SUPPORT SERVICES OFFERED TO MSME SECTOR

The Corporation continued providing following support services to help

the MSME sector to increase their business and reach to enhance their
competitiveness. NSIC provides integrated support services in the areas of

Marketing, Technology, Finance, etc.

NSIC is also implementing the schemes of Marketing Assistance and
Performance & Credit Rating on behalf of the Ministry of Micro, Small &

Medium Enterprises. The brief details are given below:1. Marketing Support
Marketing has been identified as one of the most important tools for
business development. It is critical for the growth and survival of MSMEs
in todays intensely competitive market. NSIC acts as a facilitator and has
devised a number of schemes to support enterprises in their marketing
efforts, both in domestic and foreign markets.
These schemes are briefly described as under:A. Raw Material Distribution:
In this direction, the Corporation has signed agreements /MoUs with
the major bulk producers i.e.NALCO, BALCO - for Aluminium, SAIL,RINL
- for Iron Steel, CPCL - for ParaffinWax, CIL - for Coal and IOCL - for
Polymer products etc. These arrangements facilitate MSMEs in getting
material at the manufacturers price with the priority of dispatch. This
results into reduction in the cost of production and making the
products of MSMEs competitive in the domestics well as international
markets.

These

efforts

of

the

Corporation

supplement

the

programmers of the Government aimed in making Indian MSMEs

globally competitive.
B. Consortia and Tender Marketing:
Micro& Small Enterprises (MSEs) in their individual capacity face
problems to procure and execute large orders, which deny them a

level-playing field vis--vis large enterprises.

NSIC, accordingly forms consortia of micro & small units manufacturing
the same products, there by pooling in their capacity which provides
comfort level to the concerned MSEs as suppliers and also to buyers.

The Corporation applies for tenders on behalf of consortia of MSEs and

secures orders for bulk quantities. These orders are then distributed
amongst MSEs in tune with their production capacity.
C. Single Point Registration for Government Purchase:
NSIC operates a Single Point Registration Scheme

under

the

Government Purchase Programme. The micro and small enterprises

registered under this Scheme get the following facilities:I.
Issue of Tenders free of cost.
II.
Advance intimation of Tenders issued by DGS&D.
III.
Exemption from payment of EarnestMoney Deposit (EMD).
IV.
The tender participating MSEs quoting price within price band of
L1+15% shall also be allowed to supply a portion upto 20% of
requirement by bringing down their price to L1 price where L1 is
non-MSE
Issue of competency certificate.

V.

D. Exhibitions:
To show case the competencies of Indian MSMEs, NSIC facilitates
MSMEs participations in International Exhibitions, Fairs, etc. on
concessional terms under the Marketing Assistance Scheme of the M/o
MSME through partially meeting the cost towards rent of stall as well
as

air

fare.

Participation

in

these

events

exposes

MSMEs

to

international practices and enhances their business prowess. Through

participation in these events, MSMEs are also facilitated to capture new
markets making them globally competitive.
E. Buyer Seller Meets:
Large and institutional buyers such

as

Railways,

Defence,

Communication Departments and large companies are invited to

participate in buyer-seller meets to enrich micro & small enterprises
knowledge regarding terms and conditions, quality standards etc.
required by the buyers. These meets are aimed at vendor development
from MSEs for the bulk manufacturers.
F. Marketing Assistance Scheme:

This is an ongoing scheme of the M/o MSME, for providing marketing

support to MSMEs.
The scheme is being implemented through the Corporation. Marketing,
a strategic tool for business development, is critical for the growth and
survival of MSMEs in todays intensely competitive market. One of the
major challenges before the MSME sector is to market their products/

services.
The main objectives of the scheme is to enhance the marketing
competitiveness of MSMEs; to provide them a platform for interaction
with the individual/institutional buyers; to update them with prevalent
market scenario and to provide them a forum for redressing their

problems.
MSMEs are supported under the Scheme for capturing the new market
opportunities through organizing/ participating in various domestic &
international exhibitions/ trade fairs, Buyer-Seller meets, intensive
campaigns and other marketing events.

2. Technology Support
A. Technology is the key to enhance a units competitive advantage in
todays dynamic information age.

MSMEs need to develop and

implement a technology strategy in addition to financial, marketing

and operational strategies and adopt the one that helps in integrating
their operations with their environment, customers and suppliers.
B. NSIC offers MSMEs the following technology support services through
its
I.
II.
III.
IV.
V.

