SUPPORT SERVICES OFFERED TO MSME SECTOR

The Corporation continued providing following support services to help the MSME sector to

increase their business and reach to enhance their competitiveness. NSIC provides

integrated support services in the areas of Marketing, Technology, Finance, etc.

NSIC is also implementing the schemes of Marketing Assistance and Performance & Credit

Rating on behalf of the Ministry of Micro, Small & Medium Enterprises. The brief details are

given below:-

1. Marketing Support

Marketing has been identified as one of the most important tools for business

development. It is critical for the growth and survival of MSMEs in today’s intensely

competitive market. NSIC acts as a facilitator and has devised a number of schemes to

support enterprises in their marketing efforts, both in domestic and foreign markets.

These schemes are briefly described as under:-

A. Raw Material Distribution:

In this direction, the Corporation has signed agreements /MoUs with the major bulk

producers i.e.NALCO, BALCO - for Aluminium, SAIL,RINL - for Iron Steel, CPCL - for

ParaffinWax, CIL - for Coal and IOCL - for Polymer products etc. These arrangements

facilitate MSMEs in getting material at the manufacturer’s price with the priority of

dispatch. This results into reduction in the cost of production and making the products

of MSMEs competitive in the domestics well as international markets. These efforts of

the Corporation supplement the programmers of the Government aimed in making

Indian MSMEs globally competitive.

B. Consortia and Tender Marketing:

Micro& Small Enterprises (MSEs) in their individual capacity face problems to procure

and execute large orders, which deny them a level-playing field vis-à-vis large

enterprises.

NSIC, accordingly forms consortia of micro & small units manufacturing the same

products, there by pooling in their capacity which provides comfort level to the

concerned MSEs as suppliers and also to buyers. The Corporation applies for tenders on

behalf of consortia of MSEs and secures orders for bulk quantities. These orders are

then distributed amongst MSEs in tune with their production capacity.

C. Single Point Registration for Government Purchase:

NSIC operates a Single Point Registration Scheme under the Government Purchase

Programme. The micro and small enterprises registered under this Scheme get the

following facilities:-

I. Issue of Tenders free of cost.

II. Advance intimation of Tenders issued by DGS&D.

III. Exemption from payment of EarnestMoney Deposit (EMD).

IV. The tender participating MSEs quoting price within price band of L1+15% shall

also be allowed to supply a portion upto 20% of requirement by bringing down

their price to L1 price where L1 is non-MSE

V. Issue of competency certificate.

D. Exhibitions:

To show case the competencies of Indian MSMEs, NSIC facilitates MSMEs participations

in International Exhibitions, Fairs, etc. on concessional terms under the Marketing

Assistance Scheme of the M/o MSME through partially meeting the cost towards rent of

stall as well as air fare. Participation in these events exposes MSMEs to international

practices and enhances their business prowess. Through participation in these events,

MSMEs are also facilitated to capture new markets making them globally competitive.

E. Buyer – Seller Meets:

Large and institutional buyers such as Railways, Defence, Communication Departments

and large companies are invited to participate in buyer-seller meets to enrich micro &

small enterprises’ knowledge regarding terms and conditions, quality standards etc.

required by the buyers. These meets are aimed at vendor development from MSEs for

the bulk manufacturers.

F. Marketing Assistance Scheme:

This is an ongoing scheme of the M/o MSME, for providing marketing support to

MSMEs.

The scheme is being implemented through the Corporation. Marketing, a strategic tool

for business development, is critical for the growth and survival of MSMEs in today’s

intensely competitive market. One of the major challenges before the MSME sector is to

market their products/ services.

The main objectives of the scheme is to enhance the marketing competitiveness of

MSMEs; to provide them a platform for interaction with the individual/institutional

buyers; to update them with prevalent market scenario and to provide them a forum for

redressing their problems.

MSMEs are supported under the Scheme for capturing the new market opportunities

through organizing/ participating in various domestic & international exhibitions/ trade

fairs, Buyer-Seller meets, intensive campaigns and other marketing events.

2. Technology Support

A. Technology is the key to enhance a unit’s competitive advantage in today’s dynamic

information age. MSMEs need to develop and implement a technology strategy in

addition to financial, marketing and operational strategies and adopt the one that helps

in integrating their operations with their environment, customers and suppliers.

