MODULE-4

INSTITUTIONS SUPPORTING ENTREPRENEURS

Small Industry financing developing countries: Role of small scale in Indian economy SSI sector in India creates largest employment opportunities for the Indian population, next only to agriculture. It had been estimated that Rs. 1,00,000 of investments in fixed assets in the small scale sector generates employment for four persons. The small scale industries sector plays a vital role in the growth of the country. It contributes almost 40% of the gross industrial value added in the Indian economy. The growth rates during the various plan periods have been very impressive. The number of small scale units has increased from an estimated 0.87 million units in the year 1980-81 to over 3 million in the year 2000. SSI sector plays a major role in Indias present export performance. 45%-50% of the Indian exports is contributes by SSI sector. Direct exports from SSI sector account for nearly 35% of total exports. It would surprise many to know that non-traditional products account for more than 95% of the SSI exports.

Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification. The products where the SSI sector dominates in exports are sports goods, readymade garments, woolen garments and knitwear, plastic products, processed food and leather products. Finance has been an important resource to start and run an enterprise because it facilitates the entrepreneur to produce land, labour, material, machine and so on from different parties to run his enterprise. Hence fianc is considered as life blood for an enterprise. Recognizing it, Government through financial institutions and nationalized banks has come forward to help small entrepreneurs provide those funds. With the help of adequate finance during the necessary time will increase the number of entrepreneurs in the country. This indeed helps in growth of the country like more and more exports, job opportunities, least cost of production etc. A brief overview of Financial Institutions in India: With the quickened pace of economic development, the most striking change in the Indian economy, the scale and scope of operations of entrepreneurs, particularly in small-scale industries, have brought to the fore the importance of provision of administrative and institutional assistance at various levels. Over the years financial institutions are playing a key role in providing finance and counselling to the entrepreneurs to start new ventures as well as modernise, diversify and even rehabilitate sick units.

Institutional agencies grant financial assistance to small-scale industrial units for: 1. Participation in equity capital. 2. Acquisition of fixed assets by way of term loans. 3. Working capital. Institutions that help Entrepreneurs and Entreprises: 1. National Small Industries Corporation (NSIC), Small Industries Development Organisation(SIDO), Khadi and Village Industries Commission(KVIC), Handloom Board, Silk Board, Commodity Boards etc have schemes to help in promoting exports of goods manufactured by SSI units/Entrepreneurs. 2. SIDO is one of the important agencies that help SSI units in marketing their products through consultancy, testing and marketing facilities. It also promotes ancillary units to public sector enterprises. It has already set up 31 branch Small Industries Service Institutes, 4 Regional Testing Centres, 3 Process-cum Product Development Centres and 20 Field Testing stations to provide a comprehensive range of facilities to small-scale units. 3. Disrict Industries Centres(DICs) provide marketing and other assistance to SSI units under a single roof. 4. State-level Small Industries Corporations (SICs) participate in tender programmes of governmental purchase and then sub-contracts these tenders to SSI units. 5. The Govt of India has established trade centres at varios places which disseminate information on market potentials and conditions. These centres also organise fairs and exhibition where SSI units can exhibit and sell their products. 6. 27 Small Industry Service Institutes (SISIs) have been set up by SIDO at various places for disseminating market information. 38 Exchange Centres have also been set up within some SISIs to help units in securing sub-contract jobs. 7. The Small scale Industrial sector raises term credit and working capital required by it from commercial banks, cooperative banks and State financial corporations. 8. The specialised institutes like Central Institute of T ool Design, Hyderabad, Central Tool Room and Training Centres at Ludhiana and Calcutta, Central Institute of Hand Tools, Jalandhar, Institute of Design of Electrical Measuring Instruments (IDEMI), Mumbai, Integrated Trading Centre, Nilokheri, National Institute of Small Industry Extension Training (NISIET), Hyderabad, National Institute for Entrepreneurship and Small Business Development(NIESBUD), New Delhi conduct specialised courses/ programmes/job-oriented training programmes for the benefit of small-scale industries. 9. The instituties like Industrial Development Bank of India(IDBI), the Industrial Finance Corporation of India Ltd( IFCI), Small Industries Development Bank of India (SIDBI), State Industrial Development Corporations (SIDCs), State Financial Corporations (SFCs) together with the LIC,GIC and UTI play a significant role in the rapid growth of small-scale industry. 10. A National Bank for Agriculture and Rural Development (NABARD) has been set up for the supply of credit to entrepreneurs in Agriculture and for Small Village and Cottage Industry sector in rural areas. 11. State Industrial Development Corporations (SIDCs) are established as whollyowned undertakings of the State Govts under the Companies Act,1956 to provide term assistance to industrial projects by way of loans, underwriting and guarantees,

