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2005-2006

GOVERNMENT OF INDIAMINISTRY OF SMALL SCALE INDUSTRIES

Contents

Chapter I Page No.

An Overview_______________________________________________________________1

Chapter II

Small Industry Development Organisation (SIDO)_________________________________ 5

Chapter III

National Small Industries Corporation Ltd.______________________________________ 42

Chapter IV

Training and Entrepreneurship Development____________________________________ 50

Chapter V

National Commission for Enterprises in the Unorganised Sector (NCEUS)____________ 61

Chapter VI

International Cooperation___________________________________________________ 64

Chapter VII

Activities in the North Eastern Region__________________________________________70

Chapter VIII

Development Activities for Women____________________________________________72

Chapter IX

Use of Official Language____________________________________________________ 76

Chapter X

Vigilance Matters__________________________________________________________ 78

Chapter XI

Citizens’ Charter__________________________________________________________ 80

Annexure I

Summary of Recent and Important Audit Observations and Replies Thereto___________ 82

Annexure II

Performance Indicators of Small Scale Industries________________________________ 89

A c r o n y m s____________________________________________________________90

6

� Advising the Government in formulation

of policies and programmes/projects/

schemes for the promotion and

development of the SSI.

� Providing techno-economic and

managerial consultancy, common facility

and extension services to the SSI.

� Providing support for technology

upgradation, modernisation, quality

improvement and infrastructure

facilities.

� Assisting the SSI in human resource

development through training and skill

upgradation.

� Providing economic information services

to the SSI.

� Maintaining a close liaison with the Central

Ministries, Planning Commission, State

Governments, Financial Institutions and

other organisations concerned with the

development of the SSI.

� Evolving, implementing and coordinating

policies and programmes for development

of the SSI as ancillaries to large and

medium industries.

� Providing testing and calibration services

to the SSI.

� Implementing / monitoring the flagship

schemes of:

� Credit Guarantee Fund

� Credit Linked Capital Subsidy for

Technology Upgradation

� Small Industries Cluster

Development Programme

2.1.5 An amount of Rs. 360.69 crore has

been allocated to SIDO for the implementation

of the Plan Schemes during the financial year

2005-06.

2.2.0 MAJOR POLICYINITIATIVES

2.2.1 SMALL AND MEDIUMENTERPRISES DEVELOPMENT(SMED) BILL

A single comprehensive legislation for

promotion, development and enhancement of

competitiveness of the SSI has been a long-

standing demand of the sector, with a view,

inter alia, to reducing the rigours faced by the

sector on account of application of a plethora

of laws and regulations. In keeping with the

declaration in the National Common Minimum

Programme (NCMP) of the Government in this

regard, the Ministry of SSI drafted the Small

and Medium Enterprises Development

(SMED) Bill, 2005 which seeks to define

“enterprise” as against the restrictive category

of “small scale industry”, integrate micro, small

and medium enterprises (MSME) as a

continuum and address the major problems of

the MSME. The SMED Bill was introduced in

the Lok Sabha on 12 May 2005 and later

referred to the Department-related

Parliamentary Standing Committee (DRPSC)

on Industry. After considering the wide-ranging

recommendations of the DRPSC based on its

detailed consultation with various stakeholders,

notice for official amendments to the SMED

Bill, 2005 and enacting the Micro, Small and

7

Medium Enterprises Development (MSMED)

Bill was sent to the Lok Sabha on 2 December

2005.

The MSMED Bill provides, inter alia, for the

following important matters:

(i) Constitution of the National Micro, Small

and Medium Enterprises Board with a

much wider and representative

composition and wider functions;

(ii) Replacement of the existing two-stage

system of optional “registration” of the SSI

by that of optional filing simplified

“memoranda” by micro and small

enterprises;

(iii) Improving access of micro and small

enterprises (MSE) to credit;

(iv) Statutory backing for procurement

preference policies in favour of the

MSE;

(v) Simplification and harmonisation of

inspection procedures and requirement

of maintaining registers and furnishing

returns, as applicable to the micro, small

and medium enterprises (MSME) under

specified Labour laws;

(vi) Strengthening of provisions on relating to

the problem of delayed payments to micro

and small enterprises and widening the

functions of the relevant dispute resolution

mechanisms with a view to providing

quicker and more effective relies to the

MSE in cases of disputes; and

(vii) Simpler scheme for closure of business

by the MSE

2.2.2 PACKAGE FOR PROMOTION OFMICRO AND SMALLENTERPRISES

In keeping with another declaration in the NCMP,

a promotional package for the MSE was drafted

by the Ministry during the year. Inter-Ministerial

consultations were held with seventeen

Ministries/Departments/Commissions/Councils

on the draft Promotional Package. However, on

the advice of the Planning Commission and the

Department of Expenditure to first seek

appraisal of the proposal by the Expenditure

Finance Committee (EFC), an EFC

Memorandum was circulated. Attempts are

underway to resolve the large areas of difference

of opinion of the Ministries/Departments on the

elements of the proposed package before its

consideration by the EFC and then the

Government.

2.2.3 ENHANCEMENT OFINVESTMENT LIMIT FROM RS. 1CRORE TO RS. 5 CRORE

Under the Industries (Development and

Regulation) Act 1951 [I (DR) Act] the small scale

industry is defined as one with an investment

upto Rs. 1 crore in plant and machinery,

excluding land and building. However, in the

changed economic scenario of liberalisation and

globalisation and with a view to increasing the

competitiveness of manufacturing SSI, the

investment limit in respect of 71 products has

been enhanced to Rs. 5 crore to enable the units

manufacturing these products to carry out

technological upgradation and modernisation of

their units. In addition, investment limit for 69

8

hi-tech products as well as those for the

pharmaceutical sector is also being enhanced

to Rs. 5 crore. The final notification in respect

of this is under issue.

2.2.4 RESERVATION POLICY

With a view to providing to the SSI opportunities

for technological upgradation, promotion of

exports and economies of scale, items

reserved for exclusive manufacture by the SSI

have been dereserved from time to time. The

dereservation process involves extensive

consultation with all the stake holders, including

the SSI associations and various Ministries/

Departments concerned and the Planning

Commission. As per the provisions of the I (DR)

Act, an Advisory Committee has been

constituted which recommends reservation/

dereservation of items from time to time. Based

on consultations with the stake holders and on

the recommendations of the Advisory

Committee, 193 items were dereserved during

2004-05. After this round of dereservation, there

are 506 items reserved for exclusive

manufacture by the SSI.

Section 29 B of the I (DR) Act provides for penal

action against violation of the policy of

reservation for exclusive manufacture by the

SSI by non-SSI units. Occasional complaints

of violation of this policy are received from

Members of Parliament, Government

Departments, SSI associations, individual SSI

units, etc. Detailed policy guidelines for initiating

action against non-SSI units violating the

reservation policy were circulated to all SISIs

and State Governments. On prima facie

confirmation of such violation, criminal

complaints have been filed against three units

located in Hyderabad, Kolkata and Delhi and

investigations have been initiated in a few more

cases.

2.3.0 CREDIT TO SSI AND TINY/MICRO SECTOR

2.3.1 Credit is one of the critical inputs for

the promotion and development of the SSI. To

facilitate timely and adequate credit to the SSI,

the Government has taken several initiatives/

measures. The existing components of the

credit policy for the SSI are as under:

(i) Priority Sector Lending: Credit to the SSI

is part of the priority sector lending by

banks. For the public and private sector

banks, 40% of the net bank credit (NBC)

is earmarked for the priority sector. For

the foreign banks, however, 32% of the

NBC is earmarked for the priority sector,

of which 10% is earmarked for the SSI

sector. Any shortfall in such lending by the

foreign banks has to be deposited with

the Small Industries Development Bank

of India (SIDBI).

(ii) Institutional Arrangement: The SIDBI is the

principal financial institution for promotion,

financing and development of the SSI

sector. Apart from extending financial

assistance to the sector, it coordinates the

functions of institutions engaged in similar

activities. SIDBI’s major operations are in

the areas of (i) refinance assistance (ii)

direct lending and (iii) development and

9

support services The commercial banks

are important channels of credit

dispensation to the sector and play a

pivotal role in financing the working capital

requirements, besides providing term

loans (in the form of composite loans).

State Financial Corporations (SFCs) and

twin-function State Industrial Development

Corporations (SIDCs) at the State level are

the main sources of long-term finance for

the SSI sector. Credit support in direct/

indirect form is also provided, to some

extent, by National Bank for Agriculture and

Rural Development (NABARD), NSIC, etc.

2.3.2 The table below gives the position

of flow of credit to the SSI sector from all

public sector banks, since 2000.

2.3.3 CREDIT TO TINY/MICROSECTOR

The table below gives the status of credit to

tiny/micro sector (having investment upto

Rs. 25 lakh) since 2000.

2.3.4 SCHEME OF SMALLENTERPRISES FINANCIALCENTRES (SEFCs)

As announced in the Annual Policy Statement

for 2005-06, the Reserve bank of India (RBI)

Credit Parameters At the end of March

2000 2001 2002 2003 2004 (P) 2005 (P)

Net bank credit (Rs. crore) 3,16,427 3,41,291 3,96,954 4,77,899 5,58,849 7,18,722

Credit to SSI (Rs. crore) 46,045 48,400 49,743 52,988 58,278 67,634

No. of SSI accounts (lakh) 22.72 22.80 22.23 16. 95 16.33 17.71

SSI Credit as percentage 14.6 14.2 12.5 11.1 10.4 9.4

of net bank credit

(P): Provisional

(P): Provisional

At the end of March

2000 2001 2002 2003 2004 (P) 2005 (P)

Net bank credit to tiny sector 24,742 26,019 27,030 26,937 30,826 28,063

(Rs. crore)

Tiny sector credit as 54.0 53.7 54.3 50.8 52.9 41.5

percentage of net SSI credit

10

has formulated a scheme for strategic alliance

between branches of commercial banks and

SIDBI in selected clusters of the SSI, viz.,

Scheme of Small Enterprises Financial Centres

(SEFCs). This scheme is important in the

context of expanding the outreach of banks and

improving credit flow to the SSI sector. SIDBI

has been made the nodal agency for

implementing the scheme in alliance with

commercial banks. SIDBI has rechristened its

existing branches in the clusters as SEFCs.

Based on the directive of the RBI, SIDBI has

also entered into strategic alliance with 11 major

banks for financing tiny/micro and SME in

identified clusters. All the 149 clusters identified

by the RBI have been covered under the SEFC

scheme.

2.3.5 RECENT POLICY PACKAGEFOR STEPPING UP CREDITFLOW

2.3.5.1 The Government announced on 10th

August 2005 a ‘Policy Package for Stepping up

Credit to Small and Medium Enterprises

(SMEs)’. The measures in the Policy Package

to increase the quantum of credit to SMEs

(including SSI) include:

� Public sector banks to fix their own targets

for funding SMEs in order to achieve a

minimum 20 per cent year-on-year

growth in credit to the SME sector.

� Public sector banks to follow a transparent

rating system with cost of credit linked to

the credit rating of the enterprise.

� Commercial banks to make concerted

efforts to provide credit cover on an

average to at least 5 new tiny, small and

medium enterprises at each of their semi-

urban / urban branches per year.

� The RBI to issue detailed guidelines

relating to debt restructuring mechanism

so as to ensure restructuring of debt of

all eligible small and medium

enterprises.

� Introduction of a one-time settlement

scheme to apply to SSI non-performing

asset (NPA) accounts in the books of the

banks as on March 31, 2004.

� Taking the existing RBI guidelines as

indicative minimum, banks to formulate

a comprehensive and more liberal policy

relating to advances to the SME sector.

� Special dispensation under the Credit

Guarantee Scheme for all (a) loans upto

Rs. 2 lakh, (b) eligible women

entrepreneurs and (c) eligible borrowers

located in the North Eastern region

(including Sikkim) and Jammu and

Kashmir.

� Banks to adopt cluster-based approach

for SME financing.

� The RBI to constitute empowered

committees with the respective Regional

Directors of RBI as the Chairmen to

review the progress in SME financing and

rehabilitation of sick SSI and medium

industry units.

� Boards of banks to review the progress

in achieving the self-set targets as also

rehabilitation and restructuring of SME

accounts on a quarterly basis.

11

2.3.5.2 The RBI has issued a circular dated

19th August 2005 to all public sector banks and

dated 25th August 2005 to all private sector

banks/foreign banks/ RRBs advising them to

implement the measures announced in the

Policy Package.

2.4.0 FISCAL CONCESSIONSTO THE SSI SECTOR

2.4.1 GENERAL SSI EXEMPTIONSCHEME

Consequent on the announcement of a

Comprehensive Policy Package for SSI Sector

by the Prime Minister on 30th August 2000, full

excise exemption up to the first clearance of

Rs. 1 crore per annum was provided to the SSI

sector with effect from 1st September 2000.

Under the General Excise Exemption Scheme,

units having annual turnover of less than Rs. 3

crore were eligible for the excise exemption.

2.4.2 FISCAL INCENTIVESANNOUNCED IN THE BUDGET2005-06

2.4.2.1 Excise Duty: (i) The SSI turnover

eligibility limit for availing of the General SSI

Excise Exemption was enhanced from Rs. 3

crore to Rs. 4 crore; (ii) excise duty reduced

from 16% to 8% on imitation jewellery; and (iii)

excise duty of Rs. 1 per kg on refined edible

oils and Rs. 1.25 per kg on vanaspati was

withdrawn.

2.4.2.2 Service Tax: (i) Small service

providers having gross annual turnover less than

Rs. 4 lakh were exempted from the purview of

service tax; and (ii) service tax on business

auxiliary service exempted for persons

producing/ processing goods, from inputs

received from a manufacturer and sending the

resultant product to the same manufacturer for

further manufacture of final products, which are

cleared on payment of excise duty.

2.4.2.3 Customs Duty: (i) Peak rate of

customs duty for non-agricultural products was

reduced from 20% to 15%; (ii) the customs duty

on selected capital goods and parts was

reduced to 10% in some cases and to 5% in

some others; (iii) customs duty on seven

specified machinery for leather and footwear

industry was reduced from 20% to 5%; (iv)

customs duty on nine specified machinery used

in pharmaceutical and biotechnology sectors

was reduced to 5%; (v) for primary and

secondary metals customs duty was reduced

from 15% to 10%; (vi) reduced customs duty of

10% was made applicable to industrial raw

materials such as catalysts, refractory raw

materials, basic plastic materials, molasses

and industrial ethyl alcohol; and (vii) customs

duty on coking coal was reduced from 15% to

5%.

2.5.0 SICKNESS IN THE SSISECTOR

2.5.1 As per the data compiled by the RBI

from the scheduled commercial banks, the

sickness in the SSI has decreased in the recent

years. The number of sick SSI as at the end

of March, 2000 to March, 2004 is given below:

12

2.5.2 Based on the accepted

recommendations of the Working Group set up

by the RBI under the chairmanship of Shri S.S.

Kohli, the then Chairman, Indian Banks’

Association, the RBI had drawn up the Revised

Guidelines for Rehabilitation of Sick SSI Units,

which were circulated to the banks on 16th

January 2002 for implementation. The

guidelines include, inter alia, a change in the

definition of sick SSI units, norms for deciding

the viability of sick units, extent and types of

concessional finance, etc. The revised

definitions were meant to enable banks to take

action at an early stage for revival of the

potentially viable sick units.

2.5.3 In line with the latest Policy Package,

the RBI has circulated to all public sector banks

on 3rd September, 2005 the guidelines on One-

Time Settlement (OTS) Scheme for SME

accounts. The guidelines will cover all NPAs of

the SME, which have become doubtful or loss

as on March 31, 2004 or NPAs classified as

sub-standard on that date, which have

subsequently become doubtful or loss with

Total number of sick units Potentially viable

As at Number* Amount of Number* Amount of

the end loans outstanding loans outstanding

of March (Rs. crore) (Rs. crore)

2000 3,04,235 4,608.43 14, 373 369.45

2001 2,49,630 4,505.54 13, 076 399.17

2002 1,77,336 4,818.95 4,493 416.41

2003 1,67,980 5,706.35 3,626 624.71

2004 1,38,811 5,284.54 2,385 421.18

*These units include village industries as well.

outstanding balance of Rs. 10 crore and below

on the date on which the account was classified

as doubtful.

2.5.4 The RBI has also issued to all

commercial banks detailed guidelines on 8th

September, 2005 relating to debt restructuring

mechanism to ensure restructuring of debt of

all eligible SMEs at terms which are, at least,

as favourable as the Corporate Debt

Restructuring mechanism in the banking sector.

2.6.0 SIDO SCHEMES/MEASURES FORPROMOTION OF SMALLSCALE INDUSTRIES

2.6.1 ADVERTISING ANDPUBLICATIONS

2.6.1.1 The Advertising and Publications

Division of SIDO disseminates information

about Government policies and programmes;

incentives and facilities and institutional support

services available to the SSI. It coordinates with

13

the Directorate of Audio Visual Publicity and

SIDO’s field offices for timely appearance of

advertisements on entrepreneurship

development training courses; management

development programmes; skill development

courses, etc., in local language newspapers in

different parts of the country.

2.6.1.2 An effective media plan for coverage

was prepared for wide publicity of the events.

Four advertisements for the National Expo of

Small, Agro & Rural Industries and National

Convention & National Award Function were

designed and released in all daily English/Hindi

newspapers for wide publicity across the

country. Publicity material for such events

including handbills, brochures, exhibitor’s

directory, jingles on radio, TV advertisements,

hoardings, banners, etc., was prepared for

various modes of publicity.

2.6.2 LAGHU UDYOG SAMACHARAND OTHER PUBLICATIONS

2.6.2.1. Laghu Udyog Samachar, a quarterly

journal in English and Hindi for SSI is

disseminating updated information for the

benefit of the prospective and existing

entrepreneurs. Laghu Udyog Samachar is an

important window in print for the SSI, providing

access to the latest information on a variety of

topics. It creates awareness and disseminates

information on policies and programmes of the

Central and the State Governments,

Government of India orders, circulars, gazette

notifications, field activities, statistical and

economic information as well as articles on

various issues pertaining to the SSl.

2.6.2.2 During 2005-06, the following

publications were brought out:

(i) Laghu Udyog Samachar Bilingual

January - March, 2005

(ii) Laghu Udyog Bilingual

Samachar April - (Special

September, 2005 Issue)

(iii) Laghu Udyog Bilingual

Samachar October - (In press)

December, 2005

(iv) A Guide to Self- English

Employment

(v) Swa-Rojgar Margdarshika Hindi

2.6.3 INFORMATION & FACILITATIONCOUNTER (IFC)

The Information and Facilitation Counter (IFC)

in the office of the DC (SSI) is disseminating

updated information for the benefit of the

prospective and existing entrepreneurs. The IFC

provides speedy and easy access to information

to the public on the services and activities of

SIDO and related institutions in the area of SSI

promotion and development. The IFC is

computerised (Touch Screen Kiosk) and

supplemented by hard copies of information

such as brochures, pamphlets, books, etc. The

general information and documents made

available to the entrepreneurs pertain to (i)

counselling & guidance on how to set up an SSI

unit and provide proper guidance, (ii) documents

on technical schemes, project reports and

details of various programmes implemented by

the SIDO, (iii) policies concerning SSI and

schemes of various State Governments for

14

promotion of SSI, (iv) give information on the

registration scheme and supply registration

forms, (v) information on the I (DR) Act and the

notifications on definition, etc., issued under the

Act, (vi) credit policies of the Government, (vii)

statistics related to small scale industries, (viii)

technical and marketing information concerning

SSI, (ix) list of Items reserved for exclusive

manufacture by the SSI ,etc.

2.6.4 SMALL ENTERPRISEINFORMATION & RESOURCECENTRE NETWORK (SENET)

2.6.4.1 “Small Enterprise Information &

Resource Centre Network” (SENET), was

launched in April 1997 SENET has been

awarded the Golden Icon National Award 2005

for “Best Documented Knowledge Resource”

under Professional Category by the Department

of Administrative Reforms & Public Grievances

(DARPG), Government of India. The scheme

was modified and its scope enlarged to include

office automation. The objectives of the SENET

scheme are:

� to pioneer, create and promote databases

and information;

� to facilitate networking among the

information seekers, concerning SSI,

including the Central/State Governments,

Government agencies engaged directly or

indirectly in the promotion and

development of the SSI, national and State

level industry associations, NGOs, etc.;

� to establish linkages with existing

databases and the end entrepreneur, for

development and promotion of the SSI;

� to carry out office automation in the office

of the DC (SSI) for better transparency in

the functioning of the office;

� to create a Website for hosting data

available within the organisation; and

� to host alliance databases in order to

serve as a one-stop shop for the

information seekers, industry

associations and individual industries.

