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Entrepreneurship Development

Role of SISI,DIC,NSIC and SIDBI

SUBMITTED TO

Prof. Raj


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ENTREPRENEURSHIP DEVELOPMENT

1: SISI (Small Industries Service Institute)

INTRODUCTION:

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. The small Industries Service Institute (SISI) are the field offices of Small Industries

Development Organization (SIDO), Ministry of Small Scale Industries, Govt. of India, set up

for the promotion and development of Small Scale Industries in the State in the early fifties.

This Institute provides support / services to the State Government as well as co-ordinates

various activities at the state level for promotion and development of small scale industries.

This Institute, along with SISI, Nagpur and Branch Institute at Aurangabad, look after the

whole of Maharashtra.

Small Industries Development Organisation, under the Ministry of Industry is the Apex body

at the national level, headed by Development Commissioner, Small Scale Industries to

formulate the policy governing the Small Scale Industrial Sector in the country to chalk out

schemes and programmes for development of the SSI sector. SIDO also monitors the

implementation of policies and activities of promotion and development of Small Scale

Industries in the country, with active involvement of State directorate of Industries through its

network of 28 Small Industries Service Institute (SISI) in all the States.

Small Industries Service Institute, Mumbai provides various types of extension services and

assistance in setting up of units, promoting and developing product and Services by the Small

Scale Industries. The Institute has Technical Officers to provide

guidance in all trades i.e. Metallurgy, Mechanical, Chemical, Leather, Glass & Ceramics,

Electrical, Electronics, Food Industry, Management & Economic Investigation.

KOUSALI INSTITUTE OF ANAGEENT STUDIES Page 2


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ROLE OF SISI:

The major role of SISI is to give various service to the small scale industry

Major Extension Services provided in the Institute are given below

1) Technical Consultancy

2) Industrial Management Training

3) Economic Information

4) Entrepreneurial Development Programme, Scheme for Educated Unemployed Youth / Prime

Minister's Rojgar Yojana

5) Ancillary Developments / Sub-Contract Exchange

6) Marketing Assistance

7) Export Promotion Marketing

8) Modernisation / Upgradation Technology

9) Assistance to Rehabilitation of sick units

10) Common Facility & Training

11) Assistance to District Industries Centre / State Govt. /

Various Developmental Agencies in the State

12) Technical Assistance to various Central Government Agencies like Director General of

Foreign Trade, National Small Industries Corporation, Central Excise, Bureau of Indian

Standards, CSIR etc.

13) Exhibition / Demonstration

I TECHNICAL CONSULTANCY SERVICES

Technical guidance Identification and preparation of Project profiles / reports.

Selection of Equipment, Machinery & Raw Materials

Technical Up-gradation / Quality Control

Technical Seminar / Workshop / Clinic

To prepare technical literature / papers etc.

.



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II MANAGERIAL CONSULTANCY SERVICES

Conduct various Industrial Management Courses e.g. Personnel, Finance, Marketing,

Taxation, Export etc.

Improvement of Quality, Productivity of Labour etc.

Techno-Economical and Managerial, Appraisal reports to Banks / Financial Institutions.

Technical Training Courses on product

development etc.

Short-term / Tailor-made Technical courses.

III ECONOMICAL INVESTIGATION SERVICES

Industrial Potential Surveys / Market Surveys

Feasibility reports / State Industrial Profile

Sample Survey / Collection of statistics

SSI Census

Review Report / Production Index

Assistance and Rehabilitation of sick units

Advise / Guidance on Policy issues

Guidance on facilities available with Banks, Financial Institutions etc.

IV ENTREPRENEURIAL DEVELOPMENT PROGRAMME & PMRY

General One Month EDP Courses

Product and Process EDP Programmes

One Week EDP for Self Employed Youths

EDP for Women entrepreneurs

Product / Process Demonstration

To implement the Prime Minister's Rojgar Yojana in BMR and assistance to DIC in

implementing PMRY for Educated unemployed youths

To assist various institutions and Agencies for EDP



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V ANCILLARY DEVELOPMENT PROGRAMMES

Identification of Ancillary items for large / small scale Industries

Interaction with public / private sector undertakings

Preparation of Ancillary report

Organising State Level Ancillary Development Committee and participation in PLC

meeting

Organising Buyers - Sellers Meet / Vendor Development Programme - cum Exhibition

VI MARKETING ASSISTANCE AND SERVICES

Provide Market Information

Assist to prepare Market feasibility report

Indirect marketing support through Sub-Contract Exchange

Marketing assistance for Govt. / Semi-Govt. purchase

Programme through Single Point NSIC registration

Marketing Buyer - Sellers Meet - cum Exhibition

VII EXPORT PROMOTION SERVICES

Export Market information

Export process and procedures information

Export Management training

Export Packaging training

Seminar / Workshop on Export Related Procedures

Arrange and forward exhibits to foreign trade fairs

Preparation of Export directory and reports

VIII MODERNISATION / TECHNOLOGY UP - GRADATION SERVICES

Undertaking in-plant studies

Conduct cluster studies

Programmes on Technology up - gradation / quality -

up - gradation & ISO-9000 / Energy conservation

Conducting Awareness Programmes / Seminar / Workshop on Pollution Control & ODSPhase out



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Undertaking industry status studies

Co - ordination of Modernisation Activities

IX COMMON FACILITY SERVICES

Workshop facilities for undertaking jobs, jigs &

fixtures, process tools complicated jobs etc.

