Entrepreneurial Development – 14MBA26

Module 4: (6 Hours)
Institutions Supporting entrepreneurs: Small industry financing developing countries,
A brief overview of financial institutions in India, Central level and state level
institutions, SIDBI, NABARD, IDBI, SIDCO, Indian Institute of Entrepreneurship, DIC,
Single Window, Latest Industrial Policy of Government of India

Introduction:
These institutions are supporting the entrepreneurs in various aspects of the business
such as education, training, finance, marketing etc.

The list of various State and Central Government agencies supporting small -scale
industries and their activities and functions are discussed in the following sections.

Financial Institutions
Financial sector plays an indispensable role in the overall development of a country.
The most important constituent of this sector is the financial institutions, which act as
a conduit for the transfer of resources from net savers to net borrowers, that is, from
those who spend less than their earnings to those who spend more than their earnings.
The financial institutions have traditionally been the major source of long -term funds
for the economy. These institutions provide a variety of financial products and services
to fulfill the varied needs of the commercial sector. Besides, they provide assistance to
new enterprises, small and medium firms as well as to the industries established in
backward areas.

Financing institutions Finance is one of the essential requirements of an enterprise.

Without adequate funds, no business can be developed. In India, Central and state
governments are promoting number of financial institutions to bring in the industrial
development in the country. Some of the important financial institutions are:

CENTRAL LEVEL INSTITUTES:

1. Small scale Industries Board (SSI Board)
2. Khadi and Village Industries Commission (KVIC)
3. Small Industries Development Organization (SIDO)
4. National Small Industries Corporation Ltd. (NSIC)
5. The National Science and Technology Entrepreneurship Development Board
(NSTEDB)
 6. National Productivity Council (NPC)
7. National Institute for small Industry Extension and Training (NISIET)
8. National Institute for Entrepreneurship and small business Development
(NIESBUD)
9. Indian Institute of Entrepreneurship (IIE)
10. Entrepreneurship Development Institute of India (EDII)

1. Small-scale Industries Board (SSI Board):

• Constituted in 1954 to facilitate the coordination and inter-institutional 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
2. 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
• KVIC’s 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
3. 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 advo cacy, 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
• SIDO is created for development of various small scale units in different areas. SIDO is a
subordinate office of department of SSI and ARI. It is a nodal agency for identifying the
 needs of SSI units coordinating and monitoring the policies and programmes for
promotion of the small industries. It undertakes various programmes of training,
consultancy, evaluation for needs of SSI and development of industrial estates. All these
functions are taken care with 27 offices, 31 SISI (Small Industries Service Institute) 31
extension centers of SISI and 7 centers related to production and process development.

The activities of SIDO are divided into three categories as follows:

a) Coordination activities of SIDO:

(1) To coordinate various programmes and policies of various state governments

pertaining to small industries.
(2) To maintain relation with central industry ministry, planning commission, state
level industries ministry and financial institutions.
(3) Implement and coordinate in the development of industrial estates.

(b) Industrial development activities of SIDO:

(1) Develop import substitutions for components and products based on the data
available for various volumes-wise and value-wise imports.
(2) To give essential support and guidance for the development of ancillary units.
(3) To provide guidance to SSI units in terms of costing market competition and to
encourage them to participate in the government stores and purchase tenders.
(4) To recommend the central government for reserving certain items to produce at SSI
level only.

(c) Management activities of SIDO:

(1) To provide training, development and consultancy services to SSI to develop their
competitive strength.
(2) To provide marketing assistance to various SSI units.
(3) To assist SSI units in selection of plant and machinery, location, layout design and
appropriate process.
(4) To help them get updated in various information related to the small-scale
industries activities.
4. 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

The National Small Industries Corporation (NSIC), an enterprise under the union ministry
of industries was set up in 1955 in New Delhi to promote aid and facilitate the growth of
small scale industries in the country. NSIC offers a package of assistance for the benefit of
small–scale enterprises.

