1999 onwards

1. COMPREHENSIVE POLICY PACKAGE 2000 2. MSME DEVELOPMENT ACT, 2006 3. PACKAGE FOR PROMOTION OF MICRO AND SMALL ENTERPRISES 2007

Comprehensive policy package for SSI, 2000

The Emerging Economic Scenario in the changed, liberalized & Competitive economic environment necessitated structural & fundamental changes in the policy framework, causing a shift in focus from

protection to Promotion

Policy 2000 Outline

SMALL SCALE SECTOR
2.0 Policy Support 3.0 Fiscal Support 4.0 Credit Support 5.0 Infrastructural Support 6.0 Technological Support and Quality Improvement 7.0 Marketing Support 8.0 Streamlining Inspections/ Rules and Regulations 9.0 Entrepreneurship Development 10.0 Facilitating Prompt Payment 11.0 Rehabilitation of sick units 12.0 Promoting Rural Industries 13.0 Improving Data Base

TINY SECTOR
14.0 Policy Support 15.0 Credit Support 16.0 Infrastructure Support 17.0 Technological Support 18.0 Marketing Support

1.0 Introduction
principle of

On going Economic Reforms based upon the

1. 2. 3. 4.

liberalisation, globalisation privatisation and emergence of WTO,

have brought certain challenge for SMEs. The most important challenge is

growing competition both globally and domestically

to address the problems like

1. 2. 3. 4.

credit, infrastructure, technology, Marketing We need the Policy 2000

2.0 Policy Support

1. investment limit Rs. 25 lakhs & 1 crore. - -----be raised to Rs. 5 crores 2. Limited Partnership Act will be drafted & enacted. 3. PMRY, the family income of Rs. 24,000 is now Rs. 40,000

3.0 Fiscal Support

excise duty limit Rs. 50 lakhs to Rs. 1 crore

4.0 Credit Support

1. composite loans limit 10 lakhs to Rs.25 lakhs 2. National Equity Fund Scheme,Rs. 25 lakhs to Rs. 50 lakhs 3. Credit Guarantee Scheme Rs. 10 laks to Rs.25

5.0 Infrastructural Support

1.
2. 3.

IID Scheme will cover all areas in the country with 50% reservation for rural areas. Out of this -50% for tiny sector A Plan Scheme for Cluster Development will be drawn up. cluster development is being taken up by KVIC, SIDO, SIDBI and NABARD.

6.0 Technological Support and Quality Improvement

1. 2. Capital Subsidy of 12 per cent for investment in technology in select sectors preference to the Tiny Sector. To encourage Total Quality Management, the Scheme of granting Rs.75,000/- to each unit for opting ISO-9000 Certification will continue for the next six years dissemination of the latest technology related information

3.

7.0 Marketing Support

SIDO will organize Market Development Assistance (MDA) Programme Vendor Development Programme, Buyer-Seller Meets and Exhibitions

8.0 Streamlining Inspections/Rules and Regulations To minimise harassment to Small Scale Sector repeal of laws and regulations

10.0 Facilitating Prompt Payment RBI

requested to strengthen and popularising factoring services

is being

13.0 Improving Data Base conducting Census of SMEs,

SICk Units etc ( 2001-2002 , 2003-2004 )

MSME Development Act, 2006

A. SMALL AND TINY ENTERPRISES
1.0 INTRODUCTION 2.0 TINY ENTERPRISES 3.0 FINANCIAL SUPPORT MEASURES 4.0 INFRASTRUCTURAL FACILITIES 5.0 MARKETING AND EXPORTS 6.0 MODERNISATION, TECHNOLOGICAL AND QUALITY UPGRADATION 7.0 PROMOTION OF ENTREPRENEURSHIP 8.0 SIMPLIFICATION OF RULES AND PROCEDURES

B. VILLAGE INDUSTRIES
9.0 HANDLOOM SECTOR 10.0 HANDICRAFTS SECTOR 11.0 OTHER VILLAGE INDUSTRIES

Change in definition
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.

Manufacturing Sector
Enterprises Investment in plant & machinery Does not exceed Rs 25 Lakhs does not exceed Rs. 5 Crores does not exceed Rs. 10 crore

Micro Small Medium

Enterprises

Service Sector Investment in equipments Does not Rs. 10 Lakhs does not exceed Rs. 2 crores does not exceed Rs. 5 Crores

Micro Small Medium

3.0 FINANCIAL SUPPORT MEASURES

1.
2. 3. 4.