2.6.4.2 20 SENET centres at SISIs were

initially given servers & networking components

for 64 KBPS leased line connectivity to the main

centre and database building. Servers of 64

KBPS, ISDN dialup connectivity and LAN were

also provided at these SISIs. A Website was

created and launched in 2000. It was upgraded

to a knowledge-based, database driven,

interactive portal. This portal now has more

than 8000 pages of static information and is

being updated twice a week. It has a message

board, online polls section, online events

section, monthly e-news bulletin, etc. Security

audit was carried out and the entire

infrastructure was reinforced with Intruder

Detection System and other security

measures. Online Search Facility for ISO 9000

reimbursement cases was launched in

November 2004. Monthly E-Newsletter was

launched in December 2004. 30 Computer

Touch Screen Information Kiosks were

installed at all SISIs. Computerised File

Tracking System (DMIS) has been introduced

at the headquarters.

2.6.4.3 Currently, the following initiatives are

being taken under the SENET:

15

� Connectivity to all SISIs through leased

line and application of OA modules in all

SISIs through central server.

� Upgradation and updation of software,

hardware and technologies.

� Facility management of the infrastructure.

� AMC of the hardware & software for the

headquarters and field offices.

� Updation of databases and automation of

more applications and making them

online.

� Implementation of file tracking system

and document management system for

bringing out transparency in

administration.

� Implementation of minimum agenda for

e-governance set up by the DARPG,

Government of India.

� Extension of SENET to 28 Branch SISIs.

� Commissioning of 28 Touch Screen

Information Kiosks at all Branch SISIs.

� Full conversion of website to HINDI

(launched on 28/10/05).

� Upgradation of power back up facility for

SENET data centre.

2.6.5 LIBRARY

SIDO maintains libraries at its

headquarters and in all its field offices. These

libraries make available technical information

required for the development of the SSI. The

libraries are used by the officers of the institutes

and entrepreneurs in the area to learn about new

developments in various segments of industrial

and business environment. The libraries

maintain technical books, journals, reports,

project profiles, statistical surveys, other related

publications, etc.

2.6.6 SCIENCE & TECHNOLOGY,RESEARCH ANDDEVELOPMENT

2.6.6.1 ELECTRONICS SERVICE &

TRAINING CENTRE (ESTC),

RAMNAGAR, UTTARANCHAL

Electronics Service & Training Centre (ESTC)

was set up with assistance of the United Nations

Development Programme (UNDP) as a society

under the Societies Registration Act in April,

1986 in Uttar Pradesh (now Uttaranchal). The

main objective of this Centre is to develop

human resources to meet the essential

requirements for transfer of technology in

assembly and manufacturing of electronic items

and parts to promote growth of electronic SSI.

Significant work done during the year: (i)

Software development for the institutes under

the SIDO, (ii) training courses on repair &

maintenance of CNC machine of SIDO Tool

Rooms, (iii) addition of fibre optics testing

facilities and (iv) designing training modules with

emphasis on hands-on training.

2.6.6.2 INSTITUTE FOR DESIGN OF

ELECTRICAL MEASURING

INSTRUMENTS (IDEMI), MUMBAI

Institute for Design of Electrical Measuring

Instruments (IDEMI), Mumbai was set up in

16

1969 in collaboration with the UNDP as a society

under the Societies Registration Act with the

objective of rendering technical services to

instrumentation industries in general and the

SSI in particular.

Significant work done during the year: (i)

Manufactured various precision items for ISRO;

(ii) design & manufacture of trimming tool for

M/s Yogna Udyog (P) Ltd., Mumbai; (iii) training

facilities for energy meter type testing and fibre

optics testing being added; (iv) manufacture of

the spares of gas filling unit for BPCL, Mahul,

Mumbai; (v) tailor-made training modules

designed as per the needs of the industry with

emphasis on hands-on training.

2.6.6.3 PROCESS-CUM-PRODUCT

DEVELOPMENT CENTRE,

MEERUT

Process-cum-Product Development Centre

(sports goods & leisure equipment), Meerut was

set up during 1984 as a society with UNDP

assistance mainly to cater for the technical

needs of the sports goods industry in the

country. The Centre aims at upgradation as well

as improvement in existing technology, quality

control, in-house R&D activities and providing

workshop & testing facilities to the sports goods

& allied industry.

Significant work done during the year: (i) The

Centre organised 42 training courses and

trained 289 candidates, including those

belonging to the SC, ST and physically

handicapped categories. One-year Diploma

with specialisation in sports goods was started;

(ii) The Centre provided common facility

services to 64 units upto November 2005

through its leather, mechanical, rubber, plastics

and wood-working by undertaking 252 jobs.

Besides, it provided testing facilities to 29 units

by undertaking 132 jobs for testing; (iii) The

Centre developed a Football Stitching Machine.

Developmental work on nano materials (fillers)

in rubber compounds is in process; (iv) A wood

seasoning plant for cricket bats cluster is being

set up at Anantnag, Jammu & Kashmir.

2.6.6.4 CENTRE FOR DEVELOPMENT OF

GLASS INDUSTRY, FIROZABAD

Centre for Development of Glass Industry was

established by Government of India with the

assistance of UNDP and active support of the

Government of Uttar Pradesh to promote and

modernise the glass industry by upgrading the

conventional technologies currently in use and

transfer of modern technology. The main

objective of the Centre is to provide technical

support to the small scale glass industry by

promoting installation of energy efficient glass

melting furnaces, auxiliary furnaces,

introduction of new types of glasses and their

standardisation, environmental protection,

introduction of developed techniques for the

decoration of glasswares and training for skill

development so as to improve the quality and

productivity of the SSI glass units.

Significant work done during the year: (i) Existing

day-tank furnace is running for over 9 months;

(ii) a day-tank furnace with further modified

design was constructed and commissioned in

a local unit; (iii) trial of improved design of sikai

17

bhatti was completed successfully; (iv)

construction of pot arch and pot transfer trolley

under a sponsored project sponsored by the

Department of Science and Technology was

completed; and (v) demonstration of energy

conservation measures was continued.

2.6.6.5 PROCESS AND PRODUCT

DEVELOPMENT CENTRE, AGRA

Process and Product Development Centre,

Agra was set up in 1985 with the assistance of

Government of India, Government of UP and

UNDP/UNIDO.

Significant work done during the year: (i)

Completed a prestigious order received from

ADRDE, Ministry of Defence for investigation

of para dropping component of Heavy Drop

System Platform of Russian made transport

aircrafts; (ii) received the recognition of NCVT

for different ongoing long term training courses;

(iii) under the Cluster Development

Programme, the Centre undertook

development of the brass/bronze cluster at

Pareb, Bihar and is in the process of setting

up a common facility centre at Pareb to assist

the SSI units. The Centre is also working on

the development of gun-making SSI cluster at

Munger, Bihar. For both clusters, it prepared the

diagnostic study reports.

2.6.6.6 CENTRAL INSTITUTE OF TOOL

DESIGN, HYDERABAD

Central Institute of Tool Design, Hyderabad was

established in 1968 by Government of India with

the assistance of UNDP/ILO. It was the first

institute of its kind in the country. The original

investment of the Institute was Rs. 2.37 crore.

The aim of the Institute was to fulfil the tooling

and training needs of small scale industries in

the field of tool design and manufacturing.

Significant work done during the year: (i) The

Institute achieved ISO 9001-2000 certificate; (ii)

the Institute developed import substitute tools

for Research Centres, IMARAT (a DRDO

establishment); (iii) the Institute conducted

international training programmes under various

bilateral agreements such as ITEC, TCS,

Colombo Plan, Aid to Sri Lanka etc.; (iv) the

facilities at the Institute were upgraded to keep

pace with the latest technological developments;

and (v) the training modules were designed with

emphasis on hands-on training.

2.6.6.7 FRAGRANCE & FLAVOUR

DEVELOPMENT CENTRE,

KANNAUJ (UP)

Fragrance and Flavour Development Centre

was set up at Kannauj in 1991 by the

Government of India in collaboration with

UNDP/UNIDO and Government of UP for

technological upgradation of essential oils,

aroma chemicals, fragrance and flavour

industry in the country, especially in the small

scale sector. The main objective of the Centre

is to serve, sustain and upgrade the

technological status of farmers and industry

engaged in the cultivation and processing of

aromatic plants and other naturally occurring

herbs and spices. For fulfillment of these

objectives, the following activity modules are in

operation at the Centre:

18

� Agro-Technology & Extension Services.

� Process Technology.

� Fragrance & Flavour Development and

Their Applications.

� Quality Assessment and Standardisation.

� Information, Documentation, Packaging

and Marketing.

Significant work done during the year: The

Centre earned revenue of Rs. 34.33 lakh up to

November, 2005 achieving (revenue) self-

sufficiency of 58.85 %. The activities of the

Centre benefited 632 SSI units, entrepreneurs

and farmers. 14 training and awareness

generation programmes were organised at

various places.

2.6.7 TRAINING AND MANPOWERDEVELOPMENT

2.6.7.1 CENTRAL FOOTWEAR TRAINING

INSTITUTE, CHENNAI

Central Footwear Training Institute, Chennai is

a registered society. The basic objective of the

Institute is to develop human resources for

footwear and allied industries through various

training programmes on footwear technology

and allied subjects. The Institute conducts long

term, short term and part time training courses

on various subjects of footwear technology.

Besides, the Institute provides technical support

services to the user industry by making its

facilities available to them. The Institute also

provides services for development of new

products and patterns as per given sample or

concept.

Significant work done during the year: (i) T h e

Institute organised 19 training courses of

durations ranging from one month to two years

and trained 636 candidates. The Institute also

organised short term courses for women

entrepreneurs and minority communities under

sponsorship from various Departments of the

Government of Tamilnadu; (ii) the Institute

provided common facility services to industries

in the field and undertook job works on nominal

charges. During 2005-06 (upto November 2005),

the Institute undertook 251 jobs and thereby

provided benefit to 25 units and earned revenue

of Rs. 3.15 lakh; (iii) the Institute developed new

styles/constructions of ladies’ ankle boot,

children’s shoes, casual shoes of different

types, executive shoes of different types and

Goodyear welted construction shoes with single

layer and double layer soles; (iv) a sub-centre

of CFTI was started at Ambur for the benefit of

local units; and (v) action was initiated to

procure modern machines for footwear

manufacturing.

2.6.7.2 CENTRAL FOOTWEAR TRAINING

INSTITUTE, AGRA

Central Footwear Training Institute, Agra is also

a registered society with similar objectives and

functions as the Institute at Chennai.

Significant work done during the year: The

Institute (i) organised seven training courses

of durations ranging from one month to two

years and trained 225 candidates; (ii) provides

common facility services to industries in the

field and undertook 449 jobs, thereby benefiting

34 units; (ii i) developed new styles/

19

constructions of shoes and (iv) also developed

the moulds for unit soles through its CNC

milling machines.

2.6.7.3 INDUSTRIAL MOTIVATION

CAMPAIGNS (IMC)

Industrial Motivation Campaigns (duration 1 - 2

days) are conducted to identify and motivate

traditional / non-traditional entrepreneurs having

potential for setting up SSI units so as to lead

them to self-employment. During 2005-06 (upto

November 05). 220 IMCs were conducted and

18,000 prospective entrepreneurs motivated to

start their units Around 480 IMCs are expected

to be conducted during the remaining months

of the financial year for benefiting about 32,000

entrepreneurs.

2.6.7.4 ENTREPRENEURSHIP

DEVELOPMENT PROGRAMMES

(EDPs)

Entrepreneurship Development Programmes

(EDPs) of 4-week duration are organised as a

regular training activity to familiarise the youth

with the necessary aspects for setting up small

scale industries. The minimum intake is 20

participants in each course. The training

schedules assist potential entrepreneurs in

preparing detailed feasibility reports and their

appraisal, evaluation, modification, etc.

Programmes so far organised covered, inter

alia, herbal cosmetics, high fashion garments,

hosiery, food & fruit processing, information

technology, hardware maintenance, soap and

detergents, leather products/novelties, servicing

of household electrical appliances and

electronic gadgets, gem cutting & polishing,

engineering plastics, etc.

During 2005-06, 380 EDPs were conducted

and 8500 entrepreneurs trained up to

November 2005. About 320 EDPs are expected

to be conducted during the remaining months

for providing training to about 9500

entrepreneurs.

2.6.7.5 SEPTI, TIRUVALLA

The Small Entrepreneur Promotion and Training

Institute, Tiruvalla was set up in 1994 to improve

the managerial and technical skills of the local

youth and prepare them for setting up micro

enterprises in the rural and urban areas. SEPTI

Tiruvalla is a full-time training institute to train

1000 persons per annum. At present, all training

programmes are 2-month EDPs and courses

are scheduled quarterly. Almost 25% of the

trainees have set up their own industrial units

after training, while many others have secured

jobs in India and abroad.

2.6.7.6 SEPTI, ETTAMANUR

The Production Centre, Ettamanur was

converted into Small Entrepreneur Promotion

and Training Institute in 2000 for imparting

training to artisans/entrepreneurs of Kerala in

various disciplines as per the needs of the area.

The Institute constantly identifies and reviews

the new emerging trades with quick employment

potential and develops appropriate curricula

focusing on end job profiles. The courses

comprise artisan trade, management, IT

software, computer hardware and other

20

emerging technologies, including bio-

technology etc.

2.7.0 MANAGEMENTDEVELOPMENTPROGRAMMES (MDPS)

2.7.1 Management training courses on

various areas of industrial management

initiatives are also devised for owners-cum-

managers and supervisory level personnel of

small scale industries. The contents of these

training programmes are continuously re-

structured keeping in view the demands of the

area and the local requirements of the industries.

The subjects under these training programmes

cover Industrial Management, Human Resource

Management, Marketing Management, Export

Management & Documentation, Materials

Management, Financial Management,

Information Technology & Exports, ISO 9000,

WTO/IPR issues, etc.

2.7.2 During 2005-06, about 127 MDPs have

been conducted and 2800 entrepreneurs trained

up to November 2005. Around 254 MDPs are

expected to be conducted during the remaining

months of the financial year.

2.8.0 WTO CELL

2.8.1 A WTO Cell was set up in the SIDO

headquarters in 1999 to co-ordinate the latest

developments in regard to World Trade

Organisation. The objectives of the Cell inter

alia include (a) keeping abreast with the recent

developments in the WTO agreements, (b)

disseminating information to SSI Associations

and other stakeholders on various aspects of

WTO agreements and their likely implications

for the SSI, (c) coordinating with other Ministries

and Departments of the Government of India in

this context, (d) assisting policy formulation for

SSIs in conformity with the provisions of WTO

agreements and (e) organising workshops/

seminars for the SSI to create awareness and

sensitisation, capacity building and sectoral

studies. As a part of this process, three

awareness programmes are planned during

2005-06. Six one-day workshops on Intellectual

Property Rights (IPRs) have been organised

during the current year so far. It is further proposed

to organise 8 more such programmes.

2.8.2 Various SSI related issues, which

came up during previous WTO Ministerial

Conference were handled in the WTO Cell for

appropriate response. Requisite feedbacks on

the modalities for negotiations on non-

agricultural products were provided to the

Department of Commerce, Ministry of

Commerce & Industry.

2.8.3 In view of the sixth WTO Ministerial

Conference, a meeting on WTO negotiations

on Non-Agricultural Market Access (NAMA) was

organised in consultation with the Ministry of

Commerce & Industry. SSI associations & other

stakeholders participated in this meeting and

exchanged their views / concerns regarding the

SSI sector. The issue arising out of submission

of India’s improved revised offers for services

under GATS was also taken up with the Ministry

of Commerce & Industry for suitably protecting

21

the interests of the SSI sector during such

negotiation in the WTO fora.

2.8.4 As part of the Inter-Ministerial

Consultation process, inputs were provided to

the Ministry of Commerce and Industry in regard

to the ongoing negotiations on various trade

agreements for exchange of tariff concessions.

These agreements, inter alia, included SAARC

Preferential Trading Arrangement (SAPTA),

India - Singapore Comprehensive Economic

Cooperation Agreement (CECA), Free Trade

Agreement (FTA) with the Gulf Co-operation

Council (GCC), Preferential Trade Agreement

(PTA) between India & Mauritius under the

Framework of Comprehensive Economic

Partnership Agreement, India-ASEAN Trade

Negotiations Group, Kula Lumpur and

BIMSTEC-FTA. While providing comments on

India’s negative list finalised for negotiation in

various FTAs, it was emphasised that while the

Ministry of SSI generally supported any proposal

for greater engagement of India in FTAs, it would

be in the interest of India to press for reasonable

protection of its small enterprises in such

negotiations on trade related issues. The long-

term interests of the SSI sector should be borne

in mind while working out the details of these

arrangements and, hence, Ministry of SSI

should be duly consulted at the appropriate

stages.

2.9.0 INTELLECTUALPROPERTY RIGHTS (IPR)

2.9.1 Intellectual Property Rights consist of

Patents, Trade Marks, Industrial Designs, Copy

Rights, Trade Secrets, Geographical

Indications, etc. With the onset of the Trade

Related aspects of Intellectual Property Rights

(TRIPS) agreement under WTO and the

consequent changes made by various

countries, including India, in their IPR laws, the

issues of IPR have gained special relevance

for the SSI sector. It was noticed that changes

of far-reaching consequences were being

effected in the business landscape without the

SSI sector being aware of it. It was also felt that

IPRs requires understanding and attention by

the industry. By protecting their intellectual

property, small scale units could also increase

their competitiveness. IP protection would help

in:

� preventing competitors from copying or

closely imitating a company’s products or

services;

� avoiding wasteful investment in research

& development and marketing;

� creating a corporate identity through a

trademark and branding strategy; and

� increasing the market value of the

company and enhancing access to new

market.

2.9.2 During 2005-06, six of the scheduled

14 Awareness Programmes on Intellectual

Property Rights have already been conducted

in various parts of the country. These

programmes are being organised in association

with the Department of Science and Technology,

National Research Development Corporation of

India, Waterfalls Institute of Technology Transfer

Limited, New Delhi, etc. Some of these

22

programmes were product specific, e.g.,

biotechnology, auto components, leather goods

and footwear, sports goods, glass industry, etc.

In association with World Intellectual Property

Organisation, a short-film on IPRs for small

scale industries is being made.

2.9.3 The Ministry of Small Scale Industry

has proposed a Financial Assistance Scheme

to enable registered small scale / tiny units

adopt patents in India and abroad. The objective

of the scheme is to enable the small scale / tiny

units to convert an original idea / invention /

know-how into working prototype/processes.

2.10.0 BIOTECHNOLOGY

2.101 A Biotechnology Cell has been set up

for the development and promotion of

biotechnology in the small scale sector. To

disseminate information on the use of

biotechnology, a number of sensitisation

programmes in various parts of the country are

being organised in collaboration with the

Department of Biotechnology, Biotech

Consortium India Limited (BCIL) and various

State Government agencies.

2.10.2 During 2005-06, two one-day

sensitisation programmes on biotechnology

(against the target of 10) have already been

conducted. Besides, a three-day advanced

training programme on biotechnology for a group

of 30 officers from the SISIs is scheduled to be

held in January, 2006.

2.01.3 To assist SSI entrepreneurs in getting

basic understanding of the technologies,

products and processes, a set of project profiles

has been prepared in coordination with the

Department of Biotechnology and Biotech

Consortium India Limited (BCIL). The process

of updating project profiles is being carried out

in association with BCIL. BCIL is also preparing

guidelines for setting up biotech industries in

the SME sector.

2.11.0 NATIONAL AWARDS FORSMALL SCALEENTREPRENEURS

2.11.1 To motivate small scale entrepreneurs

to achieve excellence in management of their

units through technological improvements,

innovation, quality upgradation, market

expansion, export development, etc., and

recognise their contribution in these areas, an

incentive-cum-recognition scheme of National

Awards to Small Scale Entrepreneurs is in

operation for several years. The Awards consist

of a certificate, trophy and cash prizes

amounting to Rs. 25,000, Rs. 20,000 and Rs.

15,000 for the first, second and third positions,

respectively. Special Awards at par with the

National Award to an outstanding SC/ST and a

woman entrepreneur have also been introduced

since 1993. Special Recognition Awards

carrying cash prize of Rs. 10,000, a certificate

and a trophy are given to one entrepreneur from

each State/UT.

2.11.2 A Scheme of National Awards for

Research & Development Efforts in Small

Scale Industries has also been instituted to

promote in-house research and development

23

for strengthening technical soundness and

spirit of innovation amongst SSI units. The first,

second and third Awards under this scheme

carry cash prizes of Rs. 25,000, Rs. 20,000

and Rs. 15,000 respectively besides a trophy

and a certificate.

