Micro, Small and Medium Enterprises – Promotional Agencies
Salient features of Micro, Small and Medium Enterprises Development Act, 2006 are as follows
By enacting the Micro, Small and Medium Enterprises Development Act, 2006, the Government has recently fulfilled one of the needs felt and articulated by this segment for long. This Act seeks to facilitate promotion and development and enhancing competitiveness of these enterprises. It provides the first-ever legal framework for recognition of the concept of “enterprise” (comprising both manufacturing and services) and integrating the three tiers of these enterprises, namely, micro, small and medium. Apart from clearer and more progressive classification of each category of enterprises, particularly the small, the Act provides for a statutory consultative mechanism at the national level with wide representation of all sections of stakeholders, particularly the three classes of enterprises.
1. Section 7 of Act provides for the following classification in respect of industries engaged in production or manufacture of goods or rendering service enterprises:
Manufacturing Enterprises – Investment in Plant & Machinery
Services Enterprises – Investment in Equipment
Less than Rs. 25 lacs
Less than Rs. 10 lacs
Greater than Rs. 25 lacs but up to Rs. 5 Cr.
Greater than Rs. 10 lacs but upto Rs. 2 Cr
Greater than Rs. 5 Cr. but up to 10 Cr.
Greater than Rs. 2 Cr. but upto Rs. 5 Cr.
2. Filing of Memoranda by MSMEs: Process of two-stage registration of Micro and Small Enterprises dispensed with and replaced by filing of memoranda. 1. Filing of Memorandum optional for all Micro and Small Enterprises. 2. Filing of Memorandum optional for Service Sector Medium Enterprises. 3. Filing of memorandum mandatory for Manufacturing Sector Medium Enterprises.
3. Constitution of National Board: National Board for Micro, Small and Medium Enterprises (MSME) to be headed by the Central Minister in-charge of MSMEs and consisting of 46 members from among MPs and Representatives of Central Ministries, State Governments, UT Administration, RBI, SIDBI, NABARD, Associations of MSMEs including women etc.
Functions of the National Board: Examine the factors affecting the promotion and development of MSMEs and review the policies and programmes of the Central Government in this regard.
4. Advisory Committee Headed by Central Government Secretary I/c of MSMEs and including not more than five officers of the Central Government and not more than three representatives of State Governments; and One representative each of the Associations of micro, small and medium enterprises.
5. Functions of the Advisory Committee
Ø To examine the matters referred to it by the National Board;
Ø To advise Central Government on matters relating to classification of MSMEs, programmes, guidelines or instructions for the promotion and development and enhancing the competitiveness of MSMEs.
Ø To advise State Governments on matters specified in the rules related to repeal of, “The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, including anything done or any action taken under the Act so repealed
6. Promotional and Enabling Provisions Central Government to notify programmes, guidelines or instructions for facilitating the promotion and development and enhancing the competitiveness of MSMEs. Central Government to administer the Fund or Funds for purpose mentioned in Section 9 and coordinate and ensure timely utilization and release of sums with such criteria, as may be prescribed.
7. Credit: The policies and practices in respect of credit to the MSMEs shall be progressive and such as may be specified in the guidelines or instructions issued by the Reserve Bank of India, with the aims of:
Ø Ensuring smooth credit flow to the MSMEs,
Ø Minimizing sickness among them, and
Ø Ensuring enhancement of their competitiveness
8. Procurement Policies: Central Government or a State Government to notify preference policies in respect of procurement of goods and services produced and provided by MSEs, by its Ministries, departments or its aided institutions and public sector enterprises .
9. Provisions to Check Delayed Payments
Ø Provisions related to delayed payments to micro and small enterprises (MSEs) strengthened.
Ø Period of payment of MSEs by the buyers reduced to forty-five days.
Ø Rate of interest on outstanding amount increased to three times the prevailing bank rate or Reserve Bank of India compounded on monthly basis.
Ø Constitution of MSE Facilitation Council(s) mandatory for State Government.
Ø Declaration of payment outstanding to MSE supplier mandatory for buyers in their annual statement of accounts.
Ø Interest (paid or payable to supplier) disallowed for deduction for income tax purposes.
