incentives to SSI( small sector industry) and MSME

SUPPORT SERVICES OFFERED TO MSMESECTOR
 The Corporation continued providing following support services to help the MSME sector to
increase their business and reach to enhance their competitiveness. NSIC provides
integrated support services in the areas of Marketing, Technology, Finance, etc.
 NSIC is also implementing the schemes of Marketing Assistance and Performance & Credit
Rating on behalf of the Ministry of Micro, Small & Medium Enterprises. The brief details are
given below:-
1. Marketing Support
 Marketing has been identified as one of the most important tools for business
development. It is critical for the growth and survival of MSMEs in today’s intensely
competitive market. NSIC acts as a facilitator and has devised a number of schemes to
support enterprises in their marketing efforts, both in domestic and foreign markets.
 These schemes are briefly described as under:-
A. Raw Material Distribution:
 In this direction, the Corporation has signed agreements /MoUs with the major bulk
producers i.e.NALCO, BALCO - for Aluminium, SAIL,RINL - for Iron Steel, CPCL - for
ParaffinWax, CIL - for Coal and IOCL - for Polymer products etc. These arrangements
facilitate MSMEs in getting material at the manufacturer’s price with the priority of
dispatch. This results into reduction in the cost of production and making the products
of MSMEs competitive in the domestics well as international markets. These efforts of
the Corporation supplement the programmers of the Government aimed in making
Indian MSMEs globally competitive.
B. Consortia and Tender Marketing:
 Micro& Small Enterprises (MSEs) in their individual capacity face problems to procure
and execute large orders, which deny them a level-playing field vis-à-vis large
enterprises.
 NSIC, accordingly forms consortia of micro & small units manufacturing the same
products, there by pooling in their capacity which provides comfort level to the
concerned MSEs as suppliers and also to buyers. The Corporation applies for tenders on

behalf of consortia of MSEs and secures orders for bulk quantities. These orders are
then distributed amongst MSEs in tune with their production capacity.
C. Single Point Registration for Government Purchase:
 NSIC operates a Single Point Registration Scheme under the Government Purchase
Programme. The micro and small enterprises registered under this Scheme get the
following facilities:-
I. Issue of Tenders free of cost.
II. Advance intimation of Tenders issued by DGS&D.
III. Exemption from payment of EarnestMoney Deposit (EMD).
IV. The tender participating MSEs quoting price within price band of L1+15% shall
also be allowed to supply a portion upto 20% of requirement by bringing down
their price to L1 price where L1 is non-MSE
V. Issue of competency certificate.
D. Exhibitions:
 To show case the competencies of Indian MSMEs, NSIC facilitates MSMEs participations
in International Exhibitions, Fairs, etc. on concessional terms under the Marketing
Assistance Scheme of the M/o MSME through partially meeting the cost towards rent of
stall as well as air fare. Participation in these events exposes MSMEs to international
practices and enhances their business prowess. Through participation in these events,
MSMEs are also facilitated to capture new markets making them globally competitive.
E. Buyer – Seller Meets:
 Large and institutional buyers such as Railways, Defence, Communication Departments
and large companies are invited to participate in buyer-seller meets to enrich micro &
small enterprises’ knowledge regarding terms and conditions, quality standards etc.
required by the buyers. These meets are aimed at vendor development from MSEs for
the bulk manufacturers.
F. Marketing Assistance Scheme:

 This is an ongoing scheme of the M/o MSME, for providing marketing support to
MSMEs.
 The scheme is being implemented through the Corporation. Marketing, a strategic tool
for business development, is critical for the growth and survival of MSMEs in today’s
intensely competitive market. One of the major challenges before the MSME sector is to
market their products/ services.
 The main objectives of the scheme is to enhance the marketing competitiveness of
MSMEs; to provide them a platform for interaction with the individual/institutional
buyers; to update them with prevalent market scenario and to provide them a forum for
redressing their problems.
 MSMEs are supported under the Scheme for capturing the new market opportunities
through organizing/ participating in various domestic & international exhibitions/ trade
fairs, Buyer-Seller meets, intensive campaigns and other marketing events.
2. Technology Support
A. Technology is the key to enhance a unit’s competitive advantage in today’s dynamic
information age. MSMEs need to develop and implement a technology strategy in
addition to financial, marketing and operational strategies and adopt the one that helps
in integrating their operations with their environment, customers and suppliers.
B. NSIC offers MSMEs the following technology support services through its Technical
Services Centers and Extension Centers:
I. Material testing facilities through accredited laboratories
II. Product design including CAD;
III. Common facility support in machining,EDM, CNC, etc.
IV. Energy and environment services at selected Centres
V. Practical training for skill upgradation
3. Credit Support
 The Corporation is providing Credit Facilitation to MSMEs through its various schemes.
During 2013-14 total credit facilitation of Rs. 5,162 crore and (upto February, 2014, Rs.