Technical Services Centers and Extension Centers:

Material testing facilities through accredited laboratories
Product design including CAD;
Common facility support in machining,EDM, CNC, etc.
Energy and environment services at selected Centres
Practical training for skill upgradation

3. Credit Support

The Corporation is providing Credit Facilitation to MSMEs through its

various schemes. During 2013-14 total credit facilitation of Rs. 5,162
crore and (upto February, 2014, Rs. 4419 crore was provided). The
various schemes providing Credit Support to MSMEs are as under:

I.

Meeting Credit Needs of MSMEs through tie-up arrangements with

Banks One of the major challenges faced by MSMEs is inadequate
access to finance due to lack of financial information and non-formal
business practices. To overcome these problems, NSIC has entered
into tie-up arrangements with various Banks for providing Credit

II.

Facilitation to the MSME sector.

Financing Procurement of Raw Materials & Marketing Activities
(Short term) NSIC facilitates raw material requirement of the MSMEs
by making arrangements with bulk manufacturers for procuring the
materials and supplying the same to MSMEs. In case they need any
credit support, NSIC provides financial assistance for raw material
procurement by making the payment to suppliers. NSIC facilitates
financing for marketing activities such as Internal Marketing,

III.

Exports and Bill Discounting to micro, small & medium enterprises.

Performance & Credit Rating Scheme for Small Enterprises On
behalf of the M/o MSME, NSIC is implementing Performance &
Credit Rating Scheme for Micro and Small Enterprises (MSEs). The
scheme is being operated through accredited rating agencies i.e.
CARE, CRISIL, India Rating (Formerly known as FITCH), ICRA,
ONICRA, SMERA and Brickwork Rating.The fee to be paid by the
MSEs for the rating, is subsidized by the Government to the extent
of 75% of the rating fee up to a maximum of Rs.40,000/-. The
scheme has become quite popular and getting good response. The
rating serves as a trusted third party opinion on the units
capabilities and credit worthiness. A good rating enhances the
acceptability of the rated unit in the market and also facilitates its
access to quicker and cheaper credit and thus helps in economizing
the cost of credit.Under the Performance & Credit Rating Scheme,
19,676 units were rated during the year 2012-13 as against 13,547
in the year 2011-12. The units rated during 2013-14 (upto
February,2014) are 22,263 as against 17,208 (upto February,2013).

4. Support Services

One of the problems faced by the entrepreneurs is the scarcity of

suitable space where they can set up their offices or can exhibit their
products for their wider publicity and easy marketability under one
roof. In order to give a boost to MSMEs, NSIC has taken the following

projects in this regard:A. Marketing Intelligence Cell

NSIC had established a Marketing Intelligence Cell for collecting and
disseminating both domestic and international marketing intelligence in
coordination with other concerned departments / agencies. Marketing
Intelligence Cell is acquiring and analyzing information in order to
understand the market (both existing and potential customers) to
determine the current and future needs and preferences, attitudes and
behaviour of the market, assess changes in the business environment
that may affect the size and nature of the market in future. This aims to
promote

business horizons of MSMEs of India through Marketing

Intelligence Web Portal. The beneficiaries are MSMEs seeking business

collaborations and co-production opportunities, joint ventures, exporters
and importers and those looking for technology transfer.
B. Promoting International Trade through NSICs E-Marketing Web

Portal
NSIC has expanded its existing B2B Web Portal into an Integrated EMarketing Web Portal www.msmemart.com that is not only useful for
generation of leads for expanding businesses but it is also the most
economical and fastest medium for brand creation, recognition of small

enterprises and marketing of their products.

C. NSIC-Training-cum-Incubation Centres (NSIC-TICs) for promoting

Entrepreneurship
Training-cum-Incubation Centres were started in year 2008 by NSIC with a
view to create self-employment opportunities by imparting training to the
unemployed people who want to set up new small business enterprises in
any of the manufacturing / services sectors or seek employment
opportunities. The scheme is being operated under PPP [Private Public

Partnership] mode where private partners are associated with NSIC.

