Unit-7: Institutional Support

TECKSOK; KIADB, KSSIDC; KSIMC,SISI; NSIC, DIC Single Window Agency, SIDBI; KSFC

The Karnataka Industrial Areas Development Board [KIADB]  was constituted under Sec.5 of Karnataka Industrial Areas Development Act, [KIAD Act] – 1966.

KIADB provides for expeditious acquisition of lands for industrial and infrastructure purposes.

KIADB also acquires lands in favour of various State & Central Govt. Departments for setting up their projects on stand alone basis.

Promote rapid and orderly development of industries in the state.

Assist in implementation of policies of Government within the purview of KIAD Act.

Facilitate in establishing infrastructure projects. Function on “No Profit – No Loss” basis.

Acquire land and form industrial areas in the state.

Provide basic infrastructure in the industrial areas.

Acquire land for Single Unit Complexes. Acquire land for Government agencies for

their schemes and infrastructure projects.

KIADB has formed industrial areas in all the districts of the State.

It has formed 132 small and big industrial areas spread over the State covering about 40,000 acres.

In Bangalore industrial areas like Peenya, Bidadi, Electronic City, EPIP-Whitefield, etc.

In Mysore,  Hebbal industrial area  spread over 3000 acres. KIADB has several innovative projects like Agro -Tech

Parks, Food Parks, Auto Parks, Hardware Park, Bio-Tech Park, Growth Centers etc.

KIADB has so far developed 136 industrial areas in 28 districts of the State. 

A typical industrial area developed by the Board will have following infrastructure facilities:

Approach roads and internal roads with storm water drains

Power supply and street lighting Water supply

Common Facilities Centers to accommodate Banks, Post Offices, Telephone Exchanges, Dispensaries and Canteens, among others

Power Sub-Stations Hotels & Hospitals Housing tenements to provide housing facility to the labour

force working in the industrial units

Kaushik Mukherjee, IAS, Managing Director

KSFC has been playing a vital role in the

development of Micro, Small and Medium scale

Enterprises (MSMEs) in the State of Karnataka

KSFC an ISO 9001:2000 certified organization

KSFC is one of the fast track term lending financial

institutions in the country

Assistance to over 1,63,643 units amounting to nearly

Rs 10,465 crore over the last 52 years in the State of

Karnataka.

KSFC is one of the robust and professionally managed

State Financial Corporations. 

KSFC to have assisted many industries that are

internationally recognised like

INFOSYS

BIOCON

Financial services

Infrastructure development

Term loan

Category of loans Rate of interest

Loans up to Rs. 25 lakh 10.50%

Loans above Rs. 25 lakh 11.00%

Non SSIs & MSI 11.00%

Corporate Loan 12.00%

For establishing Commercial Complexes, Residential Apartments Development of Residential Layouts, Group Housing Industrial Estates Parks Godowns

Warehouses

Acquisition of Ready built Offices/New Office Building

Sales Outlets/Showrooms and

Infrastructure projects like Flyovers, Bridges etc

Construction

Development and Maintenance of Roads

Amusement Parks

Convention Centres

Hotels and Restaurants

Travel and Transport

Tourist Service Agencies

Mobile Canteen / Catering

For acquiring capital goods

Equipment including road rollers, asphalting units

Concrete mixtures, tippers, excavators,

Surveying and other supporting equipment towards

development, maintenance and construction of roads.

The Government of India set up the SIDBI under a special Act of the Parliament in October 1989.

SIDBI commenced its operations from April 2, 1990 with its head office in Lucknow.

SIDBI has been setup as a wholly owned subsidiary of IDBI.

Its authorised capital is Rs.250 crore with an enabling provision to increase it to Rs.1000 crore.

It is the apex institution which oversees, co-ordinates & further strengthens various arrangements for providing financial and non-financial assistance to small-scale, tiny, and cottage industries.

Four basic objectives are set out in the SIDBI Charter. They are:

◦ Financing ◦ Promotion ◦ Development ◦ Co-ordination

Direct finance. Bills finance Refinance International finance Promotional & Development activities. Fixed deposit scheme Technology Upgradation & Modernisation Fund

Scheme {TDMF} Venture Capital Fund Scheme Seed Money Schemes National Equity Fund Scheme

Since its beginning, SIDBI had been providing refinance to State Level Finance Corporations / State Industrial Development Corporations / Banks etc., against their loans granted to small scale units.

SIDBI’s direct finance schemes are:◦Scheme for expansion / diversification of

small scale units.◦Scheme for specialised marketing agencies.◦Scheme for ancilaring / subcontract units.◦Scheme for existing Export Oriented

Units(EOUs) to enable them to acquire ISO 9000 series certification.

Bills Finance Scheme involves provision of medium and short-term finance for the benefit of the small-scale sector.

