BANKING TRADE AND COMMERCE

FINANCIAL ASSISTANCE TO INDUSTRIES

Industries were left to themselves prior to the period of Independence. Since Independence the Government has been encouraging industrial development through various measures. Whereas the major industries fall within the sphere of the centre, the development of medium and small-scale industries had been assigned to the States. The most important aspect of the State's programme for development of industries relates to encouraging small-scale and cottage industries through provision of training facilities for artisans in the use of improved tools and equipment, organisation of industrial cooperatives, encouragement to non-official institutions like the Bombay Village Industries Board in conducting industries in rural areas and financial assistance to individual artisans and their co-operatives.

Besides the Industrial Finance Corporation of India established in 1948, the important agencies in the state which give financial assistance to industries are the Industrial Credit and Investment Corporation of India, the National Industrial Development Corporation and the Maharashtra State Financial Corporation. These agencies sanction loans for rehabilitation and modernisation of industrial units.

A number of schemes have been in operation in Dhulia district 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 and equipment and/or for machinery is to be provided by Government. The central financing agencies are generally requested to provide working capital for these industries 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.

One of the schemes under which financial assistance is granted is governed by the State-aid to Small-scale and Cottage Industries Rules of 1935. Under these rules loans are granted to small-scale industries for the following purposes.

(1) Construction of building, 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) Purchase of fisheries equipment.

In 1955, the State Aid to Industries Rules of 1935, were amended in accordance with the Government's liberalised policy to give further fillip to the development of cottage and small-scale industries.

Some of the important changes introduced by the recent amendments are-

(1) Loans to small-scale industries will be granted by the Department of Industries upto Rs. 75,000 in each case and in exception cases upto Rs. 100,000.

(2) The former rate of 5½ 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 0.50 per cent shall be levied on all amounts including the principal and interest of the period for which arrears are not paid.

(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 security of persons other than borrowers.

(4) The period of repayment of the loans on account of machinery and equipment is upto 10 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.

Financial assistance under these rules was given in this district as detailed below:-

During 1963-64 loans to the extent of Rs. 19,150 were also granted to 26 gold-smiths in the district under the State-aid to Industries Rules, 1961.

As a part of its development programme the Government grants loans to all types of industrial co-operative societies, such as Gut and Khandsari Societies, Carpentry and Smithy Societies, etc. This is done through the State Bank by way of cash credit and hypothecation. By 1960, five miscellaneous societies were granted Rs. 8,500 as loans and Rs. 4,100 as subsidies for purchase of tools and equipment.

The Department of Industrial Co-operatives and Village Industries has certain schemes of financial assistance to cottage and village industries. This assistance is granted to individual artisans and their co-operatives in the form of loans and subsidies. These schemes and assistance granted under them are given below:

(1) Scheme for grant of loans and subsidies to educated unemployed persons and bona fide craftsmen for the purchase of tools and equipment and for working capital-Under this scheme financial assistance can be granted upto Rs. 3,000 to educated unemployed persons and upto Rs. 2,000 to trained as well as to hereditary artisans in the form of loans and subsidies. By 1960 Rs. 2,600 were distributed to 8 bona fide craftsmen in this district under the scheme.

(2) Scheme for grant of loans and subsidies to Backward Class artisans for the purchase of tools and equipment and for working capital-Preference and concessions in this respect are given to those who are trained in Government's peripatetic schools or Government recognised institutions. The assistance granted under this scheme to the individuals in this district is given below:-

(3) Scheme for grant of loans and subsidies to co-operative societies for the purchase of tools and equipment and for working capital-According to this scheme co-operative societies, one third at least of whose members are bona fide craftsmen can be granted financial assistance upto Rs. 5,000. Of this amount 50 per cent can be in the form of subsidy. To those co-operative societies, the majority of whose members conic from backward class, loans are given free of interest. For the remaining societies, however, interest at 4½ per cent is charged.

Under this scheme financial assistance was given to the industrial co-operatives in the district detailed as below:-

(4) Tanning and Leather Industry Development Scheme.-There is a large number of artisans in the Leather and Tanning industry in the district. By reason of a number of artisans possessing practical knowledge about the tanning of leather and other processes industrial societies were organised in this district. By 1960, there were five societies registered under this scheme in the district; out of them three were tanning and two were leather societies. Loans are granted to these societies. Loans are also granted to the individual artisans for the development of the industry.

(5) Development of Handloom Industry.-Handloom is one of the most important cottage industries in the district. For the development of this industry financial assistance in the form of loans is granted for the purchase of improved tools and appliances and grants are given for opening sales depots, plying mobile vans for the sale of handloom cloth, establishment of dyeing, bleaching finishing and calendering plants, setting up model production centre, etc. The societies are sanctioned rebate to promote their sales. Additional rebates are also sanctioned during the " Hand-loom or Handicraft week". The societies, again, are provided yarn at concessional rates through the District Industrial Co-operative Association. As a result the number of weavers societies increased over a period of years. By 1963-64, there were 32 societies of weavers in the district. The following statement gives the financial assistance to them under the scheme mentioned above.

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