2.11.3 The National Convention of Small, Agro

& Rural Industries and presentation of National

Awards was held on 28.10.2005 at Ashoka

Hotel, New Delhi. Hon’ble President of India, Dr.

A.P.J. Abdul Kalam was the Chief Guest and

distributed the National Awards to the

awardees.

2.12.0 SUB-CONTRACTINGEXCHANGE FORANCILLARYDEVELOPMENT

2.12.1 Ancillarisation and sub contracting

started in India simultaneously with the

Government setting up public sector enterprises

in the core sectors, viz., manufacturing

equipment for defence, railways,

telecommunications, heavy electricals,

electronics, chemicals, fertilisers, petroleum/

petrochemicals and various other engineering

and processing industries and these enterprises

sub-contracting components, sub-systems,

etc., to small scale / ancillary industries that

developed a sound base.

2.12.2 In order to help the vendees/vendors,

Sub-Contracting Exchanges have been set up

by SIDO since the early ‘70s at selected SISIs,

to compile data on the capacities and

capabilities of SSI units in terms of products

manufactured/services rendered. The Sub-

Contracting Exchanges also compile the

requirements of large buyers so that the

requirements and availability could be matched

with a view to increasing the business

opportunities for the SSI units.

2.12.3 Following the announcement of the

policy package in 1991, the scheme of setting

up of Sub-Contracting Exchanges (SCX) by

Industry Association/NGOs was also launched.

Under this scheme, financial assistance up to

Rs. 4.7 lakh is provided for purchasing capital

equipment such as computers and

accessories, suitable software, furniture, etc.,

in the first phase and photocopier machine,

telephone, fax machine, spiral binding & cutting

machine and installation charges in the second

phase, for setting up SCX. A matching grant is

also provided to these Exchanges on tapering

basis towards building rent, stationary , phone /

fax charges, electricity charges and

conveyance at the rate of 50%, 30% and 10%

of the running expenses, not exceeding Rs.

1.25, 0.75 and 0.25 lakh per year respectively

during the initial three years, subject to a ceiling

of Rs. 1.57 lakh per SCX.

2.12.4 59 Sub-Contracting Exchanges have

been sanctioned to and set up by Industry

Associations/NGOs in various parts of the

country up to 30.11.2005. Six more Sub-

contracting Exchanges are likely to be set up

during the remaining months of 2005-06.

2.12.5 Under the existing scheme, Vendor

Development Programmes (VDPs) at National

24

and State levels are also conducted by the SISIs.

These VDPs provide a common platform to

large industries/buyers and SSI/sellers to

interact with each other and establish long term

business linkages. 4 VDPs have been

conducted by the SISIs in different parts of the

country during 2005-06, till 30.11.2005 and about

26 VDPs are likely to be conducted in the

remaining months of 2005-06.

2.13.0 SCHEME OF TOOLROOMS

2.13.1 CENTRAL TOOL ROOM,LUDHIANA

Central Tool Room, Ludhiana was established

by Government of India in technical collaboration

with the Government of Federal Republic of

Germany and active support of Government of

Punjab, for providing services in the area of

tooling (design and manufacture), precision

machining, heat treatment, technical training

and technical consultancy to metal working

industry, in general and small scale industries,

in particular so as to improve the quality and

productivity of such units.

Significant work done during the year: (i)

Established one of the best Rapid Prototyping

Centres in the country; (ii) developed expertise

for tool design and manufacturing of car seat

adjuster; (iii) developed moulds for door closer

and lock for a SSI unit exporting products to

snowing regions of Europe; and (iv) established

special heat treatment process for surgical

tools, dies, moulds, etc.

2.13.2 INDO-GERMAN TOOL ROOM,AHMEDABAD

Indo-German Tool Room, Ahmedabad was

established by the Government of India in

technical collaboration with the Government of

Federal Republic of Germany to meet the

tooling and training needs of the SSI in the field

of tool design and manufacture and training of

technical personnel.

Significant work done during the year: (i) Post

Graduate Diploma in Tool Design & CAD/CAM

Course for a duration of 1 ½ years and (ii) two

vocational training programmes started for

school dropouts were started; and (iii) the Tool

Room secured ISO 9001-2000 certificate.

2.13.3 INDO GERMAN TOOL ROOM,INDORE

Indo-German Tool Room, Indore was

established by the Government of India in

technical collaboration with the Government of

Federal Republic of Germany. The Government

of Madhya Pradesh provided land and building

for the project. The Tool Room was set up to

fulfil the tooling and training needs of the SSI in

the fields of tool design and manufacture and

training of technical personnel in these fields.

Significant work done during the year: The Tool

Room (i) secured ISO 9001-2000 certificate

and; (ii) achieved nearly 100% placement for

various long term trainees.

2.13.4 INDO-GERMAN TOOL ROOM,AURANGABAD

25

Indo-German Tool Room, Aurangabad was

established by the Government of India in

technical collaboration with the Government of

Federal Republic of Germany. The Government

of Maharashtra provided land and building for

the project. The Tool Room has been set up to

fulfil the tooling and training needs of the SSI in

the fields of tool design and manufacture and

training of technical personnel in these fields.

Significant work done during the year: The Tool

Room (i) secured ISO 9001-2000 certificate

and; (ii) aTRTCchieved nearly 100% placement

for various long term trainees.

2.13.4 INDO-GERMAN TOOL ROOM,AURANGABAD

Indo-German Tool Room, Aurangabad was

established by the Government of India in

technical collaboration with the Government of

Federal Republic of Germany. The Government

of Maharashtra provided land and building for

the project. The Tool Room has been set up to

fulfil the tooling and training needs of the SSI in

the fields of tool design and manufacture and

training of technical personnel in these fields.

Significant work done during the year: The Tool

Room (i) secured ISO 14001:2004 certificate

(Environmental Management System); (ii)

started the II & III batches of 12 & 10 trainees

respectively from South Africa for a 1-year course

in tool and die making; (iii) opened sub-centres

at Pune, Mumbai and Nagpur to provide access

to tool room facilities to SSIs located in these

areas; (iv) initiated steps to develop e-learning/

e-teaching practices in tool and die technology

and; (v) achieved nearly 100% placement for the

trainees of its long term courses.

2.13.5 CENTRAL TOOL ROOM &TRAINING CENTRE, KOLKATA

Central Tool Room & Training Centre, Kolkata

was established in 1977-78 under technical co-

operation programme between the

Governments of India and Denmark to upgrade

tooling technology available to the SSI.

Significant work done during the year: (i) The

Centre developed, manufactured and supplied

blanking die for two rupee coins to the

Government of India Mints at Kolkata and

Mumbai with necessary modifications in the

coin design as desired by the Mints. Since these

blanking dies were imported earlier by the Mints,

these supplies have enabled them to save

considerable amount of foreign exchange. (ii)

The Centre is rendering project management

services to the Governments of Nagaland and

Tripura in setting up Mini Tool Room & Training

Centre at Dimapur and Agartala respectively.

2.13.6 CENTRAL TOOL ROOM&TRAINING CENTRE,BHUBANESHWAR

Shri Mahabir Prasad, Minister (SSI&ARI) visited IGTR,Aurangabad

TRTC

26

Central Tool Room & Training Centre,

Bhubaneshwar was set up in 1991 under

Technical Co-operation Programme between

the Governments of India and Denmark.

Significant work done during the year: The Tool

Room (i) developed and manufactured 2 nos. of

coating masks for gold plating of satellite

components, a new development for IISU, ISRO,

Thiruvananthapuram; (ii) secured the

Occupational Health and Safety Administrative

System (OHSAS) 18001 certificate; (iii) conducted

summer vacation training programme for 1008

engineering students (of whom 233 were girls)

from 40 engineering colleges of 5 States; (iv)

manufactured components to be used in tri-cycles

meant for physically challenged persons provided

by the Artificial Limbs Manufacturing Corporation

of the Government of India, Bhubaneshwar; (v)

developed several tooling as import substitution

for SSIs and; (vi) achieved nearly 100% placement

for the trainees of its long term courses.

2.13.7 INDO DANISH TOOL ROOM,JAMSHEDPUR

Indo Danish Tool Room, (formerly Central Tool

Room & Training Centre), Jamshedpur was set

up in 1991 under Technical Co-operation

Programme between the Governments of India

and Denmark.

Significant work done during the year: The Tool

Room (i) achieved nearly 100% placement for

trainees of its long term courses; (ii) conducted

quality workshop for the employees of SSI units;

(iii) undertook two training programmes in 2-

Year Advanced Machinist Course for students

belonging to the SC/ST/Minority (with 30%

seats reserved for women candidates),

sponsored by the Government of Jharkhand.

2.13.8 HAND TOOL DESIGNDEVELOPMENT AND TRAININGCENTRE, NAGAUR.

The Hand Tool Design Development and

Training Centre was set up at Nagaur in

Rajasthan in 1988. The main objective of this

Centre is to develop hand tool industry in the

SSI sector in around Nagaur by providing

consultancy and advisory extension services in

the areas of tooling, heat treatment, metal

finishing, forging and testing and common

facility services to these SSI. The Centre is also

assisting the SSI in adopting modern technology

product design, production process and quality

control for cost reduction and improvement in

profitability. Testing and training facilities are also

provided for upgradation of quality of production

and trained manpower.

Significant work done during the year: The

Institute has been identified for capacity building

under the National Programme for promoting

energy efficiency in the SSI hand tool sector in

India, a programme launched by the Ministry of

SSI, Government of India jointly with UNIDO,

Hand Tool Industries Association & SIDBI.

2.13.9 CENTRAL INSTITUTE OF HANDTOOL, JALANDHAR

The hand tools industry consists of organised

small scale and cottage industry units which

have undergone a rapid expansion. About 80%

27

of hand tool industry is located in and round

Jalandhar in Punjab, Nagaur in Rajasthan,

Puralia in West Bengal and Tumkur in

Karnataka. The hand tool industry plays a vital

role in the economy of the country.

With a view to providing necessary technology

support services in upgrading the hand tool

technology in the country, the Govt. of India set

up the Central Institute of Hand Tools as a

National Institute at Jalandhar as an autonomous

organisation with the assistance of the UNIDO

in 1983.

Significant work done during the year: CAD

courses for women under the Skill Development

Programme were started.

2.13.10 TOOL ROOM & TRAININGCENTRE, GUWAHATI

In order to create facilities for manufacturing

tools & dies and training in tool & die making in

the North Eastern region, setting up of Tool

Room & Training Centre (TRTC) at Guwahati

was approved at an estimated cost of Rs. 13.28

crore. The project is under implementation.

Training activities of the Centre have been

started for the time being in the SISI, Guwahati

campus. During the year (upto November 2005),

the Tool Room conducted 8 short term courses

in which 34 trainees were trained. The Tool

Room is also conducting a two-year Machinist

course, in which 20 trainees are enrolled.

2.13.11 MINI TOOL ROOM SCHEME

A “Mini Tool Room” Scheme has been approved

to help State Governments set up small Tool

Rooms for local training and production facilities

to assist the SSI units in tool & die making. The

scheme provides one-time assistance of upto

90% of the cost of machinery & equipment,

limited to Rs. 9 crore, for setting up a new Mini

Tool Room and 75% cost of machinery &

equipment limited to Rs. 7.5 crore for

upgradation of existing Mini Tool Room. The

balance machinery cost, cost of land and

building and recurring expenditure are funded

by the State Government concerned. The

proposals received from Governments of

Kerala, Madhya Pradesh, Karnataka (Hubli &

Hassan) and West Bengal for upgradation of

their existing tool rooms and proposals from

Governments of Nagaland, Tripura, Jharkhand

(Ranchi & Dumka), and Chhattisgarh for setting

up of new Mini Tool Rooms have been approved

and procurement of machinery & equipment is

in progress.

2.14.0 MARKETINGASSISTANCE ANDEXPORT PROMOTION

2.14.1 PARTICIPATION IN OVERSEASTRADE FAIRS

The SIDO participated in the DIY Show, Japan

(August 25 – 27, 2005), International Autumn

Fair, Nairobi (Kenya) (Sept. 14 – 20, 2005), 88th

MIPEL – The Bag Show, Milan (Italy) (Sept. 22

– 25, 2005), SAITEX – 2005, Johannesburg

(South Africa) and INDEE – 2005, Mexico.

Exhibits of 107 SSI units were displayed in the

SIDO stalls and 26 SSI entrepreneurs visited

the fairs themselves. Exhibits of 100 SSI units

28

are expected to be displayed in the remaining

five International Trade Fairs in the SIDO stalls

during the current financial year.

2.14.2 TRAINING PROGRAMME ONPACKAGING FOR EXPORTS

Four training programmes were organised by SISI,

Mumbai, Indore & Jaipur upto December, 2005

and 117 SSIs benefited in the sanctioned 16

programmes. These programmes are conducted

in association with the Indian Institute of Packaging.

Additional sanction for 6 programmes is being

issued to 4 SISIs during the current financial year.

A total of 22 programmes is likely to be conducted

during 2005-06.

2.14.3 SSI-MDA SCHEME

Rs. 2.85 lakh have been reimbursed to 19 SSI

units for adoption of Bar Code Certificate from

EAN India. More than 70 SSI units are expected

to avail of the financial assistance for adoption

of Bar Code Certificate during the current

financial year.

2.15.0 REGIONAL TESTINGCENTRES/FIELDTESTING STATIONS

2.15.1 REGIONAL TESTING CENTRES

Four Regional Testing Centres (RTCs), set up

at New Delhi, Kolkata, Mumbai and Chennai,

provide testing facilities to small scale industrial

units for raw materials used and semi-finished/

finished products manufactured by them. These

Centres are equipped with the state-of-the-art

indigenous and imported equipment for chemical,

mechanical, metallurgical and electrical test and

also undertake performance tests, type tests and

acceptance tests of semi-finished/finished

products and also calibration jobs for measuring

instruments and equipment. They also develop

testing processes for various products.

RTCs also render technical support to the SSI

units in upgrading the quality of the products

manufactured by them. They provide

consultancy services to SSIs in testing and

quality management and process quality

systems. In order to increase the availability of

qualified manpower to the industry, these

Centres impart training in testing of products to

young persons for gainful employment in Quality

Control Laboratories of various industries. They

also conduct training courses for the workers

sponsored by SSI units on product specific

testing and quality control so that these units

may be in a position to set up their in-house

testing facilities. RTCs also organise awareness

programmes on total quality for household

electrical appliances and allied appliances and

ISO-9000 Quality Management Systems for the

benefit of small scale entrepreneurs.

RTCs also provide testing facilities to the

Bureau of Indian Standards and assist various

Government Departments in testing the

materials procured by them. All the RTCs are

accredited by the internationally recognised

NABL as per ISO 17025 as Testing & Calibration

Laboratories.

During the 10th Plan, an amount of Rs. 30 crore

has been provided for modernisation of the

Regional Testing Centres. The performance of

29

the RTCs during the last three years and

2005-06 (upto November 2005) is given

above.

2.15.2 FIELD TESTING STATIONS

The Government set up Field Testing Stations

at Jaipur, Bhopal, Kolhapur, Hyderabad,

Bangalore Pondicerry, and Chenganacherry, as

extensions of the RTCs, to provide testing

facilities in the areas with clusters of industries

and some strategic areas not served by the

RTCs. These FTSs provide facilities for testing

products like chemicals, dye-stuffs, lamps,

rubber products castings and forgings, paints

and varnishes, domestic electrical appliances,

general engineering goods, etc. The FTSs are

regularly modernising/upgrading their facilities

to provide better service to industries in general

and SSI in particular.

During the 10th Plan, an amount of Rs. 6.5

crore has been provided for the Field Testing

Stations. Their performance of during the

last three years and 2005-06 (upto

November 2005) is summarised below:

Year Revenue Recurring %age of No. of jobs No. of tests

earned expenditure Revenue/ completed performed

(Rs. lakh) (Rs. lakh) expenditure

(self-sufficiency)

2002-03 50.38 81.86 61.79 8004 34508

2003-04 61.62 78.35 78.65 11035 43306

2004-05 82.89 87.79 94.42 15150 57269

2005-06 52.89 64.18 82.41 10590 37424

(upto Nov.2005)

Year Revenue Recurring %age of No. of jobs No. of tests

earned expenditure Revenue/ completed performed

(Rs. lakh) (Rs. lakh) expenditure

(self-sufficiency)

2002-03 238.80 344.30 69.35 12336 134646

2003-04 258.50 343.18 75.32 12409 139569

2004-05 259.74 267.89 96.95 10872 136362

2005-06 149.60 275.34 54.33 7348 91251

(upto Nov.2005)

30

2.16.0 SETTING UP OF TESTINGCENTRES BY INDUSTRYASSOCIATIONS &MODERNISATION/EXPANSION OF QUALITYMARKING CENTRESUNDER THE AEGIS OFSTATE GOVERNMENTS

2.16.1 Under this Scheme, the Government of

India provides one-time capital grant-in-aid equal

to 50% of the cost of testing equipment and

machinery (restricted to Rs. 50 lakh) to the

Industry Associations, which wish to set up and

operate testing laboratories of international

standards and also for modernisation/expansion

of the existing Quality Marking Centres of State

Governments and their autonomous bodies.

Rest of the expenditure on testing machinery and

equipment, land and building and working capital

has to be borne by the Industry Associations/

State Governments concerned. The objective of

the scheme is to promote setting up of testing

centres to offer facilities mainly to industrial units

including SSI located in such parts of the State

which cannot be adequately served by the RTCs/

FTSs for testing quality of raw materials,

components and end products as per the

relevant standard specifications.

2.16.2 The Scheme, originally introduced in

1995 with provision of maximum grant-in-aid of

Rs. 20 lakh only to the Testing Centres run by

Industry Associations, was modified in 1997 to

include the existing Quality Marking Centres run

by the State Governments. The present version

of the Scheme is that modified in 2001.

2.16.3 During the Tenth Plan, there is an outlay

of Rs. 500 lakh for providing Central grant-in-aid

to Industry Associations for setting up of Testing

Laboratories and modernisation of Quality

Marking Centres of the State Governments.

2.16.4 The year-wise expenditure incurred

so far and the number of testing centres

assisted during the current Plan are furnished

below:

Year Expenditure No. of

incurred Centres

assisted

2002-03 9.50 1

2003-04 Nil -

2004-05 40.95 1

2005-06(upto Nil -

November 2005)

2.17.0 TECHNOLOGYUPGRADATION

2.17.1 SMALL INDUSTRY CLUSTERDEVELOPMENT PROGRAMME

2.17.1.1 A scheme on Technology Upgradation

and Management Programme (UPTECH) was

launched in February, 1998 to address the

issues related to technology upgradation and

modernisation of small scale industries on

cluster approach basis. The Scheme, later

renamed as the Small Industry Cluster

Development Programme (SICDP) in 2003,

takes a holistic approach for cluster

development and includes an initial diagnostic

study and trust building exercise, based on

31

which assistance is provided for skill

development, technology upgradation of the

enterprises, marketing, exports, setting up of

common facility centres, etc. Seventy seven

clusters covering twenty three States in the

country have been taken up for development

under the SICDP, including the five National

Programmes for development of toy, stone,

machine tool, lock and hand tool industries

being implemented in collaboration with the

UNIDO. Efforts are made to include under the

Programme clusters in all the States. Out of

the seventy seven clusters under SICDP, the

development work in thirty clusters is being

carried out by the SISIs. For this purpose, cluster

development executives (CDEs) have been

imparted necessary training. Two Centres,

National Resource Development Centre at the

National Institute of Small Industry Extension

Training (NISIET), Hyderabad and International

Centre for Cluster Competitiveness and Growth

(IC3G) at the Entrepreneurship Development

Institute of India (EDII), Gandhinagar have been

established by the Ministry for imparting training

to CDEs, monitoring cluster development work,

assisting formulation of programmes and

policies for cluster development and guidance.

2.17.1.2 BE, 2005-06 for SICDP is Rs. 6.87

crore, including Rs. 0.62 crore for NE region.

Till November 05, an expenditure of Rs. 6.26

crore has been incurred under the Programme.

The 10th Plan outlay for the Programme is Rs.

33 crore, of which an expenditure of Rs. 23.3

crore has been incurred so far.

2.17.1.3 With the approval of the Ministry of

Small Scale Industries, an autonomous trust

for cluster development, named Foundation

for Micro, Small & Medium Enterprises

(MSME) Clusters has been set up by EDII,

Ahmedabad on 09.06.05 with the objective of

playing the role of a think tank to strengthen

the MSME clusters in the country. With the

support of the Ministry of Small Scale

Industries, a national convention on cluster

development was organised by the

Foundation on 1st–2

nd Dec., 2005 for

disseminating the accumulated knowledge

and understanding on clusters among a wider

group of policy makers, planners, practitioners

and academicians.