1. Single point registration: Registration under this scheme for participating in

government and public sector undertaking tenders.
2. Information service: NSIC continuously gets updated with the latest specific
information on business leads, technology and policy issues.
3. Raw material assistance: NSIC fulfils raw material requirements of small-scale
industries and provides raw material on convenient and flexible terms.
4. Meeting credit needs of SSI: NSIC facilitate sanctions of term loan and working capital
credit limit of small enterprise from banks.
5. Performance and credit rating: NSIC gives credit rating by international agencies
subsidized for small enterprises up to 75% to get better credit terms from banks and
export orders from foreign buyers.
6. Marketing assistance programme: NSIC participates in government tenders on behalf of
small enterprises to procure orders for them.

5. 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 self-employment using S&T with special focus on
backward areas
• act as a policy advisory body with regard to entrepreneurship
6. 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
7. 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
8. 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.
9. Indian Institute of Entrepreneurship: (IIE)
With an aim to undertake training, research and consultancy activities in small and micro
enterprises focusing on entrepreneurship development, the Indian Institute of
Entrepreneurship (IIE) was established in the year 1993 in Guwahati by the erstwhile
Ministry of Industry (now the Ministry of Micro, Small and Medium Enterprises),
Government of India as an autonomous national institute. The institute began operating
from April 1994 with the North East Council (NEC), Governments of Assam, Arunachal
Pradesh and Nagaland and SIDBI as its other stakeholders.
OBJECTIVES
1. To promote and develop entrepreneurship.
 2. To conduct research and provide consultancy for entrepreneurship development.
3. To coordinate and collaborate with other organizations in undertaking training,
research and other activities to increase outreach of the institute.
4. To provide consultancy and monitoring service to MSMEs/ potential entrepreneurs
and enhancing employability of participants.
5. To promote greater use of information technology in the activities/ functions of the
IIE.
6. To comply with statutory responsibility.

FUNCTIONS
 Designing and organizing training activities for different target group and
undertaking research in the relevant to entrepreneurship.
 Improving the efficiency, effectiveness and delivery of the change agents and
development practitioners i.e. trainers, support organizations engaged in enterprise
building. etc.
 Provide consultancy service to the prospective and existing entrepreneurs.
 Increasing the outreach of activities of the institute through collaborative activities
and increasing their effectiveness through use of different tools of information
technology.
10. Entrepreneurship Development Institute of India: (EDII)
The Entrepreneurship Development Institute of India (EDI), an autonomous body and
not-for-profit institution, set up in 1983, is sponsored by apex financial institutions,
namely the IDBI Bank Ltd, IFCI Ltd. ICICI Ltd and State Bank of India (SBI). The Institute
is registered under the Societies Registration Act 1860 and the Public Trust Act 1950.
The Government of Gujarat pledged twenty-three acres of land on which stands the
majestic and sprawling EDI campus.
The objectives of the EDII are as follows:
1. Augment the supply of trained entrepreneurs through training
2. Generate more employment opportunities
3. Improve managerial capabilities of SSI
4. Contribute to the creation and dissemination of new knowledge and insight into
entrepreneurial theory and practices through research
5. Promote micro enterprises at the rural level
6. Inculcate the spirit of entrepreneurship among youth
7. Collaborate with similar organization in India

STATE LEVEL INSTITUTES:

1. Directorate of Industries (DIs)
2. District Industries Centers (DICs)
3. State Financial Corporation’s (SFCs)
4. State Industrial Development/Investment Corporation (SIDCs/SIICs)
5. State Small Industrial Development Corporations (SSIDCs)
1. 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
2. District Industries Centers (DICs) – In order to extend promotion of small-scale 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

DIC: DISTRICT INDUSTRIES CENTRE. Launched in 1978 in all districts of each state. There
are about 400 DIC's in India.
Nature of support: Information and Consultancy Services. Industrial Inputs.
The District Industries Centers (DIC’s) programme was started in 1978 with a view to
provide integrated administrative framework at the district level for promotion of small
scale industries in rural areas. The DIC’s are envisaged as a single window interacting
agency at the district level providing service and support to small entrepreneurs under a
single roof. DIC’s are the implementing arm of the central and state governments of the
various schemes and programmes. Registration of small industries is done at the district
industries centre and PMRY (Pradhan Mantri Rojgar Yojana) is also implemented by DIC.
The main functions of DIC are:

 To prepare action plan to implement the schemes effectively already identified.

