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SUPPORTING INDIA’S SMALL INDUSTRIESSUPPORTING INDIA’S SMALL INDUSTRIES

Rome12th December 2002

Small Industries Development Organization(SIDO)

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SME DEFINITION IN INDIA

n Micro – Plant & Machinery n < Rs 2.5 m (~ $ 52,000)

n Small – Plant & Machinery n < Rs 10 m (~ $ 210,000)

n Selected Sectors -n < Rs 50 m (~ $1.05 m)

n Services – Fixed Assets excluding L & B n < Rs 1 m (~ $ 21,000)

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PROFILE OF SMEs IN INDIA(2001-02)

n ESTIMATED NO. OF SMALL UNITS: 3.46 million

n EMPLOYMENT PROVIDED : 19.30 million

n EXPORTS (2000-01) $14.8 billion

n CONTRIBUTION TO GDP: 6.29%

n SHARE IN INDUSTRIAL PRODUCTION : 39%

n SHARE IN EXPORTS: 34%

n TOTAL NUMBER OF ITEMS PRODUCED Over 8000

n NUMBER OF RESERVED ITEMS 749

n GROWTH RATE

n INDUSTRIAL GROWTH RATE : 2.7%

n SSI GROWTH RATE : 6.08%

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SMEs & EMPLOYMENT

n Incubator of entrepreneurial talent

n 130,000 new businesses each year

n 660,000 new jobs each year

THE SMALL INDUSTRIESDEVELOPMENTORGANISATION

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ORIGIN & HISTORY OF SIDO

n SMEDA

n 1954n Extension Servicesn Train Entrepreneursn Protection, Promotion & Co-ordination

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MISSION

CoordinationFormulation and implementation of

policies and programmes

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ORGANISATIONAL CHART

SECRETARY (SSI)

SIDBI, TBSECredit Guarantee

BIS, EAN India, NPCITPO, FIEO

Educational/Research Instts.

RBI, CSO, PFC

Biotech Consortium…

MINISTERSMALL SCALE INDUSTRIES

AS&DC (SSI)HEAD OF SIDO

CMD (NSIC)

Member Governing Body Working Group

Directing Staff (Economic)

Directing Staff (Technical)

Directing Staff (General Admn.)

Field Office Directors

Directors (Autonomous Bodies)

Deputy Directors

Asstt. Directors

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MARKET PERSPECTIVE

n Customers

n 3.4 million Small & Micro Unitsn Potential entrepreneurs

n Medium & Largen State Governmentsn Other SME Intermediaries

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KEY CONCERNS

n Creditn Marketingn Technology n Infrastructuren Regulatory bottlenecksn Impact of globalization

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SIDO - ACTIVITIES

♦ Policy Facilitation♦ Definition and Interpretation, Single Legislation,

Simplification of Procedures, Reservation, Credit Flow Interventions

♦ Technology Services♦ Technology Upgradation Schemes, Technology

Resource Centres

♦ Special Interventions♦ ISO 9000, National Programmes on Locks, Machine

Tools, Stone and Toys, Marketing Development Assistance , Participation in International Fairs,Credit Guarantee Scheme

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SIDO - ACTIVITIES

♦ Entrepreneurship Development ♦ Entrepreneurial Development Institutes

- State EDIs, EDPs, MDPs

♦ Technical Skills Development♦ Process & Product Training programmes

♦ Infrastructure Support♦ Tool Rooms, Testing Centers, Industrial Estates

♦ Economic and Statistical Investigation♦ Registration modalities, Census, Data Bank

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SIDO - ACTIVITIES

♦ Consultancy♦ Project Profiles, Energy audit, Pollution audit,

International Cooperation

♦ Forum for Interaction Among SSIs♦ SME Board, Stakeholders dialogue

♦ Networking & Continuing Education♦ Knowledge Portal, Sectoral Studies, Sensitization

Programmes on Bar Coding, WTO, IPR, Anti Dumping, Networking with other service providers

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NATIONAL PARTNERS

n NSIC (Marketing)n TBSE (Technology)n SIDBI (Finance)n RBI (Central Bank)n IBA (Banks)n Credit Guaranteen BIS (Standards)n EAN India (Bar Coding)n ITPO (Trade)n FIEO (Export)

n Ministriesn State Governmentsn SME Associationsn Trade Associationsn Educational/Research

Institutesn Training Institutionsn CSO (Statistics) n PFC (IPRs)n NPC (Productivity)n Biotech Consortium...

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INTERNATIONAL PARTNERS

n UNIDOn UNDPn ILOn GTZn DANIDA

n WIPOn APOn JICAn CFTCn INSME

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REACHING OUT

n Field Officesn Exhibitions n Print Mediumn CD ROMsn Web

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SIDO - FIELD OFFICES

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SIDO - FIELD OFFICESn Small Industries Service Institutes

(30 SISIs, 28 Branches)

n Training Institutes (2 SEPTI)

n Testing Centres (4 RTCs, 7 FTSs)

n Autonomous Institutions (21)

n Tool Rooms (11)

n NLTI (3)

n PPDCs (6)

n CFTIs (2)

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PRINT MEDIUM

n Guide Booksn Journals - HQ & Fieldn Project profilesn State/ District profilesn Industry Status Reports

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WEB

www.smallindustryindia.com

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TOOL ROOMS

SUCCESS STORYn Design, development and production of high precision

tools, moulds, dies and components

n State of art equipment – CAD/CAM, CNC (upto 5 axis), Rapid Prototyping and Vacuum Heat Treatment.

n Design, prototyping and development of new products

n Training - regular and customised (full time or part time)

n Special technical consultancy assistance to SMEs

n Technology demonstration & technology transfer

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REVENUE MODELn Annual Budget USD 80 million

THEN (100% public funds)n Free servicesn Scholarship linked education

NOW (60-65% public funds)n Paid services n Variable Cost plus services

FUTURE (50:50)n Core activities – public fundingn Self sustaining model – 75% recoveryn Phase out of public funding over 3 to 5 years

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FACTORS CRITICAL FOR MARKET SUCCESS

n Part of Governmentn Advocacyn Accessn Public Fundsn Credibility

n Technical, Economic & Admn. Manpowern Field Officesn Alliancesn Exposuren Constant unlearning & relearning

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WHAT WE OFFER

n International Training Centres on SMEsn Customized Training Solutionsn Setting up Tool Rooms n Industrial Potential Studies n Establishing SMEDAn Technology Transfer & Matchmakingn Facilitating transborder outsourcingn SME friendly Credit Regime

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THE FUTURE

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n Target – 12% annual growth as compared to 9% during last five years

n Employment growth @ 4% per annum similar to the last five years – 4.4 million jobs in 5 years

NEXT FIVE YEARS

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SHAPE OF THINGS TO COME

n Focus on key concerns to continue

n Introducing the concept of SME

n Legislative support to factoring services, limited partnership act, single law for SMEs

n Promotion of linkages between large and small enterprises

n FDI window

n Emphasis on the service sector

n Priority to sunrise industries

n Leveraging on consulting strengths

n Sustaining growth for employment

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