the activities of SIDCs also covered promotional functions such as formulation of project ideas through industrial potential surveys, preparation of feasibility reports and selection and training of potential entrepreneurs. 12. State Financial Corporations (SFCs) constitute an integral part of the national institutional network engaged in extending long-term finance to industrial sector and assist in the development of small industries. CENTRAL LEVEL INSTITUTIONS: 1. Small scale industries board (SSI Board) 2. Khadi and village industries commission (KVIC) 3. Small Industries Development Organization (SIDO) Small industries service institutes (SISIs) Regional Testing Centres (RTCs) HTI-Programme Objectives Small Entrepreneurs Promotion and Training Institute (SEPTI) , Tiruvalla Tool Rooms and Tool Design Institute ( TR/TDI) Central Footwear Training Institutes (CFTIs) Product Cum Process Development Centers (PPDCs) Prototype Development and Training Center 4. National Small Industries Corporation Limited (NSIC) 5. The National Science and Technology Entrepreneurship Development Board (NSTDEB) 6. National Productivity Council (NPC) 7. National Institute for Small Industry Extension and Training (NISIET) 8. National Institute for Entrepreneurship and Small Business Development (NIESBUD) 9. Indian Institute of Entrepreneurship (IIE) 10. Entrepreneurship Development Institute of India (EDII) STATE LEVEL INSTITUTIONS 1. 2. 3. 4. 5. Directorate of Industries (DIs) District Industries Centers (DICs) State Financial Corporations (SFCs) State Industrial Development/ Investment Corporation (SIDCs/ SIICs) State Small Industrial Development Corporation (SSIDCs)

Small Industries Development Bank of India (SIDBI) HISTORY: With a view to ensuring larger flow of afinancial and non financial assistance to the small scale sector, the Govt of India set up the Small Industries Development Bank of India under a special Act of Parliament in October 1989 as a wholly- owned subsidiary of the IDBI. The Bank commenced its operations from April 2, 1990 with its head office in Lucknow. Principal Development Financial Institution for: -- Promotion -- Financing and

-- Development of Industries in the small scale sector and --Coordinating the functions of other institutions engaged in similar activities. PROVISION OF CHARTER: SIDBI was established on April 2, 1990. The Charter establishing it, The Small Industries Development Bank of India Act, 1989 envisaged SIDBI to be "the principal financial institution for the promotion, financing and development of industry in the small scale sector and to co-ordinate the functions of the institutions engaged in the promotion and financing or developing industry in the small scale sector and for matters connected therewith or incidental thereto. MISSION: To empower the Micro, Small and Medium Enterprises (MSME) sector with a view to contributing to the process of economic growth, employment generation and balanced regional development.

VISION: To emerge as a single window for meeting the financial and developmental needs of the MSME sector to make it strong, vibrant and globally competitive, to position SIDBI Brand as the preferred and customer - friendly institution and for enhancement of share - holder wealth and highest corporate values through modern technology platform. BUSINESS DOMAIN OF SIDBI: The business domain of SIDBI consists of small scale industrial units, which contribute significantly to the national economy in terms of production, employment and exports. Small scale industries are the industrial units in which the investment in plant and machinery does not exceed Rs.10 million. About 3.1 million such units, employing 17.2 million persons account for a share of 36 per cent of India's exports and 40 per cent of industrial manufacture. In addition, SIDBI's assistance flows to the transport, health care and tourism sectors and also to the professional and self-employed persons setting up small-sized professional ventures. OBJECTIVES: Four basic objectives are set out in the SIDBI Charter for orderly growth of industry in the small scale sector. They are:

Financing Promotion Development Co-ordination .

