10.2 VILLAGE AND SMALL INDUSTRIES

Transcription

1 10.2 Village and Small Industries 599 Introduction 10.2 VILLAGE AND SMALL INDUSTRIES Small-scale and cottage industries play a very vital role in the country's economy despite the phenomenal growth in the large-scale sector. In fact, the small-scale sector is playing a vital role in the growth of national economies the world over and is considered to be the engine of growth in most countries. The small-scale industries are labour - intensive and provide employment to nearly 1.86 crores persons in the country. The emphasis on Village and Small-Scale Industries (SSIs) has always been an integral part of the Indian Industrial strategy, more so after the Second Five Year Plan. It was envisaged that Village and Small-Scale Industries would play an important role as producer of consumer goods and absorber of surplus labour thereby addressing to the problems of poverty and unemployment. Other advantages of small industries are that they ensure a more equitable distribution of national income, enhance balanced regional industrial development, act as a nursery for entrepreneurship and facilitate mobilization of local resources and skills which might otherwise remain unutilized. Consequently, the Government of India had been encouraging and supporting the promotion of Small-Scale Industries through deliberate policies such as protection from large-scale industries, capital subsidies, differential tax treatment, reservation etc. The Government continues to provide protection to the small scale sector, inter-alia, through the policy of reserving items for exclusive manufacture in the small-scale sector. Industrial undertakings other than the small-scale industrial undertakings engaged in the manufacture of items reserved for exclusive manufacture in the small-scale sector are required to obtain an industrial licence and undertake an export obligation of 50 per cent of the annual production. However, the condition of licensing is not applicable to such industrial undertakings operating under 100 per cent Export Oriented Undertakings Scheme, the Export Processing Zone and the Special Economic Zone Schemes. The reservation policy was introduced in 1967 an attempt to protect SMEs from competition from corporations and 44 goods were specified to be exclusively manufactured by SMEs (Large Corporations were allowed to enter this sector on condition that 50% of their produce would be exported). As a result, SMEs dominated readymade garments, leather goods, autocomponents, electrical appliances and the hand tool industries. Over the years, the number of items reserved for SMEs increased and it stood at over 800 in However, the Abid Hussain Committee set up by the Government of India which submitted its report in January 1997 observed that the reservation policy was inconsistent with the current trade reforms which allow free import of a large majority of the goods and most of the remaining can be imported under the special Import Licence. The number of reserved items has, therefore, been coming down. Industrial undertakings with investment in plant and machinery up to Re. 1 crore qualify for the status as small-scale or ancillary industrial

2 Village and Small Industries undertaking with effect from 24 December The investment limit for tiny units is Rs. 25 lakh. The Small-Scale Industry sector has emerged as a dynamic and vibrant sector of the Indian economy in recent years, displaying phenomenal growth in the field of production, employment and dispersed development in general and exports in particular. There are nearly 34 lakhs Small-Scale Industries in the county accounting for about 40% of the gross value of output in the manufacturing sector and about 34% of the total exports of the country. It provides employment to nearly 186 lakhs persons, which is second only to agriculture. Position as in No. of Small-Scale Industries Units Rs lakhs Production at current prices Rs. 6,45,496 crores Employment 186 lakh persons Exports Rs. 59,978 crores The Small-Scale sector contributes amply to other socio-economic aspects such as reduction in income inequalities, product diversification, dispersed development of small industries and linkage with other sectors of the economy. Tamil Nadu Small Scale Industries Profile The small scale industries, which are defined in terms of value of productive machinery, made an early start in Tamil Nadu with the Government stepping in to create major industrial estates at Guindy and Ambattur in Chennai. In 1973, Tamil Nadu had the largest number of SSIs in the country with 18,500 registered units and it has maintained this leadership, by and large. When the Second All India Census of SSIs was carried out in , it was still the leader in terms of units and employment, though not in the growth rate. According to SIDBI (2000), in its Report on small-scale industries sector during to , the Tamil Nadu SSI sector continued to grow fast. The average annual rate of growth (compound) of number of units was 12.8 per cent and of employment 10.9 per cent. As an important sector of the economy as a whole, Small Scale Industries sector accounts for 95 per cent of industrial units, 40 per cent of output in manufacturing sector, 35 per cent of exports and employment to 30 lakhs persons in the State. There are nearly 4.20 lakhs registered SSI Units and total investment nearly Rs. 12,500 crores. The contribution of Small Scale Industries to employment generation is next only to Agricultural and allied sectors. The SSI sector has been considered as a powerful instrument for realizing the twin objectives: `Accelerated Industrial Growth' and creating additional `Productive Employment Potential', in rural and backward areas.