Product Development

Industrial Design

On the job 6 months training to industrial workers

Short term training courses

X LIBRARY FACILITY

The Institute has a full fledged Library containing all sorts of Technical books, Magazines,

Journals and reports relating to Industries, including project profiles and various reference

manuals etc.

XI ASSISTANCE TO STATE GOVT. AGENCIES

Provide all sorts of technical and other assistance to State agencies like DICs, State Directorate

of Industries, Corporation and various other industrial developmental agencies in the state

XII TECHNICAL ASSISTANCE TO VARIOUS CENTRAL

GOVERNMENT AGENCIES LIKE

DGFT, NSIC, Excise, BIS, CSIR etc.

All sorts of assistance and support to various NGOs

Associations and Institutions involved in the promotionand development of industries



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2:DIC ( DISTRICT INDUSTRY CENTRE):

Role Of District Industry Centre:

Role of DIC for the promotion of Small Scale & Cottage Industries:

To get the Provisional SSI Registration

a. Filled in Application Form in duplicate. (Enclosed)

b. A declaration that the proposed unit is not owned/ controlled by or subsidiary to any other

Industrial Undertaking.

c. A detailed Scheme of the proposed Unit (if project cost exceeds Rs.40.00 lacs and/ or if

comes under Special category under Pollution Control.)

d. Pollution Control Certificate for Consent to establish usually issued by DIC except special

Red where activities relates to within the purview of SSI.

i. A site clearance certificate from Local Body./Local Self Govt.

ii. A requisite fees has to be deposited based on the project cost & category in the

branch of UBI, earmarked for, in favour of Pollution Control Board.

e. However, the Provisional certificate will be issued subject to production of specific

clearance of the concerned Department for specilised items, if any.

To get Permanent SSI Registration:-

a. Filled in Application Form in duplicate. (Form Enclosed)

b. Documents regarding constitution of SSI unit :

i. In case of a limited company - the certificate of incorporation and article of

http://www.hooghly.gov.in/industry/Provisional_Registration_DIC.dochttp://www.hooghly.gov.in/industry/Provisional_Registration_DIC.doc


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memorandum of the association.

ii. In case of registered society - copy of registration certificate.

iii. In case of industrial co-operative - copy of co-operative registration certificate.

iv. In case of partnership firm - copy of Regd. partnership agreement.

c. Purchase Documents/ Cash Memos / Sale Agreement with Payment Receipt showing

the original value of Plant & Machinery. An affidavit in case document in respect of

purchase of Plant & Machinery/tool/implements, not available.

d. An Affidavit in the prescribed format is to be submitted to the effect that the

formation/ activity is well within the purview laid down procedures and norms laid downby the authority.

e. Pollution Control Certificate for Consent to Operate (COO) from the appropriate

authority depending on the category (Upto date List enclosed)of industry.

f. However, the Permanent certificate will be issued subject to production of specific

clearance of the concerned Department for specilised items, if any.

For Carrying on Business (COB)Clearance :--

1. The same information for Carrying On Business ( COB ) clearance required. Industrial

undertakings which cross the limit of investment as prescribed in the definition of SSI by

process of natural growth will need a "Carrying on business" license before crossing the

ceiling limit from DGTD.

2. Names ofDepartments from which the clearances are required and the average time

required for each from the date of application are given below :-

3. Name ofDirectorate orSecretariat giving clearances :-

http://www.hooghly.gov.in/industry/affidavit_DIC.dochttp://www.hooghly.gov.in/Cooch%20Behar%20Website/Website/DOCfiles/category_DIC.dochttp://www.hooghly.gov.in/industry/affidavit_DIC.dochttp://www.hooghly.gov.in/Cooch%20Behar%20Website/Website/DOCfiles/category_DIC.doc


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Type of Clearance

Authority

1. Pollution

Green Category Consent to establish & operate -

Green, Orange, Red Category for Consent to Establish Respective DIC

Orange & Red Category Consent -to Operate -- WBPCB, Regional Branch

Special Red Category

1. WBPCB, Kolkata Paribesh Bhavan, 10A Block - LA, Sector - III, Salt lake,

Kolkata - 700 098

2. Electricity Divisional Engineer, /, SE, Respective area.

3. Fire & Explosive Jt. Chief Controller, Explosive Dept., 8 Esplanade East,Kolkata 700 069

4. The Central Food Laboratory, Dr. Mahammad Issaq Road, Kolkata - 700 016

5. Drug License Director, Drug Control, 141 A.J.C. Bose Road, Kolkata - 700 014

6. Excise License Central/ State Excise Department

Margin Money Assistance (Loan)

In case the promoters of tiny/ small Industrial Units are not in a position to bear the cost of

margin stipulated by the Banks/ Financial Institutions, soft loan, bearing interest @ 6.50% ( @

4% for timely repayment) to the extent of 10% ( 20% for SC, ST, PH, Ex- Servicemen, Inds. Co.

Ops) of the project cost under the scheme is extended. However, the essential conditions for this

scheme are that the promoters contributions will not exceed 25% of the project cost and the

amount of such loan will not exceed Rs.5,000/- X no. of employment generated by the Unit.

Bengal State Aid to Industries Act (B.S.A.I) (Loan)

Under this scheme individual Artisans specially in rural area, are being assisted with soft loan of



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composite nature upto Rs. 10,000/- for setting up their project. The loan bears an interest @

8.00% with a rebate of 2.5% for timely repayment.

