Institutional Framework

The Ministry of MSME designs policies, programmes, projects and

schemes in consultation with its organizations and various stakeholders
and monitors their implementation with a view to assisting the
promotion and growth of MSMES.
The Ministry also performs the function of policy advocacy on behalf of
these enterprises with other Ministries/ Departments of the Central
Government and the State and Union Territories.
Office of Development Commissioner operates a number of schemes
for the MSME sector.
For achieving these objectives, the specific schemes/programmes
undertaken by the organizations of this Ministry seek to
facilitate/provide one or more of the following for the MSMES:
• Adequate credit from financial institutions/banks;
• Funds for technology upgradation and modernization;
• Adequate infrastructural facilities;
• Modern testing facilities and quality certification laboratories;
• Modern management practices and skill upgradation through
advanced training facilities;
• Marketing assistance; and
• Level playing field at par with the large industries sector.
The Ministry of MSME is implementing following
Schemes/Programmes for promotion and development of MSMES in
the country both directly and indirectly as mentioned here under:
(a) Implemented directly by Ministry
• Guidelines of the Scheme for International Cooperation
• Guidelines for Market Development Assistance on Production Scheme
• Guidelines of Scheme for Assistance to Training Institutions
• Scheme of Surveys, Studies and Policy Research
• Scheme of Surveys, Studies and Policy Research - List of Agencies as
on 26.08.2010
• Surveys/Studies conducted under the Surveys, Studies and Policy
Research Scheme
• Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
• Rajiv Gandhi Udyami Mitra Yojana (RGUMY)

(b) Implemented through NSIC

• Marketing Assistance Scheme (English/Hindi)
• Performance and Credit Rating Scheme (English/Hindi)
(c) Implemented through KVIC
• Guidelines of the Market Development Assistance (MDA) on
Production
• Prime Minister's Employment Generation Programme (PMEGP)
• Product Development, Design Intervention and Packaging (PRODIP)
• Khadi Karigar Janashree Bima Yojana for Khadi Artisans
• Interest Subsidy Eligibility Certification (ISEC)
• Scheme for Enhancing Productivity and Competitiveness of Khadi
Industry and Artisans
• Work shed Scheme for Khadi Artisans
(d) Implemented through Coir Board
• Rejuvenation, Modernization and Technology Upgradation of the Coir
Industry
The implementation of policies and various programmes/projects/
schemes for providing infrastructure and support services to small
enterprises is under taken through its attached office, namely -the
Small Industry Development Organization (SIDO) and the National Small
Industries Corporation (NSIC) Ltd., a public sector undertaking under
the Ministry.

CENTRAL GOVERNMENT
MSME Advisory BOARD
The range of development work in MSMES involves several
Departments/ Ministries and different organisations of Central/ State
Governments.
To facilitate coordination and inter-institutional linkages and in
pursuance of the MSME Development Act, 2006, a National Board for
Micro, Small & Medium Enterprises, consisting of a total of 47
Members, has been constituted with 20 non-official members. It is an
apex advisory body constituted to render advice to the Government on
all issues pertaining to the MSME sector.
The Minister In charge of MSME of the Government of India is the
Chairman and the Board comprises among others, State Industry
Ministers, some Members of Parliament, Secretaries of various
Departments of Government of India, financial institutions, public
sector undertakings, industry associations and eminent experts in the
field.
The board meets periodically to take stock of the issues pertaining to
policy matters.

Development Commissioner (MSME)

