PROGRAMME OBJECTIVE SERIES:

PROBES/85/2001-02
POLLUTION
CONTROL
IN SMALL SCALE
INDUSTRIES
STATUS
I,;
NEEDS
CENTRAL POLLUTION CONTROL BOARD
MINISTRY OF ENVIRONMENT & FORESTS
e-mail: cpcb@alpha.nic.in
Website: http://cpcb.delhi.nic.in
December, 2001
PROGRAMME OBJECTIVE SERIES:
PROBES/85/200102
POLLUTION CONTROL

In
SMALL SCALE INDUSTRIES
Status at Needs
..
cq]X@
CENTflAL POLLUTION CONTROL BOARD
( Ministry of Environment &Forests, Govt. of India)
Parlvesh Bhawan, East Arjun Nagar
Delhl-110 032
e-mail: cpcb@alpha,nic.in Website: http://cpcb.delhLnic.in/
CPCB, 500 Copies, 2001
Published By: Dr. B.Sengupta, Member Secretary, Central Pollution Control Board, Delhi - 110032
Printing Supervision & Layout: P.KMahendru, P.KBiswas, Anamika Sagar and M. Javed
Printed at : National Institute of Communication Science (CSIR), Dr KS. Krishnan Marg, New Delhi
PREFACE
The Small-Scale Industries (SSI) covering a wide spectrum of industries in small, tiny
and cottage sector occupy an important position in planned development of Indian
Economy and has emerged as a dynamic and vibrant sector. The sector accounts for
40% of the industrial production, 35% of the total exports and employs about 16.7 million
persons in about 3.2 million SSI units in the country. The SSI sector acts as a 'nursery'
for the development of entrepreneurial talent. This sector, which manufactures a wide
range of more than 7,500 products, supplies the lower income groups with inexpensive
consumer goods and services as well as meet the requirements of sophisticated
technology based industries in India and abroad. However, unplanned, uncontrolled and
haphazard growth of these industries has resulted in the problem of pollution in several
parts of the country.
The Central Pollution Control Board (CPCB) has undertaken an exercise to estimate the
pollution load from industrial sources and to assess the status of pollution control in
various sectors of industries. Information related to large and medium scale industries of
significantly polluting categories has been compiled in parts but similar assessment for
small-scale industries was not accomplished so far.
This report entails information on the present status and requirements for pollution
control in SSI sector. The report also recommends measures to control pollution from
SSI sector through waste minimisation, cleaner production through innovative
technological options, and policy initiatives.
I am grateful to my colleagues Shri T. Venugopal, Dr (Mrs.) K.K. Saxena, Shri R.N.
Jindal and Shri Ajay Raghava for the useful help rendered in completing this document. I
am also thankful to various departments and agencies of the Government including
Ministry of Small Scale Industries and Agro & Rural Industries, National Productivity
Council and Small Industries Development Organisation for providing us with needed
data and to all those who have initially reviewed the document at the draft stage.
(Qilip Biswas)
Chairman
Central Pollution Control Board
CONTENTS
Page No.
1. Introduction
2. Definition of Small Scale Industry
3. List of polluting categories in SSI sector
4. Present Status of Pollution Control in SSI sector
4.1 Status
4.2 Available pollution control technologies
5. Existing Policy Initiatives
5.1 Pollution control initiatives for SSI sector
5.2 Existing Regulations
5.2.1 Environmental
5.2.2 Land Use
1
5
7
12
15
6. Policy Requirements for Pollution Control in SSI sector 25
6.1 Policy measures
6.2 Guidelines
6.3 Action plan
ANNEXURE
1) Illustrative List of Small Scale Service and Business
(Industry Related) Enterprises (SSSBEs)
2) Illustrative List of industries not recognised as Small
Scale Service and Business (Industry Related)
Enterprises (SSSBEs)
36
1.0 INTRODUCTION
India has a long entrepreneunai traomon wrtn craftsmen of different hues catering
to a variety of needs of both urban and rural population. The Small-Scale
Industries (SSI) covering a wide spectrum of industries in small, tiny and cottage
sector occupy an important position in planned development of Indian economy
and have emerged as a dynamic and vibrant sector. The sector accounts for
40% of the industrial production, 35% of the total exports and employs about 167
lakh persons in 32 lacs SSI units in the country. The sector acts as a 'nursery' for
the development of entrepreneurial talent. This sector, which manufactures a
wide range of more than 7500 products, supplies the lower income groups with
inexpensive consumer goods and services as well as meeting the sophisticated
requirements of technology based industries in India and abroad.
The liberalised policy of the Government has thrown this industrial sector in
competition to large and giant multinational companies, posing certain challenges
as well as bringing opportunities to the small-scale sector. Due to its flexibility,
the sector is better placed to face challenges and changes. It is ideally poised to
attract both technology and funds to generate rapid growth and sustained
process of technology upgradation and quality improvement in future.
The indispensable role of such decentralized industrial activities for employment
generation and achievement of local self-sufficiency in certain types of essential
consumer goods was recognised and emphasised upon in the Industrial Policy
Resolution of 1948 and 1956 and as well in the Industries (Development and
Regulation) Act, 1951. Organised development of the SSI sector can be said to
have begun with this.
During the first five-year plan period, six exclusive Boards were set up to promote
modern technologies in different segments of SSI sector. These were Khadi and
Village, Handloom, Handicrafts, Coir, Sericulture and Small Scale Industries
1
Boards. The first five were intended to-promote traditionalillllfuJstries where as the
last one (SSIB) was meant for modern SSls. In addition, M111Tiistry of SSI, Agro &
Rural Industries, Small Industry Development Organisatim:n (SIDO), Small
Industries Development Bank of India (SlOBI), National! Small Industries
Corporation (NSIC) and Small Scale Industries Service lnstltutes etc. were also
created over a period of time to promote SSI sector. There are now a number of
institutes at various levels to assist the SSI units with technological inputs and
other services. The creation of a separate Ministry at the Centre, SIDBI and
NSIC reflects the importance attached to this sector.
