Scale Enterprise in

20.03.12

India

Small and medium

Source: http://msme.gov.in/

SMALL AND MEDIUM SCALE ENTERPRISES

WHAT IS SME ?

DEFINITION OF SME :

SME is the abbreviation for Small and Medium Enterprises.

These enterprises can be rightly called as the backbone of the GDP of India.

The SME sector in India is growing at an exceptionally fast rate due to which it is proving to be beneficial to the Indian Economy.”

DEFINITION OF SME IN INDIA IN CONTEXT OF MANUFACTURING INDUSTRIES:

DESCRIPTION INR USD

MICRO ENTERPRISE UPTO 25 LAKH UPTO $62500

SMALL ENTERPRISE ABOVE 25LAKH—AND UPTO 5CRORE

ABOVE $62500 AND UPTO $1.2 MILLION

MEDIUM ENTERPRISE

ABOVE 5 CRORE AND UPTO 25 CRORE

ABOVE $1.25 MILLION AND UPTO $2.5 MILLION

SERVICE ENTERPRISE

DESCRIPTION INR USD

MICRO ENTERPRISE UPTO 10 LAKH UPTO $ 25000

SMALL ENTERPRISE ABOVE 10 LAKH—2 CRORE

ABOVE $25000—UPTO $ 0.5 MILLION

MEDIUM ENTERPRISE

ABOVE 2 CRORE– 5 CRORE

ABOVE $ O.5 MILLION--$1.5MILLION

Micro enterprise:- An enterprise where investment in plant and machinery [original cost excluding land and building and the items specified by the Ministry of Small Scale Industries] does not exceed Rs.50 lakh.

Small enterprise:-An enterprise where the investment in plant and machinery [original cost excluding land and building and the items specified by the Ministry of Small Scale Industries] is more than Rs.25 lakh but does not exceed Rs.5 crore.

Medium enterprise:- medium enterprise is an enterprise where the investment in plant and machinery [original cost excluding land and building and the items specified by the Ministry of Small Scale Industries] is more than Rs.5 crore but does not exceed Rs.10 crore.

TYPE’S OF SME’S

SMEs have been established in almost all-major sectors in the Indian industry such as:· Food Processing· Agricultural Inputs· Chemicals & Pharmaceuticals· Engineering; Electricals; Electronics· Electro-medical equipment· Textiles and Garments· Leather and leather goods· Meat products· Bio-engineering· Sports goods· Plastics products· Computer Software, etc.

FIGURE’S ABOUT SME’S

The Indian SME market is worth $5 billion. There are over 11 million SME units in India that

produce more than 8,000 products. SME's Contribution towards GDP in 2011 was

17% which is expected to increase at the rate of 22% by 2012.

SMEs are the fountain head of several innovations in manufacturing and service sectors, the major link in the supply chain to corporate and the PSUs. By promoting SMEs, the rural areas of India will be developed.

IMPORTANCE OF SME’S

Employment generation. Use of local resources. Balanced regional development Promoting exports Efficient use of productive factors.

BENEFITS OF REGISTERD SME’S

Credit benefits Exemptions under direct tax laws Incentives and concession in power tariffs Price and purchase preference of goods produced.

ROLE OF SME’S IN THE GROWTH OF INDIAN ECONOMY

60 MNEMPLOYMENT GENERATED

8000QUALITY PRODUCT GENERATED

BY THEM FOR INDIAN AND INTERNATIONAL MARKET

35%

INDUSTRIAL EXPORT

40%TOTAL OUTPUT

OF INDIA

1.3 MN

JOB PER YEAR

90%INDUSTRIAL UNIT IN INDIA

REASON BEHIND SURVIVAL & GROWTH OF SME’S IN INDIAN ECONOMY

REASON BEHIND SURVIVAL & GROWTH OF SME’S IN INDIAN ECONOMY

Govt. policy, tariff and easy loan with low interest rate for SME’S in help to grow these enterprises.

Foreign and local fund providers are taking huge interest in the small and medium enterprises of India.

Banking sector has also shown a keen interest in lending credit to these enterprises.

Recent mergers have taken place in the sector. The sector has significantly contributed towards the

domestic production as well as the export earnings.

REASON BEHIND SURVIVAL & GROWTH OF SME’S IN INDIAN ECONOMY

Low investment is required to start and maintain these enterprises.

The sector has contributed impressively towards job creation and increase in individual incomes.

Technological growth is also a factor for growth of SME's in India as there are several trade portals and “ BUISNESSESS DIRECTORIES “ available online with huge database of buyers, sellers, manufacturers who are basically back bone of SME's.

CHALLENGE AHEAD FOR SME’S

Infrastructure needs to be developed for setting up the SMEs in the rural sector of the country. Transportation, electricity and communication are the main parts of the infrastructure required.

