2. Policies 1999 Onwards (2)

8/3/2019 2. Policies 1999 Onwards (2)

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1999 onwards

1. COMPREHENSIVE POLICY PACKAGE 20002. MSME DEVELOPMENT ACT, 2006

3. PACKAGE FOR PROMOTION OF MICRO ANDSMALL ENTERPRISES 2007


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Comprehensive policy package for SSI,

2000

The Emerging Economic Scenario in the changed,

liberalized & Competitive economic environment

necessitated structural & fundamental changes in

the policy framework, causing a shift in focus from

protection to Promotion


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Policy 2000OutlineSMALL SCALE SECTOR2.0 Policy Support

3.0 Fiscal Support

4.0 Credit Support

5.0 Infrastructural Support

6.0 Technological Support and

Quality Improvement7.0 Marketing Support

8.0 Streamlining Inspections/

Rules and Regulations

9.0 Entrepreneurship Development

10.0 Facilitating Prompt Payment

11.0 Rehabilitation of sick units

12.0 Promoting Rural Industries

13.0 Improving Data Base

TINY SECTOR14.0 Policy Support

15.0 Credit Support

16.0 Infrastructure Support

17.0 Technological Support

18.0 Marketing Support


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1.0 Introduction On going Economic Reforms based upon theprinciple of

1. liberalisation,

2. globalisation3. privatisation and

4. emergence of WTO,

have brought certain challenge for SMEs.The most important challenge isgrowing competition both globally and domesticallyto address the problems like

1. credit,2. infrastructure,

3. technology,

4. Marketing

We need the Policy 2000


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2.0 Policy Support1. investment limit Rs. 25 lakhs & 1 crore. - -----be

raised to Rs. 5 crores

2. Limited Partnership Act will be drafted & enacted.

3. PMRY, the family income of Rs. 24,000 is now Rs.40,000

3.0 Fiscal Support excise duty limit Rs. 50 lakhs to Rs. 1 crore

4.0 Credit Support1. composite loans limit 10 lakhs to Rs.25 lakhs2. National Equity Fund Scheme,Rs. 25 lakhs to Rs.

50 lakhs

3. Credit Guarantee Scheme Rs. 10 laks to Rs.25


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5.0 Infrastructural Support1. IID Scheme will cover all areas in the country with 50%

reservation for rural areas. Out of this -50% for tiny sector

2. A Plan Scheme for Cluster Development will be drawn up.3. cluster development is being taken up by KVIC, SIDO, SIDBI

and NABARD.

6.0 Technological Support andQuality Improvement1. Capital Subsidy of 12 per cent for investment in technology in

select sectors preference to the Tiny Sector.

2. To encourage Total Quality Management, the Scheme ofgranting Rs.75,000/- to each unit for opting ISO-9000Certification will continue for the next six years

3. dissemination of the latest technology related information


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7.0 Marketing SupportSIDO will organize

Market Development Assistance (MDA) Programme

Vendor Development Programme,

Buyer-Seller Meets and Exhibitions

8.0 Streamlining Inspections/Rules and

RegulationsTo minimise harassment to Small Scale Sector -

repeal of laws and regulations

10.0 Facilitating Prompt PaymentRBI is beingrequested to strengthen and popularising factoring services

13.0 Improving Data Base conducting Census of SMEs,SICk Units etc ( 2001-2002 , 2003-2004 )


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MSME Development Act, 2006

A. SMALL AND TINY ENTERPRISES1.0 INTRODUCTION

2.0 TINY ENTERPRISES

3.0 FINANCIAL SUPPORT MEASURES

4.0 INFRASTRUCTURAL FACILITIES

5.0 MARKETING AND EXPORTS

6.0 MODERNISATION, TECHNOLOGICAL AND QUALITY UPGRADATION7.0 PROMOTION OF ENTREPRENEURSHIP

8.0 SIMPLIFICATION OF RULES AND PROCEDURES

B. VILLAGE INDUSTRIES9.0 HANDLOOM SECTOR

10.0 HANDICRAFTS SECTOR

11.0 OTHER VILLAGE INDUSTRIES


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Change in definition

Manufacturing Sector

Enterprises Investment in plant & machinery

MicroDoes not exceed Rs 25 Lakhs

Small does not exceed Rs. 5 Crores

Medium does not exceed Rs. 10 crore

Service Sector

Enterprises Investment in equipments

Micro Does not Rs. 10 Lakhs

Small does not exceed Rs. 2 crores

Medium does not exceed Rs. 5 Crores

first-ever legal framework for recognition of the concept of enterprise (comprisingboth manufacturing and services) and integrating the three tiers of theseenterprises, namely, micro, small and medium.


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3.0 FINANCIAL SUPPORT MEASURES1. Emphasis would shift from subsidized/cheap credit to to adequate flow of

credit on a normative basis.

2. access to the capital market & equity participation by other --not exceeding 24

%3. Limited Partnership Act -limit the financial liability of the new and non-activepartners/entrepreneurs to the capital invested.