FUNCTIONS OF SIDBI:

1. To initiate steps for technological upgradation and modernisation of existing units. 2. To expand the channels for marketing the products of SSI sector in domestic and international markets. 3. To promote employment oriented industries especially in semi urban areas to create more employment opportunities and thereby checking migration of people to urban areas. CHAIRMAN OF SIDBI: Mr. Rajender Mohan Malla, who has taken over as Chairman & Managing Director of Small Industries Development Bank of India (SIDBI) on July 11, 2007. PRODUCTS AND SERVICES: 1. Direct finance: SIDBI had been providing refinance to State Level Finance Corporations / State Industrial Development Corporations / Banks etc., against their loans granted to small scale units. Since the formation of SIDBI in April, 1990 a need was felt/ representations were made that SIDBI being the principal financial institution for the small sector, should take up the financing of SSI projects directly on a selective basis. So it was decided to introduce direct assistance schemes to supplement the other available channels of credit flow to the small industries sector. Since then, SIDBI has evolved itself into a supplier of a range of products and services to the Small & Medium Enterprises [SME] sector. 2. Bills finance: Bills Finance Scheme involves provision of medium and short-term finance for the benefit of the small-scale sector. Bills Finance seeks to provide finance, to manufacturers of indigenous machinery, capital equipment, components sub-assemblies etc, based on compliance to the various eligibility criteria, norms etc as applicable to the respective schemes. To be eligible under the various bills schemes, one of the parties to the transactions to the scheme has to be an industrial unit in the small-scale sector within the meaning of Section 2(h) of the SIDBI Act, 1989.
3. Refinance: Refinance scheme is introduced for catering to the need of funds of

Primary Lending Institutes(PLIS) for financing small-scale industries. Under the scheme, SIDBI grants refinance against term loans granted by the eligible PLIs to industrial concerns for setting up industrial projects in the small scale sector as also for their expansion / modernisation / diversification. Term loans granted by the PLIs for other specified eligible activities / purposes are also eligible for refinance. 4. International finance: The main objective of the various International Finance schemes is to enable small-scale industries to raise finance at internationally competitive rates to fulfil their export commitments. The financial assistance is being offered in USD and Euro currencies. Assistance in Rupees is also considered, independent of foreign currency limits. SIDBI has a license to deal in foreign exchange as a "restricted" Authorised Dealer (i.e. SIDBI confines its foreign exchange activities only to its own exposures and to exposures for its customers. The Mumbai Head Office (MHO) of SIDBI operates as a Category 'A'

branch that maintains foreign currency positions, nostro account with foreign correspondent banks and provides cover to other branches (Category 'B' branches) that carry out forex business. 5. Micro finance: The scheme of Micro-finance has found to be an effective instrument for lifting the poor above the level of poverty by providing them increased selfemployment opportunities and making them creditworthy. 6. Promotional and Developmental activities: As an apex financial institution for promotion, financing and development of industry in the small scale sector, SIDBI meets the varied developmental needs of the Indian SSI sector by its wide-ranging Promotional and Developmental (P&D) activities.P&D initiatives of the Bank aim at improving the inherent strength of small scale sector on one hand as also economic development of poor through promotion of micro-enterprises. In pursuance of its multifaceted P&D activity, synergistic with its business activities aimed at development of the small industries, SIDBI looks forward to a partnership with NGOs, associate financial institutions, corporate bodies, R&D laboratories, marketing agencies, etc., for national level programmes. CHANNELS OF ASSISTANCE: SIDBI's financial assistance to small scale sector have three major dimensions: 1. Indirect assistance to primary lending institutions (PLIs); 2. Direct assistance to small units; and 3. Development and Support Services Indirect Assistance: SIDBI's Schemes of indirect assistance envisages credit to SSIs through a large network of 913 PLIs spread across the country with a branch network of over 65000. The assistance is provided by way of refinance, bills rediscounting, and resource support in the form of short term loans/Line of Credit (LoC) in lieu of refinance, etc. Direct Assistance : The objective behind SIDBI's direct assistance schemes has been to supplement the efforts of PLIs by identifying the gaps in the existing credit delivery mechanism for Small Scale Industries. Direct assistance is provided under several tailor made schemes through SIDBI's 41 Regional/Branch offices spread across the country Development And Support Services : The Bank extends development and support services in the form of loans and grants to different agencies working for the promotion and development of SSIs and tiny industries. Over the years, the initiatives of SIDBI under promotional and developmental activities have crystallised into the following important areas:

Enterprise Promotion with emphasis on Rural Industrialisation

Human Resource Development to suit the SSI sector needs Technology Upgradation Quality and Environment Management Marketing and Promotion and Information Dissemination.

