Meaning and Concept of Small Scale Industry:

In most of the developing countries like India, Small Scale Industries (SSI) constitute an important and crucial segment of the industrial sector. They play an important role in employment creation, resource utilisation and income generation and helping to promote changes in a gradual and phased manner. They have been given an important place in the framework of Indian planning since beginning both for economic and ideological reasons. The reasons are obvious.

The scarcity of capital in India severely limits the number of non-farm jobs that can be created because investment costs per job are high in large and medium industries. An effective development policy has to attempt to increase the use of labour, relative to capital to the extent that it is economically efficient.

Small scale enterprises are generally more labour intensive than larger organisations. As a matter of fact, small scale sector has now emerged as a dynamic and vibrant sector for the Indian economy in recent years. It has attracted so much attention not only from industrial planners and economists but also from sociologists, administrators and politicians.

Definition of Small Scale Industry:

Defining small-scale industry is a difficult task because the definition of small-scale industry varies from country to country and from one time to the another in the same country depending upon the pattern and stage of development, government policy and administrative set up of the particular country.

Every country has set its own parameters in defining small-scale sector. Generally, small-scale sector is defined in terms of investment ceilings on the original value of the installed plant and machinery. But in the earlier times the definition was based on employment. In the Indian context, the parameter are as follows.

The Fiscal Commission, Government of India, New Delhi, 1950, for the first time defined a small-scale industry as, one which is operated mainly with hired labour usually 10 to 50 hands.

Fixed capital investment in a unit has also been adopted as the other criteria to make a distinction between small-scale and large-scale industries. This limit is being continuously raised up wards by government.

The Small Scale Industries Board in 1955 defined, "Small-scale industry as a unit employing less than 50 employees if using power and less than 100 employees if not using power and with a capital asset not exceeding Rs. 5 lakhs".

'The initial capital investment of Rs. 5 lakhs has been changed to Rs. 10 lakhs for sma industries and Rs. 15 lakhs for ancillaries in 1975. Again this fixed capital investment limit was raised to Rs. 15 lakhs for small units and Rs. 20 lakhs for ancillary units in 1980. The Government of India in 1985, has further increased the investment limit to Rs. 35 lakhs for small-scale units and 45 lakhs for ancillary units.

Again the new Industrial Policy in 1991, raised the investment ceilings in plant an machinery to Rs. 60 lakhs for small-scale units and Rs. 75 lakhs for ancillary units.

As per the Abid Hussain Committee's recommendations on small-scale industry, the Government of India has, in March 1997 further raised investment ceilings to Rs. 3 crores for small-scale and ancillary industries and to Rs. 50 lakhs for tiny industry.

The new Policy Initiatives in 1999-2000 defined small-scale industry as a unit engage in manufacturing, repairing, processing and preservation of goods having investment in plant and machinery at an original cost not exceeding Rs. 100 lakhs.

In case of tiny units, the cost limitation is up to Rs. 5 lakhs. Again, the Government of India in its budget for 2007-08 has raised the investment limit in plant and machinery of small-scale industries to 1.5 corers An ancillary unit is one which is engaged or proposed to be engaged in the manufacture c production of parts, components, sub-assemblies, tooling or intermediaries or rendering services and the undertaking supplies or renders or proposes to supply or render not less than 50% of its production or services, as the case may be, to one or more other Industries undertakings and whose investment in fixed assets in plant and machinery whether held on ownership terms or lease or on hire-purchase does not exceed Rs. 75 lakhs.

For small-scale industries, the Planning Commission of India uses terms 'village an small-scale industries'. These include modern small-scale industry and the traditional cottage and household industry.

Role of SSI

Production

The small-scale industries sector plays a vital role in the growth of the country. It contributes almost 40% of the gross industrial value added in the Indian economy.

It has been estimated that a million Rs. of investment in fixed assets in the small scale sector produces 4.62 million worth of goods or services with an approximate value addition of ten percentage points.

