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Small Industries Development Organization (SIDO

The Small Industries Development Organization (SIDO) is an apex body for formulating policies for the development of small scale industries in the country. It isa subordinate office of the department of SSI. SIDO was established on the basis of the recommendations of the Ford Foundation

Structure SIDO, known as the Office of the Development Commissioner (Small Scale Industries), operates under Ministry of Small Scale Industries as the nodal development agency for SMEs (please note that SIDO operates on behalf of Small Scale Industries only) The SME Board, which is part of the Small Scale Industry Ministry, is the main advisory body of SIDO. Small Scale Industry Board was last constituted on 13th October, 2000 with 90 members besides the Chairman The Board provides a forum for interactions among its members in order to facilitate coordination and inter-institutional linkages and to render advice to the Government on various policy matters and other related issues concerning SME. The term of the Small Scale Industry Board is two years.

Co-ordination of SIDO To evolve a national policy for the development of SSI. To co-ordinate the programme for the development of industrial estate. To maintain a proper liasion with related Central ministers, Financial institutions etc. Industrial development To reserve items for production by SSI. To render required support for the development of ancillary u n i ts . To encourage SSI to actively participate in government stores purchase programme. Other services of SIDO To render marketing assistance to SSI. To provide assistance in economic investigation and information to SSI. To provide consultancy & training services to strengthen the competitive ability of SSI. SIDO – ACTIVITIES Policy Facilitation
Definition and Interpretation, Single Legislation, Simplification of Procedures, Reservation, Credit Flow Interventions

Technology Upgradation Schemes, Technology Centers

Technology Services


Entrepreneurship Development

Entrepreneurial Development Institutes State EDIs, EDPs, MDPs

ISO 9000, National Programmes on Locks, Machine Tools, Stone and Toys, Marketing Development Assistance , Participation in International Fairs, Credit Guarantee Scheme Process & Product Training programmes Tool Rooms, Testing Centers, Industrial Estates Registration modalities, Census, Data Bank Project Profiles, Energy audit, Pollution audit, International Cooperation SME Board, Stakeholders dialogue

Special Interventions

Technical Skills Development Infrastructure Support

Economic and Statistical Investigation Consultancy

Forum for Interaction Among SSIs

Knowledge Portal, Sectoral Studies, Sensitization Programmes on Bar Coding, WTO, IPR, Anti Dumping, Networking with other service providers

Networking & Continuing Education

SIDO Schemes
SIDO is actively involved in promoting tiny and small scale industries in India by means of its promotional and developmental activities. To bring about economic development of the country and to assist the small scale entrepreneurs to become self reliant, SIDO offers the following schemes for the SSI Sector. 1. Credit Guarantee Fund Scheme for Small Industries: The Board of Trustees of Credit Guarantee Fund Trust for small industries have framed a scheme for providing guarantee to a substantial extent, in respect of credit facilities to the borrowers in the SSI sector without any collateral security or third party guarantee. The scheme came into force from 1st August, 2000. The following facilities are provided under this scheme: (a) The Trust covers credit facilities extended by a lending institution to a small scale entrepreneur up to an amount of Rs. 25 lakhs (in respect of a single borrower) by way of term loan and/ or working capital facilities. For this purpose, the Trust requires no Collateral Security or Third Party guarantee. However, the lending institution has to apply for a guarantee cover within a period of 90 days from the date of sanction. (b) The scheme covers all existing and new SSI units including information technology and software industries to which credit facility has been provided by the lending institutions. (c) If working capital alone is extended to an eligible borrower, the guarantee cover shall be for a period of 5 years or a block of 5 years or for such period as may be specified by the Trust in this behalf.

