Project Planning

&
Scheduling

What is a Project?
A project is a attempt undertaken to create a unique
product or service.
A project is a well-defined set of tasks or activities
that must all be completed in order to meet the
projects goals.
A project is an organized attempt aimed at
accomplishing a specific non-routine set of tasks
within a certain time and under a certain resource
constraint.
Time required and costs are usually significant.
Tasks are ordered such that they must be performed
in a given sequence.
2

Characteristics of
projects
There is a set of well-defined goals.
There is a specific start and a specific end
point.
The endeavor is unique
A project usually contains costs and time
schedules to produce a specified product or
result.
A project often cuts across many organizational
and functional lines, and thus there are
requirements for specific expertise, and
sometimes conflicts with within the project team.

Steps in Project Plan

Project Classification
Quantifiable & Non Quantifiable projects
Projects for which quantifiable benefits can be made e.g
industrial development, power generation etc.
Projects for which quantifiable benefits can not be made
e.g health education etc.

Sectoral projects
Agricultural, irrigation, industry, transport, social service
etc.

Techno- economic project

Factor intensity oriented classiication- capital or labour
intensive
Magnitude oriented classification- size of investment

 Project identification
Knowledge of potential customer needs
Watching emerging trends
Visits to trade fair & exhibitions
Meeting with Govt. agencies
Knowledge about Govt. policy, concessions &
incentives etc.
Project Selection
SWOT analysis
Project formulation
Written description of the course of action with two
purposes
Its road map-what, where how
Attract investors
Project execution and control
Project termination

Planning Activities &

Decisions

Planning involves producing a prioritised list of what needs to be done to

complete the project.
The project plan will assist
to understand the project
the strategy for completing the project,
act as the baseline against which progress and achievement can be
measured.
Identify the project customer
Establish the end product or service
Set project objectives
Estimate total resources and time required
Make key personnel appointments
Define major tasks required
Establish a budget

Planning Activities &

Decisions
Project plans:

Provide direction and focus

Give order for raw materials etc.
Minimise the risk of error
Facilitate the identification of problems before
they occur
Allow the monitoring of progress
Provide motivation and satisfaction

The ability to plan a complex project and

manage this plan is a transferable skill that
is attractive to future employers!

Scheduling Activities &

Decisions
Develop a detailed work-breakdown
structure
Estimated time required for each task
Sequence tasks in proper order
Develop a start/stop time for each task
Develop detailed budget for each task
Assign people to tasks

Execution & Control

Monitor actual time, cost, and performance

Compare planned to actual figures
Determine whether corrective action is needed
Evaluate alternative corrective actions
Take appropriate corrective actions i.e When one or more activities
threaten the time, cost, or performance of the project, a corrective action is
necessary:
Redefine the activity (e.g. split the activity).
Add resources to the activity.
Shift resources from one activity to another

Resources = people, equipment, money

Scheduling Methods
Gantt Charts
Shown as a bar charts
Visual & easy to understand

Network Methods
Shown as a graphs or networks
Show precedence relations
More complex, difficult to understand
and costly than Gantt charts

Gantt Charts
A Gantt chart is a graphical representation
of the duration of tasks against the
progression of time.
It allows you to:
1) assess how long a project should take;
2) lay out the order in which tasks need to be
carried out;
3) manage the dependencies between tasks;
4) see immediately what should have been
achieved at a point in time;
5) see how remedial action may bring the
project back on course.

Gantt Charts
Named after Henry Gantt.
Around since 1st World War

Network analysis
Network analysis is the general name given to
certain specific techniques which can be used for
the planning, management and control of
projects.

NETWORK TECHNIQUES
PERT
-Program Evaluation and
Review Technique
- developed by the US
Navy on the Polaris
Missile/Submarine
program 1958

CPM
-Critical Path Method
-Developed by El
Dupont for Chemical
Plant Shutdown Project
- About same time as
PERT

CPM - Critical Path Method

In CPM activities are shown as a network of precedence
relationships using activity-on-node network construction
Single estimate of activity time
Deterministic activity times

Nodes

A node is represented by a circle

USED IN : Production management - for the jobs of

repetitive in nature where the activity time estimates
can be predicted with considerable certainty due to the
existence of past experience.

