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Transcript of Small Scale Industries PDF
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2005-2006
GOVERNMENT OF INDIAMINISTRY OF SMALL SCALE INDUSTRIES
Contents
Chapter I Page No.
An Overview_______________________________________________________________1
Chapter II
Small Industry Development Organisation (SIDO)_________________________________ 5
Chapter III
National Small Industries Corporation Ltd.______________________________________ 42
Chapter IV
Training and Entrepreneurship Development____________________________________ 50
Chapter V
National Commission for Enterprises in the Unorganised Sector (NCEUS)____________ 61
Chapter VI
International Cooperation___________________________________________________ 64
Chapter VII
Activities in the North Eastern Region__________________________________________70
Chapter VIII
Development Activities for Women____________________________________________72
Chapter IX
Use of Official Language____________________________________________________ 76
Chapter X
Vigilance Matters__________________________________________________________ 78
Chapter XI
Citizens’ Charter__________________________________________________________ 80
Annexure I
Summary of Recent and Important Audit Observations and Replies Thereto___________ 82
Annexure II
Performance Indicators of Small Scale Industries________________________________ 89
A c r o n y m s____________________________________________________________90
6
� Advising the Government in formulation
of policies and programmes/projects/
schemes for the promotion and
development of the SSI.
� Providing techno-economic and
managerial consultancy, common facility
and extension services to the SSI.
� Providing support for technology
upgradation, modernisation, quality
improvement and infrastructure
facilities.
� Assisting the SSI in human resource
development through training and skill
upgradation.
� Providing economic information services
to the SSI.
� Maintaining a close liaison with the Central
Ministries, Planning Commission, State
Governments, Financial Institutions and
other organisations concerned with the
development of the SSI.
� Evolving, implementing and coordinating
policies and programmes for development
of the SSI as ancillaries to large and
medium industries.
� Providing testing and calibration services
to the SSI.
� Implementing / monitoring the flagship
schemes of:
� Credit Guarantee Fund
� Credit Linked Capital Subsidy for
Technology Upgradation
� Small Industries Cluster
Development Programme
2.1.5 An amount of Rs. 360.69 crore has
been allocated to SIDO for the implementation
of the Plan Schemes during the financial year
2005-06.
2.2.0 MAJOR POLICYINITIATIVES
2.2.1 SMALL AND MEDIUMENTERPRISES DEVELOPMENT(SMED) BILL
A single comprehensive legislation for
promotion, development and enhancement of
competitiveness of the SSI has been a long-
standing demand of the sector, with a view,
inter alia, to reducing the rigours faced by the
sector on account of application of a plethora
of laws and regulations. In keeping with the
declaration in the National Common Minimum
Programme (NCMP) of the Government in this
regard, the Ministry of SSI drafted the Small
and Medium Enterprises Development
(SMED) Bill, 2005 which seeks to define
“enterprise” as against the restrictive category
of “small scale industry”, integrate micro, small
and medium enterprises (MSME) as a
continuum and address the major problems of
the MSME. The SMED Bill was introduced in
the Lok Sabha on 12 May 2005 and later
referred to the Department-related
Parliamentary Standing Committee (DRPSC)
on Industry. After considering the wide-ranging
recommendations of the DRPSC based on its
detailed consultation with various stakeholders,
notice for official amendments to the SMED
Bill, 2005 and enacting the Micro, Small and
7
Medium Enterprises Development (MSMED)
Bill was sent to the Lok Sabha on 2 December
2005.
The MSMED Bill provides, inter alia, for the
following important matters:
(i) Constitution of the National Micro, Small
and Medium Enterprises Board with a
much wider and representative
composition and wider functions;
(ii) Replacement of the existing two-stage
system of optional “registration” of the SSI
by that of optional filing simplified
“memoranda” by micro and small
enterprises;
(iii) Improving access of micro and small
enterprises (MSE) to credit;
(iv) Statutory backing for procurement
preference policies in favour of the
MSE;
(v) Simplification and harmonisation of
inspection procedures and requirement
of maintaining registers and furnishing
returns, as applicable to the micro, small
and medium enterprises (MSME) under
specified Labour laws;
(vi) Strengthening of provisions on relating to
the problem of delayed payments to micro
and small enterprises and widening the
functions of the relevant dispute resolution
mechanisms with a view to providing
quicker and more effective relies to the
MSE in cases of disputes; and
(vii) Simpler scheme for closure of business
by the MSE
2.2.2 PACKAGE FOR PROMOTION OFMICRO AND SMALLENTERPRISES
In keeping with another declaration in the NCMP,
a promotional package for the MSE was drafted
by the Ministry during the year. Inter-Ministerial
consultations were held with seventeen
Ministries/Departments/Commissions/Councils
on the draft Promotional Package. However, on
the advice of the Planning Commission and the
Department of Expenditure to first seek
appraisal of the proposal by the Expenditure
Finance Committee (EFC), an EFC
Memorandum was circulated. Attempts are
underway to resolve the large areas of difference
of opinion of the Ministries/Departments on the
elements of the proposed package before its
consideration by the EFC and then the
Government.
2.2.3 ENHANCEMENT OFINVESTMENT LIMIT FROM RS. 1CRORE TO RS. 5 CRORE
Under the Industries (Development and
Regulation) Act 1951 [I (DR) Act] the small scale
industry is defined as one with an investment
upto Rs. 1 crore in plant and machinery,
excluding land and building. However, in the
changed economic scenario of liberalisation and
globalisation and with a view to increasing the
competitiveness of manufacturing SSI, the
investment limit in respect of 71 products has
been enhanced to Rs. 5 crore to enable the units
manufacturing these products to carry out
technological upgradation and modernisation of
their units. In addition, investment limit for 69
8
hi-tech products as well as those for the
pharmaceutical sector is also being enhanced
to Rs. 5 crore. The final notification in respect
of this is under issue.
2.2.4 RESERVATION POLICY
With a view to providing to the SSI opportunities
for technological upgradation, promotion of
exports and economies of scale, items
reserved for exclusive manufacture by the SSI
have been dereserved from time to time. The
dereservation process involves extensive
consultation with all the stake holders, including
the SSI associations and various Ministries/
Departments concerned and the Planning
Commission. As per the provisions of the I (DR)
Act, an Advisory Committee has been
constituted which recommends reservation/
dereservation of items from time to time. Based
on consultations with the stake holders and on
the recommendations of the Advisory
Committee, 193 items were dereserved during
2004-05. After this round of dereservation, there
are 506 items reserved for exclusive
manufacture by the SSI.
Section 29 B of the I (DR) Act provides for penal
action against violation of the policy of
reservation for exclusive manufacture by the
SSI by non-SSI units. Occasional complaints
of violation of this policy are received from
Members of Parliament, Government
Departments, SSI associations, individual SSI
units, etc. Detailed policy guidelines for initiating
action against non-SSI units violating the
reservation policy were circulated to all SISIs
and State Governments. On prima facie
confirmation of such violation, criminal
complaints have been filed against three units
located in Hyderabad, Kolkata and Delhi and
investigations have been initiated in a few more
cases.
2.3.0 CREDIT TO SSI AND TINY/MICRO SECTOR
2.3.1 Credit is one of the critical inputs for
the promotion and development of the SSI. To
facilitate timely and adequate credit to the SSI,
the Government has taken several initiatives/
measures. The existing components of the
credit policy for the SSI are as under:
(i) Priority Sector Lending: Credit to the SSI
is part of the priority sector lending by
banks. For the public and private sector
banks, 40% of the net bank credit (NBC)
is earmarked for the priority sector. For
the foreign banks, however, 32% of the
NBC is earmarked for the priority sector,
of which 10% is earmarked for the SSI
sector. Any shortfall in such lending by the
foreign banks has to be deposited with
the Small Industries Development Bank
of India (SIDBI).
(ii) Institutional Arrangement: The SIDBI is the
principal financial institution for promotion,
financing and development of the SSI
sector. Apart from extending financial
assistance to the sector, it coordinates the
functions of institutions engaged in similar
activities. SIDBI’s major operations are in
the areas of (i) refinance assistance (ii)
direct lending and (iii) development and
9
support services The commercial banks
are important channels of credit
dispensation to the sector and play a
pivotal role in financing the working capital
requirements, besides providing term
loans (in the form of composite loans).
State Financial Corporations (SFCs) and
twin-function State Industrial Development
Corporations (SIDCs) at the State level are
the main sources of long-term finance for
the SSI sector. Credit support in direct/
indirect form is also provided, to some
extent, by National Bank for Agriculture and
Rural Development (NABARD), NSIC, etc.
2.3.2 The table below gives the position
of flow of credit to the SSI sector from all
public sector banks, since 2000.
2.3.3 CREDIT TO TINY/MICROSECTOR
The table below gives the status of credit to
tiny/micro sector (having investment upto
Rs. 25 lakh) since 2000.
2.3.4 SCHEME OF SMALLENTERPRISES FINANCIALCENTRES (SEFCs)
As announced in the Annual Policy Statement
for 2005-06, the Reserve bank of India (RBI)
Credit Parameters At the end of March
2000 2001 2002 2003 2004 (P) 2005 (P)
Net bank credit (Rs. crore) 3,16,427 3,41,291 3,96,954 4,77,899 5,58,849 7,18,722
Credit to SSI (Rs. crore) 46,045 48,400 49,743 52,988 58,278 67,634
No. of SSI accounts (lakh) 22.72 22.80 22.23 16. 95 16.33 17.71
SSI Credit as percentage 14.6 14.2 12.5 11.1 10.4 9.4
of net bank credit
(P): Provisional
(P): Provisional
At the end of March
2000 2001 2002 2003 2004 (P) 2005 (P)
Net bank credit to tiny sector 24,742 26,019 27,030 26,937 30,826 28,063
(Rs. crore)
Tiny sector credit as 54.0 53.7 54.3 50.8 52.9 41.5
percentage of net SSI credit
10
has formulated a scheme for strategic alliance
between branches of commercial banks and
SIDBI in selected clusters of the SSI, viz.,
Scheme of Small Enterprises Financial Centres
(SEFCs). This scheme is important in the
context of expanding the outreach of banks and
improving credit flow to the SSI sector. SIDBI
has been made the nodal agency for
implementing the scheme in alliance with
commercial banks. SIDBI has rechristened its
existing branches in the clusters as SEFCs.
Based on the directive of the RBI, SIDBI has
also entered into strategic alliance with 11 major
banks for financing tiny/micro and SME in
identified clusters. All the 149 clusters identified
by the RBI have been covered under the SEFC
scheme.
2.3.5 RECENT POLICY PACKAGEFOR STEPPING UP CREDITFLOW
2.3.5.1 The Government announced on 10th
August 2005 a ‘Policy Package for Stepping up
Credit to Small and Medium Enterprises
(SMEs)’. The measures in the Policy Package
to increase the quantum of credit to SMEs
(including SSI) include:
� Public sector banks to fix their own targets
for funding SMEs in order to achieve a
minimum 20 per cent year-on-year
growth in credit to the SME sector.
� Public sector banks to follow a transparent
rating system with cost of credit linked to
the credit rating of the enterprise.
� Commercial banks to make concerted
efforts to provide credit cover on an
average to at least 5 new tiny, small and
medium enterprises at each of their semi-
urban / urban branches per year.
� The RBI to issue detailed guidelines
relating to debt restructuring mechanism
so as to ensure restructuring of debt of
all eligible small and medium
enterprises.
� Introduction of a one-time settlement
scheme to apply to SSI non-performing
asset (NPA) accounts in the books of the
banks as on March 31, 2004.
� Taking the existing RBI guidelines as
indicative minimum, banks to formulate
a comprehensive and more liberal policy
relating to advances to the SME sector.
� Special dispensation under the Credit
Guarantee Scheme for all (a) loans upto
Rs. 2 lakh, (b) eligible women
entrepreneurs and (c) eligible borrowers
located in the North Eastern region
(including Sikkim) and Jammu and
Kashmir.
� Banks to adopt cluster-based approach
for SME financing.
� The RBI to constitute empowered
committees with the respective Regional
Directors of RBI as the Chairmen to
review the progress in SME financing and
rehabilitation of sick SSI and medium
industry units.
� Boards of banks to review the progress
in achieving the self-set targets as also
rehabilitation and restructuring of SME
accounts on a quarterly basis.
11
2.3.5.2 The RBI has issued a circular dated
19th August 2005 to all public sector banks and
dated 25th August 2005 to all private sector
banks/foreign banks/ RRBs advising them to
implement the measures announced in the
Policy Package.
2.4.0 FISCAL CONCESSIONSTO THE SSI SECTOR
2.4.1 GENERAL SSI EXEMPTIONSCHEME
Consequent on the announcement of a
Comprehensive Policy Package for SSI Sector
by the Prime Minister on 30th August 2000, full
excise exemption up to the first clearance of
Rs. 1 crore per annum was provided to the SSI
sector with effect from 1st September 2000.
Under the General Excise Exemption Scheme,
units having annual turnover of less than Rs. 3
crore were eligible for the excise exemption.
2.4.2 FISCAL INCENTIVESANNOUNCED IN THE BUDGET2005-06
2.4.2.1 Excise Duty: (i) The SSI turnover
eligibility limit for availing of the General SSI
Excise Exemption was enhanced from Rs. 3
crore to Rs. 4 crore; (ii) excise duty reduced
from 16% to 8% on imitation jewellery; and (iii)
excise duty of Rs. 1 per kg on refined edible
oils and Rs. 1.25 per kg on vanaspati was
withdrawn.
2.4.2.2 Service Tax: (i) Small service
providers having gross annual turnover less than
Rs. 4 lakh were exempted from the purview of
service tax; and (ii) service tax on business
auxiliary service exempted for persons
producing/ processing goods, from inputs
received from a manufacturer and sending the
resultant product to the same manufacturer for
further manufacture of final products, which are
cleared on payment of excise duty.
2.4.2.3 Customs Duty: (i) Peak rate of
customs duty for non-agricultural products was
reduced from 20% to 15%; (ii) the customs duty
on selected capital goods and parts was
reduced to 10% in some cases and to 5% in
some others; (iii) customs duty on seven
specified machinery for leather and footwear
industry was reduced from 20% to 5%; (iv)
customs duty on nine specified machinery used
in pharmaceutical and biotechnology sectors
was reduced to 5%; (v) for primary and
secondary metals customs duty was reduced
from 15% to 10%; (vi) reduced customs duty of
10% was made applicable to industrial raw
materials such as catalysts, refractory raw
materials, basic plastic materials, molasses
and industrial ethyl alcohol; and (vii) customs
duty on coking coal was reduced from 15% to
5%.
2.5.0 SICKNESS IN THE SSISECTOR
2.5.1 As per the data compiled by the RBI
from the scheduled commercial banks, the
sickness in the SSI has decreased in the recent
years. The number of sick SSI as at the end
of March, 2000 to March, 2004 is given below:
12
2.5.2 Based on the accepted
recommendations of the Working Group set up
by the RBI under the chairmanship of Shri S.S.
Kohli, the then Chairman, Indian Banks’
Association, the RBI had drawn up the Revised
Guidelines for Rehabilitation of Sick SSI Units,
which were circulated to the banks on 16th
January 2002 for implementation. The
guidelines include, inter alia, a change in the
definition of sick SSI units, norms for deciding
the viability of sick units, extent and types of
concessional finance, etc. The revised
definitions were meant to enable banks to take
action at an early stage for revival of the
potentially viable sick units.
2.5.3 In line with the latest Policy Package,
the RBI has circulated to all public sector banks
on 3rd September, 2005 the guidelines on One-
Time Settlement (OTS) Scheme for SME
accounts. The guidelines will cover all NPAs of
the SME, which have become doubtful or loss
as on March 31, 2004 or NPAs classified as
sub-standard on that date, which have
subsequently become doubtful or loss with
Total number of sick units Potentially viable
As at Number* Amount of Number* Amount of
the end loans outstanding loans outstanding
of March (Rs. crore) (Rs. crore)
2000 3,04,235 4,608.43 14, 373 369.45
2001 2,49,630 4,505.54 13, 076 399.17
2002 1,77,336 4,818.95 4,493 416.41
2003 1,67,980 5,706.35 3,626 624.71
2004 1,38,811 5,284.54 2,385 421.18
*These units include village industries as well.
outstanding balance of Rs. 10 crore and below
on the date on which the account was classified
as doubtful.
2.5.4 The RBI has also issued to all
commercial banks detailed guidelines on 8th
September, 2005 relating to debt restructuring
mechanism to ensure restructuring of debt of
all eligible SMEs at terms which are, at least,
as favourable as the Corporate Debt
Restructuring mechanism in the banking sector.
2.6.0 SIDO SCHEMES/MEASURES FORPROMOTION OF SMALLSCALE INDUSTRIES
2.6.1 ADVERTISING ANDPUBLICATIONS
2.6.1.1 The Advertising and Publications
Division of SIDO disseminates information
about Government policies and programmes;
incentives and facilities and institutional support
services available to the SSI. It coordinates with
13
the Directorate of Audio Visual Publicity and
SIDO’s field offices for timely appearance of
advertisements on entrepreneurship
development training courses; management
development programmes; skill development
courses, etc., in local language newspapers in
different parts of the country.
2.6.1.2 An effective media plan for coverage
was prepared for wide publicity of the events.
Four advertisements for the National Expo of
Small, Agro & Rural Industries and National
Convention & National Award Function were
designed and released in all daily English/Hindi
newspapers for wide publicity across the
country. Publicity material for such events
including handbills, brochures, exhibitor’s
directory, jingles on radio, TV advertisements,
hoardings, banners, etc., was prepared for
various modes of publicity.
2.6.2 LAGHU UDYOG SAMACHARAND OTHER PUBLICATIONS
2.6.2.1. Laghu Udyog Samachar, a quarterly
journal in English and Hindi for SSI is
disseminating updated information for the
benefit of the prospective and existing
entrepreneurs. Laghu Udyog Samachar is an
important window in print for the SSI, providing
access to the latest information on a variety of
topics. It creates awareness and disseminates
information on policies and programmes of the
Central and the State Governments,
Government of India orders, circulars, gazette
notifications, field activities, statistical and
economic information as well as articles on
various issues pertaining to the SSl.
2.6.2.2 During 2005-06, the following
publications were brought out:
(i) Laghu Udyog Samachar Bilingual
January - March, 2005
(ii) Laghu Udyog Bilingual
Samachar April - (Special
September, 2005 Issue)
(iii) Laghu Udyog Bilingual
Samachar October - (In press)
December, 2005
(iv) A Guide to Self- English
Employment
(v) Swa-Rojgar Margdarshika Hindi
2.6.3 INFORMATION & FACILITATIONCOUNTER (IFC)
The Information and Facilitation Counter (IFC)
in the office of the DC (SSI) is disseminating
updated information for the benefit of the
prospective and existing entrepreneurs. The IFC
provides speedy and easy access to information
to the public on the services and activities of
SIDO and related institutions in the area of SSI
promotion and development. The IFC is
computerised (Touch Screen Kiosk) and
supplemented by hard copies of information
such as brochures, pamphlets, books, etc. The
general information and documents made
available to the entrepreneurs pertain to (i)
counselling & guidance on how to set up an SSI
unit and provide proper guidance, (ii) documents
on technical schemes, project reports and
details of various programmes implemented by
the SIDO, (iii) policies concerning SSI and
schemes of various State Governments for
14
promotion of SSI, (iv) give information on the
registration scheme and supply registration
forms, (v) information on the I (DR) Act and the
notifications on definition, etc., issued under the
Act, (vi) credit policies of the Government, (vii)
statistics related to small scale industries, (viii)
technical and marketing information concerning
SSI, (ix) list of Items reserved for exclusive
manufacture by the SSI ,etc.
2.6.4 SMALL ENTERPRISEINFORMATION & RESOURCECENTRE NETWORK (SENET)
2.6.4.1 “Small Enterprise Information &
Resource Centre Network” (SENET), was
launched in April 1997 SENET has been
awarded the Golden Icon National Award 2005
for “Best Documented Knowledge Resource”
under Professional Category by the Department
of Administrative Reforms & Public Grievances
(DARPG), Government of India. The scheme
was modified and its scope enlarged to include
office automation. The objectives of the SENET
scheme are:
� to pioneer, create and promote databases
and information;
� to facilitate networking among the
information seekers, concerning SSI,
including the Central/State Governments,
Government agencies engaged directly or
indirectly in the promotion and
development of the SSI, national and State
level industry associations, NGOs, etc.;
� to establish linkages with existing
databases and the end entrepreneur, for
development and promotion of the SSI;
� to carry out office automation in the office
of the DC (SSI) for better transparency in
the functioning of the office;
� to create a Website for hosting data
available within the organisation; and
� to host alliance databases in order to
serve as a one-stop shop for the
information seekers, industry
associations and individual industries.