4419 crore was provided). The various schemes providing Credit Support to MSMEs are
as under:
I. Meeting Credit Needs of MSMEs through tie-up arrangements with Banks One of the
major challenges faced by MSMEs is inadequate access to finance due to lack of
financial information and non-formal business practices. To overcome these
problems, NSIC has entered into tie-up arrangements with various Banks for
providing Credit Facilitation to the MSME sector.
II. Financing Procurement of Raw Materials & Marketing Activities (Short term) NSIC
facilitates raw material requirement of the MSMEs by making arrangements with
bulk manufacturers for procuring the materials and supplying the same to MSMEs.
In case they need any credit support, NSIC provides financial assistance for raw
material procurement by making the payment to suppliers. NSIC facilitates financing
for marketing activities such as Internal Marketing, Exports and Bill Discounting to
micro, small & medium enterprises.
III. Performance & Credit Rating Scheme for Small Enterprises On behalf of the M/o
MSME, NSIC is implementing “Performance & Credit Rating Scheme” for Micro and
Small Enterprises (MSEs). The scheme is being operated through accredited rating
agencies i.e. CARE, CRISIL, India Rating (Formerly known as FITCH), ICRA, ONICRA,
SMERA and Brickwork Rating.The fee to be paid by the MSEs for the rating, is
subsidized by the Government to the extent of 75% of the rating fee up to a
maximum of Rs.40,000/-. The scheme has become quite popular and getting good
response. The rating serves as a trusted third party opinion on the unit’s capabilities
and credit worthiness. A good rating enhances the acceptability of the rated unit in
the market and also facilitates its access to quicker and cheaper credit and thus
helps in economizing the cost of credit.Under the Performance & Credit Rating
Scheme, 19,676 units were rated during the year 2012-13 as against 13,547 in the
year 2011-12. The units rated during 2013-14 (upto February,2014) are 22,263 as
against 17,208 (upto February,2013).

4. Support Services
 One of the problems faced by the entrepreneurs is the scarcity of suitable space where
they can set up their offices or can exhibit their products for their wider publicity and
easy marketability under one roof. In order to give a boost to MSMEs, NSIC has taken
the following projects in this regard:-
A. Marketing Intelligence Cell
 NSIC had established a Marketing Intelligence Cell for collecting and disseminating both
domestic and international marketing intelligence in coordination with other concerned
departments / agencies. Marketing Intelligence Cell is acquiring and analyzing information
in order to understand the market (both existing and potential customers) to determine the
current and future needs and preferences, attitudes and behaviour of the market, assess
changes in the business environment that may affect the size and nature of the market in
future. This aims to promote business horizons of MSMEs of India through Marketing
Intelligence Web Portal. The beneficiaries are MSMEs seeking business collaborations and
co-production opportunities, joint ventures, exporters and importers and those looking for
technology transfer.
B. Promoting International Trade through NSIC’s E-Marketing Web Portal
 NSIC has expanded its existing B2B Web Portal into an Integrated E-Marketing Web Portal
www.msmemart.com that is not only useful for generation of leads for expanding
businesses but it is also the most economical and fastest medium for brand creation,
recognition of small enterprises and marketing of their products.
C. NSIC-Training-cum-Incubation Centres (NSIC-TICs) for promoting Entrepreneurship
 Training-cum-Incubation Centres were started in year 2008 by NSIC with a view to create
self-employment opportunities by imparting training to the unemployed people who want
to set up new small business enterprises in any of the manufacturing / services sectors or
seek employment opportunities. The scheme is being operated under PPP [Private Public
Partnership] mode where private partners are associated with NSIC. Corporation offers
technical & other support services to associated TICs with a view to achieve the objectives
of the programme. NSIC Trainingcum- Incubation Centres provide a unique opportunity to