The small-scale sector has grown rapidly over the years. The growth rates during the various plan periods have been very impressive. The number of small-scale units has increased from an estimated 0.87 million units in the year 1980-81 to over 3 million in the year 2000.

When the performance of this sector is viewed against the growth in the manufacturing and the industry sector as a whole, it instills confidence in the resilience of the small-scale sector.

Year Target

Achievement

1991-92

3.0 3.1

1992-93

5.0 5.6

1993-94

7.0 7.1

1994-95

9.1 10.1

1995-96

9.1 11.4

1996-97

9.1 11.3

1997-98

* 8.43

1998-99

* 7.7

1999-00

* 8.16

2000-01 (P)

* 8.90

P-Projected (April-December)* Target not fixed at constant prices

Employment

SSI Sector in India creates largest employment opportunities for the Indian populace, next only to Agriculture. It has been estimated that 100,000 rupees of investment in fixed assets in the small-scale sector generates employment for four persons.

Generation of Employment - Industry Group-wise

Food products industry has ranked first in generating employment, providing employment to 0.48 million persons (13.1%). The next two industry groups were Non-metallic mineral products with employment of 0.45 million persons (12.2%) and Metal products with 0.37 million persons (10.2%).

In Chemicals & chemical products, Machinery parts except Electrical parts, Wood products, Basic Metal Industries, Paper products & printing, Hosiery & garments, Repair services and Rubber & plastic products, the contribution ranged from 9% to 5%, the total contribution by these eight industry groups being 49%.

In all other industries the contribution was less than 5%.

Per unit employment

Per unit employment was the highest (20) in units engaged in beverages, tobacco & tobacco products mainly due to the high employment potential of this industry particularly in Maharashtra, Andhra Pradesh, Rajasthan, Assam and Tamil Nadu.

Next came Cotton textile products (17), Non-metallic mineral products (14.1), Basic metal industries (13.6) and Electrical machinery and parts (11.2.) The lowest figure of 2.4 was in Repair services line.

Per unit employment was the highest (10) in metropolitan areas and lowest (5) in rural areas.

However, in Chemicals & chemical products, Non-metallic mineral products and Basic metal industries per unit employment was higher in rural areas as compared to metropolitan areas/urban areas.

In urban areas highest employment per unit was in Beverages, tobacco products (31 persons) followed by Cotton textile products (18), Basic metal industries (13) and Non-metallic mineral products (12).

Location-wise Employment Distribution - Rural

Non-metallic products contributed 22.7% to employment generated in rural areas. Food Products accounted for 21.1%, Wood Products and Chemicals and chemical products shared between them 17.5%.

Urban

As for urban areas, Food Products and Metal Products almost equally shared 22.8% of employment. Machinery parts except electrical, Non-metallic mineral products, and Chemicals & chemical products between them accounted for 26.2% of employment.

In metropolitan areas the leading industries were Metal products, Machinery and parts except electrical and Paper products & printing (total share being 33.6%).

State-wise Employment Distribution

Tamil Nadu (14.5%) made the maximum contribution to employment.

This was followed by Maharashtra (9.7%), Uttar Pradesh (9.5%) and West Bengal (8.5%) the total share being 27.7%.

Gujarat (7.6%), Andhra Pradesh (7.5%), Karnataka (6.7%) and Punjab (5.6%) together accounted for another 27.4%.

Per unit employment was high - 17, 16 and 14 respectively - in Nagaland, Sikkim and Dadra & Nagar Haveli.

It was 12 in Maharashtra, Tripura and Delhi.

Madhya Pradesh had the lowest figure of 2. In all other cases it was around the average of 6.

Year Target(lakh nos.)

Achievement(lakh nos.)

