Introductory Note on Ministry of SSI

8/7/2019 Introductory Note on Ministry of SSI

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INTRODUCTORY NOTE ON MINISTRY OF SMALL SCALE INDUSTRIES

1.1.1 The responsibility of promotion and development of small scaleindustries (SSI) lies primarily with the State/Union Territory (UT)Governments. However, in recognition of the role of this sector in both

creation of wealth and widespread employment and of the need for country-wide framework of policies and measures to facilitate its promotion anddevelopment, the Government of India has always supplemented the effortsof the States and UTs in several ways. Over the years, the CentralGovernment has thus formulated policy packages and implemented a numberof schemes and programmes, to mainly provide infrastructural, technological,credit, marketing and entrepreneurial development support to the SSI sector.

VISION AND ACTION PLAN OF THE MINISTRY

1.1.2 The vision of the Ministry of SSI is to create an enabling policy

environment and put in place corresponding support measures to help thesector meet the emerging challenges of competition and also harness theopportunities, in tandem with the accelerating pace of liberalisation andglobalisation of the Indian economy. The agenda of the Ministry, therefore,includes steps to develop an appropriate policy framework within which supplyof credit is improved, better infrastructural facilities are provided and targetedincentives are designed and extended to the enterprises in the sector for theirmodernisation and technology upgradation, improved market access,entrepreneurship development, skill upgradation and capacity building, both atthe level of individual firms and their clusters. The agenda takes cognisanceof the significant role played by information technology, sunrise, hi-tech andexport potent industries, on the one hand, and, the special needs of the tiny/micro-enterprises, on the other, as they constitute over 95 per cent of the totalpopulation of small scale industrial units in the country. The action plan thusincludes, inter alia, the following measures:

New legislation for micro, small and medium enterprises.

Strengthening credit delivery systems and rehabilitation of potentiallyviable sick units.

Fiscal support.

Technology upgradation for modernising micro and small enterprises,

including IT support. Bridging critical infrastructural gaps.

Extending comprehensive marketing support.

Promoting cluster development with wide-ranging measures forcomprehensive development and capacity building.

Promoting entrepreneurship development and encouraging skillimprovement.

Redefining the role of existing implementation mechanisms to makethem more responsive.

Strengthening bilateral and international cooperation.


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1.2 ORGANISATIONAL SET-UP

Most of the programmes and schemes for the development of thesector are implemented through two principal organisations of the Ministry.

These are:

i) Small Industries Development Organisation (SIDO); andii) National Small Industries Corporation (NSIC).

Besides, there are three national-level Entrepreneurship DevelopmentInstitutes at Hyderabad, Noida and Guwahati. A National Commission forEnterprises for Unorganised Sector (NCEUS) has also been set up recentlyby the Government with headquarters in New Delhi.

1.2.1 Small Industries Development Organisation (SIDO): The major

activities of SIDO, established in 1954, include:

Advising the Government on policy formulation for promotionand development and enhancement of competitiveness of small-scale industries.

Facilitating credit flow to micro and small enterprises throughsupport measures like the Credit Guarantee Fund Scheme.

Providing techno-economic and managerial consultancy,common facility and extension services to small-scale units.

Providing support measures for technology upgradation, (Credit

Linked Capital Subsidy Scheme), modernisation ofmanagement, product/process quality improvement (includingproduct testing and instrument/equipment calibration) andcreation and upgradation of infrastructure facilities throughindividual schemes/programmes as well as to clusters underSmall Industries Cluster Development Programme.

Human resource development through training and skillupgradation.

Providing economic information, including market analysis,services.

Market (including export) promotion measures and facilitating

linkage of small-scale industries as ancillaries to large andmedium scale industries.

Conducting periodical census/survey of the SSI and generatingdata/reports on various important parameters/indicators ofgrowth and development of the sector.

Maintaining close liaison with other Central Ministries, PlanningCommission, State Governments, Financial Institutions andother organisations concerned with the development of small-scale industries.

Maintaining a comprehensive web site for wide dissemination ofall relevant information relating to the activities of SIDO.


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An amount of Rs. 381.71 crore has been allocated for implementationof the Plan Schemes during 2006-07.

The Small Industries Development Organisation (SIDO) comprises theOffice of the Development Commissioner (Small Scale Industries) [DC (SSI)]

with headquarters in New Delhi, 30 Small Industries Service Institutes (SISIs),28 Branch SISIs, 4 Regional Testing Centres (RTCs), 7 Field Testing Stations(FTS), one Hand Tool Design Development Training Centre (HTDD&TC), andtwo Small Entrepreneurs Promotion and Training Institutes (SEPTI) at variouslocations in the country. It is an Attached Office of the Ministry of SSI. There isat least one SISI located in every State and in some cases more. The 4 RTCsare located at New Delhi, Mumbai, Chennai and Kolkata.

Several grantee institutions/autonomous bodies also function under theadministrative control of the SIDO. AS&DC (SSI) is the ex officio Chairman ofthe Governing Councils of these autonomous societies. The activities of these

societies range from research and development to tool design die making,process-cum-product development, training in footwear technology, etc.