 To undertake industrial potential survey and to identify the types of feasible
ventures which can be taken up in ISB sector, i.e., industrial sector, service sector
and business sector.
 To guide entrepreneurs in matters relating to selecting the most appropriate
machinery and equipment, sources of it supply and procedure for importing
machineries.
 To provide guidance for appropriate loan amount and documentation.
 To assist entrepreneurs for availing land and shed equipment and tools, furniture
and fixtures.
 To appraise the worthness of the project-proposals received from entrepreneurs.
 To help the entrepreneurs in obtaining required licenses/permits/clearance.
 To assist the entrepreneurs in marketing their products and assess the possibilities
of ancillarization.
 To conduct product development work appropriate to small industry.
  To help the entrepreneurs in clarifying their doubts about the matters of operation
of bank accounts, submission of monthly, quarterly and annual returns to
government departments.
 To conduct artisan training programme.
 To act as the nodal agency for the district for implementing PMRY (Prime Minister
Rojgar Yojana)
Objectives:
1. To effectively promote cottage and small-scale industries in rural areas and small
towns.
2. To act as a Single Window Agency to help the entrepreneur with all the information
under one roof.
3. To serve as an integrated administrative frame work at the district level for
industrial development.
Functions:
1. Surveys: To carry out surveys to assess the potential of a district with respect to
industrial development taking into account availability of raw material, manpower,
infrastructure, demand for a product etc. This survey provides a basis for advising
budding entrepreneurs.
2. Action Plan: To prepare an action plan for the industrial development of the district.
3. Appraisal: To appraise various investment proposals received from entrepreneurs.
4. Guidance: To guide entrepreneurs in selecting appropriate machinery and
equipment.
5. Marketing: To assist entrepreneurs in marketing their products and assess the
possibility of export promotion.
6. R&D: To link R&D institutes with entrepreneurial activities for product innovation.
7. Training: To conduct artisan training programs.

3. State Financial Corporation’s (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, ex-servicemen, 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
4. 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
5. 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 Agencies:

National Bank Set up in 1982, provide refinance assistance to State Cooperative Banks,
for Agriculture Regional Rural Banks, and other approved institutions for all kinds of
and Rural production and investment credit to SSIs, artisans, cottage and village industries,
Development handicrafts and other allied activities. Helps SSI entrepreneurs to get loan for
(NABARD) setting up SSIs in any part of the country

Housing and Wholly owned company of GOI, incorporated Apr.1970, as a Pvt. Ltd. Co. and
Urban subsequently, converted into a Public Ltd. Co. in 1986. Primary objective is to
Development provide assistance for urban, social sector infrastructure, and the creation of
Corporation housing facility, of late, to create SSI infrastructure. Also extends assistance for
Ltd. (HUDCO) the promotion of building material industries, besides imparting consultancy,
training and technical in related matters.

Technical Set up by all-India financial institutions during 70s and 80s to cater to
Consultancy consultancy needs of SMEs and new entrepreneurs. Services include preparing
Organizations project profiles and feasibility studies, undertaking industrial potential surveys,
(TCOs) identifying potential entrepreneurs and provision of technical and management
assistance to them, undertake market research and surveys for specific
products, carrying out energy audit and energy conservatism assignment,
project supervision, taking up assignments on a turnkey basis, undertaking
export consultancy for EOU

SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI)

For ensuring larger flow of financial and non-financial assistance to the small scale sector,
the government of India set up the Small Industries Development Bank of India (SIDBI)
under Special Act of Parliament in 1989 as a wholly owned subsidiary of the IDBI. The
SIDBI has taken over the outstanding portfolio of the IDBI relating to the small scale sector.

The important functions of IDBI are as follows:

1. To initiate steps for technological up-gradation and modernization of existing units.
2. To expand the channels for marketing the products of SSI sector in domestic and
international markets.
3. To promote employment oriented industries especially in semi-urban areas to create
more employment opportunities and thereby checking migration of people to urban
areas.