Growth rate

1992-93

128.0 134.06 3.28

1993-94

133.0 139.38 3.28

1994-95

138.6 146.56 5.15

1995-96

144.4 152.61 4.13

1996-97

150.5 160.00 4.88

1997-98

165 167.20 4.50

1998-99

170.1 171.58 2.61

1999-00

175.4 177.3 3.33

P-Provisional

Export

SSI Sector plays a major role in India's present export performance. 45%-50% of the Indian Exports is contributed by SSI Sector. Direct exports from the SSI Sector account for nearly 35% of total exports. Besides direct exports, it is estimated that small-scale industrial units contribute around 15% to exports indirectly. This takes place through merchant exporters, trading houses and export houses. They may also be in the form of export orders from large units or the production of parts and components for use for finished exportable goods.

It would surprise many to know that non-traditional products account for more than 95% of the SSI exports.

The exports from SSI sector have been clocking excellent growth rates in this decade. It has been mostly fuelled by the performance of garments, leather and gems and jewellery units from this sector.

The product groups where the SSI sector dominates in exports, are sports goods, readymade garments, woollen garments and knitwear, plastic products, processed food and leather products.

The SSI sector is reorienting its export strategy towards the new trade regime being ushered in by the WTO.

Year Exports(Rs. Crores)(at current prices)

1994-95

29,068(14.86)

1995-96

36,470(25.50)

1996-97

39,249(7.61)

1997-98

43946(11.97)

1998-99

48979(10.2)

1999-00 (P)

53975(10.2)

P-Provisional

Major Export MarketsAn evaluation study has been done by M/s A.C. Nielsen on behalf of Ministry of SSI. As per the findings and recommendations of the said study the major export markets identified having potential to enhance SSIs exports are US, EU and Japan. The potential items of SSIs have been categorised into three broad categories.  More..

Export DestinationsThe Export Destinations of SSI products have been identified for 16 product groups. More..

Opportunity

The opportunities in the small-scale sector are enormous due to the following factors:

Less Capital Intensive Extensive Promotion & Support by Government Reservation for Exclusive Manufacture by small scale sector Project Profiles Funding - Finance & Subsidies Machinery Procurement Raw Material Procurement Manpower Training Technical & Managerial skills Tooling & Testing support Reservation for Exclusive Purchase by Government Export Promotion Growth in demand in the domestic market size due to overall economic growth Increasing Export Potential for Indian products Growth in Requirements for ancillary units due to the increase in number of greenfield units

coming up in the large scale sector. Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification.

By its less capital intensive and high labour absorption nature, SSI sector has made significant contributions to employment generation and also to rural industrialisation. This sector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices. This is the opportune time to set up projects in the small-scale sector. It may be said that the outlook is positive, indeed promising, given some safeguards. This expectation is based on an essential feature of the Indian industry and the demand structures. The diversity in production systems and demand structures will ensure long term co-existence of many layers of demand for consumer products / technologies / processes. There will be flourishing and well grounded markets for the same product/process, differentiated by quality, value added and sophistication. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. The promotional and protective policies of the Govt. have ensured the presence of this sector in an astonishing range of products, particularly in consumer goods. However, the bugbear of the sector has been the inadequacies in capital, technology and marketing. The process of liberalisation coupled with Government support will therefore, attract the infusion of just these things in the sector.

Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification.

By its less capital intensive and high labour absorbtion nature, SSI sector has made significant contributions to employment generation and also to rural industrialisation. This sector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices. So this is the opportune time to set up projects in the small scale sector. It may be said that the outlook is positive, indeed promising, given some safeguards. This expectation is based on an essential feature of the Indian industry and the demand structures. The diversity in production systems and demand structures will ensure long term co-existence of many layers of demand for consumer products / technologies / processes. There will be flourishing and well grounded markets for the same product/process, differentiated by quality, value added and sophistication. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. The promotional and protective policies of the Govt. have ensured the presence of this sector in an astonishing range of products, particularly in consumer goods. However, the bug bear of the sector has been the inadequacies in capital, technology and marketing. The process of liberalisation will therefore, attract the infusion of just these things in the sector.

SSI Registration

Small Scale and ancillary units (i.e. undertaking with investment in plant and machinery of less than Rs. 6.0 million and Rs. 7.5 million respectively) should seek registration with the Director of Industries of the concerned State Government.