B. NSIC offers MSMEs the following technology support services through its Technical

Services Centers and Extension Centers:

I. Material testing facilities through accredited laboratories

II. Product design including CAD;

III. Common facility support in machining,EDM, CNC, etc.

IV. Energy and environment services at selected Centres

V. Practical training for skill upgradation

3. Credit Support

The Corporation is providing Credit Facilitation to MSMEs through its various schemes.

During 2013-14 total credit facilitation of Rs. 5,162 crore and (upto February, 2014, Rs.

4419 crore was provided). The various schemes providing Credit Support to MSMEs are

as under:

I. Meeting Credit Needs of MSMEs through tie-up arrangements with Banks One of the

major challenges faced by MSMEs is inadequate access to finance due to lack of

financial information and non-formal business practices. To overcome these

problems, NSIC has entered into tie-up arrangements with various Banks for

providing Credit Facilitation to the MSME sector.

II. Financing Procurement of Raw Materials & Marketing Activities (Short term) NSIC

facilitates raw material requirement of the MSMEs by making arrangements with

bulk manufacturers for procuring the materials and supplying the same to MSMEs.

In case they need any credit support, NSIC provides financial assistance for raw

material procurement by making the payment to suppliers. NSIC facilitates financing

for marketing activities such as Internal Marketing, Exports and Bill Discounting to

micro, small & medium enterprises.

III. Performance & Credit Rating Scheme for Small Enterprises On behalf of the M/o

MSME, NSIC is implementing “Performance & Credit Rating Scheme” for Micro and

Small Enterprises (MSEs). The scheme is being operated through accredited rating

agencies i.e. CARE, CRISIL, India Rating (Formerly known as FITCH), ICRA, ONICRA,

SMERA and Brickwork Rating.The fee to be paid by the MSEs for the rating, is

subsidized by the Government to the extent of 75% of the rating fee up to a

maximum of Rs.40,000/-. The scheme has become quite popular and getting good

response. The rating serves as a trusted third party opinion on the unit’s capabilities

and credit worthiness. A good rating enhances the acceptability of the rated unit in

the market and also facilitates its access to quicker and cheaper credit and thus

helps in economizing the cost of credit.Under the Performance & Credit Rating

Scheme, 19,676 units were rated during the year 2012-13 as against 13,547 in the

year 2011-12. The units rated during 2013-14 (upto February,2014) are 22,263 as

against 17,208 (upto February,2013).

4. Support Services

One of the problems faced by the entrepreneurs is the scarcity of suitable space where

they can set up their offices or can exhibit their products for their wider publicity and

easy marketability under one roof. In order to give a boost to MSMEs, NSIC has taken

the following projects in this regard:-

A. Marketing Intelligence Cell

NSIC had established a Marketing Intelligence Cell for collecting and disseminating both

domestic and international marketing intelligence in coordination with other concerned

departments / agencies. Marketing Intelligence Cell is acquiring and analyzing information

in order to understand the market (both existing and potential customers) to determine the

current and future needs and preferences, attitudes and behaviour of the market, assess

changes in the business environment that may affect the size and nature of the market in

future. This aims to promote business horizons of MSMEs of India through Marketing

Intelligence Web Portal. The beneficiaries are MSMEs seeking business collaborations and

co-production opportunities, joint ventures, exporters and importers and those looking for

technology transfer.

B. Promoting International Trade through NSIC’s E-Marketing Web Portal

NSIC has expanded its existing B2B Web Portal into an Integrated E-Marketing Web Portal

www.msmemart.com that is not only useful for generation of leads for expanding

businesses but it is also the most economical and fastest medium for brand creation,

recognition of small enterprises and marketing of their products.

C. NSIC-Training-cum-Incubation Centres (NSIC-TICs) for promoting Entrepreneurship

Training-cum-Incubation Centres were started in year 2008 by NSIC with a view to create

self-employment opportunities by imparting training to the unemployed people who want

to set up new small business enterprises in any of the manufacturing / services sectors or

seek employment opportunities. The scheme is being operated under PPP [Private Public

Partnership] mode where private partners are associated with NSIC. Corporation offers

technical & other support services to associated TICs with a view to achieve the objectives

of the programme. NSIC Trainingcum- Incubation Centres provide a unique opportunity to

first generation entrepreneurs to acquire skills for enterprise building and also help to

incubate them to become successful small business owners. At these centres, exposure in

all areas of business operations is provided such as business skills, ideas for structure of an

enterprise, identification of appropriate technologies, hands on experience on working

projects, financial linkages etc. In the year 2013-14, thirteen more new centers were

operationalised. As a result of this, now 81 such centres are operational covering 19 states.

