MICRO, SMALL AND MEDIUM ENTERPRISE

PRESENTED BY

SAVI ARORA

PGDM 2013-2015

What is an Enterprise?

A business or company.

Entrepreneurial activity, especially when accompanied by initiative and resourcefulness.

Definitions of Micro, Small & Medium Enterprises

MSME are classified in two Classes:

(a) Manufacturing Enterprises- The enterprises engaged in the manufacture or production of goods or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use.

(b) Service Enterprises: The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.

Investment Limit

The limit for investment in plant and machinery / equipment for manufacturing enterprises.:

Manufacturing Sector

Enterprises Investment in Plant & machinery

Micro Enterprises Does not exceed twenty five lakh rupees

Small Enterprises More than twenty five lakh rupees but does not exceed five crore rupees

Medium Enterprises More than five crore rupees but does not exceed ten crore rupees

Investment Limit

The limit for investment in plant and machinery / equipment for service enterprises.:

Service Sector

Enterprises Investment in Plant & machinery

Micro Enterprises Does not exceed ten lakh rupees

Small Enterprises More than ten lakh rupees but does not exceed two crore rupees

Medium Enterprises More than two crore rupees but does not exceed five crore rupees

MSME – Organizational Structure

Abbreviations Used

S. No. Abbreviations Descriptions

1 DC(MSME)Development Commissioner (Micro, Small & Medium

Enterprises).

2 MSME-DIMicro, Small & Medium Enterprises Development Institute.

Institute.

3 Br. MSME DIBranch Micro, Small & Medium Enterprises Development

Development Institute

4 MSMEPTIMicro, Small & Medium Enterprise Promotional Testing

Institute.

5 SME-TR Micro, Small & Medium Enterprise Tool Room.

6 CDGI Centre for Development of Glass Industry.

7 HTDDTC Hand Tool Design Development & Training Centre.

8 MSME (TC) Micro, Small & Medium Enterprises Testing Centre.

9 MSME (TS) Micro, Small & Medium Enterprises Testing Station.

10 ESTC Electronic Service & Training Centre.

11 IDEMI Institute for Design, Electrical Measuring Instruments.

12 FFDC Fragrance & Flavour Development Centre.

MSME-DI or Branch MSME-DI

There are 30 MSME-DIs and 28 Branch MSME-DIs set up in state capitals and other industrial cities all over the country.

The main activities of these institutions are as follows:-

Assistance/Consultancy rendered to existing units

Preparation of State Industrial Profiles

Preparation/Updation of District Industrial Potential Surveys

Project Profiles, Industrial Training, ISO Programmes, EDPs/MDPs/IMCs & other Special Training Programmes etc.

DIVISIONS/ SECTIONS – MSME – DI, Ldh

Chemical Division

Glass and Ceramics Division

Food Division

Mechanical Division

SENET ( Small Enterprise Network )

Metallurgy Division

Industrial Management and Training Division

Economic Investigation Division

Hosiery Division

Schemes

National Manufacturing Competitiveness Programme(NMCP) Schemes Under XI Plan

The Government has announced formulation of National Competitiveness Programme in 2005

with an objective to support the Small and Medium Enterprises (SMEs)

in their endeavor

to become competitive and adjust the competitive pressure

caused by

liberalization and moderation of tariff rates.

Micro & Small Enterprises Cluster Development Programme(MSE-CDP)

DC(MSME) launched MSE-CDP for holistic development of selected MSEs clusters through value chain and supply chain management on co-operative basis.

addressing common issues such as improvement of technology, skills and quality, market access, access to capital, etc.

formation of self help groups, consortia, upgradation of associations

create/upgrade infrastructural facilities in the new/existing industrial areas/ clusters of MSEs.

set up common facility centres (for testing, training centre, raw material depot, effluent treatment, complementing production processes, etc).

Credit Linked Capital Subsidy Scheme for Technology Upgradation

The Scheme was launched in October, 2000 aimed at facilitating TechnologyUpgradation of Micro and Small Enterprises by providing 15% capital subsidy(limited to maximum Rs.15 lakhs) for purchase of Plant & Machinery.

Maximum limit of eligible loan for calculation of subsidy under the scheme isRs.100 lakhs.

Presently, more than 1500 well established/improved technologies under 51sub-sectors have been approved under the Scheme.

Credit Guarantee Fund Scheme

The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) was launched by the Government of India (GoI) to make available collateral-free credit to the micro and small enterprise sector.

The Ministry of Micro, Small and Medium Enterprises, GoI and Small Industries Development Bank of India (SIDBI), established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement the Credit Guarantee Fund Scheme.

The credit facilities are both term loans and/or working capital facility up to Rs.100 lakh per borrowing unit, extended without any collateral security and/or third party guarantee, to a new or existing micro and small enterprise

Quality Upgradation through incentive for ISO 9000/ISO 14001/HACCP Certifiation

The Scheme envisages reimbursement of charges of acquiring ISO-9000/ISO-14001/HACCP certifications to the extent of 75% of the expenditure subject to a maximum of Rs. 75,000/- in each case.

MSME MDA

The scheme offers funding for:

1. Participation in International Trade Fairs/ Exhibitions under MSME India stall.

2. Sector specific market studies by Industry Associations/ Export Promotion Councils/ Federation of Indian Export Organisation.