Registering Your SSI Unit

The main purpose of Registration is to maintain statistics and maintain a roll of such units for the purposes of providing incentives and support services.

States have generally adopted the uniform registration procedures as per the guidelines. However, there may be some modifications done by States. It must be noted that small industries is basically a state subject. States use the same registration scheme for implementing their own policies. It is possible that some states may have a 'SIDO registration scheme' and a 'State registration scheme'.

Benefits of RegisteringObjectives and FeaturesProvisional RegistrationPermanent RegistrationProcedure De-registration

Download Registration Forms & Related Documents (Proformas) Application for Provisional Registration Provisional Registration Certificate Application for Permanent Registration Certificate of Registration

o Additional Sheet-1 (for Additions/Deletions) o Appendix "A" (Production Details o Appendix "B" (Details of Plant and Machinery o Affidavit

Benefits of Registering The registration scheme has no statutory basis. Units would normally get registered to avail some benefits, incentives or support given either by the Central or State Govt. The regime of incentives offered by the Centre generally contains the following:  - Credit prescription (Priority sector lending), differential rates of interest etc.  - Excise Exemption Scheme  - Exemption under Direct Tax Laws.  - Statutory support such as reservation and the Interest on Delayed Payments Act. (It is to be noted that the Banking Laws, Excise Law and the Direct Taxes Law have incorporated the word SSI in their exemption notifications. Though in many cases they may define it differently. However, generally the registration certificate issued by the registering authority is seen as proof of being SSI).

States/UTs have their own package of facilities and incentives for small scale. They relate to development of industrial estates, tax subsidies, power tariff subsidies, capital investment subsidies and other support. Both the Centre and the State, whether under law or otherwise, target their incentives and support packages generally to units registered with them.

Objectives of The Registration Scheme

 They are summarised as follows:  - To enumerate and maintain a roll of small industries to which the package of incentives and support are targeted. - To provide a certificate enabling the units to avail statutory benefits mainly in terms of protection.  - To serve the purpose of collection of statistics.

 - To create nodal centres at the Centre, State and District levels to promote SSI.

Features of The Scheme

Features of the scheme are as follows:  - DIC is the primary registering centre - Registration is voluntary and not compulsory.  - Two types of registration is done in all States. First a provisional registration certificate is given. And after commencement of production, a permanent registration certificate is given.  - PRC is normally valid for 5 years and permanent registration is given in perpetuity.

Provisional Registration Certificate (PRC)

 - This is given for the pre-operative period and enables the units to obtain the term loans and working capital from financial institutions/banks under priority sector lending.  - Obtain facilities for accommodation, land, other approvals etc.  - Obtain various necessary NOCs and clearances from regulatory bodies such as Pollution Control Board, Labour Regulations etc.

Permanent Registration Certificate

Enables the unit to get the following incentives/concessions:  - Excise exemptions  - Income-Tax exemption and Sales Tax exemption as per State Govt. Policy.  - Incentives and concessions in power tariff etc.  - Price and purchase preference for goods produced. - Availability of raw material depending on existing policy.

Procedure For Registration

Features of the present procedures are as follows:  - A unit can apply for PRC for any item that does not require industrial license which means items listed in Schedule-III and items not listed in Schedule-I or Schedule-II of the licencing Exemption Notification. Units employing less than 50/100 workers with/without power can apply for registration even for those items included in Schedule-II. - Unit applies for PRC in prescribed application form. No field enquiry is done and PRC is issued. - PRC is valid for five years. If the entrepreneur is unable to set up the unit in this period, he can apply afresh at the end of five years period. - Once the unit commences production, it has to apply for permanent registration on the prescribed form.

The following form basis of evaluation:  - The unit has obtained all necessary clearances whether statutory or administrative. e.g. drug license under drug control order, NOC from Pollution Control Board, if required etc.  - Unit does not violate any locational restrictions in force, at the time of evaluation. - Value of plant and machinery is within prescribed limits.  - Unit is not owned, controlled or subsidiary of any other industrial undertaking as per notification.

