SIKKIM INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD (SIDCO)

Introduction : 
 
Sikkim Industrial Development & Investment Corporation Ltd. (SIDICO) was set up in the year 1977 as a company under the Registration of Companies Act, Sikkim, 1961 for the development of small and medium scale industries in the State and to perform the twin role of State Industrial Development Corporation and State Financial Corporation. Financial assistance is made available by the Corporation for fixed assets such as land, building, plant and machinery etc. with an ultimate objective of setting up of industries in the States. The upper limit for grant of loan is Rs.90 lacs for individual units. Term loans are extended to new industrial units as also to existing units for supporting their expansion, diversification, modernisation and rehabilitation programmes. 
 
Functions and Objectives :

  • Promotion, Financing and Development of tiny, cottage, small and medium sector in the State of Sikkim.
  • Providing soft loan/seed capital assistance.
  • Participating in the equity capital in selective venture projects.
  • Procuring and distributing raw-materials for selective industries/activities.
Type of industries eligible for assistance : 

Loans are admissible for undermentioned activities :- 

  • Any industrial activity either manufacture, processing or preservation of goods.
  • Hotels and restaurants.
  • Tourism development and related activities.
  • Transportation of passengers and goods.
  • Service sector units like Computer & Software Development.
  • Diagnostic Centre, Nursing Home, Medical Equipment.
  • Diagnostic Centre, Nursing Home, Medical Equipments, Pathological, Clinical Labs, Health Care Centres etc.
  • Assembling repairing or packing any articles with the aid of machinery or power.
  • Such other activities which may be made eligible by IDBI/SIDBI from time to time.
Authorised and Paid-up Capital :
 
The authorised capital of the Corporation is Rs.20 crores. The subscribed and paid-up capital is Rs.14.74 crores as on March 31, 1999. The Government of Sikkim is holding equity of Rs.8.37 crores and IDBI Rs.6.37 crores. 

Performance as on March 1999 :
 
The equity participation of the Corporation as on March 1999 is as follows :- 

No. of Units        : 15 
Amount invested  : Rs. 2.42 crores. 
 
The Scheme-wise classification of loans sanctioned upto 31.03.1999 is reproduced below:- 
                                                                                                  (Rs. in crores) 

S.NO. DESCRIPTION  NO. AMOUNT
1. Composite Loans 806 2.04
 2.  Small Scale Industries  248 17.54
3. Hotel Industry 430 10.11
4. Single Vehicle Operator 344 3.78
 5.  Others 1483 5.20
TOTAL 3311 38.67
 
During the last few years, the tourism related activities occupy a major place in sanction and disbursement. The performance of the Corporation for the last four years is as follows :- 

                                                                                                                            (Rs. in crores) 

S.NO.  YEAR SANCTION DISBURSEMENT RECOVERY
 1.  1995-96 3.26  1.80 2.05
2. 1996-97  2.33 1.91 2.98
3. 1997-98 1.47  1.20 2.87
4. 1998-99 2.13 2.09  2.41

Recoveries : 

The recovery of dues from the assisted units continue to occupy the prime source of funds for the institution. Better recovery would help the Corporation reduce its non-performing assets as well as facilitate recycling of funds which are at present locked up in unproductive assets.
 

One Time Settlement (OTS) was pursued as a serious recovery strategy wherever it was found to be the best available exit route for the Corporation. The Corporation put special efforts for OTS in respect of old and sticky accounts in order to facilitate better recycling of funds at current lending rates, although prima-facie such OTS entailed some sacrifice in respect of accrued interest etc. 

Thrust Areas :
 
The State Government has identified certain thrust areas for concentrated industrial development which will enjoy additional incentives as under : - 

  • Agro-based industries.
  • Floriculture.
  • Animal Husbandry and Dairy Products.
  • Minor Forest based produce.
  • Handloom, handicrafts and village industries.
  • Tourism.
  • Precision oriented, High Value, Low Volume products.
  • Electronic and Software.
  • Hydel Power and 
  • Tea
State Capital Investment Subsidy : 
 
An investment subsidy on the total investment shall be provided on a graded level to the industry. 

It will be available to both new units as well as those carrying out expansion, diversification or modernisation activities. 
 

Artisan and Tiny Scale Units Units  Small Scale Units Medium / Large Scale
15 percent of total capital investment in plant and machinery. 10 percent of total capital investment in plant and machinery, subject to a maximum of Rs.5 lakhs. 5 percent of total capital investment in plant and machinery, subject to a maximum of Rs.10 lakhs.
 
For units set up in the thrust areas, a larger subsidy will be provided as follows : 
 
Artisan and Tiny Scale Units Units Small Scale Units Medium / Large Scale
10 percent of total capital investment in plant and machinery. 15 percent of total capital investment in plant and machinery, subject to a maximum of Rs.7 lakhs. 10 percent of total capital investment in plant and machinery, subject to a maximum of Rs.15 lakhs.

