Institutional Support for Small Enterprises Chapter-8 Institutional Support for Small Enterprises Author: Alpana Trehan © 2011, Dreamtech Press :: Chapter 8

Institutions Supporting Small-Scale Enterprises Central level SSI Board KVIC MSME-DO NSIC NIESBUD IIE State level SIDCs/sIIcS SDIs DICs Others Industry Associations Non Governmental Organizations © 2011, Dreamtech Press :: Chapter 8

Khadi and Village Industries Commission (KVIC) Refers to a legal body formed by an Act of Parliament (No. 61 of 1956) in April, 1957 The functions of KVIC are as follows: Planning and organizing training of individuals employed or seeking employment in khadi and village industries Building up reserves of raw material and supplying them to individuals engaged or likely to be engaged in production of handspun yarn, khadi, or village industries Facilitating production and marketing of khadi or products manufactured by village industries Encouraging research in the technology used in khadi and village industries Promoting cooperative efforts among the manufacturers of khadi or individuals engaged in village industries Establishing quality standards and ensuring that products of khadi and village industries adhere to the set standards © 2011, Dreamtech Press :: Chapter 8

© 2011, Dreamtech Press :: Chapter 8 Micro, Small, and Medium Enterprises Development Organization (MSME-DO) Formulates, coordinates, implements, and monitors various policies for the growth of SSEs The services rendered by MSME-DO are follows: Advising the government in policy formulation for the promotion and development of SSEs Providing techno-economic and managerial consultancy, common facilities, and extension services to SSEs Providing facilities for technology upgradation, modernization, quality improvement, and infrastructure Developing human resources through training and skill upgradation Providing economic information services Maintaining a close link with the central ministries, planning commission, state governments, financial institutions and other organizations concerned with the development of SSEs © 2011, Dreamtech Press :: Chapter 8

National Small Industries Corporation Limited (NSIC) Aims at promoting, helping, and nurturing the development and growth of SSEs It provides the following technical support services to SSEs : Advising on application of new techniques Providing material testing facilities through accredited laboratories Facilitating product design including Computer Added Design (CAD) Providing energy and environment services at selected centers Facilitating classroom and practical training for skill upgradation © 2011, Dreamtech Press :: Chapter 8

© 2011, Dreamtech Press :: Chapter 8 National Institute for Entrepreneurship and Small Business Development (NIESBUD) Coordinates and monitors the activities of agencies involved in entrepreneurship development for SSEs The objectives of the NIESBUD are as follows: Evolving standardized materials and processes for selection, training, support and sustenance of entrepreneurs Conducting training programs for promoters, trainers, and entrepreneurs Formulating scientific selection procedure Developing training aids, manuals, and tools Sharing international experience and expertise in entrepreneurship development Undertaking research and exchange experiences globally in development and growth of entrepreneurship Creating environment suitable for the emergence of entrepreneurship © 2011, Dreamtech Press :: Chapter 8

Indian Institute of Entrepreneurship (IIE) Focuses on entrepreneurship development by providing training, research, and consultancy services to SSEs The activities of IIE include the following: Evolving strategies and methodologies for different target groups and locations, and conducting field tests Identifying training needs and offer training programmers to government and non-government organizations engaged in promoting and supporting entrepreneurship Documenting and disseminating information needed for policy formulation and implementation related to self-employment Identifying, designing, and conducting training programs for existing entrepreneurs Preparing and publishing literature related to entrepreneurship and industrial development Organizing seminars, workshops and confer conferences for providing a forum for interaction and exchange of views by various agencies and entrepreneurs Conducting research for generating knowledge to accelerate the process of entrepreneurship development Acting as a catalyst for development of self-employment/entrepreneurship, industry/business © 2011, Dreamtech Press :: Chapter 8

