Solution:

Features of New small enterprise policy 1991:

• The Industrial Policy measures announced in 1991 laid a special thrust on promotion and strengthening of small, tiny, and village industries.

• In the post reform period, a number of steps including partial dereservation, change in investment limits, facilitating foreign participation, establishment of growth centres, export promotion, marketing assistance and incentives for quality improvement, etc. have been taken by the Government for strengthening of this sector.

The highlights of the Small Scale Industries Policy of August 1991 are as follows:

• The investment limit for the tiny sector was raised to Rs. 5 lakhs from Rs. 2 lakhs. This limit has now been raised to Rs. 25 lakhs.

• Hereafter irrespective of their location would be recognized as small-scale industries.

• The Small Industries Development Organisation (SIDO) has been recognized as the nodal agency to support small-scale industries and export promotion.

• An export development center would be set up in SIDO to serve the small-scale units through its network of field officers to further augment the export activities of the sector.

• A technology development cel1 (TDC) will be set up in SIDO which could provide technical inputs to improve the quality and competitiveness of products in the small-scale sector.

• The scheme for the handloom sector, which contributed 30% of the total textile production in the country, would be redesigned keeping in view the local and regional needs.

• It would be the policy of the Government to promote handloom to sustain employment in rural areas and to improve the quality of life for handloom weavers.

• The National Small Industries Corporation (NSIC) would concentrate on the marketing of mass, consumption items under the common brand names and organizational links between NSIC and SSIDCs would be established.

• The scope of the national equity fund scheme will be widened to cover projects up to Rs. 10 lakhs for Equity Support (Up to 15 percent).

• The Single Window loan scheme has also been enlarged to cover Projects up to Rs. 20 lakhs with a working capital margin up to Rs. 10 lakhs.

• Small Scale units can have equity support to the extent of 24% of the total investment from the medium and large scale industries, Public Undertakings, NRIs, or foreign investment.

• In conformity with the socio-economic objectives of the national development plans, the development banks have introduced several promotional innovative schemes to be operated either separately or jointly.