Corporation offers technical & other support services to associated TICs
with a view to achieve the objectives of the programme. NSIC
Trainingcum- Incubation Centres provide a unique opportunity to first
generation entrepreneurs to acquire skills for enterprise building and also
help to incubate them to become successful small business owners. At
these centres, exposure in all areas of business operations is provided
such as business skills, ideas for structure of an enterprise, identification
of appropriate technologies, hands on experience on working projects,
financial linkages etc. In the year 2013-14, thirteen more new centers
were operationalised. As a result of this, now 81 such centres are
operational covering 19 states.

5. INTERNATIONAL CO-OPERATION ACTIVITIES

Under International Cooperation, the focus of activities at the enterprise

level is on the entrepreneurs and the objective is to initiate long term and
sustainable enterprise to enterprise cooperation between Indian small

enterprises and enterprises in target countries.

This is achieved by exchanging business delegations and organizing oneon-one business meetings among the enterprises of both the countries.
Main features of International Cooperation are:
Exchange of Business / Technology missions with various countries;
Facilitating Enterprise to Enterprisecooperation, Technology Transfers
& other forms of sustainable collaboration;
Explore new markets & areas of cooperation;
Identification of new export markets by participating in exhibitions
abroad;
Sharing of Indian experiences with other developing countries.

POLICY INITIATIVES
1. RESERVATION/DE-RESERVATION

OF

PRODUCTS

FOR

MANUFACTURE IN THE MICRO AND SMALL ENTERPRISE SECTOR:

A. The Policy of Reservation of Products for Exclusive Manufacture in SSI

(now MSEs) was initiated in 1967 with the objective of achieving socioeconomic development, through development and promotion of small
units all over the country. This was expected to result in countering the
challenges of regional industrial imbalances, employment generation
through

self-employment

ventures,

increased

productivity,

etc.

However, with the gradual opening up of the economy, de-reservation

had to be resorted to for providing opportunities to MSEs for
technological

upgradation

promotion

of

exports

and

achieving

economies of scale. Accordingly, the MSEs are being encouraged to

modernize

and

enhance

their

competitiveness

for

facing

the

challenges arising out of liberalization and globalisation of the

economy.
B. The items are reserved/de-reserved in accordance with Section 29(B)
of the Industries (Development & Regulation) Act, 1951, which, interalia, provides for the constitution of an Advisory Committee headed by
the

Secretary

(MSME).

The

Advisory

Committee

makes

its

recommendations for reservation/dereservation in light of the factors

like

economies

of

scale;

level

of

employment;

possibility

of

encouraging and diffusing entrepreneurship in industry; prevention of

concentration of economic power and any other factor which the
Committee may think appropriate. At present, only 20 items are
reserved for exclusive manufacture in micro and small enterprise
sector. A list of items reserved for exclusive manufacture in micro and
small enterprises sector are given below.
LIST OF ITEMS RESERVED FOR EXCLUSIVE MANUFACTURE BY MICRO
AND SMALL ENTERPRISE SECTOR
I.
II.
III.
IV.

Pickles & chutneys

Bread
Mustard Oil (except solvent extracted)
Ground nut oil (except solvent extracted)

WOOD AND WOOD PRODUCTS

I.

Wooden furniture and fixtures

PAPER PRODUCTS
I.

Exercise books and registers

OTHER CHEMICALS AND CHEMICAL PRODUCTS

I.
II.
III.
IV.
V.

Wax candles
Laundry soap
Safety matches
Fire works
Agarbatties

GLASS AND CERAMICS

I.

Glass bangles

MECHANICAL ENGG. EXCLUDING TRANSPORT EQUIPMENT

I.
II.
III.
IV.
V.
VI.
VII.
VIII.

Steel almirah
Rolling shutters
Steel chairs-All types
Steel tables-All other types
Steel furniture-All other types
Padlocks
Stainless steel utensils
Domestic utensils

2. .NATIONAL

MANUFACTURING

COMPETITIVENESS

PROGRAMME

(NMCP)
Providing competitive edge to the units in the MSME Sector in the global
environment, has been one of the important cornerstones of the policies
being pursued by the Government for sustenance of the sector. With a
view to build the capacity of the Indian micro, small and medium
manufacturing enterprises for overcoming competition in the global
markets and facing challenges being posed by the entry of the
multinationals in the domestic markets, the M/o MSME is implementing
the National Manufacturing Competitiveness Programme (NMCP). The
objective of NMCP is to ensure healthy growth of the MSME Manufacturing
Sector.