State Incentives (Subsidy)

In order to boost up Industries in the state SIS93, SIS98, SIS99, SIS2000 & WBIS 2004

have been declared. The salient features of the latest subsidy scheme i.e, SIS2000 envisages

incentives in the form of 25% ( for Gr. C area) and @15% ( for Gr. B area) subsidy on the

allowable expenditure of land & building and plant & m/cs (new) as also 50% of the interest

paid on term loan to Banks/ Financial Institutions for newly set up Industries in the District.

Waiver of Electricity Duty is allowed and also power subsidy is allowed for period of five years

for encouraging setting up of industry.

Details of the Existing Scheme WBIS - 2004

The West Bengal Incentive Scheme, 2004:

A new incentive scheme for large, medium & small scale industrial units has been announced

under notification no. 134-CI/O/Incentive/17/03/I, dated 24.03.2004, Commerce & Industriesdepartment, Govt. of WB.

The Main features (for small scale sector) :-

1. The 2004 scheme of incentive shall come into effect on & from the 1st day of April, 2004, &

shall remain valid for a period of five years ending on the 31st March 2009.

2. For the industrial under takings in the Small Scale Sector, District Industries Centres will be

the authority to scrutinize, verify & recommend the cases to District Level Committee

constituted by the C&SSI dept, for this purpose.

3. Any Cottage & Small Scale Industrial undertaking including industrial Co-operatives, Tiny

& Small Scale Service & Business(Provisional/Temporary/Permanent/Final) undertaking

registered under DIC of Dte. of C & SSI, would be eligible for this grant/assistance.

4. New unit established & commissioned for manufacturing of goods or Existing industrialunit manufacturing goods & starts commercial production for its expanded portion on or



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after 1st April 2004, will be eligible under this assistance programme.

5. An eligible industrial unit located at Gr. C area District with above condition will be entitled

to State Capital Investment Subsidy @ 10% and 7.5% for Gr. B area, of the fixed capital

investment ( means investment made in plant & machinery and also equipment installed for

pollution control measures) subject to a limit of 250 lakhs. [ The assessment of fixed capital

investment to be made on the approved project of the unit, done beforehand/at the issuance

of PMT/FNL]

NEGATIVE LIST OF INDUSTRIES:

1. Hydrogenated Edible oil,

2. Hospital, Nursing Home, Clinics, Diagnostic Centre,

3. Amusement Park,

4. Bricks(excluding fly ash bricks, sand lime bricks, refractory bricks),

5. Thermal Plants for generation of electricity except for captive use specially required for theunit/s to be registered,

6. Distribution of electricity,

7. Aqua -/culture projects.

8. All types of plantation including Tea Plantation and bought leaf tea processing factory,

9. Any other industry notified by the State Govt. for inclusion in this list.

Old age Pension to Handicraft Artisans

The District quota of such benefit have been fixed by higher authority and the amount of

benefit is Rs. 400/- per month.



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Common Facility Centre

Common Facility Centers are required to be set up in the areas having clusters of artisans

where they can work and store their products during rainy or slack seasons so that they can

market their produce in proper opportunity and get reasonable price instead of being

exploited by the traders/ middleman.

District Level Handicraft Competition

The District Industries Centre every year organise a competition amongst the artisans of the

District with Honble Sabhadhipati as the Chairman of the Committee with a view to

promote and develop innovative ideas for promotion of Handicrafts of the District and

awards are given to the best artisan.

Consent to Establish (NOC) by West Bengal Pollution Control Board

As per provisions of Water (Prevention and Control of Pollution) Act, 1974 and Air

(Prevention and Control of Pollution) Act, 1981 all new intending projects (Developmental

& Industrial) required to obtain "Consent to Establish" (popularly termed as NOC) from

State Pollution Control Board. Depending upon the pollution and hazard potential of

industrial activities, the industries are categorized as Special Red , Ordinary Red ,

Orange ,Green and Exempted.

There are sitting restrictions for special red, ordinary red and orange category of industries.

Prospective entrepreneurs should take into account these restrictions while selecting land for

their proposed industries.

The Power to grant NOC for industries is furnished below :

http://www.wbpcb.gov.in/html/red.htm#SPREDhttp://www.wbpcb.gov.in/html/red.htm#REDhttp://www.wbpcb.gov.in/html/red.htm#ORANGEhttp://www.wbpcb.gov.in/html/red.htm#GREENhttp://www.wbpcb.gov.in/html/red.htm#GREENhttp://www.wbpcb.gov.in/html/red.htm#EXEMPTEDhttp://www.wbpcb.gov.in/html/red.htm#SPREDhttp://www.wbpcb.gov.in/html/red.htm#REDhttp://www.wbpcb.gov.in/html/red.htm#ORANGEhttp://www.wbpcb.gov.in/html/red.htm#GREENhttp://www.wbpcb.gov.in/html/red.htm#EXEMPTED


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For obtaining NOC from the West Bengal Pollution Board, the entrepreneurs are required to

apply in prescribed Application Form which can be downloaded from the site of WBPCB.

Some of the important information and documents required to be submitted along with the

application form are as follows :-

Information

List of raw materials consumed (with quantity) and products (with quantity) per day.

Process flow chart and details.

Amount of water and different type of fuels per day.

Quantity of liquid wastes generated per day and its characteristics.

Expected quantity and characteristics of gaseous emissions (fuel burning and process)

Expected quantity of solid wastes generated including hazardous solid waste.

Proposal for controlling/ treatment of liquid, solid and gaseous emissions.

Documents

Location map

No objections & site clearance from local authority

Attested copies of land deed/allotment letter/lease document/rent receipt etc.

