ANNUAL REPORT

2005-2006

GOVERNMENT OF INDIA MINISTRY OF SMALL SCALE INDUSTRIES

Contents
Chapter I

Page No.

An Overview_______________________________________________________________1 Chapter II Small Industry Development Organisation (SIDO)_________________________________ 5 Chapter III National Small Industries Corporation Ltd.______________________________________ 42 Chapter IV Training and Entrepreneurship Development____________________________________ 50 Chapter V National Commission for Enterprises in the Unorganised Sector (NCEUS)____________ 61 Chapter VI International Cooperation___________________________________________________ 64 Chapter VII Activities in the North Eastern Region__________________________________________70 Chapter VIII Development Activities for Women____________________________________________72 Chapter IX Use of Official Language____________________________________________________ 76 Chapter X Vigilance Matters__________________________________________________________ 78 Chapter XI Citizens Charter__________________________________________________________ 80 Annexure I Summary of Recent and Important Audit Observations and Replies Thereto___________ 82 Annexure II Performance Indicators of Small Scale Industries________________________________ 89 A c r o n y m s____________________________________________________________90

Chapter
AN OVERVIEW
1.1.0 BACKGROUND
1.1.1 The small scale industries (SSI)

schemes/programmes undertaken by the organisations of the Ministry seek to facilitate/ provide one or more of the following:
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constitute an important segment of the Indian economy in terms of their contribution to the countrys industrial production, exports, employment and creation of an entrepreneurial base. The Government established the Ministry of Small Scale Industries and Agro and Rural Industries (SSI & ARI) in October, 1999 as the nodal Ministry for formulation of policies and Central sector programmes/schemes, their implementation and related co-ordination, to supplement the efforts of the States for promotion and development of these industries in India. The Ministry of SSI & ARI was bifurcated into two separate Ministries, namely, Ministry of Small Scale Industries and Ministry of Agro and Rural Industries in September, 2001. 1.1.2 The role of the Ministry of Small Scale

adequate credit from financial institutions/ banks;

funds for technology upgradation and modernisation;

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integrated infrastructural facilities; modern testing facilities and quality certification laboratories;

access

to

modern

management

practices and skill upgradation through appropriate training facilities;

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assistance for better access to domestic and export markets; and

cluster-wide measures to promote capacity-building and empowerment of the units and their collectives, in addition to all or some of the above-mentioned supports.

Industries is thus to mainly assist the States in their efforts to promote growth and development of the SSI, enhance their competitiveness in an increasingly market-led economy and generating additional employment opportunities. In addition, the Ministry attempts to address issues of country-wide common concerns of this segment and also undertake advocacy on behalf of the SSI for this purpose. The specific 1.2.1

1.2.0 ORGANISATIONS OF THE MINISTRY

The formulation and implementation of

the policies and programmes/projects/ schemes is undertaken by the Ministry with the assistance of its attached office and public

sector enterprise, namely, the Small Industry Development Organization (SIDO) and the National Small Industries Corporation Ltd (NSIC). 1.2.2 Recently, the Government has also set

Institutes (SEPTIs) and 1 Hand Tool Design Development and Training Centre. The SIDO also has a network of Tool Rooms and Process-cum-Product Development Centres (PPDCs) to provide technology and training support. These institutions are run as autonomous bodies, registered as societies under the Societies Act. 1.3.3 Over the last 51 years, the SIDO has

up the National Commission on Enterprises in the Unorganised Sector (NCEUS) to suggest policies and programmes for addressing the wide range of issues affecting the productive potential of the large segment of unorganised micro and small productive units.

served a very useful purpose as a catalyst of growth of the SSI through its vast network of field organisations spread all over the country.

1.3.0 SMALL INDUSTRY DEVELOPMENT ORGANISATION (SIDO)

1.3.1 The Office of the Development

1.4.0 NATIONAL SMALL INDUSTRIES CORPORATION LTD. (NSIC)

The National Small Industries Corporation Ltd. was established by the Government in 1955 as a public sector company, with a view to promoting, aiding and fostering the growth of SSI in the country, with focus on commercial aspects of their operation. NSIC implements several schemes to help the SSI in the areas of raw material procurement, product marketing, credit rating, acquisition of technologies, adoption of improved management practices, etc., through its 8 Regional Offices, 17 Branch Offices, 5 National Technical Services Centres, 2 Off-shore Offices, 2 Software Technology Parks and 3 Technical Services Extension Centres, spread practically all over the country. The Corporation, an ISO: 9001-2000 Company, has also set up a number of turnkey projects in many developing countries.

Commissioner (Small Scale Industries) [DC (SSI)] is also known as the Small Industry Development Organisation (SIDO). Established in 1954, it is the apex body for assisting the Government in formulating and overseeing the implementation of its policies and programmes/projects/schemes. The SIDO is headed by the Additional Secretary & Development Commissioner (SSI). 1.3.2 SIDO provides a comprehensive

range of common facilities, technology support services, marketing assistance, entrepreneurial development support, etc., through its network of 30 Small Industries Service Institutes (SISIs), 28 Branch SISIs, 4 Regional Testing Centres (RTCs), 7 Field Testing Stations (FTSs), 2 Small Entrepreneur Promotion and Training

His Excellency Dr. APJ Abdul Kalam, President of India giving away the prizes at the National Convention of Small Agro & Rural Industries & Presentation of National Awards. Also seen in the picture are Shri Mahabir Prasad, Minister (SSI&ARI), Shri Anupam Dasgupta, Secretary (SSI&ARI), Shri Satyananda Mishra, Addl. Secy. & Dev. Commr. (SSI)

1.5.0 SMALL SCALE INDUSTRIES BOARD

1.5.1 The range of developmental and

1.5.2

The Ministerin-charge of the Ministry

is the Chairman of this Board which includes, among others, Industry Ministers of States, some Members of Parliament, Secretaries of various Departments of the Government of India, representatives of financial institutions and public sector undertakings in the field and of important associations of SSI at the national, State and other levels.

advocacy work undertaken by the Ministry involves active participation of and consultations with several Departments/Ministries and organisations of the Central/State Governments as well as the associations of the SSI. To facilitate consultation, coordination and interinstitutional linkages, the Small Scale Industries Board has been constituted. It is an apex advisory body to render advice to the Government on all issues pertaining to the SSI.

1.6.0 NATIONAL ENTREPRENEURSHIP DEVELOPMENT INSTITUTES (EDIs)

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As entrepreneurship development and training is one of the key elements for the promotion of SSI, the Ministry has established 3 National Entrepreneurship Development Institutes, viz., the National Institute of Small Industry Extension Training (NISIET) at Hyderabad, the National Institute of Entrepreneurship and Small Business Development (NIESBUD) at Noida and the Indian Institute of Entrepreneurship (IIE) at Guwahati, as autonomous societies. These institutes are engaged in development of training modules, undertaking research and training and providing consultancy services for entrepreneurship development in the SSI sector.

1.7.0 NATIONAL COMMISSION FOR ENTERPRISES IN THE UNORGANISED SECTOR

The National Commission for Enterprises in the Unorganised Sector (NCEUS) has been constituted in September, 2004 for a period of three years. The Commission has been given the mandate to examine the problems of enterprises in the unorganised sector and suggest measures to overcome them. It consists of a Chairman, three full time members, three part-time members and an Advisory Board consisting of eminent experts from fields related to the unorganised sector.

Chapter

II

SMALL INDUSTRY DEVELOPMENT ORGANISATION (SIDO)

2.1.0 ROLE AND FUNCTIONS

2.1.1 The Office of the Development

development of the SSI, the TRCs have started concentrating on clusters of small industries for delivery of appropriate technology related services. 2.1.3 Besides, there are 18 autonomous

Commissioner (Small Scale Industries) headed by the Development Commissioner, is an apex body for assisting the Government in formulating, coordinating, implementing and monitoring policies and programmes for promotion and development of the SSI in the country. It provides a comprehensive range of facilities and services to the SSI through a network of 30 Small Industries Service Institutes (SISIs), 28 Branch SISIs, 4 Regional Testing Centres (RTCs), 7 Field Testing Stations (FTSs), 1 Hand Tool Design Development and Training Centre and 2 Small Entrepreneur Promotion and Training Institutes (SEPTIs). 2.1.2 With a view to facilitating transfer of

bodies operating with the SIDO, which offer to the SSI an array of services in product design, tooling, research and human resource development, marketing, etc. These autonomous institutions include 10 Tool Rooms located at Hyderabad, Bhubaneshwar, Kolkata, Jamshedpur, Aurangabad, Indore, Ahmedabad, Ludhiana, Jalandhar and Guwahati; two Central Footwear Training Institutes at Agra and Chennai; two Product-cum-Process Development Centres at Agra and Meerut; one Fragrance & Flavour Development Centre at Kannauj, one Centre for Development of Glass Industry at Firozabad, one Institute for Design of Electrical Measuring Instruments at Mumbai and one Electronic Service and Training Centre at Ramnagar. 2.1.4 The major activities of SIDO include

technology for technological upgradation of the SSI, Technology Resource Centres (TRC) have been set up in all the 30 SISIs. These Centres identify appropriate technologies and work with the SSI to assist them in acquiring them. With increasing emphasis on cluster based

the following:

Advising the Government in formulation of policies and programmes/projects/ schemes for the promotion and development of the SSI.

2.1.5

An amount of Rs. 360.69 crore has

been allocated to SIDO for the implementation of the Plan Schemes during the financial year 2005-06.

Providing

techno-economic

and

managerial consultancy, common facility and extension services to the SSI.

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2.2.0 MAJOR POLICY INITIATIVES

2.2.1 SMALL AND MEDIUM ENTERPRISES DEVELOPMENT (SMED) BILL

Providing support for technology upgradation, modernisation, quality improvement facilities. and infrastructure

Assisting the SSI in human resource development through training and skill upgradation.

A single comprehensive legislation for promotion, development and enhancement of competitiveness of the SSI has been a longstanding demand of the sector, with a view, inter alia, to reducing the rigours faced by the sector on account of application of a plethora of laws and regulations. In keeping with the declaration in the National Common Minimum Programme (NCMP) of the Government in this regard, the Ministry of SSI drafted the Small and Medium Enterprises Development (SMED) Bill, 2005 which seeks to define enterprise as against the restrictive category of small scale industry, integrate micro, small and medium enterprises (MSME) as a continuum and address the major problems of the MSME. The SMED Bill was introduced in the Lok Sabha on 12 May 2005 and later referred to the Department-related Parliamentary Standing Committee (DRPSC) on Industry. After considering the wide-ranging recommendations of the DRPSC based on its detailed consultation with various stakeholders, notice for official amendments to the SMED Bill, 2005 and enacting the Micro, Small and

Providing economic information services to the SSI.

Maintaining a close liaison with the Central Ministries, Planning Commission, State Governments, Financial Institutions and other organisations concerned with the development of the SSI.

Evolving, implementing and coordinating policies and programmes for development of the SSI as ancillaries to large and medium industries.

Providing testing and calibration services to the SSI.

Implementing / monitoring the flagship schemes of:

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Credit Guarantee Fund Credit Linked Capital Subsidy for Technology Upgradation

Small

Industries

Cluster

Development Programme

Medium Enterprises Development (MSMED) Bill was sent to the Lok Sabha on 2 December 2005. The MSMED Bill provides, inter alia, for the following important matters: (i) Constitution of the National Micro, Small and Medium Enterprises Board with a much wider and representative composition and wider functions; (ii) Replacement of the existing two-stage system of optional registration of the SSI by that of optional filing simplified memoranda by micro and small enterprises; (iii) Improving access of micro and small enterprises (MSE) to credit; (iv) Statutory backing for procurement preference policies in favour of the MSE; (v) Simplification and harmonisation of inspection procedures and requirement of maintaining registers and furnishing returns, as applicable to the micro, small and medium enterprises (MSME) under specified Labour laws; (vi) Strengthening of provisions on relating to the problem of delayed payments to micro and small enterprises and widening the functions of the relevant dispute resolution mechanisms with a view to providing quicker and more effective relies to the MSE in cases of disputes; and (vii) Simpler scheme for closure of business by the MSE

2.2.2

PACKAGE FOR PROMOTION OF MICRO AND SMALL ENTERPRISES

In keeping with another declaration in the NCMP, a promotional package for the MSE was drafted by the Ministry during the year. Inter-Ministerial consultations were held with seventeen Ministries/Departments/Commissions/Councils on the draft Promotional Package. However, on the advice of the Planning Commission and the Department of Expenditure to first seek appraisal of the proposal by the Expenditure Finance Committee (EFC), an EFC Memorandum was circulated. Attempts are underway to resolve the large areas of difference of opinion of the Ministries/Departments on the elements of the proposed package before its consideration by the EFC and then the Government.

2.2.3

ENHANCEMENT OF INVESTMENT LIMIT FROM RS. 1 CRORE TO RS. 5 CRORE

Under the Industries (Development and Regulation) Act 1951 [I (DR) Act] the small scale industry is defined as one with an investment upto Rs. 1 crore in plant and machinery, excluding land and building. However, in the changed economic scenario of liberalisation and globalisation and with a view to increasing the competitiveness of manufacturing SSI, the investment limit in respect of 71 products has been enhanced to Rs. 5 crore to enable the units manufacturing these products to carry out technological upgradation and modernisation of their units. In addition, investment limit for 69

hi-tech products as well as those for the pharmaceutical sector is also being enhanced to Rs. 5 crore. The final notification in respect of this is under issue.

confirmation of such violation, criminal complaints have been filed against three units located in Hyderabad, Kolkata and Delhi and investigations have been initiated in a few more cases.

2.2.4

RESERVATION POLICY

With a view to providing to the SSI opportunities for technological upgradation, promotion of exports and economies of scale, items reserved for exclusive manufacture by the SSI have been dereserved from time to time. The dereservation process involves extensive consultation with all the stake holders, including the SSI associations and various Ministries/ Departments concerned and the Planning Commission. As per the provisions of the I (DR) Act, an Advisory Committee has been constituted which recommends reservation/ dereservation of items from time to time. Based on consultations with the stake holders and on the recommendations of the Advisory Committee, 193 items were dereserved during 2004-05. After this round of dereservation, there are 506 items reserved for exclusive manufacture by the SSI. Section 29 B of the I (DR) Act provides for penal action against violation of the policy of reservation for exclusive manufacture by the SSI by non-SSI units. Occasional complaints of violation of this policy are received from Members of Parliament, Government Departments, SSI associations, individual SSI units, etc. Detailed policy guidelines for initiating action against non-SSI units violating the reservation policy were circulated to all SISIs and State Governments. On prima facie

2.3.0 CREDIT TO SSI AND TINY/ MICRO SECTOR

2.3.1 Credit is one of the critical inputs for

the promotion and development of the SSI. To facilitate timely and adequate credit to the SSI, the Government has taken several initiatives/ measures. The existing components of the credit policy for the SSI are as under: (i) Priority Sector Lending: Credit to the SSI is part of the priority sector lending by banks. For the public and private sector banks, 40% of the net bank credit (NBC) is earmarked for the priority sector. For the foreign banks, however, 32% of the NBC is earmarked for the priority sector, of which 10% is earmarked for the SSI sector. Any shortfall in such lending by the foreign banks has to be deposited with the Small Industries Development Bank of India (SIDBI). (ii) Institutional Arrangement: The SIDBI is the principal financial institution for promotion, financing and development of the SSI sector. Apart from extending financial assistance to the sector, it coordinates the functions of institutions engaged in similar activities. SIDBIs major operations are in the areas of (i) refinance assistance (ii) direct lending and (iii) development and

support services The commercial banks are important channels of credit dispensation to the sector and play a pivotal role in financing the working capital requirements, besides providing term loans (in the form of composite loans). State Financial Corporations (SFCs) and twin-function State Industrial Development Corporations (SIDCs) at the State level are 2.3.2

the main sources of long-term finance for the SSI sector. Credit support in direct/ indirect form is also provided, to some extent, by National Bank for Agriculture and Rural Development (NABARD), NSIC, etc. The table below gives the position

of flow of credit to the SSI sector from all public sector banks, since 2000.

Credit Parameters 2000 Net bank credit (Rs. crore) Credit to SSI (Rs. crore) No. of SSI accounts (lakh) SSI Credit as percentage of net bank credit (P): Provisional 2001

At the end of March 2002 3,96,954 49,743 22.23 12.5 2003 4,77,899 52,988 16. 95 11.1 2004 (P) 5,58,849 58,278 16.33 10.4 2005 (P) 7,18,722 67,634 17.71 9.4

3,16,427 3,41,291 46,045 22.72 14.6 48,400 22.80 14.2

2.3.3

CREDIT TO TINY/MICRO SECTOR

2.3.4

SCHEME OF SMALL ENTERPRISES FINANCIAL CENTRES (SEFCs)

The table below gives the status of credit to tiny/micro sector (having investment upto Rs. 25 lakh) since 2000. As announced in the Annual Policy Statement for 2005-06, the Reserve bank of India (RBI)

At the end of March 2000 Net bank credit to tiny sector (Rs. crore) Tiny sector credit as percentage of net SSI credit (P): Provisional 54.0 53.7 54.3 50.8 52.9 41.5 24,742 2001 26,019 2002 27,030 2003 26,937 2004 (P) 30,826 2005 (P) 28,063

has formulated a scheme for strategic alliance between branches of commercial banks and SIDBI in selected clusters of the SSI, viz., Scheme of Small Enterprises Financial Centres (SEFCs). This scheme is important in the context of expanding the outreach of banks and improving credit flow to the SSI sector. SIDBI has been made the nodal agency for implementing the scheme in alliance with commercial banks. SIDBI has rechristened its existing branches in the clusters as SEFCs. Based on the directive of the RBI, SIDBI has also entered into strategic alliance with 11 major banks for financing tiny/micro and SME in identified clusters. All the 149 clusters identified by the RBI have been covered under the SEFC scheme.
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average to at least 5 new tiny, small and medium enterprises at each of their semiurban / urban branches per year. The RBI to issue detailed guidelines relating to debt restructuring mechanism so as to ensure restructuring of debt of all eligible small and medium enterprises. Introduction of a one-time settlement scheme to apply to SSI non-performing asset (NPA) accounts in the books of the banks as on March 31, 2004. Taking the existing RBI guidelines as indicative minimum, banks to formulate a comprehensive and more liberal policy relating to advances to the SME sector. Special dispensation under the Credit Guarantee Scheme for all (a) loans upto Rs. 2 lakh, (b) eligible women entrepreneurs and (c) eligible borrowers located in the North Eastern region (including Sikkim) and Jammu and Kashmir.
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2.3.5

RECENT POLICY PACKAGE FOR STEPPING UP CREDIT FLOW

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2.3.5.1 The Government announced on 10

August 2005 a Policy Package for Stepping up Credit to Small and Medium Enterprises (SMEs). The measures in the Policy Package to increase the quantum of credit to SMEs (including SSI) include:
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Banks to adopt cluster-based approach for SME financing. The RBI to constitute empowered committees with the respective Regional Directors of RBI as the Chairmen to review the progress in SME financing and rehabilitation of sick SSI and medium industry units.

Public sector banks to fix their own targets for funding SMEs in order to achieve a minimum 20 per cent year-on-year growth in credit to the SME sector.

Public sector banks to follow a transparent rating system with cost of credit linked to the credit rating of the enterprise.
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Boards of banks to review the progress in achieving the self-set targets as also rehabilitation and restructuring of SME accounts on a quarterly basis.

Commercial banks to make concerted efforts to provide credit cover on an

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2.3.5.2 The RBI has issued a circular dated 19 August 2005 to all public sector banks and dated 25 August 2005 to all private sector banks/foreign banks/ RRBs advising them to implement the measures announced in the Policy Package.
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Rs. 4 lakh were exempted from the purview of service tax; and (ii) service tax on business auxiliary service exempted for persons producing/ processing goods, from inputs received from a manufacturer and sending the resultant product to the same manufacturer for further manufacture of final products, which are cleared on payment of excise duty. 2.4.2.3 Customs Duty: (i) Peak rate of customs duty for non-agricultural products was reduced from 20% to 15%; (ii) the customs duty on selected capital goods and parts was reduced to 10% in some cases and to 5% in some others; (iii) customs duty on seven specified machinery for leather and footwear industry was reduced from 20% to 5%; (iv) customs duty on nine specified machinery used in pharmaceutical and biotechnology sectors was reduced to 5%; (v) for primary and secondary metals customs duty was reduced from 15% to 10%; (vi) reduced customs duty of 10% was made applicable to industrial raw materials such as catalysts, refractory raw materials, basic plastic materials, molasses and industrial ethyl alcohol; and (vii) customs duty on coking coal was reduced from 15% to 5%.