CPM - The emphasis was on the trade-off between the cost of the
project and its overall completion time (e.g. for certain activities it
may be possible to decrease their completion times by spending
more money - how does this affect the overall completion time of
the project?)
Duration of each activity is known with certainty.
Used to determine the length of time required to complete a
project.
CPM can also be used to determine how long each activity in the
project can be delayed without delaying the completion of the
project.

PERT Project Evaluation & Review Techniques

In PERT activities are shown as a network of precedence relationships

using activity-on-arrow network construction
Multiple time estimates
Probabilistic activity times
Arrows

An arrow leads from tail to head directionally

USED IN : Project management - for non-repetitive jobs (research and
development work), where the time and cost estimates tend to be quite
uncertain. This technique uses probabilistic time estimates.

 PERT- The emphasis was on completing the program in the

shortest possible time. In addition PERT had the ability to cope
with uncertain activity completion times (e.g. for a particular
activity the most likely completion time is 4 weeks but it could
be anywhere between 3 weeks and 8 weeks).
duration of each project is not known with certainty.
used to estimate the probability that the project will be completed
by the given deadline.

PERT / CPM
PROCESS

1. Analysis of the project

Define the project and all of its significant
activities or tasks.
2. Sequence the activities
Develop the relationships among the
activities. Decide which activities must precede
others.
3. Draw the network connecting all of the activities.
4. Assign time and/or cost estimates to each
activity.
5. Compute the longest time path through the
network, known as the critical path.
6. Use the network to help plan, schedule, monitor,
and control the project.

PERT / CPM program provides management

with the following information:

What are the critical activities or tasks in the project.

Which activities are non-critical.
The amount of slack (or float) on each non-critical activity.
When will the entire project be completed.
What is the probability that the project be completed by a
specific date.
If project is on schedule, behind schedule, or ahead of schedule
at any particular date.
If money spent equal to, less than, or greater than the budgeted
amount on any given date.
if there are enough resources available to finish the project on
time.
The best way to accomplish the project at the least cost, if the
project is to be finished in a shorter amount of time.

Comparison Between CPM and PERT

CPM
1

Uses network, calculate float

or slack, identify critical path
and activities, guides to
monitor and controlling
project

PERT
Same as CPM

Uses one value of activity

Requires 3 estimates of
time. CPM is a deterministic tool activity time. PERT is a
probabilistic tool

Used where times can be

estimated with confidence,
familiar activities

Used where times cannot be

estimated with confidence.
Unfamiliar or new activities

Minimizing cost is more

important

Meeting time target or

estimating percent
completion is more
important

Example: construction
projects, building one off

Example: Involving new

activities or products,

21

BENEFITS OF CPM / PERT

Shows interdependence of all tasks.

Helps proper communications between departments and functions.
Determines expected project completion date.
Identifies so-called critical activities, which can delay the project
completion time.
Identified activities with slacks that can be delayed for specified periods
without penalty, or from which resources may be temporarily borrowed
Determines the dates on which tasks may be started or must be started if
the project is to stay in schedule.
Shows which tasks must be coordinated to avoid resource or timing
conflicts.
Shows which tasks may run in parallel to meet project completion date

22

Limitations to CPM/PERT
Clearly defined, independent and
stable activities
Specified precedence relationships
Subjective time estimates
Over emphasis on critical paths

Production Management

Plant Location
Plant layout
Product design
Production design

Plant location

Establishment of an industry at a particular place.

Choice of a location is a strategic decision that can not
be changed except at considerable loss
It is of 2 types1. Localization /centralization-means concentration of
similar type of industries at some particular place. E.g.
textile in Mumbai.
2. Delocalization /Decentralization-means spreading of
similar type of industries at different places. E.g.
banking industries.