According to the Second All India of registered SSls (about 77% of the
total) for the base year 1987-88, about 42.17% are in rural areas, 47.97 /6 in
urban areas (other than metro cities) and remaining in metropolitan areas.
Also, 62.19% of SSls are in backward areas. As for the activity status, 50.20% en
the units are involved in manufacturing/ assembling activity, 15.20% j'r:l
processing work, 12.10% in lob work and 14.30% in repairing / servicing work.
At Central level, the Ministry of Small Scale Industries & Agro and Rural
Industries is the Nodal Ministry for policy formulation, promotion, development
and protection of small-scale industries. It also monitors the implementation of
these policies and ensures their effective implementation.
The Government of India has always accorded priority to the Village and Small
Industries (VSI) Sector in its Industrial Policy Resolutions and in the strategy for
the industrialisation in the country. With deregulation of Indian economy, a new
package of policy measures for promoting and strengthening VSI sector was
announced by the Government on 6
th
August, 1991. These policy measures have
given thrust to simplification of regulations and procedures, economic viability of
SSI units, improving their competitive strength, expert promotion, credit flow and
development of integrated infrastructure for the sector.
2
The Ministry of Small Scale Industries & Agro and Rural Industries designs and
implements the policies through its field organisations for promotion and growth
of small and tiny enterprises, village and coir industries. The Ministry also
performs the functions of policy advocacy on behalf of the SSI sector with other
Ministries/Departments.
The implementation of policies and various programmes/schemes for providing
infrastructure and support services to small enterprises is undertaken through its
attached office, namely Small Industry Development Organisation (SIDO),
statutory bodies / other organisations like Khadi and Village Industries
Commission (KVIC) & Coir Board, Public Sector Undertakings like National Small
Industries Corporation (NSIC) and training institutes - National Institute of Small
Industry Extension Training (NISIET), Hyderabad; National Institute for
Entrepreneurship and Small Business Development (NIESBUD), New Delhi and
Indian Institute of Entrepreneurship (liE), Guwahati.
To meet the needs at regional and local level, the Small Industries Service
Institutes (SISls) have been setup. There are 28 SISls and 30 Branch SISls set
up in State capitals and other industrial cities all over the country. The main
activities of these institutions are as following: -
Assistance/Consultancy to Prospective Entrepreneurs
Assistance/Consultancy rendered to existing units
Preparation of State Industrial Profiles
Preparation/Updation of District Industrial Potential Surveys
Project Profiles
Entrepreneurship Development Programmes
Motivational Campaigns
.Production Index
3
Management Development Programmes
Skill Development Programmes
Energy Conservation
Pollution Control
Quality Control & Upgradation
Export Promotion
Ancillary Development
Common Facility Workshop/Lab.
Preparation of Directory of Specific Industry
Intensive Technical Assistance
Coordination with DICs
Linkage with State Govt. Functionaries
Market Surveys
Other Action Plan Activities assigned by Headquarters
4
2.0 DEFINITION OF SMALL SCALE INDUSTRY
Small Scale Industrial Undertakings
An industrial undertaking in which the investment in fixed assets in plant and machinery,
whether held on ownership terms on lease or on hire purchase does not exceed Rs 100
lacs (Rupees One hundred lacs only).
Investment Limits
The definition of small-scale industries has undergone changes over the years in terms
of investment limits in the following manner: -
YEAR INVESTMENT LIMITS ADDITIONAL
CONDITIONS
0'. _
_'w,
I
,....ess than 50/100
1950 Upto Rs 5 lacs in fixed assets Ipersons with
lor without power
1960 Upto Rs 5 lacs in Plant & Machinery 1\10 condition
-
~ ~ ... ,
... - ' - ~ ' ~ ' -
1966 UfJlU mj 7.5 lacs in Plant & Machine No condition
1975 Upto Rs 10 lacs in Plant & Machinery No condition
1980 Upto Rs 20 lacs in Plant & Machin No condition
1985 Upto Rs 35 lacs in Plant & Mavi
'''' y
No condition
"- " ..~ - -
"=
1991 Upto Rs 60 lacs in Plant & Machinery No condition
1997 Upto Rs 300 lacs in Plant & Machine No condition
1999 Upto Rs 100 lacs in Plant & Machinery No condition
5
Ancillary Industrial Undertakings
An industrial undertaking which is engaged or is proposed to be engaged in the
manufacture or production of parts, components, sub-assemblies, tooling or
intermediates, or rendering of services and undertaking supplies or renders or proposes
to supply or render not less than 50 per cent of its production or services, as the case
may be, to one or more other industrial undertakings and whose investment in fixed
assets in plant and machinery whether held on ownership terms or on lease or on hire-
purchase, does not exceed Rs 100 lacs (Rupees One hundred lacs only).
Tiny Enterprises
Investment limits in plant and machinery in respect of tiny enterprises is Rs 25 lacs
(Rupees Twenty five lacs only) irrespective of location of the unit.
Small Scale Service &Business (Industry related) Enterprises (SSSBEs)
SSSBEs industry related service/ business enterprises with investment upto Rs 5 lacs in
fixed assets, excluding land and building, are called Small Scale Service/ Business
Enterprises (SSSBEs). The list of recognised and not recognised SSSBEs are given in
Annexure 1 & 2 respectively.