The offices of Development Commissioner of MSME (DCMSME) located
at various centers are working under the Ministry of MSME, Gol, and
helps in laying down the policy of the central government and has been
playing an effective role in strengthening of the MSME sector.
The organization of the Development Commissioner (Small and
Medium Enterprises) [earlier called Development Commissioner (Small
Scale Industries)] was established as Small Industries Development
Organisation (SIDO) in 1954 on the basis of the recommendations of
the Ford Foundation.
Over the years, it has seen its role to evolve into an agency for
advocacy, hand holding and facilitation for the small industries sector.
With the enactment of the MSMED Act, 2006, the organization has
been renamed as Micro, Small and Medium Enterprises-Development
Organisation
(MSME-DO) with the wider mandate of promotion and development of
MSME sector, It has over 60 offices and 21 autonomous bodies under
its management.
These autonomous bodies include Tool Rooms, Training Institutions
and Project-cum-Process Development Centres.
MSME-DO provides a wide spectrum of services to the small industries
sector, now enlarged to include all enterprises, excluding the larger
ones.
These include facilities for testing, tool making, training for
entrepreneurship development, preparation of project and product
profiles, technical and managerial consultancy, assistance for exports,
pollution and energy audits etc.
MSME-DO provides economic information services and advises
Government in policy formulation for the promotion and development
of MSME sector. The field offices also work as effective links between
the Central and the State Governments in the area of MSME
development.
Office of Development Commissioner operates a number of schemes
for the MSME sector. At a glance these are:
1. 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 (MSMES) in their endeavor
to become competitive and adjust the competitive pressure caused by
liberalization and moderation of tariff rates.
The programme emphasizes on revival of the manufacturing sector, in
particular small and medium enterprises, to enable them to strengthen
their operations and sharpen their competitiveness.

2. 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.
The approach is adopted as a key strategy for enhancing the
productivity and competitiveness as well as capacity building of Micro
and Small Enterprises (MSES) and their collectives in the country.
Clustering of units also enables providers of various services, including
banks and credit agencies, to provide their services more economically,
thus reducing costs and improving the availability of services for these
enterprises.
3. Credit Linked Capital Subsidy Scheme for Technology Upgradation -
The Scheme was launched in October, 2000 and revised w.e.f.
29.09.2005, The revised scheme aims at facilitating Technology
Upgradation of Micro and Small Enterprises by providing 15% capital
subsidy (12% prior to 2005) on institutional finance availed by them for
induction of well-established and improved technology in approved
sub-sectors/products.
The admissible capital subsidy under the revised scheme is calculated
with reference to purchase price of Plant and Machinery. Maximum
limit of eligible loan for calculation of subsidy under the revised scheme
has also been raised from Rs. 40 Lakh to Rs. 100 Lakh w.e.f. 29-09-2005.
4. Credit Guarantee Scheme - Collateral free loans up to a limit of
Rs.100 Lakh - for individual MSEs:
The Credit Guarantee Fund Scheme for Micro and Small Enterprises
(CGMSE) was formally launched by the Government of India in August
2000 to make available collateral-free credit to the micro and small
enterprise sector. Both the existing and the new enterprises are
eligible to be covered under the scheme.
The Ministry of MSME and SIDBI have jointly established a Trust
named Credit Guarantee Fund Trust for Micro and Small Enterprises
(CGTMSE) to implement the Scheme.
The guarantee coverage available under the scheme is to the extent of
75% (80% in specific categories) of the sanctioned amount of the credit
facility. Credit facilities up to Rs. 100 Lakh are eligible under the
scheme.
The facilities are to be extended without any collateral security or third-
party guarantee
5. ISO 9000/ISO 14001 Certification Reimbursement Scheme -
The incentive scheme, introduced by GOI, is to enhance the
competitive strength of the MSME sector for their technological
upgradation/quality improvement and environment management.
Under the scheme, reimbursement of expenses for acquiring Quality
Management System (QMS) ISO 9000 certification/Environment
Management (EMS) ISO 14001 certification/HACCP certification to the
extent of 75% or Rs. 75,000/- whichever is lower is available. The
permanent registered SSI/ ancillary/ Tiny/ Small Service Business
Enterprises (SSSBE) units are eligible to avail the facility.
6. MSME MDA
The scheme offers funding up to 75% in respect of to and fro air fare for
participation by MSME Entrepreneurs in overseas fairs/ trade
delegations.
The scheme also provides for funding for producing publicly material
(upto 25% of costs) Sector specific studies (upto Rs. 2 lakh) and for
contesting anti-dumping cases (50% upto Rs. 1 lakh) for individual
MSMES & Associations.
• Participation in the International Exhibitions/Fairs
The scheme is available only to the MSME units having valid permanent
registration with Directorate of Industries/District Industries Centre.
• Financial Assistance for using Global Standards (GS1) in Bar coding
Under the scheme, financial assistance by way of reimbursement of
one-time registration fee to the extent of 75% and 75% of the annual
recurring fee for first three years paid by the MSME units to GS1 India
(solution provider) for using of Bar Coding is available. The
reimbursement is now being done by MSME- DI.
• Purchase and Price Preference Policy
This is administered through the Single Point Registration Scheme of
NSIC. Under this, 358 items are reserved for exclusive purchase from
MSME by Central Government. Other facilities include tender
documents free of cost, exemption from earnest money and security
deposit and 15% price preference in Central Government purchases for
individual MSMES
7. Mini Tool Rooms
Under the scheme, the Central Government provides financial
assistance to the State Governments in the form of one time grant-in-
aid equal to 90% of the cost of machinery/equipment or Rs. 9.00 crore
whichever is less for setting up Mini Tool Room.
For upgradation/modernization of existing Tool Rooms, the assistance
is restricted to 75% of the cost of machinery/equipment or Rs. 7.50
crore whichever is lower. The balance amount is to be met by the State
Governments concerned. The objective of the scheme is to meet the
growing demand of tools and dies in the country in particular MSMES.