Technical report for pollution control measures

Affidavit in prescribed form

http://c/Cooch%20Behar%20Website/Website/PDFfiles/Pollution_Control_NOC_DIC.pdfhttp://c/Cooch%20Behar%20Website/Website/PDFfiles/Pollution_Control_NOC_DIC.pdf


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3:SIDBI (Small Industries Development Bank of India)

Background:

Small Industries Development Bank of India is an independent financial institution aimed to

aid the growth and development of micro, small and medium-scale enterprises in India. Set upon April 2, 1990 through an act of parliament, it was incorporated initially as a wholly owned

subsidiary of Industrial Development Bank of India. Current shareholding is widely spread

among various state-owned banks, insurance companies and financial institutions. Beginning as

a refinancing agency to banks and state level financial institutions for their credit to small

industries, it has expanded its activities, including direct credit to the SME through 100

branches in all major industrial clusters in India. Besides, it has been playing the development

role in several ways such as support to micro-finance institutions for capacity building and on

lending. Recently it has opened seven branches christened as Micro Finance branches, aimed

especially at dispensing loans up to Rs. 5.00 lakhs.

It is an apex body and nodal agency for formulating, coordination and monitoring the policies

and programmed for promotion and development of small scale industries.

Small Industries Development Bank of India (SIDBI), set up in 1990 under an Act of

Parliament, is the principal financial institution for the promotion, financing and developmentof MSME sector in India. Corporate governance has all along been the underlying guiding

principle of the working and functioning of SIDBI. As a part of corporate governance, the Bank

remains committed to sustainability by promoting environmentally responsible lending to the

MSME sector.

Realizing that environment is one of the most important issues that need to be addressed at the

global level, SIDBI has embarked upon the mission of Green, Clean and Energy Efficient

Indian MSMEs by integrating environment protection measures in its lending to MSME sector.

http://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/India


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For example, SIDBI has stipulated a necessary precondition before sanctioning the credit,

wherein the enterprise has to obtain No- Objection Certificate (NOC) of Consent to Establish

from the respective State Pollution Control Board (PCB) concerned wherever required, before

the enterprise takes up the implementation of the project. Further, it has also to obtain a NoC for

Consent to operate, being the final Clearance from the PCB; before permitting the unit to

commence commercial production. The final clearance once granted is subject to review and

renewal at periodic intervals based on monitoring / inspection by the PCBs to ensure that the

unit is actually meeting the prescribed norms and parameters. Besides, SIDBI also provide

credit (e.g. under the World Bank Line of Credit) to MSMEs conforming, among others, to

E&S standards. The sustainable financing of SIDBI is facilitated by various lines of credit

(LOCs) from bilateral/multilateral institutions.

The Bank has also undertaken a number of environment friendly measures within the

organization. For example, replacing the present bulb/tube lights with CFL lights; greater use of

Video conferencing to save travel cost and energy saving; Installing the solar heater system in

the Banks office/residential building which could be used as an alternative source of energy to

generate power; water conservation measures like rain water harvesting; use of recycled paper

in official noting /records; double sided printing of all official notes/ memos, etc.

Thus, SIDBI through its environment protection oriented lending assistance to MSMEs and also

by fostering environment measures internally, endeavours to be an environmentally responsible

financial institution and strengthen the culture of doing the right thing environmentally. In

furtherance of this agenda, SIDBI plans to undertake implementation of environment friendly

measures under ISO 14000 family of standards and obtention of ISO 14001 certification. Of the

particular interest in this family of standards is ISO 14001 which outlines the generic

requirements for an Environment Management System (EMS) based on the well-established

management principle of Plan-Do-Check-Act. Under ISO 14001 standard, SIDBI would assess

the impact of its operation on the environment, understand how those impacts can be managed

and set clear objectives and targets to continuously improve on the environment performance.

The ISO 14001 would be adopted initially at the Banks Head Office at Lucknow, 5 Zonal

Offices at Lucknow, Delhi, Mumbai, Kolkata and Chennai and 5 representative branch offices

under these 5 Zonal offices. Zonal Offices at Lucknow, Delhi, Mumbai, Kolkata and Chennai

and 5 representative branch offices under these 5 Zonal offices.



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"The Bank is committed to contribute towards national goal of attaining inclusive growth by

promoting the great spirit of micro, small, and medium entrepreneurs as well as reaching out to

those at the bottom-of-the pyramid by extending developmental and financial support through

its own network and that of banks, FIs and Micro Finance Institutions. As a part of our

philosophy of responsible banking, SIDBI envisions sustainable development of the MSME

sector across its social, economic and environmental spheres."

Mission:

To empower the MSME sector with a view to contributing to the process of economic growth,

employment and balanced regional development.

Vision:

To emerge as a single window for meeting financial and developmental needs of the Indian

micro, small and medium enterprises (MSME) sector, to make it strong, vibrant and globally

competitive, to position SIDBI brand as the preferred and customer friendly institution and for

enhancement of shareholders wealth and highest corporate values through modern technology

platform.

Functions meant to help small scale industries:

1. Refinances loans given to small scale sector by primary lending institutions.

2. Discounts and rediscounts bills relating to the transaction of machinery of the small scale

sector.

3. Extends seed capital through specified agencies.

4. Assistance for export of products of small-scale sector.



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5. Provides services like leasing and factoring.

