In support of entrepreneurs
Jaya Goyal describes the numerous Government schemes aimed at assisting MSMEs

“If it has to be, then it has to be now. There will never be a better time to start.”
— NSIC’s Infomediary Services

In the past few issues of Skills Ahead we have dealt with the factors required to be an entrepreneur or the wealth creators of a nation; risks involved on way to success; an understanding of failures as a step towards success; importance of understanding consumer behaviour; marketing and advertising planning; innovation and idea generation to begin and sustain a successful enterprise; and importance of social enterprises today in India.

The next question is how we weave all the above requirements with the Government policies and support to be a successful entrepreneur. Who helps, how they help, what should you know and how should you proceed before actually embarking on the venture of entrepreneurship? These are a few questions that you must find answers to.

Earlier entrepreneurs learnt by failing and making mistakes. Today things have changed and we are privileged to have a whole lot of data and experiences shared in many ways that can prevent us from making the same mistakes someone else had made and moving much faster to achieve targets and goals as an entrepreneur.

Team India is looking all set to conquer the world. The fact that we have a robust domestic market and are relatively free from foreign markets to sell our products, that we have the patience, persistence and the will to work hard and overcome all obstacles, are just a few strengths that make the country proud.

The Indian Government says the same. All the departments working for industrial growth, innovation and financial assistance are in unison with the sentiments. India is on its own automatic path to growth and development. Anybody who boards the train of entrepreneurship now, will, by force be included in India’s growth, resulting in personal growth as well. All the Government bodies are reaching out to the masses with the schemes they have for developing entrepreneurship. The working of Government bodies has changed significantly. In the face of competition from private institutions, they have become more customer-friendly though they still have much more to do.

Start Up
To start an enterprise one needs a guide to help with the next step that needs to be taken. And Ministry of Micro, Small and Medium Enterprises is doing a good job assisting entrepreneurs, be they startups or existing ones. All that one needs to do is get in touch with one of the attached offices or PSU’s under MSME, mainly DC (MSME) Office, KVIC, NSIC, COIR Board, NI-MSME (Hyderabad), NIESBUD (Noida), IIE (Guwahati) or MGIRI (Wardha). According to Ministry of MSME, the MSMEs in India play a pivotal role in the overall industrial economy of our country. Its agility and dynamism, innovation and adaptability have been the main features that have helped it survive the recent economic downturn and recession.

All the information is available on internet but still the lengthy procedures and the red tape makes it very difficult to move at the pace one would want to. The Government bodies realise this and are looking for solutions to make it less cumbersome. And so they are getting into PPP mode. For example, Faridabad Small Industries Association (FSIA), an Industrial Association with its Special Purpose Vehicle, I am SME of India, is starting a facilitation centre that would first help with the information, project making, getting government clearances and financial assistance and then hand holding the startup entrepreneur with a mentor supporting till he is strong enough to carry on individually. FSIA is also starting a design centre with all the latest softwares and experts who will be able to help convert your dreams to a product or service.

Information and assistance
General information: To get assistance in identifying the activity one can approach the MSME Development Institutes based on industrial potential survey and product specific market studies. District industries centres/ state directorates of industries also facilitate in identification of a suitable activity.

There are many projects, which are suitable for non-technical and inexperienced entrepreneurs where skilled manpower and technical personnel can be hired according to requirements. To compete with existing manufacturers a prospective entrepreneur can take advantage of the latest technology and production process and operate at higher volume of operation. This leads to reduced production cost and production of quality goods and services.

Financial assistance: Financial assistance is available from institutions such as nationalised banks, Small Industries Development Bank of India, regional rural banks, National Small Industries Corporation, State Financial Corporations etc. depending upon the project requirement and promoters background. Financial assistance has two components. Loan for fixed capital is used to acquire plant and machinery, land and building. Working capital loan is used to meet day-to-day operational cost of the production. State Financial Corporation and National Small Industries Corporation generally provide working capital. However under a package assistance, State Financial Corporations also provide a composite loan covering plant and machinery and working capital.