6
3.0 LIST OF POLLUTING CATEGORIES IN SSI SECTOR
551 units produce an amazing variety and type of products. Over 7500 products are
known to be manufactured in this sector. Even in a particular product, there is a wide
range of qualities or specifications catering to different market segments, particularly in
consumer / household products. There are about twenty major industry groups in the
small-scale sector. These are listed below:
- food products;
- chemical & chemical products;
basic metal industries;
metal products;
- electrical machinery & parts;
rubber & plastic products;
machinery & parts (except electrical goods);
hosiery & garments - wool products;
non-metallic mineral products;
paper products & printing;
- transport equipments & parts;
leather & leather products;
beverages, tobacco & tobacco products;
repair services;
- cotton textiles;
- wool, silk, synthetic fiber textiles;
- jute, hemp and mesta textiles;
miscellaneous manufacturing industries; and
- other services & products.
A survey of indices of industrial production (liP) maintained for these major industry
groups reveals what the sunrise industries are and on what segments the sun has set.
Also the small-scale sector has emerged as a major supplier of mass consumption items
like
7
Leather and leather goods;
plastic and rubber goods;
ready-made garments;
- hosiery goods, sheet metal goods;
- stationery items;
- soap and detergents;
- domestic utensils;
- toothpaste and toothpowder;
- safety matches;
preserved foods and vegetables;
- wooden and steel furniture;
paints and varnishes; etc.
Apart from above, SSI industries also contribute to manufacture of the following
sophisticated items:
- television sets;
- calculators;
microwave components;
plastic film capacitors;
- carbon film registers;
- electro-medical equipments;
- electronic teaching aids;
- digital measuring equipments;
- air-conditioning equipments;
- optical lenses;
- drugs and pharmaceuticals;
- electric motors;
pesticide formulators;
photographic sensitized paper;
- razor blades;
- collapsible tubes; etc.
8
Industry Clusters
Small industries have tended to concentrate in the vicinity of large industries or in
metropolises and big cities. The pull of the market, availability of physical and social
infrastructural facilities and skilled labour are major considerations. The setting up of
large public sector / private sector undertakings in some places has encouraged growth
of small scale industries in those areas (e.g. Bangalore, Rourkela, Ranchi, etc.), for
manufacturing ancillary products and providing auxiliary services. The clusters of SSI
units have come up near petrochemical complexes and large automobile factories. Also
over the years, small units have exhibited significant growth in some new towns and
cities. Government support programmes, entrepreneurship, raw material availability,
improved infrastructure, increasing demand and a lot of other factors have contributed
to this phenomenon. A major aspect of 'spatial concentration' of SSI is that clusters of
certain product lines have come up. The clusters of some selected industries in some
areas are indicated below.
Major industry clusters
Product Group - District/Region
woolen & cotton hosiery - Tirupur, Ludhiana, Calcutta, Delhi
sports goods - Meerut, Jallandhar
hand tools - Jallandhar, Nagaur
glass and ceramics - Khurja, Farukkhabad, Firozabad
locks - Aligarh
scientific Instruments - Ambala, Ajmer
safety matches - Sivakasi
bicycles & parts - Ludhiana, Rajpura, Sonepat
brass parts - Jamnagar
9
leather & leather goods - Kanpur, Calcutta
carpet - Mirzapur
diesel engines, DG sets and parts - Kolhapur, Agra, Rajkot, Coimbatore,
Ghaziabad
electronics - Bombay, Pune, Bangalore, Delhi
domestic electrical appliances - Bombay, Delhi
Wall Clocks - Morvi, Delhi
Among the product groups as mentioned above, the indicative list of polluting categories
in 551 sector includes: -
1. tannery units
2. textile units
3. dye & dye intermediates
4. paints & varnishes
5. chemical industries (organic & inorganic)
6. pesticide units
7. foundries
8. brick kilns
9. hot mix plants
10. stone crushers
11. small distilleries
12. engineering units
13. electroplating units
14. rerolling & pickling units
15. metal processing units
16. small pulp, paper & board Mills
17. pharmaceuticals
18. mini cement plants
19. lime kilns
20. food / fruit processing
21. glass & ceramics
22. rubber
23. plastics
24. soap & detergent
10
25. meat processing & Slaughter houses
26. rice mills
27. edible oil & Vanaspati
28. starch industries
29. dairies
30. petrochemicals
31. electrical machinery & parts
11
4.0 STATUS OF POLLUTION CONTROL IN SSI SECTOR
4.1 Status
The objective of promoting 881s is to induce regionally balanced development. Most of
the 881s came up around major industrial areas except for the agro-based industries,
which came up close to the source of raw materials. Thus, the location of 881 units falls
in one of the following:
a) organized industrial estates
b) unauthorised clusters
c) scattered / isolated units
d) units located in non-conforming areas.
There are 867 industrial estates in the country (source: Kothari's Industrial directory of
India).
Waste generation from SSls
The share of small-scale industries in generating wastewater among different classes of
industries is estimated to be about 40%. Total volume of wastewater generated from
881s in India is 3881 mid. Break-up of the major contributors' (in mid) is as following:
1. paper and board mills
2. pharmaceuticals
3. edible oil and vanaspati
4. textile industries
5. dye and dye intermediates
6. soaps and detergents
7. paints and varnishes
8. petrochemicals
9. organic chemicals
10. engineering
11. tanneries
12
1087
40
7
450
32
10
10
10
60
2125
50
The level of pollution caused by SSI sector in India per unit of output is higher than their
counterparts in developed countries. The reasons put forth are:
i) continued usage of outdated and inefficient technologies that generate large
amounts of wastes;
ii) large and unplanned industrial conglomeration;
iii) lack of resources for enforcement and implementation of pollution control
programmes;
iv) lack of public / market pressure for improving environmental performance;
v) productivity and environmental performance still given a back seat;
vi) preference to labour intensive or capital intensive industries;
vii) lack of proper siting thereby posing greater environmental risks.