SHAREHOLDING: The entire issued capital of Rs.450 crore has been divided into 45 crore shares of Rs.10 each. Of the total Rs.450 crore subscribed by IDBI, while setting up of SIDBI, 19.21% has been retained by it and balance 80.79% has been transferred / divested in favour of banks / institutions / insurance companies owned and controlled by the Central Government. ACHIEVEMENTS: SIDBI retained its position in the top 30 Development Banks of the World in the latest ranking of The Banker, London. As per the May 2001 issue of The Banker, London, SIDBI ranked 25th both in terms of Capital and Assets. Credit Guarantee Fund Trust for Micro and Small Enterprises popularly known as CGTMSE is widely being used by many PSU Banks and Private sector banks to fund MSME sector. SIDBI Venture Capital Limited(SVCL): Mission: "To catalyse entrepreneurship by providing capital and other strategic inputs for building businesses around growth opportunities and maximize returns on investment " SIDBI Venture Capital Limited (SVCL) is a wholly owned subsidiary of SIDBI, incorporated in July 1999. Current funds managed by SVCL are: National Venture Fund for Software and Information Technology (NFSIT)

The National Venture Fund for Software and Information Technology Industry (NFSIT) has been set up by Small Industries Development Bank of India (SIDBI) in association with Ministry of Information Technology (MIT), Govt. of India during 1999-2000. It is a close ended 10 year fund with a corpus of Rs. 1 billion. SIDBI, Ministry of Information Technology (MIT), Govt. Of India and IDBI are the initial contributors to the fund. The fund is presently in the divestment stage.

SME Growth Fund (SGF)

The SME Growth Fund (SGF) has been set up by Small Industries Development Bank of India (SIDBI) in association with other leading commercial banks such as Punjab National Bank, State Bank of India, Bank of Baroda, Bank of India, Central Bank of India, Union Bank of India, Oriental Bank of Commerce and Corporation Bank. It is a close ended 8 year fund dedicated to SME sector with a corpus of Rs. 5 billion. The Fund commenced its operations in 2004-2005. SME Growth Fund focuses at wide range of growth sectors, such as life sciences, retailing, light engineering, food processing, information technology, infrastructure related services, healthcare, logistics and distribution, etc. The main objective of the fund is to invest in companies at early stage as well as in second round financing for those with a track record of proven technology or business model and opportunities for growth and earnings. The fund would endeavour to develop international networking and enable assisted units to attract co-investment from international venture capitalists in subsequent rounds of financing.

THE INDUSTRIAL DEVELOPMENT BANK OF INDIA IDBI was established on 1st July, 1964 under the industrial development bank of India act, as a wholly owned subsidiary of the reserve bank of India. The ownership of the IDBI has been transferred to the central govt. with effect from 16 February 1976. The IDBI has been assigned a special role to play in regard to industrial development. OBJECTIVES AND FUNCTIONS To serve as an apex institution for term finance for industry, to co-ordinate the working of institutions engaged in financing, promoting or developing industries & to assist in the development of these institutions. To plan, promote and develop industries to fill gaps in the industrial structure in the country. To provide technical and administrative assistance for promotion, management or expansion of industry. To undertake market and investment research & surveys as also technical & economics studies in connection with development of industry. The IDBI has been playing a significant role in the promotion of small scale industries. IDBI SCHEMES IDBI is having the following schemes for the benefit of enterprises & entrepreneurs in the small & medium scale sector. DIRECT ASSISTANCE

Project finance scheme (loans, underwriting, direct subscription & guarantees) Modernization assistance scheme for all industries. Textile modernization fund scheme . Technical development fund scheme. Venture capital fund scheme. Energy audit subsidy scheme. Equipment finance for energy consumption scheme. Equipment finance scheme. Foreign currency assistance scheme.