2.6.4.2 20 SENET centres at SISIs were
initially given servers & networking components
for 64 KBPS leased line connectivity to the main
centre and database building. Servers of 64
KBPS, ISDN dialup connectivity and LAN were
also provided at these SISIs. A Website was
created and launched in 2000. It was upgraded
to a knowledge-based, database driven,
interactive portal. This portal now has more
than 8000 pages of static information and is
being updated twice a week. It has a message
board, online polls section, online events
section, monthly e-news bulletin, etc. Security
audit was carried out and the entire
infrastructure was reinforced with Intruder
Detection System and other security
measures. Online Search Facility for ISO 9000
reimbursement cases was launched in
November 2004. Monthly E-Newsletter was
launched in December 2004. 30 Computer
Touch Screen Information Kiosks were
installed at all SISIs. Computerised File
Tracking System (DMIS) has been introduced
at the headquarters.
2.6.4.3 Currently, the following initiatives are
being taken under the SENET:
15
� Connectivity to all SISIs through leased
line and application of OA modules in all
SISIs through central server.
� Upgradation and updation of software,
hardware and technologies.
� Facility management of the infrastructure.
� AMC of the hardware & software for the
headquarters and field offices.
� Updation of databases and automation of
more applications and making them
online.
� Implementation of file tracking system
and document management system for
bringing out transparency in
administration.
� Implementation of minimum agenda for
e-governance set up by the DARPG,
Government of India.
� Extension of SENET to 28 Branch SISIs.
� Commissioning of 28 Touch Screen
Information Kiosks at all Branch SISIs.
� Full conversion of website to HINDI
(launched on 28/10/05).
� Upgradation of power back up facility for
SENET data centre.
2.6.5 LIBRARY
SIDO maintains libraries at its
headquarters and in all its field offices. These
libraries make available technical information
required for the development of the SSI. The
libraries are used by the officers of the institutes
and entrepreneurs in the area to learn about new
developments in various segments of industrial
and business environment. The libraries
maintain technical books, journals, reports,
project profiles, statistical surveys, other related
publications, etc.
2.6.6 SCIENCE & TECHNOLOGY,RESEARCH ANDDEVELOPMENT
2.6.6.1 ELECTRONICS SERVICE &
TRAINING CENTRE (ESTC),
RAMNAGAR, UTTARANCHAL
Electronics Service & Training Centre (ESTC)
was set up with assistance of the United Nations
Development Programme (UNDP) as a society
under the Societies Registration Act in April,
1986 in Uttar Pradesh (now Uttaranchal). The
main objective of this Centre is to develop
human resources to meet the essential
requirements for transfer of technology in
assembly and manufacturing of electronic items
and parts to promote growth of electronic SSI.
Significant work done during the year: (i)
Software development for the institutes under
the SIDO, (ii) training courses on repair &
maintenance of CNC machine of SIDO Tool
Rooms, (iii) addition of fibre optics testing
facilities and (iv) designing training modules with
emphasis on hands-on training.
2.6.6.2 INSTITUTE FOR DESIGN OF
ELECTRICAL MEASURING
INSTRUMENTS (IDEMI), MUMBAI
Institute for Design of Electrical Measuring
Instruments (IDEMI), Mumbai was set up in
16
1969 in collaboration with the UNDP as a society
under the Societies Registration Act with the
objective of rendering technical services to
instrumentation industries in general and the
SSI in particular.
Significant work done during the year: (i)
Manufactured various precision items for ISRO;
(ii) design & manufacture of trimming tool for
M/s Yogna Udyog (P) Ltd., Mumbai; (iii) training
facilities for energy meter type testing and fibre
optics testing being added; (iv) manufacture of
the spares of gas filling unit for BPCL, Mahul,
Mumbai; (v) tailor-made training modules
designed as per the needs of the industry with
emphasis on hands-on training.
2.6.6.3 PROCESS-CUM-PRODUCT
DEVELOPMENT CENTRE,
MEERUT
Process-cum-Product Development Centre
(sports goods & leisure equipment), Meerut was
set up during 1984 as a society with UNDP
assistance mainly to cater for the technical
needs of the sports goods industry in the
country. The Centre aims at upgradation as well
as improvement in existing technology, quality
control, in-house R&D activities and providing
workshop & testing facilities to the sports goods
& allied industry.
Significant work done during the year: (i) The
Centre organised 42 training courses and
trained 289 candidates, including those
belonging to the SC, ST and physically
handicapped categories. One-year Diploma
with specialisation in sports goods was started;
(ii) The Centre provided common facility
services to 64 units upto November 2005
through its leather, mechanical, rubber, plastics
and wood-working by undertaking 252 jobs.
Besides, it provided testing facilities to 29 units
by undertaking 132 jobs for testing; (iii) The
Centre developed a Football Stitching Machine.
Developmental work on nano materials (fillers)
in rubber compounds is in process; (iv) A wood
seasoning plant for cricket bats cluster is being
set up at Anantnag, Jammu & Kashmir.
2.6.6.4 CENTRE FOR DEVELOPMENT OF
GLASS INDUSTRY, FIROZABAD
Centre for Development of Glass Industry was
established by Government of India with the
assistance of UNDP and active support of the
Government of Uttar Pradesh to promote and
modernise the glass industry by upgrading the
conventional technologies currently in use and
transfer of modern technology. The main
objective of the Centre is to provide technical
support to the small scale glass industry by
promoting installation of energy efficient glass
melting furnaces, auxiliary furnaces,
introduction of new types of glasses and their
standardisation, environmental protection,
introduction of developed techniques for the
decoration of glasswares and training for skill
development so as to improve the quality and
productivity of the SSI glass units.
Significant work done during the year: (i) Existing
day-tank furnace is running for over 9 months;
(ii) a day-tank furnace with further modified
design was constructed and commissioned in
a local unit; (iii) trial of improved design of sikai
17
bhatti was completed successfully; (iv)
construction of pot arch and pot transfer trolley
under a sponsored project sponsored by the
Department of Science and Technology was
completed; and (v) demonstration of energy
conservation measures was continued.
2.6.6.5 PROCESS AND PRODUCT
DEVELOPMENT CENTRE, AGRA
Process and Product Development Centre,
Agra was set up in 1985 with the assistance of
Government of India, Government of UP and
UNDP/UNIDO.
Significant work done during the year: (i)
Completed a prestigious order received from
ADRDE, Ministry of Defence for investigation
of para dropping component of Heavy Drop
System Platform of Russian made transport
aircrafts; (ii) received the recognition of NCVT
for different ongoing long term training courses;
(iii) under the Cluster Development
Programme, the Centre undertook
development of the brass/bronze cluster at
Pareb, Bihar and is in the process of setting
up a common facility centre at Pareb to assist
the SSI units. The Centre is also working on
the development of gun-making SSI cluster at
Munger, Bihar. For both clusters, it prepared the
diagnostic study reports.
2.6.6.6 CENTRAL INSTITUTE OF TOOL
DESIGN, HYDERABAD
Central Institute of Tool Design, Hyderabad was
established in 1968 by Government of India with
the assistance of UNDP/ILO. It was the first
institute of its kind in the country. The original
investment of the Institute was Rs. 2.37 crore.
The aim of the Institute was to fulfil the tooling
and training needs of small scale industries in
the field of tool design and manufacturing.
Significant work done during the year: (i) The
Institute achieved ISO 9001-2000 certificate; (ii)
the Institute developed import substitute tools
for Research Centres, IMARAT (a DRDO
establishment); (iii) the Institute conducted
international training programmes under various
bilateral agreements such as ITEC, TCS,
Colombo Plan, Aid to Sri Lanka etc.; (iv) the
facilities at the Institute were upgraded to keep
pace with the latest technological developments;
and (v) the training modules were designed with
emphasis on hands-on training.
2.6.6.7 FRAGRANCE & FLAVOUR
DEVELOPMENT CENTRE,
KANNAUJ (UP)
Fragrance and Flavour Development Centre
was set up at Kannauj in 1991 by the
Government of India in collaboration with
UNDP/UNIDO and Government of UP for
technological upgradation of essential oils,
aroma chemicals, fragrance and flavour
industry in the country, especially in the small
scale sector. The main objective of the Centre
is to serve, sustain and upgrade the
technological status of farmers and industry
engaged in the cultivation and processing of
aromatic plants and other naturally occurring
herbs and spices. For fulfillment of these
objectives, the following activity modules are in
operation at the Centre:
18
� Agro-Technology & Extension Services.
� Process Technology.
� Fragrance & Flavour Development and
Their Applications.
� Quality Assessment and Standardisation.
� Information, Documentation, Packaging
and Marketing.
Significant work done during the year: The
Centre earned revenue of Rs. 34.33 lakh up to
November, 2005 achieving (revenue) self-
sufficiency of 58.85 %. The activities of the
Centre benefited 632 SSI units, entrepreneurs
and farmers. 14 training and awareness
generation programmes were organised at
various places.
2.6.7 TRAINING AND MANPOWERDEVELOPMENT
2.6.7.1 CENTRAL FOOTWEAR TRAINING
INSTITUTE, CHENNAI
Central Footwear Training Institute, Chennai is
a registered society. The basic objective of the
Institute is to develop human resources for
footwear and allied industries through various
training programmes on footwear technology
and allied subjects. The Institute conducts long
term, short term and part time training courses
on various subjects of footwear technology.
Besides, the Institute provides technical support
services to the user industry by making its
facilities available to them. The Institute also
provides services for development of new
products and patterns as per given sample or
concept.
Significant work done during the year: (i) T h e
Institute organised 19 training courses of
durations ranging from one month to two years
and trained 636 candidates. The Institute also
organised short term courses for women
entrepreneurs and minority communities under
sponsorship from various Departments of the
Government of Tamilnadu; (ii) the Institute
provided common facility services to industries
in the field and undertook job works on nominal
charges. During 2005-06 (upto November 2005),
the Institute undertook 251 jobs and thereby
provided benefit to 25 units and earned revenue
of Rs. 3.15 lakh; (iii) the Institute developed new
styles/constructions of ladies’ ankle boot,
children’s shoes, casual shoes of different
types, executive shoes of different types and
Goodyear welted construction shoes with single
layer and double layer soles; (iv) a sub-centre
of CFTI was started at Ambur for the benefit of
local units; and (v) action was initiated to
procure modern machines for footwear
manufacturing.
2.6.7.2 CENTRAL FOOTWEAR TRAINING
INSTITUTE, AGRA
Central Footwear Training Institute, Agra is also
a registered society with similar objectives and
functions as the Institute at Chennai.
Significant work done during the year: The
Institute (i) organised seven training courses
of durations ranging from one month to two
years and trained 225 candidates; (ii) provides
common facility services to industries in the
field and undertook 449 jobs, thereby benefiting
34 units; (ii i) developed new styles/
19
constructions of shoes and (iv) also developed
the moulds for unit soles through its CNC
milling machines.
2.6.7.3 INDUSTRIAL MOTIVATION
CAMPAIGNS (IMC)
Industrial Motivation Campaigns (duration 1 - 2
days) are conducted to identify and motivate
traditional / non-traditional entrepreneurs having
potential for setting up SSI units so as to lead
them to self-employment. During 2005-06 (upto
November 05). 220 IMCs were conducted and
18,000 prospective entrepreneurs motivated to
start their units Around 480 IMCs are expected
to be conducted during the remaining months
of the financial year for benefiting about 32,000
entrepreneurs.
2.6.7.4 ENTREPRENEURSHIP
DEVELOPMENT PROGRAMMES
(EDPs)
Entrepreneurship Development Programmes
(EDPs) of 4-week duration are organised as a
regular training activity to familiarise the youth
with the necessary aspects for setting up small
scale industries. The minimum intake is 20
participants in each course. The training
schedules assist potential entrepreneurs in
preparing detailed feasibility reports and their
appraisal, evaluation, modification, etc.
Programmes so far organised covered, inter
alia, herbal cosmetics, high fashion garments,
hosiery, food & fruit processing, information
technology, hardware maintenance, soap and
detergents, leather products/novelties, servicing
of household electrical appliances and
electronic gadgets, gem cutting & polishing,
engineering plastics, etc.
During 2005-06, 380 EDPs were conducted
and 8500 entrepreneurs trained up to
November 2005. About 320 EDPs are expected
to be conducted during the remaining months
for providing training to about 9500
entrepreneurs.
2.6.7.5 SEPTI, TIRUVALLA
The Small Entrepreneur Promotion and Training
Institute, Tiruvalla was set up in 1994 to improve
the managerial and technical skills of the local
youth and prepare them for setting up micro
enterprises in the rural and urban areas. SEPTI
Tiruvalla is a full-time training institute to train
1000 persons per annum. At present, all training
programmes are 2-month EDPs and courses
are scheduled quarterly. Almost 25% of the
trainees have set up their own industrial units
after training, while many others have secured
jobs in India and abroad.
2.6.7.6 SEPTI, ETTAMANUR
The Production Centre, Ettamanur was
converted into Small Entrepreneur Promotion
and Training Institute in 2000 for imparting
training to artisans/entrepreneurs of Kerala in
various disciplines as per the needs of the area.
The Institute constantly identifies and reviews
the new emerging trades with quick employment
potential and develops appropriate curricula
focusing on end job profiles. The courses
comprise artisan trade, management, IT
software, computer hardware and other
20
emerging technologies, including bio-
technology etc.
2.7.0 MANAGEMENTDEVELOPMENTPROGRAMMES (MDPS)
2.7.1 Management training courses on
various areas of industrial management
initiatives are also devised for owners-cum-
managers and supervisory level personnel of
small scale industries. The contents of these
training programmes are continuously re-
structured keeping in view the demands of the
area and the local requirements of the industries.
The subjects under these training programmes
cover Industrial Management, Human Resource
Management, Marketing Management, Export
Management & Documentation, Materials
Management, Financial Management,
Information Technology & Exports, ISO 9000,
WTO/IPR issues, etc.
2.7.2 During 2005-06, about 127 MDPs have
been conducted and 2800 entrepreneurs trained
up to November 2005. Around 254 MDPs are
expected to be conducted during the remaining
months of the financial year.
2.8.0 WTO CELL
2.8.1 A WTO Cell was set up in the SIDO
headquarters in 1999 to co-ordinate the latest
developments in regard to World Trade
Organisation. The objectives of the Cell inter
alia include (a) keeping abreast with the recent
developments in the WTO agreements, (b)
disseminating information to SSI Associations
and other stakeholders on various aspects of
WTO agreements and their likely implications
for the SSI, (c) coordinating with other Ministries
and Departments of the Government of India in
this context, (d) assisting policy formulation for
SSIs in conformity with the provisions of WTO
agreements and (e) organising workshops/
seminars for the SSI to create awareness and
sensitisation, capacity building and sectoral
studies. As a part of this process, three
awareness programmes are planned during
2005-06. Six one-day workshops on Intellectual
Property Rights (IPRs) have been organised
during the current year so far. It is further proposed
to organise 8 more such programmes.
2.8.2 Various SSI related issues, which
came up during previous WTO Ministerial
Conference were handled in the WTO Cell for
appropriate response. Requisite feedbacks on
the modalities for negotiations on non-
agricultural products were provided to the
Department of Commerce, Ministry of
Commerce & Industry.
2.8.3 In view of the sixth WTO Ministerial
Conference, a meeting on WTO negotiations
on Non-Agricultural Market Access (NAMA) was
organised in consultation with the Ministry of
Commerce & Industry. SSI associations & other
stakeholders participated in this meeting and
exchanged their views / concerns regarding the
SSI sector. The issue arising out of submission
of India’s improved revised offers for services
under GATS was also taken up with the Ministry
of Commerce & Industry for suitably protecting
21
the interests of the SSI sector during such
negotiation in the WTO fora.
2.8.4 As part of the Inter-Ministerial
Consultation process, inputs were provided to
the Ministry of Commerce and Industry in regard
to the ongoing negotiations on various trade
agreements for exchange of tariff concessions.
These agreements, inter alia, included SAARC
Preferential Trading Arrangement (SAPTA),
India - Singapore Comprehensive Economic
Cooperation Agreement (CECA), Free Trade
Agreement (FTA) with the Gulf Co-operation
Council (GCC), Preferential Trade Agreement
(PTA) between India & Mauritius under the
Framework of Comprehensive Economic
Partnership Agreement, India-ASEAN Trade
Negotiations Group, Kula Lumpur and
BIMSTEC-FTA. While providing comments on
India’s negative list finalised for negotiation in
various FTAs, it was emphasised that while the
Ministry of SSI generally supported any proposal
for greater engagement of India in FTAs, it would
be in the interest of India to press for reasonable
protection of its small enterprises in such
negotiations on trade related issues. The long-
term interests of the SSI sector should be borne
in mind while working out the details of these
arrangements and, hence, Ministry of SSI
should be duly consulted at the appropriate
stages.
2.9.0 INTELLECTUALPROPERTY RIGHTS (IPR)
2.9.1 Intellectual Property Rights consist of
Patents, Trade Marks, Industrial Designs, Copy
Rights, Trade Secrets, Geographical
Indications, etc. With the onset of the Trade
Related aspects of Intellectual Property Rights
(TRIPS) agreement under WTO and the
consequent changes made by various
countries, including India, in their IPR laws, the
issues of IPR have gained special relevance
for the SSI sector. It was noticed that changes
of far-reaching consequences were being
effected in the business landscape without the
SSI sector being aware of it. It was also felt that
IPRs requires understanding and attention by
the industry. By protecting their intellectual
property, small scale units could also increase
their competitiveness. IP protection would help
in:
� preventing competitors from copying or
closely imitating a company’s products or
services;
� avoiding wasteful investment in research
& development and marketing;
� creating a corporate identity through a
trademark and branding strategy; and
� increasing the market value of the
company and enhancing access to new
market.
2.9.2 During 2005-06, six of the scheduled
14 Awareness Programmes on Intellectual
Property Rights have already been conducted
in various parts of the country. These
programmes are being organised in association
with the Department of Science and Technology,
National Research Development Corporation of
India, Waterfalls Institute of Technology Transfer
Limited, New Delhi, etc. Some of these
22
programmes were product specific, e.g.,
biotechnology, auto components, leather goods
and footwear, sports goods, glass industry, etc.
In association with World Intellectual Property
Organisation, a short-film on IPRs for small
scale industries is being made.
2.9.3 The Ministry of Small Scale Industry
has proposed a Financial Assistance Scheme
to enable registered small scale / tiny units
adopt patents in India and abroad. The objective
of the scheme is to enable the small scale / tiny
units to convert an original idea / invention /
know-how into working prototype/processes.
2.10.0 BIOTECHNOLOGY
2.101 A Biotechnology Cell has been set up
for the development and promotion of
biotechnology in the small scale sector. To
disseminate information on the use of
biotechnology, a number of sensitisation
programmes in various parts of the country are
being organised in collaboration with the
Department of Biotechnology, Biotech
Consortium India Limited (BCIL) and various
State Government agencies.
2.10.2 During 2005-06, two one-day
sensitisation programmes on biotechnology
(against the target of 10) have already been
conducted. Besides, a three-day advanced
training programme on biotechnology for a group
of 30 officers from the SISIs is scheduled to be
held in January, 2006.
2.01.3 To assist SSI entrepreneurs in getting
basic understanding of the technologies,
products and processes, a set of project profiles
has been prepared in coordination with the
Department of Biotechnology and Biotech
Consortium India Limited (BCIL). The process
of updating project profiles is being carried out
in association with BCIL. BCIL is also preparing
guidelines for setting up biotech industries in
the SME sector.
2.11.0 NATIONAL AWARDS FORSMALL SCALEENTREPRENEURS
2.11.1 To motivate small scale entrepreneurs
to achieve excellence in management of their
units through technological improvements,
innovation, quality upgradation, market
expansion, export development, etc., and
recognise their contribution in these areas, an
incentive-cum-recognition scheme of National
Awards to Small Scale Entrepreneurs is in
operation for several years. The Awards consist
of a certificate, trophy and cash prizes
amounting to Rs. 25,000, Rs. 20,000 and Rs.
15,000 for the first, second and third positions,
respectively. Special Awards at par with the
National Award to an outstanding SC/ST and a
woman entrepreneur have also been introduced
since 1993. Special Recognition Awards
carrying cash prize of Rs. 10,000, a certificate
and a trophy are given to one entrepreneur from
each State/UT.
2.11.2 A Scheme of National Awards for
Research & Development Efforts in Small
Scale Industries has also been instituted to
promote in-house research and development
23
for strengthening technical soundness and
spirit of innovation amongst SSI units. The first,
second and third Awards under this scheme
carry cash prizes of Rs. 25,000, Rs. 20,000
and Rs. 15,000 respectively besides a trophy
and a certificate.