2.17.2 ISO-9000/ISO-14001CERTIFICATIONREIMBURSEMENT SCHEME

2.17.2.1 The process of economic liberalisation

and market reforms has opened up the Indian

small scale sector to global competition. In

order to enhance the competitive strength of

the small scale sector, the Government

introduced an incentive scheme for their quality

improvement and environment management.

The scheme provides incentive (of upto Rs. 75,

000 per unit) to SSI units which acquire ISO

9000/ISO 14001 certifications. The scheme, in

operation since March 1994, was enlarged to

include reimbursement of expenses for

acquiring ISO 14001 certification also w.e.f. 28th

October 2002.

2.17.2.2 The procedural guidelines, application

forms, etc., have been placed on the SIDO

website, (www.laghu-udyog.com) and

(www.smallindustryindia.com).

32

2.17.2.3 Since its inception, 7789 SSI units

have been benefited upto March, 2005. The

year wise progress of the ISO-9000/ISO-

14001 certification reimbursement scheme

is as under:

motivated to adopt the International quality

system and become competitive in the global

market place.

2.18.0 MODERNISATION OFSIDO WORKSHOPS

This is an ongoing Plan Scheme with the

allocation of Rs. 500 lakh during the 10th Plan

for modernisation of the workshops attached

to the SISIs/Branch (Br.) SISIs. Funds are

provided to the SISIs/Br. SISIs for replacing their

outdated/out-of-order machines. Funds are also

provided for purchase of accessories and

equipment required for developing jigs, fixtures,

dies, tools etc. On these machines, training is

also imparted to the workers sponsored by the

SSI units and unemployed youth seeking jobs

in SSI units.

2.19.0 ENERGY CONSERVATIONPROGRAMME (UNDERTECHNOLOGY UPGRADATIONSCHEME)

In pursuance of the National Programme on

Energy Conservation, SIDO launched this

programme in 1990-91. There are many energy

intensive areas in the SSI sector, such as

foundry, forging, steel re-rolling, glass &

ceramics, bakeries, etc. The source of energy

for them is coke/coal, petroleum products and

electricity. The objectives of taking up the

energy conservation programme are as under:

(i) Educating SSI units on benefits/

advantages of new techniques/

technologies for saving energy.

2.17.2.4 During 2005-06, 4000 SSI units are

expected to be benefited under this scheme.

2.17.3 AWARENESS, MOTIVATIONAL &EDUCATIONAL TRAININGPROGRAMME ON ISO 9000/14001

Simultaneously, an Awareness/Motivational &

Educational Training Programme on ISO-9000

& TQM has been taken up through the SISIs &

RTCs to sensitise the SSI in ISO-9000 and

TQM Quality Systems so that they are

Year No. of Amount ofunits assistance

(Rs. crore)

1993-94 3 0.0161994-95 10 0.0431995-96 48 0.251996-97 54 0.391997-98 85 0.491998-99 174 0.961999-2000 361 2.252000-01 649 4.052001-02 992 6.002002-03 1182 6.992003-04 917 4.772004-05 3314 17.332005-06 2026 9.76

(upto Dec. 2005)Total: 9815 53.30

Average assistance/unit = Rs.54, 314

33

(ii) Undertaking in-depth studies of high

energy consuming SSI clusters and

identifying gaps and potential barriers for

energy conservation, and promoting

adoption of suitable techniques/

technologies to achieve energy

efficiency.

(iii) Encouraging SSI units to adopt energy

audits to improve energy efficiency and

fuel substitution, and monitoring the

implementation of recommendations.

During 2005-06, taking up 30 Awareness and

Motivational – cum - Educational Programmes

on Energy Conservation at the cost of Rs. 1.80

lakh has been allocated to the SISIs for the

benefit of about 900 SSI units.

2.20.0 UPGRADATION OF SIDOWORKSHOPS INTO MINITOOL ROOMS

A Scheme of “Upgradation of SIDO

Workshops into Mini Tool Rooms” was

approved in 1992-93, envisaging conversion of

a few common facility workshops attached to

SISIs/Br. SISIs into Mini Tool Rooms.

Consequently, CNC machines, CAD/CAM

software, etc., have been provided to the

workshops at SISI, Mumbai, Chennai,

Bangalore, Jaipur, Delhi, Kolkata, Kanpur,

Ludhiana, Indore, Patna, Goa, Thrissur,

Guwahati, Jammu and Ranchi and Br. SISI,

Mangalore, Varanasi, Gwalior, Hubli, Allahabad,

etc. CAD/CAM facilities have also been

provided in selected SIDO field offices as per

the need of the area.

2.21.0 INTEGRATEDINFRASTRUCTURALDEVELOPMENT (IID)SCHEME

2.21.1 The Integrated Infrastructural

Development (IID) Scheme was launched in

1994, with the objectives of providing improved

infrastructural facilities to assist establishment

of small scale & tiny units, creating employment

opportunities and increasing exports. The

Scheme covers Districts which are not covered

under the Growth Centres Scheme. The

Scheme provides assistance for creating

developed sites with Infrastructural facilities like

power distribution network, water,

telecommunication, drainage and pollution

control facilities, roads, banks, raw materials

supply, storage and marketing outlets, common

service facilities, technological back up

services, etc. The Scheme covers rural as well

as urban areas with a provision of 50%

reservation for rural areas and 50% industrial

plots are to be reserved for the tiny sector. The

Scheme also provides for upgradation/

strengthening of the infrastructural facilities in

the existing old industrial estates.

2.21.2 Under the Scheme, the State / Union

Territory Governments concerned or a good

NGO with sound financial position are required

to select suitable sites, firm up the project

proposals and get the project appraised by

SIDBI. The High Powered Committee under the

Scheme considers the proposals after

recommendation of SIDBI becomes available.

The estimated cost to set up an IID Centre is

34

Rs. 5 crore (excluding cost of land). Central

Government provides 40% grant (subject to a

maximum of Rs. 2 crore) and the remaining

amount could be loan from SIDBI/Banks/

Financial Institutions or State funds.

2.21.3 In order to further streamline the

implementation of IID Scheme, the following

guidelines have been issued:

(a) Proper survey would be carried out before

preparing the proposals to ascertain

potential for setting up of IID Centre.

(b) The IID Scheme should be taken up in

conjunction with other schemes, viz.,

Credit Linked Capital Subsidy Scheme

(CLCSS), Small Industry Cluster

Development Programme (SICDP),

Prime Minister’s Rozgar Yojana (PMRY),

Rural Employment Generation

Programme (REGP), etc. and the States

would ensure inter-Departmental

coordination for this purpose.

(c) Advance booking/registration of plots in

the IID Centres should be encouraged

(d) Possibility of public-private partnership

may be explored by States/Implementing

agencies for maintenance and

management of the completed IID

Centres.

2.21.4 For the growth of small industries in

the North Eastern Region & other special

category States, Government of India relaxed

the funding pattern of this Scheme for the North

Eastern Region (including Sikkim), J&K, H.P.

and Uttaranchal to provide Central grant of upto

80% (subject to a maximum of Rs.4 crore).

2.21.5 Till 31.12.2005, the Central

Government has approved the setting up of 112

centres in various States, including 21 projects

for upgradation of infrastructure in the existing

Industrial Estates. During 2005-06 (upto

December, 2005), 5 new IID Centres and 8

centres for upgradation have been sanctioned.

The outlay for the Scheme for 2005-2006 is

Rs. 30 crore.

2.22.0 COLLECTION OFSTATISTICS OF SSIs

The scheme was started in 1975 with the

objective of collecting, compiling and

disseminating statistical data/information on the

SSI sector. Conduct of Census and sample

surveys, collection of IIP data and updation of

frames for data collection are covered under

the scheme. The scheme is implemented

through the State Directorates of Industries

(SDIs) and District Industries Centres (DICs).

2.22.1 INDEX OF INDUSTRIALPRODUCTION (IIP) FOR SSISECTOR

The objective of IIP is to estimate the growth in

production of the SSI sector. It is compiled on a

quarterly basis. At present SIDO is working out

the growth in production through Index of

Industrial Production (IIP) with the base year

1970. The IIP is based on a basket of 356 items

contributing 77% of SSI production as per the

First Census of SSI. These data are collected

from 2400 units having an annual production of

Rs. 1 crore or more. As a follow up of the Third

35

Census it has been decided to change the base

year from 1970 to 2001-02 and also select a

new basket of products so as to make the IIP

more representative. Accordingly, at all-India

level, a basket of 468 items covering 24,749

industrial units has been selected. These items

contribute about 75.5% of the production of the

SSI Sector. The frame is the database of the

units registered with the State Directorates of

Industries. The frame up to 31.3.2005 has been

updated.

2.22.2 PERFORMANCE OF SSIs

The Office of the DC (SSI) estimates various

performance parameters relating to the growth

of the SSI sector. The time series data on

various economic parameters are given below:

Sr. Year Total SSI Fixed Production (Rs crore) Employment Exports

No. units investment Current Constant (lakh (Rs.(lakhs) (Rs. crore) prices prices persons) crore)

(1993-94)

1 1990-91 67.87 93555 78802 84728 158.34 9664

2 1991-92 70.63 100351 80615 87355 165.99 13883

(4.07) (7.26) (2.30) (3.1) (4.83) (43.66)

3 1992-93 73.51 109623 84413 92246 174.84 17784

(4.07) (9.24) (4.71) (5.6) (5.33) (28.10)

4 1993-94 76.49 115795 98796 98796 182.64 25307

(4.07) (5.63) (17.04) (7.1) (4.46) (42.30)

5 1994-95 79.60 123790 122154 108774 191.40 29068

(4.07) (6.9) (23.64) (10.1) (4.79) (14.86)

6 1995-96 82.84 125750 147712 121175 197.93 36470

(4.07) (1.58) (20.92) (11.40) (3.42) (25.46)

7 1996-97 86.21 130560 167805 134892 205.86 39248

(4.07) (3.82) (13.60) (11.32) (4.00) (7.62)

8 1997-98 89.71 133242 187217 146262.9 213.16 44442

(4.07) (2.05) (11.57) (8.43) (3.55) (13.23)

9 1998-99 93.36 135482 210454 157525.1 220.55 48979

(4.07) (1.68) (12.41) (7.7) (3.46) (10.21)

10 1999-00 97.15 139982 233760 170379.2 229.10 54200

(4.07) (3.32) (11.07) (8.16) (3.88) (10.66)

11 2000-01 101.1 146845 261297 184401.4 238.73 69797

(4.07) (4.90) (11.78) (8.23) (4.21) (28.78)

36

2.22.3 COMPARISON OF THE SSISECTOR WITH THE OVERALLINDUSTRIAL SECTOR

The small-scale sector has maintained a higher

rate of growth than the overall industrial sector.

The comparative growth rates of production

for both the sectors are given below:

12 2001-02 105.21 154349 282270 195613 249.33 71244

(4.07) (5.11) (8.03) (6.06) (4.44) (2.07)

13 2002-03 109.49 162317 311952 210636 260.21 86013

(4.07) (5.16) (10.52) (7.68) (4.36) (20.73)

14 2003-04 113.95 170219 357733 228730 271.42 NA

(4.07) (4.87) (14.68) (8.59) (4.31)

15 2004-05 118.59 178699 418263 251511 282.57 NA

(4.07) (4.98) (16.92) (9.96) (4.11)

Sr. Year Total SSI Fixed Production (Rs crore) Employment Exports

No. units investment Current Constant (lakh (Rs.

(lakhs) (Rs. crore) prices prices persons) crore)

(1993-94)

Year Growth rate Growth rateof SSI of overall

sector (%) industrial sector

1993-94 5.7 6.0

1994-95 10.0 9.1

1995-96 11.5 13.0

1996-97 11.3 6.1

1997-98 9.2 6.7

1998-99 7.8 4.1

1999-2000 7.1 6.7

2000-01 8.0 5.0

2001-02 6.1 2.7

2002-03 7.7 5.7

2003-04 8.6 6.9

2004-05 9.96 8.4

2.22.4 CONTRIBUTION OF SSI TO THEGROSS DOMESTIC PRODUCT(GDP)

Year Contribution of SSI (%)

Total industrial Gross Domestic

production Product (GDP)

1997-98 39.70 7.02

1998-99 39.94 6.81

1999-00 40.02 6.69

2000-01 39.91 6.86

2001-02 39.63 6.67

2002-03 39.48 6.82

2003-04 39.42 6.71

37

Sr. Census/Survey Coverage Number of

No. workers (lakh)

1. Third All India Census of SSI, Registered and unregistered, 249.33

2001-02 SSIs including SSSBEs

2. Annual Survey of Industries, Registered under section 2 77.50

2001-02 m(i) and 2 m (ii) of the Factories

Act. A small portion of

manufacturing SSIs are covered.

3. Sample Survey of Unorganised Non ASI manufacturing units. 370.8

Manufacturing, 2000-01 Includes most of the manufacturing

(56th round NSS) SSIs. Also units working without

fixed premises are also covered.

4. Sample Survey of Unorganised All services activities working with 265.56

Services, 2001-02 (57th round or without fixed premises.

NSS) SSSBEs are included as illustrative

list of services.

5. Total employment among units =2+3+4 713.86

engaged in manufacturing and

services

6. Percentage share of SSI sector =(1/5)*100 34.93%

2.22.5 EMPLOYMENT IN SSI SECTOR

The total employment in the SSI sector

(including small scale service and business

entities (SSSBEs) in the country as per various

Census/Surveys and their coverage is tabulated

below:

2.23.0 CREDIT GUARANTEEFUND SCHEME FORSMALL INDUSTRIES

2.23.1 The Government introduced the Credit

Guarantee Fund Scheme for Small Industries

in May 2000 with the objective of making

available credit to the SSI units, particularly tiny

units, for loans up to Rs. 10 lakh without

collateral/third party guarantees. The scheme

is being operated by the Credit Guarantee Fund

Trust for Small Industries (CGTSI) set up jointly

by the Government of India and SIDBI. The loan

limit under the scheme, which was Rs. 10 lakh

per borrower, has been enhanced to Rs. 25 lakh

per borrower in accordance with the

Comprehensive Policy Package on SSI

announced on 30th August, 2000, when the

scheme was formally launched. Necessary

modifications have been carried out in the

indenture of the Trust to enable the CGTSI to

guarantee loans up to Rs. 25 lakh.

38

2.23.2 The scheme covers collateral free

credit facility (term loan and/or working capital

including non fund based working capital)

extended by eligible lending institutions to new

and existing SSI units as well as Small Scale

Service and Business (Industry related)

Entities (SSSBEs) including Information

Technology and Software Industry up to Rs.

25 lakh per borrowing unit. The guarantee

cover would be up to 75% of the credit,

subject to maximum guarantee limit of Rs.

18.75 lakh. However, the Member Lending

Institutions (MLIs) are allowed to extend

additional credit facilities against collateral

security and/or third party guarantee to the

borrowers already covered under the scheme

in those cases where the credit facility already

covered under the scheme has reached the

ceiling of Rs. 25 lakh. The lending institutions

availing of guarantee from the Trust have to

pay one time guarantee fee of 2.5% and

service fee of 0.75% per annum of the credit

facility sanctioned by the lending institution to

the borrower. Further, as announced in the

“Policy Package for Stepping up Credit to

Small and Medium Enterprises”, 2005, the

guarantee fee has been reduced from 2.5%

to 1.5% for the following categories of loans/

borrowers:

(a) All loans up to Rs. 2.00 lakh.

(b) All eligible women entrepreneurs.

(c) All eligible borrowers located in the NE

region including Sikkim and in Jammu &

Kashmir.

Further, Public Sector Banks will be encouraged

to absorb the annual service fee in excess of

0.25% for all borrowers mentioned in categories

(a) to (c).

2.23.3 The Credit Guarantee Scheme was

initially approved for one year with a corpus of

Rs. 125 crore contributed by the Government

of India and SIDBI in the ratio of 4: 1.

Subsequently, the Government decided to

continue the scheme beyond one year. The

corpus of CGTSI has been enhanced to Rs.

1056.55 crore with the contribution of Rs. 845.24

crore from the GoI and Rs. 211.31 crore from

SIDBI.

2.23.4 As on 30th November 2005, 52 eligible

institutions comprising 28 Public Sector Banks,

10 Private Sector Banks, 11 Regional Rural

Banks (RRBs), National Small Industries

Corporation (NSIC), North Eastern

Development Finance Corporation (NEDFi) and

Small Industries Development Bank of India

(SIDBI) have become Member Lending

Institutions (MLIs) of CGTSI for participating in

the Credit Guarantee Scheme. 34552 proposals

were approved for guarantee cover for

aggregate credit of Rs. 790.47 crore.

2.24.0 MICRO FINANCEPROGRAMME

2.24.1 The Government launched the revised

Micro Finance Programme in 2003-04. The

scheme has been tied up with the existing

programme of SIDBI, which is under operation

since January 1999, by contributing to the

security deposits required from the MFIs/NGOs

to get loan from SIDBI. The Government of India

39

provides funds for Micro Finance Programme

to SIDBI under ‘Portfolio Risk Fund’ (PRF). This

fund is used for security deposit requirement of

the loan amount from the MFIs/NGOs. At

present, SIDBI takes fixed deposit equal to 10%

of the loan amount. The share of MFIs/NGOs

would be 2.5% of the loan amount (i.e., 25% of

the security deposit) and balance 7.5% (i.e., 75%

of the security deposit) is adjusted from the

funds provided by the Government under the

PRF.

2.24.2 As on 30th

November 2005, the

Government has released an amount of Rs. 225

lakh towards PRF, which has been fully utilized

by SIDBI. The funds under PRF are utilised for

extending loans in the hitherto underserved

States like North Eastern States including

Sikkim, Bihar, Jharkhand, West Bengal, Orissa,

Madhya Pradesh, Chattisgarh, Uttar Pradesh,

Jammu & Kashmir, Rajasthan and Uttaranchal.

As on 30th November 2005, cumulative loan

amount of Rs. 34.66 crore has been provided

to MFIs/NGOs under the scheme, thereby

benefiting 1,64,434 persons.

2.25.0 CREDIT LINKED CAPITALSUBSIDY SCHEME(CLCSS)

2.25.1 The Government has been operating

a scheme for technology upgradation for the SSI

called the Credit Linked Capital Subsidy

Scheme (CLCSS). The Scheme aims at

facilitating technology upgradation by providing

upfront capital subsidy to SSI units, including

agro & rural industry units, on institutional

finance (credit) availed of by them for

modernisation of their production equipment

(plant and machinery) and technology. Existing

SSI units registered with the State Directorates

of Industries, which upgrade with the state- of

-the -art technology, with or without expansion

as well as new SSI units which are registered

with the State Directorate of Industries and

which set up their facilities only with the

appropriate eligible and proven technology are

eligible.

2.25.2 The Scheme was launched on

1st October, 2000 for a period of five years or till

the sanction of capital subsidy reached Rs. 600

crore, whichever was earlier. The Small

Industries Development Bank of India (SIDBI)

and the National Bank for Agriculture and Rural

Development (NABARD) are the two nodal

agencies for implementing this Scheme, credit

being made available through eligible Primary

Lending Institutions (PLIs). Eligible PLIs include

scheduled commercial banks, eligible

cooperative banks (other than urban

cooperative banks), eligible Regional Rural

Banks (RRBs), National Small Industries

Corporation (NSIC), State Financial

Corporations (SFCs) and North Eastern

Development Financial Institution (NEDFi).

2.25.3 The guidelines of the Scheme have been

revised from time to time by the Governing and

Technology Approval Board (GTAB) of CLCSS

to include more sub-sectors/products and

improved technologies under the Scheme. List

of 45 approved sub-sectors/products under

the current CLCSS guidelines is as under:

40

(1) Bio tech Industries

(2) Common Effluent Treatment Plants

(3) Corrugated Boxes

(4) Drugs and Pharmaceuticals

(5) Dyes and Intermediates

(6) Industries based on Medicinal and

Aromatic Plants

(7) Plastic Moulded/ Extruded Products and

Parts/ Components

(8) Rubber Processing including Cycle/

Rickshaw Tyres

(9) Food Processing (including Ice Creams)

(10) Poultry Hatcheries & Cattle Feeds

(11) Dimensional Stones (excluding quarrying

and mining)

(12) Glass and Ceramics, including Tiles

(13) Leather and Leather Products, including

Footwear and Garments

(14) Electronic Equipment, viz., Test,

Measuring, Assembly/Manufacturing,

Industrial Process Control; Analytical,

Medical, Electronic Consumer &

Communication, etc.