3. PUBLIC PROCUREMENT POLICY FOR GOODS PRODUCED AND

SERVICES RENDERED BY MICRO AND SMALL ENTERPRISES (MSEs)
A. In exercise of the powers conferred under Section 11 of the Micro,
Small

and

Medium

Enterprises

Development

Act,

2006,

the

Government of India has notified Public Procurement Policy for Micro &
Small Enterprises (MSEs) Order, 2012 which is applicable to every
Central Ministry / Department / PSU for effective implementation w.e.f.
1st April, 2012.
B. The Policy mandates that every Central Ministry / Department / Public
Sector Undertaking shall set an annual goal of procurement from Micro
and Small Enterprises from the financial year 2012-13 and onwards,
with the objective of achieving an overall procurement of minimum of
20 percent of total annual purchases of products produced and
services rendered by Micro and SmallEnterprises, in a period of three
years.
C. Every Central Government Ministry / Department / PSU shall report the
goals set with respect to procurement to be met from MSEs and the
achievement made thereto in their respective Annual Reports. They
shall also prepare Annual Procurement Plan for purchases and upload
the same on their official website so that Micro and Small Enterprises
may get advance information about requirement of procurement
agencies. All the Chief Ministers of State Governments have also been
advised to formulate similar policy for MSEs in their states. A
Grievances cell has been constituted for redressal of the grievances for
MSEs.
D. The Policy will help to promote MSEs by improving their market access
and competitiveness through increased participation by MSEs in
Government purchases and encouraging linkages between MSEs and
large enterprises.
The Ministry of Micro, Small and Medium Enterprises is the nodal
Ministry for formulation of policies, programmes and schemes, their

implementation

and

related

co-ordination,

for

the

promotion

and

development of small scale industries in India. The role of the Ministry is to

assist the States in their efforts for the growth of the small scale sector, by
enhancing their competitiveness in an increasingly liberalised economy. It is
assisted by an attached office and two public sector enterprise, namely:A. Micro, Small and Medium Enterprises Development Organisation

(MSME-DO):The Office of the Development Commissioner (Micro, Small and Medium

Enterprises) [earlier known as the O/o the DC (SSI)] is also known as
Micro, Small and Medium Enterprises-Development Organisation (MSMEDO). It is the apex body for assisting the Government in formulating,
coordinating, implementing and monitoring policies and programmes for
micro, small and medium enterprises (MSMEs) in the country. MSME-DO
provides a comprehensive range of common facilities, technology support
services, marketing assistance, entrepreneurial development support, etc.

B. National Small Industries Corporation Ltd (NSIC) :

It was established by the Government with a view to promoting, aiding

and fostering the growth of micro, small and medium enterprises in the
country, with a focus on commercial aspect of their operations. It
implements several schemes to help the MSMEs in the areas of raw
material procurement, product marketing, credit rating, acquisition of
technologies, adoption of improved management practices, etc.

C. Khadi and Village Industries Commission (KVIC) :

Established under the Khadi and Village Industries Commission Act, 1956,
as a statutory organisation engaged in promotion and development of
khadi and village industries for providing employment opportunities in the
rural areas.

D. Coir Board :

it is a statutory body, established under the Coir Industry Act, 1953, for
the promotion and development of coir industry in India as well as for
uplifting the living conditions of the workers engaged in this industry.

For unorganized sectors

Also, a National Commission on Enterprises in the Unorganised

Sector (NCEUS) has been set up for addressing the wide range of issues
affecting the productive potential of the unorganised micro and small

productive units.
Besides, there are three national level 'Entrepreneurship Development
Institutes (EDIs)' for the development of training modules, undertaking
research

and

providing

consultancy

services

for

entrepreneurship

development in the small scale sector. These include:1. National Institute of Small Industry Extension Training (NISIET) renamed as
the National Institute for Micro, small and Medium Enterprises (NIMSME)
at Hyderabad
2. National Institute of Entrepreneurship and Small Business Development
(NIESBUD) at Noida
3. Indian Institute of Entrepreneurship (IIE) at Guwahat

Certain Incentives
1. Fiscal incentives

Fiscal incentives are provided through tax concessions

granted in the

form of exempted of direct or indirect taxes leviable on production or

profits, besides special tax concessions.

These incentives have been provided to promote the SSIs and discussed
in following:

A. Tax Holiday
With effect from financial year 2005-06, deduction in respect of profit and
gains for small scale industrial undertaking is available under Section
80IB.