Ø No appeal against order of Facilitation Council to be entertained by any Court without deposit of 75% of the decreed amount payable by buyer.
Ø Appellate Court may order payment of a part of the deposit to the supplier MSE
10. Facilitating Closure of Business: Central Government may (within one year of the commencement of the Act) notify a scheme for facilitating closure of business by a micro, small or medium enterprise. The objectives of the rehabilitation policy are to give guidelines in the following areas:
• Identifying the sickness at an early stage.
• Initiating remedial measures promptly with a pro active approach
• Formulation and implementation of rehabilitation package for potentially viable sick MSME units
Micro, Small and Medium Enterprises Development Organisation (MSME – DO)
This is the apex body for promotion and development of micro, small and medium enterprises in India. On enactment of the MSME Act 2006, MSME – DO came into being after revocation of the Small Industries Development Organisation (SIDO). The MSME – DO is headed by the Additional Secretary and Development commissioner under the Ministry of Micro, Small and Medium Enterprises.
Functions: The major functions of the organisation are:
a) To advice the Government of India in formulation of national policy for promotion and development of Micro, Small and Medium Enterprises.
b) To provide techno-economic and managerial consultancy, common facilities and extension services to the MSME sector.
c) Extending facilities for technology upgradation, modernization, quality improvement and meeting infrastructural needs of the MSME sector.
d) Making available the economic information services needed for the MSME sector.
e) Developing human resources through training and skill upgradation.
DISTRICT INDUSTRIES AND COMMERCE CENTRE (DI&CC)
The District Industries and Commerce Centre (DI&CC) operate from the District head quarters of Assam. The centres work in close association with the Commissioner of Industries and Commerce, Guwahati. All the preliminary works relating to availing of the Govt. policy supports by the entrepreneurs in the form of schemes and incentives are done at the DI&CC level.
Functions of DI&CC: The DI&CC words at the grass-root for promotion and development of indigenous entrepreneurship in the state through policy supports initiated by the central and the state Governments. The major functions include the following:
1. To facilitate the voluntary filling of Memorandum by the Micro and Small Enterprises (MSEs) as per the Government of India’s MSME Development Act 2006.
2. To facilitate the compulsory filling of Memorandum by the Manufacturing Sector Medium Enterprises as per the Govt. of India’s MSME Development Act 2006.
3. To facilitate pre registration of the enterprises to avail benefits under the different schemes of assistance and supports under the central and the state Governments.
4. To guide the prospective entrepreneurs through appropriate counseling and suggestions in staring their new enterprises.
5. To guide the entrepreneurs through documentation and counseling in availing the Govt. incentive and support facilities.
6. To facilitate organization of Entrepreneurship Development Programmes (EDPs) by the NGOs through liaison.
7. To organize screening committee (Task Force) meeting for selection of beneficiaries for grant of Govt. incentives and supports.
8. To forward and recommend the entrepreneurs’ applications for availing of Govt. incentive and supports to the Commissioner of Industries and Commerce, Guwahati for onward recommendations.
KHADI AND VILLAGE INDUSTRIES COMMISSION (KVIC)
It is a statutory body created by an Act of Parliament in 1956 and became operative from April 1957 by taking over the work of the erstwhile “All India Khadi and Village Industries Board” set up in 1950. The Commission is engaged in the task of promoting and developing Khadi and Village Industries (KVI) with a view to creating employment avenues in the rural areas thereby strengthening the rural economy of India. It functions under the administrative control of the Ministry of Micro Small and Medium Enterprises, Govt. of India.
KVIC has its central office at Mumbai. It has 36 State and Divisional offices, 6 Zonal offices, 15 Departmental and 23 Non-Departmental Training Centers and a number of accreted Training Centers in addition to 13 Departmental Sales Outlets. The KVIC operates through 33 Boards spread over in different states and union territories of the country, in addition to thousands of institutions and co-operatives including DIC/DICCs.
Objectives: The broad objectives of the KVIC are of three-fold as under:
· The social objective of providing employment;
· The economic objective of producing saleable articles, and
· The wider objective of creating self-reliance amongst the people and building up a strong rural community spirit.
