mite fully to the economy, particularly in terms of growth of output, employment and exports.
1. Government have announced increase in the investment limits in plant and machinery of small scale industries, ancillary units and export-oriented units to Rs. 60 lakhs, Rs. 75 lakhs and Rs. 75 lakhs respectively. Such limits in respect of “TINY” enterprises would now be increased from the present Rs. 2 lakhs to Rs. 5 lakhs, irrespective of locations of the unit.
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2. Inadequate access to credit—both short term and long-term—remains a perennial problem facing the small-scale sector. Emphasis would henceforth that from subsidized cheap credit, except for specified target groups, and efforts would be made to ensure both adequate flow of credit on a normative basis, and the quality of the delivery, for viable operations of this sector.
3. A Technology Development Cell (TDC) would be set up in the Small Industries Development Organisation (SIDO) which would provide technology inputs to improve productivity and competitiveness of the products of the small-scale sector.
4. National Small Industries Corporation (NSIC) concentrate on marketing of mass consumption items under common brand name and organic links between NSIC and SSIDCs established. The SIDO has been recognized as the nodal agency to support the small-scale industries in export promotion.
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5. Government will continue to support first generation entrepreneur through training and will support their efforts. Large number of EDP trainers and motivators will be trained to significantly expand the Entrepreneurship Development Programmes (EDP). Industry Associations would also be encouraged to participate in this venture effectively. Women entrepreneurs will receive support through special training programmes.
6. Handloom sector contributes about 30 per cent of the total textile production in the country. It is the policy of Government to promote handloom to sustain employment in rural areas and to improve the quality of life for handloom weavers.
7. The activities of the Khadi and Village Industries Commission and the State Khadi and Village Industries Boards would be expanded and the organisations strengthened to discharge their responsibilities more effectively.