2.4.0 FISCAL CONCESSIONS TO THE SSI SECTOR

2.4.1 GENERAL SSI EXEMPTION SCHEME

Consequent on the announcement of a Comprehensive Policy Package for SSI Sector by the Prime Minister on 30 August 2000, full excise exemption up to the first clearance of Rs. 1 crore per annum was provided to the SSI sector with effect from 1 September 2000. Under the General Excise Exemption Scheme, units having annual turnover of less than Rs. 3 crore were eligible for the excise exemption.
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2.4.2

FISCAL INCENTIVES ANNOUNCED IN THE BUDGET 2005-06

2.4.2.1 Excise Duty: (i) The SSI turnover eligibility limit for availing of the General SSI Excise Exemption was enhanced from Rs. 3 crore to Rs. 4 crore; (ii) excise duty reduced from 16% to 8% on imitation jewellery; and (iii) excise duty of Rs. 1 per kg on refined edible oils and Rs. 1.25 per kg on vanaspati was withdrawn. 2.4.2.2 Service Tax: (i) Small service providers having gross annual turnover less than

2.5.0 SICKNESS IN THE SSI SECTOR

2.5.1 As per the data compiled by the RBI

from the scheduled commercial banks, the sickness in the SSI has decreased in the recent years. The number of sick SSI as at the end of March, 2000 to March, 2004 is given below:

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Total number of sick units As at the end of March 2000 2001 2002 2003 2004 3,04,235 2,49,630 1,77,336 1,67,980 1,38,811 Number* Amount of loans outstanding (Rs. crore) 4,608.43 4,505.54 4,818.95 5,706.35 5,284.54 14, 373 13, 076 4,493 3,626 2,385 Number*

Potentially viable Amount of loans outstanding (Rs. crore) 369.45 399.17 416.41 624.71 421.18

*These units include village industries as well. 2.5.2 Based on the accepted outstanding balance of Rs. 10 crore and below on the date on which the account was classified as doubtful. 2.5.4 The RBI has also issued to all
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recommendations of the Working Group set up by the RBI under the chairmanship of Shri S.S. Kohli, the then Chairman, Indian Banks Association, the RBI had drawn up the Revised Guidelines for Rehabilitation of Sick SSI Units, which were circulated to the banks on 16
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commercial banks detailed guidelines on 8

September, 2005 relating to debt restructuring mechanism to ensure restructuring of debt of all eligible SMEs at terms which are, at least, as favourable as the Corporate Debt Restructuring mechanism in the banking sector.

January 2002 for implementation. The guidelines include, inter alia, a change in the definition of sick SSI units, norms for deciding the viability of sick units, extent and types of concessional finance, etc. The revised definitions were meant to enable banks to take action at an early stage for revival of the potentially viable sick units. 2.5.3
rd

In line with the latest Policy Package,

2.6.0 SIDO SCHEMES/ MEASURES FOR PROMOTION OF SMALL SCALE INDUSTRIES

2.6.1 ADVERTISING AND PUBLICATIONS

the RBI has circulated to all public sector banks on 3 September, 2005 the guidelines on OneTime Settlement (OTS) Scheme for SME accounts. The guidelines will cover all NPAs of the SME, which have become doubtful or loss as on March 31, 2004 or NPAs classified as sub-standard on that date, which have subsequently become doubtful or loss with

2.6.1.1 The Advertising and Publications Division of SIDO disseminates information about Government policies and programmes; incentives and facilities and institutional support services available to the SSI. It coordinates with

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the Directorate of Audio Visual Publicity and SIDOs field offices for timely appearance of advertisements on entrepreneurship development training courses; management development programmes; skill development courses, etc., in local language newspapers in different parts of the country. 2.6.1.2 An effective media plan for coverage was prepared for wide publicity of the events. Four advertisements for the National Expo of Small, Agro & Rural Industries and National Convention & National Award Function were designed and released in all daily English/Hindi newspapers for wide publicity across the country. Publicity material for such events including handbills, brochures, exhibitors directory, jingles on radio, TV advertisements, hoardings, banners, etc., was prepared for various modes of publicity.

2.6.2.2 During 2005-06, the following publications were brought out: (i) (ii) Laghu Udyog Samachar January - March, 2005 Laghu Udyog Samachar April September, 2005 (iii) Laghu Udyog Samachar October December, 2005 (iv) (v) A Guide to SelfEmployment Swa-Rojgar Margdarshika Hindi English Bilingual (Special Issue) Bilingual (In press) Bilingual

2.6.3

INFORMATION & FACILITATION COUNTER (IFC)

The Information and Facilitation Counter (IFC) in the office of the DC (SSI) is disseminating updated information for the benefit of the prospective and existing entrepreneurs. The IFC provides speedy and easy access to information to the public on the services and activities of SIDO and related institutions in the area of SSI promotion and development. The IFC is computerised (Touch Screen Kiosk) and supplemented by hard copies of information such as brochures, pamphlets, books, etc. The general information and documents made available to the entrepreneurs pertain to (i) counselling & guidance on how to set up an SSI unit and provide proper guidance, (ii) documents on technical schemes, project reports and details of various programmes implemented by the SIDO, (iii) policies concerning SSI and schemes of various State Governments for

2.6.2

LAGHU UDYOG SAMACHAR AND OTHER PUBLICATIONS

2.6.2.1. Laghu Udyog Samachar, a quarterly journal in English and Hindi for SSI is disseminating updated information for the benefit of the prospective and existing entrepreneurs. Laghu Udyog Samachar is an important window in print for the SSI, providing access to the latest information on a variety of topics. It creates awareness and disseminates information on policies and programmes of the Central and the State Governments, Government of India orders, circulars, gazette notifications, field activities, statistical and economic information as well as articles on various issues pertaining to the SSl.

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promotion of SSI, (iv) give information on the registration scheme and supply registration forms, (v) information on the I (DR) Act and the notifications on definition, etc., issued under the Act, (vi) credit policies of the Government, (vii) statistics related to small scale industries, (viii) technical and marketing information concerning SSI, (ix) list of Items reserved for exclusive manufacture by the SSI ,etc.

to carry out office automation in the office of the DC (SSI) for better transparency in the functioning of the office;

to create a Website for hosting data available within the organisation; and

to host alliance databases in order to serve as a one-stop shop for the information seekers, industry associations and individual industries.

2.6.4

SMALL ENTERPRISE INFORMATION & RESOURCE CENTRE NETWORK (SENET)

2.6.4.2 20 SENET centres at SISIs were initially given servers & networking components for 64 KBPS leased line connectivity to the main centre and database building. Servers of 64 KBPS, ISDN dialup connectivity and LAN were also provided at these SISIs. A Website was created and launched in 2000. It was upgraded to a knowledge-based, database driven, interactive portal. This portal now has more than 8000 pages of static information and is being updated twice a week. It has a message board, online polls section, online events section, monthly e-news bulletin, etc. Security audit was carried out and the entire infrastructure was reinforced with Intruder Detection System and other security measures. Online Search Facility for ISO 9000 reimbursement cases was launched in November 2004. Monthly E-Newsletter was launched in December 2004. 30 Computer Touch Screen Information Kiosks were installed at all SISIs. Computerised File Tracking System (DMIS) has been introduced at the headquarters. 2.6.4.3 Currently, the following initiatives are being taken under the SENET:

2.6.4.1 Small Enterprise Information & Resource Centre Network (SENET), was launched in April 1997 SENET has been awarded the Golden Icon National Award 2005 for Best Documented Knowledge Resource under Professional Category by the Department of Administrative Reforms & Public Grievances (DARPG), Government of India. The scheme was modified and its scope enlarged to include office automation. The objectives of the SENET scheme are:
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to pioneer, create and promote databases and information;

to facilitate networking among the information seekers, concerning SSI, including the Central/State Governments, Government agencies engaged directly or indirectly in the promotion and development of the SSI, national and State level industry associations, NGOs, etc.;

to establish linkages with existing databases and the end entrepreneur, for development and promotion of the SSI;

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Connectivity to all SISIs through leased line and application of OA modules in all SISIs through central server.

and business environment. The libraries maintain technical books, journals, reports, project profiles, statistical surveys, other related publications, etc.

Upgradation and updation of software, hardware and technologies.

2.6.6

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Facility management of the infrastructure. AMC of the hardware & software for the headquarters and field offices.

SCIENCE & TECHNOLOGY, RESEARCH AND DEVELOPMENT

Updation of databases and automation of more applications and making them online.

2.6.6.1 ELECTRONICS SERVICE & TRAINING CENTRE (ESTC), RAMNAGAR, UTTARANCHAL Electronics Service & Training Centre (ESTC) was set up with assistance of the United Nations Development Programme (UNDP) as a society under the Societies Registration Act in April, 1986 in Uttar Pradesh (now Uttaranchal). The main objective of this Centre is to develop human resources to meet the essential requirements for transfer of technology in assembly and manufacturing of electronic items and parts to promote growth of electronic SSI. Significant work done during the year: (i) Software development for the institutes under the SIDO, (ii) training courses on repair & maintenance of CNC machine of SIDO Tool Rooms, (iii) addition of fibre optics testing facilities and (iv) designing training modules with emphasis on hands-on training.

Implementation of file tracking system and document management system for bringing out transparency in administration.

Implementation of minimum agenda for e-governance set up by the DARPG, Government of India.

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Extension of SENET to 28 Branch SISIs. Commissioning of 28 Touch Screen Information Kiosks at all Branch SISIs.

Full conversion of website to HINDI (launched on 28/10/05).

Upgradation of power back up facility for SENET data centre.

2.6.5

LIBRARY
SIDO maintains libraries at its

headquarters and in all its field offices. These libraries make available technical information required for the development of the SSI. The libraries are used by the officers of the institutes and entrepreneurs in the area to learn about new developments in various segments of industrial

2.6.6.2 INSTITUTE FOR DESIGN OF ELECTRICAL MEASURING INSTRUMENTS (IDEMI), MUMBAI Institute for Design of Electrical Measuring Instruments (IDEMI), Mumbai was set up in

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1969 in collaboration with the UNDP as a society under the Societies Registration Act with the objective of rendering technical services to instrumentation industries in general and the SSI in particular. Significant work done during the year: (i) Manufactured various precision items for ISRO; (ii) design & manufacture of trimming tool for M/s Yogna Udyog (P) Ltd., Mumbai; (iii) training facilities for energy meter type testing and fibre optics testing being added; (iv) manufacture of the spares of gas filling unit for BPCL, Mahul, Mumbai; (v) tailor-made training modules designed as per the needs of the industry with emphasis on hands-on training. 2.6.6.3 PROCESS-CUM-PRODUCT DEVELOPMENT CENTRE, MEERUT Process-cum-Product Development Centre (sports goods & leisure equipment), Meerut was set up during 1984 as a society with UNDP assistance mainly to cater for the technical needs of the sports goods industry in the country. The Centre aims at upgradation as well as improvement in existing technology, quality control, in-house R&D activities and providing workshop & testing facilities to the sports goods & allied industry. Significant work done during the year: (i) The Centre organised 42 training courses and trained 289 candidates, including those belonging to the SC, ST and physically handicapped categories. One-year Diploma with specialisation in sports goods was started;

(ii) The Centre provided common facility services to 64 units upto November 2005 through its leather, mechanical, rubber, plastics and wood-working by undertaking 252 jobs. Besides, it provided testing facilities to 29 units by undertaking 132 jobs for testing; (iii) The Centre developed a Football Stitching Machine. Developmental work on nano materials (fillers) in rubber compounds is in process; (iv) A wood seasoning plant for cricket bats cluster is being set up at Anantnag, Jammu & Kashmir. 2.6.6.4 CENTRE FOR DEVELOPMENT OF GLASS INDUSTRY, FIROZABAD Centre for Development of Glass Industry was established by Government of India with the assistance of UNDP and active support of the Government of Uttar Pradesh to promote and modernise the glass industry by upgrading the conventional technologies currently in use and transfer of modern technology. The main objective of the Centre is to provide technical support to the small scale glass industry by promoting installation of energy efficient glass melting furnaces, auxiliary furnaces, introduction of new types of glasses and their standardisation, environmental protection, introduction of developed techniques for the decoration of glasswares and training for skill development so as to improve the quality and productivity of the SSI glass units. Significant work done during the year: (i) Existing day-tank furnace is running for over 9 months; (ii) a day-tank furnace with further modified design was constructed and commissioned in a local unit; (iii) trial of improved design of sikai

16

bhatti was completed successfully; (iv) construction of pot arch and pot transfer trolley under a sponsored project sponsored by the Department of Science and Technology was completed; and (v) demonstration of energy conservation measures was continued.

institute of its kind in the country. The original investment of the Institute was Rs. 2.37 crore. The aim of the Institute was to fulfil the tooling and training needs of small scale industries in the field of tool design and manufacturing. Significant work done during the year: (i) The

2.6.6.5 PROCESS AND PRODUCT DEVELOPMENT CENTRE, AGRA Process and Product Development Centre, Agra was set up in 1985 with the assistance of Government of India, Government of UP and UNDP/UNIDO. Significant work done during the year: (i) Completed a prestigious order received from ADRDE, Ministry of Defence for investigation of para dropping component of Heavy Drop System Platform of Russian made transport aircrafts; (ii) received the recognition of NCVT for different ongoing long term training courses; (iii) under the the Cluster Development undertook Programme, Centre

Institute achieved ISO 9001-2000 certificate; (ii) the Institute developed import substitute tools for Research Centres, IMARAT (a DRDO establishment); (iii) the Institute conducted international training programmes under various bilateral agreements such as ITEC, TCS, Colombo Plan, Aid to Sri Lanka etc.; (iv) the facilities at the Institute were upgraded to keep pace with the latest technological developments; and (v) the training modules were designed with emphasis on hands-on training. 2.6.6.7 FRAGRANCE & FLAVOUR DEVELOPMENT CENTRE, KANNAUJ (UP) Fragrance and Flavour Development Centre was set up at Kannauj in 1991 by the Government of India in collaboration with UNDP/UNIDO and Government of UP for technological upgradation of essential oils, aroma chemicals, fragrance and flavour industry in the country, especially in the small scale sector. The main objective of the Centre is to serve, sustain and upgrade the technological status of farmers and industry engaged in the cultivation and processing of aromatic plants and other naturally occurring herbs and spices. For fulfillment of these objectives, the following activity modules are in operation at the Centre:

development of the brass/bronze cluster at Pareb, Bihar and is in the process of setting up a common facility centre at Pareb to assist the SSI units. The Centre is also working on the development of gun-making SSI cluster at Munger, Bihar. For both clusters, it prepared the diagnostic study reports. 2.6.6.6 CENTRAL INSTITUTE OF TOOL DESIGN, HYDERABAD Central Institute of Tool Design, Hyderabad was established in 1968 by Government of India with the assistance of UNDP/ILO. It was the first

17

= = =

Agro-Technology & Extension Services. Process Technology. Fragrance & Flavour Development and Their Applications.

Significant work done during the year: (i) T h e Institute organised 19 training courses of durations ranging from one month to two years and trained 636 candidates. The Institute also organised short term courses for women entrepreneurs and minority communities under sponsorship from various Departments of the Government of Tamilnadu; (ii) the Institute provided common facility services to industries in the field and undertook job works on nominal charges. During 2005-06 (upto November 2005), the Institute undertook 251 jobs and thereby provided benefit to 25 units and earned revenue of Rs. 3.15 lakh; (iii) the Institute developed new styles/constructions of ladies ankle boot, childrens shoes, casual shoes of different types, executive shoes of different types and Goodyear welted construction shoes with single layer and double layer soles; (iv) a sub-centre of CFTI was started at Ambur for the benefit of local units; and (v) action was initiated to procure modern machines for footwear manufacturing. 2.6.7.2 CENTRAL FOOTWEAR TRAINING INSTITUTE, AGRA Central Footwear Training Institute, Agra is also a registered society with similar objectives and functions as the Institute at Chennai. Significant work done during the year: The Institute (i) organised seven training courses of durations ranging from one month to two years and trained 225 candidates; (ii) provides common facility services to industries in the field and undertook 449 jobs, thereby benefiting 34 units; (iii) developed new styles/

= =

Quality Assessment and Standardisation. Information, Documentation, Packaging and Marketing.

Significant work done during the year: The Centre earned revenue of Rs. 34.33 lakh up to November, 2005 achieving (revenue) selfsufficiency of 58.85 %. The activities of the Centre benefited 632 SSI units, entrepreneurs and farmers. 14 training and awareness generation programmes were organised at various places.

2.6.7

TRAINING AND MANPOWER DEVELOPMENT

2.6.7.1 CENTRAL FOOTWEAR TRAINING INSTITUTE, CHENNAI Central Footwear Training Institute, Chennai is a registered society. The basic objective of the Institute is to develop human resources for footwear and allied industries through various training programmes on footwear technology and allied subjects. The Institute conducts long term, short term and part time training courses on various subjects of footwear technology. Besides, the Institute provides technical support services to the user industry by making its facilities available to them. The Institute also provides services for development of new products and patterns as per given sample or concept.

18

constructions of shoes and (iv) also developed the moulds for unit soles through its CNC milling machines.

electronic gadgets, gem cutting & polishing, engineering plastics, etc. During 2005-06, 380 EDPs were conducted

2.6.7.3 INDUSTRIAL MOTIVATION CAMPAIGNS (IMC) Industrial Motivation Campaigns (duration 1 - 2 days) are conducted to identify and motivate traditional / non-traditional entrepreneurs having potential for setting up SSI units so as to lead them to self-employment. During 2005-06 (upto November 05). 220 IMCs were conducted and 18,000 prospective entrepreneurs motivated to start their units Around 480 IMCs are expected to be conducted during the remaining months of the financial year for benefiting about 32,000 entrepreneurs. 2.6.7.4 ENTREPRENEURSHIP DEVELOPMENT PROGRAMMES (EDPs) Entrepreneurship Development Programmes (EDPs) of 4-week duration are organised as a regular training activity to familiarise the youth with the necessary aspects for setting up small scale industries. The minimum intake is 20 participants in each course. The training schedules assist potential entrepreneurs in preparing detailed feasibility reports and their appraisal, evaluation, modification, etc. Programmes so far organised covered, inter alia, herbal cosmetics, high fashion garments, hosiery, food & fruit processing, information technology, hardware maintenance, soap and detergents, leather products/novelties, servicing of household electrical appliances and

and 8500 entrepreneurs trained up to November 2005. About 320 EDPs are expected to be conducted during the remaining months for providing training to about 9500 entrepreneurs. 2.6.7.5 SEPTI, TIRUVALLA The Small Entrepreneur Promotion and Training Institute, Tiruvalla was set up in 1994 to improve the managerial and technical skills of the local youth and prepare them for setting up micro enterprises in the rural and urban areas. SEPTI Tiruvalla is a full-time training institute to train 1000 persons per annum. At present, all training programmes are 2-month EDPs and courses are scheduled quarterly. Almost 25% of the trainees have set up their own industrial units after training, while many others have secured jobs in India and abroad. 2.6.7.6 SEPTI, ETTAMANUR The Production Centre, Ettamanur was converted into Small Entrepreneur Promotion and Training Institute in 2000 for imparting training to artisans/entrepreneurs of Kerala in various disciplines as per the needs of the area. The Institute constantly identifies and reviews the new emerging trades with quick employment potential and develops appropriate curricula focusing on end job profiles. The courses comprise artisan trade, management, IT software, computer hardware and other

19

emerging technologies, including biotechnology etc.

disseminating information to SSI Associations and other stakeholders on various aspects of WTO agreements and their likely implications for the SSI, (c) coordinating with other Ministries and Departments of the Government of India in this context, (d) assisting policy formulation for SSIs in conformity with the provisions of WTO agreements and (e) organising workshops/ seminars for the SSI to create awareness and sensitisation, capacity building and sectoral studies. As a part of this process, three awareness programmes are planned during 2005-06. Six one-day workshops on Intellectual Property Rights (IPRs) have been organised during the current year so far. It is further proposed to organise 8 more such programmes. 2.8.2 Various SSI related issues, which

2.7.0 MANAGEMENT DEVELOPMENT PROGRAMMES (MDPS)

2.7.1 Management training courses on

various areas of industrial management initiatives are also devised for owners-cummanagers and supervisory level personnel of small scale industries. The contents of these training programmes are continuously restructured keeping in view the demands of the area and the local requirements of the industries. The subjects under these training programmes cover Industrial Management, Human Resource Management, Marketing Management, Export Management & Documentation, Materials Management, Financial Management, Information Technology & Exports, ISO 9000, WTO/IPR issues, etc. 2.7.2 During 2005-06, about 127 MDPs have

came up during previous WTO Ministerial Conference were handled in the WTO Cell for appropriate response. Requisite feedbacks on the modalities for negotiations on nonagricultural products were provided to the Department of Commerce, Ministry of Commerce & Industry. 2.8.3 In view of the sixth WTO Ministerial

been conducted and 2800 entrepreneurs trained up to November 2005. Around 254 MDPs are expected to be conducted during the remaining months of the financial year.

