Small Industries Service Institute

Introduction - MSME

• Strategic Importance due to contributions in

terms of Output, Export & Employment

• To sustain & accelerate growth, MSME sector

needs to be thoroughly competitive
Introduction
MSME’s are supported by Govt. of India & its
agencies as
 Ministry of MSME
 National Small Industries Corporation
 Small Industries Development Bank
 District Industries Centre
For
 Modernization
 Productivity
 Technological Needs
 Skill Development & Up gradation
 Adequate & Affordable assistance in Finance
Classification Investment ceiling for plant,
Machinery or Equipments
Manufacturing Service
Enterprises Enterprises
Micro Upto Rs. 25 Upto Rs. 10
lakh lakh
Small Above Rs. 25 Above Rs. 10
lakh & upto Rs. lakh & upto
5 crore Rs. 3 crore
Medium Above Rs. 5 Above Rs. 2
Crore an upto crore & upto
Rs. 10 crore Rs. 5 crore
 Importance of SME’s
• Labor Intensive
• Short gestation period
• Lowest Administrative cost
• Maximum potential for employment generation
• Assist decentralization of power
• Induce growth of industrially backward regions ensuring
balanced regional development

5
HISTORY OF MSME
1948-1991:-
 Recognition was given to the micro and small enterprises, to expand
employment opportunities, help ensure equitable distribution of the national
income and facilitate effective mobilization of private sector resources of
capital and skills.
 Tool Rooms were established with German and Danish assistance for providing
technical services essential to MSEs as also for skill-training.
1991-1999:-
 The new Policy for Small, Tiny and Village Enterprises of August, 1991 laid the
framework for government support in the context of liberalization.
 Testing Centers were set up for quality certification and new Tool Rooms as
well as Sub-contracting Exchanges were established.
 The Small Industries Development Bank of India (SIDBI) and a Technology
Development and Modernization Fund were created to accelerate finance and
technical services to the sector.
Continued…
1999 Onwards:-
 The Ministry of MSME [earlier known as Ministry of Small Scale Industries
and Agro & Rural Industries (SSI & ARI)] came into being from 1999 to
provide focused attention to the development and promotion of the
sector.
 A Credit Linked Capital Subsidy Scheme was launched to encourage
technology up gradation in the MSE sector and a Credit Guarantee
Scheme was started to provide collateral-free loans to micro and small
entrepreneurs, particularly the first generation entrepreneurs.
 In 2006, the long-awaited enactment for this sector finally became a
reality with the passage of the Micro, Small and Medium Enterprises Act.
 In March, 2007, a third Package for the Promotion of Micro and Small
Enterprises was announced which comprises the proposals/schemes
having direct impact on the promotion and development of the micro and
small enterprises, particularly in view of the fast changing economic
environment, wherein to be competitive is the key of success.
Training Institutes of MSME
 National Institute of Micro, Small and Medium Industry
Extension Training (NIMSMIET), Hyderabad.

 National Institute for Entrepreneurship and Small Business

Development (NIESBUD), New Delhi, which conducts national
and international level training programmes in different fields
and disciplines.

 Indian Institute of Entrepreneurship (IIE), Guwahati. The main

objective of the institute is to act as a catalyst for
entrepreneurship development with its focus on the North
East.
Other Agencies Associated..
 National Small Industries Corporation (NSIC) for technology
and marketing support

 Small Industries Development Bank of India (SIDBI) an apex

bank set up to provide direct/indirect financial assistance
under different schemes to meet credit needs of the small-
scale sector and to coordinate the functions of other
institutions in similar activities.