The general conditions for getting financial assistance are:

• Eligibility criteria
  
• Technical/ economic viability
  
• Promoters contribution
  
• Capacity to repay loan
  
• Collateral securities/ guarantee

Project report: The project report is a document, which gives an account of the project proposal to ascertain the prospects of the proposed plan/ activity. The project report contains detailed information about:

• Land & building required
  
• Manufacturing capacity per annum
  
• Manufacturing process
  
• Machinery & equipment along with their prices and specifications
  
• Requirements of raw materials
  
• Power & water required.
  
• Manpower needs
  
• Marketing
  
• Cost of the project and production.
  
• Financial analyses and economic viability of the project.

Training: Skill development/upgradation courses are offered by SISIs, NSIC, PPDCs etc in different disciplines to skilled workers engaged in the micro, small and medium enterprises with a view to equip them with better and improved technologies of production.

SISIs, Management development institutes, NPC, NSIC etc offer management development programmes for acquiring knowledge about the different aspects of the management required for operation of industry. Short-term courses of two to four weeks are available on production management, marketing management, financial management, export management, export procedure & documentation, packaging for exports, cost reduction, material management etc.

SISIs, DICs and State industrial development corporations can provide consultancy for development or setting up of project. Suitable technologies are also offered by CSIR Laboratories, PPDC’s, NRDCs, R&D
institutions also offer consultancy at nominal charges.

Marketing: Besides promotion of MSME products through exhibitions, NSIC directly markets the MSME produce in the domestic and overseas market. NSIC also manages a single-point registration scheme for manufacturers for Government purchase. Units registered under this scheme get the benefits of free tender documents and exemption from earnest money deposit and performance guarantee.

Promotional schemes
The Government accords the highest preference to development of MSME by framing and implementing suitable policies and promotional schemes. Besides providing developed land and sheds to the entrepreneurs on actual cost basis with appropriate infrastructure, it has designed special schemes for specific purposes like quality upgradation, common facilities, entrepreneurship development and consultancy services at nominal charges.

For quality upgradation, the Government of India has been executing the incentive scheme for providing reimbursement of charges for acquiring ISO 9000 certification to the extent of 75 per cent of the cost subject to a maximum of Rs 75,000 in each case. ISO 9000 is a mechanism to facilitate adoption of consistent management practices and production technique as decided by the entrepreneur himself. This facilitates achievement of desired level of quality while keeping check on production process and management of the enterprise.

Credit to micro, small and medium scale sector has been covered under priority sector lending by banks. Small Industries Development Bank of India (SIDBI) has been established as the apex institution for financing the MSME. Specific schemes have been designed for implementation through SIDBI, SFCs, scheduled banks, SIDCs and NSIC etc. Loans upto Rs 5 lakh are made available by the banks without insisting on collaterals. Further, Credit Guarantee Fund for micro, small and medium enterprises has been set up to provide guarantee for loans to MSME up to Rs 25 lakh extended by commercial banks and some regional rural banks.

All the State Governments provide technical and other support services to small units through their directorates of industries, and district industries centres. Although the details of the scheme vary from state to state, the following are the common areas of support.

a. Development and management of industrial estates
b. Suspension/ deferment of sales tax
c. Power subsidies
d. Capital investment subsidies for new units set up in a particular district
e. Seed capital/ margin money assistance scheme
f. Priority in allotment of power connection, water connection.
g. Consultancy and technical support

Last, but not the least, the Government of India runs a scheme for giving national awards to micro, small and medium scale entrepreneurs providing quality products in 11 selected industry groups of consumer interest. The winners are given trophy, certificate and a cash price of Rs 25,000 each.

Services by Government bodies
NSIC’s Infomediary Services: NSIC has launched a one-stop, one-window bouquet of aids that will provide information on business, technology and finance, and also exhibit the core competence of Indian SMEs in terms of price and quality-internationally, as well as domestically. Access to Infomediary services is through NSIC Infomediary Services (IS) membership at a cost of Rs 5,000.