2. Credit Linked Capital Subsidy Scheme for Technology up gradation of the Small Scale Industries (CLCSS) The purpose of the scheme is to facilitate technology up gradation in the SSI sector in the specified products/sub sectors by providing 12% capital subsidy for induction of proven technologies approved under the Scheme. Eligible borrowers under the scheme include all sole proprietors, partnerships firms, and Co-operative societies, private and public limited companies in the SSI sector. Under this scheme, Capital subsidy is available only for such projects where term loans have been sanctioned by the eligible Primary Lending Institutions on or after 1st, October, 2000. The following products/sub sectors are covered under this scheme in the SSI Sector: Leather and Leather products including footwear and garments Food Processing Information Technology (Hardware) Drugs and Pharmaceuticals Auto parts and Components Electronic Industry particular relating to Design and Measuring Glass and Ceramic items including Tiles Dyes and intermediates Toys Tyres Hand Tools Bicycle parts Foundries – Ferrous and Cast Iron, and Stone Industry.

3. Scheme for Market Development Assistance for SSI exporters (SSI-MDA) The Scheme for Market Development Assistance for SSI exporters (SSI-MDA) came into operation w.e.f. 30th August, 2001. The basic objective of the scheme is to encourage the exporters to tap and develop overseas exports. It is expected that SIDOs participation in International Fairs coupled with the presence of exporters, will help to augment export earnings. Exporters eligible for assistance under this scheme are: (a) Exporting unit must be registered as SSI/SSSBE. (b) Exporting unit must be a member of FIEO/EPC. (c) Those exporting units with aggregate exports of Rs. 2 crores and above during last 3 financial years (Rs. 1 crore for ISO-9000 certified exporters) shall receive assistance from the Ministry of Commerce through Export Promotion Councils (EPCs) or other grantee organizations. Other exporting units with aggregate exports less than this limit shall receive direct assistance from the O/o DC(SSI), New Delhi. (d) Those units who have not commenced exports are not eligible for assistance. (e) Assistance under SSI-MDA will be given to an exporting unit only once in a financial year. Activities eligible for financing are: (a) Individual participation in overseas fairs/exhibitors (b) Individual overseas study tours as member of a trade delegation going abroad. (c) Publicity Overseas. Assistance is given for travel by one permanent employee/director/partner/proprietor of the SSI unit in economy class by Air India. Travel by other airlines is also permissible provided their economy class air fare is not higher than Air India.

Permissible Funding limits: i. 90% of cost of return ticket by economy class subject to an upper ceiling of Rs. 60,000/= (Rs. 90,000/= of Latin American countries). ii. 25% of the cost of production of publicity material limited to Rs. 15,000/= in a financial year. 4. Integrated Infrastructural Development Scheme (IID) for Small Scalen Industries The Integrated Infrastructural Development Scheme (IID) was launched in March, 1994 with the basic objective of facilitating growth of cluster of small scale and tiny units so as to create employment opportunities and to promote exports. The IID centers are to provide common service facilities and technology back up services to the SSI entrepreneurs. The thrust of the scheme is on creation/up gradation of infrastructural facilities like power, water, telecommunication, drainage, pollution control facilities, effluent treatment and disposal system, road, banks, raw material depots, marketing outlets etc. in the new/existing industrial centers. The IID Scheme covers all areas with 50% reservation for rural areas. 50% of the Industrial plots created under this scheme are to be reserved for the tiny sector. The State Govt. selects an appropriate site of 15-20 hectares in rural/urban area which has potential for setting up of SSI unit, prepare project report and send the same to SIDBI for techno economic appraisal. SIDBI undertakes techno economic appraisal of the Project Reports and sends the same to the O/o DC, SSI, New Delhi for formal approval of Govt. of India. At the Central level, SIDO is the apex body for coordinating and overseeing the progress of IID projects. The State/UT Govt. is responsible for implementing the scheme at the ground level through a public sector corporation or corporate body with good track record or NGOs with sound financial position. The technology support in IID centers is provided by SISIs, NSIC, and Research Centre etc.