Technology need to be evolved so that quality products are manufactured by the sector.

Lack of information about the inputs, including raw material, machinery and skills, is one critical challenge in front of the owners of these enterprises.

High level of research and development is required.

GOVT. DEPARTMENT FOR SME’S IN INDIA

Small & Medium Business Development Chamber of India

Msme govt of india India International Trade Centre (IITC-India) Europe-India SME Business Council (EISBC) Maharashtra Industrial and Economic Development

Association SME Export Promotion Council Indian Young Entrepreneurs’ Forum SME Training Institute of India SME Technology Development Council

SCHEME OF GOVT. OF INDIA FOR SME’S

Rajiv Gandhi Udyami Mitra Yojna ( RGUMY) Marketing Assistance ( Bar Code) Skill Development Export Promotion Infrastructural Development National Awards Credit Guarantee Scheme

SCHEME OF GOVT. OF INDIA FOR SME’S

ISO 9000/14001 Certification Fee Reimbursement Scheme

Micro & Small Enterprises Cluster Development Programmed

Credit Linked Capital Subsidy Scheme Intellectual Property Rights for MSMEs Quality Management Standards/Quality Technology

Tools

RAJIV GANDHI UDHAMI MITRA

Rajiv Gandhi Udyami Mitra Yojna ( RGUMY)Rajiv Gandhi Udhyami Mitra Yojna (RGUMY) is to provide handholding support and assistance to the potential first generation entrepreneurs who have already successfully completed EDP/SDP/ESDP/VT programmes, through the selected lead agencies i.e. ‘Udyami Mitras” in the establishment and management of the new enterprises in dealing with various procedural and legal hurdles and in completion of various formalities required fo setting up and running of the enterpriseUdyami Mitras : Under RGUMY, financial assistance would be provided to the selected lead agencies i.e. Udyami Mitras for rendering assistance and handholding support to the potential first generation entrepreneurs.

MARKETING ASSISTANCE/SUPPORT TO MSES (BAR CODE)

The objective of this scheme is to popularize the Bar code registration and motivate the small and micro manufacturing enterprises to adopt the Bar Code Certification on large scale and to sell their value added products worldwide and enable higher export price realization It also helps in domestic marketing ( wholesale & retail). 75% of annual fee ( recurring) of Bar Code Certification for the first three years are reimbursed to MSEs under the scheme.

SKILL DEVELOPMENT

With an objective to create self employment, the entrepreneurship and skill development scheme is implemented by Office of the DC(SME’S) through its network of 59 MSME _ DIS and their branches,. The programs are conducted include Entrepreneurship Development, Entrepreneurship and Skill Development, Management Development and Business Skill Development. These program are conducted for unemployed youth against a nominal fee and in some cases stipend is also provided.

INFRASTRUCTURE DEVELOPMENT

For setting up of industrial estates and to develop infrastructure facilities like power distribution network, water telecommunication, drainage and pollution control facilities, roads, banks, raw material, storage and marketing outlets, common services facilities and technological back up services etc. for MSMEs, the integrated Infrastructural Development (IID) Scheme was launched in 1994. the scheme covers rural as well as urban areas with a provision of 50% reservation for rural areas and 50% industrial plots are to be reserved for the micro enterprises. The scheme also provides up gradation/strengthening of the infrastructural facilities in the existing industrial estates. The estimated cost to set up an IID Centre is Rs. 5 Crore. Central Government provided 40% in case of general states and up to 80% for North East Region, J&K, H.P. and Uttrakhand as grant and remaining amount could be loan fro SIDBI/Bank/Financial Institutions or the state Funds.

CREDIT GUARANTEE SCHEME

To ensure better flow of credit to micro and

small enterprises by minimizing the risk perception of banks/financial institutions in lending without collateral security, the Government launched Credit Guarantee Fund Scheme for SME’S in August 2000. this scheme covers collateral - free credit facility extended by eligible lending institutions to new and existing SME’S for loan upto Rs. 100 lakh per borrowing unit. The guarantee cover is upto 75% oif the credit sanctioned (85% in respect of loans upto Rs. 5 lakh and 80% for loans provided to SME’S owned /operated by women and all loans in the North East Region )

ISO 9000/14001 CERTIFICATION FEE REIMBURSEMENT SCHEME

To enhance the competitive strength of the

SME’S, the Government introduced a scheme to incentives technological up gradation , quality improvement and better environment management by the SME’S. The scheme reimburses 75% of the fees, subject to a maximum of Rs. 75,000/- for acquiring Quality Management System ( QMS)/ISO 9000 certification and / or Environment Management (EMS)?IS) 14001 certification by the SME’S.