 Small scale industrial undertaking can claim deduction at the following

rates:
o If SSI unit is owned by a company , the deduction available is 30%
for first 10 year,
o If SSI unit is owned by a co-cooperative society, the deduction to be
availed is 25% for first 10 years, and
o If any other person owns SSI units ,the deduction to be claimed is
25% for first 10 years.
B. TAX EXEMPTION CONDITIONS
No small scale or ancillary undertaking shall be subsidiary of, or owned
or controlled by other industries undertaking.
The SSI unit should commence business between 1 st April1991 and 31st
March 2002.
SSI unit can manufacture any nature/type of goods /article to avail
deduction.
They should employ at least 10 workers in manufacturing process
carried out with aid of power or at least 20 worker in manufacturing
process carried out without the aid of power.
This tax exemption from total income is allowed from the assessment
year in which the unit being to manufacture or produce goods or
articles.
C. EXCISE CONCESSIONS
Government of India has provided a major relief by grating full exemption
from the payment of central excise duty on a specified output and
thereafter slab-wise concessions.
The following concessions are available to them in this regard:
i.

SS units producing goods up to Rs.100 lakhs are exempted from

ii.

payment of excise duties.

SSI units having turnover less than Rs.60 lakhs per annum need not

iii.

have a separate storeroom for storing the finished products.

SSIs are also not required to maintain any statutory records such as
daily stock account of production and clearance , raw material

account ,personal ledger account etc. their own record are adequate
iv.

for excise purpose.

There is no distinction between registered and unregistered units for
SSI concessions for SSIs has been based on annual turnover rather
than SSI registration . Duty liability is to be discharged by 15 th of

v.

following month.
The SSI exemption is available for home consumption ,as well as in

vi.

respect of goods exported to Nepal & Bhutan.

Normally ,excise officers are not expected to visit SSI units paying

vii.

less than Rs.11lakhs duty annually .

With effect from 1-4-1994, Gate Pass System was replaced by
manufacturer invoice to cover clearance of goods as the dutypaying document.

District Industries Center (DIC)

In each district one agency to deal with all requirements of small and

village Industries. This is called District Industries Centre

The District Industries Centres have undertaken various programmes for
investment promotion at the grassroot level such as a organizing
seminars workshops, extending support for trade fairs and exhibitions

organized by various Industries associations.

All the services and support required by for MSME units under the single
roof of the District Industries Centre. The Centre has a separate wing to
look-after the special needs of cottage and house-hold industries as
district from small industries.

Administration

General Manager is the head of the District Industries Centre. The post of
General Manager is of Joint / Deputy Commissioner level. The General
Manager has senior officers to assist him, such as Manager (Raw
Material), Manager (Credit), Manage (Economic Investigation), Manager
(Marketing) Industrial Promotion Officer(IPO) and Technical Officer cum
Project Manager (PM)

Monitoring of DICs

The functioning of DICs and their achievement is monitored by Industries

Commissioner, Meeting of General Managers are organized frequently to
evaluate the performance and also help in resolving difficulties in
implementation of different schemes. To resolve the problems of
industries/industrialists, there are two types of committee at the district

level viz.
1. District Industrial Executive Committee (DIEC)
DIEC is constituted for solving industry related problems and promoting
industrial growth. District Collector is the Chairman of this Committee and
General Manager of DIC is the Member Secretary. The other members of
the DIEC are President of District Panchayat, DDO, MP, MLAs, Prominent
persons active in Industries in the district and members of all district level
industries associations.
2. Single Window Industrial Follow up Team (SWIFT)
Enterpreneurs face many difficulties when they start new industries. They
have to deal with many government agencies and get many clearances.
SWIFT helps them in guiding solving their problems at a single spot. This
committee is working under the District Collector, General Manager of DIC
is the Member Secretary and District Development Officer is Vice
President of SWIFT. All industries related officers in the district are
members of this committee.