INDIRECT ASSISTANCE Refinance scheme for industrial loans for small & medium industries. Refinance scheme for modernization & rehabilitation of small & medium industries. Equipment refinance scheme. Bill discounting/rediscounting scheme. Seed capital scheme. Scheme for concessional assistance for manufacture & industrialization of renewable energy systems. Scheme for investment shares & bonds of other financial institutions. SOURCES OF FUNDS Capital contribution from government Loan capital from government Loan capital from RBI out of National Industrial Credit (Long term operation) fund created out of its annual profits . Borrowings by way of government guaranteed bonds from domestic market. Borrowings in foreign currency from international capital market. Deposits under investment deposit account scheme in lieu of investment. allowance under section 32 AB of income tax act.

Three year IDBI capital bond scheme. SOFT LOAN SCHEME The IDBI extends soft loan to in units in selected industry groups, namely cotton textiles, jute , cement, sugar and specified engineering industries to enable them to overcome the backlog in modernization, replacement and renovation of plant and machinery so that they may achieve higher and more economic levels of production and improve their competitiveness. The loans under the soft loan scheme are extended on concessional terms not only in regard to the interest but also in regard to the promoters contribution, debt-equity ratio, initial moratorium and repayment period in pursuance of the decision taken by the government of India, loans under this scheme have been exempted from the convertibility stipulation.

SIDO Small Industries Development Organisation India Type of institution It is an attached office of the Department that assists the Ministry of Small Scale Industries (SME). SIDO was established on the basis of the recommendations of the Ford Foundation Members and governance Structure SIDO, known as the Office of the Development Commissioner (Small Scale Industries), operates under Ministry of Small Scale Industries as the nodal development agency for SMEs (please note that SIDO operates on behalf of Small Scale Industries only) Small Scale Industry Board (part of Small Scale Industry Ministry) The SME Board, which is part of the Small Scale Industry Ministry, is the main advisory body of SIDO. Small Scale Industry Board was last constituted on 13th October, 2000 with 90 members besides the Chairman The Board provides a Forum for interactions among its members in order to facilitate coordination and Inter-institutional linkages and to render advice to the Government on various policy matters and other related issues concerning SME. The term of the Small Scale Industry Board is two years. Year of establishment Established in 1954 Objectives, Mission and Development: SIDOs major SME-related activities include assisting the Ministry in evolving policies and programmes and coordinating policies and programmes of State Governments. SIDO also provides a comprehensive range of extension services through its

field offices and allied institutions and monitors or implements a large number of Government-sponsored programmes. As a consequence of the increased globalisation of the Indian economy, small industries are required to face new challenges. SIDO has recognised the changed environment and is currently focusing on providing support in the fields of credit, marketing, technology and infrastructure to SMEs. Global trends and national developments have further stressed SIDOs role as a catalyst of growth of small enterprises in the country. Organisational structure Since it is an attached office of the Ministry of Small Scale Industries, it does not have Business Units within its structure. However, The Ministry is supported by a number of support agencies and some providers of specialised services in the following areas: Finance, Technology Up gradation, Technical Training, Industrial Infrastructure, Entrepreneurship Development, and Marketing From SIDO depend several companies/ Business Units. National Presence SIDOs main office is located in New Delhi and is organise as follows: 30 Small Industries Service Institutes (SISIs), set up in State capitals and other industrial cities all over the country 28 Branch Small Industries Service Institutes (Br. SISIs), set up in State capitals and other industrial cities all over the country 4 Regional Testing Centres (RTCs) located in Mumbai, Chennai, Calcutta, and in New Delhi 7 Field Testing Stations (FTSs) located in Jaipur, Bhopal, Kolhapur, Hyderabad, Pondicherry, Chenganacherry, and in Bangalore. 21 Autonomous bodies which include: 11 Tool Rooms (TRs) and Tool Design Institutes (TDI) located in Indore, Ahmedabad, Ludhiana, Hyderabad, Bhubaneshwar, Jamshedpur, Calcutta, Jallandhar, Guwahati and Nagaur. State Govt. run tool rooms are located in Lucknow, Delhi, Bangalore, Mysore and Goa 4 Product-cum-Process Development Centres (PPDCs) located in Kannauj Firozabad, Ramnagar, Meerut and Agrai 2 Central Footwear Training Institutes (CFTIs) located in Agra & Chennai 1 Electronics Service & Training Centre (ESTC) in Ram Nagar 1 Institute for Design of Electrical Measuring Instruments (IDEMI), located in Mumbai 2 National Level Training Institutes, and 1 Departmental Training Institute located in New Delhi, Hyderabad, and Guwahati Production Centre in Tiruvalla 4 General information related to technology area (product/market) Industrial sector/s of reference - Food Products - Metal Industries