Location Analysis
Is the dynamic process of analyzing & comparing the alternatives sites
with the aim of selecting the best site for a given enterprise
Trade area analysis: Analysis of the geographical area that provide
continuous customer to the firm
Demographic analysis: study of population in term of age, per
capita income, educational level etc.
Competitive Analysis: nature , location, size & quality of
competition
Site economic: cost depends on land price,
Operating cost include expenses on materials, freight, wages , water , fuel
etc.

Factors affecting location & site decisions

Availability of raw material

Nearness to the potential market
Near to the source of operating requirements like
electricity, disposal of waste, drainage facilities.
Supply of labor (wages v/s skill)
Transport & communication facilities
Suitability of land & climate
Availability of housing, other amenities & services
Safety requirements
Others like low interest on loans, special grants

Methods for the evaluation of plant

location
1. Quantitative factors- Comparative
cost chart
2. Qualitative factors.

Comparative cost chart

A comparative chart of total costs involved in
setting up a plant of desired size is prepared.
The total cost is represented by the height of
column for each location. we select a location
for which total cost is minimum.

Qualitative factors.
Factors to which cost values cant be assigned. Like
lack of good schools, community attitude. These can be
termed as good or excellent.
factors

Location A

Location B

labor

adequate

excellent

relation

good

Very good

education

Good

Very good

Clearly location B appears to be better one.

Plant layout

Plant layout is the physical arrangement of

industrial facilities.
It involves the allocation of space & the
arrangement of equipment in such a manner
that overall operating costs are minimized.

Objectives of plant layout

Economies in materials & facilitate manufacturing process thereby

increase in productivity
Proper & efficient utilization of available floor space.
To avoid congestion & bottlenecks.
Provision of better supervision & control of operations.
Careful planning to avoid frequent changes in layout which may
result in undue increase in cost of production.
To provide adequate safety to the workers from accidents.
To meet the quality & capacity requirements in the most economical
manner
Provision of medical facilities & cafeteria at suitable & convenient
places.

Types of plant layout

1. Product layout
2. Process layout

Product layout In this layout plan, machines & equipment are

arranged in a sequence required to produce a
specific product.
Here raw material enter the production process at
one end & comes out at other end as finished
good.
Also known as line layout

Product or Line Layout

Product
A
Step 1

Step 2

Step 3

Step 1

Step 2

Step 3

Step 2

Step 3

Step 4

Product
B
Step 4

Product
C
Step 1

Step 4

Advantages of Product
Layout

Ensures a smooth flow of materials ,minimizing work in

progress & thereby high rate of output
Low material handling cost & simplifies control
Low unit cost
Labor specialization
Established scheduling
Short processing time
Smooth and continuous operations
Lesser inventory and work in progress
Optimum use of floor space

Disadvantages of Product
Layout

Inflexible as breakdown of one machine can

disrupt the entire production process & highly
susceptible to shutdowns
Creates dull, repetitive jobs
Fairly inflexible to changes in volume

Process layout Machines performing similar type of

operations are grouped together at one
location in the process layout. Thus here
facilities are grouped together acc. to their
functions.
E.g. all drilling machines are located at one
place known as drilling section.

Advantages of Process
Layouts

There is high degree of machine utilization, as a machine is not

blocked for a single product.
Machines breakdown doesnt result in shutdown.
Wide flexibility in production facilities.
High utilization of facilities
Variety makes the job interesting.
The overhead costs are relatively low
Supervision can be more effective and specialized.

Disadvantages of Process
Layouts
In-process inventory costs can be high
Challenging scheduling
Material handling is slow and inefficient
Longer processing time
Work in progress inventory is high needing greater
storage space
Suitable for job order production wherein goods are
produces according to customer specifications e.g
tailoring, jewellery

Product & Process layout

factors
1.