6. Give financial support to purchase raw material and the sales of finished products.

CODE OF SIDBIS COMMITMENT TO MICRO, SMALL AND MEDIUM

ENTERPRISES:

(In the Code, you denotes the MSMEs and we, the Bank)

1. To act fairly and reasonably in all our dealings with you by:

Providing speedy and efficient credit and service delivery relating to our lending operations.

Meeting the commitments and standards in this Code, for the products and services we offer,

and in the procedures and practices our staff follow.

Making sure our products and services meet relevant laws and regulations in letter & spirit.

Ensuring that our dealings with you rest on ethical principles of integrity and transparency.

Operating secure and reliable banking and payment and settlement systems.

Considering cases of financial difficulty sympathetically.

2. To Help You Understand How Our Financial Products And Services Work by

Giving you information about them in any one or more of the following languages: Hindi,

English or the appropriate local language.

Ensuring that our advertising and promotional literature is clear.

Ensuring that you are given clear information about our products and services, the terms and

conditions and the interest rates/service charges, which apply to them.

Ensuring that there is no mis-selling of our products.

Giving you information on what are the facilities provided to you and how you can avail of

these, what are their financial implications and whom you can contact for addressing your

queries.

3. To Help You Use Your Account Or Service by

Providing you regular appropriate updates of your account.

Keeping you informed about changes in the interest rates, charges or terms and conditions.

4. To Deal Quickly and Sympathetically When Things Go Wrong by



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Correcting mistakes promptly and cancelling any bank charges that we apply due to our

mistake.

Handling your complaints promptly.

Telling you how to take your complaint forward if you are still not satisfied.

Providing suitable alternative avenues to alleviate problems arising out of technological

failures in the Bank.

Thematic Channels Of Assistance:

A. Finance Widening Financial Access through Innovative, need based products Indirect

Assistance / Refinance

Indirect assistance in the form of Refinance is provided to more than 900 Primary Lending

Institutions (PLIs), consisting of banks, State Financial Corporations (SFCs), State Industrial

Development Corporations (SIDCs), MFIs, etc. having a network of over 82,000 branches all

over India. The main objective of the Banks Refinance Scheme is to augment the resource

position of PLIs which would ultimately facilitate greater flow of credit to MSMEs. Refinance

support is extended for: Setting up new MSME projects and for technology up gradation &

diversification expansion, etc. of existing MSMEs; l Service Sector entities; and Infrastructure

development & up gradation.

Direct Assistance- Direct finance is primarily channelized to supplement and complement the

efforts of the banks/SFCs/SIDCs/ MFIs to meet adequate credit needs of MSMEs at affordable

rates. It is also undertaken to showcase to the banking system that loans to micro enterprises can

be made profitably and lending to the MSME sector is a viable proposition. SIDBI has evolved

itself to meet the various types of credit requirements of the MSME sector by directly offering

tailor-made financial products and services. Direct Finance is being provided through fund-

based facilities in the form of term loan assistance, resource support, working capital term loan,

MSME receivable finance, risk capital assistance, equity support, scheme for energy saving

projects in MSME sector and non-fund based facilities in the form of letters of credit,

guarantees, etc.

Fighting Poverty with Micro Finance- Micro Finance has emerged as a new paradigm for

inclusive growth by empowering hitherto neglected sections of our society, such as, women,

minorities, backward communities and the poor in the rural, unorganized sector of economy.



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C. Institution Building

While finance is the basic need of the MSMEs, they also require different non-credit facilities,

such as, equity capital, credit rating, and technology transfer and up gradation, etc. to gain extra

miles in their Endeavour to attain competitiveness. As a part of corporate responsibility to the

MSME sector, SIDBI has taken upon itself the challenging task of building various institutional

mechanisms to cater to the emerging needs of the MSME sector. Such institutional set-ups are

the subsidiaries / associates of SIDBI, which have been highlighted in the following sections.

SIDBI Venture Capital Limited (SVCL):

To catalyze entrepreneurship by providing capital and other strategic inputs for building

businesses around growth opportunities and maximize returns on investment.

Venture Funds are recognized globally as the most suitable mechanism for providing risk

capital to knowledge based, innovative and high technology businesses. Recognizing this thrust

area, SIDBI set up SVCL in July, 1999 to act as an exclusive asset management company for

managing venture capital fund, with an aim to catalyze entrepreneurship by providing capital

and other strategic inputs for building businesses around growth opportunities and maximize

returns on investment. At present, SVCL manages two SEBI registered venture capital funds,

viz. National Venture Fund for Software and Information Technology Industry (NFSIT) and

SME Growth Fund (SGF). The Growth Fund has the main focus on growing sectors of the

economy, such as, life sciences, retailing, light engineering, food processing, information

technology, health care, logistics and distribution, etc. The cumulative commitment under these

two funds aggregated at Rs. 531 crore to 55 companies as on March 31, 2009, which has further

improved to Rs. 551 crore to 56 companies as on December 31, 2009.