Conference, a meeting on WTO negotiations on Non-Agricultural Market Access (NAMA) was organised in consultation with the Ministry of Commerce & Industry. SSI associations & other stakeholders participated in this meeting and exchanged their views / concerns regarding the SSI sector. The issue arising out of submission of Indias improved revised offers for services under GATS was also taken up with the Ministry of Commerce & Industry for suitably protecting

2.8.0 WTO CELL

2.8.1 A WTO Cell was set up in the SIDO

headquarters in 1999 to co-ordinate the latest developments in regard to World Trade Organisation. The objectives of the Cell inter alia include (a) keeping abreast with the recent developments in the WTO agreements, (b)

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the interests of the SSI sector during such negotiation in the WTO fora. 2.8.4 As part of the Inter-Ministerial

Rights,

Trade

Secrets,

Geographical

Indications, etc. With the onset of the Trade Related aspects of Intellectual Property Rights (TRIPS) agreement under WTO and the consequent changes made by various countries, including India, in their IPR laws, the issues of IPR have gained special relevance for the SSI sector. It was noticed that changes of far-reaching consequences were being effected in the business landscape without the SSI sector being aware of it. It was also felt that IPRs requires understanding and attention by the industry. By protecting their intellectual property, small scale units could also increase their competitiveness. IP protection would help in:
l

Consultation process, inputs were provided to the Ministry of Commerce and Industry in regard to the ongoing negotiations on various trade agreements for exchange of tariff concessions. These agreements, inter alia, included SAARC Preferential Trading Arrangement (SAPTA), India - Singapore Comprehensive Economic Cooperation Agreement (CECA), Free Trade Agreement (FTA) with the Gulf Co-operation Council (GCC), Preferential Trade Agreement (PTA) between India & Mauritius under the Framework of Comprehensive Economic Partnership Agreement, India-ASEAN Trade Negotiations Group, Kula Lumpur and BIMSTEC-FTA. While providing comments on Indias negative list finalised for negotiation in various FTAs, it was emphasised that while the Ministry of SSI generally supported any proposal for greater engagement of India in FTAs, it would be in the interest of India to press for reasonable protection of its small enterprises in such negotiations on trade related issues. The longterm interests of the SSI sector should be borne in mind while working out the details of these arrangements and, hence, Ministry of SSI should be duly consulted at the appropriate stages.

preventing competitors from copying or closely imitating a companys products or services;

avoiding wasteful investment in research & development and marketing;

creating a corporate identity through a trademark and branding strategy; and

increasing the market value of the company and enhancing access to new market.

2.9.2

During 2005-06, six of the scheduled

14 Awareness Programmes on Intellectual Property Rights have already been conducted in various parts of the country. These programmes are being organised in association with the Department of Science and Technology, National Research Development Corporation of India, Waterfalls Institute of Technology Transfer Limited, New Delhi, etc. Some of these

2.9.0 INTELLECTUAL PROPERTY RIGHTS (IPR)

2.9.1 Intellectual Property Rights consist of

Patents, Trade Marks, Industrial Designs, Copy

21

programmes were product specific, e.g., biotechnology, auto components, leather goods and footwear, sports goods, glass industry, etc. In association with World Intellectual Property Organisation, a short-film on IPRs for small scale industries is being made. 2.9.3 The Ministry of Small Scale Industry

products and processes, a set of project profiles has been prepared in coordination with the Department of Biotechnology and Biotech Consortium India Limited (BCIL). The process of updating project profiles is being carried out in association with BCIL. BCIL is also preparing guidelines for setting up biotech industries in the SME sector.

has proposed a Financial Assistance Scheme to enable registered small scale / tiny units adopt patents in India and abroad. The objective of the scheme is to enable the small scale / tiny units to convert an original idea / invention / know-how into working prototype/processes.

2.11.0 NATIONAL AWARDS FOR SMALL SCALE ENTREPRENEURS

2.11.1 To motivate small scale entrepreneurs

to achieve excellence in management of their

2.10.0 BIOTECHNOLOGY
2.101 A Biotechnology Cell has been set up

units through technological improvements, innovation, quality upgradation, market expansion, export development, etc., and recognise their contribution in these areas, an incentive-cum-recognition scheme of National Awards to Small Scale Entrepreneurs is in operation for several years. The Awards consist of a certificate, trophy and cash prizes amounting to Rs. 25,000, Rs. 20,000 and Rs. 15,000 for the first, second and third positions, respectively. Special Awards at par with the National Award to an outstanding SC/ST and a woman entrepreneur have also been introduced since 1993. Special Recognition Awards carrying cash prize of Rs. 10,000, a certificate and a trophy are given to one entrepreneur from each State/UT. 2.11.2 A Scheme of National Awards for

for the development and promotion of biotechnology in the small scale sector. To disseminate information on the use of biotechnology, a number of sensitisation programmes in various parts of the country are being organised in collaboration with the Department of Biotechnology, Biotech Consortium India Limited (BCIL) and various State Government agencies. 2.10.2 During 2005-06, two one-day

sensitisation programmes on biotechnology (against the target of 10) have already been conducted. Besides, a three-day advanced training programme on biotechnology for a group of 30 officers from the SISIs is scheduled to be held in January, 2006. 2.01.3 To assist SSI entrepreneurs in getting

Research & Development Efforts in Small Scale Industries has also been instituted to promote in-house research and development

basic understanding of the technologies,

22

for strengthening technical soundness and spirit of innovation amongst SSI units. The first, second and third Awards under this scheme carry cash prizes of Rs. 25,000, Rs. 20,000 and Rs. 15,000 respectively besides a trophy and a certificate. 2.11.3 The National Convention of Small, Agro & Rural Industries and presentation of National Awards was held on 28.10.2005 at Ashoka Hotel, New Delhi. Honble President of India, Dr. A.P.J. Abdul Kalam was the Chief Guest and distributed the National Awards to the awardees.

capabilities of SSI units in terms of products manufactured/services rendered. The SubContracting Exchanges also compile the requirements of large buyers so that the requirements and availability could be matched with a view to increasing the business opportunities for the SSI units. 2.12.3 Following the announcement of the

policy package in 1991, the scheme of setting up of Sub-Contracting Exchanges (SCX) by Industry Association/NGOs was also launched. Under this scheme, financial assistance up to Rs. 4.7 lakh is provided for purchasing capital equipment such as computers and accessories, suitable software, furniture, etc., in the first phase and photocopier machine, telephone, fax machine, spiral binding & cutting machine and installation charges in the second phase, for setting up SCX. A matching grant is also provided to these Exchanges on tapering basis towards building rent, stationary , phone / fax charges, electricity charges and conveyance at the rate of 50%, 30% and 10% of the running expenses, not exceeding Rs. 1.25, 0.75 and 0.25 lakh per year respectively during the initial three years, subject to a ceiling of Rs. 1.57 lakh per SCX. 2.12.4 59 Sub-Contracting Exchanges have

2.12.0 SUB-CONTRACTING EXCHANGE FOR ANCILLARY DEVELOPMENT

2.12.1 Ancillarisation and sub contracting

started in India simultaneously with the Government setting up public sector enterprises in the core sectors, viz., manufacturing equipment for defence, railways, telecommunications, heavy electricals, electronics, chemicals, fertilisers, petroleum/ petrochemicals and various other engineering and processing industries and these enterprises sub-contracting components, sub-systems, etc., to small scale / ancillary industries that developed a sound base. 2.12.2 In order to help the vendees/vendors,

been sanctioned to and set up by Industry Associations/NGOs in various parts of the country up to 30.11.2005. Six more Subcontracting Exchanges are likely to be set up during the remaining months of 2005-06. 2.12.5 Under the existing scheme, Vendor

Sub-Contracting Exchanges have been set up by SIDO since the early 70s at selected SISIs, to compile data on the capacities and

Development Programmes (VDPs) at National

23

and State levels are also conducted by the SISIs. These VDPs provide a common platform to large industries/buyers and SSI/sellers to interact with each other and establish long term business linkages. 4 VDPs have been conducted by the SISIs in different parts of the country during 2005-06, till 30.11.2005 and about 26 VDPs are likely to be conducted in the remaining months of 2005-06.

2.13.2 INDO-GERMAN TOOL ROOM, AHMEDABAD

Indo-German Tool Room, Ahmedabad was established by the Government of India in technical collaboration with the Government of Federal Republic of Germany to meet the tooling and training needs of the SSI in the field of tool design and manufacture and training of technical personnel.

2.13.0 SCHEME OF TOOL ROOMS

2.13.1 CENTRAL TOOL ROOM, LUDHIANA
Central Tool Room, Ludhiana was established by Government of India in technical collaboration with the Government of Federal Republic of Germany and active support of Government of Punjab, for providing services in the area of tooling (design and manufacture), precision machining, heat treatment, technical training and technical consultancy to metal working industry, in general and small scale industries, in particular so as to improve the quality and productivity of such units. Significant work done during the year : (i) Established one of the best Rapid Prototyping Centres in the country; (ii) developed expertise for tool design and manufacturing of car seat adjuster; (iii) developed moulds for door closer and lock for a SSI unit exporting products to snowing regions of Europe; and (iv) established special heat treatment process for surgical tools, dies, moulds, etc.

Significant work done during the year: (i) Post Graduate Diploma in Tool Design & CAD/CAM Course for a duration of 1 years and (ii) two vocational training programmes started for school dropouts were started; and (iii) the Tool Room secured ISO 9001-2000 certificate.

2.13.3 INDO GERMAN TOOL ROOM, INDORE

Indo-German Tool Room, Indore was established by the Government of India in technical collaboration with the Government of Federal Republic of Germany. The Government of Madhya Pradesh provided land and building for the project. The Tool Room was set up to fulfil the tooling and training needs of the SSI in the fields of tool design and manufacture and training of technical personnel in these fields. Significant work done during the year: The Tool Room (i) secured ISO 9001-2000 certificate and; (ii) achieved nearly 100% placement for various long term trainees.

2.13.4 INDO-GERMAN TOOL ROOM, AURANGABAD

24

Indo-German Tool Room, Aurangabad was established by the Government of India in technical collaboration with the Government of Federal Republic of Germany. The Government of Maharashtra provided land and building for the project. The Tool Room has been set up to fulfil the tooling and training needs of the SSI in the fields of tool design and manufacture and training of technical personnel in these fields. Significant work done during the year: The Tool Room (i) secured ISO 9001-2000 certificate and; (ii) aTRTCchieved nearly 100% placement for various long term trainees.

Significant work done during the year: The Tool Room (i) secured ISO 14001:2004 certificate (Environmental Management System); (ii) started the II & III batches of 12 & 10 trainees respectively from South Africa for a 1-year course in tool and die making; (iii) opened sub-centres at Pune, Mumbai and Nagpur to provide access to tool room facilities to SSIs located in these areas; (iv) initiated steps to develop e-learning/ e-teaching practices in tool and die technology and; (v) achieved nearly 100% placement for the trainees of its long term courses.

TRTC

2.13.5 CENTRAL TOOL ROOM & TRAINING CENTRE, KOLKATA

Central Tool Room & Training Centre, Kolkata was established in 1977-78 under technical cooperation programme between the

2.13.4 INDO-GERMAN TOOL ROOM, AURANGABAD

Indo-German Tool Room, Aurangabad was established by the Government of India in technical collaboration with the Government of Federal Republic of Germany. The Government of Maharashtra provided land and building for the project. The Tool Room has been set up to fulfil the tooling and training needs of the SSI in the fields of tool design and manufacture and training of technical personnel in these fields.

Governments of India and Denmark to upgrade tooling technology available to the SSI. Significant work done during the year: (i) The Centre developed, manufactured and supplied blanking die for two rupee coins to the Government of India Mints at Kolkata and Mumbai with necessary modifications in the coin design as desired by the Mints. Since these blanking dies were imported earlier by the Mints, these supplies have enabled them to save considerable amount of foreign exchange. (ii) The Centre is rendering project management services to the Governments of Nagaland and Tripura in setting up Mini Tool Room & Training Centre at Dimapur and Agartala respectively.

Shri Mahabir Prasad, Minister (SSI&ARI) visited IGTR, Aurangabad

2.13.6 CENTRAL TOOL ROOM &TRAINING CENTRE, BHUBANESHWAR 25

Central Tool Room & Training Centre, Bhubaneshwar was set up in 1991 under Technical Co-operation Programme between the Governments of India and Denmark. Significant work done during the year: The Tool Room (i) developed and manufactured 2 nos. of coating masks for gold plating of satellite components, a new development for IISU, ISRO, Thiruvananthapuram; (ii) secured the Occupational Health and Safety Administrative System (OHSAS) 18001 certificate; (iii) conducted summer vacation training programme for 1008 engineering students (of whom 233 were girls) from 40 engineering colleges of 5 States; (iv) manufactured components to be used in tri-cycles meant for physically challenged persons provided by the Artificial Limbs Manufacturing Corporation of the Government of India, Bhubaneshwar; (v) developed several tooling as import substitution for SSIs and; (vi) achieved nearly 100% placement for the trainees of its long term courses.

belonging to the SC/ST/Minority (with 30% seats reserved for women candidates), sponsored by the Government of Jharkhand.

2.13.8 HAND TOOL DESIGN DEVELOPMENT AND TRAINING CENTRE, NAGAUR.

The Hand Tool Design Development and Training Centre was set up at Nagaur in Rajasthan in 1988. The main objective of this Centre is to develop hand tool industry in the SSI sector in around Nagaur by providing consultancy and advisory extension services in the areas of tooling, heat treatment, metal finishing, forging and testing and common facility services to these SSI. The Centre is also assisting the SSI in adopting modern technology product design, production process and quality control for cost reduction and improvement in profitability. Testing and training facilities are also provided for upgradation of quality of production and trained manpower.

2.13.7 INDO DANISH TOOL ROOM, JAMSHEDPUR

Indo Danish Tool Room, (formerly Central Tool Room & Training Centre), Jamshedpur was set up in 1991 under Technical Co-operation Programme between the Governments of India and Denmark. Significant work done during the year: The Tool Room (i) achieved nearly 100% placement for trainees of its long term courses; (ii) conducted quality workshop for the employees of SSI units; (iii) undertook two training programmes in 2Year Advanced Machinist Course for students

Significant work done during the year: The Institute has been identified for capacity building under the National Programme for promoting energy efficiency in the SSI hand tool sector in India, a programme launched by the Ministry of SSI, Government of India jointly with UNIDO, Hand Tool Industries Association & SIDBI.

2.13.9 CENTRAL INSTITUTE OF HAND TOOL, JALANDHAR

The hand tools industry consists of organised small scale and cottage industry units which have undergone a rapid expansion. About 80%

26

of hand tool industry is located in and round Jalandhar in Punjab, Nagaur in Rajasthan, Puralia in West Bengal and Tumkur in Karnataka. The hand tool industry plays a vital role in the economy of the country. With a view to providing necessary technology support services in upgrading the hand tool technology in the country, the Govt. of India set up the Central Institute of Hand Tools as a National Institute at Jalandhar as an autonomous organisation with the assistance of the UNIDO in 1983. Significant work done during the year: CAD courses for women under the Skill Development Programme were started.

Rooms for local training and production facilities to assist the SSI units in tool & die making. The scheme provides one-time assistance of upto 90% of the cost of machinery & equipment, limited to Rs. 9 crore, for setting up a new Mini Tool Room and 75% cost of machinery & equipment limited to Rs. 7.5 crore for upgradation of existing Mini Tool Room. The balance machinery cost, cost of land and building and recurring expenditure are funded by the State Government concerned. The proposals received from Governments of Kerala, Madhya Pradesh, Karnataka (Hubli & Hassan) and West Bengal for upgradation of their existing tool rooms and proposals from Governments of Nagaland, Tripura, Jharkhand (Ranchi & Dumka), and Chhattisgarh for setting up of new Mini Tool Rooms have been approved and procurement of machinery & equipment is in progress.

2.13.10 TOOL ROOM & TRAINING CENTRE, GUWAHATI

In order to create facilities for manufacturing tools & dies and training in tool & die making in the North Eastern region, setting up of Tool Room & Training Centre (TRTC) at Guwahati was approved at an estimated cost of Rs. 13.28 crore. The project is under implementation. Training activities of the Centre have been started for the time being in the SISI, Guwahati campus. During the year (upto November 2005), the Tool Room conducted 8 short term courses in which 34 trainees were trained. The Tool Room is also conducting a two-year Machinist course, in which 20 trainees are enrolled.

2.14.0 MARKETING ASSISTANCE AND EXPORT PROMOTION

2.14.1 PARTICIPATION IN OVERSEAS TRADE FAIRS
The SIDO participated in the DIY Show, Japan (August 25 27, 2005), International Autumn Fair, Nairobi (Kenya) (Sept. 14 20, 2005), 88
th

MIPEL The Bag Show, Milan (Italy) (Sept. 22 25, 2005), SAITEX 2005, Johannesburg (South Africa) and INDEE 2005, Mexico. Exhibits of 107 SSI units were displayed in the SIDO stalls and 26 SSI entrepreneurs visited the fairs themselves. Exhibits of 100 SSI units

2.13.11 MINI TOOL ROOM SCHEME

A Mini Tool Room Scheme has been approved to help State Governments set up small Tool

27

are expected to be displayed in the remaining five International Trade Fairs in the SIDO stalls during the current financial year.

indigenous and imported equipment for chemical, mechanical, metallurgical and electrical test and also undertake performance tests, type tests and acceptance tests of semi-finished/finished products and also calibration jobs for measuring instruments and equipment. They also develop testing processes for various products. RTCs also render technical support to the SSI units in upgrading the quality of the products manufactured by them. They provide consultancy services to SSIs in testing and quality management and process quality systems. In order to increase the availability of qualified manpower to the industry, these Centres impart training in testing of products to young persons for gainful employment in Quality Control Laboratories of various industries. They also conduct training courses for the workers sponsored by SSI units on product specific testing and quality control so that these units may be in a position to set up their in-house testing facilities. RTCs also organise awareness programmes on total quality for household electrical appliances and allied appliances and ISO-9000 Quality Management Systems for the benefit of small scale entrepreneurs. RTCs also provide testing facilities to the Bureau of Indian Standards and assist various Government Departments in testing the materials procured by them. All the RTCs are accredited by the internationally recognised NABL as per ISO 17025 as Testing & Calibration Laboratories. During the 10 Plan, an amount of Rs. 30 crore has been provided for modernisation of the Regional Testing Centres. The performance of
th

2.14.2 TRAINING PROGRAMME ON PACKAGING FOR EXPORTS

Four training programmes were organised by SISI, Mumbai, Indore & Jaipur upto December, 2005 and 117 SSIs benefited in the sanctioned 16 programmes. These programmes are conducted in association with the Indian Institute of Packaging. Additional sanction for 6 programmes is being issued to 4 SISIs during the current financial year. A total of 22 programmes is likely to be conducted during 2005-06.

2.14.3 SSI-MDA SCHEME

Rs. 2.85 lakh have been reimbursed to 19 SSI units for adoption of Bar Code Certificate from EAN India. More than 70 SSI units are expected to avail of the financial assistance for adoption of Bar Code Certificate during the current financial year.

