Neha Sharma – 12216688519 Entrepreneurship Development

MBA- Weekend

Role Of Support Institutions and Management of

Small Business

Directorate of Industries

The Small Scale Industries & Export Promotion department holds the key towards
economic development of the state. State Government has been giving considerable
attention to the growth of industry by creating necessary infrastructure to ensure
sustained development.

Objectives

Generate gainful/significant employment

To provide training to entrepreneurs
To develop industrial database in all major
fields To provide provision for trade
information's & fairs
To provide quality provision testing, patents,
copyrights Information & support system
To support craftsman by adequate industrial & social database and marketing
support by Urban meats virtual sites etc
Promote & Support Export from the State.

1. DIC (DISTRICT INDUSTRIES CENTRE)

In each district there is one agent to deal with all necessities of small and village
industries. This is called "District Industries Centre"
The DIC have undertaken numerous programs for investment promotion at the
grassroot level such as a organizing seminars workshops, extending support
for trade fairs and exhibitions organized by various Industries associations.

The Centre has a discrete wing to look-after the special needs of cottage and
house-hold industries as district from small industries.

Administration

General Manager is the head of the District Industries Centre

The post of General Manager is of Joint / Deputy Commissioner
level The General Manager has senior officers to support him,
such as
Manager (Raw Material),
 Manager(Credit),
Manage (Economic Investigation),
Manager(Marketing)
Industrial Promotion Officer(IPO) and
Technical Officer cum Project Manager
(PM)

Monitoring of DICs

The functioning of DICs and their achievement is monitored

by Industries Commissioner
Meeting of General Managers are prearranged frequently to evaluate the
performance and also help in resolving difficulties in implementation of different
schemes.

 To resolve the problems of industries/industrialists, there are two types of

committee at the district level:

a. District Industrial Executive Committee (DIEC)

DIEC is constituted for solving industry related problems
And promoting industrial growth
District Collector is the Chairman of this Committee and General Manager
of DIC is the Member Secretary
The other members of the DIEC are President of District Panchayat, DDO,
MP, MLAs, Prominent persons active in Industries in the district and members
of all district level industries associations.
b. Single Window Industrial Follow up Team (SWIFT)
Entrepreneurs face many problems when they start new industries. They have to
deal with many government interventions and get many allowances. SWIFT helps
them in guiding and solving their problems at a single spot.
This committee is working under the District Collector, General Manager
of DIC is the Member Secretary
General Manager of DIC is the Member Secretary
District Development Officer is Vice President of
SWIFT
All industries related officers in the district are members of this committee.

2. SMALL INDUSTRIES DEVELOPMENT ORGANIZATION (SIDO)

The SIDO is the national SSI Development Agency of India.

It is a major constituent of the Ministry of Small Scale Industries of the
Government of India.
A senior official of the Government of India, who is designated as the
Development Commissioner for Small Scale Industries (DCSSI), heads SIDO.
He is also the ex- official Additional Secretary in the Ministry of Small Scale
Industries; that is, he is second in command in the bureaucratic hierarchy.
 Set up in 1954, SIDO provides facilities to small industry throughout the
country by implementing a broad program of activities and services
including the following:
Entrepreneurship
Development Tool Room
Services
Testing Centres
Extension Services
R&D Services
Consultancy
Services Policy
Development
SIDO partners and networks with other national providers of provision and
financial services to SMEs such as the Small Industries Development Bank of
India (SIDBI), the National Small Industries Corporation (NSIC), the Bureau of
Indian Standards (BIS), the Reserve Bank of India (RBI) (India's Central Bank)
and relevant agencies of the Governments of the 28 States of the country.
Numerous Services provided by SIDO to the SMEs:-
facilities for testing, tool-menting, training for entrepreneurship
development
preparation of project and product
profiles technical and managerial
consultancy supportance for exports
pollution and energy audits
Functions
support and encourage entrepreneurs to set up industrial unit
estimate the requirements of raw materials of SSI units and to arrange
their supplies.
Training in Technical grades, Management, SIDO officers.
SIDO keeps its officers trained the latest developments in
their respective fields of specialization.

3. SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI)

Small Industries Development Bank of India (SIDBI), set up on April 2, 1990

under an Act of Indian Parliament, is the Principal Financial Institution for the
Promotion, Financing and Development of the Micro, Small and Medium
Enterprise (MSME) sector and for Co- ordination of the functions of the
institutions engaged in similar activities.
The business domain of SIDBI consists of Micro, Small and Medium Enterprises
(MSMEs), which contribute significantly to the national economy in terms of
production, employment and exports.
MSME sector is an important pillar of Indian economy as it contributes greatly to the
 growth of Indian economy with a vast network of around 3 crore units, creating
employment of about 7 cr, manufacturing more than 6,000 products, contributing
about 45% to manufacturing output and about 40% of exports, directly and
indirectly. In addition, SIDBI's supports also flows to the service sector including
transport, health care, tourism sectors etc.
 Objective
Financing
Promotion
Development
Co-ordination
 Functions
Provides foreign currency loans to
Import equipment's by existing export oriented SSIs and new
units having plans for entering
Execute confirmed export orders by way of pre-shipment
credit/letter of credit and provides post shipment facilities. export markets
SIDBI’s Venture Capital Fund provide supportance to:
Small scale entrepreneurs using innovative indigenous
technology and expertise
SIDBI refinances:
Loans granted for new SSI projects and for expansion, Technology,
up- gradation, modernization, quality promotion.
Loans sanctioned by SIDBI to small road transport operators, qualified
professionals for self-employment, small hospitals and nursing homes,
and to promote hotel and tourism related activities.