Emphasis would shift from subsidized/cheap credit to to adequate flow of credit on a normative basis. access to the capital market & equity participation by other --not exceeding 24 % Limited Partnership Act -limit the financial liability of the new and non-active partners/entrepreneurs to the capital invested. factoring services through SIDBI to speed up payments

4.0 INFRASTRUCTURAL FACILITIES

1. 2. A Technology Development Cell (TDC) would be set up under (SIDO) To ensure Adequacy and equitable distribution of indigenous and imported raw materials

5.0 MARKETING AND EXPORTS

market promotion through marketing agencies
Export Development Centre would be set up in SIDO Parts, components, sub-assemblies, etc. required by large public/private sector undertakings would be encouraged for production in small scale ancillary units

6.0 MODERNISATION, TECHNOLOGICAL AND QUALITY UPGRADATION

awareness to produce goods and services of national and international standards Indian Institutes of Technology (IITs) and selected Regional Engineering Colleges - will serve as Technological Information, Design and Development Centres

7.0 PROMOTION OF ENTREPRENEURSHIP

EDP would be built into the curricula of vocational and other degree level courses Women entrepreneurs will receive support through special training programme.

8.0 SIMPLIFICATION OF RULES AND PROCEDURES

SMES are subjected to a large number of Acts and Laws, being required to maintain a number of registers and submit returns, and face an army of inspectors, would be attended to within a specified time frame of three months. Procedures would be simplified, bureaucratic controls effectively reduced, unnecessary interference eliminated and paper work cut down to the minimum to enable the entrepreneurs to concentrate on production and marketing functions.

PACKAGE FOR PROMOTION OF MICRO AND SMALL ENTERPRISES 2007

I. II. INTRODUCTION RECENT INITIATIVES

III.

PROMOTIONAL PACKAGE
1. LEGISLATION 2. CREDIT SUPPORT 3. FISCAL SUPPORT

4. SUPPORT FOR CLUSTER BASED DEVELOPMENT

5. 6. 7. 8. 9. TECHNOLOGIES AND QUALITY UPGRADATION SUPPORT MARKETING SUPPORT SUPPORTS FOR ENTREPRENEURIAL AND MANAGERIAL DEVELOPMENT EMPOWERMENT OF WOMEN OWNED ENTERPRISES STRENGTHENING OF PRIME MINISTERS ROZGAR YOJANA (PMRY)

10. STRENGTHENING OF DATA BASE FOR MSME SECTOR

INTRODUCTION
SSI is the most employment-intensive segment. Over 6000 products manufactured

a large no. of units faces several challenges. 1. credit, 2. technological up gradation, 3. marketing and 4. Infrastructural upgradation

1. LEGISLATION

Micro, Small and Medium Enterprises Development Bill, 2006 has recently been passed
Limited Liability Partnerships

2. CREDIT SUPPORT- (RBI) has already issued

guidelines to the public sector banks to ensure 20 per cent year-onyear growth in credit to the SME.

3. FISCAL SUPPORT the Government will examine the

feasibility of: increase in the General Excise Exemption

4. SUPPORT FOR CLUSTER BASED DEVELOPMENT 5. MARKETING SUPPORT

The National Manufacturing Competitiveness Programme (NMCP)

7. SUPPORTS FOR ENTREPRENEURIAL AND MANAGERIAL DEVELOPMEN

20% of the entrepreneurship development programmes (EDP) will be organised for SC/ST, & women and physically challenged persons 50,000 entrepreneurs will be trained in
1. 2. 3. 4. 5. information technology, catering, agro and food processing, pharmaceuticals, biotechnology, etc.

8. EMPOWERMENT OF WOMEN OWNED ENTERPRISES

Under the Credit Guarantee Fund Scheme, 80% guarantee will be for SME owned by women. 50% concession in fees would be given to women candidates in entrepreneurship/ management development programmes conducted by SISIs.

9. STRENGTHENING OF PRIME MINISTERS ROZGAR YOJANA (PMRY) PMRY is an important credit-linked subsidy schemes to generate self-employment opportunities for the educated youth by assisting them in setting up viable micro enterprises. By the end of 2005-06, it is estimated to have provided self-employment opportunities to 38.09 lakh persons.

10.Textiles: -Allocation for the Technology up gradation fund (TUF)

raised from 911 crore to Rs.1090 crore. Setting up of 6 mega clusters, Varanasi & Sibsagar for handlooms, Bhiwandi & Erodr for power looms, Narasapur & Moradabad for handicrafts 450 Crore scheme for Integrated Textile parks (SITP)

11. Banking & Finance:

Credit Guarantee Trust with SIDBI had extended guarantees to 89,129 units for an amount of Rs.2,479 crore as on January 31, 2008; SIDBI to reduce the guarantee fee from 1.5% to 1% cent and the annual service fee from 0.75% to 0.5% for loans up to Rs.5 lakhs

Legal Framework Acts and Laws applicable to Small Scale Industries I. REGISTRATION RELATED LAWS 2+ II. LABOUR RELATED LAWS30+ III. ENVIORNMENT RELATED LAWS 5+ IV. TAX RELATED LAWS 5+ V. LOCAL & OTHER MUNICIPAL LAWS 5+ VI. PRODUCT & PROCESS 10+ VII. OTHER CENTRAL ACTS 5+