Icwai Pus 8708


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This presentation was made by my friend P Udaya Shanker at the Hyderabad Chapter of Cost Accountants on 12 Jul 2008
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Icwai Pus 8708

  1. 1. MSMEs – Role of Professionals - Experience sharing P UDAYA SHANKER Head, Centre for Industrial Credit & Financial Services School of Enterprise Management
  2. 2. Coverage <ul><li>MSME act </li></ul><ul><li>Credit linked capital subsidy scheme </li></ul><ul><li>Credit guarantee fund for small industries </li></ul><ul><li>Venture capital </li></ul><ul><li>Marketing assistance for SSI products </li></ul><ul><li>Technology development & modernisation </li></ul><ul><li>Cluster development </li></ul><ul><li>National manufacturing competitiveness and capacity building </li></ul>
  3. 3. Coverage <ul><li>Micro credit </li></ul><ul><li>ISO certification </li></ul><ul><li>Intellectual property rights </li></ul><ul><li>Delayed payments to small industries </li></ul><ul><li>Credit rating </li></ul><ul><li>Rajiv Gandhi Udyami Mitra Yojna </li></ul>
  4. 4. <ul><li>Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 </li></ul>
  5. 5. <ul><li>Classification of enterprises </li></ul><ul><ul><li>Manufacture/production of </li></ul></ul><ul><ul><li>goods </li></ul></ul><ul><ul><li>Providing/rendering of </li></ul></ul><ul><ul><li>services </li></ul></ul>
  6. 6. <ul><li>Manufacturing enterprises </li></ul><ul><ul><li>Investment limit </li></ul></ul><ul><ul><li>Plant and machinery </li></ul></ul><ul><ul><li>Excluding land & building </li></ul></ul>
  7. 7. <ul><li>Micro enterprises – </li></ul><ul><li>upto Rs.25 lakh </li></ul>
  8. 8. <ul><li>Small enterprises – </li></ul><ul><li>above Rs.25 lakh & </li></ul><ul><li>upto Rs.5 crore </li></ul>
  9. 9. <ul><li>Medium enterprises - above Rs.5 crore & </li></ul><ul><li>upto Rs.10 crore </li></ul>
  10. 10. <ul><li>Services enterprises </li></ul><ul><ul><li>Investment in equipment </li></ul></ul><ul><ul><li>Excluding land & building </li></ul></ul><ul><li>No relation with turnover or </li></ul><ul><li>manpower engaged </li></ul>
  11. 11. <ul><li>Micro enterprises – </li></ul><ul><li>upto Rs.10 lakh </li></ul>
  12. 12. <ul><li>Small enterprises – </li></ul><ul><li>above Rs.10 lakh & </li></ul><ul><li>upto Rs.2 crore </li></ul>
  13. 13. <ul><li>Medium enterprises - above Rs.2 crore & </li></ul><ul><li>upto Rs.5 crore </li></ul>
  14. 14. <ul><li>Credit Linked Capital Subsidy Scheme </li></ul><ul><ul><li>Technology up-gradation </li></ul></ul><ul><ul><li>Select sectors </li></ul></ul><ul><ul><li>15 per cent upfront to MSME </li></ul></ul>
  15. 15. <ul><li>Credit Guarantee Fund Scheme for Small Industries (CGFSI) </li></ul><ul><ul><li>Collateral free lending upto Rs.25 lakh </li></ul></ul>
  16. 16. <ul><li>Venture capital scheme </li></ul><ul><ul><li>Innovative </li></ul></ul><ul><ul><li>Not qualified for conventional financing </li></ul></ul>
  17. 17. <ul><li>Marketing assistance scheme </li></ul><ul><li>for SSI products </li></ul><ul><ul><li>Specialised organisations </li></ul></ul><ul><ul><li>Marketing assistance </li></ul></ul><ul><ul><li>Infrastructure </li></ul></ul><ul><ul><li>Support services </li></ul></ul>
  18. 18. <ul><ul><li>Market related activities: </li></ul></ul><ul><ul><li>R&D </li></ul></ul><ul><ul><li>Product up-gradation & standardisation </li></ul></ul><ul><ul><li>Advertising, branding, catalogue </li></ul></ul><ul><ul><li>Audio visual aids </li></ul></ul><ul><ul><li>Trade fairs and exhibitions, sales promotion tours </li></ul></ul><ul><ul><li>Distribution networks, showrooms/ </li></ul></ul><ul><ul><li>retail outlet/ware housing </li></ul></ul><ul><ul><li>Training of personnel </li></ul></ul>
