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Entrepreneurial Development – 17MBA26

Module 4: (6 Hours)
Institutions Supporting entrepreneurs: Small industry financing developing countries, A
brief overview of financial institutions in India, Central level and state level institutions,
SIDBI, NABARD, IDBI, SIDCO, Indian Institute of Entrepreneurship, DIC, Single Window,
Latest Industrial Policy of Government of India

Introduction:

These institutions are supporting the entrepreneurs in various aspects of the business
such as education, training, finance, marketing etc.

The list of various State and Central Government agencies supporting small-scale
industries and their activities and functions are discussed in the following sections.

Financial Institutions

Financial sector plays an indispensable role in the overall development of a country. The
most important constituent of this sector is the financial institutions, which act as a
conduit for the transfer of resources from net savers to net borrowers, that is, from those
who spend less than their earnings to those who spend more than their earnings. The
financial institutions have traditionally been the major source of long-term funds for the
economy. These institutions provide a variety of financial products and services to fulfill
the varied needs of the commercial sector. Besides, they provide assistance to new
enterprises, small and medium firms as well as to the industries established in backward
areas.

Financing institutions: Finance is one of the essential requirements of an enterprise.

Without adequate funds, no business can be developed. In India, Central and state
governments are promoting number of financial institutions to bring in the industrial
development in the country. Some of the important financial institutions are:

Central Level financial Institutions:

A wide variety of financial institutions have been et up at the national level. They cater to the
diverse financial requirements of the entrepreneurs. They include all India developmental banks
like IDBI, SIDB, IFCI.
All India developmental banks include those banks which provide institutional credit to not only
large and medium enterprises but also help in promotion and development of small scale
industrial units.

Industrial Developmental Bank of India (IDBI)

 It was established in July 1964 as an apex financial institution for industrial development
in the country.
 It caters to the diversified need of medium and large scale industries in the form of
financial assistance, both direct and indirect .
 Direct assistance is provided by way of project loans, underwriting of and direct
subscription to industrial securities, soft loans, technical refund loans.
 Indirect assistance is in the form of refinance facilities to industrial concerns.

Functions of IDBI :

Various functions of IDBI are as follows.

Direct financial assistance : The IDBI provides direct financial assistance to the industrial
concerns in the form of
(a) granting loans and advance
(b) subscribing to, purchasing or underwriting the issues of stocks, bonds or debentures.
Indirect financial assistance : IDBI provides indirect financial assistance to small and medium
industrial concerns through other financial institutions, such as, State Finance Corporations, State
Industrial Development Corporations, cooperative banks, regional rural banks, commercial
banks. The assistance to these institutions include , refinancing of loans given by the institutions,
subscribing to their shares and bonds, rediscounting of bills.

Development assistance : The creation of the Development Assistance Fund is the special
feature of the IDBI. The Fund is used to provide assistance to those industries which are not able
to obtain funds in the normal course mainly because of heavy investment involved or low
expected rate of returns. The financial resources of the fund comes from contributions made by
the government in the form of loans, donations, gifts etc and from other sources. Assistance
from the Fund requires the prior approval by the Government.

Promotional function : Besides providing financial assistance, the IDBI also undertakes various
promotional activities such as marketing and investment research, techno-economic surveys. It
provides technical and administrative advice for promotion, expansion and better management of
industrial concerns.

Industrial Finance Corporation of India ltd(IFCI ltd)

Industrial finance corporation of India was the first development finance institution set up in
1948 under the IFCI Act in order to pioneer long term institutional credit to medium and large
industries.
It aims to provide financial assistance to industry by way of Rupee and foreign currency loans,
underwrites/subscribes the issue of stocks, shares, bonds and debentures of industrial concerns
etc, It has also diversified its activities in the field of merchant banking, syndication of loans,
formulation of rehabilitation programmes, assignments relating to amalgamation and mergers.

Functions of IFCI :

 The various functions of IFCI are as follows :

 The corporation grants loans and advances to industrial concerns
 Granting of loans both in Rupees and foreign currency
 The corporation underwrites the issue of stocks, bond, shares etc
 The corporation can grant loans only to public limited companies and co-operatives but
not to private limited companies or partnership firms.

Activities of IFCI

Soft loan assistance: This scheme provides soft loan assistance to existing industrial in small and
medium sector for developing technology through in houses research and development

Entrepreneur Development: IFCI provides financial support to EDPs conducted by several

agencies all over India. In co-operation with entrepreneurship development institute of India.

Industrial development in Backward areas : IFCI also takes measures to promote industrial
development in Backward areas through a scheme of concessional finance.

Subsidised consultancy : IFCI gives subsidised consultancy for,

 Small entrepreneurs for meeting the cost of project

 Promoting ancillary industries
 To do the market research
 Reviving sick units
 Implementing modernisation
 Controlling pollution in factories

Management Development : to improve the professional management, the IFCI sponsored the
management development institute in 1973. It established the development banking centre to
develop managerial, manpower in industrial concerns, commercial and development banks.

Small Industries Development bank of India (SIDBI)

Small industries bank of India was set up by the Government of India in April 1990 as a wholly
owned subsidiary of IDBI

It is the Principal financial institution for promotion, financing and development of small scale
industries in the economy. It aims to empower the micro, small and medium enterprises,
(MSME) sector with a view to contributing to the process of economic growth, employment
generation and balanced regional development .
Objectives of SIDBI

Initiating steps for technological upgradation and modernisation of existing units.

Expanding the channels for marketing the products of the small scale sector.
Promotion of employment oriented industries, especially in semi urban areas to create more
employment opportunities and thereby checking migration of population to urban areas.
Functions of SIDBI

IDBI provides assistance to the small scale industry sector in the country through the existing
banking and other financial institutions, such as, SFC State industrial development Corporations,
commercial banks, cooperative banks and RRBs etc.

The major functions of SIDBI are as follows

It refinances loans and advances provided by the existing lending institutions to the small scale
units.
It discounts and rediscounts bills arising from sale of machinery to and manufactured by small
scale industrial units.
It extends seed capital/ soft loan assistance under national equity fund, mahila udyam nidhi and
mahila vikas nidhi and seed capital schemes.
It grants direct assistance and refinance loans extended by primary lending institutions for
financing exports of products manufactured by small scale units.
It provides services like factoring, leasing to small units.
It extends financial support to State Small Industries Corporations for providing scarce raw
materials to and marketing the products of the small scale units.
it provides financial support to National Small Industries Corporation for providing leasing, hire
purchase and marketing help to the small scale units.