SME’S CLUSTER DEVELOPMENT PROGRAMME

The Micro and Small Enterprises Cluster Development Programmme ( SME’S CDP) is implemented for holistic development of clusters of SME’S. The programme envisages measures for capacity building, skill development, technology up gradation of the enterprises, improved credit delivery, marketing support, setting up of common facility centers etc, based on diagnostic studies carried out in consultation with cluster units and their collectives and management of cluster-wide facilities by the cluster collectives.

CREDIT LINKED CAPITAL SUBSIDY SCHEME

The Credit Linked Capital Subsidy Scheme (CLCSS) aims at facilitating technology up-

gradation by providing 15% upfront capital subsidy w.e.f. 29th September , 2005 to manufacturing SME’S, on institutional finance upto Rs. 1 crore availed of by them for induction of well established and improved technologies in the specified sub sectors/products approved under the scheme.

INTELLECTUAL PROPERTY RIGHTS FOR SME’S

This Scheme has been launched to enable Indian SMEs to attain global leadership position and toempower them in using effectively the tools ofIntellectual Property Rights ( IPR) of innovative projects. The main features of the scheme are :- Awareness/Sensitization Program on IPRPilot Studies for Selected Clusters/Groups of IndustriesInteractive seminars/WorkshopsSpecialized TrainingAssistance for Grant of Patent/GI RegistrationSetting up of IP Facilitation Centre ( IPFC)Interaction with International Agencies.

QUALITY MANAGEMENT STANDARDS & QUALITY TECNOLOLGY TOOLS

Government of India launched a scheme, ‘EnablingManufacturing Sector be Competitive through QualityManagement Standards ( QMS) and Quality TechnologyTools ( QTT) I’ in order to improve quality andproductivity in the SME’S sector, The scheme is aimed atimproving the quality of the products in the SME’S sectorand inculcate the Quality consciousness in this sector. The major activities under the scheme are Organizing Awareness Campaigns for SME’SOrganizing Competition-Watch ( C-Watch)Implementation of Quality Management Standardsand

Quality Technology Tools in selected SME’SMonitoring International Study Missions

DESIGN CLINIC SCHEME FOR SMES

The main objective of the scheme is to bring the SME sector and design expertise into a common platform and to provide expert advice and solutions on real time design problems, resulting in continuous improvement and value-addition for existing products. It also aims at value added costs planned under the scheme include creation of Design Clinics Secretariat along with regional centers for intervention on the design needs of the SME sector.

MARKETING ASSISTANCE AND TECHNOLOGY UPGRADATION SCHEME FOR

SMES

The objective of this scheme is to identify and encourage those clusters of SMEs which have quality production and export potential and assist them to achieve competitiveness in the national and international markets. The scheme aims at improving the marketing competitiveness of SME sector by improving their techniques and technology for pr0motion of exports.

EXPORT PROMOTIONExport promotion form the SME sector has been accorded a

high priority.To help MSEs in exporting their products, the following

facilities/incentives areprovided Products of SME are displayed in international exhibition

and the expenditure incurred is reimbursed by the Government

To acquaint SME with latest packaging standards, techniques etc. training program on packaging for exporters are organized in various parts of the country in association with the Indian Institute of Packaging

Under the SME Marketing Development Assistance ( MDA) Scheme, assistance is provided to individuals for participation in overseas fairs/exhibitions, o overseas study tours.

The scheme also offer assistance for Sector specific market study by SME Associating /Export

Promotion Councils/Federation of Indian Export Organization

TECHNOLOGY AND QUALITY UPGRADATION SUPPORT TO SME’S

The objective of this scheme is to sensitize the manufacturing sector in India to upgrade their technologies, usage of energy efficient technologies to reduce emissions of Green House Gasses, adoption of other technologies mandated as per the global standards, improve their quality and reduce cost of production et, towards becoming globally competitive. The major activities planed under the scheme include Capacity Building of SMEs Cluster for Energy Efficiency/Clean Development Interventions, Implementation of Energy Efficient Technologies in SME sector, setting up of Carbon credit aggregation centers and encouraging SMEs to acquire product certification licenses from National/ International bodies.

JOB PROSPECT Senior and Junior Executives - Administration, Business Development, Promotion, Coordination and MarketingSenior and Junior Executives - Management and coordination of Events, exhibition , conferencesSenior and Junior Executives - International Marketing for Events, conferences , exhibitionPublic Relation OfficerDatabase ManagementSenior Executives - Product Sourcing and procurementResearch Analysts for Industrial, Finance, SME & MarketSenior Executives for preparation of Business plans ( Promotion and Branding)Junior Executives - Marketing (Tele / Field Marketing )Steno-Typist, Executive Secretaries, Telephone Operators

SUBMITTED BY:-VIKRAM SINGH CHAUAHN