Institution Support to Start-up and Incentive for SSI

Institution support to start-up and incentive for SSI

Presented by: Rejoice reji Mayuri patel

Bhavini lad Reema prajapati

Harish Sachin

jignesh

DEFINITION OF SMALL INDUSTRIES

Year 1950 Size of Gross Investment in fixed assets in

plant and machinery, land, building etc. (not exceeding Rs. 5 lakhs and strength of workforce (employment less than 50 workers / day using power or less than 100 workers / day without use of power).

“Eligibility criteria based on investment in Machinery and

Equipment only.”

Under the MSMED Act 2006, Micro enterprises have been defined for the first time in this

Act. Under the MSMED Act 2006, Enterprises have been classified broadly into two categories, namely enterprises engaged in the manufacture/production of

goods 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 More than Rs. 10 lakh and up

to Rs. 5 crore up to Rs. 2 crore Medium More than Rs. 5 crore and More than Rs. 2 crore and up to Rs. 10 crore up to Rs. 5 crore

INTRODUCTION

Worldwide, the micro small and medium enterprises (MSMEs) have been accepted as the engine of economic growth and for promoting equitable development.

The major advantage of the sector is its employment potential at low capital cost. The labour intensity of the MSME sector is much higher than that of the large enterprises.

The MSMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports.

In India too, the MSMEs play a pivotal role in the overall industrial economy of the country. In recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to survive the recent economic downturn and recession.

As per available statistics (4th Census of MSME Sector), this sector employs an estimated 59.7 million persons spread over 26.1 million enterprises. It is estimated that in terms of value, MSME sector accounts for about 45% of the manufacturing output and around 40% of the total export of the country.

The economic reforms started in 1991 in India provided the opportunity to SSIs to grow big. However, the formation of WTO in 1995 has started posing a major challenge to the SSIs in India. There have been some sweeping changes which have taken place in the SSI sector in the last two years. The hitherto protection of the SSI sector by way of reservations and quantitative restrictions have been removed. More than 160 items which were reserved for the SSI sector have been de-reserved.

Small scale sector is one of the success stories of the modern India. Its success is writ large over the face of the country and is equally visible all around. This is a sector that has emerged victorious in the face of rising threats from large sector inside and from multi-nationals abroad.

In India, the small-scale industrial (SSI) sector has acquired a prominent place in the socio-economic development of the country during the past 50 years.

Small Scale Industry highlights

The SSI sector accounts for : 95 % of industrial units 40 % of output in the manufacturing sector 35 % of total export Employment of over 60million people

COMPARISON OF THE SSI SECTOR WITH THE OVERALL INDUSTRIAL SECTOR

The small-scale sector has maintained a higher rate of growth vis-à-vis the overall industrial sector. The comparative growth rates of production for both the sectors during last five years

Year Growth Rate Overall of SSI industrial sector (%) sector (%) 2002-03 8.68 5.70 2003-04 9.64 6.90 2004-05 10.88 8.40 2005-06 12.32 8.10

Institution support to ssi

Small Industries Service Institute Institutional Support: The respondents were provided with different

schemes and programs which have been offered through the institutional support mechanism for the SSI sector.

The SSI sector has used the Industrial Estates and Growth Centres and District Industry Centre the most. State Financial Corporations and Cluster Development Schemes have also contributed towards the success of SSI sector. However, Preferential Purchase Policy, Export Processing Zones, Software Technology Parks, SIDO, NSIC, SISI, SIDC, SIDBI have not lent much support to the growth of the sector.

The institutions which have been recognised as providing support to the sector have to be given further impetus to improve their systems and deliveries so that they can serve the sector better.

All Indian institution•SSIB•SIDO•NSIC

State level institution

•SDIC•SDIS•DIC

Fund base institution•SIDBI•SFC

Classification institution of SSI

Institutional Support

There are many institutes by state and Central government set ups some of them are:

SIDBI(Small Industries Development Bank of India),

SIDO(Small Industries development organization),

SISs(Product-cum-process development organization),

NSIC(national small industry corporation), SISI(Small industry service institute), SSIB(small scale industry board), SIDC(small industry development corporation),

SSIB: - It has constituted to facilitate coordination and to act as inter institutional linkage.

SIDO:It is a nodal agency for identifying needs of SSI units, coordinating and monitoring the polices and programs for promotion of small industries. the activities of SIDO are devided into coordination activities, industrial development activities and management activities.

NSIC:It provide information services, fulfill raw material requirements of SSI, meets credit needs and provide markets assistance. SSI units can get registered with NSCI to avail benefits of local /global tender and also for Government Store Purchase Programme . NSIC also does bill discounting up to a specified limit

State level institution

•SIDC (state industrial development corporation)

•SDIS (state directorate of industries)

•DIC (District industry centre)

Credit Dispension

a)Apex Level Institutions Small industries development bank of india b)Banks Commercial Banks Regional Rural Banks Co-operative Banks c)State Level Institutions State financial corporations State industrial development corporations

SIDCs: - it set up in 1956 under companies act. The important function procuring and distributing scares raw material, supplying machinery to higher purchase system, providing marketing assistance, and to construct industrial sheds.