State Industrial Development/ Investment Corporations (SIDCs/SIICs) Provides technical and financial assistance to industrial units The major activities of SIDCs are as follows: Providing term finance to all small, medium and large enterprises Subscribing to shares and debentures of enterprises for financial assistance Formulating feasibility studies and encouraging private entrepreneurs to establish their own enterprises in the state Setting up industrial ventures in joint and assisted sector by collaborating with private entrepreneurs Motivating entrepreneurs by implementing scheme of Industrial Development Bank of India © 2011, Dreamtech Press :: Chapter 8

District Industry Centers (DICs) Promotes SSEs in rural areas and small towns The activities of DICs are as follows: Conducting surveys to assess industrial potential of a district Preparing an action plan for industrial development Evaluating investment proposals received from entrepreneurs Guiding entrepreneurs in buying appropriate machinery, equipment, and raw material Suggesting appropriate marketing strategies to entrepreneurs Maintaining links with research and development institutions for quality improvement and technology upgradation Conducting training programs for artisans Providing self-employment to educated unemployed youth © 2011, Dreamtech Press :: Chapter 8

Industry Associations Help in supporting SSEs by providing them with a platform to raise industry related issues and promote their activities The major industry associations include: Federation of Indian Chambers of Commerce and Industry (FICCI) Works with the government for increasing efficiency, competitiveness, and global opportunities for SSEs by providing specialized services PHD Chamber of Commerce and Industry (PHDCCI) Works with the senior government officials and task forces that pool knowledge and experience for overall benefit of the business community World Association for Small and Medium Enterprises (WASME) Informs the promotion of SMEs in member countries and markets the products of SMEs Indian Council of Small Industries (ICSI) Aims at extending assistance to the small and cottage enterprises that further leads to the overall growth of the economy © 2011, Dreamtech Press :: Chapter 8

Non-Governmental Organizations They provide financial assistance, marketing, training, and legal advice to SSEs. They help entrepreneurs in different states by conducting various micro-financing activities for them. They support by setting sub-contract exchanges that help in the following ways: Collecting data on the manufacturing capacities of SSEs Obtaining the details of the items that are required by large units and can be produced in SSEs Setting up the data bank to provide the information to SSEs and large industries Conducting programs for promoting the products manufactured by SSEs Arranging buyer-seller meets to display products of SSEs required by large undertakings Matching the requirements of large undertakings with the capacity of SSEs © 2011, Dreamtech Press :: Chapter 8

Institutions Providing Financial Assistance Small Industries Development Bank of India (SIDBI) Provides credit flows to SSEs in the areas of transport, healthcare, and tourism Focuses on assisting individuals establishing SSEs Provides assistance the following two ways: Direct Assistance Indirect Assistance State Financial Corporations (SFCs) Spreads industrial culture in rural, semi-urban, and backward areas of different states in India Provide term loans to small and medium enterprises for procuring various assets, such as land, building, and machinery Provide non-fund based services, such as merchant banking, under-writing of public issues, project counseling, bill discounting, and leasing and hire purchase to SSEs © 2011, Dreamtech Press :: Chapter 8

schemes for technological upgradation of small enterprises ISO 9000/14001 certification fee reimbursement scheme Micro and Small Enterprises Cluster Development Program MSE-CDP Credit Linked Capital Subsidy Scheme (CLCSS), to improve the competitiveness of MSMEs National Manufacturing Competitiveness Program (NMCP) Skill development programs Integrated Infrastructure Development (IID) Scheme Other Facilities and Incentives for Indian MSMEs Prime Minister’s Employment Generation Program (PMEGP) Scheme  for rejuvenation, modernization, and technology upgradation of the coir industry © 2011, Dreamtech Press :: Chapter 8

© 2011, Dreamtech Press :: Chapter 8 recap Small-Scale Enterprises (SSEs) face a number of problems due to inadequate capital, low productivity, and lack of infrastructure facilities. Government of India has formed the Ministry of Micro, Small & Medium Enterprises (MSME), which is focused on the growth and development of the small-scale sector. The Ministry of MSME provides special facilities and support services to SSEs through its central and state level institutions. The main objective of these institutions is to enhance the competitiveness of SSEs in the market. © 2011, Dreamtech Press :: Chapter 8