The SIDBIs financial assistance to SSIs is channeled through existing credit delivery system
comprising state financial corporations, state industrial development corporations,

National Bank for Agriculture and Rural Development: (NABARD)

The Parliament, through Act,61 of 1981, approved the setting up of NABARD. The bank
came into existence on 12 July 1982 by transferring the agricultural credit functions of RBI
and refinance functions of the then Agricultural Refinance and Development Corporation
(ARDC). NABARD was dedicated to the service of the nation by the late Prime Minister Smt.
Indira Gandhi on 05 November 1982.

NABARD was set up with an initial capital of 100 crore. Consequent to the revision in the
composition of share capital between Government of India and RBI, the paid up capital as
on 31 March 2013, stood at 4000 crore with Government of India holding 3,980 crore
(99.50%) and Reserve Bank of India 20.00 crore (0.50%).

Mission

Promote sustainable and equitable agriculture and rural prosperity through effective credit
support, related services, institution development and other innovative initiatives.

Objectives of the NABARD:

1. The National Bank will be an apex organisation in respect of all matters relating to
policy, planning operational aspects in the field of credit for promotion of Agriculture,
Small Scale Industries, Cottage and Village Industries, Handicrafts and other rural crafts
and other allied economic activities in rural areas.
2. The bank will serve as a refinancing institution for institutional credit such as long-
term, short-term for the promotion of activities in the rural areas.
3. The bank will also provide direct lending to any institution as may be approved by the
Central Government.
4. The bank will have organic links with the Reserve Bank and maintain a close link with
in.

Role of NABARD:

1. Providing refinance to lending institutions in rural areas

2. Bringing about or promoting institutional development and
3. Evaluating, monitoring and inspecting the client banks
4. Acts as a coordinator in the operations of rural credit institutions.
5. Extends assistance to the government, the Reserve Bank of India and other
organizations in matters relating to rural development.
6. Offers training and research facilities for banks, cooperatives and organizations
working in the field of rural development.
7. Helps the State Governments in reaching their targets of providing assistance to eligible
institutions in agriculture and rural development.
8. Acts as regulator for cooperative banks and RRBs.

Industrial Development Bank of India: (IDBI)

• The Industrial Development Bank of India (IDBI) was established on 1 July 1964 under
an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India.
• In 16 February 1976, the ownership of IDBI was transferred to the Government of India
and it was made the principal financial institution for coordinating the activities of
institutions engaged in financing, promoting and developing industry in the country.

Objectives
The main objectives of IDBI is to serve as the apex institution for term finance for industry
in India. Its objectives include:
• Co-ordination, regulation and supervision of the working of other financial institutions
such as IFCI , ICICI, UTI, LIC, Commercial Banks and SFCs.
• Supplementing the resources of other financial institutions and there by widening the
scope of their assistance.
• Planning, promotion and development of key industries
and diversification of industrial growth.
• Devising and enforcing a system of industrial growth that conforms to national
priorities.
Functions
• The IDBI has been established to perform the following functions-
• To grant loans and advances to IFCI, SFCs or any other financial institution by way of
refinancing of loans granted by such institutions which are repayable within 25 year.
• To grant loans and advances to scheduled banks or state co-operative banks by way of
refinancing of loans granted by such institutions which are repayable in 15 years.
• To grant loans and advances to IFCI, SFCs, other institutions, scheduled banks, state co-
operative banks by way of refinancing of loans granted by such institution to industrial
concerns for exports.
• To discount or re-discount bills of industrial concerns.
• To underwrite or to subscribe to shares or debentures of industrial concerns.
• To subscribe to or purchase stock, shares, bonds and debentures of other financial
institutions.
• To grant line of credit or loans and advances to other financial institutions such as IFCI,
SFCs, etc.
• To grant loans to any industrial concern.
• To guarantee deferred payment due from any industrial concern.
• To guarantee loans raised by industrial concerns in the market or from institutions.
• To provide consultancy and merchant banking services in or outside India.
• To provide technical, legal, marketing and administrative assistance to any industrial
concern or person for promotion, management or expansion of any industry.
• Planning, promoting and developing industries to fill up gaps in the industrial structure
in India.
• To act as trustee for the holders of debentures or other securities.