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE):

To facilitate collateral-free loans to Micro and Small Enterprises from banks and financial

institutions Credit to Micro and Small Enterprises (MSE) sector is generally perceived as high

risk lending, more so in absence of any collateral. In order to encourage banks to lend more to

this sector, the Government of India (GoI) and SIDBI setup the Credit Guarantee Fund Trust for

Micro and Small Enterprises (CGTMSE, erstwhile CGTSI) in July, 2000 to provide credit

guarantee support to collateral free / third-party guarantee free loans up to Rs. 100 lakh



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extended by banks and other lending institutions to MSEs. This is the only credit guarantee

institution in the country exclusively set up for the benefit of MSEs in the country. The corpus

of CGTMSE is contributed by Government of India and SIDBI in the ratio of 4:1. During FY

2008-09, SIDBIs contribution was Rs. 34 crore which was 1.63% of its income and 11.37% of

its profits. The cumulative contribution of SIDBI till March 31, 2009 was Rs.351 crore, which

has been further enhanced to Rs. 381.31 crore by December 31, 2009. This corpus contribution

does not yield any financial return to SIDBI. Notwithstanding the same, SIDBI is committed to

provide Rs. 500 crore to the said corpus to sub serve the larger objective of facilitating

collateral free credit to MSEs. In order to widen its coverage and encourage banks to provide

collateral free loans to MSEs, CGTMSE has raised the guarantee cover to 85% for loans up to

Rs. 5 lakh to micro enterprises and reduced the lock-in period for claims settlement to 18

months. CGTMSE provides higher guarantee cover for loans in the range of Rs 5-50 lakh to

women entrepreneurs as compared to 75% for others. For availing guarantee cover, the one-

time guarantee fee and annual service fee have been reduced to 1.0% and 0.5%, respectively, in

respect of all loans up to Rs 5 lakh. The recent period has witnessed strong inclination of banks

to augment credit flow to the MSME sector under the Credit Guarantee Scheme of CGTMSE.

While it took 8 years to cover the milestone of one lakh guarantees, the next one lakh

guarantees could be achieved in a little over one years time. As on March 31,2009, CGTMSE

has approved 1,50,034 guarantees for an aggregate amount of Rs. 4,824.34 crore which has

increased to 2,49,164 credit guarantees for Rs. 9,192.27 crore as on December 31, 2009.

SME Rating Agency of India Limited (SMERA):

To be a facilitator in creating an enabling environment for growth of MSMEs through

qualitative input for financial intermediation, action research and policy advocacy

Information asymmetry restricts MSMEs growth potential due to lack of timely access to credit

information. Bankers find it difficult to have accurate risk assessment of MSMEs as the desired

information is not readily available. Hence, different banks assess MSME loan proposals with

different yardsticks. Thus, there has always been a need for an independent rating agency for

unbiased normative risk assessment of MSMEs. In order to fill up this gap, SIDBI, as a part of

its corporate responsibility, along with leading public, foreign and private sector banks and Dun

& Bradstreet Information Services India Private Limited (D&B), set up SME Rating Agency of

India Ltd. (SMERA) in September 2005, as an MSME dedicated third-party rating agency to

provide comprehensive, transparent

and reliable ratings and risk profiling. Ratings have proven beneficial for a number of reasons



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for both MSMEs and financial institutions. For MSMEs, ratings add credibility to their status

and help open doors to deal with large companies, especially those who engage with a big

number of vendors. SMERA ratings also serve as motivation to adopt good governance

practices which are beneficial in the long run and also act as a tool for self-correction and self-

improvement. From the perspective of the financial institutions, SMERA ratings facilitate

pricing of loan products on attractive terms

and prove useful in promoting compliance with regulatory and capital adequacy norms. SIDBI

provides interest rate rebate up to 1% to Separated MSMEs. In a short span of time, SMERA

has achieved market leader position in MSME rating by evaluating around 3400 MSMEs upto

March, 2009, which has further increased to around 5,400 MSMEs by December 31, 2009.

India SME Technology Services Ltd. (ISTSL):

To render services for technology transfer and attendant support services in order to enhance

market competitiveness of Micro, Small & Medium Enterprises and promote sustainable

development India SME Technology Services Limited (ISTSL) provides a platform for

MSME to tap opportunities at the global level for acquisition of modern technologies. Set up in

November, 2005, it acts as a Technology Bank for MSMEs in India at the national level. ISTSL

continues to pursue its strategy of rendering services for technology transfer and promotion of

energy efficient, environment friendly technologies in the MSME sector. Efforts are being

made to facilitate reduction in Green House Gases (GHG) in the sector. Such initiatives of

ISTSL are expected to strengthen and accelerate the process of sustainable development in the

MSME sector.

D. Coordination Role

With the objective of all-round development of the MSME sector, SIDBI coordinates with a

number of accredited technical and management institutions across the country to synergize

their services to the sector. In its promotional & development initiatives, the Bank has ongoing

collaboration with various Ministries of Government of India, voluntary, nongovernmental, and

many other developmental organizations. At an international level, SIDBI enjoys confidence

and close partnership with various multilateral and bilateral institutions, such as, the World

Bank; Japan International Cooperation Agency (JICA), Japan; Department for International

Development (DFID), UK; International Fund for Agricultural Development (IFAD), Rome;

KfW and GTZ Germany and Agency Franaise de Dveloppement (AFD), France for their

resource support and technical cooperation on various capacity building programmes for



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MSMEs in India.

E. Policy Advocacy

In line with its charter as the principal financial institution for MSMEs, SIDBI has been actively

involved in playing an effective policy advocacy role towards sound MSME policies and

frameworks by the Government of India (GoI), Planning Commission, Reserve Bank of India,

Indian Banks Association, etc. SIDBI is represented on the apex Board set up by GoI for ms

ME policy formulation and is also associated with various key committees and expert groups.