first generation entrepreneurs to acquire skills for enterprise building and also help to
incubate them to become successful small business owners. At these centres, exposure in
all areas of business operations is provided such as business skills, ideas for structure of an
enterprise, identification of appropriate technologies, hands on experience on working
projects, financial linkages etc. In the year 2013-14, thirteen more new centers were
operationalised. As a result of this, now 81 such centres are operational covering 19 states.
5. INTERNATIONAL CO-OPERATIONACTIVITIES
 Under International Cooperation, the focus of activities at the enterprise level is on the
entrepreneurs and the objective is to initiate long term and sustainable enterprise to
enterprise cooperation between Indian small enterprises and enterprises in target
countries.
 This is achieved by exchanging business delegations and organizing one-on-one business
meetings among the enterprises of both the countries.
 Main features of International Cooperation are:
 Exchange of Business / Technology missions with various countries;
 Facilitating Enterprise to Enterprisecooperation, Technology Transfers & other forms of
sustainable collaboration;
 Explore new markets & areas of cooperation;
 Identification of new export markets by participating in exhibitions abroad;
 Sharing of Indian experiences with other developing countries.
POLICY INITIATIVES
1. RESERVATION/DE-RESERVATION OF PRODUCTS FOR MANUFACTURE IN THE MICRO
AND SMALL ENTERPRISE SECTOR:
A. The Policy of Reservation of Products for Exclusive Manufacture in SSI (now MSEs) was
initiated in 1967 with the objective of achieving socio-economic development, through
development and promotion of small units all over the country. This was expected to

result in countering the challenges of regional industrial imbalances, employment
generation through self-employment ventures, increased productivity, etc. However,
with the gradual opening up of the economy, de-reservation had to be resorted to for
providing opportunities to MSEs for technological upgradation promotion of exports
and achieving economies of scale. Accordingly, the MSEs are being encouraged to
modernize and enhance their competitiveness for facing the challenges arising out of
liberalization and globalisation of the economy.
B. The items are reserved/de-reserved in accordance with Section 29(B) of the Industries
(Development & Regulation) Act, 1951, which, inter-alia, provides for the constitution of
an Advisory Committee headed by the Secretary (MSME). The Advisory Committee
makes its recommendations for reservation/dereservation in light of the factors like
economies of scale; level of employment; possibility of encouraging and diffusing
entrepreneurship in industry; prevention of concentration of economic power and any
other factor which the Committee may think appropriate. At present, only 20 items are
reserved for exclusive manufacture in micro and small enterprise sector. A list of items
reserved for exclusive manufacture in micro and small enterprises sector are given
below.
LIST OF ITEMS RESERVED FOR EXCLUSIVE MANUFACTURE BY MICRO AND SMALL ENTERPRISE
SECTOR
I. Pickles & chutneys
II. Bread
III. Mustard Oil (except solvent extracted)
IV. Ground nut oil (except solvent extracted)
WOOD AND WOOD PRODUCTS
I. Wooden furniture and fixtures
PAPER PRODUCTS
I. Exercise books and registers
OTHER CHEMICALS AND CHEMICAL PRODUCTS
I. Wax candles

II. Laundry soap
III. Safety matches
IV. Fire works
V. Agarbatties
GLASS AND CERAMICS
I. Glass bangles
MECHANICAL ENGG. EXCLUDING TRANSPORT EQUIPMENT
I. Steel almirah
II. Rolling shutters
III. Steel chairs-All types
IV. Steel tables-All other types
V. Steel furniture-All other types
VI. Padlocks
VII. Stainless steel utensils
VIII. Domestic utensils
2. .NATIONAL MANUFACTURING COMPETITIVENESS PROGRAMME (NMCP)
 Providing competitive edge to the units in the MSME Sector in the global environment, has
been one of the important cornerstones of the policies being pursued by the Government
for sustenance of the sector. With a view to build the capacity of the Indian micro, small and
medium manufacturing enterprises for overcoming competition in the global markets and
facing challenges being posed by the entry of the multinationals in the domestic markets,
the M/o MSME is implementing the National Manufacturing Competitiveness Programme
(NMCP). The objective of NMCP is to ensure healthy growth of the MSME Manufacturing
Sector.
3. PUBLIC PROCUREMENT POLICY FOR GOODS PRODUCED AND SERVICES RENDERED BY
MICRO AND SMALL ENTERPRISES (MSEs)