5. INTERNATIONAL CO-OPERATION ACTIVITIES

Under International Cooperation, the focus of activities at the enterprise level is on the

entrepreneurs and the objective is to initiate long term and sustainable enterprise to

enterprise cooperation between Indian small enterprises and enterprises in target

countries.

This is achieved by exchanging business delegations and organizing one-on-one business

meetings among the enterprises of both the countries.

Main features of International Cooperation are:

Exchange of Business / Technology missions with various countries;

Facilitating Enterprise to Enterprisecooperation, Technology Transfers & other forms of

sustainable collaboration;

Explore new markets & areas of cooperation;

Identification of new export markets by participating in exhibitions abroad;

Sharing of Indian experiences with other developing countries.

POLICY INITIATIVES

1. RESERVATION/DE-RESERVATION OF PRODUCTS FOR MANUFACTURE IN THE MICRO

AND SMALL ENTERPRISE SECTOR:

A. The Policy of Reservation of Products for Exclusive Manufacture in SSI (now MSEs) was

initiated in 1967 with the objective of achieving socio-economic development, through

development and promotion of small units all over the country. This was expected to

result in countering the challenges of regional industrial imbalances, employment

generation through self-employment ventures, increased productivity, etc. However,

with the gradual opening up of the economy, de-reservation had to be resorted to for

providing opportunities to MSEs for technological upgradation promotion of exports

and achieving economies of scale. Accordingly, the MSEs are being encouraged to

modernize and enhance their competitiveness for facing the challenges arising out of

liberalization and globalisation of the economy.

B. The items are reserved/de-reserved in accordance with Section 29(B) of the Industries

(Development & Regulation) Act, 1951, which, inter-alia, provides for the constitution of

an Advisory Committee headed by the Secretary (MSME). The Advisory Committee

makes its recommendations for reservation/dereservation in light of the factors like

economies of scale; level of employment; possibility of encouraging and diffusing

entrepreneurship in industry; prevention of concentration of economic power and any

other factor which the Committee may think appropriate. At present, only 20 items are

reserved for exclusive manufacture in micro and small enterprise sector. A list of items

reserved for exclusive manufacture in micro and small enterprises sector are given

below.

LIST OF ITEMS RESERVED FOR EXCLUSIVE MANUFACTURE BY MICRO AND SMALL ENTERPRISE

SECTOR

I. Pickles & chutneys

II. Bread

III. Mustard Oil (except solvent extracted)

IV. Ground nut oil (except solvent extracted)

WOOD AND WOOD PRODUCTS

I. Wooden furniture and fixtures

PAPER PRODUCTS

I. Exercise books and registers

OTHER CHEMICALS AND CHEMICAL PRODUCTS

I. Wax candles

II. Laundry soap

III. Safety matches

IV. Fire works

V. Agarbatties

GLASS AND CERAMICS

I. Glass bangles

MECHANICAL ENGG. EXCLUDING TRANSPORT EQUIPMENT

I. Steel almirah

II. Rolling shutters

III. Steel chairs-All types

IV. Steel tables-All other types

V. Steel furniture-All other types

VI. Padlocks

VII. Stainless steel utensils

VIII. Domestic utensils

2. .NATIONAL MANUFACTURING COMPETITIVENESS PROGRAMME (NMCP)

Providing competitive edge to the units in the MSME Sector in the global environment, has

been one of the important cornerstones of the policies being pursued by the Government

for sustenance of the sector. With a view to build the capacity of the Indian micro, small and

medium manufacturing enterprises for overcoming competition in the global markets and

facing challenges being posed by the entry of the multinationals in the domestic markets,

the M/o MSME is implementing the National Manufacturing Competitiveness Programme

(NMCP). The objective of NMCP is to ensure healthy growth of the MSME Manufacturing

Sector.