Subsidy on Interest on Working Capital : 
 
This subsidy will be provided for interest in excess of 14 percent of the interest payable by industrial units on the working capital loan obtained from banks. It will be provided for a period of 5 years as follows : - 
 

Artisan and Tiny Scale Units Units Small Scale Units Medium / Large Scale
Rs.10,000/- or actual difference in interest, whichever is less. Rs.50,000 or actual difference in interest, whichever is less. Rs.1,00,000/- or actual, difference in interest, whichever is less.
 
For units set up in the thrust area, a larger subsidy will be provided as follows : 
 
Artisan and Tiny Scale Units Units Small Scale Units Medium / Large Scale
Rs. 15,000/- or actual difference in interest, whichever is less. Rs. 60,000 or actual difference in interest, whichever is less. Rs. 1,10,000/- or actual, difference in interest, whichever is less.

Concession on State and Central Sales Tax :
 
Central and State Sales Tax shall be exempted for a period of 7 years, from the date of commencement of actual commercial production.  
 
Price Preference :
 
A price preference shall be admissible to industrial undertakings established in Sikkim, on the purchases made by various State Government Departments and Organisations, over the rates quoted for similar products brought in from outside the State. The preference will however, be admissible provided the goods are of equivalent quality to those brought in from outside the state. The preference will be 15 per cent in case of small scale and tiny undertakings and 10 per cent for all other units. 
 
Subsidy on captive Power Generating Sets :
 
In order to encourage and assist industrial units to be self-sufficient in their requirements of power 
the State Government shall subsidise upto 25 percent of the cost for purchase of captive power generating sets, subject to a maximum of Rs.One Lakh. Industries set up in the thrust area shall get a 30 per cent subsidy, subject to a maximum of Rs.1.25 Lakhs.  
 
Subsidy on Power Consumption :
 
An industrial unit consuming power upto Rs.50,000/- per annum shall be eligible for 100 per cent reimbursement. For units consuming power above Rs.50,000/- per annum, the reimbursement will be to the extent of Rs.50,000/- plus 25 percent of the balance actual payment subject to a maximum of Rs.2 lakhs per annum, in total. 

The State Government shall grant a subsidy of 30 per cent in power tariff to industrial units coming up at approved locations or in thrust areas. 
 
Subsidy on Consultancy Service 
 
An industrial unit shall receive a one-time subsidy on consultancy charge paid to an approved consultant as per the scale noted below :- 

For Project upto Rs.10 Lakhs    : 3 percent subject to a maximum of Rs. 20,000/- 
For Project above Rs.10 Lakhs  : 3 percent subject to a maximum of Rs. 1,00,000/ 

Subsidy on Study Tours and Inplant Training
 
Entrepreneurs sent outside Sikkim with the approval of the Director of Industries for study tours and/or inplant training shall be eligible for reimbursement of the return journey expenses of second class by train and an allowance of Rs.1,000/- per mensem per entrepreneur. 

Provided that the period of such a study tour/inplant training does not exceed three months and the entrepreneur shall give an undertaking in writing to the Department of Industries that he shall start an industrial unit after obtaining the necessary technical know-how of the industry concerned. The study tour and inplant training for a period not exceeding three months may also be made available for workers who are sent outside the State. 

Provided that the industrial unit sending such workers obtain an undertaking from them that they shall work in unit atleast for a period of three years from the date they complete training. Reimbursement of expenditure on return journey of second class by train and allowance of Rs.500 per workers shall be eligible to the industrial unit concerned in such cases. 

Exemption of Security Deposit and/or Earnest Money 
 
Industrial units shall be exempted from the payment of security deposits and/or earnest money in respect of tenders or quotations for purchase of stores by Government Departments. 

International Standard Organisation/Indian Standard Institute Certification 
 
The State Governement shall encourage the small scale industries to obtain Indian Standard Institute/International Standard Organisation Certification for their products to enable them to compete at the State and National level. For this purpose the State Government shall reimburse 100 percent of the expenditure incurred on registration fee, testing fee, annual licence fee and purchase of testing equipment, subject to actuals upto a maximum limit of Rs.25,000/-.This limit shall be Rs.30,000/- for units set up in thrust areas. 

Subsidy of Registration fee of Promotion Council, Indian Standard Institution, Commodity Board, Chamber of Commerce :
 
The amount spent by an industrial unit in obtaining a registration with Promotion Council. Indian Standards Institution, Commodity Board, Chamber of Commerce, etc. shall be reimbursed to the unit, subject to a maximum of Rs.10,000/- or the actual registration fee whichever is less. 

Deferment of Excise Duty 
 
An industrial unit shall be allowed to defer State Excise Duty accumulated during the first three years which shall be recovered in suitable instalments within the next five years. There shall be no interest on account of the excise duty so deferred.