Further, the SSI units plead the following as the reasons for non-implementation of
environmental standards
i) They operate in very small areas.
ii) No space for setting up of pollution control systems.
iii) No funds for setting up of pollution control systems.
iv) No guidance available from Pollution Control Boards / Committees.
v) The consultants available are not competent and competent consultants are not
affordable.
vi) Sufficient number of competent fabricators not available.
vii) Cost-effective technologies for pollution control not available.
All the industries, big or small do produce wastes. The outflow of wastewaters,
emissions or solid wastes from an SSI unit may be small, but it aggregates to a very
large quantity because of large population. The share of small-scale industries in
generation of wastewater among different sectors of industries is about 40%. Hence
pollution from SSI sector cannot be overlooked and ignored.
13
'Small is beautiful'. It can never remain so, if the pollution from SSls continues to grow.
The fact is that SSls are proliferating and that they shall continue to playa key role in
economic development of the country, retardation of their growth in no way will be
desirable, but continuation of environmental pollution from SSls is equally undesirable.
It obviously necessitates, a set of innovative policies, balancing these apparently
contradictory compulsions.
4.2 Available pollution control technologies
The technologies for pollution control for most of the sectors of polluting SSls are
available. However, there is need to apply these to Indian conditions. This requires R&D
efforts and willingness of SSls to experiment. The UNIDO through its 'DESIRE'
programme has demonstrated the pollution control technologies in SSI sector. Manuals
for some sectors of the industry have been prepared. Some of the other agencies that
are working and have demonstrated the cost-effective pollution control technologies in
SSI sector include CSIR, NPC, TERI, PSCS&T, NCB, etc.
14
5.0 EXISTINGPOLICYINITIATIVES
5.1 Pollution Control initiatives for 551 sector
a) Policy regarding the manufacture of new products and by-products
recovered through application of pollution control processes
i) It is the policy of the Government that the industrial undertakings desiring to use
the wastes and effluents for manufacture of new products should be encouraged
to do so.
ii) Many of the chemicals recovered from pollution control processes and recycling
of waste products are reserved for exclusive manufacture in the small scale
sector. As per current industrial policy, the non-small scale units require to obtain
industrial license with 50% export obligation for manufacturing any of the
products reserved for the small-scale sector. In this background, it was felt that if
the chemicals are recovered through installation of pollution control processes
that are in the larger interest of sustainable industrial development, capacity of
such recoverable chemicals, even if reserved for the small-scale, should be
permitted without the mandatory export obligation.
iii) The Government has decided that in order to encourage adoption of pollution
control processes by the industrial undertakings which have the potential to
utilise the waste products and effluents for manufacture of new items, they may
be allowed to do so by suitable endorsement in the existing industrial licenses or
issue new industrial licenses for such recoverable items which may be reserved
for the small scale sector, without necessarily stipulating the mandatory export
obligation.
iv) The industrial undertakings will submit application in form IL, to the Secretariat
for Industrial Assistance (SIA), Department of Industrial Policy & Promotion,
Ministry of Industry, Udyog Bhawan, New Delhi - 110011. Such applications will
be considered on merits and wherever Government agrees to allow industrial
15
undertakings to recycle their wastes and effluents, necessary endorsement of
capacity for the items allowed would be made on industrial licenses, without
necessarily stipulating the conditions for export of such new items. However,
before taking a decision in the matter, the SIA will obtain the prior written
comments / views of the Development Commissioner (SSI) in each case.
v) Entrepreneurs desirous of availing this facility shall have to submit applications in
the prescribed form for industrial licenses (Form FC/lL) to the SIA, giving full
details of the pollution control processes proposed to be adopted and new items
with capacities which would be recovered from the same.
b) Initiatives for Environmental Control
i) The Industrial Pollution Prevention Project
The Industrial Pollution Prevention Project has been taken up oy the Ministry of
Environment & Forests (MoEF) to utilize the support of the World Bank to
prevent and alleviate environmental degradation caused by industrial
operations. The project has following broad objectives:
a) To get individual units to install appropriate pollution control devices.
b) To assist the establishment of common effluent treatment plants (CETPs)
for the combined treatment of effluents from the clusters of small-scale
units. The financial assistance under this scheme towards the total cost of
the project is as following:
i) 25 percent each as subsidy from Central and State Governments;
ii) 30 percent as loan at reduced rate of interest from the financial
institutions; and
iii) 20 percent as contributions from individual units.
16
c) To introduce clean technologies which would have minimum generation
of wastes through demonstration projects and studies.
Ii) Adoption of Clean Technology in Small Scale Industries
This scheme aims at promotion, development and adoption of clean
technologies including waste reuse or recycling in small-scale industries. Under
this scheme, the MoEF sponsors the following activities:
- Training and awareness programmes and short duration educational
workshops for small-scale industry sector and for entrepreneurs in selected
small-scale industries through Office of the DC (SSI).
- Studies on waste minimization and demonstration in potential small scale
industrial sectors
- Publications relating to guidelines I manuals on waste minimisation in small-
scale industries.
iii) Waste Minimisation in Small Scale Industries
A project 'Waste Minimisation in Small Scale Industries' has been launched by
the MoEF with the National Productlvity Council as nodal agency under the
World Bank assisted Industrial Pollution Prevention Project. The objective of the
project is to increase the awareness, interest and confidence of small and
medium scale industries to take up waste minimisation activities on a sustained
basis. It also aims at generating enough indigenous capacity to create an
environment of self-help in waste minimisation in the industries. The project has
two components to achieve these two objectives:
- development of communication strategy for launching an awareness
campaign on waste minimisation; and
- establishment and running Waste Minimisation Circles (WMCs) in small-scale
industries in the country.