3 10.2 Village and Small Industries 601 No.of registered SSI Units Employment Total investment Production Predominant Industries Small Industries - State Profile 4.20 lakhs 30 lakhs Rs crores Rs crores - Textile, Food Products, - Non-Electrical machineries, tools and parts, - Cotton Textile - Paper and Printing. Major Exports Major issues - Readymade Garments - Leather & leather goods - Gem and Jewellery, Cashew Kernal - Food products, Marine products. - Need for modernisation and technological upgrdation, - Strengthening the system of information dissemination, - Need for availability of working capital - Need for infrastructure building The Government departments/ agencies concerned with Small Industries comprise the Small Industries Department at the Secretariat, the Directorate of Industries and Commerce, the Tamil Nadu Small Industries Development Corporation (SIDCO) with 73 Small Industrial Estates, the Tamil Nadu Small Industries Corporation (TANSI) with 26 production units, the Entrepreneur Development Institute and INCOSERVE, SAGOSERVE, TAICO Bank and Industrial Co-operatives. The Village and Small Industries Sector comprises of five Sub-Sectors viz., 1) Small Scale Industries (under the control of the Director of Industries and Commerce), 2) Handlooms and Textiles, 3) Khadi and Village Industries, 4) Handicrafts Development and 5) Sericulture. Ninth Plan Outlay - As against an outlay of Rs. 600 crores for Village and Small Industries in the Ninth Plan, the expenditure has been Rs crores. The departmentwise activities and performance during the Ninth Plan and the programs for Tenth Plan are outlined below:

4 Village and Small Industries I. Small Scale Industries Directorate of Industries and Commerce - The Directorate of Industries and Commerce is the nodal agency for planning and implementing various schemes for the promotion of Small Scale Industries in Tamil Nadu. It provides various services through the District Industries Centres such as registration of SSIs, training of entrepreneurs, Industrial guidance, promotes Village and Small Industries by organising Industrial Co-operatives (particularly for match, tea & coir industries) and identifies and promotes craftsmen and artisans engaged in the handicrafts industry. The Department of Industries and Commerce also implements a variety of programmes to provide financial assistance, technical support and guidance service to the existing as well as new industries. These programmes are implemented with an accent on the development and modernisation of industries, up-gradation of technology and quality control. It operates through a network of District Industries Centres (DICs), one in each district, headed by a General Manager. The various activities undertaken by the Department include: 1. Registration and promotion of small scale and tiny industries and industrial Co-operative societies. 2. Sanction and disbursement of various subsidies and incentives such as State Capital Subsidy, Generator Subsidy, Power Tariff Subsidy. 3. Offering various testing facilities for chemicals, metals, metallurgical, electrical, electronic gadgets and appliances. 4. Implementation of centrally sponsored schemes like Self Employment Programmes for the Educated Unemployed Youth and Prime Minister s Rozgar Yojana schemes. 5. Conducting Entrepreneur Development Programmes particularly special schemes for women. 6. Creating awareness about the various policies and programmes of the Government through seminars and dissemination meets. 7. Providing Escort Services to the Entrepreneurs. 8. Maintenance of Special purpose Industrial Estates for Electrical and Electronics Industries. 9. Providing entrepreneurial guidance through Data Bank and Information Centre and technical information sections attached to various District Industries Centres. 10. Identification of new areas with growth potential and providing familiarisation and Incubator facilities to promising entrepreneurs. 11. Conducting Techno-Economic Surveys. 12. Conducting sample and comprehensive surveys. 13. Development and promotion of cottage and handicrafts industries. 14. Training facilities in the field of light engineering, tool and die designing.

5 10.2 Village and Small Industries Assistance for import of capital goods machineries and scarce raw materials. 16. Implementation of Quality Control Act on Electrical household appliances, etc. 17. Export Promotion. 18. Supervision of implementation of special assistance schemes announced by Government in favour of small and tiny sector units. The entrepreneurs are assisted in getting statutory clearances from Local Bodies, Town Planning, Pollution Control Board, Public Health, Factories and other Departments and getting power connections through the Single Window Committee. The District Single Window Committee has been formed with District Collector as its Chairman. A State Level Committee under the Chairmanship of the Chief Secretary to Government periodically reviews the functioning of the District Window Committees in the State. In order to promote Tiny and Rural Industries, 287 Blocks in the State have been declared as Industrially Backward/ Most Backward. Small Scale Industries (SSIs) located therein are eligible for grant of State capital subsidy, Low Tension Power Tariff (L.T.P.T.) subsidy and other concessions. These incentives and concessions are also available to the units located in the Industrial Estates and Industrial Complexes sponsored by Government/ Government Agencies. An outlay of Rs. 200 crore was provided for the Small Scale Industries including Industrial Estates during the Ninth Five Year Plan ( ) of which the expenditure incurred was Rs crores. (61.98%). The details of permanent registration, investment, production in terms of value and employment generated during the Ninth Plan period may be seen from table below: Sl.No. Year Details of Permanent Registration, Investment, Production & Employment Generation Ninth Plan Period (Rs. in lakhs) Permanent Registered Units in Nos Investment Production Employment ( in lakh Nos.) Source: Department of Industries & Commerce The target and achievements in respect of permanent registration and temporary registration during the Ninth Five Year Plan ( ) period are furnished below:

6 Village and Small Industries Year Target and achievements of permanent and provisional registration from Physical target fixed by Govt. Permanent Physical Achievement Physical target fixed by Govt. Provisional (Upto Sep 01) Source: Department of Industries & Commerce Prime Minister s Rozgar Yojana Scheme - (PMRYS) The Prime Minister s Rozgar Yojana Scheme, (PMRYS) for the Educated Unemployed Youth was launched by Government of India on 2 nd October 1993 for encouraging educated unemployed youth to set up self-employment ventures in Industries, Services, Business, etc. Under this scheme training is provided in Government recognised/ approved institutions. During the Ninth Plan Period as against the target of 90,500 persons to be trained, 68,525 persons were actually trained. A total number of 73,672 applications were sanctioned for providing financial assistance to the tune of Rs crores of which an amount of Rs crores was actually dispersed to 59,578 applicants. The subsidy is met entirely by the Government of India. Small Scale Industrial Units The details of new Small Scale Industries Units set up and registered, SSI Units set up by SC/ ST Entrepreneurs registered during Ninth Plan period are given in the table below: New SSI units set up and registered Physical Achievement New SSI Units set up by SC/ST entrepreneurs Registered Target fixed Achievement by Govt. Year Target fixed by Govt. Achievement upto Sep 01 Total

