1. Module-5

2. Micro, Small and Medium Enterprises Development Act , 2006

3. PERFORMANCE AND CONTRIBUTION OF MSMEs
13 Million MSMEs
> 8000 products
45% industrial
production
MSMEs
40% Exports
31 Million
Employment

4. MSMED Act, 2006
The Act was formed for overseeing and regulating the development of MSMEs in India . The major highlight of the MSMED act is that the MSM enterprises in the service sector are also covered under the act.

5. Objectives
To facilitate the promotion and development of micro, small and medium scale enterprises.
To enhance the competitiveness of MSM enterprises.
To concentrate on the related matters of MSM enterprises.
To extend the scope of benefits from SSI undertaking and ancillary industries to MSM enterprises.

7. Micro, Small and Medium Enterprises Development Act, 2006
Salient Features
Industry replaced by enterprise which include service enterprises also.
Ambit of sector enlarged to cover medium enterprises.
Constitution of MSME Board
Simplification of registration procedure

8. Policy of preferential procurement from MSMEs
Progressive credit support
Penalty for delayed payments
Provision for exit policy

9. MSME MSME’s are supported by Govt. of India & its agencies as For
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 9

10. MAJOR SCHEMES
FOR
MSME’s SUPPORT

11. Credit Linked Capital Subsidy Scheme for Technology Up gradation
The Scheme aims at facilitating technology up gradation by providing upfront capital subsidy to SSI units
Subsidy on institutional finance (credit) availed of by them for modernization of their production equipment (plant and machinery) and techniques.
The maximum limit of eligible loan is Rs. 100 lakh. The ceiling on subsidy would be Rs.15 lakh or 15 per cent of the investment in eligible plant and machinery, whichever is lower.

12. Credit Guarantee Scheme
Launched by the Government of India to make available collateral-free credit to the micro and small enterprise sector.
The credit facilities under the scheme are both term loans and working capital facility up to Rs.100 lakh per borrowing unit, extended without any collateral security or third party guarantee, to a new or existing micro and small enterprise.

13. The fee payable to the Trust under the scheme is one-time guarantee fee of 1.5% and annual service fee of 0.75% on the credit facilities sanctioned.

14. Micro & Small Enterprises Cluster Development Programme
To support the sustainability and growth of MSEs by addressing common issues such as improvement of technology, skills and quality, market access, access to capital, etc.
To build capacity of MSEs for common supportive action through formation of self help groups, consortium, upgradation of associations, etc.
To create/upgrade infrastructural facilities in the new/existing industrial areas/clusters of MSEs.
To set up common facility centres (for testing, training centre, raw material depot, effluent treatment, complementing production processes, etc).

15. Credit Support
Public sector banks advised to double the flow of credit to MSMEs within 5 years (20% annual growth)
A minimum of 40% of bank credit earmarked for priority sector lending which includes loans to MSMEs
Specialized SME Bank branches in industrial clusters for smooth flow of credit to MSMEs
One Time Settlement (OTS) scheme for settling NPAs of MSMEs
Interest band prescribed

16. Performance and Credit Rating Scheme
Helps MSMEs in accessing credits from banks & financial institutions, orders from foreign buyers
Helps in assessing their strengths and weaknesses.
Rating by one of the empanelled national or international Rating agencies.
Government subsidises 75% of the cost of Rating fee
Concessional credits from Banks/FIs to such rated units

17. Marketing Assistance and Export Promotion
Support for participation in trade fairs and exhibitions – national as well as international
Training programmes on packaging for exports
Purchase preference in Government procurement
Market Development Assistance Scheme for publicity, market studies and adoption of modern market practices

18. Role of government & its nodal agencies in entrepreneurial development

19. Entrepreneurship development programme means “ a programme designed to help a person in strengthening and fulfilling his entrepreneurial motive and in acquiring skills and capabilities necessary for playing his entrepreneurial role effectively”

20. Organizations for EDPs
1. National institute for entrepreneurship and small business development (NIESBUD):-
It was established in 1983 by the ministry of industry. Its main functions are
Training strategies and methodology
Formulating scientific selection procedures
Facilitating and supporting agencies engaged in Ed
Developing training aids, manuals & other roots
2. Entrepreneurship development Institute of India (EDII)
Promote micro enterprises at rural level
Inculcate the spirit of “Entrepreneurship amongst youth”
Participate in institution- building efforts
Improve managerial capabilities of small scale industries

21. 3. Small industries development Organization (SIDO)
Recognizing the need for training in improving and upgrading the skill of worker. SIDO has formulated many training programs
Appreciation course in industrial management
Specialized course in the area of production, marketing, financial, export and material management
Adhoc incentive course on inspection and quality control, work study, salesmanship
4. Indian Investment Center (IIC)
It is responsible for promoting mutually rewarding joint ventures and conducting EDP’s
IIC setup an entrepreneurial guidance bureau to guide entrepreneurs for establishment of new enterprise.

22. 5. National Institute for Small Industry Extension and Training (NISIET), Hyderabad
It was established in early 1950’s to provide training and extension services.
Integrated training at Nilokheri provides technical training to artisans, workers and entrepreneurs, managers.
It organizes about 45 national and 15 international programs every year.

23. 6. Small Industrial Bank of India (SIDBI)
It was established in April 1990 and earlier it was a wholly owned subsidiary of IDBI.
The aim of SIDBI is too nurture entrepreneurs through training, motivation and guidance. The EDP’s are normally of six weeks duration
Agencies specialized in conducting EDP’s like entrepreneurs development institute of India, Institute of entrepreneurship development, center for entrepreneurship development, technical consultancy organizations
A few specialized technical institutes liked central institute of plastic engineering and technology, rural technology institute have also been extended assistance of conduct of product specific EDP’s.

24. Funding opportunities
for
start up in India

25. Department of science and Industrial Research Ministry of MSMEs
Institutions providing funds to start ups
Department of science and Industrial Research
Ministry of MSMEs
Department of science and technology
SIDBI VENTURE SME Growth Fund
Department of Biotechnology
National Research development corporation
Department of Information Technology
Risk capital and Technology Finance Corporation ltd. Now called as IFCI Venture
Angel capital to start ups
Venture capital funding in India

26. Banks and financial Institutions Funding Ventures

28. Institutions assisting Entrepreneurs
Small Scale Unit
National small Industries corporation (NSIC)
Small Industries Development Orgzn.(SIDO)
Khadi Village Industries Commission(KVIC)
Handloom Board
Silk Board

29. Institutions assisting Entrepreneurs( cont.)
Medium and Large scale unit
Industrial finance corporation of India(IFCI)
State industrial development corporation (SIDC)
ICICI bank, IDBI bank, SIDBI.

30. Services of SIDO Technical resource centre Consultancy
Marketing support
Vendor development – Buyer seller meet
Quality/ Technical up gradation
Training facility – EDP, MDP, Skill development

31. Schemes of NSIC Bank credit facilitation Export credit insurance
Performance & credit rating
Raw materials assistance
Bills discounting
Government purchase
Exhibitions

32. National Institute for Entrepreneurship and Small Business Development (NIESBUD)
Evolving effective training strategies and methodology 
Standardizing model syllabi for training various target    groups
 Developing training aids, manuals and tools
Facilitating and supporting Central / State/ Other    agencies in organizing entrepreneurship development    programmes 
Conducting training programmes for promoters, trainers    and entrepreneurs
 Undertaking research and exchange experiences globally in development and growth of    entrepreneurship.