Nature

Product layout

Process layout

Sequence of facilities

Similar aregp2gether

2. Machines utilization Not to full capacity

Better utilization

3. Product

Standardized

Diversified

4. Processing time

Less

More

5. Material handling

Less

more

6. Breakdown

Cant tolerate

Can tolerate

7. Production centre

Simple

complex

8.Flexibilty

Low

high

9. Investment

High

low

Factors affecting plant layout

1.
2.

3.

4.
5.

Nature of product- product layout is suitable for uniform products

& process layout is more appropriate for customer made products
Production Process:
1. In assembly line, product layout is better
2. In job order process layout is appropriate
Type of machine:
1. General purpose machine: product
2. Special purpose machine: process
Adequate space for Repair & maintenance
Climatic conditions, need of light, temperature also affect design of
layout.

Product Design
What to produce & how to produce
Standardization
Reliability
Maintainability
Servicing
Sustainability
Quality
Product value

Production Design
Estimating
Quantity of product to be manufactured &
inputs required

Routing
Sequence of operations involved in
production is decided to minimize time & cost

Loading
Scheduling
Fixing of priorties & time for different job

EXPORT /
INTERNATIONAL
ENTREPRENEURSHIP

 Process in which firms creatively discover and exploit

opportunities that are outside their domestic
markets in order to develop a competitive advantage
Is the study of firms risk- taking behaviour as it
ventures into international markets
A business organisation that seeks to derive
significant competitive advantage from the use of
resources & sale of outputs in multiple countries.
A firm level activity that crosses national borders &
focuses on the relationship between businesses &
the international environments in which they operate
Is a process of an entrepreneur conducting business
activities across national boundaries. The
mechanisms usally adoted can be through exporting,
licensing & opening a sales office.

ADVANTAGES
Helps as growth strategy
Geographic expansion may be used as a business strategy

Helps in managing product life cycle

Every product has to pass through different stages of
product life cycle, when it may ne maturity stage in one
market, it may get proper response at other market

Technology advantages
Companies having outstanding technology help in
capturing other markets
Firms can obtain an patent & exploit an advanced
technology e.g IBM in computers, etc.

New business oppurtunities

Expansion in other markets if have reached a saturation
point in domestic market

 Proper use of resourses

Sometimes industrial resources , such as labour,
minerals etc. are available in a country but are not
productively used
Availability of quality products
In open markets , better quality products will be ava.
everywhere
Earning foreign exchange
International business helps in earning foreign
exchange which may be used for strategic imports.
India needs foreign exchange to import crude oil,
defence equipment, raw materials & machinery.
Countries depend upon each other for meeting their
requirement. India depends on golf countries for its
crude oil supplies, investment in infracture
Economies of scale
Large size of firm help in economies of scale & thus
lower cost, e.g Wal Mart

 Diversification of risk
Bearing the risk of cyclic economies declines
Diversification of political, economic & other risk

DISADVANTAGES
Foreign regulations and standards: The firm
may need to conform to new standards. This may
require changes such as in the production
process, inputs and packaging, incurring
additional costs.
Delays in payments: International trade may
cause delays in payments, adversely affecting the
firm's cash flow.
Complex organizational structure: language
barrier, additional costs, changed mindset

International Business Entry

Export
Direct Export

Exporter handles every aspect of the

exporting process.
Market research
Foreign distribution
Collections

Direct methods of exporting give your firm:

More control over the export process
Potentially higher profits
A closer relationship to the overseas market

 Direct methods of exporting require a significant

commitment.
They are not cheap and require substatial resources.
Reorganizing the company to support the export effort
may be necessary.

Methods of direct exporting include going

through:
Sales Representatives, Distributors, A Foreign
Retailer,Direct sales to the End User

Indirect Export
Exports that are not handled directly by the
manufacturer or producer but through an export agent .
Indirect methods of exporting requires less marketing
investment, but you lose substantial control over the
marketing process.
Export Merchant
Buys the local firm's goods outright
assume the risk of being able to resell them
profitably abroad.
Usually specializes
in a particular line of products and/or
in a particular geographical market area.
Sometime sells goods with the original supplier's
labels or puts its own label.