2.11.3 The National Convention of Small, Agro
& Rural Industries and presentation of National
Awards was held on 28.10.2005 at Ashoka
Hotel, New Delhi. Hon’ble President of India, Dr.
A.P.J. Abdul Kalam was the Chief Guest and
distributed the National Awards to the
awardees.
2.12.0 SUB-CONTRACTINGEXCHANGE FORANCILLARYDEVELOPMENT
2.12.1 Ancillarisation and sub contracting
started in India simultaneously with the
Government setting up public sector enterprises
in the core sectors, viz., manufacturing
equipment for defence, railways,
telecommunications, heavy electricals,
electronics, chemicals, fertilisers, petroleum/
petrochemicals and various other engineering
and processing industries and these enterprises
sub-contracting components, sub-systems,
etc., to small scale / ancillary industries that
developed a sound base.
2.12.2 In order to help the vendees/vendors,
Sub-Contracting Exchanges have been set up
by SIDO since the early ‘70s at selected SISIs,
to compile data on the capacities and
capabilities of SSI units in terms of products
manufactured/services rendered. The Sub-
Contracting Exchanges also compile the
requirements of large buyers so that the
requirements and availability could be matched
with a view to increasing the business
opportunities for the SSI units.
2.12.3 Following the announcement of the
policy package in 1991, the scheme of setting
up of Sub-Contracting Exchanges (SCX) by
Industry Association/NGOs was also launched.
Under this scheme, financial assistance up to
Rs. 4.7 lakh is provided for purchasing capital
equipment such as computers and
accessories, suitable software, furniture, etc.,
in the first phase and photocopier machine,
telephone, fax machine, spiral binding & cutting
machine and installation charges in the second
phase, for setting up SCX. A matching grant is
also provided to these Exchanges on tapering
basis towards building rent, stationary , phone /
fax charges, electricity charges and
conveyance at the rate of 50%, 30% and 10%
of the running expenses, not exceeding Rs.
1.25, 0.75 and 0.25 lakh per year respectively
during the initial three years, subject to a ceiling
of Rs. 1.57 lakh per SCX.
2.12.4 59 Sub-Contracting Exchanges have
been sanctioned to and set up by Industry
Associations/NGOs in various parts of the
country up to 30.11.2005. Six more Sub-
contracting Exchanges are likely to be set up
during the remaining months of 2005-06.
2.12.5 Under the existing scheme, Vendor
Development Programmes (VDPs) at National
24
and State levels are also conducted by the SISIs.
These VDPs provide a common platform to
large industries/buyers and SSI/sellers to
interact with each other and establish long term
business linkages. 4 VDPs have been
conducted by the SISIs in different parts of the
country during 2005-06, till 30.11.2005 and about
26 VDPs are likely to be conducted in the
remaining months of 2005-06.
2.13.0 SCHEME OF TOOLROOMS
2.13.1 CENTRAL TOOL ROOM,LUDHIANA
Central Tool Room, Ludhiana was established
by Government of India in technical collaboration
with the Government of Federal Republic of
Germany and active support of Government of
Punjab, for providing services in the area of
tooling (design and manufacture), precision
machining, heat treatment, technical training
and technical consultancy to metal working
industry, in general and small scale industries,
in particular so as to improve the quality and
productivity of such units.
Significant work done during the year: (i)
Established one of the best Rapid Prototyping
Centres in the country; (ii) developed expertise
for tool design and manufacturing of car seat
adjuster; (iii) developed moulds for door closer
and lock for a SSI unit exporting products to
snowing regions of Europe; and (iv) established
special heat treatment process for surgical
tools, dies, moulds, etc.
2.13.2 INDO-GERMAN TOOL ROOM,AHMEDABAD
Indo-German Tool Room, Ahmedabad was
established by the Government of India in
technical collaboration with the Government of
Federal Republic of Germany to meet the
tooling and training needs of the SSI in the field
of tool design and manufacture and training of
technical personnel.
Significant work done during the year: (i) Post
Graduate Diploma in Tool Design & CAD/CAM
Course for a duration of 1 ½ years and (ii) two
vocational training programmes started for
school dropouts were started; and (iii) the Tool
Room secured ISO 9001-2000 certificate.
2.13.3 INDO GERMAN TOOL ROOM,INDORE
Indo-German Tool Room, Indore was
established by the Government of India in
technical collaboration with the Government of
Federal Republic of Germany. The Government
of Madhya Pradesh provided land and building
for the project. The Tool Room was set up to
fulfil the tooling and training needs of the SSI in
the fields of tool design and manufacture and
training of technical personnel in these fields.
Significant work done during the year: The Tool
Room (i) secured ISO 9001-2000 certificate
and; (ii) achieved nearly 100% placement for
various long term trainees.
2.13.4 INDO-GERMAN TOOL ROOM,AURANGABAD
25
Indo-German Tool Room, Aurangabad was
established by the Government of India in
technical collaboration with the Government of
Federal Republic of Germany. The Government
of Maharashtra provided land and building for
the project. The Tool Room has been set up to
fulfil the tooling and training needs of the SSI in
the fields of tool design and manufacture and
training of technical personnel in these fields.
Significant work done during the year: The Tool
Room (i) secured ISO 9001-2000 certificate
and; (ii) aTRTCchieved nearly 100% placement
for various long term trainees.
2.13.4 INDO-GERMAN TOOL ROOM,AURANGABAD
Indo-German Tool Room, Aurangabad was
established by the Government of India in
technical collaboration with the Government of
Federal Republic of Germany. The Government
of Maharashtra provided land and building for
the project. The Tool Room has been set up to
fulfil the tooling and training needs of the SSI in
the fields of tool design and manufacture and
training of technical personnel in these fields.
Significant work done during the year: The Tool
Room (i) secured ISO 14001:2004 certificate
(Environmental Management System); (ii)
started the II & III batches of 12 & 10 trainees
respectively from South Africa for a 1-year course
in tool and die making; (iii) opened sub-centres
at Pune, Mumbai and Nagpur to provide access
to tool room facilities to SSIs located in these
areas; (iv) initiated steps to develop e-learning/
e-teaching practices in tool and die technology
and; (v) achieved nearly 100% placement for the
trainees of its long term courses.
2.13.5 CENTRAL TOOL ROOM &TRAINING CENTRE, KOLKATA
Central Tool Room & Training Centre, Kolkata
was established in 1977-78 under technical co-
operation programme between the
Governments of India and Denmark to upgrade
tooling technology available to the SSI.
Significant work done during the year: (i) The
Centre developed, manufactured and supplied
blanking die for two rupee coins to the
Government of India Mints at Kolkata and
Mumbai with necessary modifications in the
coin design as desired by the Mints. Since these
blanking dies were imported earlier by the Mints,
these supplies have enabled them to save
considerable amount of foreign exchange. (ii)
The Centre is rendering project management
services to the Governments of Nagaland and
Tripura in setting up Mini Tool Room & Training
Centre at Dimapur and Agartala respectively.
2.13.6 CENTRAL TOOL ROOM&TRAINING CENTRE,BHUBANESHWAR
Shri Mahabir Prasad, Minister (SSI&ARI) visited IGTR,Aurangabad
TRTC
26
Central Tool Room & Training Centre,
Bhubaneshwar was set up in 1991 under
Technical Co-operation Programme between
the Governments of India and Denmark.
Significant work done during the year: The Tool
Room (i) developed and manufactured 2 nos. of
coating masks for gold plating of satellite
components, a new development for IISU, ISRO,
Thiruvananthapuram; (ii) secured the
Occupational Health and Safety Administrative
System (OHSAS) 18001 certificate; (iii) conducted
summer vacation training programme for 1008
engineering students (of whom 233 were girls)
from 40 engineering colleges of 5 States; (iv)
manufactured components to be used in tri-cycles
meant for physically challenged persons provided
by the Artificial Limbs Manufacturing Corporation
of the Government of India, Bhubaneshwar; (v)
developed several tooling as import substitution
for SSIs and; (vi) achieved nearly 100% placement
for the trainees of its long term courses.
2.13.7 INDO DANISH TOOL ROOM,JAMSHEDPUR
Indo Danish Tool Room, (formerly Central Tool
Room & Training Centre), Jamshedpur was set
up in 1991 under Technical Co-operation
Programme between the Governments of India
and Denmark.
Significant work done during the year: The Tool
Room (i) achieved nearly 100% placement for
trainees of its long term courses; (ii) conducted
quality workshop for the employees of SSI units;
(iii) undertook two training programmes in 2-
Year Advanced Machinist Course for students
belonging to the SC/ST/Minority (with 30%
seats reserved for women candidates),
sponsored by the Government of Jharkhand.
2.13.8 HAND TOOL DESIGNDEVELOPMENT AND TRAININGCENTRE, NAGAUR.
The Hand Tool Design Development and
Training Centre was set up at Nagaur in
Rajasthan in 1988. The main objective of this
Centre is to develop hand tool industry in the
SSI sector in around Nagaur by providing
consultancy and advisory extension services in
the areas of tooling, heat treatment, metal
finishing, forging and testing and common
facility services to these SSI. The Centre is also
assisting the SSI in adopting modern technology
product design, production process and quality
control for cost reduction and improvement in
profitability. Testing and training facilities are also
provided for upgradation of quality of production
and trained manpower.
Significant work done during the year: The
Institute has been identified for capacity building
under the National Programme for promoting
energy efficiency in the SSI hand tool sector in
India, a programme launched by the Ministry of
SSI, Government of India jointly with UNIDO,
Hand Tool Industries Association & SIDBI.
2.13.9 CENTRAL INSTITUTE OF HANDTOOL, JALANDHAR
The hand tools industry consists of organised
small scale and cottage industry units which
have undergone a rapid expansion. About 80%
27
of hand tool industry is located in and round
Jalandhar in Punjab, Nagaur in Rajasthan,
Puralia in West Bengal and Tumkur in
Karnataka. The hand tool industry plays a vital
role in the economy of the country.
With a view to providing necessary technology
support services in upgrading the hand tool
technology in the country, the Govt. of India set
up the Central Institute of Hand Tools as a
National Institute at Jalandhar as an autonomous
organisation with the assistance of the UNIDO
in 1983.
Significant work done during the year: CAD
courses for women under the Skill Development
Programme were started.
2.13.10 TOOL ROOM & TRAININGCENTRE, GUWAHATI
In order to create facilities for manufacturing
tools & dies and training in tool & die making in
the North Eastern region, setting up of Tool
Room & Training Centre (TRTC) at Guwahati
was approved at an estimated cost of Rs. 13.28
crore. The project is under implementation.
Training activities of the Centre have been
started for the time being in the SISI, Guwahati
campus. During the year (upto November 2005),
the Tool Room conducted 8 short term courses
in which 34 trainees were trained. The Tool
Room is also conducting a two-year Machinist
course, in which 20 trainees are enrolled.
2.13.11 MINI TOOL ROOM SCHEME
A “Mini Tool Room” Scheme has been approved
to help State Governments set up small Tool
Rooms for local training and production facilities
to assist the SSI units in tool & die making. The
scheme provides one-time assistance of upto
90% of the cost of machinery & equipment,
limited to Rs. 9 crore, for setting up a new Mini
Tool Room and 75% cost of machinery &
equipment limited to Rs. 7.5 crore for
upgradation of existing Mini Tool Room. The
balance machinery cost, cost of land and
building and recurring expenditure are funded
by the State Government concerned. The
proposals received from Governments of
Kerala, Madhya Pradesh, Karnataka (Hubli &
Hassan) and West Bengal for upgradation of
their existing tool rooms and proposals from
Governments of Nagaland, Tripura, Jharkhand
(Ranchi & Dumka), and Chhattisgarh for setting
up of new Mini Tool Rooms have been approved
and procurement of machinery & equipment is
in progress.
2.14.0 MARKETINGASSISTANCE ANDEXPORT PROMOTION
2.14.1 PARTICIPATION IN OVERSEASTRADE FAIRS
The SIDO participated in the DIY Show, Japan
(August 25 – 27, 2005), International Autumn
Fair, Nairobi (Kenya) (Sept. 14 – 20, 2005), 88th
MIPEL – The Bag Show, Milan (Italy) (Sept. 22
– 25, 2005), SAITEX – 2005, Johannesburg
(South Africa) and INDEE – 2005, Mexico.
Exhibits of 107 SSI units were displayed in the
SIDO stalls and 26 SSI entrepreneurs visited
the fairs themselves. Exhibits of 100 SSI units
28
are expected to be displayed in the remaining
five International Trade Fairs in the SIDO stalls
during the current financial year.
2.14.2 TRAINING PROGRAMME ONPACKAGING FOR EXPORTS
Four training programmes were organised by SISI,
Mumbai, Indore & Jaipur upto December, 2005
and 117 SSIs benefited in the sanctioned 16
programmes. These programmes are conducted
in association with the Indian Institute of Packaging.
Additional sanction for 6 programmes is being
issued to 4 SISIs during the current financial year.
A total of 22 programmes is likely to be conducted
during 2005-06.
2.14.3 SSI-MDA SCHEME
Rs. 2.85 lakh have been reimbursed to 19 SSI
units for adoption of Bar Code Certificate from
EAN India. More than 70 SSI units are expected
to avail of the financial assistance for adoption
of Bar Code Certificate during the current
financial year.
2.15.0 REGIONAL TESTINGCENTRES/FIELDTESTING STATIONS
2.15.1 REGIONAL TESTING CENTRES
Four Regional Testing Centres (RTCs), set up
at New Delhi, Kolkata, Mumbai and Chennai,
provide testing facilities to small scale industrial
units for raw materials used and semi-finished/
finished products manufactured by them. These
Centres are equipped with the state-of-the-art
indigenous and imported equipment for chemical,
mechanical, metallurgical and electrical test and
also undertake performance tests, type tests and
acceptance tests of semi-finished/finished
products and also calibration jobs for measuring
instruments and equipment. They also develop
testing processes for various products.
RTCs also render technical support to the SSI
units in upgrading the quality of the products
manufactured by them. They provide
consultancy services to SSIs in testing and
quality management and process quality
systems. In order to increase the availability of
qualified manpower to the industry, these
Centres impart training in testing of products to
young persons for gainful employment in Quality
Control Laboratories of various industries. They
also conduct training courses for the workers
sponsored by SSI units on product specific
testing and quality control so that these units
may be in a position to set up their in-house
testing facilities. RTCs also organise awareness
programmes on total quality for household
electrical appliances and allied appliances and
ISO-9000 Quality Management Systems for the
benefit of small scale entrepreneurs.
RTCs also provide testing facilities to the
Bureau of Indian Standards and assist various
Government Departments in testing the
materials procured by them. All the RTCs are
accredited by the internationally recognised
NABL as per ISO 17025 as Testing & Calibration
Laboratories.
During the 10th Plan, an amount of Rs. 30 crore
has been provided for modernisation of the
Regional Testing Centres. The performance of
29
the RTCs during the last three years and
2005-06 (upto November 2005) is given
above.
2.15.2 FIELD TESTING STATIONS
The Government set up Field Testing Stations
at Jaipur, Bhopal, Kolhapur, Hyderabad,
Bangalore Pondicerry, and Chenganacherry, as
extensions of the RTCs, to provide testing
facilities in the areas with clusters of industries
and some strategic areas not served by the
RTCs. These FTSs provide facilities for testing
products like chemicals, dye-stuffs, lamps,
rubber products castings and forgings, paints
and varnishes, domestic electrical appliances,
general engineering goods, etc. The FTSs are
regularly modernising/upgrading their facilities
to provide better service to industries in general
and SSI in particular.
During the 10th Plan, an amount of Rs. 6.5
crore has been provided for the Field Testing
Stations. Their performance of during the
last three years and 2005-06 (upto
November 2005) is summarised below:
Year Revenue Recurring %age of No. of jobs No. of tests
earned expenditure Revenue/ completed performed
(Rs. lakh) (Rs. lakh) expenditure
(self-sufficiency)
2002-03 50.38 81.86 61.79 8004 34508
2003-04 61.62 78.35 78.65 11035 43306
2004-05 82.89 87.79 94.42 15150 57269
2005-06 52.89 64.18 82.41 10590 37424
(upto Nov.2005)
Year Revenue Recurring %age of No. of jobs No. of tests
earned expenditure Revenue/ completed performed
(Rs. lakh) (Rs. lakh) expenditure
(self-sufficiency)
2002-03 238.80 344.30 69.35 12336 134646
2003-04 258.50 343.18 75.32 12409 139569
2004-05 259.74 267.89 96.95 10872 136362
2005-06 149.60 275.34 54.33 7348 91251
(upto Nov.2005)
30
2.16.0 SETTING UP OF TESTINGCENTRES BY INDUSTRYASSOCIATIONS &MODERNISATION/EXPANSION OF QUALITYMARKING CENTRESUNDER THE AEGIS OFSTATE GOVERNMENTS
2.16.1 Under this Scheme, the Government of
India provides one-time capital grant-in-aid equal
to 50% of the cost of testing equipment and
machinery (restricted to Rs. 50 lakh) to the
Industry Associations, which wish to set up and
operate testing laboratories of international
standards and also for modernisation/expansion
of the existing Quality Marking Centres of State
Governments and their autonomous bodies.
Rest of the expenditure on testing machinery and
equipment, land and building and working capital
has to be borne by the Industry Associations/
State Governments concerned. The objective of
the scheme is to promote setting up of testing
centres to offer facilities mainly to industrial units
including SSI located in such parts of the State
which cannot be adequately served by the RTCs/
FTSs for testing quality of raw materials,
components and end products as per the
relevant standard specifications.
2.16.2 The Scheme, originally introduced in
1995 with provision of maximum grant-in-aid of
Rs. 20 lakh only to the Testing Centres run by
Industry Associations, was modified in 1997 to
include the existing Quality Marking Centres run
by the State Governments. The present version
of the Scheme is that modified in 2001.
2.16.3 During the Tenth Plan, there is an outlay
of Rs. 500 lakh for providing Central grant-in-aid
to Industry Associations for setting up of Testing
Laboratories and modernisation of Quality
Marking Centres of the State Governments.
2.16.4 The year-wise expenditure incurred
so far and the number of testing centres
assisted during the current Plan are furnished
below:
Year Expenditure No. of
incurred Centres
assisted
2002-03 9.50 1
2003-04 Nil -
2004-05 40.95 1
2005-06(upto Nil -
November 2005)
2.17.0 TECHNOLOGYUPGRADATION
2.17.1 SMALL INDUSTRY CLUSTERDEVELOPMENT PROGRAMME
2.17.1.1 A scheme on Technology Upgradation
and Management Programme (UPTECH) was
launched in February, 1998 to address the
issues related to technology upgradation and
modernisation of small scale industries on
cluster approach basis. The Scheme, later
renamed as the Small Industry Cluster
Development Programme (SICDP) in 2003,
takes a holistic approach for cluster
development and includes an initial diagnostic
study and trust building exercise, based on
31
which assistance is provided for skill
development, technology upgradation of the
enterprises, marketing, exports, setting up of
common facility centres, etc. Seventy seven
clusters covering twenty three States in the
country have been taken up for development
under the SICDP, including the five National
Programmes for development of toy, stone,
machine tool, lock and hand tool industries
being implemented in collaboration with the
UNIDO. Efforts are made to include under the
Programme clusters in all the States. Out of
the seventy seven clusters under SICDP, the
development work in thirty clusters is being
carried out by the SISIs. For this purpose, cluster
development executives (CDEs) have been
imparted necessary training. Two Centres,
National Resource Development Centre at the
National Institute of Small Industry Extension
Training (NISIET), Hyderabad and International
Centre for Cluster Competitiveness and Growth
(IC3G) at the Entrepreneurship Development
Institute of India (EDII), Gandhinagar have been
established by the Ministry for imparting training
to CDEs, monitoring cluster development work,
assisting formulation of programmes and
policies for cluster development and guidance.
2.17.1.2 BE, 2005-06 for SICDP is Rs. 6.87
crore, including Rs. 0.62 crore for NE region.
Till November 05, an expenditure of Rs. 6.26
crore has been incurred under the Programme.
The 10th Plan outlay for the Programme is Rs.
33 crore, of which an expenditure of Rs. 23.3
crore has been incurred so far.
2.17.1.3 With the approval of the Ministry of
Small Scale Industries, an autonomous trust
for cluster development, named Foundation
for Micro, Small & Medium Enterprises
(MSME) Clusters has been set up by EDII,
Ahmedabad on 09.06.05 with the objective of
playing the role of a think tank to strengthen
the MSME clusters in the country. With the
support of the Ministry of Small Scale
Industries, a national convention on cluster
development was organised by the
Foundation on 1st–2
nd Dec., 2005 for
disseminating the accumulated knowledge
and understanding on clusters among a wider
group of policy makers, planners, practitioners
and academicians.