(15) Fans & Motors

(16) General Light Service (GLS)

(17) Information Technology (Hardware)

(18) Mineral Filled Sheathed Heating Elements

(19) Transformers/Coils/Chokes, including

Solenoid Coils

(20) Wires & Cables

(21) Auto Parts and Components

(22) Bicycle Parts

(23) Combustion Devices/Appliances

(24) Forgings & Hand Tools

(25) Foundries – Steel and Cast Iron

(26) General Engineering Works

(27) Gold Plating and Jewellery

(28) Locks

(29) Steel Furniture

(30) Toys

(31) Non-Ferrous Foundries

(32) Sport Goods

(33) Cosmetics

(34) Readymade Garments

(35) Wooden Furniture

(36) Mineral Water Bottles

(37) Paints

(38) Agricultural Implements and Post Harvest

Equipment

(39) Beneficiation of Graphite and Phosphate

(40) Khadi and Village Industries

(41) Coir and Coir Products

(42) Steel Re-rolling and/or Pencil Ingot Making

(43) Zinc Sulphate

(44) Welding Electrodes

(45) Sewing Machines

2.25.5 The amount of subsidy sanctioned

during 2001-02 and 2005-06 (April - November,

2005) is Rs. 24.09 crore (approx.). However, most

of it (Rs. 13.6 crore approx.) has been sanctioned

during 2004-05. The year-wise amount of

subsidy disbursed and number of units

assisted under the Scheme are given below:

41

2.25.6 To accelerate the pace of implementa-

tion of the Scheme and in the light of the experience

gathered in implementing the Scheme, the on-

going CLCSS has been amended:

Year No. of units Amount of

assisted sanctioned subsidy

(Rs. lakh)

2001-02 9 21.36

2002-03 47 93.96

2003-04 150 374.90

2004-05 526 1359.78

2005-06* 203 559.46

Total 935 2409.46

* April-November 2005

(a) to raise the ceiling on loans under the

Scheme from Rs. 40 lakh to Rs. 1 crore;

(b) to raise the rate of capital subsidy from

12 per cent to 15 per cent;

(c) to calculate the admissible capital

subsidy with reference to the purchase

price of plant and machinery, instead of

the term loan disbursed to the beneficiary

unit;

(d) to do away with the practice of

categorisation of SSI units into slabs on

the basis of their present investment for

determining the eligible subsidy; and

(e) to extend the validity of the Scheme upto

31st March, 2007.

Shri Pranab Mukherjee, Defence Minister inaugurating the National Expo of Small Agro & Rural Industries

42

3.1.0 National Small Industries

Corporation Limited (NSIC) has completed

50 years of its service to the small

enterprises. During this period, the

Corporation provided a wide range of

services to the SSI sector, in the fields of

marketing, equipment financing, technology

upgradation, exports, training and common

facilities. Over these five decades of,

growth, development and transition, NSIC

has proved its strength within the country

and abroad by promoting modernisation,

quality consciousness, strengthening of

linkages of the small with large, medium

enterprises and enhancing exports of the

SSI sector.

3.1.1 NSIC carries forward its mission to

assist small enterprises with a set of schemes

designed to put them in a competitive and

advantageous position, after drawing lessons

from the result of the schemes implemented in

the past on its own overall financial health. The

schemes now comprise facilitating marketing

support, credit support, technology support and

other support services.

NATIONAL SMALL INDUSTRIESCORPORATION LTD.

3.2.0 ORGANISATIONAL SET -UP

The Corporation is manned by a team of

professionals at different levels and delivers its

assistance through:

� 6 Zonal Offices located at Mumbai,

Chennai, Kolkata, Hyderabad, Delhi and

Noida.

� 27 Branch Offices and 19 Sub-Offices

over States.

� 5 Technical Service Centres located at

Chennai, Howrah, Hyderabad, Okhla and

Rajkot.

� 3 Technical Service Extension Centres

located at Aligarh, Rajpura and

Guwahati.

� 2 Software Technology Parks – one at

Okhla, New Delhi and the other at

Chennai.

� 2 Offices outside India – at Dubai

(UAE) and Johannesburg (South

Africa).

Chapter III

43

3.3.0 SCHEMES OF THECORPORATION

3.3.1 Marketing Services

Marketing is critical to the growth and survival

of small enterprises in today’s intensely

competitive market. NSIC acts as a facilitator

to promote SSI products and has devised a

number of schemes to support small

enterprises in their marketing efforts, both within

and outside the country. These schemes are

briefly described below:

� Consortia and Tender Marketing: In their

individual capacity, small enterprises face

problems to procure and execute large

orders, which inhibit their growth as well

as graduation. NSIC, accordingly, forms

consortia of units manufacturing the

same products, explores the market and

secures orders for bulk quantities. These

orders are then distributed among the SSI

units in tune with their production capacity.

Testing facilities are also provided to help

these units ensure that the quality of their

products conforms with the standard

specifications.

� Single Point Registration for Government

Purchases: NSIC operates a Single Point

Registration Scheme, wherein the

registered SSI units get purchase

preference in Government purchases.

The units registered under this scheme

get the following facilities :

� Advance intimation of tenders

issued by DGS&D.

� Issue of tender sets free of cost.

� Exemption from payment of earnest

money deposit.

� Waiver of security deposit up to the

monetary limit for which the unit is

registered.

� Issue of competency certificate in

case the value of an order exceeds

the monetary limit, after due

verification.

� Exhibitions and Technology Fairs: To

showcase the competencies of the SSI

and to enhance their market access,

NSIC participates in select International

and National Exhibitions and Trade Fairs

every year and facilitates participation

of the small enterprises by providing

them concessions in rentals, etc.

Participation in these events exposes

the SSI units to international practices

and enhances their marketing

prospects.

� Export of Products and Projects: NSIC

facilitates exports of products and

projects of the SSI to other countries. The

major areas of operation are:

� Export of products such as

handicrafts, leather items, hand

tools, pipes/fittings, builders’

hardware, etc.

� Supply of small industry projects on

turnkey basis.

� Export of IT solutions from India.

44

3.3.2 Financing

� Facilitation of Finance through

Commercial Banks: In order to ensure

smooth credit flow to small enterprises,

NSIC has entered into strategic alliances

with commercial banks for providing long-

term/working capital financing of the small

enterprises across the country. The

arrangement envisages forwarding of

loan applications of the interested small

enterprises by NSIC to the banks for

sanction of loans.

� NSIC also provides limited finance for

equipment and in addition financing for

procurement of raw material and

marketing activities (short term)

3.3.3 Technology Services

Technology is the key to enhancing a company’s

competitive advantage. Small enterprises need

to develop and implement suitable technology

strategy, in addition to financial, marketing and

operational strategies, and adopt that which

helps integrate their operations with their

environment, customers and suppliers.

NSIC offers small units the following support

services through its Technical Services Centres

and Extension Centres:

Advising on application of new techniques

� Material testing facilities through

accredited laboratories.

� Product design including CAD/CAM.

� Common facility support in machining,

EDM, CNC, etc.

3.3.4 Support Services

� Infomediary Services

Information plays a vital role in the success of

any business. Recognising the importance of

information and its relevance to the SSI units,

NSIC provides Infomediary Services to small

units. Besides hosting a web site

(www.nsic.co.in), NSIC hosts sector specific

portals for focused information dissemination.

Under this scheme, small units can become

members and avail of a number of value-added

services. Some important services are:

� Supplier database.

� Market intelligence database.

� Energy and environment services at

selected centres.

� Classroom and practical training for skill

upgradation.

NSIC Technical Services Centres are

located at the following places:

Location Focus area

Chennai Leather & footwear

Howrah General engineering

Hyderabad Electronics & computer

application

New Delhi Machine tools & related

activities

Rajkot Energy audit & energy

conservation activities

Rajpura Domestic electrical appliances

Aligarh Lock cluster & die and tool

making

45

� Technology providers’ database.

� Information providers’ database.

� Linkages with relevant institutions.

� E to E services.

� E to B services.

� Value additions like database/

directories on who makes machines,

who makes components, spare

capacity bulletin boards, discussion

forums, virtual exhibitions, etc.

� Mentoring and Advisory Services

Inadequate management skills are often the

cause of non-performance of small enterprises.

NSIC’s mentoring and advisory services are

aimed at addressing this impediment to growth.

It offers mentor-mentee relationship in which the

mentor, a person with wide experience in

running his own business, provides his services

to an individual or a group of units. An advisor, a

senior professional, generally retired and a

specialist in a specific area assists in the

process. Mentors and advisors provide the

necessary professional and moral support in

the early lifecycle of an enterprise or to existing

units facing critical operational problems.

� Performance and Credit Rating

Scheme for Small Industries

To enable small enterprises to diagnose the

strength and weaknesses of their existing

operations and take corrective measures to

enhance their organisational strengths, a need

was felt for introducing a Rating Scheme

specially designed for the small enterprises.

The Rating Scheme seeks to encourage the

small enterprise increase their productivity,

since a good rating would enhance their

acceptability in the market and also make

access to credit quicker and cheaper and thus

help reduce the cost of credit. Besides, the

rating would also infuse a sense of confidence

amongst the buyers of SSI products. With

these objectives, Government of India has

appointed NSIC as the implementing agency to

operate the Performance and Credit Rating

Scheme for small enterprises. The scheme is

being operated through accredited rating

agencies in the country like CARE, CRISIL,

D&B, FITCH, ICRA and ONICRA. Government

provides financial assistance to small

enterprises to the extent of 75 per cent of the

cost of rating, subject to a maximum of

Rs. 40, 000.

� Software Technology Parks

NSIC Software Technology Parks (STPs)

facilitate small industries in setting up 100 per

cent export-oriented units for software exports.

They also act as nodal points to activate

software exports directly through NSIC. These

STPs extend support in terms of the requisite

infrastructure to the SSI units to start business

operations with a minimum lead time. The

scheme is governed by the STPI regulations of

the Department of Information Technology,

Government of India. NSIC established the first

STP at Okhla, New Delhi in 1995 and second

in Chennai in 2001. Several small scale units

have taken advantage of these parks and

contributed export earnings to the exchequer.

46

� International Consultancy Services

For the last five decades, NSIC has acquired

various skill sets in the development process

of small enterprises. These skills are being

networked to offer consultancy services for

other developing countries. This activity was

started during 2004-05 and is expected to

occupy a place in the future service profile of

the Corporation. The areas of consultancy are

as listed below:

� Capacity Building

� Policy & Institutional Framework

� Entrepreneurship Development

� Business Development Services

3.4.0 HUMAN RESOURCEDEVELOPMENT &TRAINING

Human resource is the essence in any

organisation. In order to keep abreast with the

changing technology and advancements in

various fields, the Corporation strived to keep

its human resource current with latest

developments relating to their functional areas.

NSIC Corporate office and nine major branch

offices are certified for ISO 9001-2000.

Continuous efforts are put in to identify the

training needs and evolve suitable training plans

to fulfil the identified needs.

Besides, a number of officials were also

nominated for domestic training programmes,

seminars and workshops conducted by

professional bodies like FICCI, CII, NIESBUD,

SCOPE, NISIET, Associated Chambers of

Commerce & Industry of India, Indo African

Society, WASME, IMA, CBI Academy, FIEO,

ASSOCHAM, Institute of Socio Economic

Research & Action, Indian Machine Tool

Manufacturers Association, Logic Consultants

(P) Ltd. and PHD Chamber of Commerce and

Industry.

3.5.0 MAJOR EVENTS DURING2005-06

� Techmart India’ 2005 (14-27

November, 2005)

NSIC organised Techmart India ’2005, the

13th International Technology Fair coinciding with

Shri Mahabir Prasad, Hon’ble Union Minister of SSI and ARIpaid a visit to Techmart India 2005. Accompanying the Hon’ble

Minister are Shri H.P. Kumar, CMD, NSIC and Shri C.Jose,Chairman, Coir Board

47

India International Trade Fair at Pragati Maidan,

New Delhi. The event was sponsored by the

Ministry of SSI.

13th series of Techmart India’ 2005, received

tremendous response from trade and

industry. More than 230 units, including those

in the North Eastern Region, participated in

the event.

“North East Panorama”, a special display of

products from the North Eastern States, was

organised as part of Techmart India’ 2005 to

provide marketing opportunities to them.

Some of the items displayed were powder

coating machines, automatic filling & packaging

machines, tool room machines, pumps &

motors, abrasives, decoilers, refractories,

testing machines, furnaces, auto parts, R.O.

systems and water purifiers, communications

systems, public address systems, hand tools,

corrugated roofing sheets, switches & other

electrical items, genset & grass cutting

machines, automatic papad and roti making

machines, gem stone drilling and polishing

machines, high pressure liquid purification

systems, etc.

Foreign delegates from Sri Lanka, South Africa,

Congo, Saudi Arabia, Nigeria, Russia, Mexico,

Spain, Zimbabwe, Mauritius, Cyprus and

Bahrain visited Techmart.

NSIC was awarded Gold Medal for “Special

Display of North East Sector” in IITF’ 2005.

� Buyer -Seller meets: Bulk and

Government departmental buyers such

as the Railways, Defence,

Communications and large companies

are invited to participate in buyer-seller

meets to enrich SSI unit’s knowledge

regarding terms and conditions, quality

standards, etc. required by these buyers.

These programmes are aimed at vendor

development from among SSI units for

the bulk manufacturers.

� Third Commonwealth India Small

Business Competitiveness Development

Programme (20 - 26 November, 2005)

National Small Industries Corporation, in

association with Commonwealth Secretariat,

London (COMSEC) has been hosting a series

of pan-Commonwealth institution building

programmes on Small Business

Competitiveness Development. These

programmes focus at building and developing

institutional capacity on competitive small

business policies and strategies for

Commonwealth developing states.

Shri Anupam Dasgupta, Secretary, Ministry of SSI & ARIinspecting the handicrafts exhibited by Woman Entrepreneurfrom Rajasthan in Techmart 2005. Also seen in the picture is

Shri H.P. Kumar, CMD, NSIC

48

Shri Mahabir Prasad, Hon’ble Union Minister of SSI and ARI is seen inaugurating the third Commonwealth-India Small BusinessCompetitiveness Development Programme organised by NSIC

NSIC organised a seminar on “Innovative Financing for Small Enterprise Development” on September 26, 2005 at New Delhi. Theseminar was the part of the “National Expo of Small, Agro and Rural Industries” organised by Ministry of SSI and ARI from

September 26 to 29, 2005 at New Delhi. Dr. Syeda Hameed, Member, Planning Commission inaugurated the seminar. Also seen inthe picture are Shri Anupam Dasgupta, Secretary, Ministry of SSI & ARI, Shri Satyanada Mishra, AS&DC SSI and Shri H.P. Kumar,

CMD, NSIC, Shri B.D. Narang, Former Chairman, Oriental Bank of Commerce, Shri C. Chandran, CEO, KVIC

49

The third programme in this series was held at

New Delhi during 20 – 26 November, 2005. The

theme of the programme was “Networking the

Commonwealth SMEs through sharing best

practices for enhanced competitiveness”. The

programme was inaugurated by Shri Mahabir

Prasad, Hon’ble Union Minister of SSI & ARI and

the keynote address was delivered by Shri

Anupam Dasgupta, Secretary to Government

of India, Ministries of SSI & ARI.

An Agreement on Mutual Cooperation was

also signed between NSIC and Pacific Islands

Forum Secretarial at the inaugural session of

the programme. The objective of this

agreement is to enhance the cooperation

between India and the Pacif ic Islands

countries in the development of their SME

activities.

50

4.0 Entrepreneurship Development and

Training is one of the key elements for

development of small scale industries,

particularly, the first generation entrepreneurs. The

Indian Institute of Entrepreneurship (IIE),

Guwahati; the National Institute of Small Industry

Extension Training (NISIET), Hyderabad and the

National Institute of Entrepreneurship and Small

Business Development (NIESBUD), NOIDA have

been set up as national – level institutions for

training and entrepreneurship development in the

SSI Sector. To promote and assist

entrepreneurship development in the country, the

Ministry implements (in addition to the schemes

of SIDO) two important schemes, namely,

Promotion of Entrepreneurship Development

Institutions (EDI) and Scheme of National

Entrepreneurship Development Board (NEDB).

4.1 ENTREPRENEURSHIPDEVELOPMENTINSTITUTIONS (EDI)SCHEME

Under the EDI Scheme, grant is given for setting

up of new Entrepreneurship Development

TRAINING AND ENTREPRENEURSHIPDEVELOPMENT

Chapter IV

Institutions (EDIs) and also for upgradation and

modernisation of existing EDIs in the country.

Under the scheme, a matching grant of 50 per

cent, subject to a ceiling of Rs. 1 crore is

provided for building, equipment, training aids,

etc. The balance is contributed by the State

Governments/Financial Institutions. During

2005-06, a budget provision of Rs. 200 lakh has

been made against which Rs. 155 lakh has

already been released.

4.2 NATIONALENTREPRENEURSHIPDEVELOPMENT BOARD(NEDB) SCHEME

Government of India has adopted several

pol icies, launched new schemes and

programmes for entrepreneurship

development and established a number of

entrepreneurship development institutions

in the country. In the changed

circumstances, there was no functional or

organisational necessity of continuing with

the NEDB. Accordingly, the NEDB has

been abolished. Though the Board has

51

been abolished, the schemes implemented

under the NEDB Scheme are still being

implemented by the Ministry of Small

Scale Industries.

Under the scheme, a grant is provided to

eligible institutions for setting up

Entrepreneurship and Business Development

Centres in Universities/Colleges. Grant is also

given for setting up incubators. Reputed

organisations engaged in the entrepreneurship

development are also provided grants under

the scheme for organising workshops/

seminars and conducting research studies

relevant to entrepreneurship development.

During 2005-06, a budget provision of Rs. 50

lakh has been made against which Rs. 35.15

lakh has already been released. To make this

scheme more focused, the guidelines are

being revised.

4.3 INDIAN INSTITUTE OFENTREPRENEURSHIP(IIE), GUWAHATI

4.3.1 Indian Institute of Entrepreneurship

(IIE) is completing 12th year of its operation on

31st March 2006. The Institute organises training

programmes and undertakes research and

consultancy activities in the field of promotion

of small industry and entrepreneurship. Since

its establishment and upto January 2006, the

Institute has organised 903 training

programmes/workshops/seminars/meets

where 27976 participants participated.

4.3.2 The types and number of training

programmes organised and number of

participants trained during 2004-05 and

2005-2006 (up to January 2006) and expected

achievement for the year are as under:

Sr. Type of Programme 2004-2005 2005-2006

No (Up to January 2006)

No of No of No of No of

Progra- Partici- Progra- Parti-

mmes pants mmes cipants

1 Promotion of New Entrepreneurs (PNE) 44 1487 27 656

2 Growth of Existing Entrepreneurs (GEE) 49 1621 50 1767

3 Entrepreneurship Education (EE) 24 1121 27 1174

4 Creation of Environment for 05 98 05 116

Entrepreneurship(CEE)

5 Information Technology(IT) 04 70 04 49

6 Seminar & Workshop (S&W) 03 232 02 76

7 Others (Modern Office Practice) 01 15 01 03

Total 130 4644 116 3841

52

4.3.3 Promotion of New Enterprises

Promotion of new entrepreneurs has been the

major focus area of training organised by IIE.

The details of programmes conducted are

as under:

The Institute is continuing its Rural Industries

Programme (RIP) in Meghalaya, Manipur and

Barpeta in Assam with the help of SIDBI.

4.3.4 Growth of Existing Entrepreneurs: The

Institute organised 46 programmes for the

beneficiaries of the Rural Employment

Generation Programme implemented by the

KVIC, in which 1673 beneficiaries were trained

till January 2006. By the end of March 2006, the

Institute would organise 8 more programmes

of this kind. At the instance of the Ministry of

SSI, the Institute organised one comprehensive

skill upgradation programme on gem stone

cutting and polishing for entrepreneurs of the

North Eastern Region in which 23

entrepreneurs participated. The Institute also

organised two programmes to create

awareness of export opportunities, benefiting

50 prospective entrepreneurs. At the instance

of the North Eastern Council, Shillong, the

Institute organised one programme on Quality

Planning and Management for Small

Enterprises. The programme was attended by

21 prospecting entrepreneurs. The Institute

also continued its efforts on development of

cane and bamboo cluster at Dimapur in

Nagaland.

4.3.5 Creation of Environment for

Entrepreneurship: Considering the importance

of creating environment for entrepreneurship

development, the Institute organised

programmes for orientation of the support

officials. During the year (up to January 2006)

the Institute organised 5 such programmes,

where 116 participants participated. The details

are as under:

Sl. Type No. of No. of

No. Progra- Partici-

mmes pants

1. General EDP 4 105

2. Women EDP 6 150

3. Developing 4 98

Entrepreneurship

and Marketing

Strategy for

the Youth of

Char Areas

4. New Enterprises 2 52

Creation on Coir

Products

5. EDP on Food 2 48

Processing

6. New Enterprise 2 45

Creation on

Selected Sectors

7. EDP for PMRY 2 44

Beneficiaries

8. EDP for Veterinary 1 13

Graduates of

Nagaland

9. Turnkey EDP 1 27

10. EDP for Science & 3 74

Technology

Entrepreneurs

Total 27 656

53

4.3.6 Entrepreneurship Education: Creating

awareness among and orientation of college

and university teachers on entrepreneurship has

been one of the core activities of the Institute.