National Bank for Agriculture and Rural Development: (NABARD)

The Parliament, through Act,61 of 1981, approved the setting up of NABARD. The bank
came into existence on 12 July 1982 by transferring the agricultural credit functions of RBI
and refinance functions of the then Agricultural Refinance and Development Corporation
(ARDC). NABARD was dedicated to the service of the nation by the late Prime Minister Smt.
Indira Gandhi on 05 November 1982.

NABARD was set up with an initial capital of 100 crore. Consequent to the revision in the
composition of share capital between Government of India and RBI, the paid up capital as
on 31 March 2013, stood at 4000 crore with Government of India holding 3,980 crore
(99.50%) and Reserve Bank of India 20.00 crore (0.50%).

Mission

Promote sustainable and equitable agriculture and rural prosperity through effective credit
support, related services, institution development and other innovative initiatives.
Objectives of the NABARD:

1. The National Bank will be an apex organisation in respect of all matters relating to
policy, planning operational aspects in the field of credit for promotion of Agriculture,
Small Scale Industries, Cottage and Village Industries, Handicrafts and other rural crafts
and other allied economic activities in rural areas.
2. The bank will serve as a refinancing institution for institutional credit such as
long-term, short-term for the promotion of activities in the rural areas.
3. The bank will also provide direct lending to any institution as may be approved by
the Central Government.
4. The bank will have organic links with the Reserve Bank and maintain a close link
with in.

Role of NABARD:

1. Providing refinance to lending institutions in rural areas

2. Bringing about or promoting institutional development and
3. Evaluating, monitoring and inspecting the client banks
4. Acts as a coordinator in the operations of rural credit institutions.
5. Extends assistance to the government, the Reserve Bank of India and other
organizations in matters relating to rural development.
6. Offers training and research facilities for banks, cooperatives and organizations
working in the field of rural development.
7. Helps the State Governments in reaching their targets of providing assistance to
eligible institutions in agriculture and rural development.
8. Acts as regulator for cooperative banks and RRBs.

Developmental Programmes by NABARD

Integrated Rural Development Programme(IRDP)

IRDP is a scheme devised by Government of India for generating self employment
opportunities in the rural sector and for the economic development of rural areas. Banks
are advised to extend cheap credit facilities to the people /group selected under this
programme. NABARD then refinances to Banks.
NABARD has accorded high priority to projects envisaged under IRDP. The refinance
provided for IRDP accounts for highest share for the support provided for poverty
alleviation programmes.

Development of Women and children in Rural Areas

NABARD prepared guidelines for promoting group activities under the programme and
provides 100% refinance support.

Training –cum-Production Centre for Women

NABARD provides grants to voluntary /development agencies for setting up of centres
which aim at providing vocational /entrepreneurship training centres for women
exclusively. Some provide marketing oriented skill to women for upgrading technical and
designing skill.

Self Help Group

NABARD has been making efforts to establish linkages between Self help group organised
by some voluntary agencies for people in rural areas and official credit agencie. This would
augment the flow of credit for production purposes and reduce their dependence on
informal credit sources.

Scheme of monitoring Evaluation and Research Activities

NABARD conducts studies of on-going schemes and completed studies to obtain feed-back
on performance of these projects.
The NABARD has system of District Oriented Monitoring studies in which a cross section of
schemes sanctioned in a district to various banks is studied to ascertain the performance of
the schemes and to identify constraints in implementation and for initiating appropriate
action to remedy them. Annually about 100 such studi
es are conducted.

Vikas volunteer Vahni programme

NABARD has been organising farmers club in association with voluntary agencies in rural
areas particularly in tribal areas, which have proved very helpful for credit institutions in
extending credit to poor farmers. These clubs, besides creating awareness among weaker
sections about the proper utilisation of assets and importing modern method of farm
technology, are involved in educating the tribal people.

Inspection and Supervision of co-operative Banks and Regional Rural banks

NABARD has been entrusted with the responsibility of supervision of Co-operative and
Regional Rural Banks. For this purpose , it conducts inspections of Co-operative Banks and
Regional Rural Banks. These Banks are also to submit periodical information to NABARD
for monitoring purposes.

Human resource Development :

NABARD provides assistance and support for the training of staff of other credit
institutions engaged in credit dispensation for agriculture and rural development. Training
facilities are extended at its training institutions Bankers Institute Development(BIRD), and
Regional Training Centres.(RTCs).

NABARD initiated Project on Core banking Solutions in Co-operatives :

Through core banking solution (CBS), Co-operatives are being brought to a higher
technology platform so as to compete with other banks for business and growth. The
programme made rapid strides with 5543 branches of 163 banks across 10 states joining
the platform in the first phase and 42 banks joining in the second phase, a total of 7088
branches of 205 StCBs and CCBs across 16 states and Three UTs came into the umbrella of
the programme as on 31 March 2013.

Indian Institute of Entrepreneurship: (IIE)

With an aim to undertake training, research and consultancy activities in small and micro
enterprises focusing on entrepreneurship development, the Indian Institute of
Entrepreneurship (IIE) was established in the year 1993 in Guwahati by the erstwhile
Ministry of Industry (now the Ministry of Micro, Small and Medium Enterprises),
Government of India as an autonomous national institute. The institute began operating
from April 1994 with the North East Council (NEC), Governments of Assam, Arunachal
Pradesh and Nagaland and SIDBI as its other stakeholders.

OBJECTIVES

1. To promote and develop entrepreneurship.

2. To conduct research and provide consultancy for entrepreneurship development.
3. To coordinate and collaborate with other organizations in undertaking training,
research and other activities to increase outreach of the institute.
 4. To provide consultancy and monitoring service to MSMEs/ potential entrepreneurs
and enhancing employability of participants.
5. To promote greater use of information technology in the activities/ functions of the
IIE.
6. To comply with statutory responsibility.

FUNCTIONS
 Designing and organizing training activities for different target group and
undertaking research in the relevant to entrepreneurship.
 Improving the efficiency, effectiveness and delivery of the change agents and
development practitioners i.e. trainers, support organizations engaged in enterprise
building. etc.
 Provide consultancy service to the prospective and existing entrepreneurs.
 Increasing the outreach of activities of the institute through collaborative activities
and increasing their effectiveness through use of different tools of information
technology.