3. PUBLIC PROCUREMENT POLICY FOR GOODS PRODUCED AND SERVICES RENDERED BY

MICRO AND SMALL ENTERPRISES (MSEs)

A. In exercise of the powers conferred under Section 11 of the Micro, Small and Medium

Enterprises Development Act, 2006, the Government of India has notified Public

Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012 which is

applicable to every Central Ministry / Department / PSU for effective implementation

w.e.f. 1st April, 2012.

B. The Policy mandates that every Central Ministry / Department / Public Sector

Undertaking shall set an annual goal of procurement from Micro and Small Enterprises

from the financial year 2012-13 and onwards, with the objective of achieving an overall

procurement of minimum of 20 percent of total annual purchases of products produced

and services rendered by Micro and SmallEnterprises, in a period of three years.

C. Every Central Government Ministry / Department / PSU shall report the goals set with

respect to procurement to be met from MSEs and the achievement made thereto in

their respective Annual Reports. They shall also prepare Annual Procurement Plan for

purchases and upload the same on their official website so that Micro and Small

Enterprises may get advance information about requirement of procurement agencies.

All the Chief Ministers of State Governments have also been advised to formulate

similar policy for MSEs in their states. A Grievances cell has been constituted for

redressal of the grievances for MSEs.

D. The Policy will help to promote MSEs by improving their market access and

competitiveness through increased participation by MSEs in Government purchases and

encouraging linkages between MSEs and large enterprises.

The Ministry of Micro, Small and Medium Enterprises is the nodal Ministry for formulation of

policies, programmes and schemes, their implementation and related co-ordination, for the

promotion and development of small scale industries in India. The role of the Ministry is to

assist the States in their efforts for the growth of the small scale sector, by enhanci ng their

competitiveness in an increasingly liberalised economy. It is assisted by an attached office and

two public sector enterprise, namely:-

A. Micro, Small and Medium Enterprises Development Organisation (MSME-DO):-

The Office of the Development Commissioner (Micro, Small and Medium Enterprises)

[earlier known as the O/o the DC (SSI)] is also known as Micro, Small and Medium

Enterprises-Development Organisation (MSME-DO). It is the apex body for assisting the

Government in formulating, coordinating, implementing and monitoring policies and

programmes for micro, small and medium enterprises (MSMEs) in the country. MSME-DO

provides a comprehensive range of common facilities, technology support services,

marketing assistance, entrepreneurial development support, etc.

B. National Small Industries Corporation Ltd (NSIC) :-

It was established by the Government with a view to promoting, aiding and fostering the

growth of micro, small and medium enterprises in the country, with a focus on commercial

aspect of their operations. It implements several schemes to help the MSMEs in the areas of

raw material procurement, product marketing, credit rating, acquisition of technologies,

adoption of improved management practices, etc.

C. Khadi and Village Industries Commission (KVIC) :-

Established under the Khadi and Village Industries Commission Act, 1956, as a statutory

organisation engaged in promotion and development of khadi and village industries for

providing employment opportunities in the rural areas.

D. Coir Board :-

it is a statutory body, established under the Coir Industry Act, 1953, for the promotion and

development of coir industry in India as well as for uplifting the living conditions of the

workers engaged in this industry.

For unorganized sectors

Also, a National Commission on Enterprises in the Unorganised Sector (NCEUS) has been

set up for addressing the wide range of issues affecting the productive potential of the

unorganised micro and small productive units.

Besides, there are three national level 'Entrepreneurship Development Institutes (EDIs)' for

the development of training modules, undertaking research and providing consultancy

services for entrepreneurship development in the small scale sector. These include:-

1. National Institute of Small Industry Extension Training (NISIET) renamed as the National

Institute for Micro, small and Medium Enterprises (NIMSME) at Hyderabad

2. National Institute of Entrepreneurship and Small Business Development (NIESBUD) at Noida

3. Indian Institute of Entrepreneurship (IIE) at Guwahat

Certain Incentives

1. Fiscal incentives

Fiscal incentives are provided through tax concessions granted in the form of exempted of

direct or indirect taxes leviable on production or profits, besides special tax concessions.

These incentives have been provided to promote the SSIs and discussed in following:

A. Tax Holiday

With effect from financial year 2005-06, deduction in respect of profit and gains for small

scale industrial undertaking is available under Section 80IB.