7 10.2 Village and Small Industries 605 Tenth Plan Thrust Areas The following Thrust Areas have been identified for the development of Small Scale Industries in the Tenth Plan. 1. Leather and Leather products 2. Textiles and Readymade Garments 3. Gems and Jewellery 4. Pharmaceuticals 5. Information Technology 6. Bio-Technology 7. Automobile Component 8. Food Processing 9. Coir Industries, etc., The feasible project opportunities, the green areas and suggestions in respect of these industries are set out in the Table below:

8 Table Thrust Areas for SSIs in Tenth Plan (Source: Directorate of Industries and Commerce) Sl. Nature of SSI Feasible Project opportunities Green Areas/District/Places Suggestions No Leather and Leather Products Textile and Ready Made Garments Footwear and Footwear components, full shoes leather chappals, shoe upper, Leather Garments, Industrial Gloves, Leather Caps and Leather products like Leather wallet, Ladies pouch, Leather Belts, Leather Travel goods etc. Readymade Garments such as T-Shirts, Ladies Blouse, Jerseys, Trousers & Gent's Shorts, Pull overs, Gent's Shirts, Ladies Jackets, Industrial and Occupational Garments, Bath robes and shorts, Children Garments etc. Vellore, Ambur, Vaniyambadi, Erode, Dindigul, Trichy, Chennai (Pallavaram) are green areas for Leather and Leather products. Salem, Erode, Namakkal, Coimbatore, Madurai, Chennai Districts. Provide necessary infrastructure support / common Effluent Treatment Plants, CAD/CAM centres with assistance of Government aid. Common facility centre. Industrial Estates with the required facilities for leather processing may be formed for Advance Training in Leather Garments and Leather Goods. Upgradation of technology in the training sector to meet the international environmental standards. Common Facility Centres for pre sewing and post sewing operation may be started in the textile cluster of above districts. Fashion technology training may be provided in select districts. Trade Fairs/Buyer & Seller Meet to be conducted in the areas mentioned above. The terms for availing technical up gradation fund may be made. 3. Gem and Jewellery Natural Diamond cutting and polishing, cultured pearls, Jewellery design (Silver, Gold and Platinum), Gold covering on silver ornaments. Carving of idols/art-shapes out of precious/semi precious stones. Pudukottai, Trichy, Salem, Kumbakonam, Chennai, Erode and Coimbatore. Encourage setting up of training centres to train and impart courses of polishing, finishing and setting on par with international standards for Natural diamond in private sector. Jewellery designing centre and training of manpower.

9 10.2 Village and Small Industries Pharmaceutical Allopathy Medicine such as bulk drugs, cancer drugs, Vitamin Tabs, Ointments, Ayurvedic Tooth Powder.Homeopathic Medicine, Neem paste, Tulasi extract, Palm sugar, Herbal medicines etc. Chennai, Cuddalore, Tuticorin, Madurai, Dindigul, Tirunelveli, Courtalam, Kumbam, Vellore, Nagai, Salem(Yercaud), Namakkal (Kolli Hills), Dharmapuri. To create R & D and product Display Centre for Herbal medicine for imparting knowledge and Training in EOUs. 5. Information Technology International call centre, Domestic call centre, Medical Transcription Centres, E- Commerce, Portal, Dataprocessing centre, CAD/CAM/CAE Service Centre GIS service centre, ERP Training Centre, Video Conferencing Provider etc. All Districts in Tamil Nadu, especially District Head Quarters and Taluk Head Quarters. Creation of IT incubators at selected District Head quarters. To encourage SSI entrepreneurs as well as software technology. To create incubators at selected District Head quarters to encourage SSI entrepreneurs. 6. Biotechnology /Bio Informatics Hybrid Seeds, Tissue Culture, Neem and other Bio-pesticides, bio-fertilizers, botanical extract for plant disease control, Food and Industrial Enzymes.(Pupain, Phytase, Lipase, Enzyme cocktails etc.) Classical fermentation products (antibiotics, immuno modulators etc.) Bio-energy, Surface and additives, Bio-Polymers and Bio-informatics. Bio-Tech Incubators Park near Chennai, Coimbatore. Women's Bio- Technology Park, Kelambakkam. Medicinal Plants Biotechnology park near Madurai. Marine Bio-Technology Park at Mandapam, Ramanad. Bio-Informatics and Genomics Centre (BGC) at TIDEL Park Chennai. Starting of Bio-Technology incubator at Karaikudi. Creation of certain new short duration technician oriented courses at appropriate Universities / Technical Training Centres/ Associations in specific areas. Creating a Data Base for Biotechnology and Bio-informatics. Financing & Infrastructure support. Creation of Bio-technology incubator at Coimbatore and also create a data-base for Bio-Informatics. Creation of industry-university interface.