5. Integrated Technology up gradation and Management Programme (UPTECH). The Integrated Technology Up gradation and Management Programme (UPTECH)was launched in 1998. The Scheme applies to any cluster of industries where thereis a commonality in the method of production, quality control and testing, energy conservation, pollution control etc. among the units of the cluster. The scheme aims at technology up-gradation, improvement of productivity, energy conservation, pollution control, product diversification their marketing and training needs, etc. The Scheme also has provision for financial support for activities like conducting diagnostic study of the cluster, carrying out industries related Research and Development, setting up of new technology demonstration plant, setting up of common facility centers, organizing Seminars, Workshops and training of users. The proposals for technology up gradation and modernization of a cluster are received from various agencies like State Govts. Industry Associations or Special Institutions. The proposals are then discussed with the agencies and a consensus is reached on the areas of intervention in fields of technology up gradation. The next step is to decide the implementing agency for carrying out these technological interventions. A demonstration plant is then set up by the pioneering unit (wherein the technological interventions are implemented). For setting up of the demonstration plant, the pioneering unit has to bear 50% of its cost. A Common Facility Centre, if required, can be supported under the scheme. The amount of financial support under this scheme is not fixed but varies from project to project as decided by the Steering Committee. The Scheme is monitored by the Implementation Committee headed by the Development Commission (SSI). The O/o DC, SSI is the nodal agency to implement the scheme.

6. Prime Minister’s Rozgar Yojana (PMRY) The PMRY scheme was launched by the Govt. of India in Oct. 1993 and is designed to create and provide sustainable self employment opportunities to the educated unemployed. The salient features of the scheme are: Eligibility - Any unemployed educated youth satisfying the following criterion: a) Age : Between 18 to 35 years. Upper age limit relaxed by 10 years for women, SC/ST and Physically Handicapped Persons. b) Qualification: VIIIth Passed. Preference will be given to those who have been trained for any trade in govt. recognized/ approved institutions for duration of at least six months. c) Residency : Permanent resident of the area for at least three yrs. d) Family Income: Neither the income of the beneficiary along with spouse nor the income of the parents of the beneficiaries shall exceed Rs. 40,000/= p.a. e) Defaulter: Should not be a defaulter to any nationalized bank/financial institutions. B. Activities : Industry, Service or Business covers all economically viable activities including agriculture and allied activities but excluding direct agriculture activities. C. Project Cost: Rs. 1.00 lakh for business sector, Rs. 2.00 lakhs for other activities, loan to be of composite nature. If two or more eligible persons join together in a partnership, projects up to Rs. 10.00 lakhs are covered. Assistance shall be limited to individual admissibility. D. Subsidy & : i) Subsidy will be limited to 15% of the project cost

Margin Money subject to ceiling of Rs. 7,500/- per entrepreneur. Banks will be allowed to take margin money from the entrepreneur varying from 5% to 16.50% of the project cost so as to make the total of the subsidy and the margin money equal to 20% of the project cost. ii) Subsidy @ 15% of the project cost subject to a ceiling of Rs. 15,000/= for North Eastern States. Margin money contribution from the entrepreneur may vary from 5% to 12.5% of the project cost so as to make the total of the subsidy and the margin money equal to 20% of the project cost. E. Collateral : No collateral for units in industry sector with project cost up to Rs. 2 lakh (the loan ceiling under the PMRY). For partnership projects under Industry Sector, the exemption limit for obtaining of collateral security will be Rs. 5 lakhs per borrowers account. For units in service and business sector, no collateral for projects up to Rs. 1.00 lakh. Exemption from collateral in case of partnership project will also be limited to an amount of Rs. 1.00 lakh per person participating in the project. F. Rate of interest: Normal rate of interest shall be charged. Repayment may range from 3 to 7 years after an initial moratorium as may be prescribed. G. Reservation: Preference shall be given to weaker sections including women. The Scheme envisages 22.5% reservation for SC/ST and 27% for other backward classed (OBC)