- Electrical & Machinery - Chemical - Rubber and plastic products Framework of the main activities Industrial technologies of reference: By means of its State of the Art Tool Rooms and Training/testing Centres, SIDO has developed very important advances in the following technologies: - Hand Tool Technology/Manufacturing/Design - Tool Engineering - Technology in CNC, - CAD/CAM Systems, - Precision Engineering - Robotics - Heat Treatment - Electronics - Agro-technology - Chemical technology - Energy and New Technologies - Mechatronics - Mould and Die Making Technology Type of services provided Through its Technical Centres, Tool Rooms, Testing Centres, Product/Process Centres, and Institutions located nationwide, SIDO provides the following services: Formative - Training for managers & supervisors to upgrade their knowledge and skill - IPR workshop - Training in technology, inspection, quality control testing - Training and manpower development Informative - Databases and Reports on Technology trends and Trade reports - Formulation of industrial development policies to facilitate accelerated growth of SMEs based upon local resources and markets - Identification technology and equipments for setting of identified industries based upon local/export market requirements of volume, quality, etc - Several publications available on line Consulting - Advising the Government in policy formulation for the promotion and development of SMEs - Providing techno-economic and managerial consultancy, common facilities, and extension services to SMEs - General consultancy, covering all aspects of industrial development Research

- Marketing Research outsourcing and collaborative projects - Strategy driven basic and applied research Others SIDO also provides extended support through: - Relevant funding for roundtrip airfares for participation by SME Entrepreneurs in overseas fairs/trade delegations. The scheme also provide for funding for producing publicity material (up to 25% of costs) for individual SMEs & Associations - Project Sub-contracting Promotion policy. - Vendor Development Programme. For linkages between small, medium, large industry - Comprehensive policy for investment marketing brand promotion and overseas market access. - Organise WTO sensitisation programmes for small-scale industries. - Comprehensive plan for promotion of rural entrepreneurship - Master Website on Small Industries comprising information on policies and procedures, technology, products, with hyperlinks to states and countries. - Comprehensive plan for preparing Small Scale Industries for e-commerce, with appropriate electronic infrastructure support - Preference will be given to the Micro Sector while organising Buyer-Seller Meets, Vendor Development Programmes and Exhibitions Framework of themain activities - Environmental Services - Technical Assistance - Marketing Services - International Cooperation - Export Promotion Main information on Key Projects 1. National Programme on development of Indian Toy Industry 2. National Programme for Development of Stone Industry in India (NPDSI) 3. Indo-German Tool Programme Projects 4. Indo-Danish Tool Rooms (IDTRs) Main information related to the "level of market orientation" Plans for strategic development - Focus on credit, marketing, technology, infrastructure, regulatory regime and impact of globalisation - Legislative support to factoring services, limited partnership act, single law for SMEs - Promotion of linkages between large and small enterprise - Emphasis on the service sector - FDI window - Priority to sunrise industries SIDO target for the next five years:

