| 1. |
Purpose |
| The
scheme will provide 12 percent back ended Capital Subsidy on projects
of technology upgradation by SSI units in the specified products/sub-sectors. |
| 2. |
Scope
of the Scheme |
| (i) |
To
begin with, the Scheme would cover the following products/sub-sectors
in the SSI: |
| 1 |
Leather
and Leather Products including Footwear and Garments. |
| 2 |
Food
Processing |
| 3 |
Information
Technology (Hardware) |
| 4 |
Drugs
and Pharmaceuticals; |
| 5 |
Auto
parts and Components; |
| 6 |
Electronic
Industry particularly relating to Design and Measuring. |
| 7 |
Glass
and Ceramic items including Tiles. |
| 8 |
Dyes
and Intermediates. |
| 9 |
Toys |
| 10 |
Tyres |
| 11 |
Hand
Tools |
| 12 |
Bicycle
Parts and |
| 13 |
Foundries-Ferrous
and Cast iron. |
|
| (ii) |
The
above list of products/sub-sectors would be expanded as the Scheme
progresses with the approval of the Technical Advisory Committee
constituted under this Scheme. |
| 3 |
Type
of Unit to be covered under the Scheme |
| (i) |
Existing
SSI units registered with the State Directorate of Industries
which upgrade with the state-of-the-Art Technology with or without
expansion. |
| (ii) |
New
SSI units which are registered with the State Directorate of Industries
and which set up their facilities only with the appropriate eligible
and proven technology duly approvede by the Technical Advisory
Committee. |
| 4 |
Definition
of Technology Upgradation |
| (i) |
Technology
upgradation would ordinarily mean induction of state-of-the-art
or near state-of-the-art technology. In the varying mosaic of
technology obtaining in more than 7500 products being produced
in the Indian small scale sector, technology upgratdation would
mean a significant step up from the present technology level to
a substantially higher one involving improved productivity, or/and
improvement in the quality of products or/and improved environmental
conditions including work environment for the unit. It would also
include installation of improved packaging techniques as well
as anti-pollution measuring and energy conseravation machinery. |
| (ii) |
Replacement
of existing equipment/technology with the same equipment/technology
will not qualify for this Scheme, nor would the Scheme be applicable
to units upgrading with second hand machinery. |
| 5 |
Duration
of the Scheme |
|
The
Scheme will be in operation for a period of five years from 1.10.2000
to 30.9.2005, or till the time sanctions of capital subsidy by
the Nodal Agency reaches Rs. 600 crores, whichever is earlier. |
| 6 |
Nodal
Agency |
|
Small
Industries Development Bank of India (SIDBI) will act as the Nodal
Agency. |
| 7 |
Cap
on Amount of Subsidy |
| (i) |
The
financial assistance by the Banks/SIDBI for technology upgradation
will be need based. However, the subsidy support would be limited
to the loan amount indicated below: |
|
| S.No. |
Existing
Investment Limit |
Maximum
Celing of Loan eligible for Support |
| 1 |
Tiny
units with investment in plant & machinery less then
Rs. 10 lakhs |
Rs.
8 lakhs |
| 2 |
Tiny
units with investment in plant & machinery between
Rs.10 lakhs to Rs. 25 lakhs |
Rs.
20 lakhs |
| 3 |
SSI
units with investments in plant & machinery above
Rs. 25 lakhs |
Rs.
40 lakhs |
|
| (ii) |
Value
of Plant & Machinery being acquired under the Scheme will
be determined by its purchase price. |
| (iii) |
Capital
Subsidy under this Scheme will not be admissible for loan amount
exceeding the limits indicated above. |
| 8 |
Conditions
for Loans |
| (i) |
Promoters'
contribution, security, debt-equity ratio, up-front fee, etc.
will be determined by the lending agency as per its existing norms. |
| (ii) |
Entrepreneurs
availing Credit Linked Capital Subsidy for technology upgradation
shall not avail any other benefit including Interest Subsidy,
under any other Scheme of the Central Government. |
| (iii) |
One
of the main requirements for sanction of assistance under the
Technology Upgradation Scheme will be availability of competent
management to the unit concerned to carry out the upgradation
programme and t manage the operation of the unit efficiently.
Towards this end, the lending agencies may stipulate conditions
as may be considered necessary. |
| 9 |
Procedure
for Sanctions and Disburesements of Loans |
|
The
SSI unit will have to apply for financial assistance in the prescribed
form to any scheduled Commercial BAnk or SIDBI or one of the declared
eligible State Financila Corporations (SFCs). The list of eligible
SFCs would be finalised in consultation with the Banking Division,
Ministry of Finance. The bank/SFC after appraisal would refer
the cases to the SIDBI, which would convey clearnace for capital
subsidy. The lending institutions would be required to lodge claims
of capital subsidy from SIDBI on a quarterly basis. SIDBI will
settle the claim expeditiously. |
| 10 |
Preferential
Sanction/Disbursement for the Tiny Sector |
|
SIDBI/all
Scheduled Commercial Banks/eligible State Financial Corporations
would ensure preference to the tiny sector for loans for technology
upgradation. |
| 11 |
Monitoring
of the Scheme - Constitution of a Governing Board |
|
The
Scheme will be monitered by a Governing Board. The Secretary (SSI
& ARI) will be the Chairperson of the Board and the Development
Commissioner (SSI)will be its Member Secretary. The Governing
Board shall consist of representatives of Banking Division (Ministry
of Finance), Planning Commission, Department of Science and Techhnology,
Council of Scientific & Industrial Research, Indian Council
for Agriculture Research, SIDBI, some selected public sector banks
and some selected small scale industries Associations as members.
The Governing Board will lay down the policy guidelines and give
necessarydirections for smooth functioning of the Scheme. SIDBI
will operate the Scheme according to the guidelines laid down
and directions given. The Governing Board will monitor and review
the functioning of the Scheme and will meet at least twice a year. |
| 12 |
Review
of approved technologies-Constitution of a Technical Advisory
Committee |
| (i) |
Identification
of technology is a continuous process. moreover, new technologies
may alsocome during the operation of the Scheme. |
| (ii) |
A
Technica Advisory Committee would be set up under the Chairmanship
of Secretary (SSI & ARI) to identify the state-of-the-art
technology and benchmark existing and new technologies which will
be eligible for support under the Scheme. It will consist of representatives
of concerned Ministries including Planning Commission, Technical
Research Institutes/Organisations such as Council of Scientific
& Industrial Research, Department of Science and Technology,
National Research Development Corporation, Indian COuncil for
Agricultural Research and Industary Associations. The Development
Commissioner (Small Scale Industries) will be the Member-Secretary
of the Technical Advisory Committee. The Committee would periodically
meet and identify the new technologies for approval under this
Scheme. |
| 13 |
Estimated
Requirement of Funds |
| (i) |
As
credit linked capital subsidy is to be provided for loans of Rs.
5000 crores during the five years of its operation, total liability
of Government would be Rs. 600 crores(12% of Rs. 5000 crores)
under this Scheme. |
| (ii) |
For
the purpose of estimating the yearly financial requirements it
has been assumed that in a year about 15,000 units would be assisted
under the Scheme. |
|
Year
|
Loan
Amount to be covered for subsidy (Rs. in Crores) |
Credit
Linked Capital subsidy (Rs. in crores) |
|
2000-2001
|
500
|
60
|
|
2001-2002
|
1000
|
120
|
|
2002-2003
|
1000
|
120
|
|
2003-2004
|
1000
|
120
|
|
2004-2005
|
1000
|
120
|
|
2005-2006
|
500
|
60
|
|
Total
|
5000
|
600
|
|