2.15.0 REGIONAL TESTING CENTRES/FIELD TESTING STATIONS

2.15.1 REGIONAL TESTING CENTRES
Four Regional Testing Centres (RTCs), set up at New Delhi, Kolkata, Mumbai and Chennai, provide testing facilities to small scale industrial units for raw materials used and semi-finished/ finished products manufactured by them. These Centres are equipped with the state-of-the-art

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Year

Revenue earned (Rs. lakh)

Recurring expenditure (Rs. lakh) 344.30 343.18 267.89 275.34

%age of Revenue/ expenditure (self-sufficiency) 69.35 75.32 96.95 54.33

No. of jobs completed

No. of tests performed

2002-03 2003-04 2004-05 2005-06 (upto Nov.2005)

238.80 258.50 259.74 149.60

12336 12409 10872 7348

134646 139569 136362 91251

the RTCs during the last three years and 2005-06 (upto November 2005) is given above.

products like chemicals, dye-stuffs, lamps, rubber products castings and forgings, paints and varnishes, domestic electrical appliances, general engineering goods, etc. The FTSs are regularly modernising/upgrading their facilities to provide better service to industries in general and SSI in particular. During the 10 Plan, an amount of Rs. 6.5 crore has been provided for the Field Testing Stations. Their performance of during the last three years and 2005-06 (upto November 2005) is summarised below: %age of Revenue/ expenditure (self-sufficiency) No. of jobs completed No. of tests performed
th

2.15.2 FIELD TESTING STATIONS

The Government set up Field Testing Stations at Jaipur, Bhopal, Kolhapur, Hyderabad, Bangalore Pondicerry, and Chenganacherry, as extensions of the RTCs, to provide testing facilities in the areas with clusters of industries and some strategic areas not served by the RTCs. These FTSs provide facilities for testing Year Revenue earned (Rs. lakh) Recurring expenditure (Rs. lakh)

2002-03 2003-04 2004-05 2005-06 (upto Nov.2005)

50.38 61.62 82.89 52.89

81.86 78.35 87.79 64.18

61.79 78.65 94.42 82.41

8004 11035 15150 10590

34508 43306 57269 37424

29

2.16.0 SETTING UP OF TESTING CENTRES BY INDUSTRY ASSOCIATIONS & MODERNISATION/ EXPANSION OF QUALITY MARKING CENTRES UNDER THE AEGIS OF STATE GOVERNMENTS
2.16.1 Under this Scheme, the Government of

2.16.3

During the Tenth Plan, there is an outlay

of Rs. 500 lakh for providing Central grant-in-aid to Industry Associations for setting up of Testing Laboratories and modernisation of Quality Marking Centres of the State Governments. 2.16.4 The year-wise expenditure incurred

so far and the number of testing centres assisted during the current Plan are furnished below: Year Expenditure incurred 2002-03 2003-04 2004-05 2005-06(upto November 2005) 9.50 Nil 40.95 Nil No. of Centres assisted 1 1 -

India provides one-time capital grant-in-aid equal to 50% of the cost of testing equipment and machinery (restricted to Rs. 50 lakh) to the Industry Associations, which wish to set up and operate testing laboratories of international standards and also for modernisation/expansion of the existing Quality Marking Centres of State Governments and their autonomous bodies. Rest of the expenditure on testing machinery and equipment, land and building and working capital has to be borne by the Industry Associations/ State Governments concerned. The objective of the scheme is to promote setting up of testing centres to offer facilities mainly to industrial units including SSI located in such parts of the State which cannot be adequately served by the RTCs/ FTSs for testing quality of raw materials, components and end products as per the relevant standard specifications. 2.16.2 The Scheme, originally introduced in

2.17.0 TECHNOLOGY UPGRADATION

2.17.1 SMALL INDUSTRY CLUSTER DEVELOPMENT PROGRAMME
2.17.1.1 A scheme on Technology Upgradation and Management Programme (UPTECH) was launched in February, 1998 to address the issues related to technology upgradation and modernisation of small scale industries on cluster approach basis. The Scheme, later renamed as the Small Industry Cluster Development Programme (SICDP) in 2003, takes a holistic approach for cluster development and includes an initial diagnostic study and trust building exercise, based on

1995 with provision of maximum grant-in-aid of Rs. 20 lakh only to the Testing Centres run by Industry Associations, was modified in 1997 to include the existing Quality Marking Centres run by the State Governments. The present version of the Scheme is that modified in 2001.

30

which assistance is provided for skill development, technology upgradation of the enterprises, marketing, exports, setting up of common facility centres, etc. Seventy seven clusters covering twenty three States in the country have been taken up for development under the SICDP, including the five National Programmes for development of toy, stone, machine tool, lock and hand tool industries being implemented in collaboration with the UNIDO. Efforts are made to include under the Programme clusters in all the States. Out of the seventy seven clusters under SICDP, the development work in thirty clusters is being carried out by the SISIs. For this purpose, cluster development executives (CDEs) have been imparted necessary training. Two Centres, National Resource Development Centre at the National Institute of Small Industry Extension Training (NISIET), Hyderabad and International Centre for Cluster Competitiveness and Growth (IC3G) at the Entrepreneurship Development Institute of India (EDII), Gandhinagar have been established by the Ministry for imparting training to CDEs, monitoring cluster development work, assisting formulation of programmes and policies for cluster development and guidance. 2.17.1.2 BE, 2005-06 for SICDP is Rs. 6.87 crore, including Rs. 0.62 crore for NE region. Till November 05, an expenditure of Rs. 6.26 crore has been incurred under the Programme. The 10 Plan outlay for the Programme is Rs. 33 crore, of which an expenditure of Rs. 23.3 crore has been incurred so far. 2.17.1.3 With the approval of the Ministry of Small Scale Industries, an autonomous trust
th

for cluster development, named Foundation for Micro, Small & Medium Enterprises (MSME) Clusters has been set up by EDII, Ahmedabad on 09.06.05 with the objective of playing the role of a think tank to strengthen the MSME clusters in the country. With the support of the Ministry of Small Scale Industries, a national convention on cluster development was
st

organised
nd

by

the

Foundation on 1 2

Dec., 2005 for

disseminating the accumulated knowledge and understanding on clusters among a wider group of policy makers, planners, practitioners and academicians.

2.17.2 ISO-9000/ISO-14001 CERTIFICATION REIMBURSEMENT SCHEME

2.17.2.1 The process of economic liberalisation and market reforms has opened up the Indian small scale sector to global competition. In order to enhance the competitive strength of the small scale sector, the Government introduced an incentive scheme for their quality improvement and environment management. The scheme provides incentive (of upto Rs. 75, 000 per unit) to SSI units which acquire ISO 9000/ISO 14001 certifications. The scheme, in operation since March 1994, was enlarged to include reimbursement of expenses for acquiring ISO 14001 certification also w.e.f. 28 October 2002. 2.17.2.2 The procedural guidelines, application forms, etc., have been placed on the SIDO website, (www.laghu-udyog.com) and (www.smallindustryindia.com).
th

31

2.17.2.3 Since its inception, 7789 SSI units have been benefited upto March, 2005. The year wise progress of the ISO-9000/ISO14001 certification reimbursement scheme is as under: Year No. of units 3 10 48 54 85 174 361 649 992 1182 917 3314 2026 9815 Amount of assistance (Rs. crore) 0.016 0.043 0.25 0.39 0.49 0.96 2.25 4.05 6.00 6.99 4.77 17.33 9.76 (upto Dec. 2005) 53.30

motivated to adopt the International quality system and become competitive in the global market place.

2.18.0 MODERNISATION OF SIDO WORKSHOPS

This is an ongoing Plan Scheme with the allocation of Rs. 500 lakh during the 10 Plan for modernisation of the workshops attached to the SISIs/Branch (Br.) SISIs. Funds are provided to the SISIs/Br. SISIs for replacing their outdated/out-of-order machines. Funds are also provided for purchase of accessories and equipment required for developing jigs, fixtures, dies, tools etc. On these machines, training is also imparted to the workers sponsored by the SSI units and unemployed youth seeking jobs in SSI units.
th

1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Total:

Average assistance/unit = Rs.54, 314 2.17.2.4 During 2005-06, 4000 SSI units are expected to be benefited under this scheme.

2.19.0 ENERGY CONSERVATION PROGRAMME (UNDER TECHNOLOGY UPGRADATION SCHEME)

In pursuance of the National Programme on Energy Conservation, SIDO launched this programme in 1990-91. There are many energy intensive areas in the SSI sector, such as foundry, forging, steel re-rolling, glass & ceramics, bakeries, etc. The source of energy for them is coke/coal, petroleum products and electricity. The objectives of taking up the energy conservation programme are as under: (i) Educating SSI units on benefits/ advantages of new techniques/ technologies for saving energy.

2.17.3 AWARENESS, MOTIVATIONAL & EDUCATIONAL TRAINING PROGRAMME ON ISO 9000/ 14001
Simultaneously, an Awareness/Motivational & Educational Training Programme on ISO-9000 & TQM has been taken up through the SISIs & RTCs to sensitise the SSI in ISO-9000 and TQM Quality Systems so that they are

32

(ii)

Undertaking in-depth studies of high energy consuming SSI clusters and identifying gaps and potential barriers for energy conservation, and promoting adoption of suitable techniques/ technologies efficiency. to achieve energy

2.21.0 INTEGRATED INFRASTRUCTURAL DEVELOPMENT (IID) SCHEME

2.21.1 The Integrated Infrastructural

Development (IID) Scheme was launched in 1994, with the objectives of providing improved infrastructural facilities to assist establishment of small scale & tiny units, creating employment opportunities and increasing exports. The Scheme covers Districts which are not covered under the Growth Centres Scheme. The Scheme provides assistance for creating developed sites with Infrastructural facilities like power distribution network, water, telecommunication, drainage and pollution control facilities, roads, banks, raw materials supply, storage and marketing outlets, common service facilities, technological back up services, etc. The Scheme covers rural as well as urban areas with a provision of 50% reservation for rural areas and 50% industrial plots are to be reserved for the tiny sector. The Scheme also provides for upgradation/ strengthening of the infrastructural facilities in the existing old industrial estates. 2.21.2 Under the Scheme, the State / Union

(iii)

Encouraging SSI units to adopt energy audits to improve energy efficiency and fuel substitution, and monitoring the implementation of recommendations.

During 2005-06, taking up 30 Awareness and Motivational cum - Educational Programmes on Energy Conservation at the cost of Rs. 1.80 lakh has been allocated to the SISIs for the benefit of about 900 SSI units.

2.20.0 UPGRADATION OF SIDO WORKSHOPS INTO MINI TOOL ROOMS

A Scheme of Upgradation of SIDO Workshops into Mini Tool Rooms was approved in 1992-93, envisaging conversion of a few common facility workshops attached to SISIs/Br. SISIs into Mini Tool Rooms. Consequently, CNC machines, CAD/CAM software, etc., have been provided to the workshops at SISI, Mumbai, Chennai, Bangalore, Jaipur, Delhi, Kolkata, Kanpur, Ludhiana, Indore, Patna, Goa, Thrissur, Guwahati, Jammu and Ranchi and Br. SISI, Mangalore, Varanasi, Gwalior, Hubli, Allahabad, etc. CAD/CAM facilities have also been provided in selected SIDO field offices as per the need of the area.

Territory Governments concerned or a good NGO with sound financial position are required to select suitable sites, firm up the project proposals and get the project appraised by SIDBI. The High Powered Committee under the Scheme considers the proposals after recommendation of SIDBI becomes available. The estimated cost to set up an IID Centre is

33

Rs. 5 crore (excluding cost of land). Central Government provides 40% grant (subject to a maximum of Rs. 2 crore) and the remaining amount could be loan from SIDBI/Banks/ Financial Institutions or State funds. 2.21.3 In order to further streamline the

2.21.5

Till

31.12.2005,

the

Central

Government has approved the setting up of 112 centres in various States, including 21 projects for upgradation of infrastructure in the existing Industrial Estates. During 2005-06 (upto December, 2005), 5 new IID Centres and 8 centres for upgradation have been sanctioned. The outlay for the Scheme for 2005-2006 is Rs. 30 crore.

implementation of IID Scheme, the following guidelines have been issued: (a) Proper survey would be carried out before preparing the proposals to ascertain potential for setting up of IID Centre. (b) The IID Scheme should be taken up in conjunction with other schemes, viz., Credit Linked Capital Subsidy Scheme (CLCSS), Small Industry Cluster Development Programme (SICDP), Prime Ministers Rozgar Yojana (PMRY), Rural would Employment ensure Generation Programme (REGP), etc. and the States inter-Departmental coordination for this purpose. (c) Advance booking/registration of plots in the IID Centres should be encouraged (d) Possibility of public-private partnership may be explored by States/Implementing agencies Centres. 2.21.4 For the growth of small industries in for maintenance and management of the completed IID

2.22.0 COLLECTION OF STATISTICS OF SSIs

The scheme was started in 1975 with the objective of collecting, compiling and disseminating statistical data/information on the SSI sector. Conduct of Census and sample surveys, collection of IIP data and updation of frames for data collection are covered under the scheme. The scheme is implemented through the State Directorates of Industries (SDIs) and District Industries Centres (DICs).

2.22.1 INDEX OF INDUSTRIAL PRODUCTION (IIP) FOR SSI SECTOR

The objective of IIP is to estimate the growth in production of the SSI sector. It is compiled on a quarterly basis. At present SIDO is working out the growth in production through Index of Industrial Production (IIP) with the base year 1970. The IIP is based on a basket of 356 items contributing 77% of SSI production as per the First Census of SSI. These data are collected from 2400 units having an annual production of Rs. 1 crore or more. As a follow up of the Third

the North Eastern Region & other special category States, Government of India relaxed the funding pattern of this Scheme for the North Eastern Region (including Sikkim), J&K, H.P. and Uttaranchal to provide Central grant of upto 80% (subject to a maximum of Rs.4 crore).

34

Census it has been decided to change the base year from 1970 to 2001-02 and also select a new basket of products so as to make the IIP more representative. Accordingly, at all-India level, a basket of 468 items covering 24,749 industrial units has been selected. These items contribute about 75.5% of the production of the SSI Sector. The frame is the database of the units registered with the State Directorates of Sr. No. Year Total SSI units (lakhs) 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 67.87 70.63 (4.07) 3 4 5 6 7 8 9 10 11 73.51 (4.07) 76.49 (4.07) 79.60 (4.07) 82.84 (4.07) 86.21 (4.07) 89.71 (4.07) 93.36 (4.07) 97.15 (4.07) 101.1 (4.07) Fixed investment (Rs. crore) 93555 100351 (7.26) 109623 (9.24) 115795 (5.63) 123790 (6.9) 125750 (1.58) 130560 (3.82) 133242 (2.05) 135482 (1.68) 139982 (3.32) 146845 (4.90)

Industries. The frame up to 31.3.2005 has been updated.

2.22.2 PERFORMANCE OF SSIs

The Office of the DC (SSI) estimates various performance parameters relating to the growth of the SSI sector. The time series data on various economic parameters are given below: Production (Rs crore) Employment Current prices 78802 80615 (2.30) 84413 (4.71) 98796 (17.04) 122154 (23.64) 147712 (20.92) 167805 (13.60) 187217 (11.57) 210454 (12.41) 233760 (11.07) 261297 (11.78) Constant prices (1993-94) 84728 87355 (3.1) 92246 (5.6) 98796 (7.1) 108774 (10.1) 121175 (11.40) 134892 (11.32) 146262.9 (8.43) 157525.1 (7.7) 170379.2 (8.16) 184401.4 (8.23) (lakh persons) 158.34 165.99 (4.83) 174.84 (5.33) 182.64 (4.46) 191.40 (4.79) 197.93 (3.42) 205.86 (4.00) 213.16 (3.55) 220.55 (3.46) 229.10 (3.88) 238.73 (4.21) Exports (Rs. crore) 9664 13883 (43.66) 17784 (28.10) 25307 (42.30) 29068 (14.86) 36470 (25.46) 39248 (7.62) 44442 (13.23) 48979 (10.21) 54200 (10.66) 69797 (28.78)

1 2

35

Sr. No.

Year

Total SSI units (lakhs)

Fixed investment (Rs. crore)

Production (Rs crore) Employment Current prices Constant prices (1993-94) (lakh persons)

Exports (Rs. crore)

12

2001-02

105.21 (4.07)

154349 (5.11) 162317 (5.16) 170219 (4.87) 178699 (4.98)

282270 (8.03) 311952 (10.52) 357733 (14.68) 418263 (16.92)

195613 (6.06) 210636 (7.68) 228730 (8.59) 251511 (9.96)

249.33 (4.44) 260.21 (4.36) 271.42 (4.31) 282.57 (4.11)

71244 (2.07) 86013 (20.73) NA

13

2002-03

109.49 (4.07)

14

2003-04

113.95 (4.07)

15

2004-05

118.59 (4.07)

NA

2.22.3 COMPARISON OF THE SSI SECTOR WITH THE OVERALL INDUSTRIAL SECTOR
The small-scale sector has maintained a higher rate of growth than the overall industrial sector. The comparative growth rates of production for both the sectors are given below: Year Growth rate Growth rate of SSI of overall sector (%) industrial sector 5.7 10.0 11.5 11.3 9.2 7.8 7.1 8.0 6.1 7.7 8.6 9.96 6.0 9.1 13.0 6.1 6.7 4.1 6.7 5.0 2.7 5.7 6.9 8.4

2.22.4 CONTRIBUTION OF SSI TO THE GROSS DOMESTIC PRODUCT (GDP)

Year Contribution of SSI (%) Total industrial Gross Domestic production 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 39.70 39.94 40.02 39.91 39.63 39.48 39.42 Product (GDP) 7.02 6.81 6.69 6.86 6.67 6.82 6.71

1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05

36

2.22.5 EMPLOYMENT IN SSI SECTOR

The total employment in the SSI sector (including small scale service and business Sr. No. 1. 2. Third All India Census of SSI, 2001-02 Annual Survey of Industries, 2001-02 Census/Survey

entities (SSSBEs) in the country as per various Census/Surveys and their coverage is tabulated below: Number of workers (lakh) 249.33 77.50

Coverage Registered and unregistered, SSIs including SSSBEs Registered under section 2 m(i) and 2 m (ii) of the Factories Act. A small portion of manufacturing SSIs are covered.

3.

Sample Survey of Unorganised Manufacturing, 2000-01 (56 round NSS)

th

Non ASI manufacturing units. Includes most of the manufacturing SSIs. Also units working without fixed premises are also covered. All services activities working with or without fixed premises. SSSBEs are included as illustrative list of services. =2+3+4

370.8

4.

Sample Survey of Unorganised Services, 2001-02 (57 round NSS)

th

265.56

5.

Total employment among units engaged in manufacturing and services

713.86

6.

Percentage share of SSI sector

=(1/5)*100

34.93%

2.23.0 CREDIT GUARANTEE FUND SCHEME FOR SMALL INDUSTRIES

2.23.1 The Government introduced the Credit

Trust for Small Industries (CGTSI) set up jointly by the Government of India and SIDBI. The loan limit under the scheme, which was Rs. 10 lakh per borrower, has been enhanced to Rs. 25 lakh per borrower in accordance with the Comprehensive Policy Package on SSI announced on 30 August, 2000, when the scheme was formally launched. Necessary modifications have been carried out in the indenture of the Trust to enable the CGTSI to guarantee loans up to Rs. 25 lakh.
th

Guarantee Fund Scheme for Small Industries in May 2000 with the objective of making available credit to the SSI units, particularly tiny units, for loans up to Rs. 10 lakh without collateral/third party guarantees. The scheme is being operated by the Credit Guarantee Fund

37

2.23.2

The scheme covers collateral free

0.25% for all borrowers mentioned in categories (a) to (c). 2.23.3 The Credit Guarantee Scheme was

credit facility (term loan and/or working capital including non fund based working capital) extended by eligible lending institutions to new and existing SSI units as well as Small Scale Service and Business (Industry related) Entities (SSSBEs) including Information Technology and Software Industry up to Rs. 25 lakh per borrowing unit. The guarantee cover would be up to 75% of the credit, subject to maximum guarantee limit of Rs. 18.75 lakh. However, the Member Lending Institutions (MLIs) are allowed to extend additional credit facilities against collateral security and/or third party guarantee to the borrowers already covered under the scheme in those cases where the credit facility already covered under the scheme has reached the ceiling of Rs. 25 lakh. The lending institutions availing of guarantee from the Trust have to pay one time guarantee fee of 2.5% and service fee of 0.75% per annum of the credit facility sanctioned by the lending institution to the borrower. Further, as announced in the Policy Package for Stepping up Credit to Small and Medium Enterprises, 2005, the guarantee fee has been reduced from 2.5% to 1.5% for the following categories of loans/ borrowers: (a) (b) (c) All loans up to Rs. 2.00 lakh. All eligible women entrepreneurs. All eligible borrowers located in the NE region including Sikkim and in Jammu & Kashmir. Further, Public Sector Banks will be encouraged to absorb the annual service fee in excess of

initially approved for one year with a corpus of Rs. 125 crore contributed by the Government of India and SIDBI in the ratio of 4: 1. Subsequently, the Government decided to continue the scheme beyond one year. The corpus of CGTSI has been enhanced to Rs. 1056.55 crore with the contribution of Rs. 845.24 crore from the GoI and Rs. 211.31 crore from SIDBI. 2.23.4 As on 30 November 2005, 52 eligible
th

institutions comprising 28 Public Sector Banks, 10 Private Sector Banks, 11 Regional Rural Banks (RRBs), National Small Industries Corporation (NSIC), North Eastern Development Finance Corporation (NEDFi) and Small Industries Development Bank of India (SIDBI) have become Member Lending Institutions (MLIs) of CGTSI for participating in the Credit Guarantee Scheme. 34552 proposals were approved for guarantee cover for aggregate credit of Rs. 790.47 crore.