Target 12% annual growth as compared to 9% during last five years Employment growth at 4% per annum, similar to the last five years Strategy Market Partnerships - Ministry of SME and ARI (Ministry of Small Scales Industries and Agro Rural Industries) - KVIC (Khadi and Village Industries Commission) - Coir Board - RBI (Reserve Bank of India) - UNIDO (United Nations Industrial development Organisation) - EAN India - IIP - SIA (Secretariat for Industrial Assistance) - WIPO (World Intellectual Property Organisation) - NPC (National Productivity Council of India) - SIDBI (Small Industries Development Bank of India) - CEDOK (Centre for Entrepreneurship Development of Karnataka) - CSIR India (Counsel of Specific Industrial Research) - Anti-Dumping Directorate - APO-Japan - UNCTAD Geneva Revenue Model Private / public role SIDOs revenue model is composed of public funding and fees. That is, 60%of financing comes from the government and the rest (40%)comes from the private industries. DISTRICT INDUSTRY CENTRE (DIC): The District Industries Centre is functioning mainly with the aim of promoting, facilitating and developing industrial growth in the territory. For the convenience of existing and new entrepreneurs, the Administration has identified various clearance needed and incorporated them in a computerized monitoring system called SWIFT (Single Window Invest Friendly Time Bound System). MAIN ACTIVITY

To develop and promote Cottage and Small Scale Industries in the district. The Small Scale Industries (SSI) means the Industries with investment up to Rs 1 (one) crore in plant & machinery Role of DIC for the promotion of Small Scale & Cottage Industries. 1. Technical support for preparation of Project Report.

2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

Information on sources of machinery & Equipment. Priority in Power supply/ Telephone connection. Promotion of new Industrial Estates/ Growth Centers. Land/ Shed in Industrial Estate. Approval of Project Reports of special types. Promotion of Electronic Industries. Govt. Margin Money Loan under Additional Employment Programme. Training through Entrepreneurship Development Programme. Assistance under State Incentives Scheme. Allotment of Raw Materials. Financial Assistance under Self Employment Schemes. Financial assistance through Bank/ WBFC/ WBSIC/NSIC. Assistance under Equipment Leasing Scheme through NSIC. Marketing linkage with Central Govt./ State Govt. organisations/ undertakings. Marketing assistance through WBSIC/NSIC/CEO. Ancillary Industry tie-up with Govt. undertakings. Marketing information. Marketing assistance through participation in Exhibitions/ Trade Fairs/ BuyersSellers Meet etc.

20. Marketing assistance to Handicrafts Artisans through participation in Handicrafts Expo and Exhibition inside/ outside of the state.

21.

Linkage with organisations like WBHDC/ WB State Handicrafts Co-operative Society Ltd./Development Commissioners ( Handicrafts ).

22. Attending problems related to SSI Registration/ Bank loan/ Marketing of production etc. Single Window The Single Window Scheme envisages sanction and disbursement of working capital and term loan together from a single agency. It is applicable to projects with cost upto Rs. 50 lakhs. The Scheme is operated both by banks and financial institutions. State Financial Corporations under Single Window Scheme provide working capital loan along with the term loan to new tiny and small scale sector units so as to overcome the initial difficulties and delays faced by them to start production expeditiously. Eligibility: New tiny and small scale units whose cost of project (excluding working capital margin) does not exceed Rs.10 lakhs and the total working capital requirement at the normal level of operation is upto Rs.5 lakhs are eligible under the scheme. Terms and conditions: The terms and conditions are as follows: 1.Working Capital loan should be availed within one year from the date of commencement of production. 2.The unit should open a current account with a designated bank and the amount of working capital of the loan will be credited as and when disbursed by the Corporation. 3.The unit should route its entire transaction of the business including all the receipts and payments through this account only. 4.The unit should repay the entire working capital loan sanctioned by the Corporation at once in case the unit approached the bank for more working capital. 5.The unit should provide monthly stock statement showing the position of inventory level of the Corporation. If they fail to provide the same, the Corporation may recall the loan. INDUSTRIAL POLICY: Main features Objectives of the Industrial Policy of the Government are to maintain a sustained growth in productivity; to enhance gainful employment;

 to achieve optimal utilisation of human resources; to attain international competitiveness and to transform India into a major partner and player in the global arena. Policy focus is on Deregulating Indian industry; Allowing the industry freedom and flexibility in responding to market forces and Providing a policy regime that facilitates and fosters growth of Indian industry.