A few services rendered by NSIC’s Infomediary Services are tender information in your e-mail box and web based browsing, banner display on NSIC’s website, access to a wide range of technologies from India and abroad, access to national and international business leads, JV opportunities and trade information, information on trade and events, comprehensive information on Government policies, rules and regulations, schemes and incentives, access to industrial databases and members’ directory, access to NSIC’s Business Centre with facilities such as conference hall, fax, telephone, photocopy and A/V aids etc, access to a wide range of assistance for participation in business delegations, exhibitions/fairs, availability of a wide range of escort services, eg product design, credit and support rating, developing catalogues and product literature, energy and environment audit, introduction of information technology (IT) solution in business operations, skill up gradation training and mentoring services. In addition, Infomediary member would get discounts from Apollo Hospital for medical facilities.

NSIC’s IT Incubator Centre: For creating sustainable entrepreneurship development in the area of ICT, especially first generation entrepreneurs, nurturing the innovative ideas to commercially viable business prepositions, encouraging commercialisation of R&D outputs into commercial ventures, harnessing the expertise of NSIC in extending hand holding of start-up companies to become successful SSI enterprises and also assisting networking between R&D and industry. This incubation centre is ideal for ICT startups with services like ready-to- move-in built space, standard computer hardware facilities, access to software library in preliminary level; facilitation in fine-tuning business plan and market exposure in advanced level; facilitating seed finance, support in legal formalities at maturity level and sourcing of business partners, JV and legal formalities for launch of enterprise.

The prospective entrepreneur has to submit an application in the prescribed format to NSIC. The application should contain a business plan of the proposed idea to be incubated giving details of technological advantages, marketing opportunities and financial considerations. The prescribed application form is available free of cost on the website.

Rajiv Gandhi Udyami Yojana: The objective of Rajiv Gandhi Udyami Yojana (RGUMY) is to provide handholding support and assistance to potential first generation entrepreneurs, who have successfully completed EDP/ SDP/ ESDP or vocational training from ITIs, through the selected agencies ie ‘Udyami Mitras’, in the establishment and management of the new enterprise, in dealing with various procedural and legal hurdles and in completion of various formalities required for setting up and running of the enterprise.

Technology innovation management & entrepreneurship Information service: Aims at assisting techno-preneurs to find technologies, projects, funding options and information about policy environment, incentive schemes and industrial infrastructure available in the country covering both the central and state governments.

SME India: Provides the entrepreneurs with the tools and techniques required to tailor sound projects to the unique culture and dynamics of their competitive environment. The aim is to capacitate an enterprise by setting up properties for managing the entrepreneur’s resources at a strategic level and giving them the right direction.

A few more organisations that can be approached for assistance are:

• National Bank for Agriculture & Rural Development (NABARD)
  
• Laghu Udyog Bharti (LUB)
  
• SME Network - Network of Small and Medium Enterprises Associations & Members
  
• Federation of Indian Chambers of Commerce and Industry (FICCI)
  
• Confederation of Indian Industry (CII)
  
• The Associated Chambers of Commerce and Industry of India (ASSOCHAM)
  
• Federation of Indian Micro and Small & Medium Enterprises (FISME)
• World Association for Small and Medium Enterprises (WASME)
  
• India Trade Promotion Organisation (ITPO)
  
• Technology Innovation Management and Entrepreneurship Information Service
  
• Technology Bureau for Small Enterprises (TBSE)
  
• Asian and Pacific Centre for Transfer of Technology
  
• Environmental Information Centre

Information today is becoming almost as vital as the air we breathe. And with the increase in competition and melting away of international boundaries, the demand for information is reaching new heights. With the globalisation of Indian economy, the traditional sectors as well as hi-tech areas are in immediate need of innovations and fresh technological inputs. Emerging technological and knowledge-based ventures seek nurturing of ideas from professionals and support with government policies for which one needs to go beyond the traditional activities. Such entrepreneurial ideas have to be fostered and developed in a supportive environment before they become attractive to work on, feasible for action, useful for the consumer and financially profitable for the entrepreneur.

— Jaya Goyal is Chairperson, FSIA Women Entrepreneur Cell

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