 Khadi and Village Industries Commission (KVIC) assists the

development and promotion and disbursal of rural and
traditional industries in rural and town areas.
Services provided by MSME
 Technical Consultancy Services
 Managerial Consultancy Services
 Economical Investigation Services
 Entrepreneurial Development Programme
 Marketing Assistance and Service
 Ancillary Development Programmes
 Export Promotion Services
 Modernization / Up gradation of Technology
 Assistance to Rehabilitation of sick units
 Common Facility & Training (1 Day to 30 Days with
certificates)
 Assistance to State Govt. Agencies
Benefits of MSME’s
 Production and Services

Encouraging self employment

Opportunity   

Training Programmes
Indian MSME: Areas of
Co-operation
Fee-based consultancy services and training

Conducting surveys and studies to identify the tooling and

related skill requirements in specific areas or regions like
hilly/backward/indigenous.

Providing turnkey assistance to set up Tool Rooms & Training

Centers.

Providing consultancy to existing manufacturing SME in

upgrading their production facilities, selection of machine tools,
design consultancy for tools, moulds, dies, jigs & fixtures, etc.
Continued…
 Providing consultancy to existing training institutes in course
design and curriculum development including trainers
training programmes

 Assistance in product design, tool design and manufacturing

of intricate tooling's

 Product development & rapid prototyping services.

International Co-operation
of MSME
 Formulation of industrial development policies to facilitate
accelerated growth of small industries based upon local
resources and markets
 Identification of industrial opportunities including
ascertaining their commercial viability, based upon local
consumption or exports
 Project Development including preparation of project profiles,
for the identified opportunities to facilitate promotion of such
industries
 Agency to Agency co-operation
Continued…
 Identification of technology and equipment's for setting of
identified industries based upon local/export market
requirements of volume, quality, etc.
 Training for technology levels, covering skill development,
management upgradation, technological upgradation and
entrepreneurship development, including training of trainers.
 Infrastructure development particularly in the form of industrial
assistance for scientific and economic development of small
enterprises.
 General consultancy, covering all aspects of industrial
development.
 Past expertise of SIDO in assisting SMEs programmes in other
countries.
Some Important Schemes of
Ministry of MSME, Govt. of India are as under :
1. Credit Guarantee Scheme
2. ISO 9000/14001 Certification Fee Reimbursement Scheme
3. Credit Linked Capital Subsidy Scheme
4. Mini Tool Room
5. Intellectual Property Rights for MSMEs
6. Incubator Scheme
7. Quality Management Standards/Quality Technology Tools
8. Marketing Assistance (Bar Code)
10. Lean Manufacturing Competitiveness programme
11. Technology Up gradation
12. Skill Development
13. Marketing & procurement
14. Export Promotion
15. Infrastructural Development
16. National Awards
17. Rajiv Gandhi Udyami Mitra Yojana ( RGUMY)
CREDIT GUARANTEE SCHEME
 Government launched Credit Guarantee Fund Scheme for MSMEs in
August 2000.
 This scheme covers collateral - free credit facility extended by eligible
lending institutions to new and existing MSEs for loan up to Rs. 100 lakh
per borrowing unit.
 The guarantee cover is up to 75% of the credit sanctioned (85% in respect
of loans up to Rs. 5 lakh and 80% for loans provided to MSEs owned
operated by women and all loans in the North East Region)

ISO 9000/14001 CERTIFICATION FEE REIMBURSEMENT

SCHEME
 The Government introduced a scheme to incentives technological
upgradation, quality improvement and better environment management by
the MSEs.
 The scheme reimburses 75% of the fees, subject to a maximum of Rs.
75,000/- for acquiring Quality Management System (QMS)/ISO 9000
certification and / or Environment Management (EMS) 14001 certification by
the MSEs.
CREDIT LINKED CAPITAL SUBSIDY SCHEME

 Aims at facilitating technology up- gradation by providing 15% upfront

capital subsidy
 For induction of well established and improved technologies in the
specified sub sectors and products.
INTELLECTUAL PROPERTY RIGHTS
FOR MSEs.
 This Scheme has been launched to enable Indian MSMEs to attain global
leadership position and to empower them in using effectively the tools of
Intellectual Property Rights (IPR) of innovative projects.