 Export Agent
Acts for local manufacturers,
usually representing a number of non-competing
manufacturers.
In return for obtaining export order from abroad, the export
agent receives a commission.
Does not become the owner of the goods
Does not assume the risk of not being able to sell them abroad.
Functions

Appraise the export potential of the manufacturer's products,

Advertise products abroad,
Look for foreign buyers,
Obtain export orders
Advise on, or arrange for

Documentation
Shipping
Insurance

 Resident Foreign Buying Agent

Acts as the purchasing agent for foreign companies
Earns a commission on the goods purchased.
The foreign principal says that it wants certain products
at certain prices
Agent stationed locally goes looking for them, asking
for quotations from several different local suppliers.

Incentives for Exporters

Duty drawback
Excise duty paid for various inputs in manufacturing
Duty paid for import of raw materials

Excise rebate-

An excise tax is one levied on specific goods or commodities

produced or sold within a country

Exported goods have excisable goods in manufacturing

Marketing assistance
Assistance for market surveys
Participation of various trade exhibitions assisatnce of R & D work &
consultance services

Raw materials
Priorty in allotment like steeel & alloys etc.
Engineering export promotion council reimburses the rate
difference of raw material

 EOU ( export oriented units)

Separate space in industrial areas called
EPZ ( export processing zones)
Near to sea or airport

Ready made plots & buildings

100% foreign investment approved
Income tax exemtion for 5 yrs
Concessional rates working capital loans
Exempted from excise duty
No license is required for import of
machineries , spares part
Necessary administrative faclities, container
facility , customs clearance & security in EPZ.

Fiscal Support
To be competitiveness of Small Scale Sector, the exemption for excise
duty limit raised from Rs. 50 lakhs to Rs. 1 crore.
Credit Support
The composite loans limit raised from Rs. 10 lakhs to Rs.25 lakhs.
In the National Equity Fund Scheme, the project cost limit is raised
from Rs. 25 lakhs to Rs. 50 lakhs. (small scale units are given
equity type seed capital assistance to meet the margin
money requirements of small units)
The soft loan (loan with a below-market rate of interest) limit
is retained at 25 per cent of the project cost subject to a maximum of
Rs. 10 lakhs per project.
Assistance under the NEF is be provided at a service charge of 5 per
cent per annum.

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

Marketing Support
The Vendor Development Programme, BuyerSeller Meets and Exhibitions will take place more
often and at dispersed locations.

Export-Import
Documentation

Export Documentation in
India

Export Documentation in India has evolved a great deal

of interest since 1990.
Prior to 1990, documentation was manual and it lacked
proper co-ordination & The result was lot of delays and
mistakes, rendering the task very clumsy, tiresome,
repetitive, and truly frustrating.
India adopted the ADS (Aligned Documentation System)
in 1991 which is the Internationally accepted
documentation system

Export Documents
Principal Documents include:
Commercial Invoice (and the invoice prescribed
by the importer)
Packing list
Certificate of Inspection
Certificate of Insurance/Insurance Policy
Bill of Lading/Airway bill/Combined Transport
Documents
Certificate of Origin
Bill of Exchange
Shipment Advice

Commercial Documents
(1) Commercial Invoice:
This document requires the exporter to submit details such as
(1) Own details,
(2) Invoice number with date,
(3) Details of the buyer
(4) Buyers order number with date,
(5) Country of origin of the goods,
(6) Country of final destination,
(7) Terms of payment and delivery,
(8) Pre-carriage details (Road/Rail),
(9) Port of loading
(10) Final destination
(11) Container number, numbers and kind of packaging,
(12) Detailed description of goods, quantity, rate and total amount chargeable

Commercial Documents
(2) Packing List:
This document provides the details of number of packages; quantity
packed in each of them; the weight and measurement of each of the
package and the net and gross weight of the total consignment.
Net weight refers to the actual weight of the items and the gross weight
means the weight of the items plus the weight of the packing material.
The packing list serves a useful purpose of the exporter while dispatching
the consignment as a cross check of goods sent.
For the port personnel, it comes handy while planning the loading and
offloading of cargo.
It is also an essential document for the customs authorities as they as they
can carry out the physical examination of the cargo and conduct checks
on the weight and measurements of the goods smoothly against the
declarations made by the exporter in the packing list.