The Institute organised three Teachers’ Training

Programmes in entrepreneurship for school,

college and university teachers. In addition, the

Institute also organised 24 programmes for

college students till January 2006.

4.3.7 Information Technology: Other than

entrepreneurship-oriented activity, the Institute

Sl. Type of No. of No. of

No. Programme Progra- Partici-

mmes pants

1 Management 1 21

Development

Programme

for functionaries

of NBCFDC

2 Entrepreneurship 1 23

and Industrial

Extension for

officials of

Directorate of

Industries,

Meghalaya

3 Trainers ’ Training 1 23

Programmes for

NGOs

4 Workshop on Project 2 49

Identification,

Formulation and

Appraisal for DIC

officials of

Uttaranchal

Total 5 116

organises short and long duration courses on

Information Technology. At the instance of the

North Eastern Council, Shillong, the Institute

organised two Teachers’ Training Programmes

on Computer Application Skills of six months

each till January 2006. The Institute also

organised two Certificate Courses in Basic

Computer Application. 49 persons took part in

these programmes.

4.3.8 Workshops and Meets: The Institute

has been organising seminars, workshops,

meets and conferences to provide forum for

interaction among the agencies involved in

promotion of small industry and

entrepreneurship, including prospective and

existing entrepreneurs. During the year, the

Institute, in association with the American

Soybean Association, organised one workshop

on poultry & livestock based enterprises. The

Institute also organised one Bankers Meet at

Barpeta, Assam, to create awareness of small

scale financing involving bankers, district

administration and DICC officials.

4.3.9 The Institute organised a three day

Exhibition cum Counselling of Cane & Bamboo

Products at Dimapur during 23 - 25 August

2005, as part of its Cluster Development

Initiatives at Dimapur, Nagaland. The main

purpose of the exhibition was to document the

products of the cluster actors and counselling

them in regard to their products.

4.10.1 Business Facilitation & Development

Centre (BFDC) is a wing of the IIE to provide

support services to small enterprises in the

North Eastern Region of India including Sikkim.

54

The BFDC has been positioned to help the first

generation entrepreneurs who suffer heavily due

to lack of information regarding business

venture opportunities, market details of

machinery and raw material suppliers as well

as for their products, technical and financial

constraints, etc.

4.10.2 The BFDC started functioning in mid

April 2005. A core monitoring committee of

BFDC has been constituted with members from

NSIC, SISI, Arunachal Pradesh State

Commission for Women and Assam Small

Scale Entrepreneurs Association. During this

period, 128 project reports were prepared and

submitted to the commercial banks and NEDFi

for finance, out of which financial assistance

for 58 projects was sanctioned. It also provided

counselling to 505 entrepreneurs for opportunity

identification and selection of projects and

arranged training link-up for 12 entrepreneurs.

The Centre also completed 18 market

surveys and provided consultancy services to

33 entrepreneurs. It also assisted 15

entrepreneurs in getting statutory clearances

and provided bank/financial institution liaison

and linkage services to 35 entrepreneurs during

the period.

4.3.11 The Institute completed three research

and consultancy assignments during the year

and four are underway:

4.3.12 The Institute published the modified

version of Reading Material for

Entrepreneurship Awareness Camps. The

Institute also publishes a quarterly IIE

Newsletter, which highlights the activities of the

Institute and caters to the information needs of

the entrepreneurs of North East.

4.4 NATIONAL INSTITUTE OFSMALL INDUSTRYEXTENSION TRAINING(NISIET)

4.4.1 NISIET was set up as a national – level

institute in 1960 by the Government of India with

the charter of assisting in the promotion,

development, and modernisation of small scale

industries in the country. With its expertise in the

areas of entrepreneurship, policy, technology,

management, and information services, the

Institute is consistently assisting the SMEs in

facing with confidence the challenges brought

about by globalisation and the impact of IT on their

businesses. NISIET’s role has benefited not only

the Indian SME but also those in other developing

countries and helped in promoting self-employment

and enterprise development. The Institute is

constantly evolving with time, modifying its focus

with the emerging needs of SMEs, providing them

solutions in the form of consultancy, training,

research, and education to retain their competitive

edge in ever-changing markets.

4.4.2 The management of the Institute rests

with the Society, the Governing Council and the

Executive Committee, all appointed by the

Government of India. The Governing Council

acts through the Principal Director. The

Principal Director, the academic and executive

head of NISIET, functions under the guidance

of the Executive Committee/Governing Council/

Society. The academic activities are organised

55

through centres of excellence and theme

focused cells. The Academic Council is the

nucleus coordinating body, which formulates

academic activities and programmes with

quantitative and qualitative benchmarks by

providing a framework for assessment and

evaluation addressing contextual variations.

4.4.3 Training Activities

The academic performance indicators for

2004-05 (actual) and for the period April -

November 2005 (actual) and the projection for

the remaining four months of 2005-06 are

presented below:

Programmes 2005-06April – November December ’05– Total

2005 March ‘06(actuals) (Projected)

No. of No. of No. of No. of No. of No. ofProgra- Partici- Progra- Partici- Progra- Partici-

mmes pants mmes pants mmes pantsEntrepreneur-ship DevelopmentProgrammes

EDPs under Rajiv Yuva 36 2480 15 750 51 3230Shakthi Scheme of A.P.for Unemployed YouthCounselling, Re-training and 40 1977 24 1200 64 3177Re-deployment of rationalisedemployees of CPSUs

EDPs on Food Processing Industries 26 726 — — 26 726

Rural Entrepreneurship Development 5 100 10 200 15 300Programmes in RajasthanOther EDPs 13 485 10 300 23 785

Other ProgrammesNational:

Announced 11 113 7 70 18 183Sponsored 35 911 15 300 50 1211

International:Announced 12 127 06 90 18 217Sponsored 02 14 — — 02 14

Educational:PG Diploma 10 100 — — 10 100IT 09 162 4 100 13 262IGNOU 03 93 — — 03 93

Seminars and Workshops 02 105 4 200 06 305Consultancy & Research 16 — 4 — 20 —

Total 220 7393 99 3210 319 10603

56

4.4.4 Research and Consultancy

During 2005-06, the Institute took up the

following research and consultancy projects:

� Study on Demand and Supply

Assessment of Ozone Deflecting

Substances in India, sponsored by the

Ministry of Environment and Forests,

Government of India.

� Technical Break-up Unit/Interface of KVIC.

� Handholding and Monitoring Services for

20 Clusters in the Country.

� Project on Crochet Lace Cluster at

Narsapur, West Godavari District, Andhra

Pradesh.

� Study on Curriculum Models for

Entrepreneurship Development,

sponsored by the Ministry of SSI,

Government of India.

� Study on Competency Mapping of Indian

SMEs for Global Promotion, sponsored

by the Ministry of SSI, Government of

India.

� Study on Self-sustainability of Information

Support Facilities in and around industrial

clusters (particularly of SMEs) sponsored

by the Department of Scientific and

Industrial Research, Government of India.

� Consultancy Services on Micro Enterprise

Mapping of Self-Help Groups in the

Districts of Rajasthan, sponsored by the

Rural Non-Farm Development Agency

(RUDA), Jaipur.

� Study on Entrepreneurship

Development Education in Professional

Colleges of select States in India,

sponsored by Ministry of SSI,

Government of India.

� Extending Escort Services for Setting up

of Industrial Units at Tribal Industrial

Estate, Cherlapally, Hyderabad,

sponsored by the A.P. Scheduled Tribes

Cooperative Finance Corporation Ltd.,

Andhra Pradesh.

� Promotion of Self-employment Activities

among the Tribal Youth in Andhra

Pradesh, sponsored by the A.P.

Scheduled Tribes Cooperative Finance

Corporation Ltd., Andhra Pradesh.

� Industrial Potential of Packaging

Industries at Visakhapatnam, Andhra

Pradesh, sponsored by the Municipal

Corporation of Visakhapatnam, Andhra

Pradesh.

� Evaluation of Training Programmes under

NORAD, sponsored by the Andhra

Pradesh Women’s Cooperative Finance

Corporation Ltd., Hyderabad.

� Evaluation of Schemes implemented by

Maulana Azad Arthik Vikas Mahamandal,

Mumbai.

� Preparation of Business Plan for

Handicraft Clusters, sponsored by

the Development Commissioner

(Handicrafts), Government of India.

4.4.5 NISIET Initiatives on ClusterDevelopment

4.4.5.1 NISIET initiatives in this field are

centred around handholding and monitoring

57

services, training, consultancy, research, etc.

NISIET has already trained Government

officials from States like Uttar Pradesh,

Andhra Pradesh, Kerala and the North

Eastern Region, and of financial institutions

like Andhra Bank, SBH, and customised

programmes for the officials of Canara Bank

and NABARD. As on date, NISIET is involved

in developing 21 clusters with the funding

support of Development Commissioner

(Small Scale Industries), Ministry of SSI

across the country.

4.4.5.2 Successful case studies are under

preparation highlighting usefulness of the

interventions in all the clusters. Preliminary

results have been encouraging, reflecting

sincere initiatives in the field by the CDEs and

the SISIs with active support by NISIET which

has emerged as a center of excellence to cater

to the needs of not only the SME clusters but

also rural & artisan clusters in the country.

NISIET is also working on preparation of

business plan for cluster development in

Handicrafts at the request of the Office of

Development Commissioner (Handicrafts),

Government of India.

4.4.6 Financial Performance

Income target fixed for the year is Rs. 605.30

lakh against which the actual income realised,

as on 30th November 2005 is Rs. 466.15 lakh.

The target for the year is expected to be achieved

by 31st March 2006.

4.5 NATIONAL INSTITUTEFOR ENTREPRENEURSHIPAND SMALL BUSINESSDEVELOPMENT(NIESBUD)

4.5.1 The National Institute for

Entrepreneurship & Small Business

Development (NIESBUD) is a registered society

under the Ministry of Small Scale Industries,

Government of India. The major activities of the

Institute include development of model syllabi

for training of various target groups; providing

effective training strategies, methodology,

manuals and tools; facilitating and supporting

Central/State Governments and other agencies

in executing programmes of entrepreneurship

and small business development; maximising

benefits and accelerating the process of

58

entrepreneurship development; conducting

programmes for motivators, trainers and

entrepreneurs which are commonly not

undertaken by other agencies and organising

activities which help in developing an

entrepreneurial culture in the society.

4.5.2 During April - November, 2005, the

Institute has organised 16 training programmes

with 334 participants, as against of target of 32

training programmes for 2005-06.

4.5.3 11 training programmes as under

were organised for trainers/promoters, which

were attended by 195 persons:

(a). PRADAN (Professional Assistance for

Development Action), a five day

Accreditation Programme on

Entrepreneurship Motivation Training

(First Phase) for 18 professionals.

(b). On a request received from Uttar Pradesh

Industrial Consultancy Organisation

(UPICO), a one-week Awareness

Programme on Achievement Motivation.

(c). A special training programme on Capacity

Building for Field Functionaries – Project

Leaders and Field Officers – of

Chetanalaya, a Non-Governmental

Organisation doing considerable work for

Self Help Groups (SHGs) and Co-

operatives in urban areas.

(d). At the request of the Department of

Women and Child Welfare, Ministry of

Human Resource Development, a series

of 2 Sensitisation Programmes of 10 days

each, for Business Counsellors/

Consultants of Swa Shakti Project.

(e). A One-week Business Advisors’ Training

Programme, which was attended by

participants from the Directorate of

Industries; Government of Uttaranchal,

Coir Board and Union Ministry of Urban

Employment and Poverty Alleviation.

(f). A training programme on Planning &

Organising EDPs for the Faculty of

Apparel Training & Design Centre (ATDC)

which focused on familiarising the

participants with techniques of designing

EDPs; concept of behaviour objectives;

enterprise launching and enterprise

management competencies.

(g). A first-ever training programme on Small

Business Planning & Promotion, for

middle and senior management, attended

by participants drawn from Small

Industries Service Institutes (SISIs);

Grameen Bank; Maharashtra Centre for

Entrepreneurship Development; Ministry

of Urban Employment and Poverty

Alleviation, Government of India and Khadi

& Village Industries Commission.

(h). Institute’s first training programme on

Human Resources Development through

Entrepreneurship Training for national

participants, organised at Dev Sanskriti

University, Haridwar attended by

participants from Small Industries Service

Institutes (SISIs), Coir Board and

Commission of Khadi & Village Industries.

(i). 8th Trainers’ Training Programme on Project

Formulation and Appraisal attended by

participants from Small Industries Service

59

Institutes (SISIs) and the Directorates of

Industries of Bihar, Karnataka, Madhya

Pradesh, Nagaland and Delhi.

(j). 28th Accreditation Programme for

Motivational Trainers.

4.5.4 The Institute organised two

International Training Programmes during the

period. The Institute’s first six-week training

programme on Human Resource Development

through Entrepreneurship Training was

attended by participants from Myanmar, Bhutan,

Republic of Slovakia, Philippines and

Uzbekistan. The training programme on Small

Business Planning & Promotion was attended

by persons from Russia, the Philippines,

Myanmar, Iran, Iraq and Mozambique.

4.5.5 Under the National Entrepreneurship

Development Board (NEDB) Scheme, the

Institute was assigned the task of organising

10 Workshops on Gender Equity through

Enterprise Development, in association with

some Universities. The Institute organised three

such Workshops in association with Himachal

Pradesh University, Banaras Hindu University

and Aligarh Muslim University.

4.5.6 Research Assignments andPublications

4.5.6.1 During the year, the Institute carried out

the following research projects/studies and

submitted reports:

� Report of Research Study on “Project

Identification Practices Amongst

Entrepreneurs”, sponsored by the Ministry

of SSI.

� Report of the Evaluation Study of Science

& Technology Entrepreneurs Parks

(STEP) Projects – Punjab Women Dairy

Projects (Phase I & II), sponsored by the

Department of Women & Child

Development, Ministry of Human

Resource Development.

4.5.6.2 In addition, the Institute

� finalised the terms of reference with the

Department of Women & Child

Development, Ministry of Human

Resource Development; Government of

India for undertaking an Evaluation Study

of Mahila Dairy Vikas, Almora, Uttaranchal

sponsored by that Department under its

STEP Project;

� submitted proposals to the Small

Industries Development Organization

(SIDO) for undertaking two Research/

Evaluation Studies on Entrepreneurship

Development Programmes of SIDO and

Small Industries Service Institutes (SISIs)

and Branch SISIs; and

� was engaged as one of the Technical

Agencies under the Scheme of Fund for

Re-generation of Traditional Industries of

the Ministry of Agro & Rural Industries,

Government of India.

60

Programmes for International participants

Women Enterpreneurship Development Programme participants

61

5.1 The National Commission for

Enterprises in the Unorganised Sector

(NCEUS) was constituted on 20th September

2004 and consists of a Chairman, two full time

Members, one Member Secretary and three

part time Members. An Advisory Board

consisting of 10 eminent experts and activists

concerned with the unorganised sector was

also constituted to advise the Commission.

The Commission has been given the mandate

to examine the problems of the Unorganised

Sector (also referred to as Informal Sector)

and suggest measures to overcome them. The

term of the Commission, which was initially

fixed at one year, has been extended to three

years.

5.2 The following are the Terms of

Reference assigned to the Commission:

(1) Review of the status of unorganised/

informal sector in India including the nature

of enterprises, their size, spread and

scope and magnitude of employment.

(2) Identity constraints faced by small

enterprises with regard to freedom of

carrying out the enterprise, access to raw

NATIONAL COMMISSION FORENTERPRISES IN THE UNORGANISED

SECTOR (NCEUS)

Chapter V

materials, finance, skills,

entrepreneurship development,

infrastructure, technology and markets

and suggest measures to provide

institutional support and linkages to

facilitate easy access to them.

(3) Suggest the legal and policy environment

that should govern the informal/

unorganised sector for growth,

employment exports and promotion.

(4) Examine the range of existing

programmes that relate to employment

generation in informal/unorganised sector

and suggest improvement for their

redesign.

(5) Identify innovative legal and financial

instruments to promote the growth of the

informal sector.

(6) Review of the existing arrangements for

estimating employment and

unemployment in the informal sector and

examine why the rate of growth in

employment has stagnated in the 1990.

(7) Suggest elements of an employment

strategy focusing on the informal sector.

62

(8) Review Indian labour laws, consistent

with labour rights and with the

requirements of expanding growth of

industry and services particularly in the

informal sector and improving productivity

and competitiveness.

(9) Review the social security system

available for labour in the informal sector

and make recommendations for

expanding their coverage.

5.3 Task Forces Constituted byNCEUS

The National Commission has constituted Task

Forces to deliberate on the following issues

identified for immediate intervention and make

appropriate recommendations:

� Social Security for Unorganised Sector

Workers;

� Statistical issues in the Unorganised/

Informal Sector; and

� Skill formation in the Unorganised Sector.

Task Forces on Access to Technology and

Infrastructure, Access to Markets, Raw

Materials and Finance and Legal and Policy

issues concerning enterprises in the

Unorganised Sector are being constituted.

5.4 Concept of Growth Poles

5.4.1 The NCEUS proposed the formation

of Growth Poles in different parts of the country

with a view to (i) integrating within a geographical

location a number of clusters of unorganised

production units engaged in manufacturing,

services and non-farm activities and (ii)

facilitating the expansion of production of and

employment in these micro and small

enterprises. The Growth Poles would

incorporate the concept of Provision of Urban

Amenities in Rural Areas (PURA) that has been

advocated by the President of India. This

proposal also found mention in the Finance

Minister’s Budget Speech, 2005-06.

5.4.2 In the first instance, the Commission

proposed the launch of a few pilot projects for

Growth Poles. For this purpose, the State

Governments were requested to identify a

number of multi-product industrial/artisanal/

handloom and handicrafts clusters that have the

potential to evolve into Growth Poles. After

detailed discussions with the State

Governments, the proposals submitted by the

Governments of Chhattisgarh, Kerala,

Rajasthan, Uttaranchal and West Bengal have

been shortlisted by the Commission. The

Government of Chhattisgarh has recommended

a Growth Pole at Kondagaon in Bastar District

to give an impetus to the expansion of

enterprises based on the resources and skill

endowments available in the tribal belt of the

State. The Government of Kerala has proposed

a Growth Pole in Kollam District for expansion

of the existing clusters of coir, handicrafts,

handloom, cashew processing and tourism

related enterprises. The Government of

Rajasthan has recommended a Growth Pole

at Sikandara in Dausa District for accelerated

development of clusters of stone cutting and

carving, leather, handloom and khadi,

handicrafts and agricultural implements

63

production units. The Government of

Uttaranchal has proposed the development of

a Growth Hub in Chamoli District to coordinate

the interventions of various promotional

agencies mandated to develop a wide range of

products and services based on the State’s

natural resources. The Government of West

Bengal has proposed the creation of a cluster-

based Growth Pole in Domjur Block of Howrah

District to facilitate the expansion of the clusters

of rubber based industries, food processing

units, foundries, chemical industries, zari and

jewellery/gem stone and apparel units.

5.4.3 The Commission proposes to

undertake detailed technical studies for each of

the five suggested sites to work out the full details

of the identified Growth Pole pilot projects.

5.5 Redrafting of the UnorganisedSector Workers Bill

The drafts of the Unorganised Sector Workers’

Social Security Bill, 2005 and the Unorganised

Sector Workers’ (Conditions of Work and

Livelihood Promotion) Bill, 2005 have been

furnished to the Ministry of Labour &

Employment and the Prime Minister’s Office,

pursuant to a request for assistance in re-

drafting of the Unorganised Sector Workers’ Bill,

2004. The reformulated Bills have also been

placed in the public domain for engaging a wider

public discussion. The Commission is currently

preparing explanatory notes to the Bills and

formulating proposals for operationalising their

provisions.

5.6 Review of the National Policy onUrban Street Vendors

The Commission has been engaged in re-

examination of the National Policy on Urban

Street Vendors and, in this context, interacting

with various stakeholders. In the light of these

interactions, a draft of a revised National Policy

on Urban Street Vendors has been referred to

the Ministry of Urban Employment and Poverty

Alleviation.

64

6.1 INTERNATIONALCOOPERATION SCHEME

6.1.1 International Cooperation Scheme for

modernisation, technology upgradation and

competitiveness enhancement of small

enterprises has been under implementation

since 1996. Under this Scheme, small

entrepreneurs are taken to potential foreign

markets, for firm/association level interactions

on, inter alia, sourcing technology, exploring

export markets of their products and learning

best practices.

