Redefine Ssis

It is noteworthy that the Laghu Udyog Bharti has severely criticised the recent Abid Hussain Committee recommendations on the small-scale sector. This is an ideal opportunity to kill several birds with one stone. First, the small sector should be redefined. The plant and machinery should not exceed Rs 3 crore. Nor should the capital of the company exceed Rs 1 crore. No other company should be allowed to hold any shares in a SSI unit.

Second, a small unit should have to pay no excise duty. Third, the unit should be outside the purview of the Industrial Disputes Act. It should be free to hire and fire, except that the minimum compensation for retrenchment of employees should be prescribed. It can be one months current salary or wage for every year of service even if it be less than five years. Plus there would be gratuity and PF as usual.

Fourth, the reserved list for SSI should be shortened with the intention of abolishing it gradually. Exemption from excise and the Industrial Disputes Act would be the competitive edge that an SSI unit would enjoy over the large one.