2.24.0 MICRO FINANCE PROGRAMME

2.24.1 The Government launched the revised

Micro Finance Programme in 2003-04. The scheme has been tied up with the existing programme of SIDBI, which is under operation since January 1999, by contributing to the security deposits required from the MFIs/NGOs to get loan from SIDBI. The Government of India

38

provides funds for Micro Finance Programme to SIDBI under Portfolio Risk Fund (PRF). This fund is used for security deposit requirement of the loan amount from the MFIs/NGOs. At present, SIDBI takes fixed deposit equal to 10% of the loan amount. The share of MFIs/NGOs would be 2.5% of the loan amount (i.e., 25% of the security deposit) and balance 7.5% (i.e., 75% of the security deposit) is adjusted from the funds provided by the Government under the PRF. 2.24.2 As on 30
th

finance (credit) availed of by them for modernisation of their production equipment (plant and machinery) and technology. Existing SSI units registered with the State Directorates of Industries, which upgrade with the state- of -the -art technology, with or without expansion as well as new SSI units which are registered with the State Directorate of Industries and which set up their facilities only with the appropriate eligible and proven technology are eligible.

November 2005, the

2.25.2
st

The Scheme was launched on

Government has released an amount of Rs. 225 lakh towards PRF, which has been fully utilized by SIDBI. The funds under PRF are utilised for extending loans in the hitherto underserved States like North Eastern States including Sikkim, Bihar, Jharkhand, West Bengal, Orissa, Madhya Pradesh, Chattisgarh, Uttar Pradesh, Jammu & Kashmir, Rajasthan and Uttaranchal. As on 30 November 2005, cumulative loan amount of Rs. 34.66 crore has been provided to MFIs/NGOs under the scheme, thereby benefiting 1,64,434 persons.
th

1 October, 2000 for a period of five years or till the sanction of capital subsidy reached Rs. 600 crore, whichever was earlier. The Small Industries Development Bank of India (SIDBI) and the National Bank for Agriculture and Rural Development (NABARD) are the two nodal agencies for implementing this Scheme, credit being made available through eligible Primary Lending Institutions (PLIs). Eligible PLIs include scheduled commercial banks, eligible cooperative banks (other than urban cooperative banks), eligible Regional Rural Banks (RRBs), National Small Industries Corporation (NSIC), State Financial

2.25.0 CREDIT LINKED CAPITAL SUBSIDY SCHEME (CLCSS)

2.25.1 The Government has been operating

Corporations (SFCs) and North Eastern Development Financial Institution (NEDFi). 2.25.3 The guidelines of the Scheme have been

a scheme for technology upgradation for the SSI called the Credit Linked Capital Subsidy Scheme (CLCSS). The Scheme aims at facilitating technology upgradation by providing upfront capital subsidy to SSI units, including agro & rural industry units, on institutional

revised from time to time by the Governing and Technology Approval Board (GTAB) of CLCSS to include more sub-sectors/products and improved technologies under the Scheme. List of 45 approved sub-sectors/products under the current CLCSS guidelines is as under:

39

(1) (2) (3) (4) (5) (6)

Bio tech Industries Common Effluent Treatment Plants Corrugated Boxes Drugs and Pharmaceuticals Dyes and Intermediates Industries based on Medicinal and Aromatic Plants

(23) Combustion Devices/Appliances (24) Forgings & Hand Tools (25) Foundries Steel and Cast Iron (26) General Engineering Works (27) Gold Plating and Jewellery (28) Locks (29) Steel Furniture (30) Toys (31) Non-Ferrous Foundries (32) Sport Goods (33) Cosmetics (34) Readymade Garments (35) Wooden Furniture (36) Mineral Water Bottles (37) Paints (38) Agricultural Implements and Post Harvest Equipment (39) Beneficiation of Graphite and Phosphate (40) Khadi and Village Industries (41) Coir and Coir Products (42) Steel Re-rolling and/or Pencil Ingot Making (43) Zinc Sulphate (44) Welding Electrodes (45) Sewing Machines 2.25.5 The amount of subsidy sanctioned

(7)

Plastic Moulded/ Extruded Products and Parts/ Components

(8)

Rubber Processing including Cycle/ Rickshaw Tyres

(9)

Food Processing (including Ice Creams)

(10) Poultry Hatcheries & Cattle Feeds (11) Dimensional Stones (excluding quarrying and mining) (12) Glass and Ceramics, including Tiles (13) Leather and Leather Products, including Footwear and Garments (14) Electronic Equipment, viz., Test, Measuring, Assembly/Manufacturing, Industrial Process Control; Analytical, Medical, Electronic Consumer & Communication, etc. (15) Fans & Motors (16) General Light Service (GLS) (17) Information Technology (Hardware) (18) Mineral Filled Sheathed Heating Elements (19) Transformers/Coils/Chokes, including Solenoid Coils (20) Wires & Cables (21) Auto Parts and Components (22) Bicycle Parts

during 2001-02 and 2005-06 (April - November, 2005) is Rs. 24.09 crore (approx.). However, most of it (Rs. 13.6 crore approx.) has been sanctioned during 2004-05. The year-wise amount of subsidy disbursed and number of units assisted under the Scheme are given below:

40

Year

No. of units assisted

Amount of sanctioned subsidy (Rs. lakh)

(a)

to raise the ceiling on loans under the Scheme from Rs. 40 lakh to Rs. 1 crore;

(b)

to raise the rate of capital subsidy from 12 per cent to 15 per cent;

2001-02 2002-03 2003-04 2004-05 2005-06* Total

9 47 150 526 203 935

21.36 93.96 374.90 1359.78 559.46 2409.46 (d) (c)

to calculate the admissible capital subsidy with reference to the purchase price of plant and machinery, instead of the term loan disbursed to the beneficiary unit; to do away with the practice of categorisation of SSI units into slabs on the basis of their present investment for determining the eligible subsidy; and

* April-November 2005 2.25.6 To accelerate the pace of implementa-

tion of the Scheme and in the light of the experience gathered in implementing the Scheme, the ongoing CLCSS has been amended: (e)

to extend the validity of the Scheme upto 31 March, 2007.

st

Shri Pranab Mukherjee, Defence Minister inaugurating the National Expo of Small Agro & Rural Industries

41

Chapter
NATIONAL SMALL INDUSTRIES CORPORATION LTD.

III

3.1.0

National

Small

Industries

Corporation Limited (NSIC) has completed 50 years of its service to the small enterprises. During this period, the

3.2.0 ORGANISATIONAL SET UP

The Corporation is manned by a team of professionals at different levels and delivers its assistance through:
l

Corporation provided a wide range of services to the SSI sector, in the fields of marketing, equipment financing, technology upgradation, exports, training and common facilities. Over these five decades of, growth, development and transition, NSIC has proved its strength within the country and abroad by promoting modernisation, quality consciousness, strengthening of linkages of the small with large, medium enterprises and enhancing exports of the SSI sector.

6 Zonal Offices located at Mumbai, Chennai, Kolkata, Hyderabad, Delhi and Noida.

27 Branch Offices and 19 Sub-Offices over States.

5 Technical Service Centres located at Chennai, Howrah, Hyderabad, Okhla and Rajkot.

3 Technical Service Extension Centres located at Aligarh, Rajpura and Guwahati.

3.1.1

NSIC carries forward its mission to

assist small enterprises with a set of schemes designed to put them in a competitive and advantageous position, after drawing lessons from the result of the schemes implemented in the past on its own overall financial health. The schemes now comprise facilitating marketing support, credit support, technology support and other support services.
l l

2 Software Technology Parks one at Okhla, New Delhi and the other at Chennai. 2 Offices outside India at Dubai (UA E ) a n d J o h a n n e s b u rg (S o u t h Africa).

42

3.3.0 SCHEMES OF THE CORPORATION

3.3.1 Marketing Services

l l

Issue of tender sets free of cost. Exemption from payment of earnest money deposit.

Waiver of security deposit up to the monetary limit for which the unit is registered.

Marketing is critical to the growth and survival of small enterprises in todays intensely competitive market. NSIC acts as a facilitator to promote SSI products and has devised a number of schemes to support small enterprises in their marketing efforts, both within and outside the country. These schemes are briefly described below:
l l l

Issue of competency certificate in case the value of an order exceeds the monetary limit, after due verification.

Exhibitions and Technology Fairs: To showcase the competencies of the SSI and to enhance their market access, NSIC participates in select International and National Exhibitions and Trade Fairs every year and facilitates participation of the small enterprises by providing them concessions in rentals, etc. Participation in these events exposes the SSI units to international practices and enhances their marketing prospects.

Consortia and Tender Marketing: In their individual capacity, small enterprises face problems to procure and execute large orders, which inhibit their growth as well as graduation. NSIC, accordingly, forms consortia of units manufacturing the same products, explores the market and secures orders for bulk quantities. These orders are then distributed among the SSI units in tune with their production capacity. Testing facilities are also provided to help these units ensure that the quality of their products conforms with the standard specifications.
l

Export of Products and Projects: NSIC facilitates exports of products and projects of the SSI to other countries. The major areas of operation are:
l

Single Point Registration for Government Purchases: NSIC operates a Single Point Registration Scheme, wherein the registered SSI units get purchase preference in Government purchases. The units registered under this scheme get the following facilities :
l

Export of products such as handicrafts, leather items, hand tools, pipes/fittings, builders hardware, etc.

Supply of small industry projects on turnkey basis.

Advance intimation of tenders issued by DGS&D.

l

Export of IT solutions from India.

43

3.3.2
l

Financing
Facilitation of Finance through Commercial Banks: In order to ensure smooth credit flow to small enterprises, NSIC has entered into strategic alliances with commercial banks for providing longterm/working capital financing of the small enterprises across the country. The arrangement envisages forwarding of loan applications of the interested small enterprises by NSIC to the banks for sanction of loans.

Energy and environment services at selected centres.

Classroom and practical training for skill upgradation.

NSIC Technical Services Centres are located at the following places: Location Chennai Howrah Hyderabad New Delhi Rajkot Rajpura Aligarh Focus area Leather & footwear General engineering Electronics application & computer

NSIC also provides limited finance for equipment and in addition financing for procurement of raw material and marketing activities (short term)

Machine tools & related activities Energy audit & energy conservation activities Domestic electrical appliances Lock cluster & die and tool making

3.3.3

Technology Services

Technology is the key to enhancing a companys competitive advantage. Small enterprises need to develop and implement suitable technology strategy, in addition to financial, marketing and operational strategies, and adopt that which helps integrate their operations with their environment, customers and suppliers. NSIC offers small units the following support services through its Technical Services Centres and Extension Centres: Advising on application of new techniques
l

3.3.4
l

Support Services
Infomediary Services

Information plays a vital role in the success of any business. Recognising the importance of information and its relevance to the SSI units, NSIC provides Infomediary Services to small units. Besides hosting a web site (www.nsic.co.in), NSIC hosts sector specific portals for focused information dissemination. Under this scheme, small units can become members and avail of a number of value-added services. Some important services are:
l l

Material testing facilities through accredited laboratories.

l l

Product design including CAD/CAM. Common facility support in machining, EDM, CNC, etc.

Supplier database. Market intelligence database.

44

l l l l l l

Technology providers database. Information providers database. Linkages with relevant institutions. E to E services. E to B services. Value additions like database/ directories on who makes machines, who makes components, spare capacity bulletin boards, discussion forums, virtual exhibitions, etc.

specially designed for the small enterprises. The Rating Scheme seeks to encourage the small enterprise increase their productivity, since a good rating would enhance their acceptability in the market and also make access to credit quicker and cheaper and thus help reduce the cost of credit. Besides, the rating would also infuse a sense of confidence amongst the buyers of SSI products. With these objectives, Government of India has appointed NSIC as the implementing agency to operate the Performance and Credit Rating Scheme for small enterprises. The scheme is being operated through accredited rating agencies in the country like CARE, CRISIL, D&B, FITCH, ICRA and ONICRA. Government provides financial assistance to small enterprises to the extent of 75 per cent of the cost of rating, subject to a maximum of Rs. 40, 000.
l

Mentoring and Advisory Services

Inadequate management skills are often the cause of non-performance of small enterprises. NSICs mentoring and advisory services are aimed at addressing this impediment to growth. It offers mentor-mentee relationship in which the mentor, a person with wide experience in running his own business, provides his services to an individual or a group of units. An advisor, a senior professional, generally retired and a specialist in a specific area assists in the process. Mentors and advisors provide the necessary professional and moral support in the early lifecycle of an enterprise or to existing units facing critical operational problems.
l

Software Technology Parks

NSIC Software Technology Parks (STPs) facilitate small industries in setting up 100 per cent export-oriented units for software exports. They also act as nodal points to activate software exports directly through NSIC. These STPs extend support in terms of the requisite infrastructure to the SSI units to start business operations with a minimum lead time. The scheme is governed by the STPI regulations of the Department of Information Technology, Government of India. NSIC established the first STP at Okhla, New Delhi in 1995 and second in Chennai in 2001. Several small scale units have taken advantage of these parks and contributed export earnings to the exchequer.

Performance and Credit Rating Scheme for Small Industries

To enable small enterprises to diagnose the strength and weaknesses of their existing operations and take corrective measures to enhance their organisational strengths, a need was felt for introducing a Rating Scheme

45

International Consultancy Services

Commerce & Industry of India, Indo African Society, WASME, IMA, CBI Academy, FIEO, ASSOCHAM, Institute of Socio Economic Research & Action, Indian Machine Tool Manufacturers Association, Logic Consultants (P) Ltd. and PHD Chamber of Commerce and Industry.

For the last five decades, NSIC has acquired various skill sets in the development process of small enterprises. These skills are being networked to offer consultancy services for other developing countries. This activity was started during 2004-05 and is expected to occupy a place in the future service profile of the Corporation. The areas of consultancy are as listed below:
l l l l

3.5.0 MAJOR EVENTS DURING 2005-06

l

Capacity Building Policy & Institutional Framework Entrepreneurship Development Business Development Services

Techmart India 2005 (14-27 November, 2005)

NSIC organised Techmart India 2005, the 13 International Technology Fair coinciding with
th

3.4.0 HUMAN RESOURCE DEVELOPMENT & TRAINING

Human resource is the essence in any organisation. In order to keep abreast with the changing technology and advancements in various fields, the Corporation strived to keep its human resource current with latest developments relating to their functional areas. NSIC Corporate office and nine major branch offices are certified for ISO 9001-2000. Continuous efforts are put in to identify the training needs and evolve suitable training plans to fulfil the identified needs. Besides, a number of officials were also nominated for domestic training programmes, seminars and workshops conducted by professional bodies like FICCI, CII, NIESBUD, SCOPE, NISIET, Associated Chambers of
Shri Mahabir Prasad, Honble Union Minister of SSI and ARI paid a visit to Techmart India 2005. Accompanying the Honble Minister are Shri H.P. Kumar, CMD, NSIC and Shri C.Jose, Chairman, Coir Board

46

India International Trade Fair at Pragati Maidan, New Delhi. The event was sponsored by the Ministry of SSI. 13 series of Techmart India 2005, received tremendous response from trade and industry. More than 230 units, including those in the North Eastern Region, participated in the event. North East Panorama, a special display of products from the North Eastern States, was organised as part of Techmart India 2005 to provide marketing opportunities to them. Some of the items displayed were powder coating machines, automatic filling & packaging machines, tool room machines, pumps & motors, abrasives, decoilers, refractories, testing machines, furnaces, auto parts, R.O. systems and water purifiers, communications systems, public address systems, hand tools, corrugated roofing sheets, switches & other electrical items, genset & grass cutting
th

machines, automatic papad and roti making machines, gem stone drilling and polishing machines, high pressure liquid purification systems, etc. Foreign delegates from Sri Lanka, South Africa, Congo, Saudi Arabia, Nigeria, Russia, Mexico, Spain, Zimbabwe, Mauritius, Cyprus and Bahrain visited Techmart. NSIC was awarded Gold Medal for Special Display of North East Sector in IITF 2005.
l

Buyer as

-Seller the

meets:

Bulk

and

Government departmental buyers such Railways, Defence, Communications and large companies are invited to participate in buyer-seller meets to enrich SSI units knowledge regarding terms and conditions, quality standards, etc. required by these buyers. These programmes are aimed at vendor development from among SSI units for the bulk manufacturers.
l

Third Commonwealth India Small Business Competitiveness Development Programme (20 - 26 November, 2005)

National Small Industries Corporation, in association with Commonwealth Secretariat, London (COMSEC) has been hosting a series of pan-Commonwealth institution building programmes on Small Business These Competitiveness
Shri Anupam Dasgupta, Secretary, Ministry of SSI & ARI inspecting the handicrafts exhibited by Woman Entrepreneur from Rajasthan in Techmart 2005. Also seen in the picture is Shri H.P. Kumar, CMD, NSIC

Development.

programmes focus at building and developing institutional capacity on competitive small business policies and strategies for Commonwealth developing states.

47

Shri Mahabir Prasad, Honble Union Minister of SSI and ARI is seen inaugurating the third Commonwealth-India Small Business Competitiveness Development Programme organised by NSIC

NSIC organised a seminar on Innovative Financing for Small Enterprise Development on September 26, 2005 at New Delhi. The seminar was the part of the National Expo of Small, Agro and Rural Industries organised by Ministry of SSI and ARI from September 26 to 29, 2005 at New Delhi. Dr. Syeda Hameed, Member, Planning Commission inaugurated the seminar. Also seen in the picture are Shri Anupam Dasgupta, Secretary, Ministry of SSI & ARI, Shri Satyanada Mishra, AS&DC SSI and Shri H.P. Kumar, CMD, NSIC, Shri B.D. Narang, Former Chairman, Oriental Bank of Commerce, Shri C. Chandran, CEO, KVIC

48

The third programme in this series was held at New Delhi during 20 26 November, 2005. The theme of the programme was Networking the Commonwealth SMEs through sharing best practices for enhanced competitiveness. The programme was inaugurated by Shri Mahabir Prasad, Honble Union Minister of SSI & ARI and the keynote address was delivered by Shri Anupam Dasgupta, Secretary to Government of India, Ministries of SSI & ARI.

An Agreement on Mutual Cooperation was also signed between NSIC and Pacific Islands Forum Secretarial at the inaugural session of the programme. The objective of this agreement is to enhance the cooperation between India and the Pacific Islands countries in the development of their SME activities.

49

Chapter

IV

TRAINING AND ENTREPRENEURSHIP DEVELOPMENT

4.0

Entrepreneurship Development and

Institutions (EDIs) and also for upgradation and modernisation of existing EDIs in the country. Under the scheme, a matching grant of 50 per cent, subject to a ceiling of Rs. 1 crore is provided for building, equipment, training aids, etc. The balance is contributed by the State Governments/Financial Institutions. During 2005-06, a budget provision of Rs. 200 lakh has been made against which Rs. 155 lakh has already been released.

Training is one of the key elements for development of small scale industries, particularly, the first generation entrepreneurs. The Indian Institute of Entrepreneurship (IIE), Guwahati; the National Institute of Small Industry Extension Training (NISIET), Hyderabad and the National Institute of Entrepreneurship and Small Business Development (NIESBUD), NOIDA have been set up as national level institutions for training and entrepreneurship development in the SSI Sector. To promote and assist

4.2

entrepreneurship development in the country, the Ministry implements (in addition to the schemes of SIDO) two important schemes, namely, Promotion of Entrepreneurship Development Institutions (EDI) and Scheme of National Entrepreneurship Development Board (NEDB).

NATIONAL ENTREPRENEURSHIP DEVELOPMENT BOARD (NEDB) SCHEME

Government of India has adopted several policies, launched new schemes and programmes for entrepreneurship development and established a number of entrepreneurship development institutions in the country. In the changed circumstances, there was no functional or organisational necessity of continuing with the NEDB. Accordingly, the NEDB has been abolished. Though the Board has

4.1

ENTREPRENEURSHIP DEVELOPMENT INSTITUTIONS (EDI) SCHEME

Under the EDI Scheme, grant is given for setting up of new Entrepreneurship Development

50

been abolished, the schemes implemented under the NEDB Scheme are still being implemented by the Ministry of Small Scale Industries.