17
lv) Energy Conservation Programmes
The Office of DC (SSI), Govt. of India has been pursuing programmes on
energy conservation in small-scale industries. There are many energy intensive
areas in small-scale sector such as foundry, forging, rolling mills, glass &
ceramics industry etc., where thermal efficiency is very poor. In order to make
SSls aware about the advantages of taking up energy conservation measures,
awareness programmes by different SISls / RTCs are conducted every year.
Each of these SISls/RTCs advertises the date, venue, fee and programme etc.
for organising the above programmes. Any industry association / NGO or other
developmental agency for SSls may also contact the respective SISls / RTCs
for organising such specific programmes to suit their requirements.
In addition to the above, DC (SSI) also takes up energy audit studies, survey
on energy consumption pattern and any other issue related to energy
conservation through SISls / RTCs and consultants. This programme applies to
the small-scale industries different from those covered under the cluster
'UPTECH' programme.
v) Ozone layer protection
The Montreal Protocol is a global agreement under the management of United
Nations Environment Programme for Protection of Ozone Layer. The Protocol
came into force on 1st January 1989 and defines the measures the member
countries must take to limit production and consumption of ozone depleting
substances (ODS). India ratified the Montreal Protocol in September 1992. The
Protocol has classified 20 nos of OOSs which are scheduled to be phased out
world over by the year 2010.
Under the Protocol, institutional mechanism has been developed to channel
financial and technical assistance to small-scale units individually or in a group.
18
The Protocol also supports training and exposure of the entrepreneurs to
facilitate smooth transition to Ozone friendly uses.
The Union Ministry of Environment and Forests is the Nodal Ministry for
implementation of the Montreal Protocol. The Office of the DC (SSI) has also
set up a special ozone cell to oversee implementation of Montreal Protocol in
small-scale sector.
Small enterprises may obtain information from SISls in the field or from the
Office of the DC (SSI) on all matters for effecting ODS Phase Out. The
enterprises are required to submit a project report in a prescribed format to
jurisdictional SISI or Ozone Cell in the Office of the DC (SSI) or Ozone Cell in
the MoEF. The approved projects are eligible for financial grant for adoption of
new technology / machinery / services to phase out ODS. The financial
assistance is made available for incremental capital cost as well as recurring
cost for a prescribed period as per norms of multilateral fund.
The Small Industries Development Organisation (SIDO) has identified more
than 9000 small and informal sector units utilising ODS. SIOO has published a
handout titled 'Protect Ozone Layer and Save Human Life' and sent it to all
identified small and informal sector units utilising ODS. SIOO has organised,
through Small Industries Service Institutes (SISls), 20 awareness workshops to
phase out ODS.
Vi) Integrated Technology Upgradation and Management Programme
The Office of DC (SSI) has launched a new scheme called Integrated
Technology Upgradation and Management Programme (UPTECH) in Feb
1998. The special features of the scheme are that it encompasses all the areas
of technology upgradation and also related issues. The programme is directed
to a cluster, not to an individual unit, where there is a lot of commonality in the
method of production.
19
The objective of the programme is given below: -
a) To carry out technology status and technology need studies of identified
clusters of traditional skills-based enterprises.
b) To scout for and identify appropriate technologies and their provision on
the basis of the status and need studies.
c) To facilitate contract / need based research, if any required, to adopt the
available technology to the specific needs of the end users.
d) To facilitate and promote the demonstration of technologies to the largest
groups of small enterprises.
e) To promote and facilitate the delivery of the technology from its producer
to the recipient user.
f) To promote the assimilation and diffusion of the identified technology
across the cluster of small enterprises.
To start with, 10 clusters have been identified under this scheme to be taken up
during IX Five Year Plan. The project cost of the scheme is Rs. 6.25 crores
during IX Plan.
vii) Technology Bureau for Small Enterprises
The Technology Bureau for Small Enterprises (TBSE) is a joint venture of
Small Industries Development Bank of India (SIOBI) and the Asian Pacific
Centre for Transfer of Technology (APCTT).
The TBSE offers under one roof assistance to existing and prospective small
enterprises in the sphere of technology accession, transfer and funds
20
syndication. The main objective of the Bureau is speedy access and transfer
of technologies. The Bureau has a large computerised database on
technology options available in the Asia-Pacific region. It identifies business
partners willing to collaborate, brings them face-to-face and extends support
to tie up financial assistance.
The Bureau undertakes financial syndication covering term loans, foreign
currency, venture capital, lines of credit, equity assistance and bills finance. It
offers package for the export of technologies as well as SSI projects and
products and arranges assistance through SIOBI and other OFls apart from
commercial banks.
The TBSE provides consultancy services to encourage product excellence;
arranges buyer-seller meets on a regular basis for specific product groups;
undertakes technology appraisal and documents latest developments in the
areas of technology, processes, export patterns, market opportunities, etc.
5.2 Existing Regulations
5.2.1 Environmental
a) In the case of SSls excluding those which are highly polluting categories,
the consent order is now valid for 15 years or till such time there is some
significant change in the process, whichever is earlier.
b) Environmental restrictions for SSI sector
Environmental clearance procedure for small-scale industries have been
rationalised and simplified except in the case of the following 17 major
polluting industry categories:
21
- Fertilizer (Nitrogen / Phosphate);
- Sugar;
- Cement;
- Fermentation and Distillery;
- Aluminum;
- Petrochemicals;
- Thermal power;
- Oil refinery;
- Sulphuric acid;
- Tanneries;
- Copper Smelter;
- Zinc Smelter;
- Iron and Steel;
- Pulp and Paper;
- Dye and Dye intermediaries;
- Pesticides manufacturing and formulation; and
- Basic Drugs and Pharmaceuticals
For other categories of small scale industries, mere acknowledgement by the
State Pollution Control Board or State Pollution Control Committees of the
application form serves the purpose of consent; and there is no need for the
industry to obtain periodic renewal of consent till such time that a unit
modifies/changes its process(s). Provided, that the State Pollution Control
Board or Committee may conduct random checks or call for information from
any small scale unit, and make a formal consent order prescribing conditions
etc., as required.
c) Fiscal benefits for environment protection:
Depreciation allowance at the rate of 100 per cent for installing
pollution control devices.