Commercial Documents
3) Certificate of Inspection: This is the Certificate issued
by the Export Inspection Agency after it has conducted
the pre-shipment inspection of goods for export provided
the goods fall under the notified category of goods
requiring compulsory shipment of inspection.
(4) Certificate of Insurance/Insurance Policy:
Insurance is an important area in the export business as
the stakes are usually very high.
Protection needs to be taken in the form of insurance
cover for the duration of transit of goods from the
exporter to the importer.

Commercial Documents
(5) Bill of Lading:
This is issued when the goods are shipped using ocean
(marine) transport.
When the exporter finally hand over the goods to the
shipping company for loading on board the ship for
transport to their final destination, the shipping company
issues a set of Bills of Lading to the exporter.
(6) Airway Bill:
Airway Bill is a bill of lading when the goods are
shipped using air transport.
It is also known as air consignment note or airway bill of
lading.

Commercial Documents
(7) Certificate Of Origin:
This document serves as a proof of the country of origin
of goods for the importer in his country.
Imported countries usually require this to be produced at
the time customs clearance of import cargo.
It also plays an important part in computing the liability
and the rate of import duty in the country of import.
This certificate declares the details of goods to be
shipped and the country where these goods are grown,
manufactured or produced.
Such goods needs to have substantial value addition so
as to become eligible to certification of this nature.

Commercial Documents
(8) Bill of Exchange:
It is a written unconditional order for payment from a drawer to a
drawee, directing the drawee to pay a specified amount of money
in a given currency to the drawer or a named payee at a fixed or
determinable future date.
The exporter is the drawer and he draws (prepares and signs) this
unconditional order in writing upon the importer (drawee) asking
him to pay a certain sum of money either to himself or his
nominee (endorsee).
This order could be made for payment on demand, called a bill of
exchange at sight or payment at a future date, called a usance bill
of exchange.

Commercial Documents
(9) Shipping Advice:
The exporter sends this document , called shipping
advice, to the buyer soon after the shipment is made to
provide him all the shipment details.
This serves as an advance intimation of the shipment and
allows the importer to arrange for delivery of the same.

Institutions Supporting Small

Business Enterprises

Institutions Supporting Small-scale Industries

CENTRAL LEVEL
SSI BOARD
KVIC

STATE LEVEL

SIDO

DIs

NSIC
NSTEDB

SSIs

NPC

DICs
SFCs

NISIET

SIDCs/SIICs

NIESBUD

SSIDCs

IIE
EDI

OTHERS
Industry Association
Non Governmental Organizations
R & D Laboratories

Small-scale Industries Board (SSI Board)

Constituted in 1954 to facilitate the coordination and interinstitutional linkages for the development of SSI sector
The Board is an apex advisory body constituted to render advice
to the government on all issues pertaining to the SSI sector
The office of the Development Commissioner (Small-Scale
Industry) serves as the secretariat for the board
The Board operates broadly in the following areas:
- Policies & programs
- Development of industries in specific region like Northeast
- Ancillary development, quality improvement, mktg.
assistance
- Credit facilities, taxation and
modernization
- Industrial sickness

Khadi and Village Industries Commission (KVIC)

Statutory body created by an act of Parliament
It is charged with planning, promotion, organization and
implementation of the program for the development of Khadi
and other village industries in the rural areas in coordination
with other agencies engaged in rural development
KVICs functions also comprise building up a reserve of raw
materials and implements for supply to producers, creation
of common service facilities for processing of raw materials
and provision of marketing of KVIC products
KVIC is entrusted with the task of providing financial
assistance to institutions or persons engaged in the
development and operation of Khadi and village industries
and guide them through supply of designs, prototypes and
other technical information

