Financial Daily from THE HINDU group of publications
Thursday, Jan 23, 2003
Industry & Economy
SSI sector to focus on market promotion
HYDERABAD, Jan. 22
THE State Government's initiatives and its sustained focus on the IT sector overlooking the strengths of the SSI sector have led to a situation where major investments have been skirted in favour of other sectors in the last five years, according to Mr V.B. Shanker, Co-Chairman of the Federation of Andhra Pradesh Small Industries Association (FAPSIA), here.
He told newspersons that IT being essentially an application technology tool, could thrive if there was diversification and rapid growth in manufacturing activity. The State had carved a niche for itself in the manufacture of auto components, defence-related equipment, aerospace engineering goods and other technology products.
Though the situation was congenial for investments, it was not happening for want of proper projection, he added.
Despite lack of basic infrastructure facilities, the SSI sector on its own strength was making investments and registering an annual growth of nearly 20 per cent. The SSI Centre, formed in November 2001 as a joint venture of FAPSIA and the government, aimed at ensuring implementation of policy pronouncements, he said.
Dr B. Yerram Raju, Chief Advisor to FAPSIA, said among the principal activities of the centre was the promotion of markets for SSI products, helping ailing units with timely expert guidance and finance and promoting entrepreneurship.
The centre had identified east and west Godavari districts as ideal for the creation of an agro-industries corridor and Ranga Reddy and Medak districts for a corridor of ancillary units. The focus would be on growth with employment and the next year would be regarded as the `Year of Manufacturing'.
He said that in the last two years, availability of credit for the SSI sector had come down from 14 per cent to 11 per cent and as a consequence, costlier non-institutional credit was going into the sector making products more expensive.
He attributed the sickness in the sector to delays in payment by larger units and government undertakings. The Securitisation Act had excluded agricultural land given as collateral for taking loans and this might starve the farm sector of timely credit. He wanted the maximum cap on interest on credit to be fixed at 10 per cent even as housing loans were being liberally given at 9.25 per cent.
Mr T.V.R. Murthy, Executive Chairman of FAPSIA, said the centre would aim at strengthening export competitiveness of the SSI sector and focussing on the development of agro and food processing industries. To achieve its objectives, FAPSIA had signed an MoU with the National Institute of Designs.
It would soon enter into a tie-up with the Indo-German Export Promotion Council for induction of new production technologies.
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