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Customs duty at reduced rates of 35 per cent plus 5 per cent auxiliary
charges levied on imported equipment and spares for pollution
control.
Customs duty at the reduced rate of 25 per cent and full exemption
from auxiliary charges for kits required for conversion of petrol driven
vehicles to compressed natural gas driven vehicles.
Excise duty at the reduced rate of 5 per cent on manufactured goods
that are used for pollution control.
Excise duty exemption for bricks and blocks manufactured from fly
ash and phospho-gypsum.
Exemption under section 35 CCB of the Income Tax Act given to
assesses who incur expenditure by way of payments on any sum
towards association or institutions, which carry out programmes for
conservation of natural resources.
Financial assistance towards capital investment up to 25 per cent or
Rs. 50 lacs, whichever is less, is given as subsidy to industrialists
from the small scale sector for setting up common effluent treatment
facilities.
Incentives in terms of rebate on water cess payable under the Water
(Prevention & Control of Pollution) Cess Act, 1977.
Provision of loans at reduced rates of interest by financial institutions
for installing pollution control devices, for example: Funded by the
USAID (United States Agency for Industrial Development), the
Industrial Credit and Investment Corporation of India (ICICI) has a $
25 million Trade in Environmental Services and Technologies (TEST)
scheme which carries loans at 12.5 per cent with no exchange risk for
the dollar assistance.
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Under the World Bank funded 'Industrial Pollution Prevention Project',
the Bank offers loans on concessional terms that is received by the
MOEF and disbursed through different financial institutions.
5.2.2 Land Use
In tune with the liberalised licensing policy, the locational policy for 881s in India
has also been significantly amended. There is no requirement of obtaining
industrial approval from the Central Government (except for the industries under
compulsory licensing) for locations not falling within cities having a population of
more than 1 million. In respect of units proposed to be located in cities with
population greater than 1 million, industries of a non-polluting nature such as
electronics, computer software and printing, may be located within 25 kms of
periphery of urban areas. Other industries are permitted only if they are located
in Industrial Areas designated prior to 25.7.1991. The Zoning and Land Use
Regulations as well as Environmental Legislations continue to regulate industrial
locations.
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6.0 POLICY REQUIREMENTS fOR POLLUTION CONTROL IN SSI SECTOR
6.1 POLICY MEASURES
Some of the policy initiatives for pollution control in SSI sector that government must
take are suggested below.
1. The cost-effective clean technologies should be developed which interlock the
process with effluent treatment plant / air pollution control device operation so as
to ensure that SSI units operate pollution control equipment regularly.
2. Industries adopting cost-effective cleaner technologies, waste minimization
techniques and appropriate pollution abatement / control technologies, which do
not compromise on the quality of the product, should be encouraged
3. Awareness to the prospective / existing entrepreneurs on the clean technologies,
pollution abatement / control technologies to be created.
4. The Government should encourage preventive environmental management tools
to improve the environmental performance and to strengthen the competitiveness
of the SSls.
5. Efforts to be strengthened for forming Waste Minimization Circles (WMCs) for
improving the productivity of S81s and to assist their sustained development.
Government to facilitate functioning of WMCs through fiscal incentives,
technology interventions, training and declaring moratorium on prosecution, etc.
so that industries are encouraged to join these circles.
6. A system on taxation of wastes should be introduced as a major strategy for
pollution prevention. The effluent charges based on concentration of load will
encourage industry to look at pollution as basically an economic problem. Market
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based instruments to decide the cost of water, power, fuel and other inputs to be
introduced.
7. A mechanism of incentives and disincentives should be devised for small-scale
industries based on the environmental performance.
8. The excise tax on waste selling and reuse should be lifted so that wastes can be
economically used. Also resource recovery and reuse should be exempted from
tax and incentives be given. For promoting waste utilisation, part or total sales
tax and excise duties should be exempted for products made wholly or partly of
materials which otherwise would be part of the waste stream(s). Import duty
should be reduced on machinery required to be purchased from outside India in
order to establish such plants.
9. For the industries coming up in the industrial estates, prior environmental
clearances should be issued to the owner of the estate and environmental
clearances for individual industries simplified. Also, consent to establish, in such
cases, should be simplified. However, proper siting of such industrial estate
based on environmental assessments and land use compatibility should be
ensured.
10. In the industrial estates, proper layout should be ensured and provisron of
common facilities such as sewerage system, CETP, common steam generation
plant, captive power plant, etc. should be encouraged.
11. In industrial estates, the government should encourage industries to form an
association and look after the maintenance and operation of the common
facilities.
12. In case of scattered / isolated units, more stringent pollution control regulation
should be enforced.
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13. In case of S81s in non-conforming areas and in unauthorised clusters, a detailed
inventory should be prepared, environmental impact assessment / risk
assessment carried out and accordingly action plans prepared for prevention and
control of pollution, environment management plans (EMPs), changing of
process technologies, introduction of waste minimization techniques,
shifting/closing of incompatible units and working strategies for expansion or
permitting of new units and of land use controls around the sites.
