The Government of India, for the first time, tabled the new small enterprise policy titled ‘Policy Measures for promoting and Strengthening and Supplementing Small, Tiny and Village Enterprises in the Parliament on August 6, 1991. The main thrust of New Small Enterprise Policy is to impart more vitality and growth impetus to the sector to enable it to contribute it’s mite fully to the economy, particularly in terms of growth of output, employment and exports. The sector has been substantially deli censed. Concerted efforts would be made to deregulate and debureaucratize the sector with a view to removing all fetters on its growth potential, on the one hand, and reposing greater faith in small and new entrepreneurs, on the other.
The salient features of this new small enterprise policy areas under:
- Increase in the investment limit in plant and machinery of tiny enterprises from Rs. 2 Lakhs to Rs. 5 Lakhs, irrespective of the location of the enterprise.
- Inclusion of industry-related services and business enterprises, irrespective of their location, as small-scale industries.
- Introduction of limited Partnership Act. This would limit the financial liability of the new entrepreneurs to the capital invested.
- Introduction of a scheme of Integrated Infrastructural Development (including technological back-up services) for small-scale industries.
- Introduction of factoring services to help solve the problems of delayed payments to small sector.
- Market promotion of small-scale industries products through cooperative / public sector institutions, other specialized professional/marketing agencies and the consortium approach.
- Setting up a Technology Development Cell in the Small Industries Development Organization.
- According priority to small and tiny sector in the allocation of indigenous raw materials.
- Setting up of an Export Development Centre in the Small industries Development Organization (SIDO).
- Widening the scope of the National Equity Fund (NEF) to enlarge the single window scheme and also to associate commercial banks with provision of composite loans.