Small Industrial Development Corporation: (SIDCO)

Small Industries Development Corporations (SIDCO) are state-owned companies or
agencies in the states of India which were established at various times under the policy of
Government of India for the promotion of small sale industries
Tamilnadu Small Industries Development Corporation Limited (TANSIDCO), an
undertaking of Government of Tamilnadu, functions with the specific objective of
playing catalytic role in the promotion and development of Small Scale Industries and
hastening the industrial dispersal throughout Tamilnadu.

The key areas of TANSIDCO’s activities are as follows:

• Development of industrial estates with infrastructure facilities and provision of
work sheds & developed plots.
• Raw Materials Supply Scheme
• Marketing Assistance Scheme
• Guidance to Entrepreneurs
Kerala SIDCO, a Government owned Public Sector Corporation, was established in
November 1975 for the development and promotion for Small Scale Industries. Currently,
SIDCO is expanding its area of works by diversification to give new vision to the small scale
industries. God’s own Country, Kerala, is gifted with abundant natural resources essential
for establishing Industrial Units and SIDCO is taking the initiative to set up industrial units.
Kerala SIDCO is the ‘Total Solution Provider’ for Small Scale Sector as it offers all facilities
and help to set up a Small Scale Unit. This corporation is rendering valuable assistance to
Small Scale Units in the State, including consultancy at the beginning of the project to the
identification of Industrial Site, commissioning of project, providing infrastructure
facilities, distribution of essential raw materials marketing of the Small Scale Industrial
Products, undertaking civil and electrical works, and setting up of small scale unit, Kerala
SIDCO competently handles the necessary requisites of any project. Kerala SIDCO is now in
the path of profit and is now granting basic facilities and marketing security to the
industrialists and new entrepreneurs through its diversified activities and new working
style. In the year 2013-14, Kerala SIDCO achieved the highest turnover among state
Indian SIDCO’s with a turnover of 327 crores.

SINGLE WINDOW:

To provide both term loan for fixed assets and loan for working capital through a single
agency. The total working capital requirement of such units inclusive of all fund based
facilities is to be taken into account for determining the working capital facility eligible for
refinance

INDUSTRIAL POLICY 2010-2015

The Government has announced a new industrial policy for 2010-15, enhancing the
investment limit of mega projects from Rs.100 to Rs.250crore for the purpose of offering
benefits to them. The policy provides a 25 percent VAT reimbursement for five years for
large and medium enterprises, 50 percent for small enterprises and cent percent for micro
units. For micro and small industries the investment subsidy has been increased from
Rs.15lakhs to Rs.20lakhs. In case of women entrepreneurs, not only ten percent of the plots
in an industrial area but also offering 5 percent additional subsidy subject to a maximum of
Rs.5lakhs. Attract investments in the industry and service sector by developing quality
infrastructure.

Maximize employment opportunities, Implement self-employment schemes effectively, and

provides jobs to local people in the upcoming industrial units in the states.(Pradhan mantri
employment generation programme launched by the government of India.) Promote agro-
based and food processing industry to make agriculture a most profitable proposition. In
order to ensure productive uses of land, multi-stored complexes for micro and small
enterprises/industries will be constructed either through department’s corporations or
through or private sector participation at potential sites. Trade Related Intellectual
Property Rights (TRIPR) under WORLD TRADE ORGANISATION will be widely publicized
so that these could be used to generate more employment and trade opportunities.

PROHIBITED SECTORS:
FDI is prohibited in:
1. Lottery Business, including Government /private lottery, online lotteries, etc.
2. Gambling and Betting, including casinos etc.
3. Chit funds
4. Nidhi company
5. Trading in Transferable Development Rights (TDRs)
6. Real Estate Business or Construction of Farm Houses
7. Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco
8. substitutes
9. Activities / sectors not open to private sector investment e.g. Atomic Energy and
Railway