Entrepreneurship Development Institute of India: (EDII)

The Entrepreneurship Development Institute of India (EDI), an autonomous body and
not-for-profit institution, set up in 1983, is sponsored by apex financial institutions,
namely the IDBI Bank Ltd, IFCI Ltd. ICICI Ltd and State Bank of India (SBI). The Institute
is registered under the Societies Registration Act 1860 and the Public Trust Act 1950.
The Government of Gujarat pledged twenty-three acres of land on which stands the
majestic and sprawling EDI campus.

The objectives of the EDII are as follows:

1. Augment the supply of trained entrepreneurs through training
2. Generate more employment opportunities
3. Improve managerial capabilities of SSI
4. Contribute to the creation and dissemination of new knowledge and insight into
entrepreneurial theory and practices through research
5. Promote micro enterprises at the rural level
6. Inculcate the spirit of entrepreneurship among youth
7. Collaborate with similar organization in India

STATE LEVEL INSTITUTES:

Several institutions have been set up at the state level which supplements the assistance
provided by the all India institutions. They act as catalyst for promotion of investment and
industrial development in the respective states. Major state level institutions include
  District industries centres(DIC)
 State financial Corporation’s(SFC)
 Technical Consultancy Organisation(TCO)
 Khadi and Village Industries Board(KVIB)

DIC: DISTRICT INDUSTRIES CENTRE. Launched in 1978 in all districts of each state. There
are about 400 DIC's in India.

The District Industries Centers (DIC’s) programme was started in 1978 with a view
to provide integrated administrative framework at the district level for promotion of small
scale industries in rural areas. The DIC’s are envisaged as a single window interacting
agency at the district level providing service and support to small entrepreneurs under a
single roof. DIC’s are the implementing arm of the central and state governments of the
various schemes and programmes. Registration of small industries is done at the district
industries centre and PMRY (Pradhan Mantri Rojgar Yojana) is also implemented by DIC.
Headquarter of every district has a DIC which is responsible for playing the role of
multifunction agency or chief coordinator with respect to several governmental and non-
governmental departments and agencies operating in that district. The potential
entrepreneurs of small scale businesses can get any kind of assistance related to
establishment and functioning of business from these DIC’s. As per the data of 1991, 422
DIC’s were functioning in the country which benefitted 1.5 lac business units with its
valuable assistance, which in turn provide employment to more than 10.3 lac individuals.

Objectives of DIC :

DIC has the following objectives

 To increase the effort and to speed up the process of industrial development of

district
 To establish mechanical industries and handicrafts in rural areas and to help them
to grow
 To achieve evenness among the economy of all the regions of a district.
 To assist the new businessmen of the district in availing the benefits of all
government scheme.

Role of DIC:

1. Identification of entrepreneurs: DIC organises the entrepreneurs motivational

programmes in the entire district to identify potential entrepreneurs and to develop
them
2. Selection of Projects: DICs council the prospective entrepreneurs and help them to
choose the appropriate project to start
 3. Provisional Registration under SSI: After choosing the appropriate project,
entrepreneurs have to get themselves register under SSI provisionally. It’s an
obligation if the entrepreneurs wants any financial institution to assist them
4. Purchase of Fixed Asset: DIC takes the guarantee of loan applications made by SSI
unit holders to SIDCO, TIIC and other banks for the purpose of building and land
purchases. The money left after this is, generally accrued to other financial agencies
under the scheme of rural industries project loan, so that SSI unit holder can easily
make the purchases of machineries and other fixed assets
5. Clearances from various departments: DIC’s help the entrepreneurs in getting
various permits from government departments. They also help them in getting
electricity connection as soon as possible.
6. Assistance to Raw Material Supplies: DIC's also assist the entrepreneurs by
recommending them the suppliers of raw materials of their need & It also certifies
them to import the machinery and raw materials.
7. Assistance to Village Artisans and handicrafts: Person who are engaged in
handicrafts and other skilled works are also provided financial assistance by DIC’s.
DICs arrange these funds with the help of nationalised banks of that particular area.
8. Interest –Free Sales Tax Loan : IFST loans are sanctioned to those SSI units which
are established in rural areas and authority to sanction these loans lies with DIC.
The amount of IFST loan should not exceed 8 per cent of the amount o f fixed assets
from Small Industries Development Corporations (SIDC0) .
9. Subsidy Schemes: SSI unit holders and workers, who are engaged in handicrafts and
other skilled works are assisted by DICs to avail various governmental and non
-governmental subsidies such as, interest subsidy., power subsidy, etc.
10. Training Programmes: DICs impart training not only to entrepreneurs but they also
assist those institutions which train the small-scale entrepreneurs.

Schemes of DIC

Some of the schemes of .DICs are explained below:

Prime Minister's Employment Generation Programme (PMEGP): The eligibility of

PMEGP for the product -based businesses is the maximum investment of Rs. 25 lac, and
for the service -based businesses is the maximum investment of Rs.10 lacs. Fixed capital
(other than the cost of land) and the working capital together derive the project cost.
Seed Money Scheme (SMS): The prime object of this scheme is to encourage the
unemployed persons to start a business either in product industry or service industry.
Loans and credits with very lenient terms and conditions are offered to such persons
for encouraging them.
District Industries Centre Loan Scheme: The features of District Industries Centre Loan
Scheme are as follows:
Its purpose is to promote small and micro industries in rural and semi -urban areas.
This not only generates self -employment but also generates employment for others.
 To fulfil this purpose, financial help is extended as seed money or margin money
under this scheme.
Only the units which have investment of maximum Rs 2 lac in plant and machinery
are eligible for the assistance under this scheme.
This scheme covers all those rural or semi -urban areas where the population is below 1
lac. In case entrepreneurs of general category, the amount of financial assistance is . 20
per cent of total fixed capital investment or Rs.40,000 (the lesser one is considered).
This scheme covers all those businesses that fall in the category of handlooms,
handicrafts, village industries etc
The tenure Of these loans provided by State Government is 7 years and the interest is
to be paid at the rate of 4 percent per annum.

Technical Consultancy Organisation (TCO)

Technical Consultancy Organisation plays a crucial role in the industrialisation process of

the state. The TCOs are organisations established by the state governments.
The primary objective of the TCO is to furnish industrial and technical consultancy to the
entrepreneurs. The TCO is sponsored by national and state level financial institutions and
banks like ICICI, IDBI IFCI, SFC, SIDC, SSIDC, commercial banks, etc.

Access to high quality consultancy services improves the operational efficiency of

entrepreneurs. All India financial institutions have set-up 17 TCOs to provide industrial
consultancy and training to entrepreneurs.