2.17.2 ISO-9000/ISO-14001CERTIFICATIONREIMBURSEMENT SCHEME
2.17.2.1 The process of economic liberalisation
and market reforms has opened up the Indian
small scale sector to global competition. In
order to enhance the competitive strength of
the small scale sector, the Government
introduced an incentive scheme for their quality
improvement and environment management.
The scheme provides incentive (of upto Rs. 75,
000 per unit) to SSI units which acquire ISO
9000/ISO 14001 certifications. The scheme, in
operation since March 1994, was enlarged to
include reimbursement of expenses for
acquiring ISO 14001 certification also w.e.f. 28th
October 2002.
2.17.2.2 The procedural guidelines, application
forms, etc., have been placed on the SIDO
website, (www.laghu-udyog.com) and
(www.smallindustryindia.com).
32
2.17.2.3 Since its inception, 7789 SSI units
have been benefited upto March, 2005. The
year wise progress of the ISO-9000/ISO-
14001 certification reimbursement scheme
is as under:
motivated to adopt the International quality
system and become competitive in the global
market place.
2.18.0 MODERNISATION OFSIDO WORKSHOPS
This is an ongoing Plan Scheme with the
allocation of Rs. 500 lakh during the 10th Plan
for modernisation of the workshops attached
to the SISIs/Branch (Br.) SISIs. Funds are
provided to the SISIs/Br. SISIs for replacing their
outdated/out-of-order machines. Funds are also
provided for purchase of accessories and
equipment required for developing jigs, fixtures,
dies, tools etc. On these machines, training is
also imparted to the workers sponsored by the
SSI units and unemployed youth seeking jobs
in SSI units.
2.19.0 ENERGY CONSERVATIONPROGRAMME (UNDERTECHNOLOGY UPGRADATIONSCHEME)
In pursuance of the National Programme on
Energy Conservation, SIDO launched this
programme in 1990-91. There are many energy
intensive areas in the SSI sector, such as
foundry, forging, steel re-rolling, glass &
ceramics, bakeries, etc. The source of energy
for them is coke/coal, petroleum products and
electricity. The objectives of taking up the
energy conservation programme are as under:
(i) Educating SSI units on benefits/
advantages of new techniques/
technologies for saving energy.
2.17.2.4 During 2005-06, 4000 SSI units are
expected to be benefited under this scheme.
2.17.3 AWARENESS, MOTIVATIONAL &EDUCATIONAL TRAININGPROGRAMME ON ISO 9000/14001
Simultaneously, an Awareness/Motivational &
Educational Training Programme on ISO-9000
& TQM has been taken up through the SISIs &
RTCs to sensitise the SSI in ISO-9000 and
TQM Quality Systems so that they are
Year No. of Amount ofunits assistance
(Rs. crore)
1993-94 3 0.0161994-95 10 0.0431995-96 48 0.251996-97 54 0.391997-98 85 0.491998-99 174 0.961999-2000 361 2.252000-01 649 4.052001-02 992 6.002002-03 1182 6.992003-04 917 4.772004-05 3314 17.332005-06 2026 9.76
(upto Dec. 2005)Total: 9815 53.30
Average assistance/unit = Rs.54, 314
33
(ii) Undertaking in-depth studies of high
energy consuming SSI clusters and
identifying gaps and potential barriers for
energy conservation, and promoting
adoption of suitable techniques/
technologies to achieve energy
efficiency.
(iii) Encouraging SSI units to adopt energy
audits to improve energy efficiency and
fuel substitution, and monitoring the
implementation of recommendations.
During 2005-06, taking up 30 Awareness and
Motivational – cum - Educational Programmes
on Energy Conservation at the cost of Rs. 1.80
lakh has been allocated to the SISIs for the
benefit of about 900 SSI units.
2.20.0 UPGRADATION OF SIDOWORKSHOPS INTO MINITOOL ROOMS
A Scheme of “Upgradation of SIDO
Workshops into Mini Tool Rooms” was
approved in 1992-93, envisaging conversion of
a few common facility workshops attached to
SISIs/Br. SISIs into Mini Tool Rooms.
Consequently, CNC machines, CAD/CAM
software, etc., have been provided to the
workshops at SISI, Mumbai, Chennai,
Bangalore, Jaipur, Delhi, Kolkata, Kanpur,
Ludhiana, Indore, Patna, Goa, Thrissur,
Guwahati, Jammu and Ranchi and Br. SISI,
Mangalore, Varanasi, Gwalior, Hubli, Allahabad,
etc. CAD/CAM facilities have also been
provided in selected SIDO field offices as per
the need of the area.
2.21.0 INTEGRATEDINFRASTRUCTURALDEVELOPMENT (IID)SCHEME
2.21.1 The Integrated Infrastructural
Development (IID) Scheme was launched in
1994, with the objectives of providing improved
infrastructural facilities to assist establishment
of small scale & tiny units, creating employment
opportunities and increasing exports. The
Scheme covers Districts which are not covered
under the Growth Centres Scheme. The
Scheme provides assistance for creating
developed sites with Infrastructural facilities like
power distribution network, water,
telecommunication, drainage and pollution
control facilities, roads, banks, raw materials
supply, storage and marketing outlets, common
service facilities, technological back up
services, etc. 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 tiny sector. The
Scheme also provides for upgradation/
strengthening of the infrastructural facilities in
the existing old industrial estates.
2.21.2 Under the Scheme, the State / Union
Territory Governments concerned or a good
NGO with sound financial position are required
to select suitable sites, firm up the project
proposals and get the project appraised by
SIDBI. The High Powered Committee under the
Scheme considers the proposals after
recommendation of SIDBI becomes available.
The estimated cost to set up an IID Centre is
34
Rs. 5 crore (excluding cost of land). Central
Government provides 40% grant (subject to a
maximum of Rs. 2 crore) and the remaining
amount could be loan from SIDBI/Banks/
Financial Institutions or State funds.
2.21.3 In order to further streamline the
implementation of IID Scheme, the following
guidelines have been issued:
(a) Proper survey would be carried out before
preparing the proposals to ascertain
potential for setting up of IID Centre.
(b) The IID Scheme should be taken up in
conjunction with other schemes, viz.,
Credit Linked Capital Subsidy Scheme
(CLCSS), Small Industry Cluster
Development Programme (SICDP),
Prime Minister’s Rozgar Yojana (PMRY),
Rural Employment Generation
Programme (REGP), etc. and the States
would ensure inter-Departmental
coordination for this purpose.
(c) Advance booking/registration of plots in
the IID Centres should be encouraged
(d) Possibility of public-private partnership
may be explored by States/Implementing
agencies for maintenance and
management of the completed IID
Centres.
2.21.4 For the growth of small industries in
the North Eastern Region & other special
category States, Government of India relaxed
the funding pattern of this Scheme for the North
Eastern Region (including Sikkim), J&K, H.P.
and Uttaranchal to provide Central grant of upto
80% (subject to a maximum of Rs.4 crore).
2.21.5 Till 31.12.2005, the Central
Government has approved the setting up of 112
centres in various States, including 21 projects
for upgradation of infrastructure in the existing
Industrial Estates. During 2005-06 (upto
December, 2005), 5 new IID Centres and 8
centres for upgradation have been sanctioned.
The outlay for the Scheme for 2005-2006 is
Rs. 30 crore.
2.22.0 COLLECTION OFSTATISTICS OF SSIs
The scheme was started in 1975 with the
objective of collecting, compiling and
disseminating statistical data/information on the
SSI sector. Conduct of Census and sample
surveys, collection of IIP data and updation of
frames for data collection are covered under
the scheme. The scheme is implemented
through the State Directorates of Industries
(SDIs) and District Industries Centres (DICs).
2.22.1 INDEX OF INDUSTRIALPRODUCTION (IIP) FOR SSISECTOR
The objective of IIP is to estimate the growth in
production of the SSI sector. It is compiled on a
quarterly basis. At present SIDO is working out
the growth in production through Index of
Industrial Production (IIP) with the base year
1970. The IIP is based on a basket of 356 items
contributing 77% of SSI production as per the
First Census of SSI. These data are collected
from 2400 units having an annual production of
Rs. 1 crore or more. As a follow up of the Third
35
Census it has been decided to change the base
year from 1970 to 2001-02 and also select a
new basket of products so as to make the IIP
more representative. Accordingly, at all-India
level, a basket of 468 items covering 24,749
industrial units has been selected. These items
contribute about 75.5% of the production of the
SSI Sector. The frame is the database of the
units registered with the State Directorates of
Industries. The frame up to 31.3.2005 has been
updated.
2.22.2 PERFORMANCE OF SSIs
The Office of the DC (SSI) estimates various
performance parameters relating to the growth
of the SSI sector. The time series data on
various economic parameters are given below:
Sr. Year Total SSI Fixed Production (Rs crore) Employment Exports
No. units investment Current Constant (lakh (Rs.(lakhs) (Rs. crore) prices prices persons) crore)
(1993-94)
1 1990-91 67.87 93555 78802 84728 158.34 9664
2 1991-92 70.63 100351 80615 87355 165.99 13883
(4.07) (7.26) (2.30) (3.1) (4.83) (43.66)
3 1992-93 73.51 109623 84413 92246 174.84 17784
(4.07) (9.24) (4.71) (5.6) (5.33) (28.10)
4 1993-94 76.49 115795 98796 98796 182.64 25307
(4.07) (5.63) (17.04) (7.1) (4.46) (42.30)
5 1994-95 79.60 123790 122154 108774 191.40 29068
(4.07) (6.9) (23.64) (10.1) (4.79) (14.86)
6 1995-96 82.84 125750 147712 121175 197.93 36470
(4.07) (1.58) (20.92) (11.40) (3.42) (25.46)
7 1996-97 86.21 130560 167805 134892 205.86 39248
(4.07) (3.82) (13.60) (11.32) (4.00) (7.62)
8 1997-98 89.71 133242 187217 146262.9 213.16 44442
(4.07) (2.05) (11.57) (8.43) (3.55) (13.23)
9 1998-99 93.36 135482 210454 157525.1 220.55 48979
(4.07) (1.68) (12.41) (7.7) (3.46) (10.21)
10 1999-00 97.15 139982 233760 170379.2 229.10 54200
(4.07) (3.32) (11.07) (8.16) (3.88) (10.66)
11 2000-01 101.1 146845 261297 184401.4 238.73 69797
(4.07) (4.90) (11.78) (8.23) (4.21) (28.78)
36
2.22.3 COMPARISON OF THE SSISECTOR WITH THE OVERALLINDUSTRIAL SECTOR
The small-scale sector has maintained a higher
rate of growth than the overall industrial sector.
The comparative growth rates of production
for both the sectors are given below:
12 2001-02 105.21 154349 282270 195613 249.33 71244
(4.07) (5.11) (8.03) (6.06) (4.44) (2.07)
13 2002-03 109.49 162317 311952 210636 260.21 86013
(4.07) (5.16) (10.52) (7.68) (4.36) (20.73)
14 2003-04 113.95 170219 357733 228730 271.42 NA
(4.07) (4.87) (14.68) (8.59) (4.31)
15 2004-05 118.59 178699 418263 251511 282.57 NA
(4.07) (4.98) (16.92) (9.96) (4.11)
Sr. Year Total SSI Fixed Production (Rs crore) Employment Exports
No. units investment Current Constant (lakh (Rs.
(lakhs) (Rs. crore) prices prices persons) crore)
(1993-94)
Year Growth rate Growth rateof SSI of overall
sector (%) industrial sector
1993-94 5.7 6.0
1994-95 10.0 9.1
1995-96 11.5 13.0
1996-97 11.3 6.1
1997-98 9.2 6.7
1998-99 7.8 4.1
1999-2000 7.1 6.7
2000-01 8.0 5.0
2001-02 6.1 2.7
2002-03 7.7 5.7
2003-04 8.6 6.9
2004-05 9.96 8.4
2.22.4 CONTRIBUTION OF SSI TO THEGROSS DOMESTIC PRODUCT(GDP)
Year Contribution of SSI (%)
Total industrial Gross Domestic
production Product (GDP)
1997-98 39.70 7.02
1998-99 39.94 6.81
1999-00 40.02 6.69
2000-01 39.91 6.86
2001-02 39.63 6.67
2002-03 39.48 6.82
2003-04 39.42 6.71
37
Sr. Census/Survey Coverage Number of
No. workers (lakh)
1. Third All India Census of SSI, Registered and unregistered, 249.33
2001-02 SSIs including SSSBEs
2. Annual Survey of Industries, Registered under section 2 77.50
2001-02 m(i) and 2 m (ii) of the Factories
Act. A small portion of
manufacturing SSIs are covered.
3. Sample Survey of Unorganised Non ASI manufacturing units. 370.8
Manufacturing, 2000-01 Includes most of the manufacturing
(56th round NSS) SSIs. Also units working without
fixed premises are also covered.
4. Sample Survey of Unorganised All services activities working with 265.56
Services, 2001-02 (57th round or without fixed premises.
NSS) SSSBEs are included as illustrative
list of services.
5. Total employment among units =2+3+4 713.86
engaged in manufacturing and
services
6. Percentage share of SSI sector =(1/5)*100 34.93%
2.22.5 EMPLOYMENT IN SSI SECTOR
The total employment in the SSI sector
(including small scale service and business
entities (SSSBEs) in the country as per various
Census/Surveys and their coverage is tabulated
below:
2.23.0 CREDIT GUARANTEEFUND SCHEME FORSMALL INDUSTRIES
2.23.1 The Government introduced the Credit
Guarantee Fund Scheme for Small Industries
in May 2000 with the objective of making
available credit to the SSI units, particularly tiny
units, for loans up to Rs. 10 lakh without
collateral/third party guarantees. The scheme
is being operated by the Credit Guarantee Fund
Trust for Small Industries (CGTSI) set up jointly
by the Government of India and SIDBI. The loan
limit under the scheme, which was Rs. 10 lakh
per borrower, has been enhanced to Rs. 25 lakh
per borrower in accordance with the
Comprehensive Policy Package on SSI
announced on 30th August, 2000, when the
scheme was formally launched. Necessary
modifications have been carried out in the
indenture of the Trust to enable the CGTSI to
guarantee loans up to Rs. 25 lakh.
38
2.23.2 The scheme covers collateral free
credit facility (term loan and/or working capital
including non fund based working capital)
extended by eligible lending institutions to new
and existing SSI units as well as Small Scale
Service and Business (Industry related)
Entities (SSSBEs) including Information
Technology and Software Industry up to Rs.
25 lakh per borrowing unit. The guarantee
cover would be up to 75% of the credit,
subject to maximum guarantee limit of Rs.
18.75 lakh. However, the Member Lending
Institutions (MLIs) are allowed to extend
additional credit facilities against collateral
security and/or third party guarantee to the
borrowers already covered under the scheme
in those cases where the credit facility already
covered under the scheme has reached the
ceiling of Rs. 25 lakh. The lending institutions
availing of guarantee from the Trust have to
pay one time guarantee fee of 2.5% and
service fee of 0.75% per annum of the credit
facility sanctioned by the lending institution to
the borrower. Further, as announced in the
“Policy Package for Stepping up Credit to
Small and Medium Enterprises”, 2005, the
guarantee fee has been reduced from 2.5%
to 1.5% for the following categories of loans/
borrowers:
(a) All loans up to Rs. 2.00 lakh.
(b) All eligible women entrepreneurs.
(c) All eligible borrowers located in the NE
region including Sikkim and in Jammu &
Kashmir.
Further, Public Sector Banks will be encouraged
to absorb the annual service fee in excess of
0.25% for all borrowers mentioned in categories
(a) to (c).
2.23.3 The Credit Guarantee Scheme was
initially approved for one year with a corpus of
Rs. 125 crore contributed by the Government
of India and SIDBI in the ratio of 4: 1.
Subsequently, the Government decided to
continue the scheme beyond one year. The
corpus of CGTSI has been enhanced to Rs.
1056.55 crore with the contribution of Rs. 845.24
crore from the GoI and Rs. 211.31 crore from
SIDBI.
2.23.4 As on 30th November 2005, 52 eligible
institutions comprising 28 Public Sector Banks,
10 Private Sector Banks, 11 Regional Rural
Banks (RRBs), National Small Industries
Corporation (NSIC), North Eastern
Development Finance Corporation (NEDFi) and
Small Industries Development Bank of India
(SIDBI) have become Member Lending
Institutions (MLIs) of CGTSI for participating in
the Credit Guarantee Scheme. 34552 proposals
were approved for guarantee cover for
aggregate credit of Rs. 790.47 crore.
2.24.0 MICRO FINANCEPROGRAMME
2.24.1 The Government launched the revised
Micro Finance Programme in 2003-04. The
scheme has been tied up with the existing
programme of SIDBI, which is under operation
since January 1999, by contributing to the
security deposits required from the MFIs/NGOs
to get loan from SIDBI. The Government of India
39
provides funds for Micro Finance Programme
to SIDBI under ‘Portfolio Risk Fund’ (PRF). This
fund is used for security deposit requirement of
the loan amount from the MFIs/NGOs. At
present, SIDBI takes fixed deposit equal to 10%
of the loan amount. The share of MFIs/NGOs
would be 2.5% of the loan amount (i.e., 25% of
the security deposit) and balance 7.5% (i.e., 75%
of the security deposit) is adjusted from the
funds provided by the Government under the
PRF.
2.24.2 As on 30th
November 2005, the
Government has released an amount of Rs. 225
lakh towards PRF, which has been fully utilized
by SIDBI. The funds under PRF are utilised for
extending loans in the hitherto underserved
States like North Eastern States including
Sikkim, Bihar, Jharkhand, West Bengal, Orissa,
Madhya Pradesh, Chattisgarh, Uttar Pradesh,
Jammu & Kashmir, Rajasthan and Uttaranchal.
As on 30th November 2005, cumulative loan
amount of Rs. 34.66 crore has been provided
to MFIs/NGOs under the scheme, thereby
benefiting 1,64,434 persons.
2.25.0 CREDIT LINKED CAPITALSUBSIDY SCHEME(CLCSS)
2.25.1 The Government has been operating
a scheme for technology upgradation for the SSI
called the Credit Linked Capital Subsidy
Scheme (CLCSS). The Scheme aims at
facilitating technology upgradation by providing
upfront capital subsidy to SSI units, including
agro & rural industry units, on institutional
finance (credit) availed of by them for
modernisation of their production equipment
(plant and machinery) and technology. Existing
SSI units registered with the State Directorates
of Industries, which upgrade with the state- of
-the -art technology, with or without expansion
as well as new SSI units which are registered
with the State Directorate of Industries and
which set up their facilities only with the
appropriate eligible and proven technology are
eligible.
2.25.2 The Scheme was launched on
1st October, 2000 for a period of five years or till
the sanction of capital subsidy reached Rs. 600
crore, whichever was earlier. The Small
Industries Development Bank of India (SIDBI)
and the National Bank for Agriculture and Rural
Development (NABARD) are the two nodal
agencies for implementing this Scheme, credit
being made available through eligible Primary
Lending Institutions (PLIs). Eligible PLIs include
scheduled commercial banks, eligible
cooperative banks (other than urban
cooperative banks), eligible Regional Rural
Banks (RRBs), National Small Industries
Corporation (NSIC), State Financial
Corporations (SFCs) and North Eastern
Development Financial Institution (NEDFi).
2.25.3 The guidelines of the Scheme have been
revised from time to time by the Governing and
Technology Approval Board (GTAB) of CLCSS
to include more sub-sectors/products and
improved technologies under the Scheme. List
of 45 approved sub-sectors/products under
the current CLCSS guidelines is as under:
40
(1) Bio tech Industries
(2) Common Effluent Treatment Plants
(3) Corrugated Boxes
(4) Drugs and Pharmaceuticals
(5) Dyes and Intermediates
(6) Industries based on Medicinal and
Aromatic Plants
(7) Plastic Moulded/ Extruded Products and
Parts/ Components
(8) Rubber Processing including Cycle/
Rickshaw Tyres
(9) Food Processing (including Ice Creams)
(10) Poultry Hatcheries & Cattle Feeds
(11) Dimensional Stones (excluding quarrying
and mining)
(12) Glass and Ceramics, including Tiles
(13) Leather and Leather Products, including
Footwear and Garments
(14) Electronic Equipment, viz., Test,
Measuring, Assembly/Manufacturing,
Industrial Process Control; Analytical,
Medical, Electronic Consumer &
Communication, etc.
