SSIs sore over dereservations

The SSI sector is nursing its wounds. The 30-member SSI board set up by the Union government only some time ago to submit a roadmap for the small-scale sector was perhaps surprised to see its recommendation on dereservation go unheeded.
Finance minister Jaswant Singh has announded another spate of dereservation. In his speech, Mr Singh said, “After consulting with stakeholders in respect of certain other items in the reserved list, it is now proposed to withdraw SSI reservation on another 75 items of laboratory chemicals, reagents, leather and leather products, plastic products, chemicals and chemical products and paper products.�
“We are shocked to see the finance minister talk about having consulted stakeholders,� Mr S S Singhania, president of the Indian Council for Small Industries, said. Mr Singhania is a part of the 30-member SSI board which unanimously recommended that there should be a halt to further dereservation out of the SSI list.
“If a body constituted by the government comprising members from the SSI fraternity are not the real stakeholders, then who are they,� asked Mr Singhania.
The ICSI president is also little encouraged by Mr Singh’s ‘bouquet’ in the form of cheaper finance to the SSI sector. The finance minister had mentioned in his speech about the interest rate band evolved by State Bank of India, whereby SSIs could get working capital finance at rates 2% above the bank’s best customers. He said he had asked the Indian Banks’ Association (IBA) to take a leaf out of SBI’s book and make the same schemes available through other PSU banks as well.
Mr Singhania said even that is far from helpful to the SSI sector since the rates will continue to be between 13-14%. He said even this was not forthcoming from the banks easily. Mr Singhania the finanance minister could have done well by ensuring better credit delivery rather than alluring entrepreneurs through mere talk of cheaper finance.