14. In urban residential areas, no polluting industries should be permitted. Such
industries should come up exclusively in the designated industrial areas/ estates
only.
15. For the small scale service and business (industry related) enterprises (SSSBEs)
that are essentially required within the residential areas, areas should be
designated within or close proximity to residential areas and should be allowed in
only such areas. The list of recognized SSSBEs is given in Annexure -1 and
those, which are not included in the list, are in Annexure -2.
16. There should be ban on certain categories of SSI (e.g. tanneries, slaughter
houses, bone mill, feather & hair processing units, cattle feed, etc.) units in urban
areas.
17. A comprehensive Human Resource Development strategy for SSI sector should
be evolved for meeting the training needs of Pollution Control Board officials,
Entrepreneurs, operators / workers in SSls, wastewater treatment facilities and
for strengthening the manpower facilities in SPCBs / PCCs for effective
implementation of pollution control laws.
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6.2 GUIDELINES
1. For the existing industrial estates / industrial clusters, priority should be on
providing a CETP rather than on laying sewerage system, since conveyance
accounts for significant share of costs of pollution abatement infrastructure in the
industrial estates.
2. Segregation of hazardous, special or toxic industrial wastes, heavy metals, acidic
and alkaline wastes, oils, sewage, storm water streams etc should be done at
source before such wastes are conveyed to CETPs so that treatment costs are
minimized.
3. Minimum pretreatment of wastewater at individual units should be enforced to
achieve atleast the sewer standards and influent standards if effluent is treated
through CETP.
4. While setting up CETP, the following should be considered-
a) The pollution load from the industrial estate and characterization of
effluent (qualitative and quantitative) should be suitably assessed for
correct design of the CETP.
b) Environmental Impact Assessment studies need to be carried out for
setting up of CETPs.
c) Based on techno-economic considerations, optimum number of SSls to
setup the CETP should be ascertained.
d) The consent to operate CETP should be granted and strictly enforced. A
committee involving concerned stakeholders including SPCB officials
should decide 'influent standards' to the CETP, as per notification under
the Environment (Protection) Rules,1986. This will help in identifying the
defaulting industries sending their wastewaters to CETP and will ensure
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that maximum efficiency of CETP is maintained. The SPCS / CETP
management should ensure compliance of influent standards by
individual member industry.
e) The CETP should be preferably operated by public companies, formed
from participation of industrial association / external agency / large
industry, as a self-sustaining venture.
f) Apportionment of costs and other requirements among industries for
setting and running the facilities in the CETP should be evolved.
5. For proper maintenance and operation of the CETPs, following should be
ensured:
a) Technical training should be given to the manpower operating the plant.
b) There should be provision of fully equipped laboratory, workshop, library,
database center and waste exchange facilities.
c) Suitable quantities of chemicals required in the plant should be stored.
d) The plant should have separate standby electricity connection.
e) In the case of CETPs where wastewater are collected through sewers,
adequate pre-treatment by industries is to be ensured wherever
wastewater are highly acidic or corrosive in nature.
f) The 'Manifest System' for transportation of the wastewater has to be
maintained wherever the wastewater is conveyed through vehicles and
tankers.
g) Proper health & safety measures against various hazards in CEPT
operation should be taken.
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6. The possibility of treatment of wastewater from 881 units jointly by a large
industry located in the vicinity may be considered. Alternatively, large industry
can manage a CETP where wastewater from its plants and 881s are discharged.
In such case -
a) The large industry can act as facilitator.
b) The large industry should be given the licensing / authorization power by
government for regulating the 581 units.
c) Some financial incentives should be given to large industry that is
accommodating the wastes from 881s.
7. For the proposed industrial estates
a. Promoters of industrial estates to seek prior environmental clearance from
the government.
b. While granting consent to establish the industrial estate, it should be ensured
that proper pollution control, treatment and disposal details are included.
c. The consent should include details of layout plans, drains, CETP, common
utilities like water supply, steam generation, solid /hazardous wastes disposal
facilities etc.
d. Funding mechanism for proposed common facilities for the industries should
be included in the development costs.
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8. In case of industrial estates with tanneries, pharmaceuticals, textile dyeing
industries, the domestic sewage after secondary treatment can be added to
industrial wastes for diluting chlorides, TD8, colour, etc which are otherwise not
economical to treat.
9. The Industrial Association to maintain the following in the industrial estate-
a) Each industrial estate should maintain the directory of wastes generated
(type, category, quantity) by each individual industry. This information can
be widely circulated through the Internet. Based on this database,
feasibility studies can be taken up for setting 'Waste Exchange Banks'
where waste of one industry can be utilized by other industry either in its
production process or for treating the wastes e.g. neutralization of the
acidic effluents with the alkaline wastes. This will encourage reuse and
recycling of wastes.
b) The common boiler facility in an industrial estate can economically set up
and operate air pollution control equipments, which will reduce costs and
air pollution generated. However, it should be ensured that heat and
steam is efficiently supplied (by reducing heat losses) to participating
industries. This can be planned for new industrial estates or where
industrial expansion is taking place.
c) The industrial estate can have the captive power plant operated by the
Industrial Association. Provision of common stand-by power supply in the
estate should also be made.
d) The Industrial Association should also ensure that solid wastes (both
hazardous and non-hazardous) generated by 881 units are properly
treated, utilized and disposed depending on their category. The Common
Hazardous Waste Management Facilities should be made available to
881s.
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e) It should be the responsibility of the Industrial Association to maintain
green belt within and surrounding the estate. Regular sweeping and
paving of roads, sprinkling of recycled water should be done for dust
reduction.
10. 8ince 881 units cannot take risk of adopting new technologies, these should be
'demonstrated' on field in the selected industries before it is propagated among
other 881s. Demonstration industries will serve as attractive models enthusing
others to adopt cleaner technologies.