Functions: The crucial functions which the KVIC performs towards attainment of its avowed objectives are as follows:
1. Works towards planning, promotion, organization and implementation of programmes for the development of Khadi and other village industries in the rural areas of the country in coordination with the other agencies engaged in rural development.
2. Works towards building up of a reserve of raw materials and implements for supply to producers, creation of common service facilities for processing of raw materials as semi-finished goods and provision of facilities for marketing of KVI products.
3. Organizes training of artisans engaged in Khadi and Village Industries.
4. Encourages and promotes research in the production techniques and equipments employed in the KVI sector and provides facilities for study of the problems relating to the same.
5. It also encourages the use of non-conventional energy, bio-fertilizer and other organic products.
6. Provides financial assistance to institutions and persons who are engaged in the development and operation of Khadi and Village Industries and guides them through the supply of designs, prototypes and other technical information.
KHADI AND VILLAGE INDUSTRIES BOARD (KVIB)
It is a state level statutory body formed by an Act of the concerned state legislature. In India, at present there are 33 KVIBs in different States and Union Territories. The Assam Khadi and Village Industries Board Act was passed in the year 1955. The basic objective of the Board is to work towards organizing, developing and regulating the village industries in the state.
Functions: As a statutory Body of the Govt. of Assam the KVIB is required to perform numerous functions for promotion and development of Khadi and Village Industries in the State. The most important functions of the Board as enumerated in the Assam Khadi and Village Act, 1955 are listed below:
1. To start, encourage, assist and carry on Khadi and Village Industries and to carry on trade and business on such industries and to deal with matters incidental to such trade or business.
2. To help the people providing them with work in their homes and to give those monetary help.
3. To encourage establishment of Co-operative Societies for Khadi and Village Industries.
4. To conduct Training Centres and to train people with a view to equipping them with the necessary knowledge for starting for carrying on KVIs.
5. To manufacture tools and equipments required for carrying on KVIs.
6. To arrange for supply of raw materials and tools & equipments for KVIs.
7. To sell and arrange to sell the products of the KVIs.
8. To arrange for publicity and popularizing of finished products of KVIs by opening stores, shops, emporiums, organizing exhibitions or adopting other similar measures.
9. To undertake and encourage research work in connection with KVIs and to carry on such activities as per needs and circumstance.
10. To sanction loans to individuals and institutions as per the limit set for the purpose from time-to-time.
On the basis of the above board outline of functions as assigned to the Board and stipulated in the Act, the KVIB of Assam undertakes the following activities.
a) It works as implementing agency of various Govt. schemes, including the Central Government’s PMEGP scheme for the rural applicants.
b) It organizes State and District level exhibitions on Khadi and Village Industries Products.
c) It organizes training of the artisans at the State and district levels.
d) Establishes Emporiums for marketing of Khadi and Village Industries Products at different places.
e) All units assisted by the Board under different schemes are provided technical supports as and when needed.
f) It helps entrepreneurs in preparing their Project Reports.
NORTH EASTERN DEVELOPMENT FINANCE CORPORATION (NEDFi)
The North Eastern Development Finance Corporation Ltd (NEDFi) is a Public Limited Company registered under the Companies Act 1956 on 9th August, 1995. It is notified as a Public Financial Institution under Section 4A of the said Act and was registered as an NBFC in 2002 with RBI. The shareholders of the Corporation are IDBI, SBI, LICI, SIDBI, ICICI, IFCI, SUUTI, GIC and its subsidiaries. The management of NEDFi has been entrusted upon the Board of Directors comprising representatives from shareholder institutions, DoNER, State Governments and eminent persons from the NE Region and outside having wide experience in industry, economics, finance and management.
NEDFi provides financial assistance to micro, small, medium and large enterprises for setting up industrial, infrastructure and agri-allied projects in the North Eastern Region of India and also Microfinance through MFI/NGOs. Besides financing, the Corporation offers Consultancy & Advisory services to the state Governments, private sectors and other agencies. NEDFi conduct sector or state specific studies under its Techno-Economic Development Fund (TEDF) and is the designated nodal agency for disbursal of Govt. of India incentives to the industries in the North-East India under North–East Industrial and Investment Promotion Policy 2007 (NEIIPP 2007).
