Manufacturing Equipment

New Delhi, Aug 10: The contribution of small scale industries to manufacturing and employment generation slipped by 10 and seven percent respectively, in the first quarter, as large and medium industries have started sourcing their inputs through cheaper imports, a report said.

Due to the ongoing economic slowdown SSIs have not been able to assure their vendors supplies at affordable rates. As a result, the large and medium industries have resorted to imports to overcome the scenario, the industry chamber said in its report on ‘Latest Prospects of SSIs vis-a-vis other Booming Sector’.

Majority of the SSI units could not upgrade their machinery and equipment due to high cost of borrowings. Consequently, their competitiveness has eroded to a great extent, it said.

“The SSI’s contribution to manufacturing in the first quarter of current fiscal has come down to 35 percent as compared to around 45 percent a few months ago,” Assocham President Sajjan Jindal said.

Jindal asked the government to adopt a multi-pronged strategy for the sector such as reducing the number of inspectors to less than 15 and concessional credit be extended at not more than six to seven percent.

Availability of equipment and machinery be made to this sector at much reduced customs tariff with facilities for technology adoption to the entire SSI sector, he added.