4. SMALL INDUSTRIES DEVELOPMENT CORPORATIONS (SIDC)

They 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 scale industries.
In 1960, the first State Industrial Development Corporation (SIDC) was established
in Bihar. These mainly autonomous bodies are controlled by the State
government, who may own a stake in the corporation. There are approximately 28
SIDCs in India.
Their main functions include the promotion of rapid industrialization in India. They
mainly work at the grass roots level, providing development in the backward and
less frequented parts of India.
They offer financial leases and offers guarantees. They also administer the
schemes of the central and state governments. The projects and surveys of the
industrial potential areas are conducted by them.
5. MSME-SMALL INDUSTRIES SERVICE INSTITUTE

It has been playing a key role for development of MSME through counselling,
consultancy and training. Established in 1960 as Small Industries Service
Institute in 1975, the Institute has made significant contributions for promotion
and development of Micro, Small and Medium Enterprises.

Spectrum of Services:

Supportance / Consultancy to Prospective Entrepreneurs.

Supportance/ Consultancy to existing Micro and Small
Enterprises. Preparation / Upgradation of District Industrial
Potential Surveys. Preparation of Project Reports / Project
Profiles.
Entrepreneurship Development Programs
Motivation Campaigns
Project Appraisal for Bank / Financial
Institutions. Management Development
Programs.
Skill Development Programs
Awareness Programmes on Energy Conservation / Pollution
Control. Quality Improvement & Technology up gradation
Export Promotion
Market surveys
Marketing Support
Registration of Micro and Small Enterprises under Ozone Depleting Substances
Rules
, 2000
Revival of Sick Micro and Small Enterprises.

6. NATIONAL SMALL INDUSTRIES CORPORATION LTD. (NSIC)

NSIC is an ISO 9001-2008 certified Government of India Enterprise under Ministry

of Micro, Small and Medium Enterprises (MSME).
NSIC has been working to fulfil its mission of promoting, aiding and fostering the
growth of small industries and industry related micro, small and medium
enterprises in the country.
NSIC carries forward its mission to support small enterprises with a set of
specially tailored schemes designed to put them in a competitive and
advantageous position. NSIC acts as a facilitator to promote small industries
products and has devised a number of schemes to support small enterprises in
their marketing efforts, both in and outside the country. The schemes comprise
 of facilitating marketing support, credit support, technology support and other
support services.
 Schemes
Single Point Registration Scheme wherein registered SSI units get
purchase preference in Government purchase program
Issue of the Tender Sets free of cost
Exemption from payment of Earnest Money Deposit (EMD)
Consultancy in
Capacity Building
Policy & Institutional Framework
Entrepreneurship Development
Business Development Services

7. NATIONAL INSTITUTE FOR ENTREPRENEURSHIP AND SMALL BUSINESS

DEVELOPMENT (NIESBUD)

The National Institute for Entrepreneurship and Small Business Development is a

premier organization of Ministry of Micro, Small and Medium Enterprises engaged
in training, consultancy, research, etc. in order to promote entrepreneurship.

 Objectives

To evolve standardized materials and processes for selection, training, support

and sustenance of entrepreneurs, potential and existing.
To help/support and affiliate institutions/organizations in carrying out training
and other entrepreneurship development related activities.
To serve as an apex national level resource institute for accelerating the process of
entrepreneurship development ensuring its impact across the country and among all
strata of the society.
To provide vital information and support to trainers, promoters and entrepreneurs by
organizing research and documentation activities relevant to entrepreneurship
development
To train trainers, promoters and consultants in various areas of
entrepreneurship development
To offers consultancy nationally/internationally for promotion of entrepreneurship
and small business development.
To provide national/international forums for interaction and exchange of
experiences helpful for policy formulation and modification at various levels.
To share international experience and expertise in entrepreneurship
development. To share experience and expertise in entrepreneurship
development across national frontiers.

8. STATE FINANCIAL CORPORATIONS(SFC)

In order to provide medium and long term credit to industrial undertaking, which fall
outside the normal activities of commercial banks, a central industrial finance
corporation was set up under the Industrial Finance Corporations act, 1948.