A. In exercise of the powers conferred under Section 11 of the Micro, Small and Medium
Enterprises Development Act, 2006, the Government of India has notified Public
Procurement Policy for Micro & Small Enterprises (MSEs) Order, 2012 which is
applicable to every Central Ministry / Department / PSU for effective implementation
w.e.f. 1st April, 2012.
B. The Policy mandates that every Central Ministry / Department / Public Sector
Undertaking shall set an annual goal of procurement from Micro and Small Enterprises
from the financial year 2012-13 and onwards, with the objective of achieving an overall
procurement of minimum of 20 percent of total annual purchases of products produced
and services rendered by Micro and SmallEnterprises, in a period of three years.
C. Every Central Government Ministry / Department / PSU shall report the goals set with
respect to procurement to be met from MSEs and the achievement made thereto in
their respective Annual Reports. They shall also prepare Annual Procurement Plan for
purchases and upload the same on their official website so that Micro and Small
Enterprises may get advance information about requirement of procurement agencies.
All the Chief Ministers of State Governments have also been advised to formulate
similar policy for MSEs in their states. A Grievances cell has been constituted for
redressal of the grievances for MSEs.
D. The Policy will help to promote MSEs by improving their market access and
competitiveness through increased participation by MSEs in Government purchases and
encouraging linkages between MSEs and large enterprises.
The Ministry of Micro, Small and Medium Enterprises is the nodal Ministry for formulation of
policies, programmes and schemes, their implementation and related co-ordination, for the
promotion and development of small scale industries in India. The role of the Ministry is to
assist the States in their efforts for the growth of the small scale sector, by enhancing their
competitiveness in an increasingly liberalised economy. It is assisted by an attached office and
two public sector enterprise, namely:-
A. Micro, Small and Medium Enterprises Development Organisation (MSME-DO):-

 The Office of the Development Commissioner (Micro, Small and Medium Enterprises)
[earlier known as the O/o the DC (SSI)] is also known as Micro, Small and Medium
Enterprises-Development Organisation (MSME-DO). It is the apex body for assisting the
Government in formulating, coordinating, implementing and monitoring policies and
programmes for micro, small and medium enterprises (MSMEs) in the country. MSME-DO
provides a comprehensive range of common facilities, technology support services,
marketing assistance, entrepreneurial development support, etc.
B. National Small Industries Corporation Ltd (NSIC) :-
 It was established by the Government with a view to promoting, aiding and fostering the
growth of micro, small and medium enterprises in the country, with a focus on commercial
aspect of their operations. It implements several schemes to help the MSMEs in the areas of
raw material procurement, product marketing, credit rating, acquisition of technologies,
adoption of improved management practices, etc.
C. Khadi and Village Industries Commission (KVIC) :-
 Established under the Khadi and Village Industries Commission Act, 1956, as a statutory
organisation engaged in promotion and development of khadi and village industries for
providing employment opportunities in the rural areas.
D. Coir Board :-
 it is a statutory body, established under the Coir Industry Act, 1953, for the promotion and
development of coir industry in India as well as for uplifting the living conditions of the
workers engaged in this industry.
For unorganizedsectors
 Also, a National Commission on Enterprises in the Unorganised Sector (NCEUS) has been
set up for addressing the wide range of issues affecting the productive potential of the
unorganised micro and small productive units.

 Besides, there are three national level 'Entrepreneurship Development Institutes (EDIs)' for
the development of training modules, undertaking research and providing consultancy
services for entrepreneurship development in the small scale sector. These include:-
1. National Institute of Small Industry Extension Training (NISIET) renamed as the National
Institute for Micro, small and Medium Enterprises (NIMSME) at Hyderabad
2. National Institute of Entrepreneurship and Small Business Development (NIESBUD) at Noida
3. Indian Institute of Entrepreneurship (IIE) at Guwahat
Certain Incentives
1. Fiscal incentives
 Fiscal incentives are provided through tax concessions granted in the form of exempted of
direct or indirect taxes leviable on production or profits, besides special tax concessions.
 These incentives have been provided to promote the SSIs and discussed in following:
A. Tax Holiday
 With effect from financial year 2005-06, deduction in respect of profit and gains for small
scale industrial undertaking is available under Section 80IB.
 Small scale industrial undertaking can claimdeduction at the following rates:
o If SSI unit is owned by a company , the deduction available is 30% for first 10 year,
o If SSI unit is owned by a co-cooperative society, the deduction to be availed is 25%
for first 10 years, and
o If any other person owns SSI units ,the deduction to be claimed is 25% for first 10
years.
B. TAX EXEMPTION CONDITIONS
 No small scale or ancillary undertaking shall be subsidiary of, or owned or controlled by
other industries undertaking.
 The SSI unit should commence business between 1st April1991 and 31st March 2002.
 SSI unit can manufacture any nature/type of goods /article to avail deduction.