1.2.2 National Small Industries Corporation Limited (NSIC) wasestablished in 1955 with a view to promoting, aiding, and fostering the growthof small scale industries and industry related small scale services / businessenterprises in the country, on a commercial footing. During the last 50 years,the Corporation expanded its activities in the areas of Marketing, Technology,Financing and Information Support to small enterprises in the country. Theemerging competitive business environment and dismantling of the marketbarriers provide an added impetus for enlarging the activities of NSIC. In linewith the current economic changes, the Corporation has introduced many newSchemes from time to time for the development of small enterprises. TheCorporation is now an ISO: 9001-2000 company, providing services ofmarketing assistance, technology upgradation and entrepreneurshipdevelopment. The scheme of assisting these enterprises in obtainingperformance cum credit rating is the latest initiative of the Governmentbeing implemented by the NSIC with the assistance of noted rating agenciesoperating in the country.

1.2.3 National Institute of Small Industry Extension Training (NISIET),

Hyderabad was set up in 1960 to assist in promotion, development, andmodernisation of small and medium enterprises (SMEs) in the country. Atpresent, the main activities of NISIET are entrepreneurship developmentrelated training programmes, training research and consultancy, including themethodology of cluster development.

1.2.4 National Institute for Entrepreneurship and Small BusinessDevelopment (NIESBUD), Noida: The major activities of the Institute,established in 1986, include, development of model syllabi for training ofvarious target groups, designing effective training strategies, methodology,manuals and tools, facilitating and supporting Central/State Governments and

other agencies in executing programmes of entrepreneurship and smallbusiness development, etc.


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1.2.5 Indian Institute of Entrepreneurship (IIE), Guwahati was establishedin 1993, with the aim of undertaking training, research and consultancyactivities in the small industry sector focusing on entrepreneurshipdevelopment as an autonomous national institute. IIE is working towards

strengthening the capacity in the field of entrepreneurship development,training, entrepreneurship education, research, consultancy, incubatorservices on gems and jewellery, publication and sensitisation of environmentfor promotion of entrepreneurship, enterprise creation and self-employment inthe North Eastern Region. IIE, Guwahati has also taken initiatives forproviding hand-holding services to the entrepreneurs in the North EasternRegion for which a Business Facilitation & Development Centre (BFDC) hasbeen set up with financial assistance from the Ministry.

1.2.6 National Commission for Enterprises in the Unorganised Sectorhas been set up by the Government as an advisory body and a watchdog for

the informal sector with a view to fulfilling the commitment in the NationalCommon Minimum Programme of the Government. The Commission willrecommend measures considered necessary for bringing about improvementin the productivity of these enterprises, generation of large scale employmentopportunities on a sustainable basis, particularly in the rural areas, enhancingthe competitiveness of the sector in the emerging global environment, linkageof the sector with institutional framework in areas such as credit, raw material,infrastructure, technology upgradation, marketing and formulation of suitablearrangements for skill development

1.3 TARGETS AND ACHIEVEMENTS

The small-scale sector has continued to play an important role in theIndian economy. This sector helps generate cost effective employment andaddress the problem of poverty through well dispersed economic growth.

According to estimates, based on the Third All-India Census of SSIwith references year of 2001-02, there are about 118.60 lakh smallenterprises (2004-05) in the country contributing more than 39 per cent of thetotal industrial production in the manufacturing sector. It provides employmentto about 282.91 lakh persons (2004-05), which is second only to that in the

agriculture sector.

The SSI sector has, over the years, generally recorded higher growthrate than the industry sector as a whole. Indicative physical targets andachievements in respect of production, employment and exports are given inthe table below:


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2004-2005 2005-2006 2006-07Target Target Achieve-

MentTarget Achievement

(Anticipated)Target

1.Prodution(Rs. crore at

current prices)

429548 412450* 493405 493405 566404

2.Employment(lakh persons)

275.73 282.91 284.53 284.53 293.33

3.Export (Rs.crore at currentprices) @

93653 NA 107701 NA 126107

NA-Not available yet.*Estimate based on the growth rate achieved during April to December2004.@ Source: Target for export recommended by a sub group under the

chairmanship of CMD, NSIC.

1.4 PLAN OUTLAY(LIKELYBUDGET ALLOCATION) FOR 2006-07

The Plan schemes of the Ministry provide support for the developmentand promotion of small scale sector in the form of infrastructure development,technology up-gradation, human resource development, enhanced creditavailability, market development, etc. In order to continue these activities, thePlan outlay allocated for 2006-07 is 469.93 crore, as against Rs.412.26 crorein the BE, 2005-06. As in the previous years, a major portion of the Planoutlay is for the Credit Guarantee Fund Scheme (Rs.118.10 crore), Credit

Linked Capital Subsidy Scheme (Rs.61.81 crore), and Scheme forTechnology Up-gradation (Rs.62.93 crore).

A promotional package for the small-scale sector is under preparationand is likely to be announced shortly. The Plan outlay for 2006-07 would needto be augmented to accommodate the requirement of funds for this purpose.

The National Manufacturing Competitiveness Council has recentlyapproved a National Manufacturing Competitiveness Programme, with focuson small and medium enterprises. It is expected that the Plan outlay for 2006-07 would be able to accommodate the funds needed for startingimplementation of this programme during 2006-07.

The NCEUS has also initiated steps for formulating pilot project(s) ofGrowth Poles (bases on PURA principles) for enterprises in the unorganisedsector. Implementation of this project is expected to be started in 2006-07, forwhich a token sum of Rs. 28 crore has been included in the approved Planoutlay.

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Introductory Note on Ministry of SSI