Govt may raise SMEs’ investment limit to Rs 5 cr
SMALL and medium enterprise(SME) manufacturers in auto components, food processing and the pharmaceutical sector, among others, can now look forward to higher investment limits.
By Radhika Bhalla, TNN |
NEW DELHI: SMALL and medium enterprise(SME) manufacturers in auto components, food processing and the pharmaceutical sector, among others, can now look forward to higher investment limits. The government is considering a proposal to increase the investment limit from Rs 1 crore to Rs 5 crore for 69 products in the small scale sector.
The total number of products in the SME sector which will be allowed higher investment limit will go upto 140 with the investment limit being raised for another 69 products.
���The government is considering a proposal to raise the investment limit in plant and machinery for 69 more products in the small scale sector. For the last fifteen years the SME sector has been growing at a faster rate than the industrial sector as a whole. Naturally, more investment is needed in this sector and the investment ceiling should be raised,��� says an industry source.
Almost 40% of Indian exports are from this sector, which is a large employment provider. Some of these are suffering from low productivity and poor quality. There has been little investment to upgrade technology. Says Vishnu Mathur of ATMA (Automotive components manufacturers association of India): ���Investment limits in the small scale sector are very low. Our SME���S have been adversely affected due to the scale of operation.���
Items included in the list for which investment limit is going to be raised range from pickles and chutneys, bread, dyestuffs, glass and ceramics to automotive parts such as horn buttons, radiator grills, seat cushions and sun shades.
Says Gurpal Singh of the CII: ���We have been recommending an increase in investment limit for small scale enterprises. An increase in the limit is called for to enhance the much needed technological upgradation and quality improvement of products in this sector.���
The total number of products in the SME sector which will be allowed higher investment limit will go upto 140 with the investment limit being raised for another 69 products.
���The government is considering a proposal to raise the investment limit in plant and machinery for 69 more products in the small scale sector. For the last fifteen years the SME sector has been growing at a faster rate than the industrial sector as a whole. Naturally, more investment is needed in this sector and the investment ceiling should be raised,��� says an industry source.
Almost 40% of Indian exports are from this sector, which is a large employment provider. Some of these are suffering from low productivity and poor quality. There has been little investment to upgrade technology. Says Vishnu Mathur of ATMA (Automotive components manufacturers association of India): ���Investment limits in the small scale sector are very low. Our SME���S have been adversely affected due to the scale of operation.���
Items included in the list for which investment limit is going to be raised range from pickles and chutneys, bread, dyestuffs, glass and ceramics to automotive parts such as horn buttons, radiator grills, seat cushions and sun shades.
Says Gurpal Singh of the CII: ���We have been recommending an increase in investment limit for small scale enterprises. An increase in the limit is called for to enhance the much needed technological upgradation and quality improvement of products in this sector.���
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