Bills Finance seeks to provide finance, to manufacturers of indigenous machinery, capital equipment, components sub-assemblies etc, based on compliance to the various eligibility criteria, norms etc as applicable to the respective schemes.

To be eligible under the various bills schemes, one

of the parties to the transactions to the scheme has to be an industrial unit in the small-scale sector within the meaning of Section 2(h) of the SIDBI Act, 1989.

Refinance scheme is introduced for catering to the need of funds of Primary Lending Institutes {PLI} for financing small scale sector.

Under the scheme, SIDBI grants refinance against term loans granted by the eligible PLIs to industrial concerns for setting up industrial projects in the small scale sector as also for their expansion / modernisation / diversification.

PLIs are SIDC, SFC. Banks like commercial banks, Co-operative Banks, Regional Rural Banks

Schemes of re-finance assistence:

◦ Scheme for SC-ST & physically handicraft persons◦ Composite loan scheme◦ Equipment refinance schemes.◦ Schemes for small road transport operators.◦ Special assistence to ex-servicemen.

              

The main objective of the various International Finance schemes is to enable small-scale industries to raise finance at internationally competitive rates to fulfill their export commitments.

The financial assistance is being offered in US Dollars and Euro currencies. Assistance in Rupees is also provided to the needy borrowers.

The international finance is available from pre-shipment & post shipment credit.

Need based limit, depending on the normal trade terms and credit period given to overseas buyers by exporters not exceeding 180 days.

Time periodTime period

Revised Annual Revised Annual Interest Rate %p.a. Interest Rate %p.a. * w.e.f August 10, * w.e.f August 10,

20092009

Interest (% p.a.)Interest (% p.a.) 12 months - 13 12 months - 13 months months

6.50 6.50

14 months - 36 14 months - 36 months months

7.00 7.00

14 months - 36 14 months - 36 months months

7.50 7.50

For Senior For Senior CitizensCitizens

7.07.0

7.57.5

8.08.0

As an apex financial institution for promotion, financing and development of industry in the small scale sector, SIDBI meets the varied developmental needs of the Indian SSI sector by its wide-ranging Promotional and Developmental (P&D) activities.

The activities are as follows:◦Enterpreneurship Development Programmes.◦Management Development Programmes. ◦Technology Upgradation Programmes.

This fund was setup in the year 1996 by the SIDBI with an initial capital of 200 crores.

It was setup for the purpose of encouraging the existing small scale industrial units to modernise production facilities and adopt improved and updated technology for strengthning export capabalities.

For availing benefits under this scheme the unit have to prepare an estimate for modernisation & submit it to SIDBI.

The sanction of funds is made depending upon the estimate submited.

SIDBI is participating in the Venture capital fund set by public sector institutions as well as private companies to the extent of Rs,50,00,000 of total capital of the fund required.

The fund should be didicated to financing small industry preferabally the most risky one.

In order to provide equity type assistance, SIDBI is operation a National Equity Fund Scheme.

The equity capital loan to the extent of 2.5lakh is sanctioned to each project provided the profect qualities under this scheme.

One of the constraints faced by Entrepreneurs is the lack of own resources to promote the minimum promoter contribution.

Hence, SIDBI introduced seed money scheme for the benefit of entrepreneurs.

Seed money is available through DIC { Direct Industry Centre } to those entrepreneur who are technically qualified but lack of own capital.

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Sikander KushwahaXavier Institute of Development

Studies and Action, Jabalpur

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To develop entrepreneur skills of people. To motivate for self employment. To providing all the necessary facility in

one roof. To reduce regional imbalance of

development. To Cheek in migration

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All the services and support required by small entrepreneurs is provided under the single roof of the District Industries Centre. For comprehensive understanding of DIC I am taking an example of Gujarat’s district Centre.

Till 1997gujrat has set up 23 district Industrial Centers , few of them are : Amreli, Bhavnagar, Kutch, Junagadh, Sabarkantha, Banaskantha, Panchmahal, Bharuch, Surendranagar, Mehsana, Valsad, Surat, Vadodara, Kheda, Ahmedabad, Rajkot ,Jamnagar ,Ganadhinagar etc.

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Till March 31st 1998, 422 district industries centers (DICs) have been set up covering 431districts of country leaving out the metropolitan cities and some new districts.

S. No Particular No. of Units/ Beneficiary

1. New units establisheda. artisansb. b. small scale

industries

3,16,1691,06,0211

2. Credit provided by financial institution (RS. In cr.)

89,080

3. Additional employment generated

13, 33,024

Source: (Khanka, 2001:164)

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Registration Infrastructure Assistance Incentive Scheme Seminars Others Activities Self Employment scheme Co-operative Package Scheme