Objectives: The main objective of NEDFi is to provide finance and other facilities for promotion, expansion and modernization of industrial and infrastructure projects in the NE-region.
Functions: The NEDFi aims to be a dynamic and responsive organization catalyzing the economic development of the North East India. It assists in the efficient formation of fixed assets by identifying and nurturing eco-friendly and commercially viable industrial and infrastructure projects in the region. Thus, the NEDFi prime role is to enhance the wealth of the region and prosperity of its people. The major functions of the NEDFi are as follows:
a) To provide financial assistance to MSMEs for setting up industrial units, infrastructure and agri-allied projects in the North Eastern Region of India.
b) To extend Micro-Finance to Non-Government Organizations (NGOs) and voluntary Agencies (Vas) with good track-records for on-lending to the needy who can take up income generating activities for self-employment.
c) To offer Consultancy and Advisory services to the state Governments private sectors and other agencies.
d) To conduct state specific studies under the state’s Techno-Economic Development Fund (TEDF).
e) To serve as a designated nodal agency for disbursement of the Government of India’s incentives to industries in the N.E. Region under the “North East Industrial and Investment Promotion Policy (NEIIPP) 2007” and also under the “Prime Minister’s Employment Generation Programme (PMEGP)” scheme.
f) In addition to the above, the NEDFi takes up promotional activities which include NEDFi Haat, NEDFi Convention Centre, NEDFi Pavilion, etc.
IMPORTANT FINANCE SCHEMES OF THE NEDFI
The NEDFi finances a wide spectrum of activities which include agro-processing, mining, shipping, leasing, transport, tourism, information technology, medical & health services generation and distribution of electricity, setting up and development of industrial estates and other commercially viable infrastructure facilities. Some important financing schemes of the NEDFi are highlighted below:
a) Rupee Term Loan Scheme (RTL): The scheme aims to provide medium and long term financial assistance for setting up of new projects, expansion, diversification or modernization of existing projects in various manufacturing or services sector.
b) Equipment Finance Scheme: The scheme grants financial assistance for acquiring specific machinery/equipment by financially sound and profit making companies having good credit record.
c) Corporate Finance Scheme: the objective of the scheme is to provide finance to meet normal capital expenditure, working capital margin, shortfall in working capital, payment of high cost debt and also for meeting the general corporate purpose like funding of business acquisition, or for brand building, etc. where no tangible asset creation may be envisaged.
d) Working Capital Term Loan Scheme: The aim of the scheme is to provide one-time core working capital assistance to deserving units in the form of working capital term loan.
NORTH EASTERN INDUSTRIAL AND TECHNICAL CONSULTANCY ORGANIZATION LIMITED (NEITCO)
The North Eastern Industrial and Technical Consultancy Organization Limited (NEITCO) is a premier consultancy organization setup in 1973 by the all India financial institutions, nationalized banks and state development corporations under the aegis of the Industrial Development Bank of India (IDBI) to cater to the consultancy needs of the north eastern states of India. The co-promoters are ICICI, IFCI, IIBI, SBI, UCO BANK, UBI, AIDC, MIDC and APIDFC. The NEITCO pioneer in systematic entrepreneurship development movement in the entire North Eastern Region, has been organizing and conducting Entrepreneurship Development Programmes (EDPs) in the region since 1982 under the sponsorship of North Eastern Council (NEC), IDBI, SIDBI, IFCI, ICICI, NABARD, SBI, Department of Science and Technology, Govt. of India and state Governments of North Eastern Region. The organization operates from its head office at Guwahati in addition to branch offices at Shillong and Itanagar.
Functions: The NEITCO performs the following functions ‘to provide the quality, cost effective and timely services’ to its clients.
1. Consultancy Service: the consultancy services of the NEITCO are of the following types:
a) Technical and management consultancy services to the entrepreneurs for developing project profiles of numerous types of industries based on cement, textiles, food processing, chemicals engineering, etc.
b) It carries out Market Surveys, Diagnostic / Rehabilitation studies of sick industrial units.
c) Evaluation-cum-impact studies, Industrial potential Surveys and several specialized studies on specific sector.