  19. 19. <ul><li>Technology Development and Modernisation Scheme (TDMFS) </li></ul><ul><ul><li>New/existing SSI, generally private limited companies </li></ul></ul><ul><ul><li>Equipment </li></ul></ul><ul><ul><li>Technical know how </li></ul></ul><ul><ul><li>Designs, drawings </li></ul></ul><ul><ul><li>Up-gradation of process </li></ul></ul><ul><ul><li>technology and products, packaging </li></ul></ul><ul><ul><li>TQM and ISO 9000 </li></ul></ul>
  20. 20. <ul><li>Industries Cluster Development </li></ul><ul><li>Programme (SICDP) </li></ul><ul><li>Micro & Small Enterprises </li></ul><ul><li>Cluster Development </li></ul><ul><li>Programme - Technology </li></ul><ul><li>upgradation for a group of </li></ul><ul><li>MSMEs of one industry </li></ul>
  21. 21. <ul><li>National Manufacturing Competitiveness Programme (NMCP) Schemes </li></ul><ul><li>Scheme for Capacity Building - Strengthening of database and advocacy by industry/enterprise associations </li></ul>
  22. 22. Micro Credit Scheme <ul><li>Micro Finance Institutions (MFIs) </li></ul><ul><li>Having network and experience in small saving-cum-credit programmes </li></ul><ul><li>Self-Help Groups (SHGs), Federation of SHGs, Non-Banking Finance Companies dealing with poor, specialised co-operative societies, etc. </li></ul><ul><li>Rating </li></ul>
  23. 23. <ul><li>ISO 9000/ISO 14001 Certification </li></ul><ul><li>Reimbursement Scheme </li></ul><ul><li>Acquiring Quality Management System (QMS) ISO 900 certification/ environment management (EMS) </li></ul><ul><li>ISO 14001 certification </li></ul><ul><li>To the extent of 75% or </li></ul><ul><li>Rs.75,000 whichever is lower </li></ul><ul><li>For SSIs/ancillary/tiny/SSSBE </li></ul>
  24. 24. Intellectual property rights <ul><li>Patents and registration under geographical indications of goods </li></ul><ul><li>Domestic patents Rs.25,000 grant </li></ul><ul><li>Foreign patent Rs.2 lakh grant </li></ul><ul><li>Geographical indications Rs.1,00,000 grant </li></ul>
  25. 25. <ul><li>Delayed payments to micro and small enterprises </li></ul><ul><ul><li>Make payment on or before date agreed in writing </li></ul></ul><ul><ul><li>In no case, period agreed in writing shall exceed 45 days from the day of acceptance/deemed acceptance </li></ul></ul>
  26. 26. <ul><li>Where buyer fails to make payment </li></ul><ul><ul><li>Liable to pay compound interest with monthly rests </li></ul></ul><ul><ul><li>(3) three times of the bank rate </li></ul></ul><ul><li>Annual accounts to furnish information of unpaid amount with interest </li></ul><ul><ul><li>Principal amount and interest due thereon (shown separately) </li></ul></ul>
  27. 27. <ul><li>Report on amount of interest and amounts paid during each accounting year </li></ul><ul><li>Amount of interest due/payable for period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest </li></ul><ul><li>Amount of interest accrued and remaining unpaid; and </li></ul>
  28. 28. <ul><li>Amount of further interest due and payable even in succeeding years, until such date when interest dues are actually paid </li></ul><ul><li>Amount of interest payable or paid, shall not, for the purposes of computation of income, allowed as deduction. (Interest not to be allowed as deduction from income .) </li></ul>
  29. 29. Credit rating of small enterprises <ul><li>NSIC </li></ul><ul><li>Empanelled agencies: ICRA, ONICRA, Dun & Bradstreet, CRISIL, FITCH and CARE, SMERA   </li></ul>
  30. 30. Rajiv Gandhi Udyami Mitra Yojna (RGUMY) <ul><li>First generation entrepreneurs – </li></ul><ul><li>stages </li></ul><ul><li>Selection of enterprises to financing by agencies </li></ul><ul><li>Legal formalities </li></ul><ul><li>Follow up </li></ul>
  31. 31. <ul><li>Building of data base for products and services in specific locations </li></ul><ul><li>Model formats for project report preparation </li></ul><ul><li>Drawing of long term perspective for enterprise sustenance </li></ul><ul><li>Establishing linkages with the suppliers and customers </li></ul><ul><li>Empanelling experts in various fields of operation </li></ul>