 They should employ at least 10 workers in manufacturing process carried out with aid of
power or at least 20 worker in manufacturing process carried out without the aid of
power.
 This tax exemption from total income is allowed from the assessment year in which the
unit being to manufacture or produce goods or articles.
C. EXCISE CONCESSIONS
 Government of India has provided a major relief by grating full exemption from the
payment of central excise duty on a specified output and thereafter slab-wise concessions.
 The following concessions are available to them in this regard:
i. SS units producing goods up to Rs.100 lakhs are exempted from payment of excise
duties.
ii. SSI units having turnover less than Rs.60 lakhs per annum need not have a separate
storeroom for storing the finished products.
iii. SSIs are also not required to maintain any statutory records such as daily stock
account of production and clearance , raw material account ,personal ledger account
etc. their own record are adequate for excise purpose.
iv. There is no distinction between registered and unregistered units for SSI concessions
for SSIs has been based on annual turnover rather than SSI registration . Duty
liability is to be discharged by 15th of following month.
v. The SSI exemption is available for home consumption ,as well as in respect of goods
exported to Nepal & Bhutan.
vi. Normally ,excise officers are not expected to visit SSI units paying less than
Rs.11lakhs duty annually .
vii. With effect from 1-4-1994, Gate –Pass System was replaced by manufacturer invoice
to cover clearance of goods as the duty-paying document.
District Industries Center (DIC)

 In each district one agency to deal with all requirements of small and village Industries. This
is called “District Industries Centre”
 The District Industries Centres have undertaken various programmes for investment
promotion at the grassroot level such as a organizing seminars workshops, extending
support for trade fairs and exhibitions organized by various Industries associations.
 All the services and support required by for MSME units under the single roof of the District
Industries Centre. The Centre has a separate wing to look-after the special needs of cottage
and house-hold industries as district from small industries.
Administration
 General Manager is the head of the District Industries Centre. The post of General Manager
is of Joint / Deputy Commissioner level. The General Manager has senior officers to assist
him, such as Manager (Raw Material), Manager (Credit), Manage (Economic Investigation),
Manager (Marketing) Industrial Promotion Officer(IPO) and Technical Officer cum Project
Manager (PM)
Monitoring of DICs
 The functioning of DICs and their achievement is monitored by Industries Commissioner,
Meeting of General Managers are organized frequently to evaluate the performance and
also help in resolving difficulties in implementation of different schemes. To resolve the
problems of industries/industrialists, there are two types of committee at the district level
viz.
1. District Industrial Executive Committee (DIEC)
 DIEC is constituted for solving industry related problems and promoting industrial growth.
District Collector is the Chairman of this Committee and General Manager of DIC is the
Member Secretary. The other members of the DIEC are President of District Panchayat,
DDO, MP, MLAs, Prominent persons active in Industries in the district and members of all
district level industries associations.
2. Single Window IndustrialFollow up Team (SWIFT)
 Enterpreneurs face many difficulties when they start new industries. They have to deal with
many government agencies and get many clearances. SWIFT helps them in guiding solving

their problems at a single spot. This committee is working under the District Collector,
General Manager of DIC is the Member Secretary and District Development Officer is Vice
President of SWIFT. All industries related officers in the district are members of this
committee.
Functions of DICs
1. Registration
o EM Part-I acknowledgement
o EM Part-II acknowledgement
o C.S.P.O.
o Lubricating, Oil, Grease Licence
2. Recommendation
o Land recommendation for N.A.
3. Incentive Scheme
4. Seminars
o District or Taluka Level
o Buyer-Seller & Exhibition
5. Others Activities
o Recovery of Package Loan margin Money Loan & Subsidy
o Welfare of Salt Workers and Recovery of Royalty from Salt Workers.
o Follow up of Industrial Approvals.
o Follow up of units which have availed benefits under incentives schemes
6. Self Employment scheme
o Recommendation of loan applications under Vajpayee Bankable Scheme
o Recommendation of loan application under PMEGP Scheme
o Manav Kalyan Yojana – Tool kits to artisans.
7. Co-operative Package Scheme
o Package Scheme
o Handloom Development Scheme
o Training & Production centre