Functions of DICs
1. Registration
o EM Part-I acknowledgement
o EM Part-II acknowledgement
o C.S.P.O.
o Lubricating, Oil, Grease Licence
2. Recommendation
o Land recommendation for N.A.
3. Incentive Scheme
4. Seminars
o District or Taluka Level
o Buyer-Seller & Exhibition
5. Others Activities
o Recovery of Package Loan margin Money Loan & Subsidy
o Welfare of Salt Workers and Recovery of Royalty from Salt Workers.

o Follow up of Industrial Approvals.

o Follow up of units which have availed benefits under incentives
schemes
6. Self Employment scheme
o Recommendation of loan applications under Vajpayee Bankable
Scheme
o Recommendation of loan application under PMEGP Scheme
o Manav Kalyan Yojana Tool kits to artisans.
7. Co-operative Package Scheme
o Package Scheme
o Handloom Development Scheme
o Training & Production centre
o Woolen Carpet Centre
o Weaving Scheme
o Recovery of Loan & Share contribution of Co-operative Societies
o Liquidation of Industrial Society
o Preparation of Project Profiles
o Audit of Industrial Society
o Gramodyog Vikas Kendra
o Hastakala Mela

Procedures
The main steps involve in setting up a Micro, Small & Medium
Enterprise are as below :(a) Project Selection
(b) Technology and Machinery
(c) Arranging Finance
(d) Unit Development
(e) Filing of Entrepreneurs Memorandum & Addresses of DICs
(f) Approvals
(g) Clearances
(h) Quality Certification
TO START AN ACTIVITY
Product Selection : MSME Development Institute,
Registration : District Industry Centre of your city
Technical Assistance : MSME Development Institute, and
District Industry Centre of your city

Plot/Shed Distribution : K S S I D C., of your city or nearest city

Finance/Loan/Investment : KSFC, SIDBI,other Nationalized banks
PMREGP : District Industry Centre of your city
Hire and purchase of machinery : National Small Industry Corporation
Raw Materials : District Industry Centre of your city and Karnataka State
Industrial Corporation of your city
Industrial Management : MSME Development Institute and District Industry
Centre of your city
License : District Industry Centre of your city and Local Bodies
Marketing : MSME Development Institute, and National Small Industry
Corporation,
I. S. I. Mark : Bureau of Indian Standards, Peenya Indistrial Area I
Product Testing : Regional Testing Centre, Chennai
Patent Registration and Trademark : EPatents IP Services
License for compulsory
Products: Director, Technical Development, Udyog Bhawan, Delhi
Registration under factory act : Factory Investigator of your city
Pollution related clearance : Pollution Control Board of your city
Central Product Registration : Central Excise, Superintendent of your city
Sales Tax Registration : Sales Tax office of your city
Industrial Statistical Information : District Statistical officer of your city
Khadi and Gramodyog : District Khadi and Gramodyog officer of your city
Agriculture : Agriculture Department of your city and nearest any agriculture
university
Handicrafts : Directorate of Handicrafts,
Electricity : KPTCl, BESCOM
NABARD : NABARD
How do one select an activity for self-employment?

For selecting an activity or enterprise, you will have to consider the

following significant issues:
1) Where do you want to promote the enterprise?
2) What resources are available near the location of the enterprise?

3) What kind of market or consumer pattern exists near the site of

enterprise?
4) What kind of contacts you have to exploit to your advantage for
marketing of the product?
5) What infrastructure is available at the location of your enterprise?
6) How much capital is available?

Criteria For MSME

The Micro, Small and Medium Enterprises Development (MSMED)

Act, 2006 is the first single comprehensive legislation in India, covering
micro, small and medium enterprises. Under the Act, the terms "medium

sector" and "micro enterprises" have been defined for the first time.
Also, the concept of Industries has been widened to that of Enterprises.
Enterprises have been classified broadly into two categories, namely,
enterprises engaged in the manufacture/production of goods pertaining to
any industry; and enterprises engaged in providing/rendering of services.
The term "enterprise" has been defined in terms of investment in plant
and machinery/ equipment (excluding land & building). Accordingly, the
definition of micro, small and medium enterprise is:Investment in plant and machinery/ equipment (excluding

Micro
Small

land and building)

Manufacturing Enterprises
Service Enterprises
Up to Rs. 25 lakh
Up to Rs. 10 lakh
More than Rs. 25 lakh and up More than Rs. 10 lakh and up to Rs

Mediu

to Rs. 5 crore
2 crore
More than Rs. 5 crore and up More than Rs. 2

to Rs. 10 crore

crore

and

up

to Rs. 5 crore

SIDBI
Main Schemes of SIDBI

National Equity Fund Scheme which provides equity support to small

entrepreneurs setting up projects in Tiny Sector.

