MSMEs definitions MSMEs importance MSMEs Roles and GDP contribution MSME ministry of India MSME Policies under Modi Government

1. Policies and schemes for
the growth of MSMEs
by
Ravi Pohani
Ravi Rawat

2. NEED FOR IDENTIFICATION OF MSMEs
 Employment Opportunities (MSMEs > LARGE SCALE INDUSTRIES)
 Capital Requirements (MSMEs < LARGE SCALE INDUSTRIES)
 Industrialization of rural areas
 Reducing regional imbalances
 Equitable distribution of national income
 Ancillary to LARGER industries

3. Facts & Figures about MSMEs
 36 million units as on January 2016
 80 million employees
 6000 products
 Contributing 8% to GDP
 45% total manufacturing output
 40% of total exports

4. Issues with MSMEs
 Unquenched capital requirements + difficult financing of
working capital
 Lack of modern-technology
 Lack of professional management
 Lack of necessary entrepreneurial and technical skills
 Problem of electrical infrastructure in rural areas

5. Organizational Structure of Ministry
Ministry of Small Scale Industries Ministry of Agro & Rural Industries
Ministry of Micro Small and
Medium Enterprises (as on May
9th, 2007)
Amendment of GOI
(Allocation of business)
rules, 1961

6. Organizational Structure of Ministry
State Governments
(Responsibility of promotion of
MSMEs)
Central Government
(Supplements efforts of states)

7. Organizational Set-up
Development Commissioner
MSME
Development
Institutes
(30)
MSME
Promotional
Training
Institutes
MSME
Testing
Centers
Hand Tool
Design
Development
and Training
Centers
Autonomous
bodies
MSME DI
branches
MSME Testing
Stations
MSME Tool
Rooms
Central Footwear
Training
Institutions etc.
Central Glass
Training
Institutions

8. The Office Of Development
Commissioner
 Apex body for monitoring policy implementation for growth and development
of MSMEs.
 It functions through a network of MSME-Development Institutes, Regional
Testing Centers, Footwear Training Institutes, Production Centers, Field
Testing Stations and specialized institutions.
 Serves as advisory to ministry for policy framework
 Provides techno-economic and managerial consultancy
 Common facilities and extension services to MSMEs
 Provides facilities for technological up-gradation, modernization, quality
improvement and infrastructure
 Develops Human Resource through training and skill development.

9. Khadi and Village Industries Commission
(KVIC)
 Developed under Khadi and village Industries Commission ACT,1956
 Statutory Organization engaged in promoting and developing khadi and village
industries for providing employment and opportunities in rural areas.
 Major organization for generation of sustainable rural-non-farm employment,
thereby reducing rural to urban migration.

10. Mahatma Gandhi Institute for Rural
Industrialization (MGIRI)
 Established under Societies(Registration) ACT, 1860
 Erstwhile Jamnalal Bajaj Central Research Institute
 Strengthens the R&D activities in Khadi and Village Industries.
 Encourages research through extension of R&D projects, quality control,
training and dissemination of technology related information.

11. Coir Board
 Established under Coir Industries ACT, 1953
 Promotes overall sustainable development of coir industry
 Improves living conditions of workers engaged in traditional industry
 Includes undertaking of scientific, technological and economic R&D activities
 Promotes co-operative organization between husk producers, coir fiber and
coir yarn manufacturers, and end-product manufacturers.

12. National Small Industries Corporation
Ltd. (NSIC)
 Established in 1955 by GOI
 To promote aid and foster the growth of SSIs in India.
 Procures raw material; markets their products; provides credit ratings to SSIs;
technological acquisitions; provides with latest management practices, etc.
 It has 142 offices located in India and one office in Johannesburg, S.A.

13. National Institute for
MSMEs (NI-MSME)
 Ministry develop NIMSME to inculcate
entrepreneurial culture amongst first generation
of entrepreneurs on a regular basis.
 Engages in developing training modules, undertakes R&D and training,
provides consultancy for entrepreneurial services.
 During the last 3 years, it has offered ~5000 training programs benefiting
~1,60,000 participants , undertook many research and consultancy programs.
 Over 9000 executives from 140 developing countries have profited from its
expertise, knowledge and resources
 Its international connections makes its endeavors more meaningful and
effective

14. National Board for MSMEs (NB-MSMEs)
 The large range of development works in MSMEs involves various departments
or ministries and different Central and State govt. organizations. NB-MSMEs
facilitates coordination and inter-institutional linkages in pursuance of MSMED
act, 2006.
 It is the apex advisory to govt. on all issues pertaining to MSME sector.

15. MSMEs Definitions as per MSMED ACT,
2006
Village industries have been redefined in amended KVIC, ACT, 1956, as any industry located in rural area
which produces any goods or renders any services with or without use of power and in which the fixed
capital investment per artisan or worker doesn’t exceeds Rs. 1 lakh (Rs. 1 lakh 50 thousand in hilly
areas).

16. Change of definitions of MSMEs
 Cabinet in its meeting held on 25.3.15 approved proposal for introduction of a
bill namely, MSMED (Amendment) Bill, 2015 to revise the definitions of MSMEs,
increasing their capital investment range.
 Also to include micro or tiny or village enterprise as a part of Medium
enterprise so as to make them more competitive
 And to empower Central Govt. to revise existing limit of investment,
considering inflation and dynamic marketing situations.