 The main features of the scheme are :-

i. Awareness/Sensitization Programme on IPR
ii. Pilot Studies for Selected Clusters/Groups of Industries
iii. Interactive seminars/Workshops
iv. Specialized Training
v. Assistance for Grant of Patent/GI Registration
vi. Setting up of IP Facilitation Centre (IPFC)
vii. Interaction with International Agencies.

 These initiatives are being developed through Public-Private Partnership

(PP) Mode.
Entrepreneurial and Managerial
Development of SMEs through Incubators.
 The Scheme aims at nurturing innovative business ides ( new/ingenious
technology, processes, products, procedures etc.) which could be
commercialized in a year.
 Under this scheme, various institutions like Engineering Colleges, Research
Labs etc will be provided funds upto Rs. 6.25 lakh for handholding each new
idea/entrepreneur.
 The incubator will provide technology guidance, workshop and Lab support
and linkage to other agencies for successful launching of the Business and
guide the entrepreneur in establishing the enterprise.
Quality Management Standards &
Quality Technology Tools (QTT)
 Government of India launched a scheme, ‘Enabling Manufacturing Sector
be Competitive through Quality Management Standards (QMS) and Quality
Technology Tools (QTT)’ in order to improve quality and productivity in the
MSE sector.

 The scheme is aimed at improving the quality of the products in the MSE
sector and inculcate the Quality consciousness in this sector.

 The major activities under the scheme are

i. Introduction of Appropriate Modules for Technical Institutions
ii. Organizing Awareness Campaigns for MSEs
iii. Organizing Competition-Watch ( C-Watch)
iv. Implementation of Quality Management Standards and Quality Technology
Tools in selected MSEs
v. Monitoring International Study Missions
vi. Impact studies of the initiatives.
Marketing Assistance/Support
to MSEs (Bar Code)
 The Main objective of this scheme is to popularize the Bar code
registration and motivate the small and micro manufacturing enterprises
to adopt the Bar Code Certification on large scale and to sell their value
added products worldwide and enable higher export price realization.
 It also helps in domestic marketing ( wholesale & retail).
 75% of annual fee ( recurring) of Bar Code Certification for the first three
years are reimbursed to MSEs under the scheme.
Marketing Assistance and Technology
Upgradation Scheme for MSMEs
 The objective of this scheme is to identify and encourage those clusters of
MSMEs which have quality production and export potential and assist them to
achieve competitiveness in the national and international markets.
 The scheme aims at improving the marketing competitiveness of MSME
sector by improving their techniques and technology for promotion of
exports.
 The GOI contribution is stipulated as Rs. 19 crore for this scheme.
 The broad activities planed under the scheme include technology up
gradation in packaging , development of modern marketing techniques,
competition studies, etc.
Technology and Quality Upgradation
Support to MSMEs
 The objective of this scheme is to sensitize the manufacturing sector in India
to upgrade their technologies, usage of energy efficient technologies to reduce
emissions of Green House Gasses, adoption of other technologies mandated
as per the global standards, improve their quality and reduce cost of
production et, towards becoming globally competitive.
 The major activities planed under the scheme include Capacity Building of
MSMEs Cluster for Energy Efficiency/Clean Development Interventions,
Implementation of Energy Efficient Technologies in MSME sector, setting up of
Carbon credit aggregation centers and encouraging MSMEs to acquire product
certification licence’s from National/ International bodies.
Skill Development
 With an objective to create self employment, the entrepreneurship and
skill development scheme is implemented by Office of the DC(MSME)
through its network of 59 MSME and their branches.
 The programmes are conducted include Entrepreneurship Development,
Entrepreneurship and Skill Development, Management Development and
Business Skill Development.
 These programme are conducted for unemployed youth against a nominal
fee and in some cases stipend is also provided.
 Marketing and Procurement
 Under Government Stores Purchase Programme, various facilities are
provided to enterprises registered with National Small Industries Corporation
( NSIC) in order to assist them for marketing their products in competitive
environment
 These facilities are:-
i. Issue of tender sets free of cost
ii. Exemption from payment of Earnest money deposit
iii. Waiver of Security Deposit upto the Monetary Limit for which the unit is
registered
iv. Price preference upto 15% over the quotation of large scale units
 In addition to this some items have been reserved for exclusive purchase
from MSE sector
 Export Promotion
 Export promotion form the MSE sector has been accorded a high priority.
 To help MSEs in exporting their products, the following facilities/incentives are
provided
i. Products of MSE exporters are displayed in international exhibition and the
expenditure incurred is reimbursed by the Government
ii. To acquaint MSE exporters with latest packaging standards, techniques etc
training programme on packaging for exporters are organized in various parts of
the country in association with the Indian Institute of Packaging
iii. Under the MSE Marketing Development Assistance ( MDA) Scheme, assistance
is provided to individuals for participation in overseas fairs/exhibitions, o
overseas study tours.
 The scheme also offer assistance for
i. Sector specific market study by MSE Associating /Export Promotion
Councils/Federation of Indian Export Organization
ii. Initiating/contesting anti dumping cases by MSE Associations and
iii. Reimbursement of 75% of the one time registration fee and annual fee charged
by GSI India for adoption of Bar Coding.
Infrastructure Development
 For setting up of industrial estates and to develop infrastructure facilities like
power distribution network, water telecommunication, drainage and pollution
control facilities, roads, banks, raw material, storage and marketing outlets,
common services facilities and technological back up services etc for MSMEs,
the integrated Infrastructural Development (IID) Scheme was launched in 1994
 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
micro enterprises.
 The scheme also provides upgradation/strengthening of the infrastructural
facilities in the existing industrial estates.
 The estimated cost to set up an IID Centre is Rs. 5 Crore. Central Government
provided 40% in case of general states and upto 80% for North East Region,
J&K, H.P. and Uttrakhand as grant and remaining amount could be loan fro
SIDBI/Bank/Financial Institutions or the state Funds.
 National Awards
DETAILS OF AWARDS UNDER CATEGORY (A) ARE AS FOLLOWS
• National Award for outstanding Entrepreneurship in Micro & Small Enterprises
engaged in manufacturing
• National Award for Outstanding Entrepreneurship in Micro & Small Enterprises
rendering services
• National Award for outstanding Entrepreneurship in Medium Enterprises engaged in
manufacturing
• A Special Recognition Award.