10 Village and Small Industries 7. Automobile Components Industry Gears, Starter Motors, Radiators, Spark plug, Fuel pump elements, Shock Absorbers, Piston Pairs, Piston rings etc. 8. Food Processing Dehydrated Vegetables & fruits, fuel Briguettes fuels, Egg Powdered Bakery, Sun dried fruits and vegetables, Cold storage, Confectionery, Iodized salt fruit processing tamarind pulp, tamarind concentrate, spices and oleoresins, natural juices, ready to eat. 9. Coir Industries Coir Ropes, Carpets, Door mats, Upholstery, Rubberized coir mattresses, Coir Ply Board, Curled Coir etc. Chennai, Tiruvellore, Kancheepuram, Hosur, Madurai, Trichy, Pudukkottai. Dharmapuri, Erode, Salem, Coimbatore, Theni, Usilampatti, Madurai, Nagercoil, Tuticorin, PUdukkottai, Chennai, Cuddalore, Thanjavur, Vellore, Kancheepuram, Tiruvellore. Thanjavur, Dharmapuri, Tirunelveli. Salem, Nagercoil, To assist the SSI's towards Technology upgradation for graduating them to medium Scale Industries. R & D centre in select areas. Training Centres in select areas. Trade Centres in select areas and mechanisation process to be introduced to upgrade the technology of the SSI sector. Technology centre in the lines of CFTCI. Creation of Common Facility Centre at selected areas. Creation of Product Development Centres at selected areas. Training centres at selected areas.

11 Tenth Plan Programmes During the year , a number of new schemes were or are to be taken up for implementation. New Anna Marumalarchi Thittam under 15 Points Programme of Chief Minister to promote Agro-Based /Food Processing Industries with investment of one crore and above in each of 385 blocks of the State with special package incentives and Escort Support, to generate employment and to uplift rural economy. On-line Registration and issue of Provisional SSI Registration Certificate to new Entrepreneurs through the approved Browsing Centres at District and Taluk Headquarters was inaugurated by the Chief Minister on On-line filing for Permanent SSI Registration Certificate is also proposed to be introduced. The furnishing of data by SSI units through online will also be introduced. Public Private Partnership Concept for maintenance and infrastructure in the Estate, Business Development/ Documentation / Advisory Services / Consultancy Services/ Marketing Assistance, Common Facility Centres and Product Display Business Development Centres, Human Resource Development for development of SSI sector. Under this scheme, a part of Capital Cost shall be borne by the Association / State and Central Government and the Balance Capital Cost shall be obtained as loan from financial institutions. The entire recurring expenditure shall be met by the Associations and the Scheme shall be implemented on no-profit basis and the cost of services shall be charged accordingly. Cluster Development Scheme with 75% of the cost of the Project as Grant will be provided by Government of India towards creation of infrastructure facilities/ services for development of Industrial Clusters. It is proposed to establish the above services mentioned under PPP concept to the needy viable clusters duly getting funds from Government of India. Formation of Export Guidance Cell under the chairmanship of the District Collector in the District Industries Centres to provide information on export activities, potential and procedural matters for export and to initiate measures for development of export in the State. On Going Schemes Centrally Sponsored Schemes 1. Setting up of Nucleus Cells The Nucleus Cell of this Department was created in the year 1977 so as to collect statistics from the registered SSI units through census and to update the data collected in the census by means of sample surveys. This is a centrally sponsored ongoing scheme with 100% financial assistance from Government of India. A Census-cum-Sample Survey and Diagnostic Survey was conducted during 1995 in Dindigul, Tuthukudi, Thiruvannamalai and Nagapattinam Districts. The field level collection of data in these districts

12 Village and Small Industries has been completed and all the collected schedules have been sent to the Development Commissioner (SSI), New Delhi. The 3 rd All India Census of SSI Units was held in October 2002 for which a list of SSI Units registered during the years to was prepared and fed into the N.I.C. A new Scheme of Collection of monthly production details from the selected sample Small Scale Industrial Units was introduced for the purpose of computing Index of Industrial production so as to assess the growth of this Sector. This has assumed national importance because of the present economic scenario. The DC (SSI) has provided Computer Hardware and Software to the 11 selected District Industries Centres and to the district offices for transferring the IIP to the Directorate of National Informatics Centre, and DC (SSI), New Delhi. A sum of Rs crores has been proposed for Tenth Plan for this scheme towards staff costs which will be fully met by Government of India. 2. Prime Ministers Rozgar Yojana Scheme (PMRY) PMRY.scheme for providing Self-Employment to Educated Unemployed Youth was announced by the Prime Minister of India on 15th August 1993 to provide Self-employment opportunities to one million educated unemployed youth in the country. This Scheme benefits persons who are educated unemployed youth in the age group of 18 to 35 years and having passed VIII standard with family income not exceeding Rs. 40,000/- (per annum). The age limit has been relaxed upto 45 Years in respect of SC/STs, Ex-Serviceman, physically handicapped and women from onwards. Preference is being given to those who have received training in any trade in Government approved/ recognised Institutions (I.T.I. etc) for a period of at least 6 months. The Scheme envisages 22.5% reservation for SC/ST candidates and 27% for other backward classes. An outlay of Rs crores is proposed for implementation of the Scheme during Tenth Plan. The entire amount will be borne by Government of India. Centrally Shared Schemes Market Development Assistance State s Share for sale of coir by Indl. Co-operative Socities Market Development Assistance scheme (MDA) has been approved by the Government of India in lieu of 20% coir rebate scheme for the remaining period of Ninth Five year Plan ie. upto As per this scheme the expenditure is to be shared by the Central and State Governments. 10% of the annual turnover can be granted as MDA for this purpose. Under this scheme, all the Coir products are eligible for assistance throughout the year. A sum of Rs crores has been provided for Tenth plan period towards the State s share for this scheme. Entrepreneur Development Institute (E.D.I.) It is proposed to establish an E.D.I. with model of E.D.I. Ahmedabad. This is meant to meet the entrepreneurial needs of the Southern Region in future. Government of Tamil Nadu provided Rs. 50 lakhs during the year

