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THE finance minister P Chidambaram is expected to announce a Rs 2,200-crore package for small-scale industries (SSIs) in the Budget this month. Excise duty exemption limit is expected to go up from Rs 1 crore to Rs 1.25 crore for micro enterprises, according to a source. The government plans to augment its contribution to SIDBI’s portfolio risk fund to benefit 50 lakh additional entrepreneurs. In addition, a risk capital fund will be created to offer soft loans to micro enterprises.

Approved by the CCEA, the package includes other measures like improving the credit guarantee scheme and augmenting the corpus of the credit guarantee fund to Rs 2,500 crore over five years, starting from 2006-07. Apart from the relaxation of excise duty limit, other measures to provide enhanced fiscal support for MSEs include, restoring the alternative concession of payment of cenvat duty at 60% of the normal rate, with cenvat credit extended to clearance of up to Rs 1.25 crore. The source added that the turnover eligibility limit for excise duty exemption for small enterprises will be enhanced from Rs 4 crore to Rs 5 crore. Time limit of 15 days for the payment of excise duty will be increased to 45 days for MSEs. Furthermore, the excise duty exemption benefits to small enterprises will be extended for three years even after they attain the status of medium enterprises.

For comprehensive and faster development of MSEs clusters, the package envisages comprehensive review of the existing guidelines of the small industries cluster development programme. The package also includes a slew of measures to support technology and quality upgradation, such as setting up four training-cum-product development centres. Emphasis has also been laid on the immediate implementation of the national manufacturing competitiveness programme, which relates to providing marketing support to MSEs, the source added. The package especially means good news for women.

They will be provided with 80% guarantee cover under the credit guarantee scheme. Women entrepreneurs would also be provided with financial assistance of up to 90% of the project cost, subject to certain limitations.

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