The Government has taken 79 items out of the list of products reserved for the small scale industry (SSI) sector. The items belong to product groups like food and allied products (five), plastic products (five), drug and intermediates (three) chemical products (seven) as well as wood and wood products (one).
The Government has taken major policy measures since the early 1990’s for making Indian industry including its crucial MSEs competitive to unleash its growth potential. The pace for de-reservation of SSI items has accelerated since 2005. Only 114 items now remain for exclusive manufacturing by the SSI sector .
One of the crucial measures have been the gradual and calibrated removal of restriction in the form of reservation of items to be exclusively produced in the Small Scale Sector. This policy has been undertaken essentially to:
- To increase the competitiveness of industry.
- To facilitate adequate flow of credit.
- To upgrade technology so that the product produced are of world class and competitive in the global market.
- Enable Indian industry to compete with imports.
- To achieve the economies of scale.
- Promote creation of job opportunities
The pace for de-reservation of the items has accelerated since 2005. Number of items de-reserved in 2005, 2006 and 2007 were 108, 180 and 212 respectively. Thus, from 2005 onwards Government has de-reserved 500 items and only114 items were remaining for exclusive manufacture in the SSI Sector.
The Government has recently decided to de-reserve another 79 items. With this de-reservation only 35 items will remain in the list of the items, which can be exclusively manufactured in the Small Scale Sector. The details of these items product-group- wise are: Food & Allied Items – 5 items, Wood & Wood Products – 1 item, Paper & Paper Product -1 item, Plastic Product (including injection moulded Thermo Plastic Products) – 5, Organic Chemicals, Drugs & Drug Intermediates – 3 items, Other Chemicals & Chemical Products -7 items, Glass & Ceramics -1 item, Mechanical Engineering Excluding Transport Equipment – 10 items and Electrical Machines, Appliances & Apparatus- 2 items.
The government has de-reserved 108, 180 and 212 items in 2005, 2006 and 2007 respectively.