3. Initiating/ contesting anti‐dumping cases by SSI Associations and

4. Reimbursement of 75% of one time registration fee and 75% of annual fees.

Export Promotion

Export Promotion

The Micro, Small and Medium Enterprises(MSME) Sectorcontribute significantly to the manufacturing output,employment and exports of the country.

It is estimated that in terms of value, the sector counts forabout 40 per cent of the total exports of the country.

Export Promotion

Export Promotion Strategy which includes:

simplification of procedures,

incentives for higher production of exports,

preferential treatment to MSMEs in market development fund,

simplification of duty drawback rules, etc

Export Promotion

Training Programmes on Packaging for Exports are organized in various parts of the country by all MSME-DI in association with Indian Institute of Packaging (IIP), Mumbai.

All matters relating to Export-Import Policy, export related problems, representations from Trade & Industry relating to Export-Import issues etc., are also being looked after, in the EP Division

Support for Entrepreneurial and ManagerialDevelopment of SMEs through Incubators

The main objective of the scheme is to promote emergingtechnological and knowledge based innovative ventures thatseek the nurturing of ideas from professionals beyond thetraditional activities of Micro, Small & Medium Enterprises(MSMEs).

100 “Business Incubators” (BIs) are to be set up underTechnology (Host) Institutions

Building Awareness on Intellectual Property Rights (IPR)

The objective is to enhance awareness of MSME about Intellectual Property Rights (IPRs) to take measures for the protecting their ideas and business strategies.

Effective utilization of IPR tools by MSMEs would also assist them in technology upgradation and enhancing competitiveness.

TRAINING PROGRAMMES

TRAINING PROGRAMMES

Conduct Product & Process Oriented EDPs/SDPs for different target groups such as educated unemployed youths. General & Technical Graduates, women, ex-servicemen etc.

Industrial Motivational Campaign:-

Entrepreneurship Development Programme:-

Entrepreneurial and Skill Development Programmes:-

Management Development Programme:-

Skill Development Programme:

Setting up a Micro, Small and Medium Enterprise

(a) Project Selection

(b) Technology and Machinery

(c) Arranging Finance

(d) Unit Development

(e) Filing of Entrepreneurs’ Memorandum & Addresses of DICs

(f) Approvals

(g) Clearances

(h) Quality Certification

Project Selection

It all begins with an Idea

Once the ideas are screened and a viable business opportunity emerges the project has to be conceptualised in all its dimensions. The 4 Ps of Project Conception is:

- PRODUCT (Shape, Size and Nature)

- PROCESS (Technology to produce the product)

- PLACE (Location of Plant)

- PARTNER (Technological of Financial Collaborator)

Technology and Machinery

Process Selection

Choices of process technology emerge once the product is finalised.

Technology intensive or labor intensive?

The main objective of National micro, small and medium enterprises (NMSME) is to provide machinery and equipment to small industrial units offering them long repayment period with moderate rate of interest.

Arranging Finance

Financial assistance in India for MSME units is available from a variety of institutions

I. Commercial/Regional Rural/Co-operative Banks.

II. SIDBI: Small Industries Development Bank of India (refinance and direct lending)

III. SFCs/SIDCs: State Financial Corporations (e.g. Delhi Financial Corporation)/State Industrial Development Corporations.

Unit Development

After deciding the issues of product and process, the next important question is where to set the unit up?

Construction of Building

Getting the Utility Connections: Power Connection – LT, HT

Getting 3M's Right

Men

Machinery

Materials

Filing of Entrepreneurs Memorandum

The following form basis of evaluation:

The unit has obtained all necessary clearances whether statutory or administrative. e.g. drug license under drug control order, NOC from Pollution Control Board, if required etc.

Unit does not violate any locational restrictions in force, at the time of evaluation.

Value of plant and machinery is within prescribed limits.

Unit is not owned, controlled or subsidiary of any other industrial undertaking as per notification.

District Industries Centre

Industrial Estate, Ludhiana

0161-2532052Fax: 0161-2534558

gmludhiana@punjabmail.gov.in

Approvals

Every SSI unit has to comply with various regulations in force. These include regulatory, taxation, environmental and certain product specific clearances.

Exemption from Compulsory Licence

No industrial license is required except in case of 6 product groups included in compulsory licensing

An entrepreneur can set up a SSI unit anywhere in the country without any restriction

Clearences

An entrepreneur has to obtain several clearances or permissions depending upon the nature of his unit and products manufactured.

Regulatory or Taxation Clearances : reg. under sales tax, central excise act, ITO, partnership deed, power connection etc.

Environment & Pollution Related Clearances: For 17 sectors which includes- Sugar, cement, thermal power, oil refinery etc.

Product Specific Clearances: For eg.: printing press, cold storage, drug & pharmaceuticals etc.

Quality Certification

To avail the certification of ISO-9000, a unit has to undertake significant costs.

A scheme has been launched to give financial incentive to those SSI units who acquire ISO-9000 certification, by reimbursing 75% of their costs of obtaining certification, subject to a maximum of Rs. 0.75 lacs per unit.

The SSI units are also encouraged to participate in quality awareness and learning programmes organised specially for their benefit.

Congratulations!!

Great! Now You have set up your own MSME Unit!

Enjoy Being an Entrepreneur!

Cheers!!

THANK YOU!