De-Registration

A Small Scale Unit can violate the regulations in the following ways which will make it liable for de-registration: - It crosses the investment limits.  - It starts manufacturing any new item or items that require an industrial license or other kind of statutory license.  - It does not satisfy the condition of being owned, controlled or being a subsidiary of any other industrial undertaking.

POLLUTION CONTROL BOARD

Pursuant to the decision taken by the Government of Uttar Pradesh on 05.2.1997 and subsequent directions issued on 21.2.1997, the U.P. Pollution Control Board hereby notifies for information and clarification to General Public and all persons concerned and affected, thereby, that subject to fulfilment of following conditions , Small Scale industries mentioned in Schedule-I shall be exempted from the restrictions imposed vide publication no.G.O./933/37/96 dated 09.7.1996:-

1 All non-obnoxious and non-hazardous small scale industries. (It is clarified that obnoxious and hazardous industries are those using infammable,explosive,corrosive or toxic substance.)

2. All such small scale industries which are proposed to be located within the prescribed industrial area or in area conforming to the prescribed land use. No Objection Certificate should not be issued in Residential Areas and in areas not conforming to prescribed land use. The land use certificate from the competent authority only, must be obtained before the registration. The responsibility for compliance of conditions of land use certificate will be on the General Manager, District Industriesd Centre, who will furnish Compliance report, in this regard, to U.P. Pollution Control Board, regularly. General Manager, District Industries Centre will personally ensure that in municipal limits, the - industries shall be permitted to establish only after the full compliance of prescribed land-use norms/conditions.

3. All such small scale industries, which do not consume any fuel in manufacturing or any subsidiary process or do not emit process emissions and fugitive emissions of a diffused nature. Liquid fuel may be used in the D.G. sets of upto 5 K.V.A., only. It is clarified that in such area/areas, which have been/will be identified as prohibited and restricted area such a Doon- Valley region and Agra-Mathura region i.e. Taj Trapezium zone., no D.G. sets shall be permitted irrespective of their capacity.

4. All such small scale industries, which do not discharge industrial effluent of a polluting nature and have suitable arrangements for disposal and treatment of their sewage/domestic effluent.

5. All such small scale industries which do not undertake amny of the following process:-

ElectroplatingGalvanizingBleachingDegreasing, phosphatingDyeingPicklisng, tanningCooling of fibers and DigestingDesizing of fabricUnhairing, Soaking, Deliming and bating of hides

Trimming, pulling, juicing and blanching of fruits and Vegetables.

Stopping and processing of grainDistilliation of alcohol, stillage, evaporationSlaughtering of animals, rendering of bones, washing of meatJuice of sugar cane, extraction of sugar, Filteration, Centrifugation,Distillation Pulp-making, pulp-process and paper making, coking of coal,washing of blast furnance flue gases Stripping of oxidesWashing of latex etc.Solvent extractionsChemical processing

6. It shall be ensured that the proposed activity does not cause ambient noise to violate the prescribed standards. The responsibility of the District Industries Centre in this respect shall be absolute.

7. Industries which do not satisfy any one of the above criteria from points 1 to 6 or carryout any

modification, extension or addition in their industrial processes or operations, resulting in generation of any trade effluent or air pollutant, shall be required to obtain the consent to establish (i.e. No. Objection Certificate from the U.P. Pollution Control Board before their establishment as per provisions of the Water Prevention and Control of Pollution) Act, 1974 and Air (Prevention and Control of Pollution) Act. 1981.

////Sourcing Process, Raw Materials, Machineries and Equipments Once the firm has decided on the foremost issues of which product it wants to produce and the location of the industry, the next important step is to select appropriate technology and equipment to produce the same. In addition to this, the source of raw material has to be decided upon. The requirements of all these can either be met through domestic sources or can be imported subject to the regulatory requirements of the Government. The regulatory requirements pertaining to the import procedures vary depending on the item of import. In case of raw materials, the Export Import Policy of the Government regulates imports. However, in the case of technology, the Foreign Direct Investment (FDI) Policy and the Foreign Technology Transfer Agreements govern the imports.