4.3

INDIAN INSTITUTE OF ENTREPRENEURSHIP (IIE), GUWAHATI

Indian Institute of Entrepreneurship
th

4.3.1 Under the scheme, a grant is provided to eligible institutions for setting up Entrepreneurship and Business Development Centres in Universities/Colleges. Grant is also given for setting up incubators. Reputed organisations engaged in the entrepreneurship development are also provided grants under the scheme for organising workshops/ seminars and conducting research studies relevant to entrepreneurship development. During 2005-06, a budget provision of Rs. 50 lakh has been made against which Rs. 35.15 lakh has already been released. To make this scheme more focused, the guidelines are being revised. 4.3.2
st

(IIE) is completing 12 year of its operation on 31 March 2006. The Institute organises training programmes and undertakes research and consultancy activities in the field of promotion of small industry and entrepreneurship. Since its establishment and upto January 2006, the Institute has organised 903 training programmes/workshops/seminars/meets where 27976 participants participated. The types and number of training

programmes organised and number of participants trained during 2004-05 and 2005-2006 (up to January 2006) and expected achievement for the year are as under:

Sr. Type of Programme No

2004-2005 No of Programmes No of Participants 1487 1621 1121 98 70 232 15 4644

2005-2006 (Up to January 2006) No of Programmes 27 50 27 05 04 02 01 116 No of Participants 656 1767 1174 116 49 76 03 3841

1 2 3 4 5 6 7

Promotion of New Entrepreneurs (PNE) Growth of Existing Entrepreneurs (GEE) Entrepreneurship Education (EE) Creation of Environment for Entrepreneurship(CEE) Information Technology(IT) Seminar & Workshop (S&W) Others (Modern Office Practice) Total

44 49 24 05 04 03 01 130

51

4.3.3

Promotion of New Enterprises

The Institute is continuing its Rural Industries Programme (RIP) in Meghalaya, Manipur and Barpeta in Assam with the help of SIDBI. 4.3.4 Growth of Existing Entrepreneurs: The

Promotion of new entrepreneurs has been the major focus area of training organised by IIE. The details of programmes conducted are as under: Sl. No. Type No. of Programmes 1. 2. 3. General EDP Women EDP Developing Entrepreneurship and Marketing Strategy for the Youth of Char Areas 4. New Enterprises Creation on Coir Products 5. 6. EDP on Food Processing New Enterprise Creation on Selected Sectors 7. 8. EDP for PMRY Beneficiaries EDP for Veterinary Graduates of Nagaland 9. Turnkey EDP Technology Entrepreneurs Total 27 656 1 3 27 74 10. EDP for Science & 1 13 2 44 2 45 2 48 2 52 4 6 4 No. of Participants 105 150 98

Institute organised 46 programmes for the beneficiaries of the Rural Employment Generation Programme implemented by the KVIC, in which 1673 beneficiaries were trained till January 2006. By the end of March 2006, the Institute would organise 8 more programmes of this kind. At the instance of the Ministry of SSI, the Institute organised one comprehensive skill upgradation programme on gem stone cutting and polishing for entrepreneurs of the North Eastern Region in which 23 entrepreneurs participated. The Institute also organised two programmes to create awareness of export opportunities, benefiting 50 prospective entrepreneurs. At the instance of the North Eastern Council, Shillong, the Institute organised one programme on Quality Planning and Management for Small Enterprises. The programme was attended by 21 prospecting entrepreneurs. The Institute also continued its efforts on development of cane and bamboo cluster at Dimapur in Nagaland. 4.3.5 Creation of Environment for

Entrepreneurship: Considering the importance of creating environment for entrepreneurship development, the Institute organised programmes for orientation of the support officials. During the year (up to January 2006) the Institute organised 5 such programmes, where 116 participants participated. The details are as under:

52

Sl. Type of No. Programme 1 Management Development Programme for functionaries of NBCFDC 2 Entrepreneurship and Industrial Extension for officials of Directorate of Industries, 3 Meghalaya Trainers Training Programmes for NGOs 4 Workshop on Project Identification, Formulation and Appraisal for DIC officials of Uttaranchal Total 4.3.6

No. of No. of Progra- Particimmes 1 pants 21

organises short and long duration courses on Information Technology. At the instance of the North Eastern Council, Shillong, the Institute organised two Teachers Training Programmes on Computer Application Skills of six months each till January 2006. The Institute also organised two Certificate Courses in Basic Computer Application. 49 persons took part in

23

these programmes. 4.3.8 Workshops and Meets: The Institute

has been organising seminars, workshops, meets and conferences to provide forum for interaction among the agencies involved in promotion 1 23 of small industry and entrepreneurship, including prospective and existing entrepreneurs. During the year, the Institute, in association with the American 2 49 Soybean Association, organised one workshop on poultry & livestock based enterprises. The Institute also organised one Bankers Meet at Barpeta, Assam, to create awareness of small scale financing involving bankers, district administration and DICC officials. 5 116 4.3.9 The Institute organised a three day Exhibition cum Counselling of Cane & Bamboo Products at Dimapur during 23 - 25 August 2005, as part of its Cluster Development Initiatives at Dimapur, Nagaland. The main purpose of the exhibition was to document the products of the cluster actors and counselling them in regard to their products. 4.10.1 Business Facilitation & Development

Entrepreneurship Education: Creating

awareness among and orientation of college and university teachers on entrepreneurship has been one of the core activities of the Institute. The Institute organised three Teachers Training Programmes in entrepreneurship for school, college and university teachers. In addition, the Institute also organised 24 programmes for college students till January 2006. 4.3.7 Information Technology: Other than

Centre (BFDC) is a wing of the IIE to provide support services to small enterprises in the North Eastern Region of India including Sikkim. entrepreneurship-oriented activity, the Institute

53

The BFDC has been positioned to help the first generation entrepreneurs who suffer heavily due to lack of information regarding business venture opportunities, market details of machinery and raw material suppliers as well as for their products, technical and financial constraints, etc. 4.10.2 The BFDC started functioning in mid

Institute and caters to the information needs of the entrepreneurs of North East.

4.4

NATIONAL INSTITUTE OF SMALL INDUSTRY EXTENSION TRAINING (NISIET)

NISIET was set up as a national level

April 2005. A core monitoring committee of BFDC has been constituted with members from NSIC, SISI, Arunachal Pradesh State Commission for Women and Assam Small Scale Entrepreneurs Association. During this period, 128 project reports were prepared and submitted to the commercial banks and NEDFi for finance, out of which financial assistance for 58 projects was sanctioned. It also provided counselling to 505 entrepreneurs for opportunity identification and selection of projects and arranged training link-up for 12 entrepreneurs. The Centre also completed 18 market surveys and provided consultancy services to 33 entrepreneurs. It also assisted 15 entrepreneurs in getting statutory clearances and provided bank/financial institution liaison and linkage services to 35 entrepreneurs during the period. 4.3.11 The Institute completed three research

4.4.1

institute in 1960 by the Government of India with the charter of assisting in the promotion, development, and modernisation of small scale industries in the country. With its expertise in the areas of entrepreneurship, policy, technology, management, and information services, the Institute is consistently assisting the SMEs in facing with confidence the challenges brought about by globalisation and the impact of IT on their businesses. NISIETs role has benefited not only the Indian SME but also those in other developing countries and helped in promoting self-employment and enterprise development. The Institute is constantly evolving with time, modifying its focus with the emerging needs of SMEs, providing them solutions in the form of consultancy, training, research, and education to retain their competitive edge in ever-changing markets. 4.4.2 The management of the Institute rests

and consultancy assignments during the year and four are underway: 4.3.12 version The Institute published the modified of Reading Material for

with the Society, the Governing Council and the Executive Committee, all appointed by the Government of India. The Governing Council acts through the Principal Director. The Principal Director, the academic and executive head of NISIET, functions under the guidance of the Executive Committee/Governing Council/ Society. The academic activities are organised

Entrepreneurship Awareness Camps. The Institute also publishes a quarterly IIE Newsletter, which highlights the activities of the

54

through centres of excellence and theme focused cells. The Academic Council is the nucleus coordinating body, which formulates academic activities and programmes with quantitative and qualitative benchmarks by providing a framework for assessment and evaluation addressing contextual variations. Programmes

4.4.3

Training Activities

The academic performance indicators for 2004-05 (actual) and for the period April November 2005 (actual) and the projection for the remaining four months of 2005-06 are presented below: 2005-06 December 05 March 06 (Projected)

April November 2005 (actuals)

Total

No. of No. of No. of No. of No. of No. of Progra- Partici- Progra- Partici- Progra- Particimmes pants mmes pants mmes pants Entrepreneur-ship Development Programmes EDPs under Rajiv Yuva Shakthi Scheme of A.P. for Unemployed Youth Counselling, Re-training and Re-deployment of rationalised employees of CPSUs EDPs on Food Processing Industries Rural Entrepreneurship Development Programmes in Rajasthan Other EDPs Other Programmes National: Announced Sponsored International: Announced Sponsored Educational: PG Diploma IT IGNOU Seminars and Workshops Consultancy & Research 36 2480 15 750 51 3230

40

1977

24

1200

64

3177

26 5 13

726 100 485

10 10

200 300

26 15 23

726 300 785

11 35 12 02 10 09 03 02 16 220

113 911 127 14 100 162 93 105 7393

7 15 06 4 4 4 99

70 300 90 100 200 3210

18 50 18 02 10 13 03 06 20 319

183 1211 217 14 100 262 93 305 10603

Total

55

4.4.4

Research and Consultancy

Colleges of select States in India, sponsored by Ministry of SSI, Government of India.

l

During 2005-06, the Institute took up the following research and consultancy projects:
l

Extending Escort Services for Setting up of Industrial Units at Tribal Industrial Estate, Cherlapally, Hyderabad, sponsored by the A.P. Scheduled Tribes Cooperative Finance Corporation Ltd., Andhra Pradesh.

Study

on

Demand

and

Supply

Assessment of Ozone Deflecting Substances in India, sponsored by the Ministry of Environment and Forests, Government of India.
l l

Technical Break-up Unit/Interface of KVIC. Handholding and Monitoring Services for 20 Clusters in the Country.

Promotion of Self-employment Activities among the Tribal Youth in Andhra Pradesh, sponsored by the A.P. Scheduled Tribes Cooperative Finance Corporation Ltd., Andhra Pradesh.

Project on Crochet Lace Cluster at Narsapur, West Godavari District, Andhra Pradesh.
l

Industrial Potential of Packaging Industries at Visakhapatnam, Andhra Pradesh, sponsored by the Municipal Corporation of Visakhapatnam, Andhra Pradesh.

Study on Curriculum Models for Entrepreneurship Government of India. Development, sponsored by the Ministry of SSI,
l

Study on Competency Mapping of Indian SMEs for Global Promotion, sponsored by the Ministry of SSI, Government of India.

Evaluation of Training Programmes under NORAD, sponsored by the Andhra Pradesh Womens Cooperative Finance Corporation Ltd., Hyderabad.

Study on Self-sustainability of Information Support Facilities in and around industrial clusters (particularly of SMEs) sponsored by the Department of Scientific and Industrial Research, Government of India.

Evaluation of Schemes implemented by Maulana Azad Arthik Vikas Mahamandal, Mumbai.

Preparation of Business Plan for Handicraft Clusters, sponsored by the Development Commissioner (Handicrafts), Government of India.

Consultancy Services on Micro Enterprise Mapping of Self-Help Groups in the Districts of Rajasthan, sponsored by the Rural Non-Farm Development Agency (RUDA), Jaipur.

4.4.5

NISIET Initiatives on Cluster Development

Study

on

Entrepreneurship

4.4.5.1 NISIET initiatives in this field are centred around handholding and monitoring

Development Education in Professional

56

the SISIs with active support by NISIET which has emerged as a center of excellence to cater to the needs of not only the SME clusters but also rural & artisan clusters in the country. NISIET is also working on preparation of business plan for cluster development in Handicrafts at the request of the Office of Development Commissioner (Handicrafts), Government of India.

4.4.6

Financial Performance

Income target fixed for the year is Rs. 605.30 lakh against which the actual income realised, as on 30 November 2005 is Rs. 466.15 lakh. The target for the year is expected to be achieved by 31 March 2006.
st th

4.5
services, training, consultancy, research, etc. NISIET has already trained Government officials from States like Uttar Pradesh, Andhra Pradesh, Kerala and the North Eastern Region, and of financial institutions like Andhra Bank, SBH, and customised programmes for the officials of Canara Bank and NABARD. As on date, NISIET is involved in developing 21 clusters with the funding support of Development Commissioner (Small Scale Industries), Ministry of SSI across the country. 4.4.5.2 Successful case studies are under preparation highlighting usefulness of the interventions in all the clusters. Preliminary results have been encouraging, reflecting sincere initiatives in the field by the CDEs and 4.5.1

NATIONAL INSTITUTE FOR ENTREPRENEURSHIP AND SMALL BUSINESS DEVELOPMENT (NIESBUD)

The National & Institute Small for

Entrepreneurship

Business

Development (NIESBUD) is a registered society under the Ministry of Small Scale Industries, Government of India. The major activities of the Institute include development of model syllabi for training of various target groups; providing effective training strategies, methodology, manuals and tools; facilitating and supporting Central/State Governments and other agencies in executing programmes of entrepreneurship and small business development; maximising benefits and accelerating the process of

57

entrepreneurship development; conducting programmes for motivators, trainers and entrepreneurs which are commonly not undertaken by other agencies and organising activities which help in developing an entrepreneurial culture in the society. 4.5.2 During April - November, 2005, the (f). (e).

Consultants of Swa Shakti Project. A One-week Business Advisors Training Programme, which was attended by participants from the Directorate of Industries; Government of Uttaranchal, Coir Board and Union Ministry of Urban Employment and Poverty Alleviation. A training programme on Planning & Organising EDPs for the Faculty of Apparel Training & Design Centre (ATDC) which focused on familiarising the participants with techniques of designing EDPs; concept of behaviour objectives; enterprise launching and enterprise management competencies.

Institute has organised 16 training programmes with 334 participants, as against of target of 32 training programmes for 2005-06. 4.5.3 11 training programmes as under

were organised for trainers/promoters, which were attended by 195 persons: (a). PRADAN (Professional Assistance for Development Action), a five day Accreditation Programme on Entrepreneurship Motivation Training (First Phase) for 18 professionals. (b). On a request received from Uttar Pradesh Industrial Consultancy Organisation (UPICO), a one-week Awareness Programme on Achievement Motivation. (c). A special training programme on Capacity Building for Field Functionaries Project Leaders and Field Officers of Chetanalaya, a Non-Governmental Organisation doing considerable work for Self Help Groups (SHGs) and Cooperatives in urban areas. (d). At the request of the Department of Women and Child Welfare, Ministry of Human Resource Development, a series of 2 Sensitisation Programmes of 10 days each, for Business Counsellors/ (i). (h). (g).

A first-ever training programme on Small Business Planning & Promotion, for middle and senior management, attended by participants drawn from Small Industries Service Institutes (SISIs); Grameen Bank; Maharashtra Centre for Entrepreneurship Development; Ministry of Urban Employment and Poverty Alleviation, Government of India and Khadi & Village Industries Commission. Institutes first training programme on Human Resources Development through Entrepreneurship Training for national participants, organised at Dev Sanskriti University, Haridwar attended by participants from Small Industries Service Institutes (SISIs), Coir Board and Commission of Khadi & Village Industries. 8 Trainers Training Programme on Project Formulation and Appraisal attended by participants from Small Industries Service
th

58

Institutes (SISIs) and the Directorates of Industries of Bihar, Karnataka, Madhya Pradesh, Nagaland and Delhi. (j). 28
th

Report of Research Study on Project Identification of SSI. Practices Amongst Entrepreneurs, sponsored by the Ministry

Accreditation Programme for

l

Motivational Trainers. 4.5.4 The Institute organised two

Report of the Evaluation Study of Science & Technology Entrepreneurs Parks (STEP) Projects Punjab Women Dairy Projects (Phase I & II), sponsored by the Department of Women & Child Development, Ministry of Human Resource Development.

International Training Programmes during the period. The Institutes first six-week training programme on Human Resource Development through Entrepreneurship Training was attended by participants from Myanmar, Bhutan, Republic of Slovakia, Philippines and Uzbekistan. The training programme on Small Business Planning & Promotion was attended by persons from Russia, the Philippines, Myanmar, Iran, Iraq and Mozambique. 4.5.5 Under the National Entrepreneurship

4.5.6.2 In addition, the Institute

l

finalised the terms of reference with the Department of Women & Child Development, Ministry of Human Resource Development; Government of India for undertaking an Evaluation Study of Mahila Dairy Vikas, Almora, Uttaranchal sponsored by that Department under its STEP Project;

Development Board (NEDB) Scheme, the Institute was assigned the task of organising 10 Workshops on Gender Equity through Enterprise Development, in association with some Universities. The Institute organised three such Workshops in association with Himachal Pradesh University, Banaras Hindu University and Aligarh Muslim University.
l

submitted proposals to the Small Industries Development Organization (SIDO) for undertaking two Research/ Evaluation Studies on Entrepreneurship Development Programmes of SIDO and Small Industries Service Institutes (SISIs) and Branch SISIs; and

4.5.6

Research Assignments and Publications

was engaged as one of the Technical Agencies under the Scheme of Fund for Re-generation of Traditional Industries of the Ministry of Agro & Rural Industries, Government of India.

4.5.6.1 During the year, the Institute carried out the following research projects/studies and submitted reports:

59

Women Enterpreneurship Development Programme participants

Programmes for International participants

60

Chapter

NATIONAL COMMISSION FOR ENTERPRISES IN THE UNORGANISED SECTOR (NCEUS)

5.1 The National Commission
th

for

materials,

finance,

skills,

Enterprises in the Unorganised Sector (NCEUS) was constituted on 20 September 2004 and consists of a Chairman, two full time Members, one Member Secretary and three part time Members. An Advisory Board consisting of 10 eminent experts and activists concerned with the unorganised sector was also constituted to advise the Commission. The Commission has been given the mandate to examine the problems of the Unorganised Sector (also referred to as Informal Sector) and suggest measures to overcome them. The term of the Commission, which was initially fixed at one year, has been extended to three years. (5) 5.2 The following are the Terms of (6) Reference assigned to the Commission: (1) Review of the status of unorganised/ informal sector in India including the nature of enterprises, their size, spread and scope and magnitude of employment. (2) Identity constraints faced by small enterprises with regard to freedom of carrying out the enterprise, access to raw (7) (4) (3)

entrepreneurship

development,

infrastructure, technology and markets and suggest measures to provide institutional support and linkages to facilitate easy access to them. Suggest the legal and policy environment that should govern the informal/ unorganised sector for growth, employment exports and promotion. Examine the range of existing

programmes that relate to employment generation in informal/unorganised sector and suggest improvement for their redesign. Identify innovative legal and financial instruments to promote the growth of the informal sector. Review of the existing arrangements for estimating employment and unemployment in the informal sector and examine why the rate of growth in employment has stagnated in the 1990. Suggest elements of an employment strategy focusing on the informal sector.

61

(8)

Review Indian labour laws, consistent with labour rights and with the requirements of expanding growth of industry and services particularly in the informal sector and improving productivity and competitiveness.

services and non-farm activities and (ii) facilitating the expansion of production of and employment in these micro and small enterprises. The Growth Poles would incorporate the concept of Provision of Urban Amenities in Rural Areas (PURA) that has been advocated by the President of India. This proposal also found mention in the Finance Ministers Budget Speech, 2005-06. 5.4.2 In the first instance, the Commission

(9)

Review the social security system available for labour in the informal sector and make recommendations for expanding their coverage.

5.3

Task Forces Constituted by NCEUS

proposed the launch of a few pilot projects for Growth Poles. For this purpose, the State Governments were requested to identify a number of multi-product industrial/artisanal/ handloom and handicrafts clusters that have the potential to evolve into Growth Poles. After detailed discussions with the State Governments, the proposals submitted by the Governments of Chhattisgarh, Kerala, Rajasthan, Uttaranchal and West Bengal have been shortlisted by the Commission. The Government of Chhattisgarh has recommended a Growth Pole at Kondagaon in Bastar District to give an impetus to the expansion of enterprises based on the resources and skill endowments available in the tribal belt of the State. The Government of Kerala has proposed a Growth Pole in Kollam District for expansion of the existing clusters of coir, handicrafts, handloom, cashew processing and tourism related enterprises. The Government of Rajasthan has recommended a Growth Pole at Sikandara in Dausa District for accelerated development of clusters of stone cutting and carving, leather, handloom and khadi, handicrafts and agricultural implements

The National Commission has constituted Task Forces to deliberate on the following issues identified for immediate intervention and make appropriate recommendations:
l

Social Security for Unorganised Sector Workers;

Statistical issues in the Unorganised/ Informal Sector; and

Skill formation in the Unorganised Sector.