Many TCOs have also made forays in the international market for technical consultancy
services. However, only a few TCOs have made a mark for themselves in the field of
international technical consultancy.

Role of TCO

Following roles are performed by TCO:

1. Identification of potential entrepreneurs among different target groups as rural

poor, women, minorities,SCs. STs, etc.
2. Identification of area specific viable manufacturing and servicing activities.
3. Extending candidate specific hand -holding support right from project
identification, securing financial assistance, accessing market through guidance and
monitoring during project implementation and commercial operation.
4. Capacity building of other support providers.

Services Provided by TCO

Services provided by TCO are as follows:

1. Consultants to individual entrepreneurs, government agencies, commercial banks in

task of industrial development,
 2. Project consultancy (identify industrial potential through research, feasibility
reports, pre –investment studies, providing assistance to potential entrepreneurs),
3. Management consultancy (project supervision, technical and administrative
assistance, rehabilitation of sick units),
4. Market consultancy (market research and surveys for specific products), and
5. Export consultancy (assistance to export -oriented projects for modern technology).

State Financial Corporation (SFC)

The Government of India passed the state Financial Corporation Act in 1951, according to
which. Government of every State can authoritatively start a financial institution or
corporation, which can operate only in a particular state.

The main purpose of incorporating this act is to cover those industries which were not
covered by the IFCI.

Being the state -level institutions SFCs focus on the industrial development in their
respective states. They Play an important role in the growth of small and medium scale
companies. The methods through which SFCs assists the companies are term loans, buying
the securities of company, buying the promissory notes, taking guarantee on behalf of the
Company on behalf of company. etc. Generating employment opportunities, speeding up of
the investment, increasing the shareholders etc are the some of the prime motives of SFC’s

SFC’s also assist the new and emerging business such as, poultry farming, tissue culture,
floriculture, etc.

In India, 18 SFCs are operative, which are as

1) Andhra Pradesh State Financial Corporation (APSFC),

2) Himachal Pradesh Financial Corporation (HPFC),
3) Madhya Pradesh Financial Corporation (MPFC),
4) North Eastern Development Finance Corporation (NEDFI).
5) Rajasthan Finance Corporation (RFC),
6) Tamil Nadu Industrial investment Corporation Limited,
7) Uttar Pradesh Financial Corporation (UPFC),
8) Delhi Financial Corporation (DFC),
9) Gujarat State Financial Corporation (GSFC),
10) Economic Development Corporation of Goa (EDC),
11) Haryana Financial Corporation (HFC),
12) Jammu and Kashmir State Financial Corporation (JKSFC),
13) Karnataka State Financial Corporation (KSFC),
14) Kerala Financial Corporation (KFC),
15) Maharashtra State Financial Corporation (MSFC),
16) Orissa State Financial Corporation (OSFC),
17) Punjab Financial Corporation (PFC), and
18) West Bengal Financial Corporation (WBFC).

Objectives of SFC
Different objectives of SFC are as follows:
1) To establish uniformity in regional industries,
2) To provide incentive to new industries,
3) To bring efficiency in regional industrial units,
4) To provide finance to small-scale, medium sized and cottage industries in the state and
5) To develop regional financial resources.

Role of SFC

Following are the ways in which SFCs can provide financial assistance:

1. Sanctioning loans to the enterprises; provided that the payback period is not more
than 20 years.
2. Buying the debentures of enterprises in order to raise their capital; provided that
the repayment period of debenture is not more than 20 years.
3. Taking guarantee of loans taken by enterprises; provided that the repayment
period of loan is not more than 20 years.
4. Raising capital by issuing shares, debentures, bonds, etc., on behalf of the company;
provided that the maximum duration of the securities is 7 years.
5. Taking guarantee of payments on behalf of those companies which make purchases
of capital goods within India.
6. Sanctioning loans to the companies on the directive of the Central or State
Government or the IFC1.

Schemes of SFC

Sources through which SFCs generate their finances are as follows:

1) Their own share capital,

2) Income from investment and repayment of loans,
3) Sale of bonds,
4) Loans from the IDBI (to some extent),
5) Borrowings from the RBI,
6) Deposits from the public, and
7) Loans from State Governments

The State Financial Corporations Act. 1951 applies to all those companies which are
associated with any of the following industries:

1) The manufacturing, preservation or processing of goods;

2) The mining industry;
3) The hotel industry;
4) The transport industry, i.e., transportation of persons or goods by road, water or air
5) The generation or distribution of electricity or any other form of power;
6) The Maintenance, Repair, testing or servicing of machinery of any description such as,
vehicles, vessels, motorboats, trailers, tractors, etc.;
7) Assembling, repairing, or packaging of article with the help of machinery Or power;
8) Setting -up or development of an industrial area or industrial estate;
9) Fishing, providing or maintaining the shore facilities for fishing;
10) Providing weight bridge facilities;
11) Providing services such as, technical, engineering, marketing, financial, general
management, etc., to any industry;
12) Providing services associated with medical and healthcare for industrial workers;
13) Providing software or hardware services relating to information technology,
telecommunication or electronics including satellite linkage;
14) Providing services which encourage tourism such as, conventions centres, amusement
parks, travel and transport, restaurants, tourism agencies, guidance services to tourists,
etc.;
15) Construction and development, maintenance and construction of roads;
16) Providing facilities such as, commercial complexes, community centres, banquet halls,
conference halls;
17) Floriculture;
18) Tissue culture, fish culture, poultry farming, breeding and hatcheries;
19) Providing services such as, ornamentation, altering, polishing, oiling, finishing,
washing, cleaning, or treating an article for using or selling, Recycling it; and
20) Doing research and development on any concept, technology, product design or
process design, not necessarily associated with the above mentioned fields. It also includes
activities approved by the Small Industries Bank.

Khadi and Village Industries Board (KVIB)

‘Khadi and Village Industries Commission Act' was passed in Parliament in 1956 by
Government of India, under which the KVIC was formulated. This organisation is governed
by the Ministry of MSME, Government of India and it is concerned with the khadi and
village industries Operative in India.

There was a board by the name of All India Khadi and Village Industries Board, which was
Overtook by the Khadi and Village Industries Commission in April, 1957. Since then KVIC is
known as KVIB.

KVIB is headquartered in Mumbai and it has six zonal offices in Kolkata, Mumbai, Bhopal,
Delhi, Guwahati, and Bangalore. Along with it, for the proper execution of its range of
activities, it has a network of branch offices spread across 29 states of the country.