 Main Features
 The bill provides that the state government may, by notification in the authorized
gazette, establish a financial corporation for the state.
The share capital shall be fixed by the State government but shall not exceed Rs
2cr
Shares of the corporation will be guaranteed by the State government as to the re –
payment of principal and the payment of a minimum dividend to be prescribed in
consultation with the central government.
The corporation will be authorized to issue bonds and debentures for amounts
which together with the contingent liabilities of the corporations shall not exceed five
– times the amount of the paid – up share capital and the reserve fund of the
corporations.
The corporation may accept deposits from the public repayable after not less than
five years, subject to the maximum not exceeding the paid up capital.
The corporation will be managed by a board consisting of a majority of Directors
nominated by the State governments, The Reserve banks and the industrial
Finance corporation of India.

 Functions

Project advisory and Finance

Project conceptualization and related services, including guidance in relation to
selection of projects, preparation of feasibility studies, capital structuring, techno –
economic feasibility, financial engineering, project management design etc.
Credit Syndication including supportance in legal
documentation Documentation of various project documents

9. MARKETING MANAGEMENT

Effective marketing of small scale industrial products would ensure higher levels of
income, consumption, and employment which increase the standard of living of the
people.

Marketing is a dynamic process as it is highly situational. It is concerned with the

activities involved in the flow of goods and services from producer to consumer.

Factors which contribute to the marketing problems

Increasing competition from within the small scale sector as well as from large
industries with established brand names and marketing setup
Consumer awareness, even in rural and semi urban areas, for quality goods.
The need to set up distribution networks for reaching out widely dispersed markets
Inability of the SSI units to exploit the export markets
 10. PRODUCTION MANAGEMENT

Production management means planning, organizing, directing and controlling of

production activities.
Production management deals with converting raw materials into finished goods or
products. It brings together the 6M's i.e. men, money, machines, materials, methods
and markets to satisfy the wants of the people.

 Function

Production Control : ensure the right production plan

Scheduling : planning when the actual production would begin and ends.
Cost and Quality Control
Maintenance of Machines : ensure instruments used are in good working
condition

 Importance

Helps the Firm to Accomplish its

Objectives Boost Business Reputation
and Goodwill Reduces the Cost of
Production

11. FINANCE MANAGEMENT

It means controlling and managing the firm's financial resources. The process of
managing finances involves cash flow management which is concerned with the
inflow and outflow of money in and out of a business.

For this a cash flow statement is prepared which records a company's income
and expenses in a systematic form. It lists cash to and cash from operating,
investing and financing activities along with the net increase or decrease in cash
for the period.
For proper management of a company's finances, the knowledge of accountancy,
particularly the principles of double entry book keeping is an essential requirement.
This whole process of financial management gives the true financial position of the
company. It is thus essential for smooth and successful functioning of the
enterprise in a profitable manner on a long term basis.

Rules to manage cash Flow

Understand the cash flows in a broader perspective in order to any
avoid financial troubles in future.
Measure the cash flows and the changes in it over a time-period and
categorize company's cash receipts and outlays for every financial year This
can be done by preparing a statement of cash flows on monthly, weekly or daily
basis depending upon the requirement of business.
All the business transactions of a company are recorded in a general ledger
 account. A 'general ledger account' is the main accounting record of a business
in which the financial transactions are represented by means of the two entries
i.e. debit and credit.

12. HUMAN RESOURCE MANAGEMENT

Today human factor is considered to be the most important resource because the
effective utilization of the other resources of the organization depends upon the
management of the personnel of the organization. Human resources appreciates in
value as the time progresses in terms of acquisition of knowledge and experience.
They have inherent dynamism and potential for development.

 Objectives

 To build and maintain cordial relations between people working at

different levels of the organization
 To ensure effective utilization of the available human resources.
 To provide fair working conditions, wages and amenities to the employees.
 To achieve the development of each individual employee to his/her fullest
potential.

Small and medium industries can include variable pay component to their pay
structures. Apart from the regular pay scales, pay-hike linked to performance may
be integrated.
Similarly, these SMES should put in place individual and group incentive schemes.
The units may take consultancy from the business schools, at a nominal charge in
this regard.

A majority of small and medium units under review do not follow promotion system.
This may be one of the reasons for larger quits. The performance of employee is
deeply connected with his career advancement.
These units may adopt appropriate promotion policy. A seniority may be the basis
for promotion decisions for non-technical nature of work and ‘performance’ ought to
be the criterion for the skill and competency based jobs.

13. EXPORT MARKETING

The capability of Indian MSME products to compete in international markets is

reflected in its share of about 34% in national exports.
In view of this, export promotion from the small scale sector has been accorded
high priority in India’s export promotion strategy which includes simplification of
procedures, incentives for higher production of exports, preferential treatments to
MSMEs in the market development fund, simplification of duty drawback rules, etc.
Products of MSME exporters are displayed in international exhibitions free of cost
under SIDO Umbrella abroad.
SSI Sector plays a major role in India's present export performance. 45%-50% of
the Indian Exports is contributed by SSI Sector.
It would surprise many to know that non-traditional products account for more than
95% of the SSI exports.
The SSI sector is reorienting its export strategy towards the new trade regime
being ushered in by the WTO.