Role of Government in Promoting SMEs in India

1. MSME
Subject Expert
S. Afrin Sulthana

2. Role of Government in Promoting SMEs
• Credit rating of MSMEs
• DE-reservation
• Credit finance
• Credit guarantee Scheme
• Emerging funding sources
• Competitive Technology
• Micro and Small Enterprises Cluster Development Programme
• Credit Linked Capital Subsidy Scheme
• National Manufacturing Competitiveness Programme

3. Role of Government in Promoting SMEs
• Skill Development
• Marketing and Procurement under Government store purchase
programme
• Export promotion
• Infrastructural development
• Fiscal Concessions
• Securing payment with delayed interest for SMEs
• Strengthening of Database

4. Backward area development
• The central govt enacted the Micro, Small and Medium Enterprises
Deployment Act, 2006 facilitating the growth of the MSME sector in the
country.
Meaning of Backwardness:
1. They must have potential for development
2. There must be inhibiting factors which prevents this potential from being
realized
3. There must be a need for special programme to remove or mitigate the
inhibiting factor and realize the full potential for development

5. Govt Assistance
1. Technical Assistance
2. Assistance for obtaining raw material
3. Cash assistance
4. Supply of plant and machinery on hire-purchase basis
5. Marketing assistance
6. Assistance to small entreprenurs
7. Rural industrial project assistance
8. Setting up of financial institutions

6. Financial Assistance
• National bank for Agriculture and rural development
• The Rural Small Business Development Centre
• National Small Industries Corporation
• Small Industries Development Bank of India
• The National Commission for Enterprises in the Unorganized Sector
• Rural and Women Entrepreneurship Development
• World Association for Small and Medium Enterprises
• Scheme of Fund for regeneration of traditional Industries
• The District Industries Centres

7. Govt incentives
1. Subsidy relating to investment
2. Export/Import subsidies and bounties
3. Subsidy relating to research and development
4. Subsidy relating to taxes
5. Subsidy relating to resources
6. Capital subsidy scheme for technology upgradation
7. Industrial infrastructure upgradation scheme
8. Industrial clusters

8. For hill area
• Land
• Power
• Water
• Sales tax
• Octroi
• Rawmaterial
• Finance
• Marketing assistance
• Tax holiday
• Industrial estates