(15) Fans & Motors
(16) General Light Service (GLS)
(17) Information Technology (Hardware)
(18) Mineral Filled Sheathed Heating Elements
(19) Transformers/Coils/Chokes, including
Solenoid Coils
(20) Wires & Cables
(21) Auto Parts and Components
(22) Bicycle Parts
(23) Combustion Devices/Appliances
(24) Forgings & Hand Tools
(25) Foundries – Steel and Cast Iron
(26) General Engineering Works
(27) Gold Plating and Jewellery
(28) Locks
(29) Steel Furniture
(30) Toys
(31) Non-Ferrous Foundries
(32) Sport Goods
(33) Cosmetics
(34) Readymade Garments
(35) Wooden Furniture
(36) Mineral Water Bottles
(37) Paints
(38) Agricultural Implements and Post Harvest
Equipment
(39) Beneficiation of Graphite and Phosphate
(40) Khadi and Village Industries
(41) Coir and Coir Products
(42) Steel Re-rolling and/or Pencil Ingot Making
(43) Zinc Sulphate
(44) Welding Electrodes
(45) Sewing Machines
2.25.5 The amount of subsidy sanctioned
during 2001-02 and 2005-06 (April - November,
2005) is Rs. 24.09 crore (approx.). However, most
of it (Rs. 13.6 crore approx.) has been sanctioned
during 2004-05. The year-wise amount of
subsidy disbursed and number of units
assisted under the Scheme are given below:
41
2.25.6 To accelerate the pace of implementa-
tion of the Scheme and in the light of the experience
gathered in implementing the Scheme, the on-
going CLCSS has been amended:
Year No. of units Amount of
assisted sanctioned subsidy
(Rs. lakh)
2001-02 9 21.36
2002-03 47 93.96
2003-04 150 374.90
2004-05 526 1359.78
2005-06* 203 559.46
Total 935 2409.46
* April-November 2005
(a) to raise the ceiling on loans under the
Scheme from Rs. 40 lakh to Rs. 1 crore;
(b) to raise the rate of capital subsidy from
12 per cent to 15 per cent;
(c) to calculate the admissible capital
subsidy with reference to the purchase
price of plant and machinery, instead of
the term loan disbursed to the beneficiary
unit;
(d) to do away with the practice of
categorisation of SSI units into slabs on
the basis of their present investment for
determining the eligible subsidy; and
(e) to extend the validity of the Scheme upto
31st March, 2007.
Shri Pranab Mukherjee, Defence Minister inaugurating the National Expo of Small Agro & Rural Industries
42
3.1.0 National Small Industries
Corporation Limited (NSIC) has completed
50 years of its service to the small
enterprises. During this period, the
Corporation provided a wide range of
services to the SSI sector, in the fields of
marketing, equipment financing, technology
upgradation, exports, training and common
facilities. Over these five decades of,
growth, development and transition, NSIC
has proved its strength within the country
and abroad by promoting modernisation,
quality consciousness, strengthening of
linkages of the small with large, medium
enterprises and enhancing exports of the
SSI sector.
3.1.1 NSIC carries forward its mission to
assist small enterprises with a set of schemes
designed to put them in a competitive and
advantageous position, after drawing lessons
from the result of the schemes implemented in
the past on its own overall financial health. The
schemes now comprise facilitating marketing
support, credit support, technology support and
other support services.
NATIONAL SMALL INDUSTRIESCORPORATION LTD.
3.2.0 ORGANISATIONAL SET -UP
The Corporation is manned by a team of
professionals at different levels and delivers its
assistance through:
� 6 Zonal Offices located at Mumbai,
Chennai, Kolkata, Hyderabad, Delhi and
Noida.
� 27 Branch Offices and 19 Sub-Offices
over States.
� 5 Technical Service Centres located at
Chennai, Howrah, Hyderabad, Okhla and
Rajkot.
� 3 Technical Service Extension Centres
located at Aligarh, Rajpura and
Guwahati.
� 2 Software Technology Parks – one at
Okhla, New Delhi and the other at
Chennai.
� 2 Offices outside India – at Dubai
(UAE) and Johannesburg (South
Africa).
Chapter III
43
3.3.0 SCHEMES OF THECORPORATION
3.3.1 Marketing Services
Marketing is critical to the growth and survival
of small enterprises in today’s intensely
competitive market. NSIC acts as a facilitator
to promote SSI products and has devised a
number of schemes to support small
enterprises in their marketing efforts, both within
and outside the country. These schemes are
briefly described below:
� Consortia and Tender Marketing: In their
individual capacity, small enterprises face
problems to procure and execute large
orders, which inhibit their growth as well
as graduation. NSIC, accordingly, forms
consortia of units manufacturing the
same products, explores the market and
secures orders for bulk quantities. These
orders are then distributed among the SSI
units in tune with their production capacity.
Testing facilities are also provided to help
these units ensure that the quality of their
products conforms with the standard
specifications.
� Single Point Registration for Government
Purchases: NSIC operates a Single Point
Registration Scheme, wherein the
registered SSI units get purchase
preference in Government purchases.
The units registered under this scheme
get the following facilities :
� Advance intimation of tenders
issued by DGS&D.
� Issue of tender sets free of cost.
� Exemption from payment of earnest
money deposit.
� Waiver of security deposit up to the
monetary limit for which the unit is
registered.
� Issue of competency certificate in
case the value of an order exceeds
the monetary limit, after due
verification.
� Exhibitions and Technology Fairs: To
showcase the competencies of the SSI
and to enhance their market access,
NSIC participates in select International
and National Exhibitions and Trade Fairs
every year and facilitates participation
of the small enterprises by providing
them concessions in rentals, etc.
Participation in these events exposes
the SSI units to international practices
and enhances their marketing
prospects.
� Export of Products and Projects: NSIC
facilitates exports of products and
projects of the SSI to other countries. The
major areas of operation are:
� Export of products such as
handicrafts, leather items, hand
tools, pipes/fittings, builders’
hardware, etc.
� Supply of small industry projects on
turnkey basis.
� Export of IT solutions from India.
44
3.3.2 Financing
� Facilitation of Finance through
Commercial Banks: In order to ensure
smooth credit flow to small enterprises,
NSIC has entered into strategic alliances
with commercial banks for providing long-
term/working capital financing of the small
enterprises across the country. The
arrangement envisages forwarding of
loan applications of the interested small
enterprises by NSIC to the banks for
sanction of loans.
� NSIC also provides limited finance for
equipment and in addition financing for
procurement of raw material and
marketing activities (short term)
3.3.3 Technology Services
Technology is the key to enhancing a company’s
competitive advantage. Small enterprises need
to develop and implement suitable technology
strategy, in addition to financial, marketing and
operational strategies, and adopt that which
helps integrate their operations with their
environment, customers and suppliers.
NSIC offers small units the following support
services through its Technical Services Centres
and Extension Centres:
Advising on application of new techniques
� Material testing facilities through
accredited laboratories.
� Product design including CAD/CAM.
� Common facility support in machining,
EDM, CNC, etc.
3.3.4 Support Services
� Infomediary Services
Information plays a vital role in the success of
any business. Recognising the importance of
information and its relevance to the SSI units,
NSIC provides Infomediary Services to small
units. Besides hosting a web site
(www.nsic.co.in), NSIC hosts sector specific
portals for focused information dissemination.
Under this scheme, small units can become
members and avail of a number of value-added
services. Some important services are:
� Supplier database.
� Market intelligence database.
� Energy and environment services at
selected centres.
� Classroom and practical training for skill
upgradation.
NSIC Technical Services Centres are
located at the following places:
Location Focus area
Chennai Leather & footwear
Howrah General engineering
Hyderabad Electronics & computer
application
New Delhi Machine tools & related
activities
Rajkot Energy audit & energy
conservation activities
Rajpura Domestic electrical appliances
Aligarh Lock cluster & die and tool
making
45
� Technology providers’ database.
� Information providers’ database.
� Linkages with relevant institutions.
� E to E services.
� E to B services.
� Value additions like database/
directories on who makes machines,
who makes components, spare
capacity bulletin boards, discussion
forums, virtual exhibitions, etc.
� Mentoring and Advisory Services
Inadequate management skills are often the
cause of non-performance of small enterprises.
NSIC’s mentoring and advisory services are
aimed at addressing this impediment to growth.
It offers mentor-mentee relationship in which the
mentor, a person with wide experience in
running his own business, provides his services
to an individual or a group of units. An advisor, a
senior professional, generally retired and a
specialist in a specific area assists in the
process. Mentors and advisors provide the
necessary professional and moral support in
the early lifecycle of an enterprise or to existing
units facing critical operational problems.
� Performance and Credit Rating
Scheme for Small Industries
To enable small enterprises to diagnose the
strength and weaknesses of their existing
operations and take corrective measures to
enhance their organisational strengths, a need
was felt for introducing a Rating Scheme
specially designed for the small enterprises.
The Rating Scheme seeks to encourage the
small enterprise increase their productivity,
since a good rating would enhance their
acceptability in the market and also make
access to credit quicker and cheaper and thus
help reduce the cost of credit. Besides, the
rating would also infuse a sense of confidence
amongst the buyers of SSI products. With
these objectives, Government of India has
appointed NSIC as the implementing agency to
operate the Performance and Credit Rating
Scheme for small enterprises. The scheme is
being operated through accredited rating
agencies in the country like CARE, CRISIL,
D&B, FITCH, ICRA and ONICRA. Government
provides financial assistance to small
enterprises to the extent of 75 per cent of the
cost of rating, subject to a maximum of
Rs. 40, 000.
� Software Technology Parks
NSIC Software Technology Parks (STPs)
facilitate small industries in setting up 100 per
cent export-oriented units for software exports.
They also act as nodal points to activate
software exports directly through NSIC. These
STPs extend support in terms of the requisite
infrastructure to the SSI units to start business
operations with a minimum lead time. The
scheme is governed by the STPI regulations of
the Department of Information Technology,
Government of India. NSIC established the first
STP at Okhla, New Delhi in 1995 and second
in Chennai in 2001. Several small scale units
have taken advantage of these parks and
contributed export earnings to the exchequer.
46
� International Consultancy Services
For the last five decades, NSIC has acquired
various skill sets in the development process
of small enterprises. These skills are being
networked to offer consultancy services for
other developing countries. This activity was
started during 2004-05 and is expected to
occupy a place in the future service profile of
the Corporation. The areas of consultancy are
as listed below:
� Capacity Building
� Policy & Institutional Framework
� Entrepreneurship Development
� Business Development Services
3.4.0 HUMAN RESOURCEDEVELOPMENT &TRAINING
Human resource is the essence in any
organisation. In order to keep abreast with the
changing technology and advancements in
various fields, the Corporation strived to keep
its human resource current with latest
developments relating to their functional areas.
NSIC Corporate office and nine major branch
offices are certified for ISO 9001-2000.
Continuous efforts are put in to identify the
training needs and evolve suitable training plans
to fulfil the identified needs.
Besides, a number of officials were also
nominated for domestic training programmes,
seminars and workshops conducted by
professional bodies like FICCI, CII, NIESBUD,
SCOPE, NISIET, Associated Chambers of
Commerce & Industry of India, Indo African
Society, WASME, IMA, CBI Academy, FIEO,
ASSOCHAM, Institute of Socio Economic
Research & Action, Indian Machine Tool
Manufacturers Association, Logic Consultants
(P) Ltd. and PHD Chamber of Commerce and
Industry.
3.5.0 MAJOR EVENTS DURING2005-06
� Techmart India’ 2005 (14-27
November, 2005)
NSIC organised Techmart India ’2005, the
13th International Technology Fair coinciding with
Shri Mahabir Prasad, Hon’ble Union Minister of SSI and ARIpaid a visit to Techmart India 2005. Accompanying the Hon’ble
Minister are Shri H.P. Kumar, CMD, NSIC and Shri C.Jose,Chairman, Coir Board
47
India International Trade Fair at Pragati Maidan,
New Delhi. The event was sponsored by the
Ministry of SSI.
13th series of Techmart India’ 2005, received
tremendous response from trade and
industry. More than 230 units, including those
in the North Eastern Region, participated in
the event.
“North East Panorama”, a special display of
products from the North Eastern States, was
organised as part of Techmart India’ 2005 to
provide marketing opportunities to them.
Some of the items displayed were powder
coating machines, automatic filling & packaging
machines, tool room machines, pumps &
motors, abrasives, decoilers, refractories,
testing machines, furnaces, auto parts, R.O.
systems and water purifiers, communications
systems, public address systems, hand tools,
corrugated roofing sheets, switches & other
electrical items, genset & grass cutting
machines, automatic papad and roti making
machines, gem stone drilling and polishing
machines, high pressure liquid purification
systems, etc.
Foreign delegates from Sri Lanka, South Africa,
Congo, Saudi Arabia, Nigeria, Russia, Mexico,
Spain, Zimbabwe, Mauritius, Cyprus and
Bahrain visited Techmart.
NSIC was awarded Gold Medal for “Special
Display of North East Sector” in IITF’ 2005.
� Buyer -Seller meets: Bulk and
Government departmental buyers such
as the Railways, Defence,
Communications and large companies
are invited to participate in buyer-seller
meets to enrich SSI unit’s knowledge
regarding terms and conditions, quality
standards, etc. required by these buyers.
These programmes are aimed at vendor
development from among SSI units for
the bulk manufacturers.
� Third Commonwealth India Small
Business Competitiveness Development
Programme (20 - 26 November, 2005)
National Small Industries Corporation, in
association with Commonwealth Secretariat,
London (COMSEC) has been hosting a series
of pan-Commonwealth institution building
programmes on Small Business
Competitiveness Development. These
programmes focus at building and developing
institutional capacity on competitive small
business policies and strategies for
Commonwealth developing states.
Shri Anupam Dasgupta, Secretary, Ministry of SSI & ARIinspecting the handicrafts exhibited by Woman Entrepreneurfrom Rajasthan in Techmart 2005. Also seen in the picture is
Shri H.P. Kumar, CMD, NSIC
48
Shri Mahabir Prasad, Hon’ble Union Minister of SSI and ARI is seen inaugurating the third Commonwealth-India Small BusinessCompetitiveness Development Programme organised by NSIC
NSIC organised a seminar on “Innovative Financing for Small Enterprise Development” on September 26, 2005 at New Delhi. Theseminar was the part of the “National Expo of Small, Agro and Rural Industries” organised by Ministry of SSI and ARI from
September 26 to 29, 2005 at New Delhi. Dr. Syeda Hameed, Member, Planning Commission inaugurated the seminar. Also seen inthe picture are Shri Anupam Dasgupta, Secretary, Ministry of SSI & ARI, Shri Satyanada Mishra, AS&DC SSI and Shri H.P. Kumar,
CMD, NSIC, Shri B.D. Narang, Former Chairman, Oriental Bank of Commerce, Shri C. Chandran, CEO, KVIC
49
The third programme in this series was held at
New Delhi during 20 – 26 November, 2005. The
theme of the programme was “Networking the
Commonwealth SMEs through sharing best
practices for enhanced competitiveness”. The
programme was inaugurated by Shri Mahabir
Prasad, Hon’ble Union Minister of SSI & ARI and
the keynote address was delivered by Shri
Anupam Dasgupta, Secretary to Government
of India, Ministries of SSI & ARI.
An Agreement on Mutual Cooperation was
also signed between NSIC and Pacific Islands
Forum Secretarial at the inaugural session of
the programme. The objective of this
agreement is to enhance the cooperation
between India and the Pacif ic Islands
countries in the development of their SME
activities.
50
4.0 Entrepreneurship Development and
Training is one of the key elements for
development of small scale industries,
particularly, the first generation entrepreneurs. The
Indian Institute of Entrepreneurship (IIE),
Guwahati; the National Institute of Small Industry
Extension Training (NISIET), Hyderabad and the
National Institute of Entrepreneurship and Small
Business Development (NIESBUD), NOIDA have
been set up as national – level institutions for
training and entrepreneurship development in the
SSI Sector. To promote and assist
entrepreneurship development in the country, the
Ministry implements (in addition to the schemes
of SIDO) two important schemes, namely,
Promotion of Entrepreneurship Development
Institutions (EDI) and Scheme of National
Entrepreneurship Development Board (NEDB).
4.1 ENTREPRENEURSHIPDEVELOPMENTINSTITUTIONS (EDI)SCHEME
Under the EDI Scheme, grant is given for setting
up of new Entrepreneurship Development
TRAINING AND ENTREPRENEURSHIPDEVELOPMENT
Chapter IV
Institutions (EDIs) and also for upgradation and
modernisation of existing EDIs in the country.
Under the scheme, a matching grant of 50 per
cent, subject to a ceiling of Rs. 1 crore is
provided for building, equipment, training aids,
etc. The balance is contributed by the State
Governments/Financial Institutions. During
2005-06, a budget provision of Rs. 200 lakh has
been made against which Rs. 155 lakh has
already been released.
4.2 NATIONALENTREPRENEURSHIPDEVELOPMENT BOARD(NEDB) SCHEME
Government of India has adopted several
pol icies, launched new schemes and
programmes for entrepreneurship
development and established a number of
entrepreneurship development institutions
in the country. In the changed
circumstances, there was no functional or
organisational necessity of continuing with
the NEDB. Accordingly, the NEDB has
been abolished. Though the Board has
51
been abolished, the schemes implemented
under the NEDB Scheme are still being
implemented by the Ministry of Small
Scale Industries.
Under the scheme, a grant is provided to
eligible institutions for setting up
Entrepreneurship and Business Development
Centres in Universities/Colleges. Grant is also
given for setting up incubators. Reputed
organisations engaged in the entrepreneurship
development are also provided grants under
the scheme for organising workshops/
seminars and conducting research studies
relevant to entrepreneurship development.
During 2005-06, a budget provision of Rs. 50
lakh has been made against which Rs. 35.15
lakh has already been released. To make this
scheme more focused, the guidelines are
being revised.
4.3 INDIAN INSTITUTE OFENTREPRENEURSHIP(IIE), GUWAHATI
4.3.1 Indian Institute of Entrepreneurship
(IIE) is completing 12th year of its operation on
31st March 2006. The Institute organises training
programmes and undertakes research and
consultancy activities in the field of promotion
of small industry and entrepreneurship. Since
its establishment and upto January 2006, the
Institute has organised 903 training
programmes/workshops/seminars/meets
where 27976 participants participated.
4.3.2 The types and number of training
programmes organised and number of
participants trained during 2004-05 and
2005-2006 (up to January 2006) and expected
achievement for the year are as under:
Sr. Type of Programme 2004-2005 2005-2006
No (Up to January 2006)
No of No of No of No of
Progra- Partici- Progra- Parti-
mmes pants mmes cipants
1 Promotion of New Entrepreneurs (PNE) 44 1487 27 656
2 Growth of Existing Entrepreneurs (GEE) 49 1621 50 1767
3 Entrepreneurship Education (EE) 24 1121 27 1174
4 Creation of Environment for 05 98 05 116
Entrepreneurship(CEE)
5 Information Technology(IT) 04 70 04 49
6 Seminar & Workshop (S&W) 03 232 02 76
7 Others (Modern Office Practice) 01 15 01 03
Total 130 4644 116 3841
52
4.3.3 Promotion of New Enterprises
Promotion of new entrepreneurs has been the
major focus area of training organised by IIE.
The details of programmes conducted are
as under:
The Institute is continuing its Rural Industries
Programme (RIP) in Meghalaya, Manipur and
Barpeta in Assam with the help of SIDBI.
4.3.4 Growth of Existing Entrepreneurs: The
Institute organised 46 programmes for the
beneficiaries of the Rural Employment
Generation Programme implemented by the
KVIC, in which 1673 beneficiaries were trained
till January 2006. By the end of March 2006, the
Institute would organise 8 more programmes
of this kind. At the instance of the Ministry of
SSI, the Institute organised one comprehensive
skill upgradation programme on gem stone
cutting and polishing for entrepreneurs of the
North Eastern Region in which 23
entrepreneurs participated. The Institute also
organised two programmes to create
awareness of export opportunities, benefiting
50 prospective entrepreneurs. At the instance
of the North Eastern Council, Shillong, the
Institute organised one programme on Quality
Planning and Management for Small
Enterprises. The programme was attended by
21 prospecting entrepreneurs. The Institute
also continued its efforts on development of
cane and bamboo cluster at Dimapur in
Nagaland.
4.3.5 Creation of Environment for
Entrepreneurship: Considering the importance
of creating environment for entrepreneurship
development, the Institute organised
programmes for orientation of the support
officials. During the year (up to January 2006)
the Institute organised 5 such programmes,
where 116 participants participated. The details
are as under:
Sl. Type No. of No. of
No. Progra- Partici-
mmes pants
1. General EDP 4 105
2. Women EDP 6 150
3. Developing 4 98
Entrepreneurship
and Marketing
Strategy for
the Youth of
Char Areas
4. New Enterprises 2 52
Creation on Coir
Products
5. EDP on Food 2 48
Processing
6. New Enterprise 2 45
Creation on
Selected Sectors
7. EDP for PMRY 2 44
Beneficiaries
8. EDP for Veterinary 1 13
Graduates of
Nagaland
9. Turnkey EDP 1 27
10. EDP for Science & 3 74
Technology
Entrepreneurs
Total 27 656
53
4.3.6 Entrepreneurship Education: Creating
awareness among and orientation of college
and university teachers on entrepreneurship has
been one of the core activities of the Institute.
