3. This module discusses the various governmental Institutional Support provided to nurture entrepreneurship in India especially Small scale and cottage industry in villages. , Type of Support provided by governmental agencies, Directorate of Industries, Industrial Development Corporation, State Financial Corporations, State Small industries Development Corporation(SSIDC), Khadi and Village Industries Commission (KVIC),National Small Industries Corporation (NSIC) and Small Industries Development Bank Of India(SIDBI).

1. Institutional Support to
Entrepreneurship
• Prepared by
Jitendra Patel
Assistant Professor,
Prestige Institute of Management and
Research, Indore
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Jitendra Patel, Assistant Professor,
PIMR,Indore

2. Module IV
• Need of Institutional Support
• Type of Support
• Directorate of Industries
• Industrial Development Corporation
• State Financial Corporations
• State Small industries Development
Corporation(SSIDC)
• Khadi and Village Industries Commission.
• National Small Industries Corporation
• Small Industries Development Bank Of
India(SIDBI)
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Jitendra Patel, Assistant Professor,
PIMR,Indore

3. Institutional Support to Entrepreneurship
• Need for Institutional Support
• Starting a business unit – say, enterprise in short –
requires various resources and facilities.. Small
scale enterprises with there small resource find it
difficult to start or run enterprise.
• Finance is an important resources for the
organization to start and run business.
• Government and Nationalized banks has start
helping the small entrepreneurs to establish
industry in small backward areas
• Apart from this the institutional support is also
provided to entrepreneur to help making
conducive business environment.
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Jitendra Patel, Assistant Professor,
PIMR,Indore

4. Role of Directorate of Industries
• To implement policies and programmes for
development of industry
• Acquisitions of land for development of industrial
infrastructure.
• To provide various incentives under packages of
incentives to industrial units in the states
• Development and maintenance of industrial
Estates in various states
• Organizing seminars Workshops and awareness
campaigns for motivating the entrepreneurs
• To provide marketing Assistance.
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Jitendra Patel, Assistant Professor,
PIMR,Indore

5. DIC : Districts Industries Centre
• Started in May 1978 with a view to provide
integrated administrative framework at district
level for the promotion of small scale industries
in rural areas.
• The DICS are envisaged as single window
interacting agency with the entrepreneur at
district level.
• Services and support to small entrepreneur's are
provided under the single roof.
• The organizational structure of DICs consists of
General Manager, four functional managers and
3 project managers to provide assistant on all
relevant areas.
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Jitendra Patel, Assistant Professor,
PIMR,Indore

6. DIC Role
• To conduct industrial potential surveys keeping in
view the availability of resources
• To prepare techno economic surveys and identify
product lines and then to provide investment
advice to entrepreneurs.
• To prepare a action plan to effectively implement
the schemes identified
• To appraise the worthiness of the various
proposals received
• To assist entrepreneur in marketing there product
• To conduct artisan training programmes.
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Jitendra Patel, Assistant Professor,
PIMR,Indore

7. Industrial Development Corporation
• To secure and assist in the expeditious and orderly
Establishment, orderly growth and development of
industries in the states
• Promotion of joint sector and assisted sector units
in important industry segment
• Financing medium & large scale industries through
various loan schemes
• Development of business, trade and industrial links
with domestic as well as foreign institutions and
companies.
• Dissemination of information related to prospects
of industries in the state
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Jitendra Patel, Assistant Professor,
PIMR,Indore

8. State Financial Corporations
• In order to meet the financial requirements of small
scale and medium sized industries, there was an need
of special financial institutions
• Central government has passed the state financial
corporation act on 28th September 1951
• The state government to establish financial
corporation to operate within the state.
• So far 18 financial corporation has been established in
different state.
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Jitendra Patel, Assistant Professor,
PIMR,Indore

9. Objectives of State Financial Corporation
• To establish uniformity in regional industries
• To provide incentive to new industries
• To bring efficiency in regional industrial units
• To provide finance to small-scale, medium sized
and cottage industries in the state
• To develop regional financial resources
• Functions
I. To provide loans for period not exceeding 20
years to industrial units
II. To underwrite the issue of shares, debentures and
bonds for a period not exceeding 20 years
III. To give guarantee to loans taken up by industries
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Jitendra Patel, Assistant Professor,
PIMR,Indore