4. factoring services through SIDBI to speed up payments

4.0 INFRASTRUCTURAL FACILITIES1. A Technology Development Cell (TDC) would be set up under (SIDO)

2. To ensure Adequacy and equitable distribution of indigenous and imported rawmaterials


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5.0 MARKETING AND EXPORTS market promotion through marketing agencies

Export Development Centre would be set up in SIDO

Parts, components, sub-assemblies, etc. required by largepublic/private sector undertakings would be encouraged forproduction in small scale ancillary units

6.0 MODERNISATION, TECHNOLOGICALAND QUALITY UPGRADATION

awareness to produce goods and services of national andinternational standards

Indian Institutes of Technology (IITs) and selected RegionalEngineering Colleges - will serve as Technological Information,Design and Development Centres

7 0 PROMOTION OF


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7.0 PROMOTION OFENTREPRENEURSHIP

EDP would be built into the curricula of vocational and otherdegree level courses

Women entrepreneurs will receive support through specialtraining programme.

8.0 SIMPLIFICATION OF RULES ANDPROCEDURES

SMES are subjected to a large number of Acts and Laws, being required to maintain a number of registers and submit

returns, and face an army of inspectors, would be attended to within a

specified time frame of three months. Procedures would be simplified, bureaucratic controls

effectively reduced, unnecessary interference eliminated andpaper work cut down to the minimum to enable theentrepreneurs to concentrate on production and marketing

functions.


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PACKAGE FOR PROMOTION OF

MICRO AND SMALL ENTERPRISES 2007I. INTRODUCTION

II. RECENT INITIATIVES

III. PROMOTIONAL PACKAGE

1. LEGISLATION

2. CREDIT SUPPORT

3. FISCAL SUPPORT

4. SUPPORT FOR CLUSTER BASED DEVELOPMENT

5. TECHNOLOGIES AND QUALITY UPGRADATION SUPPORT

6. MARKETING SUPPORT

7. SUPPORTS FOR ENTREPRENEURIAL AND MANAGERIALDEVELOPMENT

8. EMPOWERMENT OF WOMEN OWNED ENTERPRISES

9. STRENGTHENING OF PRIME MINISTERS ROZGAR YOJANA (PMRY)

10. STRENGTHENING OF DATA BASE FOR MSME SECTOR


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INTRODUCTION SSI is the most employment-intensive segment.

Over 6000 products manufactured

a large no. of units faces several challenges.

1. credit,

2. technological up gradation,

3. marketing and

4. Infrastructural upgradation


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1. LEGISLATION Micro, Small and Medium Enterprises Development Bill, 2006 has

recently been passed

Limited Liability Partnerships2. CREDIT SUPPORT- (RBI) has already issued

guidelines to the public sector banks to ensure 20 per cent year-on-year growth in credit to the SME.

3. FISCAL SUPPORT the Government will examine thefeasibility of: increase in the General Excise Exemption


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4. SUPPORT FOR CLUSTER BASEDDEVELOPMENT

5. MARKETING SUPPORT The National Manufacturing Competitiveness Programme (NMCP)

7. SUPPORTS FOR ENTREPRENEURIAL ANDMANAGERIAL DEVELOPMEN

20% of the entrepreneurship development programmes (EDP) will beorganised for SC/ST, & women and physically challenged persons

50,000 entrepreneurs will be trained in

1. information technology,2. catering,

3. agro and food processing,

4. pharmaceuticals,

5. biotechnology, etc.


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8. EMPOWERMENT OF WOMEN OWNEDENTERPRISES

Under the Credit Guarantee Fund Scheme, 80% guarantee will be for SME

owned by women. 50% concession in fees would be given to women candidates in

entrepreneurship/ management development programmes conducted bySISIs.

9. STRENGTHENING OF PRIME MINISTERSROZGAR YOJANA (PMRY)-

PMRY is an important credit-linked subsidy schemes

to generate self-employment opportunities for the educated youth

by assisting them in setting up viable micro enterprises.

By the end of 2005-06, it is estimated to have provided self-employmentopportunities to 38.09 lakh persons.


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10.Textiles: -Allocation for the Technology up gradation fund (TUF)raised from 911 crore to Rs.1090 crore.

Setting up of 6 mega clusters,

Varanasi & Sibsagar for handlooms,

Bhiwandi & Erodr for power looms, Narasapur & Moradabad for handicrafts

450 Crore scheme for Integrated Textile parks (SITP)

11.Banking & Finance: Credit Guarantee Trust with SIDBI had extended guarantees to 89,129

units for an amount of Rs.2,479 crore as on January 31, 2008;

SIDBI to reduce the guarantee fee from 1.5% to 1% cent and the annualservice fee from 0.75% to 0.5% for loans up to Rs.5 lakhs


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Legal Framework

Acts and Laws applicable to Small ScaleIndustries

I. REGISTRATION RELATED LAWS 2+

II. LABOUR RELATED LAWS- 30+

III. ENVIORNMENT RELATED LAWS 5+IV. TAX RELATED LAWS - 5+

V. LOCAL & OTHER MUNICIPAL LAWS 5+

VI. PRODUCT & PROCESS 10+VII. OTHER CENTRAL ACTS 5+

Documents

2. Policies 1999 Onwards (2)