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 Rules. Under these schemes 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 industries in Yeotmal district are cotton ginning and pressing, oil mills, weaving, brick making, etc.

The Department of Industries of the Government of Maharashtra provided assistance to these industries to the tune of Rs. 5,802 [Annual Report, Department of Industries, 1966-67.], during the year 1966-67 covering about 29 units.

In addition to this, there were other schemes in operation in Yeotmal district during the last decade under which financial assistance was granted 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 his home with capital not exceeding Rs. 25,000. The Act defined small-scale industry as an industry with capital assets not exceeding Rs. 5 lakhs, regard being given 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,

(2) construction of buildings or work sheds, godowns, ware houses, wells, etc., necessary for the industry,

(3) purchase of tools, equipment, appliances, plant and machinery,

(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:—

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

With the formation of the Zilla Parishad the rules governing the grants are administered by the Zilla Parishad itself. During 1966-67 a sum of Rs. 50,000 was granted to 149 units.

Bank of Maharashtra.

In addition to the above, the Bank of Maharashtra also rendered financial assistance to small-scale and cottage industries. The bank provided financial assistance to the tune of Rs. 14,000 [Annual Report, Department of Industries, 1966-67.] to two units in the district during 1966-67.

Maharashtra State Financial Corporation.

Financial assistance to small-scale and cottage industries is also rendered through Maharashtra State Financial Corporation. Originally it was known as the Bombay State Financial Corporation and was set up in 1963 under the State Financial Corporation Act of 1957.

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 development 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 6½ 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. The Corporation granted subsidy to the tune of Rs. 40,000 to only one unit in the district during the year 1966-67 [Ibid.].

Besides the Corporation, the small-scale industries can also secure financial assistance from the State Bank of India.

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