ACHIEVEMENTS OF LAGHU UDYOG BHARATI AT A GLANCE

  • The only all India organization to assist and promote the Small Scale Industries.
  • Operating infrastructure catering to the needs of SSI in 23 States.
  • Representation in International Labour Organization. Geneva (Switzerland).
  • Representations in various Committees in Ministry of Labour, Ministry of Finance, Ministry of Industries etc.
  • Enlisted in MSME Board, Ministry of Industry, Government of India.
  • Representation of Laghu Udyog Bharati with the Minister of Finance at pre Budget Discussion.
  • Co-organised the “SWADESHI-MELA” at Pragati Maidan, New Delhi in January 1999 which was participated by over 250 units and was inaugurated by Shri Atal Bihari Vajpayee, the Prime Minister of India.
  • Laghu Udyog Bharati is a member of National Productivity Council (NPC).
  • Organized various national level seminars and conferences.
  • Laghu Udyog Bharati Iis called for discussion regarding Small Scale Industry in Parliamentary Standing Committee of Small Scale Industries.
  • Relief from Inspector Raj in UP, Rajastan & Gujrat.
  • Simplification of registration process in Gujrat & Delhi.
  • Bihar- disbursement loan of 3200 crore sick SSI’s.
  • Delhi simplification of sales tax process.
  • Maharastra-relief in stamp duty on registration and, in collateral tax on loan.
  • Reduction of interest rates from 26% to 14% by MSIB, and term of security deposit from 3 months to 2 months.
  • Orders passed for ingrate reales of payments to small scale industries by government departments.
  • Called for discussion in 11th 5YEAR PLAN meeting.
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    SUGGESTION ACCEPTED IN CENTRAL BUDGET

  • Reservation countinues for Small Scale Industries units.
  • Investment Limit increase to 1 crore.
  • Increase in Import duty on furnished products.
  • Exise increased from 30 to 50 lakhs.
  • Cancellation of service tax.
  • Computer software industry included in SSI sales tax exemption.
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    Relief to SSI Sector in Budget- 1999-2000
     
     
     
    NATIONAL PROGRAMME FOR RURAL INDUSTRIALISATION (NPRI)
     

    National Programme for Rural lndustrialisation (NPRI) has been announced with a mission to set up 100rural clusters every year to give a boost to rural industrialisation, in order to benefit the rural artisan and unemployed youth & reduce rural urban disparities.

     
     
    IMPROVING CREDIT DELIVERY TO SSI SECTOR
     
    A new credit insurance scheme launched

    Inability to provide adequate security to banks and low recovery are often sighted as major constraint in flow of investment credit to SSI units. The problem is more acute for export oriented and tiny sector enterprises.

    Composite Loan Scheme Limit Enhanced to Rs. 5 Lakhs

    Inability to provide adequate security to banks and low recovery are often sighted as major constraint in flow of investment credit to SSI units. The problem is more acute for export oriented and tiny sector enterprises.

    Working Capital Limit Enhanced to Rs. 5 Crores

    For SSI units the working capital limit is determined by the banks on the basis of simple calculation of 20% of their annual turnover. The turnover limit for this purpose has been enhanced from Rs. 4 Crore to Rs. 5 Crore.

    Credit Delivery to Tiny Sector

    To increase the outreach of banks to the tiny sector, lending by banks to Non-Banking Companies (NBFCs) or other financial intermediaries for purposes of on-lending to the tiny sector is being included within the definition of priority sector for bank lending.

    Implementation of High Power Committee

    With a view to ease the flow of bank credit to SSI units, RBI had advised banks to delegate more powers to branch managers, to grant adhoc limits, to sim; lify application forms, to fix their own norms for assessment of credit requirement and open more SSI branches.

     
     
    MODIFICATION OF THE DEFINITION OF SMALL SCALE INDUSTRY INCOME TAX ACT.
     

    Under the existing provisions of the Section 80 HHA, a deduction of 20% for a period of 10 years is available to small scale industrial undertakings which commenced manufacture or production in the period between 30th September,1977 to 31 st March, 1990. The definition of small scale industry based on value of investment in plant and machinery is different for dirrerent periods. This definition is proposed to be modified by bringing it in consonance with the definition prescribed under section 11B of Industries (Development & Regulation) Act, 1951.

     
     
    FISCAL PROVISION
     
    Restoration of 100% MOD VAT Credit

    In the last Budget the MOD VAT adjustment allowed to manufacturing units had been capped at 95 per cent. In this year’s Budget this capped on MOD VAT credit has been lifted and restored to 100%.

    Excise exemption for branded goods to units located in rural areas.

    Currently, SSI units are not eligible for exemption from excise duty on products bearing the brand name of another manufacturer. In his budget speech the Finance Minister extended the SSI exemption to goods bearing a brand name of another manufacturer, when produced by units located in the rural areas.

    Cotton yarn included in General Excise Exemption Scheme

    The General SSI exemption scheme has been extended w.e.f. 1.4.99 to cotton yarn not containing synthetic staple fibre.

    General SSI Exemption Limit would be 50 lakhs.

    SSI Excise Exemption Scheme

    Modified for cosmetic, toilets preparations, air conditioning, refrigeration equipment and part thereof w.e.f. 1.4.99. The SSI exemption scheme for cosmetics, toilet preparations, airconditioning, refrigeration equipment and parts thereof has been modified as under:

     

      Clearance ValuePresent RateRevised Rate
      Upto Rs. 15 LakhsNilNil
      Rs. 15 to 30 Lakhs50% of normal dutyNil
      Rs. 30-50 LakhsNormal duty50% of Normal duty
      Above Rs.50 LakhsNormal dutyNormal duty

     

    The eligibility limit for availing exemption has been enhanced from Rs. 50 lakhs to Rs.100 lakhs.
     

    Duty exemption for printing of glazed files

    Small job workers engaged in printing of glazed tiles have been exempted from the incidence of excise duty.

    SSI units permitted to pay excise duty on a monthly basis

    Under the current procedure, all manufacturing units are required to pay excise duty at the time of clearance of goods from their manufacturing premises. As a measure for simplification of procedures, the Finance Minister permitted SSI units to pay excise duty on a monthly basis with effect from 1.6.99.

     
     

    OTHER GENERAL PROPOSALS FOR ALL INDUSTRIES INCLUDING SSI
     

    Rationalisation of duty structure

    Central Excise 11 major adv. rates have been merged into following three new rates-:

  • Merit rate 8% (merging existing rates of 5%, 8%, 10%,12%).
  • Central rate 16% (merging existing rates of 13%, 15%, 18%).
  • Demerit rate 24% (merging existing rates of 25%,30%,32%,40%).
  • Customs 7 major adv. rates of basic custom duty merged into following 5 rates:

  • 5% (merging existing 5% rate) No change
  • 15% (merging existing 10% rate)
  • 25% (merging existing rates of 20% and 25%)
  • 35% (merging existing rates of 30% & 35%)
  • 40% (merging existing rate of 40%) duty
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    CUSTOMS
     

    Imposition, of 10% Surcharge on Imports

    A Surcharge @ 10% of basic duty has been imposed across the board except on gold silver, crude petroleum and petroleum products, items attracting 40% rate of basic, duty and certain GATT bound items.

    Continuation of Special Additional Duty
    The special additional duty @ 4 % shall continue.

    Special customs duty abolished
    Special customs duty @ 5% has be withdrawn.

    Withdrawal of exemption

    A basic duty of 5% has been imposed on a number of commodities by withdrawing exemption or imposing tariff. However, 4% SAD is exempted on such goods on which this 5% duty has been imposed for the first time.

     

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