The functions of KVIB are Planning, promoting, facilitating, Organising, and assisting the
setting -up and expansion of khadi and village industries. KVIB performs these functions by
coordinating with other agencies, which are also involved in the development of rural
areas. Other than these, KVIB also performs the function of creating reserve of raw
materials and equipment, providing facilities to process the raw materials, marketing of
khadi and village industry products, providing training to artisans, etc.

Objectives of KVIB

The KVIB has three main objectives which guide its functioning. These are as follows:
1) Social Objective: Providing employment in rural areas.
2) Economic Objective: Providing saleable articles.

3) Wider Objective: Creating self-reliance amongst people and building-up a strong rural
Community

The commission seeks to achieve these objectives by implementing and monitoring various
schemes and programs

Role of KVIB

Following points highlights the role of KVIB:

1. To organise the training, programmes for existing and aspiring workers of Khadi
and Village Industries.
2. To create reserve of raw materials and equipment related to khadi and village
industry and provide them to those who are involved or want to involve in this
industry, these things are provided at the rate as decided by the KVIB
3. To create or help in creating common facilities to process the raw material and
work in progress; along with this KVIB also assists in manufacturing and marketing
activities of khadi, and other village industry products.
4. To encourage the marketing and sales activities of handicrafts, khadi, and other
village in coordinating with Specialised agencies for marketing activities;
5. To simulate the activity of research and development in relation to the technology
used in various processes of KVI such as, in manufacturing, packaging, energy
source, etc. Intent behind this function to increase the level of production, decrease
the use of manpower, which in turn can increase the competitiveness of the units.
KVIB also has to communicate the outcome of R&D, if any positives are achieved:
6. To take the problems and issues of KVI units under consideration or instruct any
Other agency to do so;
7. To extend credit and loan facilities towards the entities involved in khadi and
village industries and its development, KVIB also has to assist them in production of
goods in demand by providing, valuable ideas and information on design and
pattern of product as well as on other technical concerns.
8. To carry out experiments and try dummy projects which they feel are necessary for
the growth of KVI;
9. To incorporate and manage various organisations which will be dedicated to
undertake the functions stated above.
10. To instil the quality of being supportive and helpful towards each other among the
persons associated with khadi and village industries
11. To set quality standards for the products and to make sure that the KVI products
are conforming to those standards, issuance of certificates and recognition letters
are also the functions or KVIb
12. To encourage the quality of cooperation and mutual support among workers; and
13. To undertake all other issues and concerns related to the aforesaid matters.
Schemes of KVIB

Several schemes are operated and managed by KVIB in order to realise its purposes.

Schemes of KVIB are as follows;

1. Credit facilities for acquiring land, factory, equipment, plant and machinery, etc. at
nominal interest rate of 4 per cent:
2. Working capital provision
3. Prime Ministers Employment Generation Program (PMEGP);
4. Rebate Scheme:
5. Equity capital.
6. Credit facility for acquiring raw materials;
7. Centres and places for selling the products of craftsmen, artisans, etc.
8. Subsidies and grants for the registered societies of artisans and craftsmen belonging
to scheduled castes, scheduled tribes. Ex -servicemen, women, etc.

INDUSTRIAL POLICY 1991

TRENDS IN INDUSTRIAL GROWTH

Growth in Pre -Reform period (1947-1990)

In the post independence period, India embarked upon economic upon the economic
development under the Five Year Plans. It was accepted, that rapid development
Of the nation would only be possible through the establishment of strong and diversified
industrial base.

The major changes in the industrial growth and structure during the Planning Period can
be analyzed by the planning period into three phases

1. (1951-65): Building up of Strong Industrial Structure

The First Plan did not envisage any large Scale programmes of industrialization. Only Rs.55
Out of the total expenditure of Rs. 1,9602 Crore (2.8 per cent) was spent on Industry &
Minerals' in the First Plan.

The Second Plan (1956 -1961,), accorded top priority to programme of industrialization as
would be clear from the fact that the expenditure on industry and minerals was hiked to Rs
938 crore under this was which is 21.1% of the total expenditure of Rs. 4,627 crore.

Third Plan (1961-1966)

Third Plan was also 'pressed forward with the establishment of basic capital and the
producer goods industries with special emphasis on machine e buildings programmes —
so that the growth of the economy in the subsequent plans could become self sustaining.
Expenditure on industry in the Third Plan was Rs.1, 726 crore which was 21.1 per cent of
the total expenditure of Rs. 8577 crore under the plan.
On an average growth rate Of Industrial output during this phase was about 7% per
annum;

2. Phase II (1965-1980): Industrial Deceleration

This phase was marked by industrial deceleration and structural retrogression.

The industrial growth rate declined to less than an annual average of 5%. The slow growth
was attributed to inadequate investment in infrastructure sectors such as Power,
transportation etc.

Slow growth in the agricultural sector caused a decline in demand from this sector to
industrial products.

3 Phase Three: (1980 – 91) - Industrial Recovery

The period of 1980’s can be broadly termed as a period of industrial recovery. The Rate of
industrial growth was 6.4% per annum during 1981 to 1985,, 8.5% per annum during the
Seventh plan (4985-90) and 8.3% per annum in 1990-91.

Latest Industrial Policy of Government of India:

New Industrial policy 1991

On July 24. 199I, New Industrial Policy was introduced by Mr. P.V. Narasimha Rao, under
Congress Government. This policy brought major changes to the previous industrial policy.
Liberalisation of Indian industries was the main objective of this policy. The policy aimed to
eliminate control of bureaucracy, introduce the globalisation of Indian economy, make free
flow of direct foreign investment in India, and remove restrictions like MRTP Act on the
domestic entrepreneur. Moreover, it also intended to discard the burden of
public enterprises which were incurring losses and had low rate of return. In this policy,
extent of the private sector was enlarged by introducing most of the industries to the
private sector.

Features of New Industrial Policy

The main features of New Industrial Policy (NIP) are as follows:

1. Abolition of Industrial Licensing:

To liberalise the Indian economy, the major step taken under NIP was abolition of all
industrial licensing except for certain industries dealing in environmental issues, safety,
security and strategic concerns etc.

According to the amendments made on February 1999, there are only six industries which
come under compulsory licensing. These industries are related to alcohol, cigarettes,
hazardous chemicals, drugs and pharmaceuticals, industrial explosives, electronic,
aerospace and defence equipments.