The firm should do a careful cost and benefit analysis before going ahead with the process of placing the orders to minimize the production costs and hence increasing the profit margins. Various sources of Capital should be explored and the cost of capital should be analysed cautiously.

Process Selection

Once the choice of the product is made, selection of the right process technology becomes important. The process technology required may be :-

Indigenously developed:- In India, technologies are being developed at CSIR and Defence Research Labs. There are some intermediaries like APCTT (Asian and Pacific Centre for Transfer of Technology), TBSE( Technology Bureau for Small Enterprises) which can help you to locate the relevant technologies. Besides there are some In-house R & D centres of companies which develop technologies and sell them to interested parties. Indigenously developed process know-how has intrinsic benefits like appropriateness, relative inexpensiveness and possibility to work with technology developer.

Imported :- For some complex products, process know-how has to be imported. In such cases agreements for technology transfer should be made with due care in order to safeguard nation's interest. Government of India facilitates foreign technology induction both through FDI and through foreign technology collaboration agreements. FDI and Foreign technology collaboration agreements can be approved either through the automatic route under the powers delegated to the Reserve Bank of India or otherwise by the Government.

For more details visit our Section on "Doing Business Abroad"

While choosing the process technology, the following considerations are essential :-

The level of skilled workers or complex machines required by the process.

The quantity of water and / or power required.

If any process or product patent is needed in order to utilize the selected process technology.

Any special Pollution or Environmental regulation is to be followed.

The appropriateness of the technology to the Indian environment and conditions.

Raw Materials

Raw Material procurement and planning are critical to success, of a start-up unit. The raw materials required may be:-

Domestically available (within the country):- As we know that our country is a resource rich country with abundance of specific raw materials in different States. (For details, please refer to 'Investment opportunities and incentives' section). Accordingly appropriate suppliers of raw materials have to be selected.

Imported from abroad:- For importing the raw materials the Government rules and regulations have to be followed. The imports are regulated by the Foreign Trade (Development and Regulation) Act, 1992. The Act provides for the appointment by the Central Government, of a Director General of Foreign Trade for the purpose of the Act. The DGFT shall advise Central Government in formulating export and import policy and implementing the policy. (For details, please refer to 'Legal Aspects' section).

Whatever be the source of raw materials it must be bought from reputed dealers and agencies only. Before ordering, compare the prices and get quotation from at least 3-4 places and also check whether price is inclusive or exclusive of transportation costs. While receiving the delivery, check the quality and quantity of the materials.

Proper planning is essential because non-availability of the required raw material may result in production hold-ups, idle machinery and manpower. On the other hand if too much is ordered too soon considerable amount of working capital gets locked up. All this will lead to increased production costs. But proper inventory management can lead to manageable cash flow situations. For imported raw material whose lead time are large, proper planning is all the more essential.

Machinery and Equipments

The next important step is choosing and ordering of right machinery and equipments. The machinery and equipments required may be either domestically available or imported from abroad. For importing machinery and equipments, the Government rules and regulations have to be followed. The imports are regulated by the Foreign Trade (Development and Regulation) Act, 1992. The Act provides for the appointment by the Central Government, of a Director General of Foreign Trade for the purpose of the Act. The DGFT shall advise Central Government in formulating export and import policy and implementing the policy. (For details, refer to 'Legal Aspects' section).

Generally, technology or process provides with the necessary specifications relating to machinery and equipment required. Otherwise, an extensive techno-economic survey of the available machinery and equipment may be carried out. International trade fairs and engineering fairs are good places to look at available options. The entrepreneur may also consult experts, dealers / suppliers as well as users, prior to making a selection of equipment and machinery. Many entrepreneurs buy second hand machines and equipments. But this leads to the problem of prevalence of outdated production and management methods hindering the efficient operation of business units. The advice of SISI and NSIC can also be sought.