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4:NSIC (National Small Industries Corporation)

INTRODUCTION:

National small industries corporation Ltd. (NSIC), An ISO 9001 certified company, since its

establishment in 1955, has been working to fulfill its mission of promoting, aiding and fostering

the growth of business enterprise in the country, since its establishment in 1955, has been

working to fulfill its mission of promoting, aiding and fostering the growth of small scale

industries and industry related small scale services /business enterprises in the country. Over a

period of five decades of transition, growth and development, NSIC has proved its strength

within the country and abroad by promoting modernization, up gradation of technology, quality

conscious, strengthening linkages with large and medium enterprises and enhancing exports

project and products from small industries. NSIC facilitates credit facilities to small-scale

industries for their technology modernization programmes and marketing activities through

Equipment Financing and Marketing Financing Schemes. Under the Equipment Financing the

Corporation is offering Term loan scheme and Hire purchase Scheme. For financing the

Marketing Activities (short term) NSIC facilitates financing for marketing actives such as Raw

Material Assistance, Internet Marketing, Exports and Bill Discounting

NSIC operates through 6 Zonal Office, 26 Branch Office, 15 Sub Offices, 5 Technical Service

Centers, 3 Extension Center and 2 Software Technology Parks supported by team of over 500

professionals spread across the country. To manage operations in Gulf and African countries,

NSIC operates from its offices in Dubai and Johannesburg.

National Small Industries Corporation (NSIC) is working to fulfill its mission of promoting

aiding and fostering the growth of Micro, Small & Medium Enterprises (MSMEs) in the

country. One of the objectives of National Small Industries Corporation (NSIC) is to promote

entrepreneurship development in the country. This objective can be achieved by way of

providing handholding support to the first generation entrepreneurs by helping them to set up

their own micro & small enterprises. There is also an urgent need in the country to inculcate

entrepreneurial skills to the youth by way of skill development through which they become

employable as well as create their own enterprise.

NSIC is engaged in basic skill development training programmes through its NSIC Technical

Service Centres (NTSCs) and NSIC Technical Service Extension Centres (NTSECs). Since



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NSIC has few centres only, the reach of NTSCs is very limited geographically. In order to

increase the reach there are several trades which need to be covered to cater to the skill

demands in the country. Labour intensive mass manufacturing based on relatively lower skill

levels provide an opportunity to expand employment in the industrial sector particularly in the

MSEs. However, one of the most critical barriers to the growth of manufacturing sector is

shortage of skilled manpower. This is extremely disconcerting in view of the facts that Indias

young demographic profile has placed the country favourably in terms of manpower

availability. People can be turned to economic assets if they can be gainfully employed. It is,

therefore, necessary to invest in building their capabilities towards training thereby providing

relevant skills for productive employment.

Available data suggest that percentage of population undergoing vocational training in the

country is much lower than in other developing countries. It is therefore necessary to give

special emphasis on technical/vocational education and skill development so as to increase the

skilled workforce from 5% at present to about 50% as envisaged by the Government policies.

There is also a need to expand the number of skills for which training is provided and for this

there is an urgent need for proactive involvement of Indian industries in every aspect of skill

development.

With some of the incubators in place at NSIC, in the light of huge skill demand which exists in

the country, it is felt necessary to build skill development training modules alongwith these

incubators. To bridge this gap, idea of NSIC Training cum Incubation Centre (NSIC -TIC ) was

conceived, which takes into account providing of basic training facilities alongwith incubators

for setting up of small enterprise establishment in the Public - Private Partnership mode. NSIC-

TIC coupled with training on basic trades are envisaged to benefit the society by increasing

self employment opportunities in the country. So, far 20 nos. of NSIC-TIC have been

established pan India. Details of such NSICTICs are available on NSIC website.

NSIC Training-cum-Incubation Centres provide an opportunity for first generation

entrepreneurs to acquire skill on basic technical trades and gain exposure in all areas of business

operations such as business skills development, identification of appropriate technology, hands

on experience on working projects, project / product selection, opportunity guidance

including commercial aspects of business.

NSIC-TICs are to be set up at various places in the country under Public - Private Partnership

(PPP) mode, with a view of benefit the society by creating self-employment opportunities. In

these NSIC-TICs low cost projects using modern/appropriate technologies for setting up new



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enterprises shall be displayed in working condition. The training modules for providing basic

training in skill development

Schemes and Activities of NSIC for Promoting SSI:

NSIC continues to implement its various programmes and projects throughout the country to

assist the SSI units. The Corporation has been assisting the sector through the following

schemes and activities:

a. Composite Term Loan Scheme:

To promote small-scale sector, NSIC has launched a Composite Term Loan Scheme for the

benefit of existing and prospective entrepreneurs to acquire land and building, machinery andequipment and working capital under one roof to the tiny units.

b) Hire Purchase Scheme

Supply of indigenous and imported machinery and equipment on easy financial terms with

special focus on women entrepreneurs, weaker sections, handicapped and ex-servicemen and

SC/ST entrepreneurs.

c) Equipment leasing

It is done mainly to facilitate SMEs to expand their capacities or diversify and/or upgrade their

technology according to the needs of the market

d) Working Capital Finance

This Scheme aims at augmenting working capital of viable and well managed units, on selective

basis in case of emergent requirements to enable them to pay-off their purchase of consumable

stores, spares and production related overheads particularly electricity bills, statutory dues.

e) Raw Material Assistance

It facilitates availability of scarce raw material either through the domestic market or by

importing.

f) Marketing Support Programme

NSIC has been trying to act as a major agency to bring SMEs closer to various Governmental

purchasing agencies, with the intention of creating confidence in the purchasing agencies about



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SMEs, and their capabilities to supply goods and services of requisite quality, economic prices

and adherence to agreed delivery schedules.