Small scale industrial undertaking can claim deduction at the following rates:

o If SSI unit is owned by a company , the deduction available is 30% for first 10 year,

o If SSI unit is owned by a co-cooperative society, the deduction to be availed is 25%

for first 10 years, and

o If any other person owns SSI units ,the deduction to be claimed is 25% for first 10

years.

B. TAX EXEMPTION CONDITIONS

No small scale or ancillary undertaking shall be subsidiary of, or owned or controlled by

other industries undertaking.

The SSI unit should commence business between 1st April1991 and 31st March 2002.

SSI unit can manufacture any nature/type of goods /article to avail deduction.

They should employ at least 10 workers in manufacturing process carried out with aid of

power or at least 20 worker in manufacturing process carried out without the aid of

power.

This tax exemption from total income is allowed from the assessment year in which the

unit being to manufacture or produce goods or articles.

C. EXCISE CONCESSIONS

Government of India has provided a major relief by grating full exemption from the

payment of central excise duty on a specified output and thereafter slab-wise concessions.

The following concessions are available to them in this regard:

i. SS units producing goods up to Rs.100 lakhs are exempted from payment of excise

duties.

ii. SSI units having turnover less than Rs.60 lakhs per annum need not have a separate

storeroom for storing the finished products.

iii. SSIs are also not required to maintain any statutory records such as daily stock

account of production and clearance , raw material account ,personal ledger account

etc. their own record are adequate for excise purpose.

iv. There is no distinction between registered and unregistered units for SSI concessions

for SSIs has been based on annual turnover rather than SSI registration . Duty

liability is to be discharged by 15th of following month.

v. The SSI exemption is available for home consumption ,as well as in respect of goods

exported to Nepal & Bhutan.

vi. Normally ,excise officers are not expected to visit SSI units paying less than

Rs.11lakhs duty annually .

vii. With effect from 1-4-1994, Gate –Pass System was replaced by manufacturer invoice

to cover clearance of goods as the duty-paying document.

District Industries Center (DIC)

In each district one agency to deal with all requirements of small and village Industries. This

is called “District Industries Centre”

The District Industries Centres have undertaken various programmes for investment

promotion at the grassroot level such as a organizing seminars workshops, extending

support for trade fairs and exhibitions organized by various Industries associations.

All the services and support required by for MSME units under the single roof of the District

Industries Centre. The Centre has a separate wing to look-after the special needs of cottage

and house-hold industries as district from small industries.

Administration

General Manager is the head of the District Industries Centre. The post of General Manager

is of Joint / Deputy Commissioner level. The General Manager has senior officers to assist

him, such as Manager (Raw Material), Manager (Credit), Manage (Economic Investigation),

Manager (Marketing) Industrial Promotion Officer(IPO) and Technical Officer cum Project

Manager (PM)

Monitoring of DICs

The functioning of DICs and their achievement is monitored by Industries Commissioner,

Meeting of General Managers are organized frequently to evaluate the performance and

also help in resolving difficulties in implementation of different schemes. To resolve the

problems of industries/industrialists, there are two types of committee at the district level

viz.

1. District Industrial Executive Committee (DIEC)

DIEC is constituted for solving industry related problems and promoting industrial growth.

District Collector is the Chairman of this Committee and General Manager of DIC is the

Member Secretary. The other members of the DIEC are President of District Panchayat,

DDO, MP, MLAs, Prominent persons active in Industries in the district and members of all

district level industries associations.

2. Single Window Industrial Follow up Team (SWIFT)

Enterpreneurs face many difficulties when they start new industries. They have to deal with

many government agencies and get many clearances. SWIFT helps them in guiding solving

their problems at a single spot. This committee is working under the District Collector,

General Manager of DIC is the Member Secretary and District Development Officer is Vice

President of SWIFT. All industries related officers in the district are members of this

committee.

Functions of DICs

1. Registration

o EM Part-I acknowledgement

o EM Part-II acknowledgement

o C.S.P.O.

o Lubricating, Oil, Grease Licence

2. Recommendation

o Land recommendation for N.A.

3. Incentive Scheme

4. Seminars

o District or Taluka Level

o Buyer-Seller & Exhibition

5. Others Activities

o Recovery of Package Loan margin Money Loan & Subsidy

o Welfare of Salt Workers and Recovery of Royalty from Salt Workers.

o Follow up of Industrial Approvals.

o Follow up of units which have availed benefits under incentives schemes

6. Self Employment scheme

o Recommendation of loan applications under Vajpayee Bankable Scheme

o Recommendation of loan application under PMEGP Scheme

o Manav Kalyan Yojana – Tool kits to artisans.