Task Forces on Access to Technology and Infrastructure, Access to Markets, Raw Materials and Finance and Legal and Policy issues concerning enterprises in the Unorganised Sector are being constituted.

5.4
5.4.1

Concept of Growth Poles

The NCEUS proposed the formation

of Growth Poles in different parts of the country with a view to (i) integrating within a geographical location a number of clusters of unorganised production units engaged in manufacturing,

62

production units. The Government of Uttaranchal has proposed the development of a Growth Hub in Chamoli District to coordinate the interventions of various promotional agencies mandated to develop a wide range of products and services based on the States natural resources. The Government of West Bengal has proposed the creation of a clusterbased Growth Pole in Domjur Block of Howrah District to facilitate the expansion of the clusters of rubber based industries, food processing units, foundries, chemical industries, zari and jewellery/gem stone and apparel units.

Sector Workers (Conditions of Work and Livelihood Promotion) Bill, 2005 have been furnished to the Ministry of Labour & Employment and the Prime Ministers Office, pursuant to a request for assistance in redrafting of the Unorganised Sector Workers Bill, 2004. The reformulated Bills have also been placed in the public domain for engaging a wider public discussion. The Commission is currently preparing explanatory notes to the Bills and formulating proposals for operationalising their provisions.

5.6
5.4.3 The Commission proposes to undertake detailed technical studies for each of the five suggested sites to work out the full details of the identified Growth Pole pilot projects.

Review of the National Policy on Urban Street Vendors

The Commission has been engaged in reexamination of the National Policy on Urban Street Vendors and, in this context, interacting with various stakeholders. In the light of these interactions, a draft of a revised National Policy on Urban Street Vendors has been referred to the Ministry of Urban Employment and Poverty Alleviation.

5.5

Redrafting of the Unorganised Sector Workers Bill

The drafts of the Unorganised Sector Workers Social Security Bill, 2005 and the Unorganised

63

Chapter

VI

INTERNATIONAL COOPERATION
6.1 INTERNATIONAL COOPERATION SCHEME
International Cooperation Scheme for 6.1.3 During 2005-06, participation of SSIs in international exhibitions and deputation of business delegations has been sponsored 6.1.1 under the Scheme. modernisation, technology upgradation and competitiveness enhancement of small enterprises has been under implementation since 1996. Under this Scheme, small entrepreneurs are taken to potential foreign markets, for firm/association level interactions on, inter alia, sourcing technology, exploring export markets of their products and learning best practices. 6.1.2 The Scheme now encompasses the The Confederation of Indian Industry (CII), jointly with the Ministry of Small Scale Industries, and in association with the National Small Industries Corporation (NSIC) and Small Industries Development Bank of India (SIDBI) organised India Global Summit on MSMEs Facing Competition through Consolidation on 25 26 November 2005 at New Delhi. The Summit was inaugurated by Shri Pranab Mukherjee, Defence Minister and Shri Mahabir Prasad, Minister for Small Scale Industries and Agro & Rural Industries. The Summit witnessed participation from more than 500 delegates from India and abroad. While the domestic participation basically comprised the stakeholders from the MSME sector, the overseas participation comprised representatives from 34 countries across the
l

6.2

INDIA GLOBAL SUMMIT ON MSMES

following activities:
l

Participation in exhibitions, fairs and buyer-seller meets (with an international component).

Exchange of business delegations, to explore new areas of technology upgradation, facilitating joint ventures, improving marketability of SSI products, foreign collaborations, etc. Holding of seminars/buyer-seller meets, to promote enterprise-to-enterprise interactions through selected agencies, both in India & abroad.

globe. The Summit aimed at enhancing cooperation among the MSME in India and their counterparts abroad and facilitating the process of globalisation.

64

Shri Pranab Mukherjee, Honble Defence Minister lighting the lamp at the inauguration of India Global Summit on SME during 25-26 November, 2005. (Below) Shri Mahabir Prasad, Honble Minister of SSI&ARI is addressing the delegates

65

Member States of the Commonwealth attended this programme. The focus of the programme was on the role of technology and financing in developing small business competitiveness and on pro-poor employment generation programmes, through the development of agro and rural industries. 6.3.2 NSIC organised the third

Commonwealth Programme on Small Business Competitiveness Development during 20-25, November, 2005 at New Delhi. The theme of the programme Practices was for Networking the Commonwealth SMEs through Sharing Best Enhanced Competitiveness. Fifty senior policy makers and practitioners representing 35 member States of the Commonwealth attended the five-day programme. The
Shri Pravir Kumar, Joint Secretary, Ministry of SSI, addressing the participants at the Valedictory session of the India Global Summit on MSMEs

participants were exposed to a combination of best practices, case studies and field visits.

6.3

PAN COMMONWEALTH INSTITUTION BUILDING PROGRAMMES ON SMALL BUSINESS COMPETITIVENESS DEVELOPMENT

NSIC in association with the second (in a series of

6.4
(i)

OTHER SIGNIFICANT EVENTS

A Memorandum of Understanding (MoU) on cooperation in the sphere of support of small and private entrepreneurship between India and Uzbekistan was signed by the Minister (SSI & ARI) and the First Deputy Prime Minister and Minister of Economy, Government of Uzbekistan, on 05 April 2005, at New Delhi.

6.3.1 the four

Commonwealth Secretariat, London organised institution-building programmes) (ii)

Commonwealth - India Small Business Competitiveness Development Programme during 17-22 April 2005 at Chennai. 61 policy makers and practitioners, representing 36

Minister (SSI & ARI) visited Mauritius to attend the SME and Handicrafts Fair2005, during 08-10 April 2005, at the

66

Shri Mahabir Prasad, Honble Union Minister of SSI and ARI interacting with Women entrepreneurs from Seychelles participating in Techmart India 2005 organised by NSIC at New Delhi

invitation of the Minister of Small Enterprises, Cooperatives, Handicrafts and Informal Sector, Government of Mauritius. (iii) Mr. Nicolas Forissier, Minister of State for Agriculture, Food Processing, Fisheries and Rural Affairs, Republic of France met the Minister (SSI & ARI) on 13 April 2005. It was decided to establish a Sub-Group on cooperation for matters relating to small enterprises (particularly in the areas of agro, rural, khadi & coir sectors) within the Joint Working Group on Agriculture (under the Indo French Agreement in the field of Agriculture, Fisheries, Rural Development, industries). (iv) At the invitation of the World Association of Small and Medium Enterprises (WASME), Secretary (SSI & ARI) participated in the WASME 2005-World SME Convention XVI International Conference at Bucharest, Romania (vii) Forestry & Food (vi) (v)

during 14 19 May 2005 and made a presentation at the Plenary Session on Indian SMEs Harnessing Opportunities of Globalisation. The first Meeting of the Joint Committee set up under the MoU between the Governments of India and Sri Lanka on cooperation in small-scale industries sector was held at New Delhi on 7 July 2005. Dr. U. Vidana Pathirana, Secretary, Ministry of Industry & Investment Promotion, Government of Sri Lanka & Shri Anupam Dasgupta, Secretary (SSI&ARI) led the respective delegations at the Joint Committee meeting. Mr. Madan Murlidhar Dullo, Minister of Foreign Affairs, International Trade and Cooperation, Government of Mauritius met Minister (SSI&ARI) in his office on 02 September 2005. A delegation led by Mr. Mohammed Hanif Atmar, Minister of Rural Rehabilitation and Development, Government of Afghanistan

67

Discussion taking place at the First Joint Committee Meeting as per the Memorandum of Understanding (MoU) between Ministry of Small Scale Industries. Govt. of India and Ministry of Industry, Govt. of Sri Lanka on 07.07.2005 at New Delhi

met Minister (SSI&ARI) on 03 October 2005 and requested to depute a multidisciplinary team of experts from India to Afghanistan to undertake study of its small scale sector, identify its strengths and weaknesses and make recommendations on the possible strategies for its development. (viii) The Director, National Agency for Small and Medium Size Enterprises and Cooperative (NASMSEC), Government of Romania, Mrs. Florentina Ionescu met Joint Secretary (SSI) on 24 October 2005. Both sides agreed to facilitate enterprise - to - enterprise cooperation between India and Romania through exchange of (x)

economic missions and delegations comprising entrepreneurs. (ix) A delegation led by H.E. Shri Alhaji Ahmed Mohammad Makarfi, Executive Governor of the Kaduna State of Nigeria, met Minister (SSI&ARI) on 17.11.2005 at New Delhi, to discuss cooperation in the small scale sector between India & Nigeria. The delegation also visited NSIC & Techmart. A delegation led by Mr. Mathew Szymanski, Chief of Staff, U.S. House Small Business Committee met Secretary (SSI&ARI) on 13.12.2005 in New Delhi, to discuss areas of cooperation in the small scale sector.

68

(xi)

The Mexican Ambassador in India proposed an MoU for cooperation in the small scale sector between the Ministry of SSI, Government of India and Secretariat of Economy of the United Mexican States, which is likely to be signed soon.

(xii)

Secretary (SSI & ARI) visited the U.K. to discuss ongoing and future Small Business Development Competitiveness Programmes with the Commonwealth Secretariat.

69

Chapter

VII

ACTIVITIES IN THE NORTH EASTERN REGION

7.1

The North Eastern region, consisting

7.2

of Assam, Arunachal Pradesh, Manipur, Mizoram, Meghalaya, Nagaland, Tripura and Sikkim, has abundant natural resources and these resources can be harnessed for all-round economic development of and employment generation in the region through promotion and establishment of micro and small enterprises.

PROFILE OF THE MSE SECTOR IN NORTH EASTERN REGION

The available figures of estimated number of SSI units, fixed investment, production and employment in North Eastern region for 2004-05 are as follows:

Name of the State SIKKIM ARUNACHAL PRADESH NAGALAND MANIPUR MIZORAM TRIPURA MEGHALAYA ASSAM TOTAL

No of units 415 1411 15623 54101 12529 27448 25383 219092 356002

Fixed investment (Rs. crore) 12.60 34.17 378.55 403.67 139.89 329.27 164.45 1287.39 2749.99

Production (Rs crore) 44 69 540 703 207 461 481 4907 7412

Employment 1580 4330 66466 153715 28622 62861 75607 487871 881052

7.3

The Ministry of SSI is actively

the programmes and schemes implemented by its organisations. SIDO has SISIs at Gangtok, Guwahati, Imphal, Agartala and also

promoting the development of small scale industries in the North Eastern region through

70

Branch SISIs at Aizwal, Dimapur, Itanagar, Diphu, Silchar, Tezpur, Shillong, and Tura. There is a Tool Room and Training Centre at Guwahati (see details in para. 2.13.10). NSIC has a Technical Service Centre at Guwahati and a network of offices in the region, including Branch Office at Guwahati (Assam) and sub-offices at Imphal (Manipur), Dimapur (Nagaland), Itanagar (Arunachal Pradesh), Shillong (Meghalaya) and Agartala (Tripura).

Management Development Programmes were conducted by the SIDO field institutions in the region for 5039 persons. 7.4.3 For growth of small industries in the

region, the funding pattern of Integrated Infrastructural Development (IID) Scheme has been relaxed, providing for upto 80% of Central grant with maximum of Rs. 4 crore. 7.4.4 The activities of the NSIC include

training programmes to increase self-

7.4
7.4.1

SIGNIFICANT ACTIVITIES
As on 31 January 2006, 840 proposals

employment opportunities of the trainees in the region. In Techmart India 2005, North East Panorama, a special display of products from North Eastern States, was organised to provide marketing opportunities to the participating SSI units. NSIC was awarded for Gold Medal for Special Display of North East Sector in the IITF, 2005.

for loans Rs. 20.07 crore to SSI units were approved under the Credit Guarantee Scheme from the North Eastern States (including Sikkim). 7.4.2 61 In 2005-06 (upto January 2006), 50

Entrepreneurship Development Programmes, Motivational Campaigns and 39

7.4.5

The activities of IIE, Guwahati in the

NER are detailed in paragraph 4.3 above.

NSIC organized TECHMART INDIA-2005 from November 14-27, 2005 at Pragati Maidan, New Delhi. Techmart India 2005 showcased the manufacturing strengths of Indian small scale Industries. It also provided the platform from technology seekers and technology providers to meet, discuss and conclude agreements on technical collaboration/technology transfer etc. Shri Mahabir Prasad, Honble Minister of SSI&ARI is seen watching the demonstration by SSI participants from North East at Techmart India 2005

71

Chapter

VIII

DEVELOPMENT ACTIVITIES FOR WOMEN

8.1

In the policy measure for promoting and

8.2.2

The

total

number

of

women

strengthening small, tiny and village enterprises announced in Parliament on 06.08.1991, it was stated that the definition of women enterprises would be simplified. Accordingly, the definition of Women Enterprises has been revised as under:

enterprises in the SSI Sector was estimated at 10, 63, 721 (10.11 %). The estimated number of enterprises actually managed by women was 9, 95, 141 (9.46 %). 8.2.3 About 13% of the women enterprises

A small scale industrial unit/industry - related service or business enterprise, managed by one or more women entrepreneurs in proprietary concerns, or in which she/they individually or jointly have a share capital of not less then 51 per cent as partners/shareholders/ directors of private limited company/members of co-operative society.

were in the registered SSI category, the rest being unregistered. Of the enterprises managed by women, 11.5% were in the registered SSI category. 8.2.4 The share of the units managed by

women in terms of employment was 7.14%. The employment generated per Rs. 1 lakh investment in the units managed by women was 2.49. 8.2.5 The total number of female employees

8.2

PARTICIPATION OF WOMEN IN SSI SECTOR

In the Third All India Census of SSIs,

in the SSI sector is estimated at 33, 17, 496. 8.2.1 About 57.62% of the women were employed in SSI units located in the States of Tamil Nadu, Kerala, Karnataka, West Bengal and Andhra Pradesh. 8.2.6 The proportion of female employees the participation of women in the SSI sector has been categorised in three roles: some women are owners of enterprises, some managers of enterprises and some employees. With regard to ownership, the definition mentioned above has been adopted. in the total employment in the SSI sector was

72

13.315%. In the States/Union Territories of Mizoram, Orissa, Karnataka, Goa, Lakshadweep, Kerala, Tamil Nadu and Pondicherry, the share of women employment was significantly higher (more than 20%), compared with the total employment in the respective States. 8.3 In India, Women entrepreneurs have

technology, engineering, graded grey iron, nonferrous casting and sophisticated electronic equipment, etc. Tool Rooms have started designing special courses for women in the field of tool engineering. Voluntary organisations in the country are also doing commendable work in the field of women entrepreneurship development. Associations of women entrepreneurs have also come up and are doing remarkably well in some States.

been in business for quite some time and achieved remarkable success. However, their number is still small. One of the reasons for this is the initial hesitation and inhibition, which emanates from the traditional and societal perception of the role of women. Like any other entrepreneurs, a new women entrepreneur has to compete with those who are already well established. Therefore, women entrepreneurs have to not only face the gender insensitivity and bias prevalent in the society but also compete against established competition. In its industrial policy, the Government of India has laid considerable emphasis on the promotion of women entrepreneurship, particularly first generation women entrepreneurs, through various training and support services. Special attention is given by organising exclusive entrepreneurship development programmes for women. In these programmes, the trainees/ entrepreneurs are exposed, through demonstration and training, to the manufacture of a variety of products. Thus, many women are trained every year by the Institutes of the Ministry. The available feedback shows that these women have not limited themselves to the conventional ventures but also set up hitech industries in the fields of information

8.4

TRAINING OF WOMEN ENTREPRENEURS

Various institutes of the SIDO conduct need based training programmes for existing and prospective entrepreneurs. During 2005-06 (up to December 05), 15000 women participated in these training programmes, i.e., Industrial Motivational Campaigns, Entrepreneurship Development Programmes and Management Development Programmes conducted by SISIs and CFTI, Agra and Chennai.

8.5

WOMEN EMPOWERMENT UNDER IID SCHEME

Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP), an NGO comprising the women members only, has successfully completed the implementation of an IID project at village Gajularamaram, District Rangareddy, A.P. 64 units have been established in this IID Centre, which generated employment for 1400. Further, 108 women entrepreneurs have benefited from this project. Out of the total project cost of Rs. 347 lakh, Government of India

73

provided grant to the tune of Rs. 139 lakh. Another IID project at Vijyawada, District Krishna, A.P. is being implemented by ALEAP. The total project cost is Rs. 370 lakh. Government of India grant of Rs. 91.38 lakh has been released for this project.

assist such women are routed through eligible NGOs/SHGs/MFIs engaged in assisting poor women through any kind of income generating activities in non- farm sector. 8.6.3 Training organisations, viz., Small Service Institutes (SISIs),

Industries

8.6

TRADE RELATED ENTREPRENEURSHIP ASSISTANCE AND DEVELOPMENT (TREAD) FOR WOMEN

Women have been among the most

Entrepreneurship Development Institutes (EDIs), National Institute of Small Industries Extension Training (NISIET) and the NGOs conducting training programmes for empowerment of women beneficiaries identified under the scheme are provided a grant upto Rs. 1.00 lakh per programme, provided such institutions also bring their share to the extent of minimum 25% of the Government grant. However NGOs are allowed to conduct training programmes only after they take up some lending proposals of women entrepreneurs under this scheme. 8.6.4 Institutions such as NISIET, NIESBUD,

8.6.1

disadvantaged sections of the population with regard to access to and control over resources. Problems faced by them continue to be grave particularly for illiterate & semi - literate women of rural and urban areas In order to alleviate their problems, Government of India launched a scheme titled Trade Related Entrepreneurship Assistance and Development (TREAD). The scheme envisages economic empowerment of such women through trade related training, information and counselling/extension activities related to trades, products, services etc. 8.6.2 Under this scheme, Government of

IIE, SISIs, EDIs sponsored by State Governments and any other suitable institution of repute are provided need based GoI grant primarily for undertaking activities aiming at empowerment of women such as field surveys, research studies, evaluation studies, designing of training modules, etc., covered under the scheme. The grant is limited up to Rs. 5 lakh per project. 8.6.5 During 2005-06, Rs. 7.73 lakh have

India (GoI) gives grant up to 30% of the total project cost as appraised by lending institutions which would finance the remaining 70% as loan assistance to applicant women, who have no easy access to credit from banks due to their cumbersome procedures and the inability of poor & usually illiterate/semi-literate women to provide adequate collateral security. The GoI grant and the loan from the lending agencies to

been sanctioned as GoI grant for capacity building of three NGOs whose projects have been appraised by Canara Bank. About 435 women beneficiaries are likely to be benefited through the projects approved by the Bank

74

under the TREAD Scheme. It is expected that 10 more projects would be appraised during the year and another 1000 women entrepreneurs would benefit during the remaining period of the current financial year. 8.6.6 Indian Institute of Entrepreneurship

grant of Rs. 3 lakh for conducting 3 EDPs under the scheme. It is expected that another 100 women would be trained by IIE, Dehradun during the remaining period of the current financial year. 8.6.7 IIE, Dehradun and Guwahati are also

(IIE), Dehradun and Guwahati have conducted 7 EDPs and provided process - cum - product development training to 166 women under the scheme. IIE, Dehradun has been sanctioned

conducting two studies on Prospects of Women and Problems Faced by Women Entrepreneurs in the Uttaranchal and Assam respectively.

75

Chapter
USE OF OFFICIAL LANGUAGE
9.1 Hindi is the Official Language of the

IX

9.4

Union of India and the Government policy is aimed at progressively increasing the use of Hindi in official work. Effective steps were taken during the year in the Ministry of Small Scale Industries to ensure compliance of the Official Language policy of the Government, implementation of the annual programme and compliance with the orders of the President on the recommendations of the Committee of Parliament on Official Language

CORRESPONDENCE IN HINDI

Letters to State Governments, Union Territory Administrations and Central Government offices located in regions A and B were issued in Hindi, to the maximum extent possible. Similarly, efforts were made to send letters in Hindi to Central Government offices located in region C, as per the targets laid down in the annual programme.

9.5

9.2

COMPLIANCE OF THE PROVISIONS OF THE OFFICIAL LANGUAGE ACT, 1963

SECTIONS SPECIFIED FOR WORKING IN HINDI

The sections of the Ministry, notified for doing all work in Hindi, are working satisfactorily.

9.6

All documents such as resolutions, general orders, rules, licences, etc., under section 3(3) of the Official Language Act and all papers laid on the Tables of the Houses of Parliament were issued in Hindi and English. The Ministry is already notified under the Official Language Rule 10(4).

MONITORING AND INSPECTIONS

In order to ensure compliance of the Official Language policy, there is constant monitoring and review of the progress reports. During the year, six Sections of the Ministry were inspected , to ensure use of Hindi and compliance of the Official Language policy.