g) Tender Marketing

It participates in bulk local/global tender on behalf of Small Scale Industries/Enterprises. It is

aimed at assisting SSIs with the ability to manufacture quality products but which lack brand

equity & credibility or have limited financial capabilities.

h) Integrated Marketing Support

NSIC has been operating an Integrated Marketing Support Programme in which bills pertaining

to supplies made by small scale units to eligible purchasers are discounted by NSIC up to a

certain specified limit.

i) Government Stores Purchase Programme

The units registered with the Corporation for participation in government purchase programme

are considered at or with individual purchase organizations and derive all the benefits like free

supply of tender forms, exemption from payment of earnest money, security deposits, etc.

j) Technology Upgradation

Excellent technical support is provided to SSIs/SMEs through five NSIC Technical Service

Centres. These centres have been recognised by Council of Scientific and Industrial Research

for in-house R&D. NSIC has set up a Technology Transfer Centre. The latest information is

provided to on-line connections and networks of computers on matching technology seekers

and technology providers are arranged through the Technology Transfer Centre.

k) Software Technology ParksNSIC has set up a NSIC-STP Complex under Software Technology Parks of India (STPI).

Software Technology Parks facilitates small scale units to establish their units for the 100%

export of software and also act as the major point to activate software exports directly through

NSIC. NSIC-STP.

Complex at Okhla, New Delhi is one of such Parks set up by the National Small Industries

Corporation under the Software Technology Parks of India to promote small entrepreneurs in

software development. NSIC-STP provides high speed better communication facilities through



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VSNL/SATCOM networks, built-up office space, and uninterrupted power supply, back-up

power through DG sets, a modern business centre and other administrative support.

l) Exports:

NSIC is providing a complete package of export assistance, testing facilities, pre-shipment

credit facility, export incentives etc. apart from exposure to the products of SSEs in trade fairs,

buyer and seller meets etc. The Corporation has been endeavoring to increase share of Indian

industries in purchases to United Nations Organization, it being the largest single buyer in the

world.

2) Imformediary services:

Information today is becoming almost as vital as the air we breathe. Weneed it every minute of

our working lives. And with the increase in competition and melting away of international

boundaries, the demand for information is reaching new heights.

Keeping in mind the information needs of small industries NSIC has launched its

Informediary Services. A one-stop, one-window bouquet of aids that will provide information

on business, technology and finance, and also exhibit the core competence of Indian SMEs in

terms of price and quality-internationally, as well as domestically.

NSICs Infomediary Services use a professionally managed HR base and modern technology

for dissemination of vital information-websites, sector- specific newsletters (both print and

electronic), and e-mails. Potential.

3) Other Roles of NSIC:

a) Approval of lay out plan of NSIC-TIC

NSIC shall approve the layout plan submitted by the Private Partner, of the built up/proposed

infrastructure for setting up of proposed NSICTIC.

b) Arrangement of finance for procurement of machinery and equipment required for

setting up NSIC-TIC

NSIC may consider proposal of the franchises for arranging either through bank and or through

its own resources against the provision of bank guarantee etc. The Franchise may take the help



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of NSIC in procuring such machineries / equipments by availing the services of approved

supplier for which prescribed service charges should be payable to NSIC.

c) Training of faculty

NSIC shall train the teaching faculty engaged by franchises for imparting training for NSIC

-TICs. Such training shall be provided by NSIC at the prescribed fee before start of

the training.

d) Training modules and contents

The training modules shall be approved by NSIC out of the projects tick marked by the

franchises in the suggested list of project(s) or the list of training modules submitted by

the franchises depending upon the demand of local area. The franchises shall conduct the

training programme strictly in accordance with the training modules and contents approved and

provided by NSIC.

e) Handholding support to trainees

NSIC shall provide handholding support to the successful trainees by way of arranging finance

from the banks and other support services required for setting up their own micro/small

business enterprises.

f) Monitoring by NSIC

The Franchise shall submit monthly reports in the prescribed formats and in the prescribed

manner, to NSIC for monitoring and control.

d) On completion of successful training, the candidates shall be issued a certificate with a

unique code number jointly by NSIC and Franchise.

e) The Franchise shall permit NSIC officials to inspect/surprise visits their Centres.

f) NSIC authorise the Franchise to make use of its name only to notify the understanding

between the NSIC and the Franchise for setting up of NSIC Training cum Incubation

Centre (NSIC-TIC) for Small Enterprise Establishment under Public Private Partnership

(PPP) Mode.

g) The logo and artwork of NSIC shall be made available to the franchise centres for the limited

purpose of association of Franchise with NSIC.

h) The Franchise indemnifies the NSIC of all liabilities claims, consequential damages, etc.,

occurring in setting up and running of NSIC-TICs. In this regard, the Franchise will have to



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execute an Indemnity Bond on the prescribed format to be provided by NSIC.

i) The franchise shall also enter into agreement with NSIC in the prescribed format to be

provided by NSIC, before setting up of NSIC-TICs. This agreement shall be valid for one year

from the date of signing. The performance of the centre shall be reviewed before granting any

extension in the contract.

j) The Franchise should not commit any employment opportunity to any trainee, in the name of

the NSIC.

k) Sub-Franchise is not allowed.

5. How to apply:

Companies, firms, NGOs, Educational & Technical Institutions, Industry Associations,

interested to set up NSIC-TICs under the franchise arrangements may apply on prescribed

application format with stated enclosures along with non refundable application fee of Rs.

5,000/- by way of demand draft in favour of National Small Industries Corporation Limited.

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