The Gazetteers Department

State aid to Industries.—Since Independence, Government have actively participated in the industrial development programmes of the regions or parts thereof. The Second Five Year Plan assigned an important place to the development and growth of small-scale industries. It emphasised that the sector represented by these industries should be viewed more as a progressive rather than a static part of the economy. In conformity with this policy, the Government have been adopting different plans and measures to develop small-scale industries. One such measure is to render financial assistance to them. A number of schemes have been chalked out under which financial assistance is granted by the State to artisans and their co-operative societies. According to the orders of the Government, finance required for long-term purposes by industrial Co-operatives, such as, for purchase of tools, equipment and machinery, is to be provided by Government. The central financing agencies are generally requested to provide working capital for these societies either on the strength of their own funds or on the strength of marginal guarantee varying between 20 and 40 per cent given by the Joint Registrar of Industrial Co-operatives and Village Industries. The Maharashtra State Co-operative Bank, too, offers on a small scale, such assistance to these industries.

Financial assistance to industries is given under the State-aid to Small Scale and Cottage Industries Rules, 1935. Loans accordingly, are granted for the following purposes:—

(1) Construction of buildings, godowns, warehouses, wells, tanks, and other works necessary for industrial operations and for purchase of land;

(2) Purchase and erection of machinery, plant and appliances;

(3) Purchase of raw materials;

(4) Working capital; and

(5) Fishing

The Government have been a pioneer in the development of cottage and small scale industries. From 1948, the Government implemented a progressive industrial policy. Since then the Government have been taking keen interest in the development of these industries as one of the effective solutions to the problem of unemployment. It was also decided by the Government to develop these industries on a co-operative basis and to reserve a separate field for cottage and small-scale industries. The amendment to the State-aid to Industries Rules, 1935, was effected in 1955 with a view to bringing about more liberal measures in its industrial policy to give a fillip to the development of cottage and small-scale industries. The Central Government have placed a sum of Rs. 10 lakhs at the disposal of the State Government for the purpose.

The important changes introduced by recent amendment are as under:—

(1) loans to small-scale industries will be granted by the Department of Industries up to Rs. 75,000 in each case and in exceptional cases up to Rs. 1,00,000;

(2) The former rate of 5� per cent compound interest is brought down to 5 per cent compound interest per annum, subject to a stipulation that if the instalments are not paid in time a penalty of � per cent shall be levied on all amounts including the principal and interest of the period for which arrears are unpaid;

(3) Loans are advanced to the extent of 75 per cent of the security offered instead of 50 per cent as provided in the earlier rules. Loans are given also against personal security of persons other than borrowers;

(4) The period of repayment of the loans on account of machinery and equipment is up to ten years; such period in respect of that part of the loan which is meant for working capital would not ordinarily exceed five to seven years.

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