17. MAJOR PLANS AND
SCHEMES IMPLEMENTED
BY THE MINISTRY

18. Performance and Credit Rating Scheme
(PCR)
 Implemented through NSIC
 Provides trusted third-party opinion on capabilities and credit-worthiness of
MSMEs, so as to create awareness amongst them about their strengths and
weakness of their existing operations.
 Rating agencies involved are CRISIL, CARE, ONICRA, ICRA, Brickwork India,
SMERA.
 Rating fee payable by MSMEs subsidized for first year and that is subject to
maximum 75% of the fee or Rs. 40000 whichever is less
During the year 2015-16, ~13000 units have been rated
Budget under this scheme was Rs. 28 Cr. For 13000 units

19. Marketing Assistance (MA) Scheme
 Implemented through NISC
 Main objective is to enhance marketing competitiveness of MSMEs
 Providing them a platform for interaction with buyers
 Updating them with prevalent market scenario
 Providing them a form for problem redressing.
 MSMEs are supported under the scheme for capturing new market
opportunities and participating in various domestic and international trade
fairs.
During year 2015-16, 8 international and 66 domestic fairs have been organized.
Budget under this scheme was around Rs. 14Cr. For the year 2015-16.

20. Assistance to Training Institutions (ATI)
 Implemented through National Institutes for MSMEs
 Engages in technical and entrepreneurial skill development
 Strengthening of infrastructure and program support
 Maximum of 150 lakhs on matching basis not exceeding 50% of project cost
(270 lakhs or 90% project cost whichever is less for residents of N.E.,
Andaman and Nicobar and Lakshadweep)
During year 2015-16 1146 programs held and ~31000 people trained under the
scheme with budget estimates of Rs. 80Cr.

21. Prime Minister Employment Generation
Program (PMEGP)
 Credit Linked subsidy scheme
 Implemented through KVIC and DICs
 Helps in establishing new self-employment ventures/ projects and micro
enterprises
 The objective is to bring together rural and urban artisans and unemployed
youth(>18yrs. of age) and give them opportunities to start their own
businesses, thereby preventing migration.
 assistance of upto 25 lakhs for manufacturing enterprise and 10 lakhs for
service sector
During year 2015-16 ~2 lakh employments generated and Rs.631Cr. of subsidy
utilized.

22. Market Promotion and Development
Assistance (MPDA)
 Market development assistance scheme of KVIC has been modified to Market
Promotion and Development Scheme is formulated as unified scheme by
merging different schemes and sub-schemes of the 11th – Plan, namely Market
development assistance, publicity, marketing and market promotion and adds
a new component of infrastructure(inclusive of new component of Marketing
Complex/Khadi Plaza)
 The existing MDA scheme , had subsidy @ 20% on production value of
Khadi be distributed among producing institutions (30%), selling
institutions (45%) and artisans (25%). The Modified MDA shall be at 30% of the
Prime Cost and shall be distributed amongst producing institutions (20%),
selling institutions (40%) and artisans (40%).
 Assistance for visiting and exhibiting in trade fairs domestic as well as
international is also provided
produc
tion
institu
tion
30%
sellers
45%
artisia
ns
25%
0%
SUBSIDY
DISTRIBUTION
MDA
produc
er
20%
seller
40%
artisian
40%
0%
SUBSIDY
DISTRIBUTION
MPDA

23. Coir Vikas Yojana
 Implemented through Coir Board
 For marketing, publicity, product development, sustainability of the Coir
Industry in domestic as well as industrial markets as an eco-friendly product.
 TA of about 2 lakhs is provided to Coir exporters to participate in
international fairs.
 Assistance for material publicity upto 25% of production cost is also provided
with a cap of Rs. 15000
Budget estimates for the year 2015-16 was Rs.26.37Cr.

24. Coir Udyami Yojana
 Implemented through Coir Board
 To Rejuvenate, modernize and technologically Upgrade the most crucial link
in Coir production chain.
 Replacement of outdated looms and providing worksheds to spinners for
increase in production.
 Under the scheme SC&STs, women and residents of A&N islands and
Lakshadweep will be given priority.
Budget estimates of 2015-16 was Rs20 Cr.

25. Technology Centre System Programs
 15 new tool rooms would be set-up and existing ones would be upgraded with
support of World-Bank.
 Objective is to strengthen tech. capabilities of MSMEs, Cluster network
Management to establish linkages between all key stake holders, National
Portal for creating vibrant and interactive Platform to meet various needs of
MSMEs

26. Trade Related Entrepreneurship Assistance
and Development (TREAD) for Women
 Economic Empowerment of such women through trade relate training, information
and counseling extension activities related to trades, products and services.
 The scheme provides financial loans through NGOs who are also provided GOI grant
for capacity building
 Grant of 30% on maximum credit of Rs. 30 lakhs by lending institutions/ banks
through NGOs(min 3yrs. Of experie.nce in taking and managing funds) for
undertaking non-farm activities
 GOI grant of Rs. 1 lakh per program to training institutes? NGOs imparting training
to women entrepreneurs
 State govt. sponsored institutes provided with a grant of upto Rs.5lakhs per
project for primarily undertaking activities aiming at women empowerment like,
field surveys, research studies, evaluation, and design of training modules.
Total no. of women beneficiaries till 2015-16 was ~28000

27. THANK – YOU