DIC: It conducts surveys to know industrial potential

of a district keeping in view the availaility of raw material,human skills,demand ,etc..

It prepares an action plan for industrial development.

It maintains links with r&d institutions for upgradation of technology, quality improvement, industrial training etc..

It suggests appropriate marketing strategies to entrepreneurs.

Fund base institution

•SIDBI(Small Industries Development Bank of India)

•SFC(state financial corporation)

SIDBI: - The Bank extends development and support

services in the form of loans and grants to different agencies working for the promotion and development of SSI.

The initiatives of SIDBI under promotional and developmental activities have crystallized into the following important areas:

Enterprise Promotion with emphasis on Rural Industrialization

Human Resource Development to suit the SSI sector needs

Technology Upgradation Quality and Environment Management Marketing and Promotion and Information Dissemination.

SFC: it provides long term finance to industrial enterprises having sole proprietary, partnership,company and co-operative society form of business organization.

Provide working capital loans and meeting various short term needs of their clients.

SISI :- it serve as interface between central and state government, render technical support service, conduct entrepreneurship development programme and initiate promotional programmme. The Institute has Technical Officers to provide guidance in all trades i.e. Mechanical, Chemical, Leather, Glass & Ceramics, Electrical, Electronics, Food Industry, Management & Economic Investigation. Small Industries Service Institute (SISI) located in the four Metropolitan cities of Delhi, Kolkata, Mumbai and Chennai.

Infrastructural Support

The Integrated Infrastructure Development (IID) Scheme will progressively cover all areas in the country with 50 per cent reservation for rural areas.

A Plan Scheme for Cluster Development is drawn up.

The funds available under the non-lapsable pool spl for the North-East will be used for Industrial Infrastructure Development, setting up of incubation centers, for Cluster Development and for setting up of IIDs in the North-East including Sikkim.

Technological Support and Quality Improvement

The TSQI scheme set up by SIDBI will be strengthened so that it functions effectively as a Technology Bank. It will be properly networked with NSIC, SIDO (SENET Programme) and APCTT.

SIDO, SIDBI and NSIC will jointly prepare a Compendium of available technologies for the R&D institutions in India and abroad and circulate it among the industry associations for the dissemination of the latest technology related information.

Commercial Banks are being requested to develop Schemes to encourage investment in technology upgradation and harmonise the same with SIDBI.

One time Capital Grant of 50% will be given to Small Scale Associations which wish to develop and operate Testing Laboratories, provided they are of international standard.

Marketing Support

SIDO will have a Market Development Assistance (MDA) Programme, similar to one obtaining in the Ministry of Commerce & Industry. It will be a Plan Scheme.

The Vendor Development Programme, Buyer-Seller Meets and Exhibitions will take place more often and at dispersed locations.

INTERNATIONAL COOPERATION INTERNATIONAL COOPERATION SCHEME INDIA GLOBAL SUMMIT ON SME

The dignitaries in the course of one of the Technical Sessions during 5thCommonweath-India Small Business Competitiveness Development Programme

Awards and incentives National awards for quality product in small

scale industry. National awards for outstanding ssi

entrepreneur. National awards for research and

development effort in small scale sector. NATIONAL AWARD TO SMALL SCALE

ENTREPRENEURS

Awards and incentives

Shri Pranab Mukherjee, the then Hon’ble Defence Minister and Shri Mahabir Prasad, Hon’ble Union Minister of SSI & ARI giving away prize to a successful woman entrepreneur

Besides a Trophy and a Certificate, the First, Second & Third Awardcarry a Cash Prize of Rs.25,000/-,Rs.20,000/- and 15,000/- respectively

INCENTIVES FOR SMALL SCALE SECTOR Small industry cluster development programme. Credit linked capital subsidy scheme for technology

upgradation. Credit guarantee scheme. Iso 9000/iso-14001 certification reimbursement scheme. Participation in international fairs. Purchase and price preference policy. Integreted infrastucture development. Mini tool room. Testing centres. Sub contracting exchanges. Ssi mda. Assistance to entrepreneurship development institutes. Prime minister’s rozgar yojana.

EXPORT

33% of the Indian Exports is contributed by SSI Sector.

non-traditional products account for more than 95% of

the SSI exports. mostly fuelled by the performance of

garments, leather and gems and jewellery units from this

sector.

Aims of institutions toward SSI

To facilitate growth of this sector with changing economic

scenario To facilitate growth within the framework of social and economic policy of the country To encourage technology modernization To promote entrepreneurship among technically

qualified persons To improve product standards To create opportunities for in house R&D To provide greater export thrust

Thank you