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SSI Policies » Policy Of Reservation
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Criteria for Reservation
The overwhelming consideration for reservation of an item is its suitability and feasibility for being made in the small scale sector without compromising quality aspects.
Review of Reservation List
After the introduction of economic reforms with emphasis on liberalisation, de-licencing and de-regulation, a need was felt by the Government to review the reservation policy. Accordingly, a Committeee was constituted under the Chairmanship of Shri T.S Vijayaraghavan, former Additional Secretary in the Ministry of Commerce who has recommended to the Government for de-reservation of 91 items out of 821 items presently reserved in this sector.
Another committee known as Expert Committee under the Chairmanship of Shri Abid Hussain was also constituted to review the policies in the changed economic scenario for SSIs sector who had recommended for total abolition of the reservation for SSIs.
Advisory Committee on Reservation constituted under the I (D&R) Act in its meeting held on 19th February 1997 recommended to the Government that the complete de-reservation at this stage is not desirable and de-reservation should be done in a phased manner.
Violation and Punishment
As per policy no medium/large including multi-national companies are allowed to manufacture reserved items except under 50% export obligation. Those who had been manufacturing reserved items prior to the date of reservation can continue to do so after obtaining a Carry-On Business (COB) Licence from the Government.
Any violation of the policy of reservation is punishable under Section 24 of I (D&R) Act. Appropriate action on the cases of violations of the Policy of Reservation is taken up suitably by the concerned Administrative Ministry/Department.
812 products reserved for exclusive production in the small scale sector.
The reserved items fall under the following broad categories:-
- Food and allied industries;
- Textile products including hosiery;
- Wood and wood products;
- Paper products;
- Leather and leather products including footwear;
- Rubber products;
- Plastic products;
- Chemical and chemical products;
- Glass and ceramics;
- Mechanical engineering;
- Electrical machines, appliances etc.;
- Electronic equipments and components;
- Transport equipment, auto-parts, bicycle parts and
- Miscellaneous (sports goods, stationery items etc.)
-Establishments employing 10-19 persons require to maintain only 3 registers and to submit an annual core return only.
-Establishments employing less than 10 persons to maintain only 1 register and submit only one annual core return.
-Earlier inspections under the EPF Scheme were conducted six monthly in normal cases and quarterly in default cases. Now inspections in normal cases are being conducted on annual basis. However, in default cases establishments are liable for random inspections. Earlier in the ESI Scheme establishments were liable for inspections once in a year. Now after liberalisation small scale establishments employing upto 20 persons are inspected once in 2 years, whereas establishments employing more than 20 persons are inspected annually.
-Steps are also being taken to have better self-discipline regarding enforcement of labour laws in the small scale sector.
-Simplification and rationalisation of forms/returns to be submitted by the Establishments/Industries is under process.
-Simplification of Labour legislation with a view to bringing them nearer to Labour Market and simplification of procedures with a view to minimising the adverse impact of excessive inspections and having joint inspection by the inspectors of the Ministry of Labour, is under process.