o Woolen Carpet Centre
o Weaving Scheme
o Recovery of Loan & Share contribution of Co-operative Societies
o Liquidation of Industrial Society
o Preparation of Project Profiles
o Audit of Industrial Society
o Gramodyog Vikas Kendra
o Hastakala Mela
Procedures
The main steps involve in setting up a Micro, Small & Medium Enterprise are as below :-
(a) Project Selection
(b) Technology and Machinery
(c) Arranging Finance
(d) Unit Development
(e) Filing of Entrepreneurs’ Memorandum & Addresses of DICs
(f) Approvals
(g) Clearances
(h) Quality Certification
TO START AN ACTIVITY
Product Selection : MSME Development Institute,
Registration : District Industry Centre of your city
Technical Assistance : MSME Development Institute, and
District Industry Centre of your city
Plot/Shed Distribution : K S S I D C., of your city or nearest city
Finance/Loan/Investment : KSFC, SIDBI,other Nationalized banks
PMREGP : District Industry Centre of your city
Hire and purchase of machinery : National Small Industry Corporation

Raw Materials : District Industry Centre of your city and Karnataka State Industrial Corporation
of your city
Industrial Management : MSME Development Institute and District Industry Centre of your city
License : District Industry Centre of your city and Local Bodies
Marketing : MSME Development Institute, and National Small Industry Corporation,
I. S. I. Mark : Bureau of Indian Standards, Peenya Indistrial Area I
Product Testing : Regional Testing Centre, Chennai
Patent Registration and Trademark : EPatents IP Services
License for compulsory
Products: Director, Technical Development, Udyog Bhawan, Delhi
Registration under factory act : Factory Investigator of your city
Pollution related clearance : Pollution Control Board of your city
Central Product Registration : Central Excise, Superintendent of your city
Sales Tax Registration : Sales Tax office of your city
Industrial Statistical Information : District Statistical officer of your city
Khadi and Gramodyog : District Khadi and Gramodyog officer of your city
Agriculture : Agriculture Department of your city and nearest any agriculture university
Handicrafts : Directorate of Handicrafts,
Electricity : KPTCl, BESCOM
NABARD : NABARD
How do one select an activity for self-employment?
 For selecting an activity or enterprise, you will have to consider the following significant
issues:
1) Where do you want to promote the enterprise?
2) What resources are available near the location of the enterprise?
3) What kind of market or consumer pattern exists near the site of enterprise?

4) What kind of contacts you have to exploit to your advantage for marketing of the
product?
5) What infrastructure is available at the location of your enterprise?
6) How much capital is available?
CriteriaFor MSME
 The “Micro, Small and Medium Enterprises Development (MSMED) Act, 2006” is the first
single comprehensive legislation in India, covering micro, small and medium enterprises.
Under the Act, the terms "medium sector" and "micro enterprises" have been defined for
the first time.
 Also, the concept of ‘Industries’ has been widened to that of ‘Enterprises’. Enterprises have
been classified broadly into two categories, namely, enterprises engaged in the
manufacture/production of goods pertaining to any industry; and enterprises engaged in
providing/rendering of services. The term "enterprise" has been defined in terms of
investment in plant and machinery/ equipment (excluding land & building). Accordingly, the
definition of micro, small and medium enterprise is:-
Investment in plant and machinery/ equipment (excluding land and building)
Manufacturing Enterprises Service Enterprises
Micro Up to Rs. 25 lakh Up to Rs. 10 lakh
Small More than Rs. 25 lakh and up to Rs. 5
crore
More than Rs. 10 lakh and up to Rs 2 crore
Medium More than Rs. 5 crore and up to Rs. 10
crore
More than Rs. 2 crore and up to Rs. 5 crore
SIDBI
MainSchemes of SIDBI