13 10.2 Village and Small Industries with a matching grant from Government of India. During , both Central and State Governments will be contributing equal sum. During Tenth Plan a sum of Rs crores has been provided for this scheme towards State s share. State Schemes 1.Industrial Estates-Maintenance (Maintenance of Additional sheds in TACEL at Vridhachalam.) TACEL Industrial Estate, Vridhachalam comprises of total area of acres and at present there are 64 Units on rental basis. For maintenance of the sheds in the Industrial Estate during the Tenth Plan period a sum of Rs. 10 lakh will be provided. 2. Technical Information Sections in Industrial Estates The Technical Information Sections are functioning at Guindy, Ambattur, Madurai, Pettai, Katpadi, Trichy, Coimbatore and Salem to disseminate information to the industrialists and prospective entrepreneurs. The Sections have libraries containing technical books on Science, Technology, Management, Industrial Information Digests and Journals, Project profiles on SSI and details of ISI specifications for various products. The Technical Information Section, Guindy has a well-furnished auditorium with a video scope system. For the Tenth Plan period Rs. 30 lakhs is provided for maintenance of Technical Information Sections. 3. State Industries Centres EDP Training, Women Entrepreneur Development Programme, Construction of DIC building, maintenance, contribution to specific fund (TTM) etc. It is proposed to train 1,25,000 women entrepreneurs within a period of five years from to at the rate of 25,000 women per year. During the year , 5000 women were trained under Prime Minister's Rojgar Yojana (P.M.R.Y.) Scheme. The balance 20,000 women were trained at a cost of Rs. 80 lakhs. It is proposed to impart training for 25,000 persons per year and also to construct and maintain DIC buildings and to contribute specific funds (TTM) during Tenth Plan period. An amount of Rs crores is provided. 4. Assistance to Coir Industrial Co-operative Societies At present there are 65 Co-operative Societies in the State with 10,050 members with a paid up Share Capital of Rs. 560 lakhs. To modernise the activities of these coir industrial Co-operatives, an Integrated Coir Development Project is being implemented. 21 societies have been identified for 1 st Phase programme at a cost outlay of Rs lakhs. 3 numbers of staff have been sanctioned for the administrative matters of the Coir Section. For the Tenth Plan period a sum of Rs. 20 lakhs is provided to meet the expenditure towards staff cost. 5. Assistance for setting up of Industries (Capital Investment Subsidy to SSI Units) New Anna Marumalarchi Thittam is being implemented for the promotion of Agro based / Food Processing Industries in each of the 385

14 Village and Small Industries blocks of the State with minimum investment of Rs. 1 crore and above with special package of incentives as mentioned below: 1. 15% subsidy on investment in Plant and Machinery limited to Rs. 15 lakhs per block in all the 385 blocks for investments made by the entrepreneurs under this Scheme. 2. Power Tariff Subsidy (LTPT) of 30%, 20%, 10% of energy charges in the first, second and third year respectively from the date of commencement of production or date of power connection, which is later. 3. The units set up under this Scheme will be eligible for Generator subsidy of 15% on the cost of the generator with a maximum ceiling of Rs. 5 lakhs. 4. The units employing more than 50% of their work force from women will be eligible for additional 5% capital subsidy subject to a limit of Rs. 5 lakhs. Besides, a new scheme, viz Interest Subsidy under Technology Upgradation Scheme to supplement the 12% back-end subsidy given by Government of India for technology upgradation of selected categories of industries is implemented through SIDBI. For the implementation of Capital Subsidy Scheme, a sum of Rs. 50 crores is provided for Tenth Plan 6. Technical Training Centre, Guindy Payment to Part time staff Government have since ordered the transfer the courses conducted at Government Technical Training Centre, Chennai and Institute of Tool Engineering, Dindigul, functioning under the control of the Department of Industries and Commerce to the Department of Technical Education. The students admitted prior to the transfer of courses are attending second and third year of the courses. For the conduct of classes for these students during the year and the expenditure towards the faculty has to be met. A sum of Rs. 3 lakhs is provided for above expenditure for 2 years in the Tenth Plan period New Schemes 1. Human Resource Development It is proposed to train at least 1000 workers and 100 managerial staff per year in each of the 10 clusters identified sectorwise and sending them for training to National level Training Institutions for Skill and Managerial Development. It is proposed to meet the above cost of expenditure on 60:40 basis (60% will be borne by the SSI units and 40% will be borne by the Government). A sum of Rs. 20 lakhs is provided for the scheme during Tenth Plan. 2. Product Display Centre At present SSI units are not having any guidance and expertise in import, export, finance, management and marketing aspects so as to enable them to face global competition. They do not have any forum or agency to inform the buyers regarding various products manufactured by the SSI units. Hence, it is proposed to establish Trade Facilitation and Product