Policy measures Some of the important policy measures announced and procedural simplifications undertaken to pursue the above objectives are as under: i) Liberalisation of Industrial Licensing Policy The list of items requiring compulsory licensing is reviewed on an ongoing basis. At present, only six industries are under compulsory licensing mainly on account of environmental, safety and strategic considerations. Similarly, there are only three industries reserved for the public sector. ii) Introduction of Industrial Entrepreneurs Memorandum(IEM) Industries not requiring compulsory licensing are to file an Industrial Entrepreneurs Memorandum (IEM) to the Secretariat for Industrial Assistance (SIA). No industrial approval is required for such exempted industries. Amendments are also allowed to IEM proposals filed after 1.7.1998. iii) Liberalisation of the Locational Policy A significantly amended locational policy in tune with the liberlised licensing policy is in place. No industrial approval is required from the Government for locations not falling within 25 kms of the periphery of cities having a population of more than one million except for those industries where industrial licensing is compulsory. Non-polluting industries such as electronics, computer software and printing can be located within 25 kms of the periphery of cities with more than one million population. Permission to other industries is granted in such locations only if they are located in an industrial area so designated prior to 25.7.91. Zoning and land use regulations as well as environmental legislations have to be followed. iv) Policy for Small Scale Industries

Reservation of items of manufacture exclusively for the small scale sector forms an important focus of the industrial policy as a measure of protecting this sector. Since 24th December 1999, industrial undertakings with an investment upto rupees one crore are within the small scale and ancillary sector. A differential investment limit has been adopted since 9th October 2001 for 41 reserved items where the investment limit upto rupees five crore is prescribed for qualifying as a small scale unit. The investment limit for tiny units is Rs. 25 lakhs. 749 items are reserved for manufacture in the small scale sector. All undertakings other than the small scale industrial undertakings engaged in the manufacture of items reserved for manufacture in the small scale sector are required to obtain an industrial licence and undertake an export obligation of 50% of the annual production. This condition of licensing is, however, not applicable to those undertakings operating under 100% Export Oriented Undertakings Scheme, the Export Processing Zone (EPZ) or the Special Economic Zone Schemes (SEZs).

V) Non-Resident Indians Scheme The general policy and facilities for Foreign Direct Investment as available to foreign investors/company are fully applicable to NRIs as well. In addition, Government has extended some concessions specially for NRIs and overseas corporate bodies having more than 60% stake by the NRIs. These inter-alia includes (i) NRI/OCB investment in the real estate and housing sectors upto 100% and (ii) NRI/OCB investment in domestic airlines sector upto 100%. NRI/OCBs are also allowed to invest upto 100% equity on non-repatriation basis in all activities except for a small negative list. Apart from this, NRI/OCBs are also allowed to invest on repatriation/non-repatriation under the portfolio investment scheme. vi) Electronic Hardware Technology Park (EHTP)/Software Technology Park (STP) scheme For building up strong electronics industry and with a view to enhancing export, two schemes viz. Electronic Hardware Technology Park (EHTP) and Software Technology Park (STP) are in operation. Under EHTP/STP scheme, the inputs are allowed to be procured free of duties. The Directors of STPs have powers to approved fresh STP/EHTP proposals and also grand post-approval amendment in repsect of EHTP/STP projects as have been given to the Development Commissioners of Export Processing Zones in the case of Export Oriented Units. All other application for setting up projects under these schemes, are considered by the Inter-Ministerial Standing Committee (IMSC) Chaired by Secretary (Information Technology). The IMSC is serviced by the SIA. vii) Policy for Foreign Direct Investment (FDI) Promotion of foreign direct investment forms an integral part of Indias economic policies. The role of foreign direct investment in accelerating economic growth is by way of infusion

of capital, technology and modern management practices. The Department has put in place a liberal and transparent foreign investment regime where most activities are opened to foreign investment on automatic route without any limit on the extent of foreign ownership. Some of the recent initiatives taken to further liberalise the FDI regime, inter alia, include opening up of sectors such as Insurance (upto 26%); development of integrated townships (upto 100%); defence industry (upto 26%); tea plantation (utp 100% subject to divestment of 26% within five years to FDI); Encenhancement of FDI limits in private sector banking, allowing FDI up to 100% under the automatic route for most manufacturing activities in SEZs; opening up B2B e-commerce; Internet Service Providers (ISPs) without Gateways; electronic mail and voice mail to 100% foreign investment subject to 26% divestment condition; etc. The Department has also strengthened investment facilitation measures through Foreign Investment Implementation Authority (FIIA).