7. Co-operative Package Scheme

o Package Scheme

o Handloom Development Scheme

o Training & Production centre

o Woolen Carpet Centre

o Weaving Scheme

o Recovery of Loan & Share contribution of Co-operative Societies

o Liquidation of Industrial Society

o Preparation of Project Profiles

o Audit of Industrial Society

o Gramodyog Vikas Kendra

o Hastakala Mela

Procedures

The main steps involve in setting up a Micro, Small & Medium Enterprise are as below :-

(a) Project Selection

(b) Technology and Machinery

(c) Arranging Finance

(d) Unit Development

(e) Filing of Entrepreneurs’ Memorandum & Addresses of DICs

(f) Approvals

(g) Clearances

(h) Quality Certification

TO START AN ACTIVITY

Product Selection : MSME Development Institute,

Registration : District Industry Centre of your city

Technical Assistance : MSME Development Institute, and

District Industry Centre of your city

Plot/Shed Distribution : K S S I D C., of your city or nearest city

Finance/Loan/Investment : KSFC, SIDBI,other Nationalized banks

PMREGP : District Industry Centre of your city

Hire and purchase of machinery : National Small Industry Corporation

Raw Materials : District Industry Centre of your city and Karnataka State Industrial Corporation

of your city

Industrial Management : MSME Development Institute and District Industry Centre of your city

License : District Industry Centre of your city and Local Bodies

Marketing : MSME Development Institute, and National Small Industry Corporation,

I. S. I. Mark : Bureau of Indian Standards, Peenya Indistrial Area I

Product Testing : Regional Testing Centre, Chennai

Patent Registration and Trademark : EPatents IP Services

License for compulsory

Products: Director, Technical Development, Udyog Bhawan, Delhi

Registration under factory act : Factory Investigator of your city

Pollution related clearance : Pollution Control Board of your city

Central Product Registration : Central Excise, Superintendent of your city

Sales Tax Registration : Sales Tax office of your city

Industrial Statistical Information : District Statistical officer of your city

Khadi and Gramodyog : District Khadi and Gramodyog officer of your city

Agriculture : Agriculture Department of your city and nearest any agriculture university

Handicrafts : Directorate of Handicrafts,

Electricity : KPTCl, BESCOM

NABARD : NABARD

How do one select an activity for self-employment?

For selecting an activity or enterprise, you will have to consider the following significant

issues:

1) Where do you want to promote the enterprise?

2) What resources are available near the location of the enterprise?

3) What kind of market or consumer pattern exists near the site of enterprise?

4) What kind of contacts you have to exploit to your advantage for marketing of the

product?

5) What infrastructure is available at the location of your enterprise?

6) How much capital is available?

Criteria For MSME

The “Micro, Small and Medium Enterprises Development (MSMED) Act, 2006” is the first

single comprehensive legislation in India, covering micro, small and medium enterprises.

Under the Act, the terms "medium sector" and "micro enterprises" have been defined for

the first time.

Also, the concept of ‘Industries’ has been widened to that of ‘Enterprises’. Enterprises have

been classified broadly into two categories, namely, enterprises engaged in the

manufacture/production of goods pertaining to any industry; and enterprises engaged in

providing/rendering of services. The term "enterprise" has been defined in terms of

investment in plant and machinery/ equipment (excluding land & building). Accordingly, the

definition of micro, small and medium enterprise is:-

Investment in plant and machinery/ equipment (excluding land and building)

Manufacturing Enterprises Service Enterprises

Micro Up to Rs. 25 lakh Up to Rs. 10 lakh

Small More than Rs. 25 lakh and up to Rs. 5

crore

More than Rs. 10 lakh and up to Rs 2 crore

Medium More than Rs. 5 crore and up to Rs. 10

crore

More than Rs. 2 crore and up to Rs. 5 crore

SIDBI

Main Schemes of SIDBI

National Equity Fund Scheme which provides equity support to small entrepreneurs setting

up projects in Tiny Sector.

1. Technology Development & Modernisation Fund Scheme for providing finance to existing

SSI units for technology upgradation/modernisation.