15 10.2 Village and Small Industries 613 Display Centres as a Joint Venture with the District Small Scale Industries Associations to improve the marketing. It has also been programmed to conduct Buyer-Seller Meet in these Centres to have one-to- one discussion with them so as to improve the marketing of their products. Government contribution as equity for the project may be 10% of the Project cost. An outlay of Rs. 5 crores is provided for implementation of the scheme during the Tenth Plan period. 3. Common Facility Centre and Technology Mall SSI units could not improve the quality of the products for want of testing equipments due to high cost. Hence, it is proposed to establish Common Facility Centre with the latest modem machineries/ testing equipments to cater to the needs of the SSI units. It is also proposed to establish centralized Common Trade/ Product Development and Design Centre, and Machinery Demonstration Centre under one roof to offer guidance on trade and product display available to SSIs to provide an opportunity to the SSI units to see the working of modern machinery and, to use the latest machinery to manufacture quality products at lesser cost, it is proposed to establish Technology Malls at various centres. An outlay of Rs. 3 crores is provided for implementation of the scheme in the Tenth Plan. 4. Interest Subsidy for Tech. Upgradation It is proposed to provide 5 % Back-end interest subsidy to SSI units for the loan obtained for technology upgradation to supplement Credit Linked Capital Subsidy announced by Government of India so as to help the SSI Units to come out of their present difficulties on account of outdated technologies and to face the global market with quality product at competitive price. An outlay of Rs. 10 crores is provided for implementation of the scheme in the Tenth Plan. 5. Tech & Financial Consultancy support to SSI It is proposed to provide technology and financial consultancy services to the SSIs / Tiny Units in the identified thrust areas and to the needy entrepreneurs. This will enable them to access funds for the projects from Financial Institutions in a credible manner. In this regard expert panel will be drawn for each of the thrust sectors by taking the assistance of reputed companies and individual experts within and outside the country. These supports will make the SSI/ Tiny sector entrepreneurs to become aware of the technological processes, innovative methods being followed at international level to equip themselves to meet the global competition and the growing demand. During Tenth Five Year plan, priority will be given to develop the above mentioned thrust sectors. It is proposed to give incentives for Technical financial consultancy support not exceeding Rs. 1 lakh per unit for 100 SSI units by providing Rs. 1 crore per year and, therefore, the outlay for Tenth Plan will be Rs. 5 crores. Public Sector undertakings under Small Industries SIDCO There are at present 73 Industrial Estates where necessary Infrastructural facilities such as water supply, electricity, roads etc. are

16 Village and Small Industries looked after by SIDCO. This will be continued and new industrial infrastructure will be created in rural areas based on the demand in the Tenth Plan period in accordance with the objectives of the Corporation. NSIC SIDCO Small Industries Development Corporation (SIDCO) for composite Loan Scheme to Tiny Sector Industries National Small Industries Corporation (NSIC) has introduced a new composite term loan scheme for the tiny sector industries. Under this scheme, a total loan upto Rs. 25 lakhs is given towards investment in land and building, plant and machinery and working capital required for the tiny sector units. NSIC with SIDCO will extend the above loan on the single window concept. TANSI The Tamil Nadu Small Industries Corporation Limited (TANSI) was formed in 1965 to take over from the Government, to begin with, 64 departmental small-scale units with net assets amounting to Rs lakhs to be run on commercial lines. These industrial units were started under the plan periods earlier under the control of the Directorate of Industries and Commerce for non-commercial purposes such as i) to serve as Training cum Demonstration Centres; ii) iii) to provide infrastructure for the development of industries; and to ensure dispersal of economic growth. They were later converted into manufacturing units. After transfer of certain units back to Industries Department, two units to TACEL (Tamil Nadu Ceramics Ltd.), one unit to Tamil Nadu Agro Industries Corporation and closure of two units, TANSI was running for a long time 56 units. The activities relating to mining and export of granite blocks were transferred to the Tamil Nadu Minerals Ltd. on its formation. During 1986 four units were transferred to Tamil Nadu Leather Development Corporation Ltd. Certain other units were closed down under restructuring programmes. TANSI is a conglomeration, at present, of 26 production units and 6 Sales Centres. The product lines of TANSI fall under Structurals, Engineering, Foundries, Furniture, Pumps and Pump Spares, Spirit based products, Assembly of TITAN watches, paints and allied products. TALCO The Tamil Nadu Leather Development Corporation Ltd. was established in 1983 with the main objective of developing leather industry in Tamil Nadu by (1) helping tanners by supply of raw materials, chemicals etc., (2) assisting artisans engaged in the manufacture of footwear and leather goods by providing market link, (3) improving skills and efficiency of small artisans, (4) affording infrastructure facilities to prospective entrepreneurs in leather industry and (5) dealing with the problems faced in tannery effluent by establishing Common Effluent Treatment Plants. The Committee headed by Thiru S.V.S. Raghavan to study the performance of the State Public Sector Enterprises recommended the winding up of the Corporation in view of the