11. For guiding the industry in 'upgrading their technology and clearing the
appropriate clean technologies' there should be a committee of experts.
12. A database for the availability of clean technology and its present status in 881s
should be created.
13. C81R and other specialty research institutions to be encouraged to develop
cleaner technologies and commercialise them. Common pool type R&D cells
should be established in clusters of 881s with full involvement of 881s in that
cluster.
14. For 881s in non-conforming areas following guidelines should be considered:
a) For the industries located in residential I non-conforming areas are
operating largely in violation of Master Plan norms, there should be an
'Industrial Relocation Policy'. The polluting industries should be shifted
first. 8hifting of these industries should ensure proper siting based on
environmental considerations and adequate safeguards at the new site.
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b) The service sector/ household industries, which meet day-to-day
requirements of local residents, may be allowed to continue at such
places.
c) The requirements of civic services viz. power, water, etc for permissible
industries should not exceed the standards and norms permissible for the
residential areas.
d) Industries having more than five workers and one kw power load should
not be permitted in residential areas.
e) Mega-cities and metro-cities should opt for high technology intensive,
non-polluting, sophisticated and high value addition generating industries.
6.3 ACTION PLAN
For the implementation of above policy measures, the following action plan is
suggested:
1. Preparation of the database on 881 sector to be taken up to create statistics on
881s, which include information about pollution control facilities, production, raw
materials, disposal facilities etc. The information collected to be location wise i.e.
district-wise and category-wise (type of industry).
2. Information regarding the location of industrial units to be collected Le. whether
these 881s are located in industrial estates, in clusters, scattered / isolated or
located in non-conforming areas. This will help in identifying whether industry
needs to have common / individual treatment plant or industry needs to be closed
or shifted.
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3. With the help of local bodies like development authorities, municipal
corporations, SSls located in non-conforming areas in urban and rural areas are
to be rehabilitated.
4. To identify the minimum size of operation, which is economically feasible, studies
for determining optimal size of S81 units, which can sustain burden of pollution
control, are to be taken up.
5. Demonstration of waste minimisation options and cleaner production techniques
through better house keeping, recycling, by-product recovery and reuse for
different sectors of SSls.
6. Training institutions to be identified for conducting training of managerial and
operator level personnel in waste treatment facilities and for officials from
pollution control boards.
7. R&D activities for development of cost effective technologies in various sectors
of 881s and for state level demonstration of these technologies.
8. Assistance for setting up of waste exchange banks in industrial areas.
9. Setting up of CETPs for 8S1 units in industrial estates I clusters on joint
partnership basis.
10. Working out an environmental tax to be levied on polluting industrial units by the
government.
11. Studies for siting and development of common hazardous and non-hazardous
waste disposal sites.
12. Feasibility studies for provision of common infrastructure facilities such as steam
& electricity generation, pulping facilities etc.
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13. Shifting of workers / residents living within 500 m around the industrial estates /
clusters is to be taken up. Residential areas to be identified keeping in view the
wind direction and other meteorological conditions to prevent tragedies like
Bhopal Gas disaster in future.
14. In the industrial estates having chemical, toxic, hazardous wastes generating
industries chances of accidents are more. In such cases, it is mandatory to have
offsite management plans. The mock drills involving local people need to be
organised for such industrial estates.
15. Providing cleaner fuels like natural gas to the SSI units located in mega-cities /
environmentally critical areas / urban industrial estates is of utmost importance.
This could be done in association with the Ministry of Petroleum & Natural Gas,
Ministry of Environment & Forests, Local bodies etc.
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Annexure-1
Illustrative List of Small Scale Service and Business (Industry Related)
Enterprises (SSSBEs)
1. Advertising Agencies
2. Marketing Consultancy
3. Industrial Consultancy
4. Equipment Rental & Leasing
5. Typing Centres
6. Xeroxing
7. Industrial Photography
8. Industrial R&D Labs
9. Industrial Testing Labs
10. Computerised Design and Drafting
11. Creation of databases suitable for foreign /Indian markets
12. Software Development
13. Auto repair, services and garages
14. Documentary Films on themes like Family Planning, Social forestery, energy
conservation and commercial advertising
15. Laboratories engaged in Testing of Raw Materials, Finished Products
16. "Servicing Industry" Undertakings engaged in maintenance, repair, testing or
electronic/electrical equipment/instruments i.e. measuring/control instruments
servicing of all types of vehicles and machinery of any description including,
televisions, tape recorders, VCRs, Radios, Transformers, Motors, Watches, etc.
36
17. Laundry and Dry Cleaning
18. X-Ray Clinic
19. Tailoring
20. Servicing of agriculture farm equipment e.g. Tractor, Pump, Rig, Boring Machine,
etc.
21. Weigh Bridge
22. Photographic Lab.
23. Blue printing and enlargement of drawing / designs facilities
24. All ISD / STD Booths
25. Teleprinter / Fax Services
26. Sub-contracting Exchanges (SEXs) established by non-governmental industry
association
27. EDP Institutes established
28. Coloured and Black & White Studios equipped with processing laboratory
29. Ropeways in hilly areas
30. Installation and operation of Cable TV Network
31. Operating EPABX under franchises
32. Beauty Parlours and Creches
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Annexure - 2
Illustrative List of Activities which are not recognised as Small Scale Industry I
Business (Industry Related) Enterprises (SSSBEs)
1. Transportation
2. Storage (except cold storage which is recognised as SSI)
3. Retail / wholesale trade establishments
4. General merchandized stores
5. Sale outlets for industrial components
6. Health services including pathological laboratories
7. Legal services
8. Educational services
9. Social services
10. Hotels
38