2. Project Implementation: The Project Division of the NEITCO implements new industrial projects in addition to working for expansion of the existing projects. In doing so, it arranges for technical know-how and other technical, economic and managerial aspects.
3. Entrepreneurship Development: The NEITCO is the pioneer in systemic Entrepreneurship Development Programme Movement in the North Eastern Region and has since conducted a large number of Entrepreneurship Development Programmes (EDPs). It also collaborates and develops networks with lending institutions in the country for a vibrant learning environment.
4. Rural Development: The NEITCO also works to promote self-employment in rural areas through a number of Vocational Training Programmes / Skill Development Programmes with the help of the Department of Science and Technology, Government of India.
Indian Institute of Entrepreneurship (IIE)
Indian Institute of Entrepreneurship (IIE) is an autonomous organization under the Ministry of Skill Development & Entrepreneurship. The main aim of the Institute is to provide training, research and consultancy activities in Small and Micro Enterprises (SME), with special focus on entrepreneurship development. The Indian Institute of Entrepreneurship (IIE) registered under the Societies Registration Act,1860 was established in the year 1993 in Guwahati by the erstwhile Ministry of Industry (now the Ministry of Micro, Small and Medium Enterprises), Government of India. The Institute began operating from April 1994 with the North East Council (NEC), Governments of Assam, Arunachal Pradesh and Nagaland and SIDBI as its other stakeholders. IIE has been transferred to the Ministry of Skill Development & Entrepreneurship on 22nd May’2015. The head quarter of IIE is situated in Guwahati.
OBJECTIVES OF IIE
a) To promote and develop entrepreneurship.
b) To conduct research and provide consultancy for entrepreneurship development.
c) To coordinate and collaborate with other organizations in undertaking training, research and other activities to increase outreach of the institute.
d) To provide consultancy and monitoring service to MSMEs/ potential entrepreneurs and enhancing employability of participants.
e) To promote greater use of information technology in the activities/ functions of the IIE.
f) To comply with statutory responsibility.
FUNCTIONS OF IIE
a) Designing and organising training activities for different target group and undertaking research in the relevant to entrepreneurship.
b) Improving the efficiency, effectiveness and delivery of the change agents and development practitioners i.e. trainers, support organizations engaged in enterprise building. etc.
NATIONAL SMALL INDUSTRIES CORPORATION (NSIC)
The National Small Industries Corporation (NSIC) was set up by the Government of India in 1955 with the aim of promoting, aiding and fostering the growth and development of the MSMEs in the country. Over a period of close to six decades of transition, growth and development, the NSIC has proved its strength within the country and abroad by promoting modernization, up gradation of technology, quality consciousness, strengthening linkages with large and medium enterprises and enhancing export-projects and products from small industries. The NSIC operates through country wide network of 123 offices and Technical Centres. In addition to this, The NSIC has 48 Training cum-Incubation Centres with a large professional manpower; the NSIC provides a package of services as per the need of MSME sector.
NSIC IN THE NORTH – EAST INDIA
The present North Eastern Region of India comprises of eight states including Sikkim. The abundance of natural resources like cane, bamboo, silk and cotton has yielded a fine heritage of handicrafts and handloom products of daily use. From the ancient times these products have catered the rather than commercial uses.
Apart from other activities, the NSIC undertakes the task of promoting and marketing of these unique products in the country and abroad through its strong network in and around the country as well as abroad, by imparting training to the traditional artisans to improve their technology and productivity and subsequently displaying the products by organizing / participating in different trade fairs and exhibitions.
To create awareness amongst the unemployed youths and budding entrepreneurs of the North East, the NSIC imparts need based training both within and outside the region from time-to-time. The training programmes include the trades like TV & Mobile Repairing, Computer Hardware Maintenance, Electrical Goods Repairing, Leather Footwear, Machinist, Two-wheeler & Four-wheeler Repairing, Fashion technology, Beautician Programme, Electrician, Export Linkage and Export Management, Food Processing Technology, Hospitality and Tourism Management, Catering and Banking Technology, and Advance Welding.