17 10.2 Village and Small Industries 615 fact that its 4 leather units were sick and the Corporation was making losses. Government issued orders in October 2000 for closure. Khadi and Village Industries Board has taken over the production units of TALCO. An outlay of Rs crores have been provided to implement the schemes for Small Industries Sector during Tenth Plan. Details of outlay are furnished below: Schemes and Outlay for Tenth Plan (Rs.. in crores) Sl.No Schemes Outlay (A) On Going Schemes Industrial Estates Maintanence 2 Technical Information Sections in Industrial Estates State Industries Centres:- Women Entrepreneur Development 6.97 Programme, Construction of DIC Building, Maintenance of building and contribution to specific fund (TTM). 4 Assistance to Coir Industrial Coop Societies Assistance of setting up of Industries - Capital Subsidy (As per the New Anna Marumalarchi Thittam, this subject is continued only to Agro-based/Food Processing Units to be set up in 385 blocks of the state and earlier subsidies to SSI units are withdrawn by the government. Hence this amount will be utilised on priority basis to the projects under NAMT and the balance amount will be disbursed to the earlier sanctioned cases.) 6 Technical Training Centre, Guindy -- Payment to part-time staff 0.03 (Consequent on the transfer of the courses conducted by the Institute of Tool Room Engineering, Dindigul to Director of Technical Education, an outlay of Rs crores is provided towards the expenditure of faculty for conduct of classes for the students attending second and third year of the courses at Institute of Tool Room Engineering, Dindigul) 7 Market Development Assistance State's Share-for sale of coir by I.C 1.25 Societies 8 Entrepreneur Development Institute 1.50 Total (A) - On going schemes (B) New Schemes Human Resource Development Product Display Centre Common Facility Centre and Technical Mall Interest Subsidy for Technical Upgradation Technical and Financial Consultancy support to SSI 5.00 Total (B) - New Schemes Grand Total (A) & (B) II. Handlooms and Textiles The textile industry is a major foreign exchange earner for the country. It earns more than 35% of the total exports revenue. Textile industry is a predominantly cotton based industry and is facing crisis due to adverse effect of globalisation, excess production, decline in exports, nonavailability of adequate quantity of quality cotton, increase in cotton prices, etc. The Textile Industry is extremely crucial in terms of employment and economic well-being of the State considering that it is next only to Agriculture in the scope of employment.

18 Village and Small Industries Handlooms - Handlooms form a part of heritage of India and richness and diversity of our country and artistry of the weavers. It plays a very important role in the economy. Handloom is the largest economic activity after agriculture. This sector is estimated to provide direct and indirect employment to more than 30 lakh weaver households and about 130 lakh weavers in the country (! ). Due to effective State intervention through financial assistance and implementation of various developmental and welfare schemes, this sector has been able to withstand competition from the powerloom and mill sectors. Production in this sector was 6792 million sq.meters in This sector contributes substantially to the export income of the country. According to the 1987 Handlooms census, there were 4.27 lakh Handlooms in Tamil Nadu. There are as on , 2.83 lakh handlooms functioning in 1414 Primary Handloom Weavers' Co-operative Societies. The Weavers' Co-operative Societies exist in rural and semi-urban areas where there is a large concentration of handloom weavers. All the benefits of the development and welfare schemes implemented by the State Government and the Government of India are channelised through these societies. The average annual production of various varieties of handloom goods by these societies is around 950 lakh metres and the annual sales turn over around Rs. 450 crores. Tamil Nadu has always occupied a pride of place in having the maximum number of handlooms in the country. This sector continues to be alive in spite of setbacks on account of quantum jump in Powerlooms. Although major areas of the State which are dependent heavily on handlooms have been affected on account of lack of demand in the market, there are sectors where handlooms are progressing well. There are about 3 lakh handlooms, of which 1.50 lakh handlooms are within the Co-operative fold. Handloom Weavers Co-operative Societies have been fairly successful in breaking the element of bondedness among Master Weavers and their subordinates. Better wages, welfare measures and the like have gone a long way in this. Co-operative Societies need to continue to be patronised as a welfare measure without ignoring those outside the Cooperative fold. Powerlooms - The decentralised powerloom sector plays an important role in meeting the clothing needs of the country. The powerloom industry produces a variety of cloth both grey as well as processed bearing intricate designs. The contribution of the powerlooms sector to the total cloth production in the country is about 59%, excluding the cloth produced by non-ssi, weaving and hosiery /knitting units. This sector also contributes significantly to the export earnings. There are 3.20 lakh registered powerlooms in Tamil Nadu. These powerlooms are situated within and outside the Co-operative fold. There are nearly 25,000 powerlooms operating in 149 Powerloom Weavers' Cooperative Societies with about 9,000 weaver members. These societies produced lakh metres of cloth valued at Rs crores and effected sales to the tune of Rs crores during The

