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Commerce ministry delists pickles, breads, chutneys from reserved list
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Friday, 17 April, 2015, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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fiogf49gjkf0d The government has delisted 20 product items reserved for micro, small and medium enterprises (MSMEs) till now. The delisting will allow large companies produce these items, which include pickles, breads and chutneys.
According to the ministry of commerce, the policy initiatives have been taken to encourage greater investment, including the existing MSME units, to incorporate better technologies, standard and branch building to enhance competition in Indian and global markets for these products.
Items ‘de-reserved’ Accordingly following items are ‘de-reserved’: Pickles and Chutneys; Bread; Mustard Oil (except solvent extracted); Ground Nut Oil (except solvent extracted).
No justification Further the ministry stated, “An Advisory Committee constituted under Section 29B(2C) of the Industries (Development & Regulation) Act, 1951 on de-reservation periodically evaluates products /items reserved for exclusive production by Micro and Small Enterprises. India has opened up its economy since 1991 through a forward looking Policy which led to de-licensing of items. Over the years list of items reserved for manufacture by MSE Sector has been reduced from over 800 to 20. The Advisory Committee in its meeting, held on 20.10.2014, noted that with the import liberalisation, all remaining items are allowed for imports. Thus, there is no prima facie justification for continuation of reservation of manufacturing in the MSE Sector since such reservation may inhibit the possibilities based on technologies, economy of scale, etc. vis-à-vis the imported items.”
According to experts, big companies were producing these items using outsourcing contracts to MSMEs, but the current move would allow a direct route to the corporate giants to manufacture these. D V Malhan from All India Food Processors’ Association says, “It’s a step in wrong direction.” He added that the move is likely to affect the MSME sector badly, which is largely household industry and the provision could have been continued.
The policy of reservation of products for exclusive manufacture in small-scale industries (now MSMEs) was launched in 1967 with the objective of achieving socio-economic development through the development and promotion of small enterprises across India. However, the ministry observed that with the gradual opening up of the economy, which allowed free import of many of these items, such reservations have not really worked.
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