9.3

REPLIES TO LETTERS IN HINDI

9.7

TRAINING OF OFFICIALS

All letters received in Hindi were replied to in Hindi.

All officials of the Ministry have already been trained in Hindi typing and stenography.

76

9.8

USE OF MECHANICAL AIDS

organised during this period in Hindi typing, Hindi stenography, debate in Hindi, Hindi essay writing and noting and drafting in Hindi. A large number of officers and employees participated with enthusiasm. The messages of the Home Minister and Cabinet Secretary were circulated for information and compliance on this occasion.

As required under the Official Language Act, bilingual facilities have been provided on office equipment in the Ministry. Computers and terminals have also been installed with facility to work in Hindi.

9.9

HINDI MONTH

Hindi month was celebrated during September, 2005 in the Ministry. Competitions were

77

Chapter
VIGILANCE MATTERS
10.1 The vigilance unit of the Ministry is
l

furnishing comments to the CVC on the investigation reports of the Central Bureau of Investigation(CBI);

headed by a Chief Vigilance Officer (CVO) of the rank of Joint Secretary, Ministry of Small Scale Industries appointed on the advice of the Central Vigilance Commission (CVC). The CVO functions as the nodal point in the vigilance set-up of the Ministry. The secretariat assistance to the CVO in the Ministry of SSI is, however, provided by the Vigilance Desk of the Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce and Industry as the Ministry of SSI does not have its independent vigilance unit. The vigilance unit is, inter alia, responsible for the following:
l l l l

taking appropriate action in respect of departmental proceedings on the advice of the DoPT & CVC; obtaining second stage advice of the CVC, wherever necessary; and obtaining advice of the Union Public Service Commission (UPSC) in regard to the nature and quantum of penalty to be imposed, wherever necessary.

1.1

Preventive vigilance continues to

receive attention with emphasis on identification identification of sensitive areas prone to malpractices/temptations and taking preventive functioning;
l

of areas sensitive/prone to malpractices and temptations. The guidelines/instructions issued by the DoPT and the CVC from time to time in this regard are followed. Action taken includes the following: i) Regular and surprise inspections are carried out by the Departmental Security Officer of the DIPP. In the attached and subordinate offices, respective Departmental Security Officers carry out these inspections. ii) Strengthening of vigilance machinery by way of appointing CVO in the offices and

measures

to

ensure

integrity/efficiency in Government

taking suitable action to achieve the targets fixed by the Department of Personnel & Training (DoPT)on anticorruption measures;

scrutiny of complaints and initiation of appropriate investigation measures;

inspections and follow-up action on the foregoing;

78

organisations under the Ministry, who looks after the vigilance activities in the office/organization concerned. iii) A strict watch is kept on liaison men and on other persons. The Departmental security instructions are iterated from time to time for streamlining entry of outsiders in the building. To end the practice of professional liaison men operating in the Ministry, a fresh list of such unwanted liaison men has been prepared. iv) Cases of the officers, who have attained the age of 50 years or have put in 30 years of service, are reviewed under FR 56 (j) in order to judge their suitability to continue in service thereafter. The exercise is currently being done by the Establishment Division of the DIPP. v) In order to make officers conscious of the provisions of Conduct Rules applicable to them as also to acquaint them with the importance of departmental security, Rules/Instructions are reiterated in this respect from time to time.

also responsible for all the field offices of the SIDO. The Vigilance Section deals with vigilance matters like complaints and vigilance cases coming within the purview of CCS (CCA) Rules, 1965 concerning Small Industries Development Organization. 10.2.1 Apart from dealing with complaints and

vigilance cases against officers and staff relating to corruption and improper motives, a number of anonymous/pseudonymous complaints as also complaints and vigilance cases other than those of corruption or improper motives pertaining to the officers of Small Industries Development Organisation were also handled. All complaints relating to corruption/ improper motives and/or delays were investigated and suitable action taken against officers found guilty of misconduct/ misbehaviour. 2.2 The vigilance cases in respect of

Group C & D staff of field offices are attended to by the Director of the institute/centre who is assisted by AD (Admn).The services of senior officers both at the Headquarters office and in the field offices are utilized for investigating the complaints.

10.2

SMALL INDUSTRIES DEVELOPMENT ORGANISATION

10.3
The Vigilance Unit in the office of the Development Commissioner (Small Scale Industries), New Delhi, is headed by a CVO of the rank of Director appointed on the advice of the Central Vigilance Commission (CVC), with full complement of staff under him. The CVO is

NATIONAL SMALL INDUSTRIES CORPORATION (NSIC)

NSIC has its own part time CVO appointed on the advice of the CVC.

79

Chapter
CITIZENS CHARTER
11.1 This Charter is a declaration of the

XI

contribute to accelerating the expansion of productive employment opportunities in the country. The Ministry seeks to fulfil its mission by formulating appropriate policies and designing/implementing support measures in the fields of credit, technological upgradation, marketing, entrepreneurship development, etc., and undertaking effective advocacy for these purposes.

Ministry, incorporating its mission and commitment to the small scale entrepreneurs and for the people of India in general.

11.2

MINISTRY OF SSI

The Ministry of Small Scale Industries is responsible for formulation of policies and designing programmes, projects and schemes for promoting the growth of micro and small enterprises in the country. The policies and programmes/projects/schemes are implemented by the organisations like the Small Industry Development Organization (SIDO), National Small Industries Corporation Ltd. (NSIC), national level Entrepreneurship Development Institutes, etc. The Organisations of the Ministry have their own Citizens Charters.

11.4

COMMITMENT

The Ministry and its organisations are committed to providing efficient and prompt service with transparency and courtesy to the with citizens and individual or groups of micro and small enterprises. Towards this, the Ministry will, in the spirit of dutiful discipline, respect the rights of individuals, entrepreneurs and their

11.3

MISSION

associations. The Ministry will maintain and uphold the confidentiality of personal and business information disclosed to it by the citizens. The Ministry and its organisations will continuously review the policies and programmes and enforcement of related laws and regulations, in consultation with the stakeholders concerned, with the aim of fulfilling its mission.

The mission of the Ministry is to promote, in cooperation with other Ministries and Departments of the Central Government, State Governments, Union Territory Administrations and all other stakeholders, the growth and development of the micro and small enterprises and to enhance their competitiveness so that these enterprises

80

11.5

STANDARD FOR GENERAL PROCEDURE

11.8

GUIDANCE AND HELP

The Information and Facilitation Counter of The letters received by the Ministry will be acknowledged within 15 days and replied to as soon as possible. the Ministry, located on the ground floor, Gate No. 4, Nirman Bhavan, New Delhi, will provide information on the services and activities of the Ministry and its organisations.

11.6

RESPONSIBILITIES OF OUR CITIZENS

The Ministry expects continuous feed back from the citizen on the quality of the services provided to them and on areas in which improvements are expected.

11.9

COMPLAINTS

In case of any complaint, one may telephone or send a letter or fax or visit the Ministry at Udyog Bhavan, New Delhi. However, before lodging of a complaint, one may, first of all, use the Information and Facilitation Counter of the Ministry. In case one is not satisfied, the matter may be taken up with the Grievance Officer in this Ministry. The address, phone and fax numbers of the Information and Facilitation Counter and the Grievance Cell are as follows:

11.7

ASSESSING PERFORMANCE

The Ministry will, from time to time, share its performance with the citizens and stakeholders through the media and its website. The Ministry will also undertake independent surveys on perceptions of the citizens and assessment of its performance. IMPORTANT ADDRESSES (1) Grievance Cell Deputy Secretary Ministry of SSI Room No. 124-D Udyog Bhavan New Delhi - 110011 Tel. No. 23061431 No. 011-23061756 (Fax) Information and Facilitation Counter Gate No. 4, Ground Floor, Nirman Bhavan, New Delhi-110 011 Tel. No. 23062219

WEBSITES ADDRESS http.//ssi.gov.in www.laghu-udyog.com www.nsicindia.com www.niesbud.com www.nisiet.com www.iie.nic.in - Ministry of SSI - SIDO - NSIC - NIESBUD - NISIET - IIE

(2)

81

Annexure

SUMMARY OF RECENT AND IMPORTANT AUDIT OBSERVATIONS AND REPLIES THERETO

NATIONAL SMALL INDUSTRIES CORPORATION LIMITED (NSIC) LOAN ASSISTANCE AND RECOVERY PERFORMANCE (REPORT NO. 4 OF 2005 COMMERCIAL)
The review of loan assistance and recovery performance was done by the office of the Comptroller and Auditor General (C & AG) of India based on the operation of NSIC in earlier years. The audit paragraphs included in the C&AGs report on the basis of this review are given below. The gist of the replies to these paragraphs is given below: Para: The Company was incorporated in February 1955 to provide financial assistance to small industrial units for industrial development of the country. However, due to the deficiencies in the pre-sanction appraisals and weak recovery mechanism, a very large As a result, the provisions for doubtful debts have come down to Rs.126.47 crore as on The Corporation has also geared up its recovery mechanism. A separate recovery cell headed by a senior officer has been set up to monitor the recovery progress regularly. A scheme of one time settlement in respect of old cases has also been introduced with a view to settling the old default cases. percentage of its debts have become bad and doubtful. Accumulated losses as on 31 March 2004 stood at Rs. 143.52 crore. Reply: The amount of accumulated losses of Rs. 143.52 crore as on 31 March 2004 was due mainly to making provisions for doubtful debts, as per provisioning norms approved by Board of Directors. As a corrective measure, the Corporation has since strengthened its appraisal system and also tightened the security norms under various schemes to control the defaults, so that additional provisions do not become necessary.
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31.3.2005 from Rs.137.63 crore as on 31.3.2002. The financing schemes have also been reviewed and the following corrective steps have been taken: a. The Bill Discounting Scheme, based only on the security of the supply bills of the SSI units and generally no other collateral, has been discontinued. b. Raw Material Assistance Scheme has been modified to supply material to the SSI units against security of bank guarantee. Earlier, collateral security of land and building, Letter of Credit, etc., was also taken. c. Long term financing under the Hire Purchase and Term Loan Scheme has been modified, requiring 100% collateral security. Financing under this scheme has been restricted up to Rs. 5 lakh w.e.f. 01.01.2006. Cases beyond Rs.5 lakh would be forwarded to nationalised banks, with which tie up arrangements have been made for sanction of such proposals. Para: Recovery performance being poor, the Company had to avail of a loan of Rs.70 crore from Small Industries Development Bank of India leading to payment of interest of Rs.22.95 crore during the period 1998-99 to 2003-04, which could have been avoided. Reply: The Corporation had availed of financial accommodation from the Small Industries

Development Bank of India (SIDBI) to meet its working capital requirement. There was no increase in borrowings to meet cash crunch. Total borrowing as on 31.3.1999 was Rs. 288.27 crore, which was reduced to Rs. 219.25 crore as on 31.3.2001 and further to Rs. 117.50 crore only as on 31.3.2005. Dues of the SIDBI have been fully repaid on 31.3.2004 and there is no more interest burden on this account Para: Due to poor recovery performance, the Non Performing Assets (NPA) stood at Rs. 184.97 crore (86 per cent) of the total outstanding loan of Rs. 215.56 crore as on 31 March, 2004. Reply: The system of monitoring of outstanding dues and follow up of over due amounts has been strengthened by the Corporation. A Default Management and Recovery Cell has been set up at the Head Office for effective and regular monitoring of defaults. The Corporation has taken various measures to not only recover the old dues but also prevent occurrence of further defaults in future. Some of the initiatives taken by the Corporation for stepping up of the recovery of dues are mentioned below: i The assisted units are being inspected and the entrepreneurs and guarantors are being contacted regularly to assess the condition and availability of the
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machine(s) and functioning of the unit and press the entrepreneurs for repayment of dues. ii Critical review of default cases is made by Default Review Committee (DRC) of NSIC. iii A Default Management & Recovery cell (DMRC) has been established at the Head Office under the control of a senior executive. Default cases are being closely monitored by the DMRC. iv For extending opportunity to the defaulting units to settle the outstanding dues, a One Time Settlement Scheme (OTS) has been launched, based on the guidelines issued by the Reserve Bank of India for settlement of defaults of SMEs by the Banks and Financial Institutions.

A computerised data base has been created at the Branches in respect of all accounts where financial assistance is provided.

vi

Greater emphasis is being laid on recovery in cases wherein provisions are likely to increase due to change in their age classification.

vii

To present further increase in defaults, steps have been taken to strengthen the pre-sanction/disbursement norms as well as post-disbursement follow up. Security norms have also been tightened.

With these measures, the recovery of dues has improved which may be observed from the following:

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1)

Recovery of Current Dues under Equipment Finance Schemes:

available to create pressure on the borrowers / guarantors to settle the dues of the Corporation.

Year

% Recovery of current dues (fallen due during the year)

ii.

Steps have been taken to the ascertain personal assets of the borrowers / guarantors by verification with the authorities like Income Tax Department, Office of the Registrar of Companies, Registrar of Societies, Municipality and village revenue officials.

2002-03 2003-04 2004-05

63 65 71 iii.

Early execution of Recovery Certificates is being pursued.

2)

Recovery Performance of Overdues: iv.

The overdue amounts have also come down from Rs. 224.53 crore as on 31.03.03 to Rs. 211.13 crore as on 31.03.05. 71% of the total default of the Corporation, as on 31 March 05, is under litigation. Though the Corporation has resorted to various legal measures; namely, filing of Recovery Certificate (RCs) proceedings, wherever permitted by the State Laws, filing criminal complaints under section 138 of the Negotiable Instruments (NI) Act in cases of the cheques issued being dishonoured by the banks, etc., the actual realisation, however depends on the disposal of the cases by the relevant Courts. In addition, the following measures have also been initiated to address the defaults in legal cases: i. Interim petitions for injunctions,
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In the cases of criminal complaint under section 138 of the N.I. Act, necessary steps are being taken immediately after filing the complaint to complete service of notice on the accused persons and constant follow up with the advocates to expedite disposal of such cases.

v.

Performance of the advocates is being reviewed and non-performing advocates are being de-empanelled.

vi.

Suit cards have been prepared to register the progress and development of each case under litigation by the branches and monthly development report of each case is being submitted to the Head Office to enable close monitoring of the cases.

Para: In 24 cases test checked in audit, deficiencies were noticed in appraisal, sanction and follow up which led to nonrecovery of Rs. 18.61 crore.

attachment before judgement and appointment of Receivers are also being moved where charged assets are

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Reply: All the default cases are being monitored closely by the branches concerned as well as Default Review Committees and corrective steps are

being initiated for recovering the dues. Out of 24 cases involving Rs. 18.61 crore, four cases involving Rs.108.97 lakh have been settled and part recovery has also been made in four more cases detailed below: (Rs. Lakh)

Sl. No.

Name of unit

Amount of over dues as reported by the Govt. Auditor

Status

1 2. 3. 4 5.

M/s. Hanuman Bricks (P) Ltd. M/s. Raghvendra Industries M/s. Hanung Toys M/s. Viknesh Knits M/s. Leela Apparels

23.92 17.10 50.03 17.92 40.60

Account closed. Account closed. Account closed. Full amount recovered. Rs. 16.80 lakh recovered, party being pursued for balance recovery.

6.

M/s. Shivi Poly Pax

62.26

Party has offered to settle the account, which is under consideration.

7.

SSI units of Jaipur (BD)

200.03

Settlement offer in 4 accounts for Rs. 90 lakh received which is under consideration.

8.

SSI units of Kolkata (RMA)

949.71

In most cases, the amount is to be recovered from State Electricity Boards (SEBs) to settle the units account. An amount of Rs. 287 lakh has been received from the Kerala SEB and Rs. 32 lakh has been recovered from Tamil Nadu SEB. Payment of Rs. 258 lakh is expected from TNEB before March06. IFC has allowed claim of Rs.853 lakh in favour of NSIC. KSEB has obtained stay from High Court. Efforts are being made to get the stay vacated to enforce the recovery of awarded amount.

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In the remaining 16 accounts for amounts outstanding of Rs. 5 crore, the process of recovery by filing suit / arbitration / RC, wherever applicable, has already started. Intensive efforts are also being made to amicably settle the account under the One Time Settlement Scheme or Out of Court settlement, wherever possible. Para: 2053 civil suits/ petitions for recovery of Rs.181.66 crore are pending in various courts. The Corporation could not execute decrees in 816 cases involving Rs.36.51 crore due to ineffective follow up. Further in 12 cases chances of recovery of Rs.37.34 crore are remote.

with the result , we have recovered considerable dues. Total no of cases under all categories at present are 1938 including new suits filed during the current financial year. The present status of pending civil/ R.C. and Execution petitions is as under:S. No. 1 2 (A) (B) Civil suits/ R.C. pending in various courts Cases Decreed Decree not executed Decree under execution Total Para: The Company lost Rs. 1.89 crore due to 805 291 514 1938 Particulars No. of cases 1133

Reply: The Corporation has constantly followed up for obtaining decrees in the legal suits, execution of decrees and also ascertaining the means and assets of judgment Debtors for filing of execution petitions so that effective executions are possible. In order to monitor the legal cases, the Corporation has introduced a suit card system in which all the particulars are noted including the date of filing, the suit claim amount together with present position of the cases and the securities held.

failure in monitoring the disposal of seized machinery. Reply: The Government Auditors had observed that Rs. 2.15 crore was receivable in loan accounts where 69 machines were seized by the branches of NSIC but could not be disposed of. The loss of Rs.1.89 crore is arrived at by the Audit after adjusting the reserve price of machines and ground rent. The outstanding dues comprise overdue

Pressure have been created in most of the suit filed decreed accounts as well as upon judgement Debtors to settle the dues of Corporation by way of compromise/settlement or by execution of decrees /recovery certificates

instalment amount, interest for delayed period & misc. and other charges debited to the account. The outstanding dues after deducting reserve price of the machines may not be considered as loss since the Corporation has

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recourse to recover the dues from the hirers by initiating legal process for recovery of resultant loss or by way of settlement / compromise of accounts. Concerted efforts have been made for speedy disposal of the machines seized by the branches. Amendments to the policy on expeditious sale of seized machinery have been made by the branches. Accordingly 42 seized machines have been sold and efforts are in progress for disposal of the remaining 27 machines. Disposal of machines is a time consuming process due to the following reasons: 1. Poor condition of the machines at the time of seizer. 2. Wear and tear due to transportation of the machines. Sometimes the machines are seized at site only due to their heavy / bulky size.

3. 4. 5.

Obsolescence / outdated technology. No / lack of response from the buyers. Offer received from the buyers are far below the reserve price / market price of machines.

6.

Vital parts of seized machines are often missing, which affects their sale adversely.

7.

Delay in getting permission from the Courts concerned.

Some of the machines have been seized under the directions of Courts due to non-payment of dues of the Corporation, and, therefore, such machines cannot be disposed of unless the Court permits. Such machines are lying in the godowns, pending Courts decision. Efforts are also being made through legal counsels to seek permission of the Courts for early disposal of such machines.

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PERFORMANCE INDICATORS:

Annexure II

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ACRONYMS
CAD CAM CFTI CGFS CLCSS CNC DC (SSI) EDP FTS IDTR IGTR IID IIE ISO LUCC MDA MDP NEF Computer Aided Design Computer Aided Manufacturing Central Footwear Training Institute Credit Guarantee Fund Scheme Credit Linked Capital Subsidy Scheme Computerized Numerical Control Development Commissioner (Small Scale Industries) Entrepreneurship Development Programme Field Testing Station Indo-Danish Tool Room Indo-German Tool Room Integrated Infrastructural Development Indian Institute of Entrepreneurship International Organisation for Standardization Laghu Udyami Credit Card Market Development Assistance Management Programme Development TRTC VDP WTO TRC TREAD SME SSI TDMF PPDC NTSC National Centre Process-cum-Product Development Centre RTC SDP SENET Regional Testing Centre Skill Development Programme Small Enterprise Information and Resource Centre Network SEPTI Small Entrepreneurs Promotion and Training Institutes SIDO Small Industries Development Organisation Small and Medium Enterprises Small Scale Industries Technology Development Modernisation Fund Technology Research Centre Trade Related Entrepreneurship Assistance and Development for Women Tool Room and Training Centre Vendor Development Programme World Trade Organisation Small Industries Corporation Technical Service

National Equity Fund

NIESBUD National Institute for Entrepreneurship and Small Business Development NISIET NSIC National Institute of Small Industry Extension Training National Small Industries Corporation Limited.

UNIT
1 crore 10 lakh 1 lakh 10 million 1 million 100 thousand

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