1. Technology Development & Modernisation Fund Scheme for providing

finance to existing SSI units for technology upgradation/modernisation.
2. Single Window Scheme to provide both term loan for fixed assets and loan
for working capital capital through the same agency.
3. Composite Loan Scheme for equipment and/or working capital and also
for work sheds to artisans, village and cottage industries in Tiny Sector.
4. Mahila Udyam Nidhi (MUN) Scheme provides equity support to women
entrepreneurs for setting up projects in Tiny Sector.
5. Scheme for financing activities relating to marketing of SSI products which
provides assistance for undertaking various marketing related activities
such as marketing research, R&D, product upgradation, participation in
trade fairs and exhibitions, advertising branding, establishing distribution
networks including show room, retail outlet, wears-housing facility, etc.
6. Equipment Finance Scheme for acquisition of machinery/equipment
including Diesel Generator Sets which are not related to any specific
project.
7. Venture Capital Scheme to encourage SSI ventures/sub- contracting units
to acquire capital equipment, as also requisite technology for building up
of export capabilities/import substitution including cost of total quality
management and acquisition of ISO-9000 certification and for expansion
of capacity.
8. ISO 9000 Scheme to meet the expenses on consultancy, documentation,
audit, certification fee, equipment and calibrating instruments required for
obtaining ISO 9000 certification.
9. Micro Credit Scheme to meet the requirement of well managed Voluntary
Agencies that are in existence for at least 5 years; have a good track
record and have established network and experience in small savingscum-credit programmes with Self Help Groups (SHGs) individuals.
New Schemes
(i) To enhance the export capabilities of SSI units.
(ii) Scheme for Marketing Assistance.

(iii) Infrastructure Development Scheme.

(iv) Scheme for acquisition of ISO 9000 certification.
(v) Factoring Services and
(vi) Bills Re-discounting Scheme against inland supply bills of SSIs.
Major schemes
1. Technology Development & Modernisation Fund

SIDBI has set up Technology Development & Modernisation Fund (TDMF)

scheme for direct assistance of small sale industries to encourage existing
industrial units in the sector, to modernise their production facilities and
adopt improved and updated technology so as to strengthen their export
capabilities. Assistance under the scheme is available for meeting the
expenditure on purchase of capital equipment acquisition of technical
know-how, upgradation of process technology and products with thrust
on quality improvement, improvement in packaging and cost of TQM and

acquisition of ISO-9000 series certification.

SIDBI in July 1996 had permitted SFCs and promotional banks to grant
loans for modernisation projects costing upto Rs. 50 lakhs. The Coverage
of the TDMF scheme has been enlarged w.e.f. 1.9.1997. Non-exporting
units and units which are graduating out of SSI sector are now eligible to
avail assistance under this scheme.

2. National Equity Fund

National Equity Fund (NEF) under Small Industries Development Bank of

India (SIDBI) provides equity type assistance to SSI units, tiny units at five
per cent service charges. The scope of this scheme was widened in 200001 raising the limit of loan from Rs. 6.25 lakhs to Rs. 10 lakhs and project

cost limit from Rs. 25 lakhs to Rs. 50 lakhs.

a. The following are eligible for assistance under the scheme:-

I.

New projects in tiny and small scale sectors for manufacture,

preservation or processing of goods irrespective of the location

II.

(except for the units in Metropolitan areas).

Existing tiny and small scale industrial units and service enterprises
as mentioned above (including those which have availed of NEF
assistance

earlier),

undertaking

expansion,

modernisation,

technology upgradation and diversification irrespective of location

III.

(except in Metropolitan areas).

Sick units in the tiny and small scale sectors including service
enterprises as mentioned above, which are considered potentially
viable, irrespective of the location of the units (except for the units

IV.

in Metropolitan areas).
All industrial activities and service activities (except Road Transport
Operators).

b. Project cost (including margin money for working capital) should not
exceed Rs. 50 lakhs in the case of new projects in the case of existing
units

and

service

enterprises,

the

outlay

on

expansion/modernisation/technology upgradation or diversification or

rehabilitation should not exceed Rs. 50 lakhs per project.
c. There is no change in the existing level of promoters' contribution at 10%
of the project cost. However, the ceiling on soft loan assistance under the
Scheme has been enhanced from the present level of 15% lakh per
project to 25% of the project cost subject to a maximum of Rs. 10 lakhs
per project.
d. 30% of the investment is earmarked for tiny units.