Small Scale Industry

20. The entrepreneur-driven small-scale sector forms the backbone of our industry. I am deeply committed to strengthening this sector. The following set of measures will be put in place immediately.

• First, the Small Industries Development Bank of India (SIDBI) has an unutilised corpus of about Rs.175 crore in its Technology Development and Modernisation Fund Scheme. I am now proposing that SIDBI should refinance the State Financial Corporations (SFCs) and commercial banks for modernisation projects upto Rs.50 lakh. This will decentralise decision-making to the advantage of small- scale units seeking modernisation funds from SFCs and banks.
• Second, refinance is now provided for the Single Window Scheme of SFCs etc. for composite loans upto Rs.50 lakh. I am doubling this ceiling to Rs.100 lakh.
• Third, SIDBI will participate in venture capital funds set up by public sector institutions as well as private companies upto 50% of the total corpus of the fund, provided such a fund is dedicated to the financing of small-scale industry.
• Fourth,in order to encourage a larger number of small scale units to seek ISO 9000 certification of quality, lending institutions will be permitted to lend to the ultimate borrowers on the same terms and conditions as SIDBI's direct lending scheme. SIDBI will provide refinance assistance to these lending institutions.