A New Small Enterprise Policy, 1991 for small, medium and large scale industries was initiated.
Following provisions were made under this :
1. The limit for tiny sector has been raised from 2 lakh rupees to 5 lakh rupees. Earlier, these units could only be established in places having a population of less than 50,000. According to the new policy, the commercial activities related to service sector were also included in these industries.
2. A package was announced for tiny units, in which assurance of providing continued assistance was given to them, whereas small scale units were to be given assistance on priority basis.
3. According to the new policy, other industrial units were also allowed to invest up to 24 per cent of equity in small scale units. This permitted both the industrial extremities to come closer to each other and also the large scale industrial units will assist them in their development and existence.
4. A new legal arrangement for business organizations was made under the new policy, which was called Limited partnership. Under this arrangement, the responsibility of at least one partner was kept unlimited, while the responsibilities of other partners were kept limited.
5. ‘Sufficiency of credit’ was emphasized in the new policy instead of‘cheap credit’.
6. It was arranged to give priority to small scale sector in government purchase.
7. To identify new markets for small scale and tiny sectors, cooperative institutions, public institutions and commercial organisations were formed.
8. Great emphasis was laid upon establishing small scale and tiny industrial units in rural and backward areas.