6.1.2 The Scheme now encompasses the

following activities:

� Participation in exhibitions, fairs and

buyer-seller meets (with an international

component).

� Exchange of business delegations, to

explore new areas of technology

upgradation, facilitating joint ventures,

improving marketability of SSI products,

foreign collaborations, etc.

� Holding of seminars/buyer-seller meets,

to promote enterprise-to-enterprise

interactions through selected agencies,

both in India & abroad.

INTERNATIONAL COOPERATION

Chapter VI

6.1.3 During 2005-06, participation of SSIs

in international exhibitions and deputation of

business delegations has been sponsored

under the Scheme.

6.2 INDIA GLOBAL SUMMITON MSMES

The Confederation of Indian Industry (CII),

jointly with the Ministry of Small Scale

Industries, and in association with the National

Small Industries Corporation (NSIC) and Small

Industries Development Bank of India (SIDBI)

organised “India Global Summit on MSMEs –

Facing Competition through Consolidation” on

25 – 26 November 2005 at New Delhi. The

Summit was inaugurated by Shri Pranab

Mukherjee, Defence Minister and Shri Mahabir

Prasad, Minister for Small Scale Industries and

Agro & Rural Industries. The Summit

witnessed participation from more than 500

delegates from India and abroad. While the

domestic participation basically comprised the

stakeholders from the MSME sector, the

overseas participation comprised

representatives from 34 countries across the

globe. The Summit aimed at enhancing

cooperation among the MSME in India and their

counterparts abroad and facilitating the

process of globalisation.

65

Shri Pranab Mukherjee, Hon’ble Defence Minister lighting the lamp at the inauguration of India Global Summit on SME’ during25-26 November, 2005. (Below) Shri Mahabir Prasad, Hon’ble Minister of SSI&ARI is addressing the delegates

66

6.3 PAN COMMONWEALTHINSTITUTION BUILDINGPROGRAMMES ONSMALL BUSINESSCOMPETITIVENESSDEVELOPMENT

6.3.1 NSIC in association with the

Commonwealth Secretariat, London organised

the second (in a series of

four institution-building programmes)

Commonwealth - India Small Business

Competitiveness Development Programme

during 17-22 April 2005 at Chennai. 61 policy

makers and practitioners, representing 36

Member States of the Commonwealth attended

this programme. The focus of the programme

was on the role of technology and financing in

developing small business competitiveness and

on pro-poor employment generation

programmes, through the development of agro

and rural industries.

6.3.2 NSIC organised the third

Commonwealth Programme on Small

Business Competitiveness Development

during 20-25, November, 2005 at New Delhi.

The theme of the programme was

“Networking the Commonwealth SMEs

through Sharing Best Practices for

Enhanced Competitiveness”. Fifty senior

policy makers and practitioners representing

35 member States of the Commonwealth

attended the five-day programme. The

participants were exposed to a combination

of best practices, case studies and field

visits.

6.4 OTHER SIGNIFICANTEVENTS

(i) A Memorandum of Understanding (MoU)

on cooperation in the sphere of support

of small and private entrepreneurship

between India and Uzbekistan was signed

by the Minister (SSI & ARI) and the First

Deputy Prime Minister and Minister of

Economy, Government of Uzbekistan, on

05 April 2005, at New Delhi.

(ii) Minister (SSI & ARI) visited Mauritius to

attend the SME and Handicrafts Fair-

2005, during 08-10 April 2005, at the

Shri Pravir Kumar, Joint Secretary, Ministry of SSI, addressingthe participants at the Valedictory session of the India Global

Summit on MSMEs

67

invitation of the Minister of Small

Enterprises, Cooperatives, Handicrafts

and Informal Sector, Government of

Mauritius.

(iii) Mr. Nicolas Forissier, Minister of State for

Agriculture, Food Processing, Fisheries

and Rural Affairs, Republic of France met

the Minister (SSI & ARI) on 13 April 2005.

It was decided to establish a Sub-Group

on cooperation for matters relating to

small enterprises (particularly in the areas

of agro, rural, khadi & coir sectors) within

the Joint Working Group on Agriculture

(under the Indo French Agreement in the

field of Agriculture, Fisheries, Rural

Development, Forestry & Food

industries).

(iv) At the invitation of the World Association

of Small and Medium Enterprises

(WASME), Secretary (SSI & ARI)

participated in the WASME 2005-World

SME Convention –XVI International

Conference at Bucharest, Romania

during 14 – 19 May 2005 and made a

presentation at the Plenary Session on

“Indian SMEs – Harnessing Opportunities

of Globalisation”.

(v) The first Meeting of the Joint Committee

set up under the MoU between the

Governments of India and Sri Lanka on

cooperation in small-scale industries

sector was held at New Delhi on 7 July

2005. Dr. U. Vidana Pathirana, Secretary,

Ministry of Industry & Investment

Promotion, Government of Sri Lanka &

Shri Anupam Dasgupta, Secretary

(SSI&ARI) led the respective delegations

at the Joint Committee meeting.

(vi) Mr. Madan Murlidhar Dullo, Minister of

Foreign Affairs, International Trade and

Cooperation, Government of Mauritius

met Minister (SSI&ARI) in his office on 02

September 2005.

(vii) A delegation led by Mr. Mohammed Hanif

Atmar, Minister of Rural Rehabilitation and

Development, Government of Afghanistan

Shri Mahabir Prasad, Hon’ble Union Minister of SSI and ARI interacting with Women entrepreneurs from Seychelles participating inTechmart India 2005 organised by NSIC at New Delhi

68

met Minister (SSI&ARI) on 03 October

2005 and requested to depute a multi-

disciplinary team of experts from India

to Afghanistan to undertake study of

its small scale sector, identify its

strengths and weaknesses and make

recommendations on the possible

strategies for its development.

(viii) The Director, National Agency for Small

and Medium Size Enterprises and

Cooperative (NASMSEC), Government of

Romania, Mrs. Florentina Ionescu met

Joint Secretary (SSI) on 24 October 2005.

Both sides agreed to facilitate enterprise

- to - enterprise cooperation between India

and Romania through exchange of

Discussion taking place at the First Joint Committee Meeting as per the Memorandum of Understanding (MoU) between Ministryof Small Scale Industries. Govt. of India and Ministry of Industry, Govt. of Sri Lanka on 07.07.2005 at New Delhi

economic missions and delegations

comprising entrepreneurs.

(ix) A delegation led by H.E. Shri Alhaji Ahmed

Mohammad Makarfi, Executive Governor

of the Kaduna State of Nigeria, met

Minister (SSI&ARI) on 17.11.2005 at New

Delhi, to discuss cooperation in the small

scale sector between India & Nigeria. The

delegation also visited NSIC & Techmart.

(x) A delegation led by Mr. Mathew

Szymanski, Chief of Staff, U.S. House

Small Business Committee met

Secretary (SSI&ARI) on 13.12.2005 in

New Delhi, to discuss areas of

cooperation in the small scale sector.

69

(xi) The Mexican Ambassador in India

proposed an MoU for cooperation in the

small scale sector between the Ministry

of SSI, Government of India and

Secretariat of Economy of the United

Mexican States, which is likely to be

signed soon.

(xii) Secretary (SSI & ARI) visited the U.K. to

discuss ongoing and future Small

Business Development Competitiveness

Programmes with the Commonwealth

Secretariat.

70

7.1 The North Eastern region, consisting

of Assam, Arunachal Pradesh, Manipur,

Mizoram, Meghalaya, Nagaland, Tripura and

Sikkim, has abundant natural resources and

these resources can be harnessed for all-round

economic development of and employment

generation in the region through promotion and

establishment of micro and small enterprises.

Name of the State No of units Fixed investment Production Employment

(Rs. crore) (Rs crore)

SIKKIM 415 12.60 44 1580

ARUNACHAL 1411 34.17 69 4330

PRADESH

NAGALAND 15623 378.55 540 66466

MANIPUR 54101 403.67 703 153715

MIZORAM 12529 139.89 207 28622

TRIPURA 27448 329.27 461 62861

MEGHALAYA 25383 164.45 481 75607

ASSAM 219092 1287.39 4907 487871

TOTAL 356002 2749.99 7412 881052

7.2 PROFILE OF THE MSESECTOR IN NORTHEASTERN REGION

The available figures of estimated number of

SSI units, fixed investment, production and

employment in North Eastern region for

2004-05 are as follows:

7.3 The Ministry of SSI is actively

promoting the development of small scale

industries in the North Eastern region through

the programmes and schemes implemented

by its organisations. SIDO has SISIs at

Gangtok, Guwahati, Imphal, Agartala and also

ACTIVITIES IN THE NORTH EASTERNREGION

Chapter VII

71

Branch SISIs at Aizwal, Dimapur, Itanagar,

Diphu, Silchar, Tezpur, Shillong, and Tura.

There is a Tool Room and Training Centre

at Guwahati (see details in para. 2.13.10).

NSIC has a Technical Service Centre at

Guwahati and a network of offices in the

region, including Branch Office at Guwahati

(Assam) and sub-offices at Imphal (Manipur),

Dimapur (Nagaland), Itanagar (Arunachal

Pradesh), Shillong (Meghalaya) and Agartala

(Tripura).

7.4 SIGNIFICANT ACTIVITIES

7.4.1 As on 31 January 2006, 840 proposals

for loans Rs. 20.07 crore to SSI units were

approved under the Credit Guarantee Scheme

from the North Eastern States (including

Sikkim).

7.4.2 In 2005-06 (upto January 2006), 50

Entrepreneurship Development Programmes,

61 Motivational Campaigns and 39

Management Development Programmes were

conducted by the SIDO field institutions in the

region for 5039 persons.

7.4.3 For growth of small industries in the

region, the funding pattern of Integrated

Infrastructural Development (IID) Scheme has

been relaxed, providing for upto 80% of Central

grant with maximum of Rs. 4 crore.

7.4.4 The activities of the NSIC include

training programmes to increase self-

employment opportunities of the trainees in the

region. In Techmart India’ 2005, “North East

Panorama”, a special display of products from

North Eastern States, was organised to provide

marketing opportunities to the participating SSI

units. NSIC was awarded for Gold Medal for

“Special Display of North East Sector“ in the

IITF, 2005.

7.4.5 The activities of IIE, Guwahati in the

NER are detailed in paragraph 4.3 above.

NSIC organized “TECHMARTINDIA-2005” from November 14-27,2005 at Pragati Maidan, New Delhi.Techmart India 2005 showcased themanufacturing strengths of Indian

small scale Industries. It alsoprovided the platform from

technology seekers and technologyproviders to meet, discuss and

conclude agreements on technicalcollaboration/technology transfer etc.

Shri Mahabir Prasad, Hon’bleMinister of SSI&ARI is seen watching

the demonstration by SSIparticipants from North East at

Techmart India 2005

72

8.1 In the policy measure for promoting and

strengthening small, tiny and village enterprises

announced in Parliament on 06.08.1991, it was

stated that the definition of women enterprises

would be simplified. Accordingly, the definition of

‘Women Enterprises’ has been revised as under:

“A small scale industrial unit/industry - related

service or business enterprise, managed by

one or more women entrepreneurs in

proprietary concerns, or in which she/they

individually or jointly have a share capital of not

less then 51 per cent as partners/shareholders/

directors of private limited company/members

of co-operative society.”

8.2 PARTICIPATION OFWOMEN IN SSI SECTOR

8.2.1 In the Third All India Census of SSIs,

the participation of women in the SSI sector has

been categorised in three roles: some women

are owners of enterprises, some managers of

enterprises and some employees. With regard

to ownership, the definition mentioned above

has been adopted.

DEVELOPMENT ACTIVITIES FORWOMEN

ChapterVIII

8.2.2 The total number of women

enterprises in the SSI Sector was estimated at

10, 63, 721 (10.11 %). The estimated number

of enterprises actually managed by women was

9, 95, 141 (9.46 %).

8.2.3 About 13% of the women enterprises

were in the registered SSI category, the rest

being unregistered. Of the enterprises managed

by women, 11.5% were in the registered SSI

category.

8.2.4 The share of the units managed by

women in terms of employment was 7.14%.

The employment generated per Rs. 1 lakh

investment in the units managed by women

was 2.49.

8.2.5 The total number of female employees

in the SSI sector is estimated at 33, 17, 496.

About 57.62% of the women were employed in

SSI units located in the States of Tamil Nadu,

Kerala, Karnataka, West Bengal and Andhra

Pradesh.

8.2.6 The proportion of female employees

in the total employment in the SSI sector was

73

13.315%. In the States/Union Territories of

Mizoram, Orissa, Karnataka, Goa,

Lakshadweep, Kerala, Tamil Nadu and

Pondicherry, the share of women employment

was significantly higher (more than 20%),

compared with the total employment in the

respective States.

8.3 In India, Women entrepreneurs have

been in business for quite some time and

achieved remarkable success. However, their

number is still small. One of the reasons for

this is the initial hesitation and inhibition, which

emanates from the traditional and societal

perception of the role of women. Like any other

entrepreneurs, a new women entrepreneur has

to compete with those who are already well

established. Therefore, women entrepreneurs

have to not only face the gender insensitivity

and bias prevalent in the society but also

compete against established competition. In its

industrial policy, the Government of India has

laid considerable emphasis on the promotion

of women entrepreneurship, particularly first

generation women entrepreneurs, through

various training and support services. Special

attention is given by organising exclusive

entrepreneurship development programmes for

women. In these programmes, the trainees/

entrepreneurs are exposed, through

demonstration and training, to the manufacture

of a variety of products. Thus, many women

are trained every year by the Institutes of the

Ministry. The available feedback shows that

these women have not limited themselves to

the conventional ventures but also set up hi-

tech industries in the fields of information

technology, engineering, graded grey iron, non-

ferrous casting and sophisticated electronic

equipment, etc. Tool Rooms have started

designing special courses for women in the field

of tool engineering. Voluntary organisations in

the country are also doing commendable work

in the field of women entrepreneurship

development. Associations of women

entrepreneurs have also come up and are doing

remarkably well in some States.

8.4 TRAINING OF WOMENENTREPRENEURS

Various institutes of the SIDO conduct need -

based training programmes for existing and

prospective entrepreneurs. During 2005-06 (up

to December ’05), 15000 women participated

in these training programmes, i.e., Industrial

Motivational Campaigns, Entrepreneurship

Development Programmes and Management

Development Programmes conducted by SISIs

and CFTI, Agra and Chennai.

8.5 WOMEN EMPOWERMENTUNDER IID SCHEME

Association of Lady Entrepreneurs of Andhra

Pradesh (ALEAP), an NGO comprising the

women members only, has successfully

completed the implementation of an IID project

at village Gajularamaram, District Rangareddy,

A.P. 64 units have been established in this IID

Centre, which generated employment for 1400.

Further, 108 women entrepreneurs have

benefited from this project. Out of the total

project cost of Rs. 347 lakh, Government of India

74

provided grant to the tune of Rs. 139 lakh.

Another IID project at Vijyawada, District

Krishna, A.P. is being implemented by ALEAP.

The total project cost is Rs. 370 lakh.

Government of India grant of Rs. 91.38 lakh has

been released for this project.

8.6 TRADE RELATEDENTREPRENEURSHIPASSISTANCE ANDDEVELOPMENT (TREAD)FOR WOMEN

8.6.1 Women have been among the most

disadvantaged sections of the population with

regard to access to and control over resources.

Problems faced by them continue to be grave

particularly for illiterate & semi - literate women

of rural and urban areas In order to alleviate their

problems, Government of India launched a

scheme titled “Trade Related Entrepreneurship

Assistance and Development” (TREAD). The

scheme envisages economic empowerment of

such women through trade related training,

information and counselling/extension activities

related to trades, products, services etc.

8.6.2 Under this scheme, Government of

India (GoI) gives grant up to 30% of the total

project cost as appraised by lending institutions

which would finance the remaining 70% as loan

assistance to applicant women, who have no

easy access to credit from banks due to their

cumbersome procedures and the inability of

poor & usually illiterate/semi-literate women to

provide adequate collateral security. The GoI

grant and the loan from the lending agencies to

assist such women are routed through eligible

NGOs/SHGs/MFIs engaged in assisting poor

women through any kind of income generating

activities in non- farm sector.

8.6.3 Training organisations, viz., Small

Industries Service Institutes (SISIs),

Entrepreneurship Development Institutes

(EDIs), National Institute of Small Industries

Extension Training (NISIET) and the NGOs

conducting training programmes for

empowerment of women beneficiaries identified

under the scheme are provided a grant upto Rs.

1.00 lakh per programme, provided such

institutions also bring their share to the extent

of minimum 25% of the Government grant.

However NGOs are allowed to conduct training

programmes only after they take up some

lending proposals of women entrepreneurs

under this scheme.

8.6.4 Institutions such as NISIET, NIESBUD,

IIE, SISIs, EDIs sponsored by State

Governments and any other suitable institution

of repute are provided need based GoI grant

primarily for undertaking activities aiming at

empowerment of women such as field surveys,

research studies, evaluation studies, designing

of training modules, etc., covered under the

scheme. The grant is limited up to Rs. 5 lakh

per project.

8.6.5 During 2005-06, Rs. 7.73 lakh have

been sanctioned as GoI grant for capacity

building of three NGOs whose projects have

been appraised by Canara Bank. About 435

women beneficiaries are likely to be benefited

through the projects approved by the Bank

75

under the TREAD Scheme. It is expected that

10 more projects would be appraised during the

year and another 1000 women entrepreneurs

would benefit during the remaining period of the

current financial year.

8.6.6 Indian Institute of Entrepreneurship

(IIE), Dehradun and Guwahati have conducted

7 EDPs and provided process - cum - product

development training to 166 women under the

scheme. IIE, Dehradun has been sanctioned

grant of Rs. 3 lakh for conducting 3 EDPs under

the scheme. It is expected that another 100

women would be trained by IIE, Dehradun

during the remaining period of the current

financial year.

8.6.7 IIE, Dehradun and Guwahati are also

conducting two studies on “Prospects of

Women and Problems Faced by Women

Entrepreneurs” in the Uttaranchal and Assam

respectively.

76

9.1 Hindi is the Official Language of the

Union of India and the Government policy is

aimed at progressively increasing the use of

Hindi in official work. Effective steps were taken

during the year in the Ministry of Small Scale

Industries to ensure compliance of the Official

Language policy of the Government,

implementation of the annual programme and

compliance with the orders of the President on

the recommendations of the Committee of

Parliament on Official Language

9.2 COMPLIANCE OF THEPROVISIONS OF THEOFFICIAL LANGUAGEACT, 1963

All documents such as resolutions, general

orders, rules, licences, etc., under section 3(3)

of the Official Language Act and all papers laid

on the Tables of the Houses of Parliament were

issued in Hindi and English. The Ministry is

already notified under the Official Language

Rule 10(4).

9.3 REPLIES TO LETTERS INHINDI

All letters received in Hindi were replied to in

Hindi.

USE OF OFFICIAL LANGUAGE

Chapter IX

9.4 CORRESPONDENCE INHINDI

Letters to State Governments, Union Territory

Administrations and Central Government offices

located in regions ‘A’ and ‘B’ were issued in Hindi,

to the maximum extent possible. Similarly, efforts

were made to send letters in Hindi to Central

Government offices located in region ‘C’, as per

the targets laid down in the annual programme.

9.5 SECTIONS SPECIFIEDFOR WORKING IN HINDI

The sections of the Ministry, notified for doing

all work in Hindi, are working satisfactorily.

9.6 MONITORING ANDINSPECTIONS

In order to ensure compliance of the Official

Language policy, there is constant monitoring

and review of the progress reports. During the

year, six Sections of the Ministry were inspected

, to ensure use of Hindi and compliance of the

Official Language policy.

9.7 TRAINING OF OFFICIALS

All officials of the Ministry have already been

trained in Hindi typing and stenography.

77

9.8 USE OF MECHANICALAIDS

As required under the Official Language Act,

bilingual facilities have been provided on office

equipment in the Ministry. Computers and

terminals have also been installed with facility

to work in Hindi.

9.9 HINDI MONTH

Hindi month was celebrated during September,

2005 in the Ministry. Competitions were

organised during this period in Hindi typing,

Hindi stenography, debate in Hindi, Hindi essay

writing and noting and drafting in Hindi. A large

number of officers and employees participated

with enthusiasm. The messages of the Home

Minister and Cabinet Secretary were circulated

for information and compliance on this

occasion.

78

10.1 The vigilance unit of the Ministry is

headed by a Chief Vigilance Officer (CVO) of

the rank of Joint Secretary, Ministry of Small

Scale Industries appointed on the advice of

the Central Vigilance Commission (CVC).