There are 30 Micro,Small and Medium Enterprises Development Institutes (MSME-DIs) and 28 Branch MSME-DIs (formerly SISIs) set up in State capitals and other industrial cities all over the country. The main objective of National Small Industries Corporation Limited (NSIC) is to provide machinery and equipment to small industrial units offering them long repayment period with moderate rate of interest.

It has been found that small industrialists are unable to install modern machinery and equipment due to lack of investable funds. Hence many schemes and incentives are available to assist them. Now, small scale firms can acquire industrial machinery, office equipment, vehicles, etc, without making full payment through hire purchase. With the help of assets acquired through hire purchase, they can produce and sell. From the earning of production, they can make payments in installment. Ultimately the ownership of assets can be acquired.

National Small Industries Corporation (NSIC) provides machinery and equipment to small scale units on hire purchase basis and on lease basis. NSIC follows the following Hire Purchase procedure and Hire Purchase Scheme for financing plant and machinery to small scale units:

The hire purchase application is to be made on the prescribed form.

The Director of Industries of the State under whose jurisdiction the applicant falls, forwards the application to the head office of the NSIC at Delhi with his recommendation and comments.

All applications for indigenous or imported machines are considered by acceptance committees comprising of the representatives of the Chief Controller of Imports, Development Commissioner, Small Scale Industries and other concerned departments.

Decisions of these committees are conveyed to the parties concerned with copies to the regional offices of the NSIC and the concerned Directorate of Industries.

It is open to an applicant whose case has been rejected to get his application reviewed by a high powered committee.

Once the hirer completes all these formalities, instructions are sent to the suppliers to dispatch the consignment (duly insured for transit risk) to the hirer and to send the R/R or C/R as the case may be, to the regional office.

The NSIC after ensuring that the hirer has paid all dues, releases the R/R or C/R to him for taking delivery of the machines.

In case of imported machines, the procedure is slightly different in as much as the shipping documents are sent to the clearing agents for clearing the consignment from the Customs and dispatching it to the hirer.

For more details visit our Section on 'Industry and Services'

Project AppraisalDuring the process of Project Appraisal, SMEs should keep following points in mind -Technical Appraisal - Manufacturing process/technology, Technical arrangements, Size of the plant, Product-mix, Selection of plant and machinery, Procurement of plant and machinery, Plant layout Location of the project, Land, Raw material, Market,

Labour, Utilities such as water, power, fuel etc., Effluent disposal, Transportation, Community infrastructure, Development of other industries, schedule of project implementation.Commercial Appraisal - Demand-techniques of forecasting, Import substitution, Past trend method, End-use method, Correlation and regression, Export market, Supply-depth of competition, Pricing policy, Life cycle of the product, Brand name of the product, Packing and transport, Distribution channels, Sales promotion-Salesman AdvertisingServicing, Sources of market information, Publications useful to study various aspects of marketingFinancial Appraisal - Capital cost of projects, Land and site developments, Buildings, Plant and machinery, Engineering and consultancy fees, Miscellaneous fixed assets, Preliminary and preoperative expenses, Provision for contingencies, Margin money for working capital, Sources of finance, Financial projections, Profitability estimates, Cash flowestimates, Projected balance sheets, Ratio analysis, Debt-equity ratio, Current ratio,Debt-service coverage ratio, Margin on security, Other ratios, Break-even point, Discounted cash flow techniques, Net present value, Internal rate of return.Management Appraisal - Qualities of an entrepreneur, Honesty and integrity, Involvement in the project, Financial resources, Competence, Risk taking, Initiative, Drive and energy, Self confidence, Frankness, Patience, Various forms of organizations- Proprietary concern, Partnership firm , Corporate sector, Board of Directors, Committee of Board, ChiefExecutive, Other Executives, Organizational set up, Management problems.