BANKING TRADE AND COMMERCE

STATE AID TO INDUSTRIES

With a view to encouraging and developing small-scale and cottage industries the Government of Maharashtra has set up the Department of Industries. The department gives financial assistance to these industries under various schemes besides the "State-aid to Industries under Rules 1935." Under this scheme loans are granted to industries for (1) construction of buildings, godowns, warehouses, wells, tanks, etc., (2) purchase of land for buildings, (3) purchase of and erection of plant and machinery, (4) purchase of raw materials and (5) use as working capital.

The important small-scale and cottage industries in Amravati district were ginning and pressing works, oil ghanis. brick-making, carpentry, dyeing, printing, etc. Under the scheme mentioned above these industries received financial assistance from the State as given below: -

Year

Amount (in Rs.)

 

Number of parties to whom financial assistance was granted

(1)

(2)

 

(3)

1957-58

33,865

41

 

 

1958-59

39,320

48

 

1959-60

28,760

24

 

1960-61

13,200

28

 

1961-62

4,300

14

 

1962-63

15,000

2

Advanced by the

   Bank of Mahar-

   ashtra.

1963-64

7,000

1

Various other schemes were in operation in Amravati district during the last decade under which financial assistance was rendered to individuals and their co-operatives. In 1960, the Government of Maharashtra passed the Maharashtra State-aid to Industries Act, to regulate grant of loans to small-scale and cottage industries in the State. Under the Act cottage industry is defined as an industry carried on by an artisan in or near his home with capital not exceeding Rs. 25,000. The Act defined small-scale industry as an industry with capital assets not exceeding the value of Rs. five lakhs, regard being had to the nature of undertaking and the number of persons employed therein. The loans granted under the Act were repayable by instalments together with interest from the date of the actual advance of the loan.

Subsequently, the Government passed the Maharashtra State-aid to Industries Rules. 1961, with a view to granting loans to small-scale or cottage industry for the following purposes: -

(1) Purchase of land required for an industry;

(2) Construction of buildings or worksheds, godowns, ware-houses, wells, etc. necessary for industry;

(3) Purchase of tools, equipment, appliances, plant and machines;

(4) Erection of plant and machinery;

(5) Purchase of raw materials or for other use as working capital otherwise than as cash credit; and

(6) Tiding over initial difficulties or bottlenecks.

Under the Rules the following authorities were entitled to grant loans up to the amount specified against each of them as given below: -

Authority

Amount

--

Rs.

Secretary to Government, Industries and

1,00,000

Labour Department.

--

Director of Industries

25,000

Deputy Director of Industries

5,000

Assistant Director of Industries

2,000

Of these loans, those which are granted to the extent of rupees thousand are to be secured by personal bond of the applicant, and in case of the applicant being a firm, by personal bonds of all partners. Loans exceeding Rs. 1,000 but not exceeding Rs. 5,000 arc to be secured by one or more personal sureties.

With the formation of the Zilla Parishad the Rules governing the grants are administered and executed by the Zilla Parishad itself. During 1962-63, an amount of Rs. 14,333 was granted as loan and subsidy to 18 parties by the Zilla Parishad in Amravati district.

The following statement gives the expenditure on the Schemes included in the Third Five-Year Plan and implemented through the Zilla Parishad. Amravati: -

Name of the Scheme

Total expenditure up to 31 -3-1963

(1)

(2)

--

Rs.

(1)

Grant-in-aid to Industrial Co-operatives for management expenses

4,996

(2)

Organisation of Handicraft Co-operative Societies in Maharashtra State.

1,000

(3)

Scheme for financial assistance to Industrial Co-operatives for the purchase of tools and equipment.

1,000 Subsidy.

(4)

Scheme for financial assistance to Industrial Co-operatives for construction of godowns.

--

(5)

Scheme for grant of financial assistance to Industrial Co-operattives of Scheduled Tribes, Scheduled Castes and Backward Class persons.

--

Maharashtra State Financial Corporation.

Financial assistance to small-scale and cottage industries is also rendered through this agency. Originally known as the Bombay State Financial Corporation, this institution was set up in 1963 under the State Financial Corporation Act of 1951. Now its activities are restricted only to Maharashtra State.

The Corporation provides financial assistance to medium and small-scale industrial concerns in the State for purposes of purchase of land, plant and machinery and other assets, for renovation and expansion of existing units and for the develop- ment of new ones. It considers applications from small-scale units under the State-aid to Industries Rules for aid ranging between Rs. 10,000 and Rs. 75,000 and in exceptional cases up to RS. 1 lakh. The rate of interest for loans advanced is 6 per cent. The period of loan is decided on merit but is not generally more than ten years. The amount of loan is to the extent of 59 per cent of the net value of the fixed assets consisting of land, building, plant and machinery.

Since the reorganisation of States, the small-scale units in Amravati district have received the following assistance from the Corporation: -

Year

Amount

Number of Parties

(1)

(2)

(3)

 

Rs.

 

1959-60

30,000

1

1961-62

2,50,000

1

1962-63

52,500

2

Financial Assistance Through State Bank of India.

Besides the Corporation, the small-scale industries can also secure financial assistance from the State Bank of India. In Amravati district such industries received Rs. 1,13,000 during 1960-61 and Rs. 93,000 during the subsequent year. Each year there were four parties which received such assistance.

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