2. Diminishing Role of Public Sector:

In New Industrial Policy, the role of public sector in facilitating the growth and
development of economy was totally in contrast with Industrial Policy, 1956. As a result,
the reservation of industries was reduced from seventeen to eight in 1991.

Presently the number of industries reserved for public sector is two. The arms and
ammunition industry was also moved to the private sector. Government introduced a
'divestment scheme' in public sector for further reducing the burden of the public
sector.

For this, financial institutions, mutual funds, employees and general public were provided
shareholding in public organisation. Along with this, the participation of private sector was
promoted in the potential fields of the economy.

3. Incentives and Concessions for Foreign Investment and Technology:

New Industrial Policy identified a list of 34 categories of high priority industries requiring
high technology and high investment, where foreign direct investment decision up to 50/5
1/74/1 00 per cent was approved automatically depending , on the nature of activity.

Up to 100 per cent foreign equity has been permitted at present, in field of building
and maintaining roads, highways, ports, bridges, and electricity production and
distribution.

The objective behind these investment decisions was to make India more developed and
economically strong.

4. Drastic Amendments to MRTP Act:

New Industrial Policy also enabled the drastic amendments in the Monopolies and
Restrictive Trade Practices (MRTP) Act, so as to ease the functioning of MRTP companies.

These companies were potentially strong in terms of market hold and assets. Earlier, MRTP
companies were having restrictions on the size of their assets. Due to amendments in
MRTP Act, such restrictions were removed on these companies to operate freely.

For example, in most industries, foreign equity went up to 51 per cent as its maximum
limit. There was 100 per cent foreign equity for enterprises like tools manufacturers,
lifesaving medicines and Export Oriented Units (EOUs). Prevention and control of
restrictive and unfair trade practices was also emphasised in this amended act.

5. Removal of Compulsory Convertibility Clause:

In India, any kind of industrial investment was mainly drawn from banks and financial
institutions as loans. These banks or institutions were following a compulsory
convertibility clause for their lending operations. According to this clause, institutions were
able to convert a part of their loans into equity of the lending firm on the approval of their
management. As this clause facilitated the financial institutions to take over the private
firms, this concept was not usually exercised. Therefore, removal of compulsory
convertibility clause was done by New Industrial Policy.

EVALUATION OF NEW INDUSTRIAL POLICY (NIP) 1991

The new industrial policy (NIP), 1991, has given a new direction to the development of the
Industrial sector. Industrial growth has picked up in recent years, after initial periods of ,
adjustment. Domestic and foreign investment in almost every industrial sector has
increased manifold. The economy is growing at healthy rate after reforms were introduced.
However, the industrial growth has been erratic and fluctuating and has not resulted in
corresponding rise in employment.

A. Positive Impacts of the New Industrial Policy

1. Reduction in project cost and time:

The Policy changes related to licensing foreign investment and foreign technology
agreements have freed industries from excessive government control. Thus time and
money spent to acquire licenses and approvals have been reduced resulting in low project
cost as well as less time required to complete the project. Inother words the gestation
period has been shortened and efficiency has increased.

2. Availability of foreign capital and technology:

Policies in the area of foreign investment and foreign technology agreements would bring
in more capital, technology and managerial and technical performed from abroad. This
would increase the availability of such resources. The inflow of foreign direct investment in
1991-92 was $129 million which increased to $43.29 billion in 2006.

Telecommunications, electrical equipments and services are the sectors that are attracting
foreign investment.

3. Performance of Public Sector:

Changed in the public sector policy would bring about better allocation of public funds and
improve efficiency of the public funds and improve efficiency of the public sector. Closures,
liquidation or rehabilitation of sick public sector units will free resources for more
productive use.

Greater efficiency and accountability of units in the public sector should be ensured
through implementations of Memorandum of Understanding (MoUs). The performance of
public sector enterprises has improved considerably in recent years.
4. Restrictive Trade Practices:

Amendments in the MRTP Act would curb anti competitive behaviour and thus promote
competition. Indian firms are now able to expand and grow with greater ease after the
amendment.

5. Benefits to Consumers:

The NIP and subsequently policy changes have made the Indian market more competitive.
This has benefited Indian Consumers, who can now choose from a wide variety of good
quality products at competitive prices.' Companies are now able to change their product
mixes to match changing consumer demand.

Easier capacity expansion has reduced shortages of essential industrial items to large
extent.

6. Internationalization of Indian Industries:

As Indian industries have become internationally competitive; they are increasing their
export orientation as well as making their global presence felt through mergers and
acquisitions.

7. The NIP has given greater autonomy to the Public Sector Undertakings (PSUs):

This will lead to better performance, as there will be less interference from the government
and bureaucrats and moreover dilution a public sector will 'help the government to divert
its bureaucrats. Moreover, this attention to other essential sectors.

Limitations of New Industrial 'Policy

1. Dominance of Multinational Firms:

According to H.K. Paranjape, certain sectors of the economy, which have been opened to
direct foreigner investments, include areas where Indian firms have been well established
for years. Besides, these industries are in a position to develop indigenous technology
through R and D efforts.

Inviting foreign investment in these make it possible for transnational and multinational
firms to dominate these sectors of the economy. The multinational firms would emerge as
the most dominant one and will destroy indigenous research and development.

2. Unsuitable and Inferior Foreign Technology:

Unsuitable and inferior use of foreign technology and managerial input may not be suitable
for Indian business conditions. MNCs are often reluctant to use their state-of-the-art
technology in their subsidiaries in developing countries.
3. Unemployment:

The issue of employment generation has been overlooked by this Policy, Most of the
industries encouraged by the NIP are capital intensive, energy and import intensive.

Moreover use of foreign technology and excessive competition has increased capital
Intensity in production Process. This has had an adverse effect on employment generation
in the industrial sector. The MNCs have very low absorption capacity of labour.

The employment generation capacity in the organized manufacturing sector has also
reduced since 1991.

4. Dilution of the Public Sector: areas like

The dilution of the public sector from certain key infrastructure development has resulted
in increased user charges for many services like power and roads, adversely affecting the
poor. Besides employment generation and job security provided by the public sector has
become a thing of the past.

5. MRTP Act:

The amendment of the MRTP Act and the relaxation of regulations related to mergers,
amalgamations and acquisitions have resulted in emergence of large monopolies. This
has increased concentration of economic power and has adversely affected small business.