Small Industries Development Organization (SIDO)

Established in 1954 on recommendation of Ford
Foundation
Over the years, it had seen its role evolve into an agency
for advocacy,devlopmnt, promotion, handholding and
facilitation for the small industries sector
SIDO provides facilities for testing, tool mending, training
for entrepreneurship development, preparation of project
and product profiles, technical and managerial consultancy,
assistance for export, pollution and energy audits, and so
on
SIDO provides economic information services and advises
the government in policy formulation for the promotion and
development of SSIs

National Small Industries Corporation Ltd. (NSIC)

Established in 1955 by GOI with the main objectives to
promote, aid and foster the growth of SSIs in the country
Over four decades of transition and growth in the SSI sector,
NSIC has provided strength through a progressive attitude of
modernization, upgradation of technology, quality
consciousness, strengthening linkages with large and
medium-scale enterprise and boosting exports of products
from small enterprises
Main services provided by NSIC are:
- Machinery and Equipment (Hire Purchase / Lease scheme)
- Financial Assistance Scheme
Assistance for Procurement of Raw Material
Government Store Purchase Program
Technology Transfer Centre (TTC)
Marketing Assistance

National Science and Technology

Entrepreneurship Development Board (NSTEDB)
Established in 1982 by GOI, is an institutional mechanism to
help promote knowledge-driven and technology-intensive
enterprises
Major objectives are:
- promote and develop high-end entrepreneurship for S&T
manpower as well as self-employment by utilizing S&T
infrastructure and by using S&T methods
- facilitate and conduct various informational
services relating to promotion of entrepreneurship
- network agencies of support system,
academic institutions and R&D organizations to foster selfemployment using S&T with special focus on backward areas
- act as a policy advisory body with
regard to entrepreneurship

National Productivity Council (NPC)

Autonomous institution functioning under the overall supervision of
the Ministry of Industry, GOI
Primary objective is to act as a catalyst in enhancing the productivity
of all sectors of the economy, including industry and agriculture
Administered by a tripartite Governing Council (GC) which has equal
representation from the government, industry and trade unions
Active in the field of consultancy and training and has a number of
specialized divisions to provide tailor-made solutions to agriculture
and industry. These divisions, manned by trained consultants, deal
with issues related to industrial engineering, plant engineering,
energy management, HRD, informal sector, agriculture and so on
NPC is a member of the Asian Productivity Organization (APO),
Tokyo, an umbrella body of all productivity councils in Asian region
To channelise expertise of NPC to small-scale and informal sector,
SIDBI has tied-up with NPC for enhancing technology in small units

National Institute for Small Industry

Extension and Training (NISIET)
Set up in early 1950s, NISIET acts an important resource
and information centre for small units and undertakes
research and consultancy for small industry development
An autonomous arm of the Ministry of Small Scale
Industries, the institute achieves its objectives through
training, consultancy, research and education, to extension
and information services
In 1984, UNIDO has recognized NISIET as an institute of
meritorious performance under its Centre of Excellence
Scheme to extend aid

National Institute for Entrepreneurship and

Small Business Development (NIESBUD)
NIESBUD is an autonomous body under the administrative
control of the Office of the DC(SSI)
NIESBUD established in 1983 by the Ministry of Industry, GOI,
as an apex body for coordinating and overseeing the activities
of various institutions/agencies engaged in Entrepreneurship
Development particularly in the area of small industry and
business
The policy, direction and guidance to the institute is provided by
its Governing Council whose chairman is the Minister of SSI.
Besides conducting national and international training
programs, the institute undertakes research studies,
consultancy assignments, development of training aids, etc.