10. State Small industries Development
Corporation(SSIDC)
• To procure and distribute scare raw materials
• To supply machinery on hire purchase system
• To provide assistance form marketing of the products
of small-scale industries.
• To construct industrial estates/sheds, providing alled
infrastructure facilities and their maintenance.
• To extend seed capital assistance on behalf of the State
Government concerned.
• Provide management assistance to production units.
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Jitendra Patel, Assistant Professor,
PIMR,Indore

11. Khadi and Village Industries Commission
• To plan and organize training of persons employed or desirous of
seeking employment in khadi and village industries
• To build up reserves of raw materials and implements and supply
them to persons engaged or likely to be engaged in production of
handspun khadi or village industries at such rates as the
commission may decide.
• To encourage and assist in the creation of common service facilities
for the processing of raw materials or semi finished goods and for
otherwise facilitating production and marketing of khadi or
products of village industries.
• To undertake directly or through other agencies studies of the
problems of khadi or village industries.
• To establish and maintain separate organizations for the purchase
of carrying out any or all of the above matter.
• To promote and encourage cooperative efforts among the
manufactures of khadi or persons engaged in village industries.
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Jitendra Patel, Assistant Professor,
PIMR,Indore

12. National Small Industries Corporation
• To provide machinery on hire purchase scheme to small-
scale industries.
• To provide equipments leasing facility.
• To help in export marketing of the products of small scale
industries.
• To participate in bulk purchase programme of the
government.
• To develop prototype of machines and equipments to pass
on small-scale industries for commercial production.
• To distribute basic raw materials.
• To impart training in various industrial trades.
• To undertake the construction of industrial estates
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Jitendra Patel, Assistant Professor,
PIMR,Indore

13. Small Industries Development Bank Of
India(SIDBI)
SIDBI was established as wholly own subsidiary of Industrial
Development Bank of India(IDBI) under the small Industries
Development of India Act 1989.It is the principal institution for
promotion, financing and development of industries in the small-
scale sector. It also coordinate the functions of institutions engaged
in similar activities. For this purpose. SIDBI has taken over the
responsibility of administrative small Industries Development Fund
and National Equity Fund from IDBI
Capital- SIDBI started its operation from April 1990 with an initial
authorized capital of Rs. 250 crore, which could be increased to Rs.
1000 Crore. It also took over the outstanding portfolio of IDBI
relating to small-scale sector held under Small Industries
Development Fund as on March 31,1990 worth over Rs. 4000 crore
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Jitendra Patel, Assistant Professor,
PIMR,Indore

14. What are the Objectives of SIDBI
• Initiating steps for technologies upgrading and
modernization of existing units.
• Expanding the channels for marketing the
products of small-scale sector.
• Promotion of employment oriented industries
, especially in semi-urban areas
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Jitendra Patel, Assistant Professor,
PIMR,Indore

15. What are the functions of SIDBI
• It refinances loans and advances provided by
existing lending institutions to the small scale
units
• It discounts and rediscounts bills arising from
sale of machinery to and manufactured by small
scale industrial units
• It extends seed capital/ soft loan assistance
under national equity fund
• It grants direct assistance and refinance loans
extended by primary lending institutions for
financing exports of products manufactured by
small scale units
• It extends support to State Small Industries
Corporations for providing scarce raw materials .
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Jitendra Patel, Assistant Professor,
PIMR,Indore

16. Reference
1. Badi, R.V. & Badi, N.V. 'Entrepreneurship'; Vrinda Publications, New Delhi.
2. Desai, Vasant, 'The Dynamics of Entrepreneurial Development & Management'; Himalaya
Publishing House, New Delhi.
3. Khanka, S.S. (2013) 'Entrepreneurial Development' ; S. Chand & Company Ltd. New Delhi.
4. Kothari, Mishra, Sahu, 'Entrepreneurship Development II'; RBD Publications, Jaipur.
5. Kuratko, Donald F. (2013) 'Entrepreneurship An Introduction'; Cengage Learning, New
Delhi.
6. Roy, Rajeev (2012) 'Entrepreneurship'; Oxford University Press, New Delhi.
7. Sudha, G.S. ' Fundamentals of Entrepreneurship' ; RBD Publications, Jaipur. New Delhi.
8. Trehan, Alpana (2012) 'Entrepreneurship'; Kogent Learning Solutions Incorparation. New
Delhi.
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PIMR,Indore
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Jitendra Patel, Assistant Professor,
PIMR,Indore
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