National award for Research and Development Efforts in Micro & Small Enterprises :
a. First National Award: Rs. 1,00,000/- cash prize , a Trophy and a Certificate.
b. Second National Award : Rs. 75,000/- cash prize, a Trophy and a Certificate

National Award for Research & Development Efforts in Medium Enterprises

a. First National Award: Rs. 1,00,000/- cash prize , a Trophy and a Certificate.
b. Second National Award : Rs. 75,000/- cash prize, a Trophy and a Certificate

A special Recognition Award

A special Recognition Award to those MSMEs scoring marks above 80 percent (50% in
case of North Eastern Region including Sikkim) will be given a Cash prize of Rs,
20,000/- each, a Certificate and a Trophy at the State Level Function to be organized
by Director, MSME DI
Continued…..
• Rajiv Gandhi Udyami Mitra Yojana ( RGUMY)
Rajiv Gandhi Udhyami Mitra Yojana (RGUMY) is to provide handholding
support and assistance to the potential first generation entrepreneurs
who have already successfully completed EDP/SDP/ESDP/VT programmes,
through the selected lead agencies i.e. ‘Udyami Mitras” in the
establishment and management of the new enterprises in dealing with
various procedural and legal hurdles and in completion of various
formalities required for setting up and running of the enterprise

• Udyami Mitras :
Financial assistance would be provided to the selected lead agencies i.e.
Udyami Mitras for rendering assistance and handholding support to the
potential first generation entrepreneurs.