6. Social Problems:

The policy has brought with social problems that are a direct result of increasing
unemployment and reduced job security. The interests of workers who have been rendered
jobless have not been successfully dealt with by the government.

7. Industrial Sickness:

The NIP has not been able to tackle the growing industrial sickness which continues to
remain a major problem especially in the small scale sector.

Single Window Concept

The objective of DIC was to provide single window facilities to the industrial entrepreneurs
by keeping proper linkage with other line Agencies of State Govt. and Govt. of India. The
State Government is committed to provide the facility of single window clearance to ensure
that entrepreneurs do not have to visit different government offices to obtain the required
clearances for setting -up industrial units in the State.
For this purpose, the State Government intends to introduce single window clearance
system at the district and the state levels based on a common application backed by
computerised processing and clearance through Committees where all the government
departments and agencies are represented

The State enacted Single Window Clearances Act in 2002, with an aim to provide requisite
clearances to entrepreneurs at a single point, within fixed timeframe. "Deemed Provision"
in certain cases, if the competent authority fails to communicate decision with the
timeframe
proposals of industries with investment upto Rs.5 crore will be processed at the District
Industries centres level and all other proposals at Commissionerate level, District Level
Committee, State Level Committee, Empowered committee, and State Board to review the
Progress.

Efforts will be made to further strengthen the Single Window systems. To provide efficient,
effective, transparent and citizen friendly interface, a system is being developed for
providing the services related to Industries Department online/Electronically.

Advantages of Single Window System

1. The single window act provides an investor a time bound response on his investment
application. Eleven departments of the government have been brought under the single
window with each department liable to give a response in a certain time limit
depending on the nature of investment.
2. Investors will not have to approach each department seeking permission for the
project. They can just come to the nodal agency which will be the DIC and furnish
details. This can be done online too without visiting any department.
3. Permission for land, power, registration number, sales tax number, pollution control
were approved by different departments. But single window has reduced the project
cost to the greater extent.

Single window system is necessary to build motivation and confidence in women

entrepreneurs and modify policies and programs of enterprises and supporting institution,
in order to improve the business environment.

The purpose of this system is to give all kinds of information about institutions and
agencies giving financial assistance, procurement of raw materials, technology design, etc.
For medium and large-scale units, approval has to be obtained from the State Level Single
Window Agency for clearance of the project. Subsequent to clearance, the application for
allotment of land has to be filed with the Bangalore office in case the allotment of land is in
Bangalore district or to Zonal office of jurisdiction depending on the location of the
industrial area.
Other Institutions Supporting Entrepreneurs

1. Directorate of Industries (DIs)

2. State Industrial Development/Investment Corporation (SIDCs/SIICs)
3. State Small Industrial Development Corporations (SSIDCs)
4. Small scale Industries Board (SSI Board)
5. Small Industries Development Organization (SIDO)
6. National Small Industries Corporation Ltd. (NSIC)
7. The National Science and Technology Entrepreneurship Development Board
(NSTEDB)
8. National Productivity Council (NPC)
9. National Institute for small Industry Extension and Training (NISIET)
10. National Institute for Entrepreneurship and small business Development
(NIESBUD)

Directorate of Industries (DIs) – At the State level, the Commissioner/ Director of

Industries implements policies for the promotion and development of small-scale, cottage,
medium and large scale industries. The Central policies for the SSI sector serve as
guidelines but each State evolves its own policy and package of incentives. The
Commissioner/ Director of Industries in all the States/UTs, oversee the activities of field
offices, that is, the District Industries Centers (DICs) at the district level

State Industrial Development / Investment Corporation (SIDC/SIIC) – Set up under the

Companies Act, 1956, as wholly owned undertakings of the State governments, act as catalysts
in respective states. SIDC helps in developing land providing developed plots together with
facilities like roads, power, water supply, drainage and other amenities. They also extend
assistance to small-scale sector by way of term loans subscription to equity and promotional
services. 11 out of 28 SIDCs in the country also function as SFCs and are termed as Twin-
function IDCs
State Small Industrial Development Corporations (SSIDC) – Established
under Companies Act, 1956, as State government undertaking, caters to small,
tiny and village industries in respective states. Being operationally flexible
undertakes the activities like
(i) procure and distribution of scarce raw materials, (ii) supply of
machinery to SSI units on hire-purchase basis, (iii) product marketing
assistance, (iv) construction of industrial estates, allied infrastructure
facilities and their maintenance (v) extending seed capital assistance on
behalf of State government and (vi) providing management assistance to
production units

Small Industrial Development Corporation: (SIDCO)

Small Industries Development Corporations (SIDCO) are state-owned companies or
agencies in the states of India which were established at various times under the policy
of Government of India for the promotion of small sale industries
Tamilnadu Small Industries Development Corporation Limited (TANSIDCO), an
undertaking of Government of Tamilnadu, functions with the specific objective of
playing catalytic role in the promotion and development of Small Scale Industries
and hastening the industrial dispersal throughout Tamilnadu.

The key areas of TANSIDCO’s activities are as follows:

• Development of industrial estates with infrastructure facilities and provision of
work sheds & developed plots.
• Raw Materials Supply Scheme
• Marketing Assistance Scheme
• Guidance to Entrepreneurs
Kerala SIDCO, a Government owned Public Sector Corporation, was established in
November 1975 for the development and promotion for Small Scale Industries. Currently,
SIDCO is expanding its area of works by diversification to give new vision to the small scale
industries. God’s own Country, Kerala, is gifted with abundant natural resources essential
for establishing Industrial Units and SIDCO is taking the initiative to set up industrial units.
Kerala SIDCO is the ‘Total Solution Provider’ for Small Scale Sector as it offers all facilities
and help to set up a Small Scale Unit. This corporation is rendering valuable assistance to
Small Scale Units in the State, including consultancy at the beginning of the project to the
identification of Industrial Site, commissioning of project, providing infrastructure
facilities, distribution of essential raw materials marketing of the Small Scale Industrial
Products, undertaking civil and electrical works, and setting up of small scale unit, Kerala
SIDCO competently handles the necessary requisites of any project. Kerala SIDCO is now in
the path of profit and is now granting basic facilities and marketing security to the
industrialists and new entrepreneurs through its diversified activities and new working
style. In the year 2013-14, Kerala SIDCO achieved the highest turnover among state
Indian SIDCO’s with a turnover of 327 crores.