The CVO functions as the nodal point in the

vigilance set-up of the Ministry. The

secretariat assistance to the CVO in the

Ministry of SSI is, however, provided by the

Vigilance Desk of the Department of

Industrial Policy & Promotion (DIPP),

Ministry of Commerce and Industry as the

Ministry of SSI does not have its independent

vigilance unit. The vigilance unit is, inter alia,

responsible for the following:

� identification of sensitive areas prone to

malpractices/temptations and taking

preventive measures to ensure

integrity/efficiency in Government

functioning;

� taking suitable action to achieve the

targets fixed by the Department of

Personnel & Training (DoPT)on anti-

corruption measures;

� scrutiny of complaints and initiation of

appropriate investigation measures;

� inspections and follow-up action on the

foregoing;

VIGILANCE MATTERS

Chapter X

� furnishing comments to the CVC on the

investigation reports of the Central Bureau

of Investigation(CBI);

� taking appropriate action in respect of

departmental proceedings on the advice

of the DoPT & CVC;

� obtaining second stage advice of the

CVC, wherever necessary; and

� obtaining advice of the Union Public

Service Commission (UPSC) in regard

to the nature and quantum of penalty to

be imposed, wherever necessary.

1.1 Preventive vigilance continues to

receive attention with emphasis on identification

of areas sensitive/prone to malpractices and

temptations. The guidelines/instructions issued

by the DoPT and the CVC from time to time in

this regard are followed. Action taken includes

the following:

i) Regular and surprise inspections are

carried out by the Departmental Security

Officer of the DIPP. In the attached and

subordinate offices, respective

Departmental Security Officers carry out

these inspections.

ii) Strengthening of vigilance machinery by

way of appointing CVO in the offices and

79

organisations under the Ministry, who

looks after the vigilance activities in the

office/organization concerned.

iii) A strict watch is kept on liaison men and

on other persons. The Departmental

security instructions are iterated from time

to time for streamlining entry of outsiders

in the building. To end the practice of

professional liaison men operating in the

Ministry, a fresh list of such unwanted

liaison men has been prepared.

iv) Cases of the officers, who have attained

the age of 50 years or have put in 30 years

of service, are reviewed under FR 56 (j)

in order to judge their suitability to continue

in service thereafter. The exercise is

currently being done by the Establishment

Division of the DIPP.

v) In order to make officers conscious of the

provisions of Conduct Rules applicable

to them as also to acquaint them with the

importance of departmental security,

Rules/Instructions are reiterated in this

respect from time to time.

10.2 SMALL INDUSTRIESDEVELOPMENTORGANISATION

The Vigilance Unit in the office of the

Development Commissioner (Small Scale

Industries), New Delhi, is headed by a CVO of

the rank of Director appointed on the advice of

the Central Vigilance Commission (CVC), with

full complement of staff under him. The CVO is

also responsible for all the field offices of the

SIDO. The Vigilance Section deals with vigilance

matters like complaints and vigilance cases

coming within the purview of CCS (CCA) Rules,

1965 concerning Small Industries Development

Organization.

10.2.1 Apart from dealing with complaints and

vigilance cases against officers and staff

relating to corruption and improper motives, a

number of anonymous/pseudonymous

complaints as also complaints and vigilance

cases other than those of corruption or improper

motives pertaining to the officers of Small

Industries Development Organisation were also

handled. All complaints relating to corruption/

improper motives and/or delays were

investigated and suitable action taken against

officers found guilty of misconduct/

misbehaviour.

2.2 The vigilance cases in respect of

Group ‘C’ & ‘D’ staff of field offices are attended

to by the Director of the institute/centre who is

assisted by AD (Admn).The services of senior

officers both at the Headquarters office and in

the field offices are utilized for investigating the

complaints.

10.3 NATIONAL SMALLINDUSTRIESCORPORATION (NSIC)

NSIC has its own part time CVO appointed on

the advice of the CVC.

80

11.1 This Charter is a declaration of the

Ministry, incorporating its mission and

commitment to the small scale entrepreneurs

and for the people of India in general.

11.2 MINISTRY OF SSI

The Ministry of Small Scale Industries is

responsible for formulation of policies and

designing programmes, projects and

schemes for promoting the growth of micro

and small enterprises in the country. The

policies and programmes/projects/schemes

are implemented by the organisations like the

Small Industry Development Organization

(SIDO), National Small Industries Corporation

Ltd. (NSIC), national level Entrepreneurship

Development Institutes, etc. The Organisations

of the Ministry have their own Citizen’s Charters.

11.3 MISSION

The mission of the Ministry is to promote, in

cooperation with other Ministries and

Departments of the Central Government, State

Governments, Union Territory Administrations

and all other stakeholders, the growth and

development of the micro and small

enterprises and to enhance their

competitiveness so that these enterprises

CITIZENS’ CHARTER

Chapter XI

contribute to accelerating the expansion of

productive employment opportunities in the

country. The Ministry seeks to fulfil its mission

by formulating appropriate policies and

designing/implementing support measures in

the fields of credit, technological upgradation,

marketing, entrepreneurship development,

etc., and undertaking effective advocacy for

these purposes.

11.4 COMMITMENT

The Ministry and its organisations are committed

to providing efficient and prompt service with

transparency and courtesy to the with citizens

and individual or groups of micro and small

enterprises.

Towards this, the Ministry will, in the spirit of

dutiful discipline, respect the rights of

individuals, entrepreneurs and their

associations. The Ministry will maintain and

uphold the confidentiality of personal and

business information disclosed to it by the

citizens. The Ministry and its organisations will

continuously review the policies and

programmes and enforcement of related laws

and regulations, in consultation with the

stakeholders concerned, with the aim of fulfilling

its mission.

81

11.5 STANDARD FORGENERAL PROCEDURE

The letters received by the Ministry will be

acknowledged within 15 days and replied to as

soon as possible.

11.6 RESPONSIBILITIES OFOUR CITIZENS

The Ministry expects continuous feed back from

the citizen on the quality of the services provided

to them and on areas in which improvements

are expected.

11.7 ASSESSINGPERFORMANCE

The Ministry will, from time to time, share its

performance with the citizens and stakeholders

through the media and its website. The Ministry

will also undertake independent surveys on

perceptions of the citizens and assessment of

its performance.

11.8 GUIDANCE AND HELP

The Information and Facilitation Counter of

the Ministry, located on the ground floor,

Gate No. 4, Nirman Bhavan, New Delhi, will

provide information on the services and

activi t ies of the Ministry and i ts

organisations.

11.9 COMPLAINTS

In case of any complaint, one may

telephone or send a letter or fax or visit the

Ministry at Udyog Bhavan, New Delhi.

However, before lodging of a complaint, one

may, first of all, use the Information and

Facilitation Counter of the Ministry. In case

one is not satisfied, the matter may be taken

up with the Grievance Off icer in this

Ministry. The address, phone and fax

numbers of the Information and Facilitation

Counter and the Grievance Cell are as

follows:

IMPORTANT ADDRESSES WEBSITES ADDRESS

(1) Grievance Cell http.//ssi.gov.in - Ministry of SSI

Deputy Secretary www.laghu-udyog.com - SIDO

Ministry of SSI www.nsicindia.com - NSIC

Room No. 124-D www.niesbud.com - NIESBUD

Udyog Bhavan www.nisiet.com - NISIET

New Delhi - 110011 www.iie.nic.in - IIE

Tel. No. 23061431

No. 011-23061756 (Fax)

(2) Information and Facilitation Counter

Gate No. 4, Ground Floor,

Nirman Bhavan, New Delhi-110 011

Tel. No. 23062219

82

NATIONAL SMALL INDUSTRIESCORPORATION LIMITED (NSIC)

LOAN ASSISTANCE ANDRECOVERY PERFORMANCE

(REPORT NO. 4 OF 2005COMMERCIAL)

The review of loan assistance and recovery

performance was done by the office of the

Comptroller and Auditor General (C & AG) of

India based on the operation of NSIC in earlier

years. The audit paragraphs included in the

C&AG’s report on the basis of this review are

given below. The gist of the replies to these

paragraphs is given below:

Para:

The Company was incorporated in February

1955 to provide financial assistance to small

industrial units for industrial development

of the country. However, due to the

deficiencies in the pre-sanction appraisals

and weak recovery mechanism, a very large

SUMMARY OF RECENT AND IMPORTANTAUDIT OBSERVATIONS AND REPLIES

THERETO

Annexure I

percentage of its debts have become bad

and doubtful. Accumulated losses as on 31st

March 2004 stood at Rs. 143.52 crore.

Reply:

The amount of accumulated losses of

Rs. 143.52 crore as on 31st March 2004 was

due mainly to making provisions for doubtful

debts, as per provisioning norms approved by

Board of Directors. As a corrective measure,

the Corporation has since strengthened its

appraisal system and also tightened the security

norms under various schemes to control the

defaults, so that additional provisions do not

become necessary.

The Corporation has also geared up its recovery

mechanism. A separate recovery cell headed

by a senior officer has been set up to monitor

the recovery progress regularly. A scheme of

one time settlement in respect of old cases has

also been introduced with a view to settling the

old default cases.

As a result, the provisions for doubtful debts

have come down to Rs.126.47 crore as on

83

31.3.2005 from Rs.137.63 crore as on

31.3.2002. The financing schemes have also

been reviewed and the following corrective

steps have been taken:

a. The Bill Discounting Scheme, based only

on the security of the supply bills of the

SSI units and generally no other collateral,

has been discontinued.

b. Raw Material Assistance Scheme has

been modified to supply material to the

SSI units against security of bank

guarantee. Earlier, collateral security of

land and building, Letter of Credit, etc.,

was also taken.

c. Long term financing under the Hire

Purchase and Term Loan Scheme has

been modified, requiring 100% collateral

security. Financing under this scheme has

been restricted up to Rs. 5 lakh w.e.f.

01.01.2006. Cases beyond Rs.5 lakh

would be forwarded to nationalised banks,

with which tie up arrangements have been

made for sanction of such proposals.

Para:

Recovery performance being poor, the

Company had to avail of a loan of Rs.70

crore from Small Industries Development

Bank of India leading to payment of interest

of Rs.22.95 crore during the period 1998-99

to 2003-04, which could have been avoided.

Reply:

The Corporation had availed of financial

accommodation from the Small Industries

Development Bank of India (SIDBI) to meet

its working capital requirement. There was no

increase in borrowings to meet cash crunch.

Total borrowing as on 31.3.1999 was

Rs. 288.27 crore, which was reduced to

Rs. 219.25 crore as on 31.3.2001 and further

to Rs. 117.50 crore only as on 31.3.2005.

Dues of the SIDBI have been fully repaid on

31.3.2004 and there is no more interest

burden on this account

Para:

Due to poor recovery performance, the Non

Performing Assets (NPA) stood at Rs. 184.97

crore (86 per cent) of the total outstanding

loan of Rs. 215.56 crore as on 31st March,

2004.

Reply:

The system of monitoring of outstanding dues

and follow up of over due amounts has been

strengthened by the Corporation. A Default

Management and Recovery Cell has been set

up at the Head Office for effective and regular

monitoring of defaults. The Corporation has

taken various measures to not only recover the

old dues but also prevent occurrence of further

defaults in future.

Some of the initiatives taken by the Corporation

for stepping up of the recovery of dues are

mentioned below:

i The assisted units are being inspected

and the entrepreneurs and guarantors

are being contacted regularly to assess

the condition and availability of the

84

machine(s) and functioning of the unit

and press the entrepreneurs for

repayment of dues.

ii Critical review of default cases is made

by Default Review Committee (DRC) of

NSIC.

iii A Default Management & Recovery cell

(DMRC) has been established at the

Head Office under the control of a senior

executive. Default cases are being closely

monitored by the DMRC.

iv For extending opportunity to the defaulting

units to settle the outstanding dues, a One

Time Settlement Scheme (OTS) has

been launched, based on the guidelines

issued by the Reserve Bank of India for

settlement of defaults of SMEs by the

Banks and Financial Institutions.

v A computerised data base has been

created at the Branches in respect of all

accounts where financial assistance is

provided.

vi Greater emphasis is being laid on

recovery in cases wherein provisions are

likely to increase due to change in their

age classification.

vii To present further increase in defaults,

steps have been taken to strengthen the

pre-sanction/disbursement norms as

well as post-disbursement follow up.

Security norms have also been tightened.

With these measures, the recovery of dues has

improved which may be observed from the

following:

85

2) Recovery Performance of Overdues:

The overdue amounts have also come down

from Rs. 224.53 crore as on 31.03.03 to Rs.

211.13 crore as on 31.03.05. 71% of the total

default of the Corporation, as on 31st March 05,

is under litigation.

Though the Corporation has resorted to

various legal measures; namely, filing of

Recovery Certificate (RCs) proceedings,

wherever permitted by the State Laws, filing

criminal complaints under section 138 of the

Negotiable Instruments (NI) Act in cases of the

cheques issued being dishonoured by the

banks, etc., the actual realisation, however

depends on the disposal of the cases by the

relevant Courts.

In addition, the following measures have also

been initiated to address the defaults in legal

cases:

i. Interim petitions for injunctions,

attachment before judgement and

appointment of Receivers are also being

moved where charged assets are

available to create pressure on the

borrowers / guarantors to settle the dues

of the Corporation.

ii. Steps have been taken to the ascertain

personal assets of the borrowers /

guarantors by verification with the

authorities like Income Tax Department,

Office of the Registrar of Companies,

Registrar of Societies, Municipality and

village revenue officials.

iii. Early execution of Recovery Certificates

is being pursued.

iv. In the cases of criminal complaint

under section 138 of the N.I. Act,

necessary steps are being taken

immediately after filing the complaint to

complete service of notice on the

accused persons and constant follow

up with the advocates to expedite

disposal of such cases.

v. Performance of the advocates is being

reviewed and non-performing advocates

are being de-empanelled.

vi. Suit cards have been prepared to register

the progress and development of each

case under litigation by the branches and

monthly development report of each case

is being submitted to the Head Office to

enable close monitoring of the cases.

Para:

In 24 cases test checked in audit,

deficiencies were noticed in appraisal,

sanction and follow up which led to non-

recovery of Rs. 18.61 crore.

1) Recovery of Current Dues under

Equipment Finance Schemes:

Year % Recovery of

current dues (fallen

due during the year)

2002-03 63

2003-04 65

2004-05 71

86

Reply:

All the default cases are being monitored closely

by the branches concerned as well as Default

Review Committees and corrective steps are

being initiated for recovering the dues. Out of

24 cases involving Rs. 18.61 crore, four cases

involving Rs.108.97 lakh have been settled and

part recovery has also been made in four more

cases detailed below:

(Rs. Lakh)

Sl. Name of unit Amount of Status

No. over dues

as reported

by the Govt.

Auditor

1 M/s. Hanuman Bricks (P) Ltd. 23.92 Account closed.

2. M/s. Raghvendra Industries 17.10 Account closed.

3. M/s. Hanung Toys 50.03 Account closed.

4 M/s. Viknesh Knits 17.92 Full amount recovered.

5. M/s. Leela Apparels 40.60 Rs. 16.80 lakh recovered, party being pursued

for balance recovery.

6. M/s. Shivi Poly Pax 62.26 Party has offered to settle the account, which

is under consideration.

7. SSI units of Jaipur (BD) 200.03 Settlement offer in 4 accounts for Rs. 90 lakh

received which is under consideration.

8. SSI units of Kolkata (RMA) 949.71 In most cases, the amount is to be recovered

from State Electricity Boards (SEBs) to settle

the unit’s account. An amount of Rs. 287 lakh

has been received from the Kerala SEB and

Rs. 32 lakh has been recovered from Tamil

Nadu SEB. Payment of Rs. 258 lakh is

expected from TNEB before March’06. IFC has

allowed claim of Rs.853 lakh in favour of NSIC.

KSEB has obtained stay from High Court.

Efforts are being made to get the stay vacated

to enforce the recovery of awarded amount.

87

In the remaining 16 accounts for amounts

outstanding of Rs. 5 crore, the process of

recovery by filing suit / arbitration / RC, wherever

applicable, has already started. Intensive efforts

are also being made to amicably settle the

account under the One Time Settlement

Scheme or Out of Court settlement, wherever

possible.

Para:

2053 civil suits/ petitions for recovery of

Rs.181.66 crore are pending in various

courts. The Corporation could not execute

decrees in 816 cases involving Rs.36.51

crore due to ineffective follow up. Further

in 12 cases chances of recovery of Rs.37.34

crore are remote.

Reply:

The Corporation has constantly followed up for

obtaining decrees in the legal suits, execution

of decrees and also ascertaining the means

and assets of judgment Debtors for filing of

execution petitions so that effective executions

are possible. In order to monitor the legal cases,

the Corporation has introduced a suit card

system in which all the particulars are noted

including the date of filing, the suit claim amount

together with present position of the cases and

the securities held.

Pressure have been created in most of the suit

filed decreed accounts as well as upon

judgement Debtors to settle the dues of

Corporation by way of compromise/settlement

or by execution of decrees /recovery certificates

Para:

The Company lost Rs. 1.89 crore due to

failure in monitoring the disposal of seized

machinery.

Reply:

The Government Auditors had observed that Rs.

2.15 crore was receivable in loan accounts

where 69 machines were seized by the

branches of NSIC but could not be disposed of.

The loss of Rs.1.89 crore is arrived at by the

Audit after adjusting the reserve price of

machines and ground rent.

The outstanding dues comprise overdue

instalment amount, interest for delayed period

& misc. and other charges debited to the

account. The outstanding dues after deducting

reserve price of the machines may not be

considered as loss since the Corporation has

S. Particulars No. of

No. cases

1 Civil suits/ R.C. pending 1133

in various courts

2 Cases Decreed 805

(A) Decree not executed 291

(B) Decree under execution 514

Total 1938

with the result , we have recovered considerable

dues. Total no of cases under all categories at

present are 1938 including new suits filed during

the current financial year. The present status of

pending civil/ R.C. and Execution petitions is

as under:-

88

recourse to recover the dues from the hirers by

initiating legal process for recovery of resultant

loss or by way of settlement / compromise of

accounts.

Concerted efforts have been made for speedy

disposal of the machines seized by the

branches. Amendments to the policy on

expeditious sale of seized machinery have been

made by the branches. Accordingly 42 seized

machines have been sold and efforts are in

progress for disposal of the remaining 27

machines. Disposal of machines is a time

consuming process due to the following

reasons:

1. Poor condition of the machines at the time

of seizer.

2. Wear and tear due to transportation of the

machines. Sometimes the machines are

seized at site only due to their heavy /

bulky size.

3. Obsolescence / outdated technology.

4. No / lack of response from the buyers.

5. Offer received from the buyers are far

below the reserve price / market price of

machines.

6. Vital parts of seized machines are often

missing, which affects their sale

adversely.

7. Delay in getting permission from the

Courts concerned.

Some of the machines have been seized under

the directions of Courts due to non-payment of

dues of the Corporation, and, therefore, such

machines cannot be disposed of unless the

Court permits. Such machines are lying in the

godowns, pending Court’s decision. Efforts are

also being made through legal counsels to seek

permission of the Courts for early disposal of

such machines.

89

Annexure IIPERFORMANCE INDICATORS:

90

CAD Computer Aided Design

CAM Computer Aided Manufacturing

CFTI Central Footwear Training Institute

CGFS Credit Guarantee Fund Scheme

CLCSS Credit Linked Capital Subsidy

Scheme

CNC Computerized Numerical Control

DC (SSI) Development Commissioner

(Small Scale Industries)

EDP Entrepreneurship Development

Programme

FTS Field Testing Station

IDTR Indo-Danish Tool Room

IGTR Indo-German Tool Room

IID Integrated Infrastructural

Development

IIE Indian Institute of Entrepreneurship

ISO International Organisation for

Standardization

LUCC Laghu Udyami Credit Card

MDA Market Development Assistance

MDP Management Development

Programme

NEF National Equity Fund

NIESBUD National Institute for

Entrepreneurship and Small

Business Development

NISIET National Institute of Small Industry

Extension Training

NSIC National Small Industries

Corporation Limited.

NTSC National Small Industries

Corporation Technical Service

Centre

PPDC Process-cum-Product

Development Centre

RTC Regional Testing Centre

SDP Skill Development Programme

SENET Small Enterprise Information and

Resource Centre Network

SEPTI Small Entrepreneurs Promotion

and Training Institutes

SIDO Small Industries Development

Organisation

SME Small and Medium Enterprises

SSI Small Scale Industries

TDMF Technology Development

Modernisation Fund

TRC Technology Research Centre

TREAD Trade Related Entrepreneurship

Assistance and Development for

Women

TRTC Tool Room and Training Centre

VDP Vendor Development Programme

WTO World Trade Organisation

UNIT

1 crore 10 million

10 lakh 1 million

1 lakh 100 thousand

A C R O N Y M S