11(1)2000 RTC 16.5.2001
The Secretary (SSIs), all State Govts.
Commissioner & Director of Industries, all State Govts.
Director, all SISIs/RTCs.

Sub: Scheme for Setting up of Testing Centres by Industries Associations and Modernisation/Expansion of the Quality Marking Centers of State Govts. and their Autonomous bodies -2001.


Govt. of India in the Ministry of SSI&ARI introduced a scheme in 1995 to render financial assistance to Industries Associations of SSIs for establishing quality counselling and common testing facilities, with a view to :
  1. a) Encouraging the Industries Associations to establish and offer testing facilities in area of testing of raw- materials/components and of finished products as per relevant standard specifications so that small scale units could be helped in improving quality of their products and become licensed users of ISI quality marking logo.

    b) Offering consultancy services to SSI Units in improving quality, standardisation and providing necessary information relating to specifications of raw materials and finished products.

  2. The financial assistance under this Scheme of 1995 is equal to 50% of the cost of machinery and equipment, restricted to Rs. 20 lakhs in each case, provided the State Govt. also commits itself to release matching funds to the Association, and the Association provides fully developed infrastructure to accommodate testing centers and meet the recurring cost of running the Centre. This Scheme has also been extended to States for modernisation and expansion of the existing Quality Marking Centres run by the Industries Department of the State Govts. Since November 1997.
  3. During the past 5 years of its operation, the scheme has not shown the desired results because some of the State Govts. could not commit the matching contribution due the budgetary constraints; the upper limit of Rs. 20 lakhs as central assistance has not been found attractive enough and the procedural delay in releasing the funds to the Associations through States causes inconvenience.

  4. Govt. of India have, therefore, reviewed the scheme and it has been decided to modify it by raising the upper limit of the central assistance from Rs.20 lakh to Rs. 50 lakh without any condition of matching contribution by the State Govt. This modification is also in accordance with the package of incentives for SSIs announced by Hon’ble Prime Minister, while inaugurating the National Conference on Small Scale *Industries at New Delhi on 30th August, 2000. The package of incentives includes inter alia a one time capital grant equal to 50% of the cost of testing machinery/equipment limiting to Rs. 50 lakh to the Small Scale Industries Associations which wish to set up and operate testing laboratories, provided such laboratories are of international standards. The cost of infrastructure facilities like land and buildings, 50% cost of the machinery/equipments and the recurring cost would be met by the Industries Associations.
  5. Accordingly, I am directed to convey the approval of Govt. of India, to the modification of the scheme as given below:

    1. The Industry Associations including Chambers of Commerce and Industry and Industrial Cooperatives and registered under the Societies Registration Act or under any other Statutory Act will be eligible to claim financial assistance for setting up Testing Laboratories/Centers.
    2. The Scheme will also cover expansion/modernisation of existing centers under the aegis of State Govt. or State Govt. funded autonomous bodies.
    3. The financial assistance will be equal to 50% of the cost of testing machinery/equipment restricted to Rs, 50 lakhs in each case, without any condition of matching contribution from the State Govt.
    4. Other conditions of financial assistance will be:

      • The applicant association constitutes an exclusive Governing Council to look after the work of the Testing Centre.
      • The Governing Council will also have a representative of State Govt.
      • The employees of the Testing Centre will have functional freedom.
      • The Association will not dispose off any of the assets created out of grant-in-aid received from Govt. without its prior permission.

  6. Procedure for claiming grant-in-aid:

    1. The Registered Industries Associations desirous of setting up of Testing Centers would prepare a Project document containing details of cost estimates, funding pattern, financial viability etc. and submit it to the Director of Industries of the State, who would forward the same to Office the Development Commissioner, Small Scale Industries, Nirman Bahaman, New Delhi-110011, along with their recommendations for sanctioning Central assistance to Industry Association under the scheme for procurement of machinery/equipments. For examination of the Project document and verifications of expenditure details, a Committee under the Chairmanship of Commissioner/Director of Industries and Director of concerned Regional Testing Centre (RTC) will be formed. The Committee may co-opt any other representative to assist it.
    2. 'In case the Associations/State Govts. have availed themselves of any other grant-in-aid from the State/Central Govt. for setting up of the testing centers including the assistance under the earlier Scheme they may indicate so and prepare a fresh project proposal for expansion of testing centers/modernisation of Quality Marking Centre to international standards and forward the same to the Office of the DC(SSI) through the Director of Industries of the State with their recommendation.

    3. A Screening Committee shall be set up with AS&DC(SSI) as Chairman and representatives of Deptt. of Science and Technology, BIS, State Govt., IF Wing of Ministry, IA(Modn) and Director (RTC) as Member- Secretary to consider the proposal received from the States and sanction the Central grant-in-aid direct to the beneficiary association, which would be disbursed only after the Association creates infrastructure like land & building, finalise the list of machinery/equipment to be procured and submit a formal application to the Office of the DC(SSI) (in the prescribed form) through the State Govt. Depending on the progress in the implementation of the project, central assistance will be released in two instalments of Rs. 22.50 lakh each, provided the beneficiary Industry Association/ Quality Marking Centre of the State Govt., furnishes proof of having invested/ mobilised atleast an equivalent amount . The last instalment of Rs. 5 lakh would be released only after the testing laboratory of the Industry Association/ Quality Marking Centre of the State Govt., has obtained accreditation from BIS/ NABL/ any other reputed International Organisation or its authorised representatives.

  7. The modified scheme will be in operation for a period of five years w.e.f. 2001-2002 and the existing scheme as mentioned in Paras 1& 2 above will be subsumed in the modified scheme and it shall cease to be in operation.

The detailed guidelines of modified schemes are enclosed for ready reference.

This issues with the concurrence of Integrated Finance Wing of Ministry of SSI&ARI vide their Dy. No. 922/Fin.1/2001 dated 11.5.2001.

Yours faithfully,
Encl: As stated.
Tele.No. 3018544

Copy to :

Pay & Accounts Office, O/o DC(SSI)
I.F.Wing, Udyog Bhavan, New Delhi

Planning Commission (VSI Division) (Shri S.G. Raoot, Dy.Adviser)
Ministry of Finance, (Plan Finance Divn)
Director, Regional Testing Centres, New Delhi, Mumbai, Calcutta and Chennai.
All IAs/JDC/Directors at HQrs of DC(SSI)
Guard file