Small-scale Industries Board (SSI Board):

• Constituted in 1954 to facilitate the coordination and inter-institutional linkages for
the development of SSI sector
• The Board is an apex advisory body constituted to render advice to the government on
all issues pertaining to the SSI sector
• The office of the Development Commissioner (Small-Scale Industry) serves as the
secretariat for the board
• The Board operates broadly in the following areas:
- Policies & programs
- Development of industries in specific region like Northeast
• - Ancillary development, quality improvement, mktg. assistance - Credit facilities,
taxation and modernization
- Industrial sickness
Small Industries Development Organization (SIDO):

• Established in 1954 on recommendation of Ford Foundation

• Over the years, it had seen its role evolve into an agency for advocacy, handholding and
facilitation for the small industries sector
• SIDO provides facilities for testing, tool mending, training for entrepreneurship
development, preparation of project and product profiles, technical and managerial
consultancy, assistance for export, pollution and energy audits, and so on
• SIDO provides economic information services and advises the government in policy
formulation for the promotion and development of SSIs
• SIDO is created for development of various small scale units in different areas. SIDO is a
subordinate office of department of SSI and ARI. It is a nodal agency for identifying the
needs of SSI units coordinating and monitoring the policies and programmes for promotion
of the small industries. It undertakes various programmes of training, consultancy,
evaluation for needs of SSI and development of industrial estates. All these functions are
taken care with 27 offices, 31 SISI (Small Industries Service Institute) 31 extension centres
of SISI and 7 centres related to production and process development.

The activities of SIDO are divided into three categories as follows:

a) Coordination activities of SIDO:

(1) To coordinate various programmes and policies of various state governments

pertaining to small industries.
(2) To maintain relation with central industry ministry, planning commission, state
level industries ministry and financial institutions.
(3) Implement and coordinate in the development of industrial estates.

(b) Industrial development activities of SIDO:

(1) Develop import substitutions for components and products based on the data
available for various volumes-wise and value-wise imports.
(2) To give essential support and guidance for the development of ancillary units.
(3) To provide guidance to SSI units in terms of costing market competition and to
encourage them to participate in the government stores and purchase tenders.
(4) To recommend the central government for reserving certain items to produce at SSI
level only.

(c) Management activities of SIDO:

(1) To provide training, development and consultancy services to SSI to develop their
competitive strength.
 (2) To provide marketing assistance to various SSI units.
(3) To assist SSI units in selection of plant and machinery, location, layout design and
appropriate process.
(4) To help them get updated in various information related to the small-scale
Industries activities.

National Small Industries Corporation Ltd. (NSIC):

• Established in 1955 by GOI with the main objectives to promote, aid and foster the
growth of SSIs in the country
• Over four decades of transition and growth in the SSI sector, NSIC has provided
strength through a progressive attitude of modernization, upgradation of
technology, quality consciousness, strengthening linkages with large and medium-
scale enterprise and boosting exports of products from small enterprises

• Main services provided by NSIC are:

- Machinery and Equipment (Hire Purchase / Lease scheme)
- Financial Assistance Scheme
- Assistance for Procurement of Raw Material
- Government Store Purchase Program
- Technology Transfer Centre (TTC)
- Marketing Assistance

The National Small Industries Corporation (NSIC), an enterprise under the union ministry
of industries was set up in 1955 in New Delhi to promote aid and facilitate the growth of
small scale industries in the country. NSIC offers a package of assistance for the benefit of
small–scale enterprises.

1. Single point registration: Registration under this scheme for participating in

government and public sector undertaking tenders.
2. Information service: NSIC continuously gets updated with the latest specific
information on business leads, technology and policy issues.
3. Raw material assistance: NSIC fulfils raw material requirements of small-scale
industries and provides raw material on convenient and flexible terms.
4. Meeting credit needs of SSI: NSIC facilitate sanctions of term loan and working capital
credit limit of small enterprise from banks.
5. Performance and credit rating: NSIC gives credit rating by international agencies
subsidized for small enterprises up to 75% to get better credit terms from banks and
export orders from foreign buyers.
6. Marketing assistance programme: NSIC participates in government tenders on behalf of
small enterprises to procure orders for them.
National Science and Technology Entrepreneurship Development Board
(NSTEDB):
• Established in 1982 by GOI, is an institutional mechanism to help promote
knowledge-driven and technology-intensive enterprises

• Major objectives are:

• promote and develop high-end entrepreneurship for S&T manpower as well
as self-employment by utilizing S&T infrastructure and by using S&T
methods
• facilitate and conduct various informational services relating to
promotion of entrepreneurship
• network agencies of support system, academic institutions and R&D
organizations to foster self-employment using S&T with special focus on
backward areas
• act as a policy advisory body with regard to entrepreneurship

National Productivity Council (NPC):

 Autonomous institution functioning under the overall supervision of the Ministry of
Industry, GOI
 Primary objective is to act as a catalyst in enhancing the productivity of all sectors of
the economy, including industry and agriculture
 Administered by a tripartite Governing Council (GC) which has equal
representation from the government, industry and trade unions
 Active in the field of consultancy and training and has a number of specialized
divisions to provide tailor-made solutions to agriculture and industry. These
divisions, manned by trained consultants, deal with issues related to industrial
engineering, plant engineering, energy management, HRD, informal sector,
agriculture and so on
 NPC is a member of the Asian Productivity Organization (APO), Tokyo, an umbrella
body of all productivity councils in Asian region
 To channelise expertise of NPC to small-scale and informal sector, SIDBI has tied-up
with NPC for enhancing technology in small units

National Institute for Small Industry Extension and Training (NISIET):

• Set up in early 1950s, NISIET acts an important resource and information centre for
small units and undertakes research and consultancy for small industry development
• An autonomous arm of the Ministry of Small Scale Industries, the institute achieves its
objectives through training, consultancy, research and education, to extension and
information services
• In 1984, UNIDO has recognized NISIET as an institute of meritorious performance
under its Centre of Excellence Scheme to extend aid
National Institute for Entrepreneurship and Small Business Development
(NIESBUD)
• NIESBUD is an autonomous body under the administrative control of the Office of the
DC(SSI)
• NIESBUD established in 1983 by the Ministry of Industry, GOI, as an apex body for
coordinating and overseeing the activities of various institutions/agencies engaged in
Entrepreneurship Development particularly in the area of small industry and business
• The policy, direction and guidance to the institute is provided by its Governing
Council whose chairman is the Minister of SSI.
• Besides conducting national and international training programs, the institute
undertakes research studies, consultancy assignments, development of training
aids, etc.