The Institute organised three Teachers’ Training
Programmes in entrepreneurship for school,
college and university teachers. In addition, the
Institute also organised 24 programmes for
college students till January 2006.
4.3.7 Information Technology: Other than
entrepreneurship-oriented activity, the Institute
Sl. Type of No. of No. of
No. Programme Progra- Partici-
mmes pants
1 Management 1 21
Development
Programme
for functionaries
of NBCFDC
2 Entrepreneurship 1 23
and Industrial
Extension for
officials of
Directorate of
Industries,
Meghalaya
3 Trainers ’ Training 1 23
Programmes for
NGOs
4 Workshop on Project 2 49
Identification,
Formulation and
Appraisal for DIC
officials of
Uttaranchal
Total 5 116
organises short and long duration courses on
Information Technology. At the instance of the
North Eastern Council, Shillong, the Institute
organised two Teachers’ Training Programmes
on Computer Application Skills of six months
each till January 2006. The Institute also
organised two Certificate Courses in Basic
Computer Application. 49 persons took part in
these programmes.
4.3.8 Workshops and Meets: The Institute
has been organising seminars, workshops,
meets and conferences to provide forum for
interaction among the agencies involved in
promotion of small industry and
entrepreneurship, including prospective and
existing entrepreneurs. During the year, the
Institute, in association with the American
Soybean Association, organised one workshop
on poultry & livestock based enterprises. The
Institute also organised one Bankers Meet at
Barpeta, Assam, to create awareness of small
scale financing involving bankers, district
administration and DICC officials.
4.3.9 The Institute organised a three day
Exhibition cum Counselling of Cane & Bamboo
Products at Dimapur during 23 - 25 August
2005, as part of its Cluster Development
Initiatives at Dimapur, Nagaland. The main
purpose of the exhibition was to document the
products of the cluster actors and counselling
them in regard to their products.
4.10.1 Business Facilitation & Development
Centre (BFDC) is a wing of the IIE to provide
support services to small enterprises in the
North Eastern Region of India including Sikkim.
54
The BFDC has been positioned to help the first
generation entrepreneurs who suffer heavily due
to lack of information regarding business
venture opportunities, market details of
machinery and raw material suppliers as well
as for their products, technical and financial
constraints, etc.
4.10.2 The BFDC started functioning in mid
April 2005. A core monitoring committee of
BFDC has been constituted with members from
NSIC, SISI, Arunachal Pradesh State
Commission for Women and Assam Small
Scale Entrepreneurs Association. During this
period, 128 project reports were prepared and
submitted to the commercial banks and NEDFi
for finance, out of which financial assistance
for 58 projects was sanctioned. It also provided
counselling to 505 entrepreneurs for opportunity
identification and selection of projects and
arranged training link-up for 12 entrepreneurs.
The Centre also completed 18 market
surveys and provided consultancy services to
33 entrepreneurs. It also assisted 15
entrepreneurs in getting statutory clearances
and provided bank/financial institution liaison
and linkage services to 35 entrepreneurs during
the period.
4.3.11 The Institute completed three research
and consultancy assignments during the year
and four are underway:
4.3.12 The Institute published the modified
version of Reading Material for
Entrepreneurship Awareness Camps. The
Institute also publishes a quarterly IIE
Newsletter, which highlights the activities of the
Institute and caters to the information needs of
the entrepreneurs of North East.
4.4 NATIONAL INSTITUTE OFSMALL INDUSTRYEXTENSION TRAINING(NISIET)
4.4.1 NISIET was set up as a national – level
institute in 1960 by the Government of India with
the charter of assisting in the promotion,
development, and modernisation of small scale
industries in the country. With its expertise in the
areas of entrepreneurship, policy, technology,
management, and information services, the
Institute is consistently assisting the SMEs in
facing with confidence the challenges brought
about by globalisation and the impact of IT on their
businesses. NISIET’s role has benefited not only
the Indian SME but also those in other developing
countries and helped in promoting self-employment
and enterprise development. The Institute is
constantly evolving with time, modifying its focus
with the emerging needs of SMEs, providing them
solutions in the form of consultancy, training,
research, and education to retain their competitive
edge in ever-changing markets.
4.4.2 The management of the Institute rests
with the Society, the Governing Council and the
Executive Committee, all appointed by the
Government of India. The Governing Council
acts through the Principal Director. The
Principal Director, the academic and executive
head of NISIET, functions under the guidance
of the Executive Committee/Governing Council/
Society. The academic activities are organised
55
through centres of excellence and theme
focused cells. The Academic Council is the
nucleus coordinating body, which formulates
academic activities and programmes with
quantitative and qualitative benchmarks by
providing a framework for assessment and
evaluation addressing contextual variations.
4.4.3 Training Activities
The academic performance indicators for
2004-05 (actual) and for the period April -
November 2005 (actual) and the projection for
the remaining four months of 2005-06 are
presented below:
Programmes 2005-06April – November December ’05– Total
2005 March ‘06(actuals) (Projected)
No. of No. of No. of No. of No. of No. ofProgra- Partici- Progra- Partici- Progra- Partici-
mmes pants mmes pants mmes pantsEntrepreneur-ship DevelopmentProgrammes
EDPs under Rajiv Yuva 36 2480 15 750 51 3230Shakthi Scheme of A.P.for Unemployed YouthCounselling, Re-training and 40 1977 24 1200 64 3177Re-deployment of rationalisedemployees of CPSUs
EDPs on Food Processing Industries 26 726 — — 26 726
Rural Entrepreneurship Development 5 100 10 200 15 300Programmes in RajasthanOther EDPs 13 485 10 300 23 785
Other ProgrammesNational:
Announced 11 113 7 70 18 183Sponsored 35 911 15 300 50 1211
International:Announced 12 127 06 90 18 217Sponsored 02 14 — — 02 14
Educational:PG Diploma 10 100 — — 10 100IT 09 162 4 100 13 262IGNOU 03 93 — — 03 93
Seminars and Workshops 02 105 4 200 06 305Consultancy & Research 16 — 4 — 20 —
Total 220 7393 99 3210 319 10603
56
4.4.4 Research and Consultancy
During 2005-06, the Institute took up the
following research and consultancy projects:
� Study on Demand and Supply
Assessment of Ozone Deflecting
Substances in India, sponsored by the
Ministry of Environment and Forests,
Government of India.
� Technical Break-up Unit/Interface of KVIC.
� Handholding and Monitoring Services for
20 Clusters in the Country.
� Project on Crochet Lace Cluster at
Narsapur, West Godavari District, Andhra
Pradesh.
� Study on Curriculum Models for
Entrepreneurship Development,
sponsored by the Ministry of SSI,
Government of India.
� Study on Competency Mapping of Indian
SMEs for Global Promotion, sponsored
by the Ministry of SSI, Government of
India.
� Study on Self-sustainability of Information
Support Facilities in and around industrial
clusters (particularly of SMEs) sponsored
by the Department of Scientific and
Industrial Research, Government of India.
� Consultancy Services on Micro Enterprise
Mapping of Self-Help Groups in the
Districts of Rajasthan, sponsored by the
Rural Non-Farm Development Agency
(RUDA), Jaipur.
� Study on Entrepreneurship
Development Education in Professional
Colleges of select States in India,
sponsored by Ministry of SSI,
Government of India.
� Extending Escort Services for Setting up
of Industrial Units at Tribal Industrial
Estate, Cherlapally, Hyderabad,
sponsored by the A.P. Scheduled Tribes
Cooperative Finance Corporation Ltd.,
Andhra Pradesh.
� Promotion of Self-employment Activities
among the Tribal Youth in Andhra
Pradesh, sponsored by the A.P.
Scheduled Tribes Cooperative Finance
Corporation Ltd., Andhra Pradesh.
� Industrial Potential of Packaging
Industries at Visakhapatnam, Andhra
Pradesh, sponsored by the Municipal
Corporation of Visakhapatnam, Andhra
Pradesh.
� Evaluation of Training Programmes under
NORAD, sponsored by the Andhra
Pradesh Women’s Cooperative Finance
Corporation Ltd., Hyderabad.
� Evaluation of Schemes implemented by
Maulana Azad Arthik Vikas Mahamandal,
Mumbai.
� Preparation of Business Plan for
Handicraft Clusters, sponsored by
the Development Commissioner
(Handicrafts), Government of India.
4.4.5 NISIET Initiatives on ClusterDevelopment
4.4.5.1 NISIET initiatives in this field are
centred around handholding and monitoring
57
services, training, consultancy, research, etc.
NISIET has already trained Government
officials from States like Uttar Pradesh,
Andhra Pradesh, Kerala and the North
Eastern Region, and of financial institutions
like Andhra Bank, SBH, and customised
programmes for the officials of Canara Bank
and NABARD. As on date, NISIET is involved
in developing 21 clusters with the funding
support of Development Commissioner
(Small Scale Industries), Ministry of SSI
across the country.
4.4.5.2 Successful case studies are under
preparation highlighting usefulness of the
interventions in all the clusters. Preliminary
results have been encouraging, reflecting
sincere initiatives in the field by the CDEs and
the SISIs with active support by NISIET which
has emerged as a center of excellence to cater
to the needs of not only the SME clusters but
also rural & artisan clusters in the country.
NISIET is also working on preparation of
business plan for cluster development in
Handicrafts at the request of the Office of
Development Commissioner (Handicrafts),
Government of India.
4.4.6 Financial Performance
Income target fixed for the year is Rs. 605.30
lakh against which the actual income realised,
as on 30th November 2005 is Rs. 466.15 lakh.
The target for the year is expected to be achieved
by 31st March 2006.
4.5 NATIONAL INSTITUTEFOR ENTREPRENEURSHIPAND SMALL BUSINESSDEVELOPMENT(NIESBUD)
4.5.1 The National Institute for
Entrepreneurship & Small Business
Development (NIESBUD) is a registered society
under the Ministry of Small Scale Industries,
Government of India. The major activities of the
Institute include development of model syllabi
for training of various target groups; providing
effective training strategies, methodology,
manuals and tools; facilitating and supporting
Central/State Governments and other agencies
in executing programmes of entrepreneurship
and small business development; maximising
benefits and accelerating the process of
58
entrepreneurship development; conducting
programmes for motivators, trainers and
entrepreneurs which are commonly not
undertaken by other agencies and organising
activities which help in developing an
entrepreneurial culture in the society.
4.5.2 During April - November, 2005, the
Institute has organised 16 training programmes
with 334 participants, as against of target of 32
training programmes for 2005-06.
4.5.3 11 training programmes as under
were organised for trainers/promoters, which
were attended by 195 persons:
(a). PRADAN (Professional Assistance for
Development Action), a five day
Accreditation Programme on
Entrepreneurship Motivation Training
(First Phase) for 18 professionals.
(b). On a request received from Uttar Pradesh
Industrial Consultancy Organisation
(UPICO), a one-week Awareness
Programme on Achievement Motivation.
(c). A special training programme on Capacity
Building for Field Functionaries – Project
Leaders and Field Officers – of
Chetanalaya, a Non-Governmental
Organisation doing considerable work for
Self Help Groups (SHGs) and Co-
operatives in urban areas.
(d). At the request of the Department of
Women and Child Welfare, Ministry of
Human Resource Development, a series
of 2 Sensitisation Programmes of 10 days
each, for Business Counsellors/
Consultants of Swa Shakti Project.
(e). A One-week Business Advisors’ Training
Programme, which was attended by
participants from the Directorate of
Industries; Government of Uttaranchal,
Coir Board and Union Ministry of Urban
Employment and Poverty Alleviation.
(f). A training programme on Planning &
Organising EDPs for the Faculty of
Apparel Training & Design Centre (ATDC)
which focused on familiarising the
participants with techniques of designing
EDPs; concept of behaviour objectives;
enterprise launching and enterprise
management competencies.
(g). A first-ever training programme on Small
Business Planning & Promotion, for
middle and senior management, attended
by participants drawn from Small
Industries Service Institutes (SISIs);
Grameen Bank; Maharashtra Centre for
Entrepreneurship Development; Ministry
of Urban Employment and Poverty
Alleviation, Government of India and Khadi
& Village Industries Commission.
(h). Institute’s first training programme on
Human Resources Development through
Entrepreneurship Training for national
participants, organised at Dev Sanskriti
University, Haridwar attended by
participants from Small Industries Service
Institutes (SISIs), Coir Board and
Commission of Khadi & Village Industries.
(i). 8th Trainers’ Training Programme on Project
Formulation and Appraisal attended by
participants from Small Industries Service
59
Institutes (SISIs) and the Directorates of
Industries of Bihar, Karnataka, Madhya
Pradesh, Nagaland and Delhi.
(j). 28th Accreditation Programme for
Motivational Trainers.
4.5.4 The Institute organised two
International Training Programmes during the
period. The Institute’s first six-week training
programme on Human Resource Development
through Entrepreneurship Training was
attended by participants from Myanmar, Bhutan,
Republic of Slovakia, Philippines and
Uzbekistan. The training programme on Small
Business Planning & Promotion was attended
by persons from Russia, the Philippines,
Myanmar, Iran, Iraq and Mozambique.
4.5.5 Under the National Entrepreneurship
Development Board (NEDB) Scheme, the
Institute was assigned the task of organising
10 Workshops on Gender Equity through
Enterprise Development, in association with
some Universities. The Institute organised three
such Workshops in association with Himachal
Pradesh University, Banaras Hindu University
and Aligarh Muslim University.
4.5.6 Research Assignments andPublications
4.5.6.1 During the year, the Institute carried out
the following research projects/studies and
submitted reports:
� Report of Research Study on “Project
Identification Practices Amongst
Entrepreneurs”, sponsored by the Ministry
of SSI.
� Report of the Evaluation Study of Science
& Technology Entrepreneurs Parks
(STEP) Projects – Punjab Women Dairy
Projects (Phase I & II), sponsored by the
Department of Women & Child
Development, Ministry of Human
Resource Development.
4.5.6.2 In addition, the Institute
� finalised the terms of reference with the
Department of Women & Child
Development, Ministry of Human
Resource Development; Government of
India for undertaking an Evaluation Study
of Mahila Dairy Vikas, Almora, Uttaranchal
sponsored by that Department under its
STEP Project;
� submitted proposals to the Small
Industries Development Organization
(SIDO) for undertaking two Research/
Evaluation Studies on Entrepreneurship
Development Programmes of SIDO and
Small Industries Service Institutes (SISIs)
and Branch SISIs; and
� was engaged as one of the Technical
Agencies under the Scheme of Fund for
Re-generation of Traditional Industries of
the Ministry of Agro & Rural Industries,
Government of India.
60
Programmes for International participants
Women Enterpreneurship Development Programme participants
61
5.1 The National Commission for
Enterprises in the Unorganised Sector
(NCEUS) was constituted on 20th September
2004 and consists of a Chairman, two full time
Members, one Member Secretary and three
part time Members. An Advisory Board
consisting of 10 eminent experts and activists
concerned with the unorganised sector was
also constituted to advise the Commission.
The Commission has been given the mandate
to examine the problems of the Unorganised
Sector (also referred to as Informal Sector)
and suggest measures to overcome them. The
term of the Commission, which was initially
fixed at one year, has been extended to three
years.
5.2 The following are the Terms of
Reference assigned to the Commission:
(1) Review of the status of unorganised/
informal sector in India including the nature
of enterprises, their size, spread and
scope and magnitude of employment.
(2) Identity constraints faced by small
enterprises with regard to freedom of
carrying out the enterprise, access to raw
NATIONAL COMMISSION FORENTERPRISES IN THE UNORGANISED
SECTOR (NCEUS)
Chapter V
materials, finance, skills,
entrepreneurship development,
infrastructure, technology and markets
and suggest measures to provide
institutional support and linkages to
facilitate easy access to them.
(3) Suggest the legal and policy environment
that should govern the informal/
unorganised sector for growth,
employment exports and promotion.
(4) Examine the range of existing
programmes that relate to employment
generation in informal/unorganised sector
and suggest improvement for their
redesign.
(5) Identify innovative legal and financial
instruments to promote the growth of the
informal sector.
(6) Review of the existing arrangements for
estimating employment and
unemployment in the informal sector and
examine why the rate of growth in
employment has stagnated in the 1990.
(7) Suggest elements of an employment
strategy focusing on the informal sector.
62
(8) Review Indian labour laws, consistent
with labour rights and with the
requirements of expanding growth of
industry and services particularly in the
informal sector and improving productivity
and competitiveness.
(9) Review the social security system
available for labour in the informal sector
and make recommendations for
expanding their coverage.
5.3 Task Forces Constituted byNCEUS
The National Commission has constituted Task
Forces to deliberate on the following issues
identified for immediate intervention and make
appropriate recommendations:
� Social Security for Unorganised Sector
Workers;
� Statistical issues in the Unorganised/
Informal Sector; and
� Skill formation in the Unorganised Sector.
Task Forces on Access to Technology and
Infrastructure, Access to Markets, Raw
Materials and Finance and Legal and Policy
issues concerning enterprises in the
Unorganised Sector are being constituted.
5.4 Concept of Growth Poles
5.4.1 The NCEUS proposed the formation
of Growth Poles in different parts of the country
with a view to (i) integrating within a geographical
location a number of clusters of unorganised
production units engaged in manufacturing,
services and non-farm activities and (ii)
facilitating the expansion of production of and
employment in these micro and small
enterprises. The Growth Poles would
incorporate the concept of Provision of Urban
Amenities in Rural Areas (PURA) that has been
advocated by the President of India. This
proposal also found mention in the Finance
Minister’s Budget Speech, 2005-06.
5.4.2 In the first instance, the Commission
proposed the launch of a few pilot projects for
Growth Poles. For this purpose, the State
Governments were requested to identify a
number of multi-product industrial/artisanal/
handloom and handicrafts clusters that have the
potential to evolve into Growth Poles. After
detailed discussions with the State
Governments, the proposals submitted by the
Governments of Chhattisgarh, Kerala,
Rajasthan, Uttaranchal and West Bengal have
been shortlisted by the Commission. The
Government of Chhattisgarh has recommended
a Growth Pole at Kondagaon in Bastar District
to give an impetus to the expansion of
enterprises based on the resources and skill
endowments available in the tribal belt of the
State. The Government of Kerala has proposed
a Growth Pole in Kollam District for expansion
of the existing clusters of coir, handicrafts,
handloom, cashew processing and tourism
related enterprises. The Government of
Rajasthan has recommended a Growth Pole
at Sikandara in Dausa District for accelerated
development of clusters of stone cutting and
carving, leather, handloom and khadi,
handicrafts and agricultural implements
63
production units. The Government of
Uttaranchal has proposed the development of
a Growth Hub in Chamoli District to coordinate
the interventions of various promotional
agencies mandated to develop a wide range of
products and services based on the State’s
natural resources. The Government of West
Bengal has proposed the creation of a cluster-
based Growth Pole in Domjur Block of Howrah
District to facilitate the expansion of the clusters
of rubber based industries, food processing
units, foundries, chemical industries, zari and
jewellery/gem stone and apparel units.
5.4.3 The Commission proposes to
undertake detailed technical studies for each of
the five suggested sites to work out the full details
of the identified Growth Pole pilot projects.
5.5 Redrafting of the UnorganisedSector Workers Bill
The drafts of the Unorganised Sector Workers’
Social Security Bill, 2005 and the Unorganised
Sector Workers’ (Conditions of Work and
Livelihood Promotion) Bill, 2005 have been
furnished to the Ministry of Labour &
Employment and the Prime Minister’s Office,
pursuant to a request for assistance in re-
drafting of the Unorganised Sector Workers’ Bill,
2004. The reformulated Bills have also been
placed in the public domain for engaging a wider
public discussion. The Commission is currently
preparing explanatory notes to the Bills and
formulating proposals for operationalising their
provisions.
5.6 Review of the National Policy onUrban Street Vendors
The Commission has been engaged in re-
examination of the National Policy on Urban
Street Vendors and, in this context, interacting
with various stakeholders. In the light of these
interactions, a draft of a revised National Policy
on Urban Street Vendors has been referred to
the Ministry of Urban Employment and Poverty
Alleviation.
64
6.1 INTERNATIONALCOOPERATION SCHEME
6.1.1 International Cooperation Scheme for
modernisation, technology upgradation and
competitiveness enhancement of small
enterprises has been under implementation
since 1996. Under this Scheme, small
entrepreneurs are taken to potential foreign
markets, for firm/association level interactions
on, inter alia, sourcing technology, exploring
export markets of their products and learning
best practices.