19 10.2 Village and Small Industries 617 Powerloom Weavers Co-operative Societies mainly produce the cloth required for scheme of free supply of uniforms to school children and distribution of sarees and dhoties. Textiles - The Textile Industry of the State is the forerunner in Industrial development and is providing massive employment. It is predominantly spinning oriented. Out of 1937 large and medium textile mills in the country, 893 mills are located in the State. Similarly, out of 921 small units in the country, 745 are located in the State. The 893 large and medium textile mills include 18 Co-operative Spinning Mills, 17 NTC Mills and 25 Composite Mills. The spinning capacity is million spindles and the labour force 2.32 lakhs. The Textile Industry has a very important role in the industrial field with regard to employment potential and overall economic and commercial activities. This industry enables the Central and State Governments to earn revenue besides foreign exchange through exports. 25% of Indian yarn is exported and 35% of Indian yarn is from Tamil Nadu. Garments - Garments occupy a predominant position in World trade as it is the second fastest growing product category next only to office and telecom equipment. In India, 12% of total exports in India is from the Garment Industry and it provides direct employment to over 20 lakh people. In Tamil Nadu, the garment sector is located substantially around Chennai, with specialisation in cotton fibre garments (2/3 of the total garment exports). Garments includes knitwear but for the purpose of understanding, knitwear has been taken as a separate sub-category. The garments industry around Chennai accounts for over Rs crores in exports. 45% of all garment exports is to the EU and 35% to the U.S. The garment sector has been functioning without any Government help. Knitwear - The Knitwear Industry in the Country is located at Tiruppur in Coimbatore District. Estimated at over Rs crores in exports, this industry has been at the helm of textile exports for a long period of time and has acquired international fame. Its strength is due to skilled manpower and rich raw material base. Processing - Pre-loom and Post-loom processing facilities have not grown adequately to meet the demand of the textile industry. In Tamil Nadu, processing facility is mainly in the unorganised hand dyeing/ hand printing sector. Ninth Five Year Plan ( ) Financial Performance The approved outlay for the Handlooms and Textiles sector for the Ninth Five Year Plan was Rs. 240 crore and the expenditure incurred was Rs crores. The yearwise expenditure incurred during Ninth Plan period is furnished below:

20 Village and Small Industries Handlooms and Textiles-Ninth Plan Performance Financial (Rs. in lakhs) Year Expenditure Total Physical Performance As against a target for the establishment of 100 Handloom Development Centres, 38 Handloom Development Centres were established as on ; similarly, as against a target of 25 Quality Dyeing units, 4 Dyeing units were formed. As on , 86,221 weavers benefitted under Central Thrift Fund. In respect of construction of House-cum-Workshed scheme, 3310 Houses were constructed as against a target of 5000 houses as on units were provided units worksheds to the existing houses as against a target of 10,000 units as on The problems besetting the sector and the issues which will have to be addressed in the Tenth Plan with suggestions / recommendations are detailed in the Annexure. Tenth Five Year Plan ( ) Outlay and Programmes An outlay of Rs.180 crores has been proposed for Handlooms and Textiles for Tenth Plan. The details of programmes to be taken up during the Tenth Plan period are given below. 1. Deendayal Hatkargha Protsahan Yojana Government of India has formulated a new integrated and comprehensive scheme for development and promotion of Handlooms, viz., Deendayal Hathkargha Protsahan Yojana Scheme with effect from The components of this scheme are: (a) Basic Inputs, (b) Infrastructure support, (c) Design Input, (d) Publicity, (e) Marketing incentive/ Rebate and (f) Strengthening of Handloom Organisations. The above scheme was introduced since Government of India have decided to continue this scheme in the Tenth Plan also. The cost is shared between the Centre and States on 50:50 basis. The outlay for the scheme during the Tenth Plan will be Rs. 100 crores.

21 10.2 Village and Small Industries Interest Subsidy Scheme The Interest Subsidy scheme is one of the vital schemes being implemented by the Department from the funds of State Government. From the year , the Interest Subsidy Scheme was one of the component of Government of India's Scheme of Market Development Assistance Scheme. As Market Development Assistance Scheme was discontinued from , the State Government has to meet the cost on the Interest Subsidy. A total outlay of Rs. 22 crores is provided for implementation of this scheme in the Tenth Five Year Plan. 3. Weavers House-cum-Workshed Scheme The Weavers House-cum-Workshed scheme has been under implementation from onwards with State Government subsidy and HUDCO loan. From , the G.O.I., has also been participating in the scheme by sanction of subsidy. A unit of House-cum-Workshed in urban area costs Rs.72,000 which comprises of State Subsidy of Rs. 10,000 (increased from Rs. 7,000), Central Subsidy of Rs. 20,000, beneficiary's contribution of Rs. 5,000 and loan of Rs. 40,000 provided by HUDCO. It is proposed to construct 5000 units (in rural areas and urban areas) during Tenth Plan. The cost per unit of House-cum-Workshed in rural area is Rs /-. The total cost of the project is Rs. 35 crores which includes Government of India s subsidy of Rs.10 crores and State s subsidy of Rs.5 crores. An outlay of Rs. 5 crores has been proposed as State subsidy for this scheme for the Tenth Plan. 4. Insurance Scheme for Handloom Weavers The Government of Tamilnadu is implementing Insurance Scheme for the Handloom Weavers with the financial assistance of Government of India. In the event of death of a member before attaining the age of 60 years, the State Government is sanctioning Rs. 50,000/- for the nominees of the deceased Handloom Weavers towards Insurance amount apart from Co-optex Contribution of Rs. 15,000/- (increased from Rs. 10,000/- with effect from ). The Govt. of India's share towards premium is being claimed every year at Rs. 40/- per weaver. Under this scheme, the State Government meets the amount over and above the Government of India s contribution. The provision for the scheme for Tenth Plan will be Rs crores. 5. Workshed Scheme Apart from House-cum-Workshed scheme, the Government of India has been providing subsidy for construction of Worksheds for the dwellings of the weavers since The cost of Workshed in rural areas is Rs. 9,000 and in case of urban areas Rs. 14,000, for which the beneficiary has to contribute Rs and Rs and the Government of India provides a subsidy of Rs. 7,000 and Rs. 10,000 respectively. It is proposed that the Government of Tamilnadu may also participate in this scheme as in the