The Hindu Business Line : FAPCCI calls for ABC analysis of sick SSIs

THE Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) has called for an ABC analysis while taking up revival of sick small-scale units.

Banks could closely monitor the financial status, clearly manifested through companies' ability to pay back, and alert the authorities concerned in order to save them from going sick, Mr O.P. Goenka, President of FAPCCI, told Business Line. If the ABC analysis of a unit gave any hope of revival, stakeholders should step in to revive it, Mr Goenka said in an interview. "If there's no scope, one should better go for an exit option." He , however, put the onus on the entrepreneur in question because it was he/she who knew best the status of the unit.

Development of clusters would help the industry in several ways. For one, setting up a treatment plant in a cluster would benefit a number of units that could not have set up a treatment facility individually.

Mr Goenka called for policies that would encourage manufacturing and agro-food industries.

Development in these two areas would result in creation of significant number of jobs unlike in service sectors. "We need to look at the China model that focussed on manufacture-driven development," Mr Goenka said.

They (Chinese) invested heavily in the manufacturing sector. "Instead of offering undeveloped or underdeveloped industrial sites, we should create well-developed sites for setting up industries," he said.

The existing industrial estates too needed a facelift with better connectivity and common testing and effluent facilities. Development of social infrastructure was also important in order to curtail commuting time and fatigue.

While giving incentives to SSI units for technology development and modernisation, the Government should help the sector by providing them with a comprehensive list of research and development institutes, consultancy organisations and testing centres.

He said the year 2004 saw a good beginning with an inflow of investments to the tune of Rs 600 crore in the last nine months. These investments went mostly into the fields of infrastructure, power, manufacturing and food processing.

Commending the Congress Government for taking positive steps such as the focus on bio diesel, revival of sick units and food policy, Mr Goenka asked the State to provide low cost quality power and reform labour laws. As against plethora of interfaces, the State Government should offer an efficient single window.

On the post-WTO regime, he said there were big opportunities for India.

Calling for selective strategies to build on the strengths of SSI sector, he pointed out that linkages between small and large-scale industries should be established.

Budgetary allocations for industry and mineral sector should be in the range of Rs 1,000 crore to Rs 1,500 crore, he added.