State Level Institutions DIs and DICs

Directorate of Industries (DIs) At the State level, the Commissioner/
Director of Industries implements policies for the promotion and
development of small-scale, cottage, medium and large scale industries.
The Central policies for the SSI sector serve as guidelines but each State
evolves its own policy and package of incentives. The Commissioner/
Director of Industries in all the States/UTs, oversee the activities of field
offices, that is, the District Industries Centers (DICs) at the district level
District Industries Centers (DICs) In order to extend promotion of smallscale and cottage industries beyond big cities and state capitals to district
headquarters, DIC program was initiated in May, 1978, as a centrally
sponsored scheme. DIC was established with the aim of generating greater
employment opportunities especially in rural and backward areas in the
country. At present DICs operate under respective Sate budgetary
provisions. DICs extend services of the following nature (i) economic
investigation of local resources (ii) supply of machinery and equipment (iii)
provision of raw materials (iv) arrangement of credit facilities (v) marketing
(vi) quality inputs (vii) consultancy

State Level Institutions - SFCs

State Financial Corporations (SFCs) Main objectives are to finance
and promote small and medium enterprises in their respective states for
achieving balanced regional growth, catalyze investment, generate
employment and widen ownership base of industry.
Financial assistance is provided by way of term loans, direct subscription
to equity/debentures, guarantees, discounting of bills of exchange and
seed capital assistance.
SFCs operate a number of schemes of refinance of IDBI and SIDBI and
also extend equity type assistance. SFCs have tailor-made schemes for
artisans and special target groups such as SC/ST, women, exservicemen, physically challenged and also provide financial assistance
for small road transport operators, hotels, tourism-related activities,
hospitals and so on.
Under Single Window Scheme of SIDBI, SFCs have also been extending
working capital along with term loans to mitigate the difficulties faced by
SSIs in obtaining working capital limits on time

State Level Institutions SIDC / SIIC and SSIDC

State Industrial Development / Investment Corporation (SIDC/SIIC)
Set up under the Companies Act, 1956, as wholly owned undertakings of
the State governments, act as catalysts in respective states.
SIDC helps in developing land providing developed plots together with
facilities like roads, power, water supply, drainage and other amenities.
They also extend assistance to small-scale sector by way of term loans,
subscription to equity and promotional services.
11 out of 28 SIDCs in the country also function as SFCs and are termed
as Twin-function IDCs
State Small Industrial Development Corporations (SSIDC) Established

under Companies Act, 1956, as State government undertaking, caters to small, tiny and village
industries in respective states. Being operationally flexible undertakes the activities like (i) procure
and distribution of scarce raw materials, (ii) supply of machinery to SSI units on hire-purchase
basis, (iii) product marketing assistance, (iv) construction of industrial estates, allied infrastructure
facilities and their maintenance (v) extending seed capital assistance on behalf of State government
and (vi) providing management assistance to production units

Other State-level agencies Extending

Facilities for SSI Promotion

State Infrastructure Development Corporations

State Cooperative Banks
Regional Rural Banks
State Export Corporations
Agro Industries Corporations
Handloom and Handicrafts Corporations

Other Agencies
National
Bank for
Agriculture
and Rural
Developm
ent
(NABARD)

Set up in 1982, provide refinance assistance to State

Cooperative Banks, Regional Rural Banks, and other
approved institutions for all kinds of production and
investment credit to SSIs, artisans, cottage and village
industries, handicrafts and other allied activities. Helps
SSI entrepreneurs to get loan for setting up SSIs in any
part of the country

Housing
and Urban
Developm
ent
Corporatio
n Ltd.
(HUDCO)

Wholly owned company of GOI, incorporated Apr.1970,

as a Pvt. Ltd. Co. and subsequently, converted into a
Public Ltd. Co. in 1986. Primary objective is to provide
assistance for urban, social sector infrastructure, and
the creation of housing facility, of late, to create SSI
infrastructure. Also extends assistance for the
promotion of building material industries, besides
imparting consultancy, training and technical in
related matters.

Set up by all-India financial institutions during 70s and

Technical 80s to cater to consultancy needs of SMEs and new
Consultanc entrepreneurs. Services include preparing project