6.1.2 The Scheme now encompasses the
following activities:
� Participation in exhibitions, fairs and
buyer-seller meets (with an international
component).
� Exchange of business delegations, to
explore new areas of technology
upgradation, facilitating joint ventures,
improving marketability of SSI products,
foreign collaborations, etc.
� Holding of seminars/buyer-seller meets,
to promote enterprise-to-enterprise
interactions through selected agencies,
both in India & abroad.
INTERNATIONAL COOPERATION
Chapter VI
6.1.3 During 2005-06, participation of SSIs
in international exhibitions and deputation of
business delegations has been sponsored
under the Scheme.
6.2 INDIA GLOBAL SUMMITON MSMES
The Confederation of Indian Industry (CII),
jointly with the Ministry of Small Scale
Industries, and in association with the National
Small Industries Corporation (NSIC) and Small
Industries Development Bank of India (SIDBI)
organised “India Global Summit on MSMEs –
Facing Competition through Consolidation” on
25 – 26 November 2005 at New Delhi. The
Summit was inaugurated by Shri Pranab
Mukherjee, Defence Minister and Shri Mahabir
Prasad, Minister for Small Scale Industries and
Agro & Rural Industries. The Summit
witnessed participation from more than 500
delegates from India and abroad. While the
domestic participation basically comprised the
stakeholders from the MSME sector, the
overseas participation comprised
representatives from 34 countries across the
globe. The Summit aimed at enhancing
cooperation among the MSME in India and their
counterparts abroad and facilitating the
process of globalisation.
65
Shri Pranab Mukherjee, Hon’ble Defence Minister lighting the lamp at the inauguration of India Global Summit on SME’ during25-26 November, 2005. (Below) Shri Mahabir Prasad, Hon’ble Minister of SSI&ARI is addressing the delegates
66
6.3 PAN COMMONWEALTHINSTITUTION BUILDINGPROGRAMMES ONSMALL BUSINESSCOMPETITIVENESSDEVELOPMENT
6.3.1 NSIC in association with the
Commonwealth Secretariat, London organised
the second (in a series of
four institution-building programmes)
Commonwealth - India Small Business
Competitiveness Development Programme
during 17-22 April 2005 at Chennai. 61 policy
makers and practitioners, representing 36
Member States of the Commonwealth attended
this programme. The focus of the programme
was on the role of technology and financing in
developing small business competitiveness and
on pro-poor employment generation
programmes, through the development of agro
and rural industries.
6.3.2 NSIC organised the third
Commonwealth Programme on Small
Business Competitiveness Development
during 20-25, November, 2005 at New Delhi.
The theme of the programme was
“Networking the Commonwealth SMEs
through Sharing Best Practices for
Enhanced Competitiveness”. Fifty senior
policy makers and practitioners representing
35 member States of the Commonwealth
attended the five-day programme. The
participants were exposed to a combination
of best practices, case studies and field
visits.
6.4 OTHER SIGNIFICANTEVENTS
(i) A Memorandum of Understanding (MoU)
on cooperation in the sphere of support
of small and private entrepreneurship
between India and Uzbekistan was signed
by the Minister (SSI & ARI) and the First
Deputy Prime Minister and Minister of
Economy, Government of Uzbekistan, on
05 April 2005, at New Delhi.
(ii) Minister (SSI & ARI) visited Mauritius to
attend the SME and Handicrafts Fair-
2005, during 08-10 April 2005, at the
Shri Pravir Kumar, Joint Secretary, Ministry of SSI, addressingthe participants at the Valedictory session of the India Global
Summit on MSMEs
67
invitation of the Minister of Small
Enterprises, Cooperatives, Handicrafts
and Informal Sector, Government of
Mauritius.
(iii) Mr. Nicolas Forissier, Minister of State for
Agriculture, Food Processing, Fisheries
and Rural Affairs, Republic of France met
the Minister (SSI & ARI) on 13 April 2005.
It was decided to establish a Sub-Group
on cooperation for matters relating to
small enterprises (particularly in the areas
of agro, rural, khadi & coir sectors) within
the Joint Working Group on Agriculture
(under the Indo French Agreement in the
field of Agriculture, Fisheries, Rural
Development, Forestry & Food
industries).
(iv) At the invitation of the World Association
of Small and Medium Enterprises
(WASME), Secretary (SSI & ARI)
participated in the WASME 2005-World
SME Convention –XVI International
Conference at Bucharest, Romania
during 14 – 19 May 2005 and made a
presentation at the Plenary Session on
“Indian SMEs – Harnessing Opportunities
of Globalisation”.
(v) The first Meeting of the Joint Committee
set up under the MoU between the
Governments of India and Sri Lanka on
cooperation in small-scale industries
sector was held at New Delhi on 7 July
2005. Dr. U. Vidana Pathirana, Secretary,
Ministry of Industry & Investment
Promotion, Government of Sri Lanka &
Shri Anupam Dasgupta, Secretary
(SSI&ARI) led the respective delegations
at the Joint Committee meeting.
(vi) Mr. Madan Murlidhar Dullo, Minister of
Foreign Affairs, International Trade and
Cooperation, Government of Mauritius
met Minister (SSI&ARI) in his office on 02
September 2005.
(vii) A delegation led by Mr. Mohammed Hanif
Atmar, Minister of Rural Rehabilitation and
Development, Government of Afghanistan
Shri Mahabir Prasad, Hon’ble Union Minister of SSI and ARI interacting with Women entrepreneurs from Seychelles participating inTechmart India 2005 organised by NSIC at New Delhi
68
met Minister (SSI&ARI) on 03 October
2005 and requested to depute a multi-
disciplinary team of experts from India
to Afghanistan to undertake study of
its small scale sector, identify its
strengths and weaknesses and make
recommendations on the possible
strategies for its development.
(viii) The Director, National Agency for Small
and Medium Size Enterprises and
Cooperative (NASMSEC), Government of
Romania, Mrs. Florentina Ionescu met
Joint Secretary (SSI) on 24 October 2005.
Both sides agreed to facilitate enterprise
- to - enterprise cooperation between India
and Romania through exchange of
Discussion taking place at the First Joint Committee Meeting as per the Memorandum of Understanding (MoU) between Ministryof Small Scale Industries. Govt. of India and Ministry of Industry, Govt. of Sri Lanka on 07.07.2005 at New Delhi
economic missions and delegations
comprising entrepreneurs.
(ix) A delegation led by H.E. Shri Alhaji Ahmed
Mohammad Makarfi, Executive Governor
of the Kaduna State of Nigeria, met
Minister (SSI&ARI) on 17.11.2005 at New
Delhi, to discuss cooperation in the small
scale sector between India & Nigeria. The
delegation also visited NSIC & Techmart.
(x) A delegation led by Mr. Mathew
Szymanski, Chief of Staff, U.S. House
Small Business Committee met
Secretary (SSI&ARI) on 13.12.2005 in
New Delhi, to discuss areas of
cooperation in the small scale sector.
69
(xi) The Mexican Ambassador in India
proposed an MoU for cooperation in the
small scale sector between the Ministry
of SSI, Government of India and
Secretariat of Economy of the United
Mexican States, which is likely to be
signed soon.
(xii) Secretary (SSI & ARI) visited the U.K. to
discuss ongoing and future Small
Business Development Competitiveness
Programmes with the Commonwealth
Secretariat.
70
7.1 The North Eastern region, consisting
of Assam, Arunachal Pradesh, Manipur,
Mizoram, Meghalaya, Nagaland, Tripura and
Sikkim, has abundant natural resources and
these resources can be harnessed for all-round
economic development of and employment
generation in the region through promotion and
establishment of micro and small enterprises.
Name of the State No of units Fixed investment Production Employment
(Rs. crore) (Rs crore)
SIKKIM 415 12.60 44 1580
ARUNACHAL 1411 34.17 69 4330
PRADESH
NAGALAND 15623 378.55 540 66466
MANIPUR 54101 403.67 703 153715
MIZORAM 12529 139.89 207 28622
TRIPURA 27448 329.27 461 62861
MEGHALAYA 25383 164.45 481 75607
ASSAM 219092 1287.39 4907 487871
TOTAL 356002 2749.99 7412 881052
7.2 PROFILE OF THE MSESECTOR IN NORTHEASTERN REGION
The available figures of estimated number of
SSI units, fixed investment, production and
employment in North Eastern region for
2004-05 are as follows:
7.3 The Ministry of SSI is actively
promoting the development of small scale
industries in the North Eastern region through
the programmes and schemes implemented
by its organisations. SIDO has SISIs at
Gangtok, Guwahati, Imphal, Agartala and also
ACTIVITIES IN THE NORTH EASTERNREGION
Chapter VII
71
Branch SISIs at Aizwal, Dimapur, Itanagar,
Diphu, Silchar, Tezpur, Shillong, and Tura.
There is a Tool Room and Training Centre
at Guwahati (see details in para. 2.13.10).
NSIC has a Technical Service Centre at
Guwahati and a network of offices in the
region, including Branch Office at Guwahati
(Assam) and sub-offices at Imphal (Manipur),
Dimapur (Nagaland), Itanagar (Arunachal
Pradesh), Shillong (Meghalaya) and Agartala
(Tripura).
7.4 SIGNIFICANT ACTIVITIES
7.4.1 As on 31 January 2006, 840 proposals
for loans Rs. 20.07 crore to SSI units were
approved under the Credit Guarantee Scheme
from the North Eastern States (including
Sikkim).
7.4.2 In 2005-06 (upto January 2006), 50
Entrepreneurship Development Programmes,
61 Motivational Campaigns and 39
Management Development Programmes were
conducted by the SIDO field institutions in the
region for 5039 persons.
7.4.3 For growth of small industries in the
region, the funding pattern of Integrated
Infrastructural Development (IID) Scheme has
been relaxed, providing for upto 80% of Central
grant with maximum of Rs. 4 crore.
7.4.4 The activities of the NSIC include
training programmes to increase self-
employment opportunities of the trainees in the
region. In Techmart India’ 2005, “North East
Panorama”, a special display of products from
North Eastern States, was organised to provide
marketing opportunities to the participating SSI
units. NSIC was awarded for Gold Medal for
“Special Display of North East Sector“ in the
IITF, 2005.
7.4.5 The activities of IIE, Guwahati in the
NER are detailed in paragraph 4.3 above.
NSIC organized “TECHMARTINDIA-2005” from November 14-27,2005 at Pragati Maidan, New Delhi.Techmart India 2005 showcased themanufacturing strengths of Indian
small scale Industries. It alsoprovided the platform from
technology seekers and technologyproviders to meet, discuss and
conclude agreements on technicalcollaboration/technology transfer etc.
Shri Mahabir Prasad, Hon’bleMinister of SSI&ARI is seen watching
the demonstration by SSIparticipants from North East at
Techmart India 2005
72
8.1 In the policy measure for promoting and
strengthening small, tiny and village enterprises
announced in Parliament on 06.08.1991, it was
stated that the definition of women enterprises
would be simplified. Accordingly, the definition of
‘Women Enterprises’ has been revised as under:
“A small scale industrial unit/industry - related
service or business enterprise, managed by
one or more women entrepreneurs in
proprietary concerns, or in which she/they
individually or jointly have a share capital of not
less then 51 per cent as partners/shareholders/
directors of private limited company/members
of co-operative society.”
8.2 PARTICIPATION OFWOMEN IN SSI SECTOR
8.2.1 In the Third All India Census of SSIs,
the participation of women in the SSI sector has
been categorised in three roles: some women
are owners of enterprises, some managers of
enterprises and some employees. With regard
to ownership, the definition mentioned above
has been adopted.
DEVELOPMENT ACTIVITIES FORWOMEN
ChapterVIII
8.2.2 The total number of women
enterprises in the SSI Sector was estimated at
10, 63, 721 (10.11 %). The estimated number
of enterprises actually managed by women was
9, 95, 141 (9.46 %).
8.2.3 About 13% of the women enterprises
were in the registered SSI category, the rest
being unregistered. Of the enterprises managed
by women, 11.5% were in the registered SSI
category.
8.2.4 The share of the units managed by
women in terms of employment was 7.14%.
The employment generated per Rs. 1 lakh
investment in the units managed by women
was 2.49.
8.2.5 The total number of female employees
in the SSI sector is estimated at 33, 17, 496.
About 57.62% of the women were employed in
SSI units located in the States of Tamil Nadu,
Kerala, Karnataka, West Bengal and Andhra
Pradesh.
8.2.6 The proportion of female employees
in the total employment in the SSI sector was
73
13.315%. In the States/Union Territories of
Mizoram, Orissa, Karnataka, Goa,
Lakshadweep, Kerala, Tamil Nadu and
Pondicherry, the share of women employment
was significantly higher (more than 20%),
compared with the total employment in the
respective States.
8.3 In India, Women entrepreneurs have
been in business for quite some time and
achieved remarkable success. However, their
number is still small. One of the reasons for
this is the initial hesitation and inhibition, which
emanates from the traditional and societal
perception of the role of women. Like any other
entrepreneurs, a new women entrepreneur has
to compete with those who are already well
established. Therefore, women entrepreneurs
have to not only face the gender insensitivity
and bias prevalent in the society but also
compete against established competition. In its
industrial policy, the Government of India has
laid considerable emphasis on the promotion
of women entrepreneurship, particularly first
generation women entrepreneurs, through
various training and support services. Special
attention is given by organising exclusive
entrepreneurship development programmes for
women. In these programmes, the trainees/
entrepreneurs are exposed, through
demonstration and training, to the manufacture
of a variety of products. Thus, many women
are trained every year by the Institutes of the
Ministry. The available feedback shows that
these women have not limited themselves to
the conventional ventures but also set up hi-
tech industries in the fields of information
technology, engineering, graded grey iron, non-
ferrous casting and sophisticated electronic
equipment, etc. Tool Rooms have started
designing special courses for women in the field
of tool engineering. Voluntary organisations in
the country are also doing commendable work
in the field of women entrepreneurship
development. Associations of women
entrepreneurs have also come up and are doing
remarkably well in some States.
8.4 TRAINING OF WOMENENTREPRENEURS
Various institutes of the SIDO conduct need -
based training programmes for existing and
prospective entrepreneurs. During 2005-06 (up
to December ’05), 15000 women participated
in these training programmes, i.e., Industrial
Motivational Campaigns, Entrepreneurship
Development Programmes and Management
Development Programmes conducted by SISIs
and CFTI, Agra and Chennai.
8.5 WOMEN EMPOWERMENTUNDER IID SCHEME
Association of Lady Entrepreneurs of Andhra
Pradesh (ALEAP), an NGO comprising the
women members only, has successfully
completed the implementation of an IID project
at village Gajularamaram, District Rangareddy,
A.P. 64 units have been established in this IID
Centre, which generated employment for 1400.
Further, 108 women entrepreneurs have
benefited from this project. Out of the total
project cost of Rs. 347 lakh, Government of India
74
provided grant to the tune of Rs. 139 lakh.
Another IID project at Vijyawada, District
Krishna, A.P. is being implemented by ALEAP.
The total project cost is Rs. 370 lakh.
Government of India grant of Rs. 91.38 lakh has
been released for this project.
8.6 TRADE RELATEDENTREPRENEURSHIPASSISTANCE ANDDEVELOPMENT (TREAD)FOR WOMEN
8.6.1 Women have been among the most
disadvantaged sections of the population with
regard to access to and control over resources.
Problems faced by them continue to be grave
particularly for illiterate & semi - literate women
of rural and urban areas In order to alleviate their
problems, Government of India launched a
scheme titled “Trade Related Entrepreneurship
Assistance and Development” (TREAD). The
scheme envisages economic empowerment of
such women through trade related training,
information and counselling/extension activities
related to trades, products, services etc.
8.6.2 Under this scheme, Government of
India (GoI) gives grant up to 30% of the total
project cost as appraised by lending institutions
which would finance the remaining 70% as loan
assistance to applicant women, who have no
easy access to credit from banks due to their
cumbersome procedures and the inability of
poor & usually illiterate/semi-literate women to
provide adequate collateral security. The GoI
grant and the loan from the lending agencies to
assist such women are routed through eligible
NGOs/SHGs/MFIs engaged in assisting poor
women through any kind of income generating
activities in non- farm sector.
8.6.3 Training organisations, viz., Small
Industries Service Institutes (SISIs),
Entrepreneurship Development Institutes
(EDIs), National Institute of Small Industries
Extension Training (NISIET) and the NGOs
conducting training programmes for
empowerment of women beneficiaries identified
under the scheme are provided a grant upto Rs.
1.00 lakh per programme, provided such
institutions also bring their share to the extent
of minimum 25% of the Government grant.
However NGOs are allowed to conduct training
programmes only after they take up some
lending proposals of women entrepreneurs
under this scheme.
8.6.4 Institutions such as NISIET, NIESBUD,
IIE, SISIs, EDIs sponsored by State
Governments and any other suitable institution
of repute are provided need based GoI grant
primarily for undertaking activities aiming at
empowerment of women such as field surveys,
research studies, evaluation studies, designing
of training modules, etc., covered under the
scheme. The grant is limited up to Rs. 5 lakh
per project.
8.6.5 During 2005-06, Rs. 7.73 lakh have
been sanctioned as GoI grant for capacity
building of three NGOs whose projects have
been appraised by Canara Bank. About 435
women beneficiaries are likely to be benefited
through the projects approved by the Bank
75
under the TREAD Scheme. It is expected that
10 more projects would be appraised during the
year and another 1000 women entrepreneurs
would benefit during the remaining period of the
current financial year.
8.6.6 Indian Institute of Entrepreneurship
(IIE), Dehradun and Guwahati have conducted
7 EDPs and provided process - cum - product
development training to 166 women under the
scheme. IIE, Dehradun has been sanctioned
grant of Rs. 3 lakh for conducting 3 EDPs under
the scheme. It is expected that another 100
women would be trained by IIE, Dehradun
during the remaining period of the current
financial year.
8.6.7 IIE, Dehradun and Guwahati are also
conducting two studies on “Prospects of
Women and Problems Faced by Women
Entrepreneurs” in the Uttaranchal and Assam
respectively.
76
9.1 Hindi is the Official Language of the
Union of India and the Government policy is
aimed at progressively increasing the use of
Hindi in official work. Effective steps were taken
during the year in the Ministry of Small Scale
Industries to ensure compliance of the Official
Language policy of the Government,
implementation of the annual programme and
compliance with the orders of the President on
the recommendations of the Committee of
Parliament on Official Language
9.2 COMPLIANCE OF THEPROVISIONS OF THEOFFICIAL LANGUAGEACT, 1963
All documents such as resolutions, general
orders, rules, licences, etc., under section 3(3)
of the Official Language Act and all papers laid
on the Tables of the Houses of Parliament were
issued in Hindi and English. The Ministry is
already notified under the Official Language
Rule 10(4).
9.3 REPLIES TO LETTERS INHINDI
All letters received in Hindi were replied to in
Hindi.
USE OF OFFICIAL LANGUAGE
Chapter IX
9.4 CORRESPONDENCE INHINDI
Letters to State Governments, Union Territory
Administrations and Central Government offices
located in regions ‘A’ and ‘B’ were issued in Hindi,
to the maximum extent possible. Similarly, efforts
were made to send letters in Hindi to Central
Government offices located in region ‘C’, as per
the targets laid down in the annual programme.
9.5 SECTIONS SPECIFIEDFOR WORKING IN HINDI
The sections of the Ministry, notified for doing
all work in Hindi, are working satisfactorily.
9.6 MONITORING ANDINSPECTIONS
In order to ensure compliance of the Official
Language policy, there is constant monitoring
and review of the progress reports. During the
year, six Sections of the Ministry were inspected
, to ensure use of Hindi and compliance of the
Official Language policy.
9.7 TRAINING OF OFFICIALS
All officials of the Ministry have already been
trained in Hindi typing and stenography.
77
9.8 USE OF MECHANICALAIDS
As required under the Official Language Act,
bilingual facilities have been provided on office
equipment in the Ministry. Computers and
terminals have also been installed with facility
to work in Hindi.
9.9 HINDI MONTH
Hindi month was celebrated during September,
2005 in the Ministry. Competitions were
organised during this period in Hindi typing,
Hindi stenography, debate in Hindi, Hindi essay
writing and noting and drafting in Hindi. A large
number of officers and employees participated
with enthusiasm. The messages of the Home
Minister and Cabinet Secretary were circulated
for information and compliance on this
occasion.
78
10.1 The vigilance unit of the Ministry is
headed by a Chief Vigilance Officer (CVO) of
the rank of Joint Secretary, Ministry of Small
Scale Industries appointed on the advice of
the Central Vigilance Commission (CVC).