 National Equity Fund Scheme which provides equity support to small entrepreneurs setting
up projects in Tiny Sector.
1. Technology Development & Modernisation Fund Scheme for providing finance to existing
SSI units for technology upgradation/modernisation.
2. Single Window Scheme to provide both term loan for fixed assets and loan for working
capital capital through the same agency.
3. Composite Loan Scheme for equipment and/or working capital and also for work sheds to
artisans, village and cottage industries in Tiny Sector.
4. Mahila Udyam Nidhi (MUN) Scheme provides equity support to women entrepreneurs for
setting up projects in Tiny Sector.
5. Scheme for financing activities relating to marketing of SSI products which provides
assistance for undertaking various marketing related activities such as marketing research,
R&D, product upgradation, participation in trade fairs and exhibitions, advertising branding,
establishing distribution networks including show room, retail outlet, wears-housing facility,
etc.
6. Equipment Finance Scheme for acquisition of machinery/equipment including Diesel
Generator Sets which are not related to any specific project.
7. Venture Capital Scheme to encourage SSI ventures/sub- contracting units to acquire capital
equipment, as also requisite technology for building up of export capabilities/import
substitution including cost of total quality management and acquisition of ISO-9000
certification and for expansion of capacity.
8. ISO 9000 Scheme to meet the expenses on consultancy, documentation, audit, certification
fee, equipment and calibrating instruments required for obtaining ISO 9000 certification.
9. Micro Credit Scheme to meet the requirement of well managed Voluntary Agencies that are
in existence for at least 5 years; have a good track record and have established network and
experience in small savings-cum-credit programmes with Self Help Groups (SHGs)
individuals.
New Schemes

(i) To enhance the export capabilities of SSI units.
(ii) Scheme for Marketing Assistance.
(iii) Infrastructure Development Scheme.
(iv) Scheme for acquisition of ISO 9000 certification.
(v) Factoring Services and
(vi) Bills Re-discounting Scheme against inland supply bills of SSIs.
Major schemes
1. Technology Development & Modernisation Fund
 SIDBI has set up Technology Development & Modernisation Fund (TDMF) scheme for direct
assistance of small sale industries to encourage existing industrial units in the sector, to
modernise their production facilities and adopt improved and updated technology so as to
strengthen their export capabilities. Assistance under the scheme is available for meeting
the expenditure on purchase of capital equipment acquisition of technical know-how,
upgradation of process technology and products with thrust on quality improvement,
improvement in packaging and cost of TQM and acquisition of ISO-9000 series certification.
 SIDBI in July 1996 had permitted SFCs and promotional banks to grant loans for
modernisation projects costing upto Rs. 50 lakhs. The Coverage of the TDMF scheme has
been enlarged w.e.f. 1.9.1997. Non-exporting units and units which are graduating out of
SSI sector are now eligible to avail assistance under this scheme.
2. National Equity Fund
 National Equity Fund (NEF) under Small Industries Development Bank of India (SIDBI)
provides equity type assistance to SSI units, tiny units at five per cent service charges. The
scope of this scheme was widened in 2000-01 raising the limit of loan from Rs. 6.25 lakhs to
Rs. 10 lakhs and project cost limit from Rs. 25 lakhs to Rs. 50 lakhs.
a. The following are eligible for assistance under the scheme:-

I. New projects in tiny and small scale sectors for manufacture, preservation or
processing of goods irrespective of the location (except for the units in Metropolitan
areas).
II. Existing tiny and small scale industrial units and service enterprises as mentioned
above (including those which have availed of NEF assistance earlier), undertaking
expansion, modernisation, technology upgradation and diversification irrespective
of location (except in Metropolitan areas).
III. Sick units in the tiny and small scale sectors including service enterprises as
mentioned above, which are considered potentially viable, irrespective of the
location of the units (except for the units in Metropolitan areas).
IV. All industrial activities and service activities (except Road Transport Operators).
b. Project cost (including margin money for working capital) should not exceed Rs. 50 lakhs in
the case of new projects in the case of existing units and service enterprises, the outlay on
expansion/modernisation/technology upgradation or diversification or rehabilitation should
not exceed Rs. 50 lakhs per project.
c. There is no change in the existing level of promoters' contribution at 10% of the project
cost. However, the ceiling on soft loan assistance under the Scheme has been enhanced
from the present level of 15% lakh per project to 25% of the project cost subject to a
maximum of Rs. 10 lakhs per project.
d. 30% of the investment is earmarked for tiny units.

incentives to SSI( small sector industry) and MSME

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incentives to SSI( small sector industry) and MSME