2. Single Window Scheme to provide both term loan for fixed assets and loan for working

capital capital through the same agency.

3. Composite Loan Scheme for equipment and/or working capital and also for work sheds to

artisans, village and cottage industries in Tiny Sector.

4. Mahila Udyam Nidhi (MUN) Scheme provides equity support to women entrepreneurs for

setting up projects in Tiny Sector.

5. Scheme for financing activities relating to marketing of SSI products which provides

assistance for undertaking various marketing related activities such as marketing research,

R&D, product upgradation, participation in trade fairs and exhibitions, adverti sing branding,

establishing distribution networks including show room, retail outlet, wears -housing facility,

etc.

6. Equipment Finance Scheme for acquisition of machinery/equipment including Diesel

Generator Sets which are not related to any specific project.

7. Venture Capital Scheme to encourage SSI ventures/sub- contracting units to acquire capital

equipment, as also requisite technology for building up of export capabilities/import

substitution including cost of total quality management and acquisition of ISO -9000

certification and for expansion of capacity.

8. ISO 9000 Scheme to meet the expenses on consultancy, documentation, audit, certification

fee, equipment and calibrating instruments required for obtaining ISO 9000 certification.

9. Micro Credit Scheme to meet the requirement of well managed Voluntary Agencies that are

in existence for at least 5 years; have a good track record and have established network and

experience in small savings-cum-credit programmes with Self Help Groups (SHGs)

individuals.

New Schemes

(i) To enhance the export capabilities of SSI units.

(ii) Scheme for Marketing Assistance.

(iii) Infrastructure Development Scheme.

(iv) Scheme for acquisition of ISO 9000 certification.

(v) Factoring Services and

(vi) Bills Re-discounting Scheme against inland supply bills of SSIs.

Major schemes

1. Technology Development & Modernisation Fund

SIDBI has set up Technology Development & Modernisation Fund (TDMF) scheme for direct

assistance of small sale industries to encourage existing industrial units in the sector, to

modernise their production facilities and adopt improved and updated technology so as to

strengthen their export capabilities. Assistance under the scheme is available for meeting

the expenditure on purchase of capital equipment acquisition of technical know-how,

upgradation of process technology and products with thrust on quality improvement,

improvement in packaging and cost of TQM and acquisition of ISO-9000 series certification.

SIDBI in July 1996 had permitted SFCs and promotional banks to grant loans for

modernisation projects costing upto Rs. 50 lakhs. The Coverage of the TDMF scheme has

been enlarged w.e.f. 1.9.1997. Non-exporting units and units which are graduating out of

SSI sector are now eligible to avail assistance under this scheme.

2. National Equity Fund

National Equity Fund (NEF) under Small Industries Development Bank of India (SIDBI)

provides equity type assistance to SSI units, tiny units at five per cent service charges. The

scope of this scheme was widened in 2000-01 raising the limit of loan from Rs. 6.25 lakhs to

Rs. 10 lakhs and project cost limit from Rs. 25 lakhs to Rs. 50 lakhs.

a. The following are eligible for assistance under the scheme:-

I. New projects in tiny and small scale sectors for manufacture, preservation or

processing of goods irrespective of the location (except for the units in Metropolitan

areas).

II. Existing tiny and small scale industrial units and service enterprises as mentioned

above (including those which have availed of NEF assistance earlier), undertaking

expansion, modernisation, technology upgradation and diversification irrespective

of location (except in Metropolitan areas).

III. Sick units in the tiny and small scale sectors including service enterprises as

mentioned above, which are considered potentially viable, irrespective of the

location of the units (except for the units in Metropolitan areas).

IV. All industrial activities and service activities (except Road Transport Operators).

b. Project cost (including margin money for working capital) should not exceed Rs. 50 lakhs in

the case of new projects in the case of existing units and service enterprises, the outlay on

expansion/modernisation/technology upgradation or diversification or rehabilitation should

not exceed Rs. 50 lakhs per project.

c. There is no change in the existing level of promoters' contribution at 10% of the project

cost. However, the ceiling on soft loan assistance under the Scheme has been enhanced

from the present level of 15% lakh per project to 25% of the project cost subject to a

maximum of Rs. 10 lakhs per project.

d. 30% of the investment is earmarked for tiny units.