Industrial Policy Statement 1977 #2
Creation of District Industries Centres
Small Scale Industries: The emphasis of industrial policy so far has been mainly on large industries neglecting small, cottage and small scale industries completely relegating small industries to make a minor role. Now, the government has firm policy to change this approach in the coming Industrial Policy. The main thrust of the new Industrial Policy 1977 will be on effective promotion of cottage and small industries widely dispersed in rural areas and small towns. In this policy whatever can produced by the small and cottage industries must only be so produced. For this, an exhaustive analysis of industrial products has been made to identify those items which are capable of being established or expanded in the small scale sector. The exclusive reserve list of industries which would be reserve for small scale sector has been significantly expanded and will now include more than 500 items as compared to about 180 items earlier. It also be ensure that production in this sector is economic and of acceptable quality. The list of industries reserve for the small scale sector has to be continually reviewed so that capacity creation does not leg behind the requirements of the economy. Annual review of reserve industries will be undertaken in order to ensure that reservation accorded to the small scale sector is efficient and is also continually expanded as new processes capable of being manufactured in the small scale are identified.
The Tiny Sector: The existing definition of small scale industries will remain within the small scale sector, special attention will be given to units in the tiny sector namely, those with investment in machinery and equipment up to Rs. 1 lakh and situated in towns with a population of less than 50,000 according to 1971 census figures and villages. The scheme draws making available margin money assistance especially to tiny units in the small scale sectors as well as to cottage and household industries.
Cottage Industries Legislation: There has been reservation for small scale sector and no special protection for cottage and household industries sector. Government will consider introducing special legislation for protection of the interest of cottage and household industries with a view to ensuring that these activities which provide self-employment in large numbers get due recognition in industrial development.
Promotional Measures: There has been a tendency to proliferate schemes in the past, agencies and organisations which have tended more confuse the average small and rural entrepreneurs than to encourage and help them. The focus point of development for small scale and cottage industries will be taken away from the big cities and State Capitals to the District Head Quarters. In each District, there will be one agency to deal all requirements of small and village industries and this will be called the District Industries Centres. All the services and support required by small and village entrepreneurs will be provided under single roof of the District Industries Centres. These will include economic investigation of the District’s raw-materials and other resources, supply of machinery and equipment, provision of raw-materials arrangements for credit facilities, an effective set up for marketing and a cell for quality control, research and extension etc. The Centre will have a separate wing for looking after the special needs of cottage and household industries as distinct from small industries. The Centre will establish close linkages with the Development Blocks on the one hand and with specialised institutions like Small Industries Service Service Institutes on the matter. The intention of the Government is to extend this important organisational pattern to all the Districts in the course of next four years. Suitable financial and organisational supports will be provided to the State Government to achieve this objective. The financial assistance given to small and cottage industries under the Rural Industries Programme will also be extended to all the Districts in the Country within the next four years.
In order to provide effective financial support for promotion of small village and cottage industries, the Industrial Development Bank of India has taken steps to set up a separate wing to deal exclusively with the credit requirements of this sector. It will coordinate, guide and monitor the entire range of credit facilities offered by other institutions for the small and cottage sector, for which separate wings will be set up in these institutions particularly Nationalised Banks. Banks will also be expected to earmark a specified proportion of their total advances for promotion of small, village and cottage industries. The policy of the Government is to see that no worthwhile scheme of small or village industry is given up for want of credit.
Want of satisfactory marketing arrangements for their products has been the main tardy of the growth of small scale and cottage industries. The marketing of small, village and cottage industries goods with its concomitant product standardisation, quality control, and market surveys will therefore need special attention. Now, the government will provide the maximum support for these activities on a priority basis. Measures such as purchase preference and reservation for exclusive purchase by the Government Departments and Public Sector Undertakings will also be used to support the marketing of these products.