Kochi: The Indian government should change its approach towards the country’s small-scale industry to enable it to face global competition, demands the Confederation of Southern Small Industries Association (COSSIA).

COSSIA president A Selvaraj accuses that the policies are against the small-scale sector in every field, including loans, taxes, technology and procedures. “Globalisation is a reality; it cannot be avoided.”

Of the 35-lakh units in the sector, more than 50 per cent are running in losses. The main reason for this is the non-availability of the required money and the huge interest charged for the loans, too. Even when the interest rates have come down, and the loans are charged interest at the rate of 12 per cent; in most other countries the interest rates are around 5 per cent.

Raw materials have 20 per cent more rates in the country, and the electricity charges are also high here. The investors will have to submit several returns. There should be laws to lessen these difficulties. However, things like entry tax should be fully avoided.

It was to gain strength on their own and to get favourable decision from the government that the small industry groups in Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, Pondicherry and Goa have come together to form a federation.

The S V Gupta Committee report should be implemented at the earliest, says Kerala state general secretary Damodaran Avanoor.

The Reserve Bank of India (RBI) has given the directive to avoid security for loans up to Rs 15 lakh, adds Kerala Small-scale Industries Association president Xavier Thomas Kondody. “The committee under RBI deputy governor K Vedakamesam had put forward this suggestion.”

There is criticism that State Bank of India and State Bank of Travancore do not allow enough loans to small-scale industries, he says. “The loan share should be hiked from 12 per cent to 16 per cent by the commercial banks. More information regarding the loans should be made available and the application forms should be simpler.”