The CVO functions as the nodal point in the
vigilance set-up of the Ministry. The
secretariat assistance to the CVO in the
Ministry of SSI is, however, provided by the
Vigilance Desk of the Department of
Industrial Policy & Promotion (DIPP),
Ministry of Commerce and Industry as the
Ministry of SSI does not have its independent
vigilance unit. The vigilance unit is, inter alia,
responsible for the following:
� identification of sensitive areas prone to
malpractices/temptations and taking
preventive measures to ensure
integrity/efficiency in Government
functioning;
� taking suitable action to achieve the
targets fixed by the Department of
Personnel & Training (DoPT)on anti-
corruption measures;
� scrutiny of complaints and initiation of
appropriate investigation measures;
� inspections and follow-up action on the
foregoing;
VIGILANCE MATTERS
Chapter X
� furnishing comments to the CVC on the
investigation reports of the Central Bureau
of Investigation(CBI);
� taking appropriate action in respect of
departmental proceedings on the advice
of the DoPT & CVC;
� obtaining second stage advice of the
CVC, wherever necessary; and
� obtaining advice of the Union Public
Service Commission (UPSC) in regard
to the nature and quantum of penalty to
be imposed, wherever necessary.
1.1 Preventive vigilance continues to
receive attention with emphasis on identification
of areas sensitive/prone to malpractices and
temptations. The guidelines/instructions issued
by the DoPT and the CVC from time to time in
this regard are followed. Action taken includes
the following:
i) Regular and surprise inspections are
carried out by the Departmental Security
Officer of the DIPP. In the attached and
subordinate offices, respective
Departmental Security Officers carry out
these inspections.
ii) Strengthening of vigilance machinery by
way of appointing CVO in the offices and
79
organisations under the Ministry, who
looks after the vigilance activities in the
office/organization concerned.
iii) A strict watch is kept on liaison men and
on other persons. The Departmental
security instructions are iterated from time
to time for streamlining entry of outsiders
in the building. To end the practice of
professional liaison men operating in the
Ministry, a fresh list of such unwanted
liaison men has been prepared.
iv) Cases of the officers, who have attained
the age of 50 years or have put in 30 years
of service, are reviewed under FR 56 (j)
in order to judge their suitability to continue
in service thereafter. The exercise is
currently being done by the Establishment
Division of the DIPP.
v) In order to make officers conscious of the
provisions of Conduct Rules applicable
to them as also to acquaint them with the
importance of departmental security,
Rules/Instructions are reiterated in this
respect from time to time.
10.2 SMALL INDUSTRIESDEVELOPMENTORGANISATION
The Vigilance Unit in the office of the
Development Commissioner (Small Scale
Industries), New Delhi, is headed by a CVO of
the rank of Director appointed on the advice of
the Central Vigilance Commission (CVC), with
full complement of staff under him. The CVO is
also responsible for all the field offices of the
SIDO. The Vigilance Section deals with vigilance
matters like complaints and vigilance cases
coming within the purview of CCS (CCA) Rules,
1965 concerning Small Industries Development
Organization.
10.2.1 Apart from dealing with complaints and
vigilance cases against officers and staff
relating to corruption and improper motives, a
number of anonymous/pseudonymous
complaints as also complaints and vigilance
cases other than those of corruption or improper
motives pertaining to the officers of Small
Industries Development Organisation were also
handled. All complaints relating to corruption/
improper motives and/or delays were
investigated and suitable action taken against
officers found guilty of misconduct/
misbehaviour.
2.2 The vigilance cases in respect of
Group ‘C’ & ‘D’ staff of field offices are attended
to by the Director of the institute/centre who is
assisted by AD (Admn).The services of senior
officers both at the Headquarters office and in
the field offices are utilized for investigating the
complaints.
10.3 NATIONAL SMALLINDUSTRIESCORPORATION (NSIC)
NSIC has its own part time CVO appointed on
the advice of the CVC.
80
11.1 This Charter is a declaration of the
Ministry, incorporating its mission and
commitment to the small scale entrepreneurs
and for the people of India in general.
11.2 MINISTRY OF SSI
The Ministry of Small Scale Industries is
responsible for formulation of policies and
designing programmes, projects and
schemes for promoting the growth of micro
and small enterprises in the country. The
policies and programmes/projects/schemes
are implemented by the organisations like the
Small Industry Development Organization
(SIDO), National Small Industries Corporation
Ltd. (NSIC), national level Entrepreneurship
Development Institutes, etc. The Organisations
of the Ministry have their own Citizen’s Charters.
11.3 MISSION
The mission of the Ministry is to promote, in
cooperation with other Ministries and
Departments of the Central Government, State
Governments, Union Territory Administrations
and all other stakeholders, the growth and
development of the micro and small
enterprises and to enhance their
competitiveness so that these enterprises
CITIZENS’ CHARTER
Chapter XI
contribute to accelerating the expansion of
productive employment opportunities in the
country. The Ministry seeks to fulfil its mission
by formulating appropriate policies and
designing/implementing support measures in
the fields of credit, technological upgradation,
marketing, entrepreneurship development,
etc., and undertaking effective advocacy for
these purposes.
11.4 COMMITMENT
The Ministry and its organisations are committed
to providing efficient and prompt service with
transparency and courtesy to the with citizens
and individual or groups of micro and small
enterprises.
Towards this, the Ministry will, in the spirit of
dutiful discipline, respect the rights of
individuals, entrepreneurs and their
associations. The Ministry will maintain and
uphold the confidentiality of personal and
business information disclosed to it by the
citizens. The Ministry and its organisations will
continuously review the policies and
programmes and enforcement of related laws
and regulations, in consultation with the
stakeholders concerned, with the aim of fulfilling
its mission.
81
11.5 STANDARD FORGENERAL PROCEDURE
The letters received by the Ministry will be
acknowledged within 15 days and replied to as
soon as possible.
11.6 RESPONSIBILITIES OFOUR CITIZENS
The Ministry expects continuous feed back from
the citizen on the quality of the services provided
to them and on areas in which improvements
are expected.
11.7 ASSESSINGPERFORMANCE
The Ministry will, from time to time, share its
performance with the citizens and stakeholders
through the media and its website. The Ministry
will also undertake independent surveys on
perceptions of the citizens and assessment of
its performance.
11.8 GUIDANCE AND HELP
The Information and Facilitation Counter of
the Ministry, located on the ground floor,
Gate No. 4, Nirman Bhavan, New Delhi, will
provide information on the services and
activi t ies of the Ministry and i ts
organisations.
11.9 COMPLAINTS
In case of any complaint, one may
telephone or send a letter or fax or visit the
Ministry at Udyog Bhavan, New Delhi.
However, before lodging of a complaint, one
may, first of all, use the Information and
Facilitation Counter of the Ministry. In case
one is not satisfied, the matter may be taken
up with the Grievance Off icer in this
Ministry. The address, phone and fax
numbers of the Information and Facilitation
Counter and the Grievance Cell are as
follows:
IMPORTANT ADDRESSES WEBSITES ADDRESS
(1) Grievance Cell http.//ssi.gov.in - Ministry of SSI
Deputy Secretary www.laghu-udyog.com - SIDO
Ministry of SSI www.nsicindia.com - NSIC
Room No. 124-D www.niesbud.com - NIESBUD
Udyog Bhavan www.nisiet.com - NISIET
New Delhi - 110011 www.iie.nic.in - IIE
Tel. No. 23061431
No. 011-23061756 (Fax)
(2) Information and Facilitation Counter
Gate No. 4, Ground Floor,
Nirman Bhavan, New Delhi-110 011
Tel. No. 23062219
82
NATIONAL SMALL INDUSTRIESCORPORATION LIMITED (NSIC)
LOAN ASSISTANCE ANDRECOVERY PERFORMANCE
(REPORT NO. 4 OF 2005COMMERCIAL)
The review of loan assistance and recovery
performance was done by the office of the
Comptroller and Auditor General (C & AG) of
India based on the operation of NSIC in earlier
years. The audit paragraphs included in the
C&AG’s report on the basis of this review are
given below. The gist of the replies to these
paragraphs is given below:
Para:
The Company was incorporated in February
1955 to provide financial assistance to small
industrial units for industrial development
of the country. However, due to the
deficiencies in the pre-sanction appraisals
and weak recovery mechanism, a very large
SUMMARY OF RECENT AND IMPORTANTAUDIT OBSERVATIONS AND REPLIES
THERETO
Annexure I
percentage of its debts have become bad
and doubtful. Accumulated losses as on 31st
March 2004 stood at Rs. 143.52 crore.
Reply:
The amount of accumulated losses of
Rs. 143.52 crore as on 31st March 2004 was
due mainly to making provisions for doubtful
debts, as per provisioning norms approved by
Board of Directors. As a corrective measure,
the Corporation has since strengthened its
appraisal system and also tightened the security
norms under various schemes to control the
defaults, so that additional provisions do not
become necessary.
The Corporation has also geared up its recovery
mechanism. A separate recovery cell headed
by a senior officer has been set up to monitor
the recovery progress regularly. A scheme of
one time settlement in respect of old cases has
also been introduced with a view to settling the
old default cases.
As a result, the provisions for doubtful debts
have come down to Rs.126.47 crore as on
83
31.3.2005 from Rs.137.63 crore as on
31.3.2002. The financing schemes have also
been reviewed and the following corrective
steps have been taken:
a. The Bill Discounting Scheme, based only
on the security of the supply bills of the
SSI units and generally no other collateral,
has been discontinued.
b. Raw Material Assistance Scheme has
been modified to supply material to the
SSI units against security of bank
guarantee. Earlier, collateral security of
land and building, Letter of Credit, etc.,
was also taken.
c. Long term financing under the Hire
Purchase and Term Loan Scheme has
been modified, requiring 100% collateral
security. Financing under this scheme has
been restricted up to Rs. 5 lakh w.e.f.
01.01.2006. Cases beyond Rs.5 lakh
would be forwarded to nationalised banks,
with which tie up arrangements have been
made for sanction of such proposals.
Para:
Recovery performance being poor, the
Company had to avail of a loan of Rs.70
crore from Small Industries Development
Bank of India leading to payment of interest
of Rs.22.95 crore during the period 1998-99
to 2003-04, which could have been avoided.
Reply:
The Corporation had availed of financial
accommodation from the Small Industries
Development Bank of India (SIDBI) to meet
its working capital requirement. There was no
increase in borrowings to meet cash crunch.
Total borrowing as on 31.3.1999 was
Rs. 288.27 crore, which was reduced to
Rs. 219.25 crore as on 31.3.2001 and further
to Rs. 117.50 crore only as on 31.3.2005.
Dues of the SIDBI have been fully repaid on
31.3.2004 and there is no more interest
burden on this account
Para:
Due to poor recovery performance, the Non
Performing Assets (NPA) stood at Rs. 184.97
crore (86 per cent) of the total outstanding
loan of Rs. 215.56 crore as on 31st March,
2004.
Reply:
The system of monitoring of outstanding dues
and follow up of over due amounts has been
strengthened by the Corporation. A Default
Management and Recovery Cell has been set
up at the Head Office for effective and regular
monitoring of defaults. The Corporation has
taken various measures to not only recover the
old dues but also prevent occurrence of further
defaults in future.
Some of the initiatives taken by the Corporation
for stepping up of the recovery of dues are
mentioned below:
i The assisted units are being inspected
and the entrepreneurs and guarantors
are being contacted regularly to assess
the condition and availability of the
84
machine(s) and functioning of the unit
and press the entrepreneurs for
repayment of dues.
ii Critical review of default cases is made
by Default Review Committee (DRC) of
NSIC.
iii A Default Management & Recovery cell
(DMRC) has been established at the
Head Office under the control of a senior
executive. Default cases are being closely
monitored by the DMRC.
iv For extending opportunity to the defaulting
units to settle the outstanding dues, a One
Time Settlement Scheme (OTS) has
been launched, based on the guidelines
issued by the Reserve Bank of India for
settlement of defaults of SMEs by the
Banks and Financial Institutions.
v A computerised data base has been
created at the Branches in respect of all
accounts where financial assistance is
provided.
vi Greater emphasis is being laid on
recovery in cases wherein provisions are
likely to increase due to change in their
age classification.
vii To present further increase in defaults,
steps have been taken to strengthen the
pre-sanction/disbursement norms as
well as post-disbursement follow up.
Security norms have also been tightened.
With these measures, the recovery of dues has
improved which may be observed from the
following:
85
2) Recovery Performance of Overdues:
The overdue amounts have also come down
from Rs. 224.53 crore as on 31.03.03 to Rs.
211.13 crore as on 31.03.05. 71% of the total
default of the Corporation, as on 31st March 05,
is under litigation.
Though the Corporation has resorted to
various legal measures; namely, filing of
Recovery Certificate (RCs) proceedings,
wherever permitted by the State Laws, filing
criminal complaints under section 138 of the
Negotiable Instruments (NI) Act in cases of the
cheques issued being dishonoured by the
banks, etc., the actual realisation, however
depends on the disposal of the cases by the
relevant Courts.
In addition, the following measures have also
been initiated to address the defaults in legal
cases:
i. Interim petitions for injunctions,
attachment before judgement and
appointment of Receivers are also being
moved where charged assets are
available to create pressure on the
borrowers / guarantors to settle the dues
of the Corporation.
ii. Steps have been taken to the ascertain
personal assets of the borrowers /
guarantors by verification with the
authorities like Income Tax Department,
Office of the Registrar of Companies,
Registrar of Societies, Municipality and
village revenue officials.
iii. Early execution of Recovery Certificates
is being pursued.
iv. In the cases of criminal complaint
under section 138 of the N.I. Act,
necessary steps are being taken
immediately after filing the complaint to
complete service of notice on the
accused persons and constant follow
up with the advocates to expedite
disposal of such cases.
v. Performance of the advocates is being
reviewed and non-performing advocates
are being de-empanelled.
vi. Suit cards have been prepared to register
the progress and development of each
case under litigation by the branches and
monthly development report of each case
is being submitted to the Head Office to
enable close monitoring of the cases.
Para:
In 24 cases test checked in audit,
deficiencies were noticed in appraisal,
sanction and follow up which led to non-
recovery of Rs. 18.61 crore.
1) Recovery of Current Dues under
Equipment Finance Schemes:
Year % Recovery of
current dues (fallen
due during the year)
2002-03 63
2003-04 65
2004-05 71
86
Reply:
All the default cases are being monitored closely
by the branches concerned as well as Default
Review Committees and corrective steps are
being initiated for recovering the dues. Out of
24 cases involving Rs. 18.61 crore, four cases
involving Rs.108.97 lakh have been settled and
part recovery has also been made in four more
cases detailed below:
(Rs. Lakh)
Sl. Name of unit Amount of Status
No. over dues
as reported
by the Govt.
Auditor
1 M/s. Hanuman Bricks (P) Ltd. 23.92 Account closed.
2. M/s. Raghvendra Industries 17.10 Account closed.
3. M/s. Hanung Toys 50.03 Account closed.
4 M/s. Viknesh Knits 17.92 Full amount recovered.
5. M/s. Leela Apparels 40.60 Rs. 16.80 lakh recovered, party being pursued
for balance recovery.
6. M/s. Shivi Poly Pax 62.26 Party has offered to settle the account, which
is under consideration.
7. SSI units of Jaipur (BD) 200.03 Settlement offer in 4 accounts for Rs. 90 lakh
received which is under consideration.
8. SSI units of Kolkata (RMA) 949.71 In most cases, the amount is to be recovered
from State Electricity Boards (SEBs) to settle
the unit’s account. An amount of Rs. 287 lakh
has been received from the Kerala SEB and
Rs. 32 lakh has been recovered from Tamil
Nadu SEB. Payment of Rs. 258 lakh is
expected from TNEB before March’06. IFC has
allowed claim of Rs.853 lakh in favour of NSIC.
KSEB has obtained stay from High Court.
Efforts are being made to get the stay vacated
to enforce the recovery of awarded amount.
87
In the remaining 16 accounts for amounts
outstanding of Rs. 5 crore, the process of
recovery by filing suit / arbitration / RC, wherever
applicable, has already started. Intensive efforts
are also being made to amicably settle the
account under the One Time Settlement
Scheme or Out of Court settlement, wherever
possible.
Para:
2053 civil suits/ petitions for recovery of
Rs.181.66 crore are pending in various
courts. The Corporation could not execute
decrees in 816 cases involving Rs.36.51
crore due to ineffective follow up. Further
in 12 cases chances of recovery of Rs.37.34
crore are remote.
Reply:
The Corporation has constantly followed up for
obtaining decrees in the legal suits, execution
of decrees and also ascertaining the means
and assets of judgment Debtors for filing of
execution petitions so that effective executions
are possible. In order to monitor the legal cases,
the Corporation has introduced a suit card
system in which all the particulars are noted
including the date of filing, the suit claim amount
together with present position of the cases and
the securities held.
Pressure have been created in most of the suit
filed decreed accounts as well as upon
judgement Debtors to settle the dues of
Corporation by way of compromise/settlement
or by execution of decrees /recovery certificates
Para:
The Company lost Rs. 1.89 crore due to
failure in monitoring the disposal of seized
machinery.
Reply:
The Government Auditors had observed that Rs.
2.15 crore was receivable in loan accounts
where 69 machines were seized by the
branches of NSIC but could not be disposed of.
The loss of Rs.1.89 crore is arrived at by the
Audit after adjusting the reserve price of
machines and ground rent.
The outstanding dues comprise overdue
instalment amount, interest for delayed period
& misc. and other charges debited to the
account. The outstanding dues after deducting
reserve price of the machines may not be
considered as loss since the Corporation has
S. Particulars No. of
No. cases
1 Civil suits/ R.C. pending 1133
in various courts
2 Cases Decreed 805
(A) Decree not executed 291
(B) Decree under execution 514
Total 1938
with the result , we have recovered considerable
dues. Total no of cases under all categories at
present are 1938 including new suits filed during
the current financial year. The present status of
pending civil/ R.C. and Execution petitions is
as under:-
88
recourse to recover the dues from the hirers by
initiating legal process for recovery of resultant
loss or by way of settlement / compromise of
accounts.
Concerted efforts have been made for speedy
disposal of the machines seized by the
branches. Amendments to the policy on
expeditious sale of seized machinery have been
made by the branches. Accordingly 42 seized
machines have been sold and efforts are in
progress for disposal of the remaining 27
machines. Disposal of machines is a time
consuming process due to the following
reasons:
1. Poor condition of the machines at the time
of seizer.
2. Wear and tear due to transportation of the
machines. Sometimes the machines are
seized at site only due to their heavy /
bulky size.
3. Obsolescence / outdated technology.
4. No / lack of response from the buyers.
5. Offer received from the buyers are far
below the reserve price / market price of
machines.
6. Vital parts of seized machines are often
missing, which affects their sale
adversely.
7. Delay in getting permission from the
Courts concerned.
Some of the machines have been seized under
the directions of Courts due to non-payment of
dues of the Corporation, and, therefore, such
machines cannot be disposed of unless the
Court permits. Such machines are lying in the
godowns, pending Court’s decision. Efforts are
also being made through legal counsels to seek
permission of the Courts for early disposal of
such machines.
89
Annexure IIPERFORMANCE INDICATORS:
90
CAD Computer Aided Design
CAM Computer Aided Manufacturing
CFTI Central Footwear Training Institute
CGFS Credit Guarantee Fund Scheme
CLCSS Credit Linked Capital Subsidy
Scheme
CNC Computerized Numerical Control
DC (SSI) Development Commissioner
(Small Scale Industries)
EDP Entrepreneurship Development
Programme
FTS Field Testing Station
IDTR Indo-Danish Tool Room
IGTR Indo-German Tool Room
IID Integrated Infrastructural
Development
IIE Indian Institute of Entrepreneurship
ISO International Organisation for
Standardization
LUCC Laghu Udyami Credit Card
MDA Market Development Assistance
MDP Management Development
Programme
NEF National Equity Fund
NIESBUD National Institute for
Entrepreneurship and Small
Business Development
NISIET National Institute of Small Industry
Extension Training
NSIC National Small Industries
Corporation Limited.
NTSC National Small Industries
Corporation Technical Service
Centre
PPDC Process-cum-Product
Development Centre
RTC Regional Testing Centre
SDP Skill Development Programme
SENET Small Enterprise Information and
Resource Centre Network
SEPTI Small Entrepreneurs Promotion
and Training Institutes
SIDO Small Industries Development
Organisation
SME Small and Medium Enterprises
SSI Small Scale Industries
TDMF Technology Development
Modernisation Fund
TRC Technology Research Centre
TREAD Trade Related Entrepreneurship
Assistance and Development for
Women
TRTC Tool Room and Training Centre
VDP Vendor Development Programme
WTO World Trade Organisation
UNIT
1 crore 10 million
10 lakh 1 million
1 lakh 100 thousand
A C R O N Y M S