8. Assistance to Entrepreneurship Development Institutes (EDIs)-

Financial assistance by the Central Government through DC-MSME is
being provided for strengthening training infrastructure in EDIs to the
extent of 50% of the cost or Rs. 100 Lakh whichever is less. Proposals of
EDIS have to be submitted to DC-MSME through State Government
duly recommended for consideration.

9. Scheme of Micro Finance Programme

Creating self-employment opportunities is one way of attacking poverty
and solving the problems of unemployment. There are over 24 crore
people below the poverty line in the country, The Micro Finance
programme of SIDBI is under operation. Under the programme, the
NGOS/ MFls are required to provide equity support to the extent of
2.5% of the loan amount which they find it difficult to manage due to
their weak financial condition.
The Central Government will provide 'Portfolio Risk Fund' (PRF) for
Micro-Finance Programme to SIDBI. The PRF would be used for security
deposit requirement for loans from the NGOs/ MFIS and to meet the
cost of interest loss.

10. Mahatma Gandhi Institute for Rural Industrialization (MGIRI)

The national level institute namely 'Mahatma Gandhi Institute for Rural
Industrialization (MGIRI) (erstwhile Jamnalal Bajaj Central Research
Institute) has been established as a society under Societies Registration
Act, 1860 at Wardha, Maharashtra, to strengthen the R&D activities in
KVI sector.
The main functions of the Institute are to improve the R&D activities
under rural industrial sector through encouraging research, extension
of R&D, quality control, training and dissemination of technology
related information.
11. Scheme of National Award
The Micro, Small & Medium Enterprises (MSMES) in India have seen a
vast development in the last five decades.
The MSMES have registered tremendous growth as also progress in
terms of quality production, exports, innovation, product development
and import substitution, very much beyond the expected objectives of
setting up MSMES by the planners of industrial production base in the
country.
MSMES have made it possible to produce various items including items
of import substitutes owing to the ambitions and visionary spirit of the
entrepreneurs. The Ministry of MSME, with a view to recognizing the
efforts and contribution of MSMES, gives National Award annually to
selected entrepreneurs and enterprises under the scheme of National
Award.
12. Scheme to Support 5 Selected University/Colleges to Run 1200
Entrepreneurship Clubs per Annum
The scheme called "Scheme to support 5 selected Universities/colleges
to run 1200 Entrepreneurship Clubs" is one of the components of the
promotional Package for Micro and Small Enterprise declared in Lok
Sabha on 27th February 2007 and Rajya Sabha on 2nd March 2007. The
scheme provides support to 5 selected universities/colleges to run 1200
Entrepreneurship Club i.e. one each from Northern, Western, Eastern,
Southern, and North East region.
Each university will have to run 240 clubs per year and each club may
have a membership of 50 entrepreneurs, etc.

TRAINING SERVICES: MSME TESTING

CENTRE, NEW DELHI
with an objective to support specifically to MSMES and also to other
industries for improvement of skill of their testing personnel, the
MSME-Testing Centre, New Delhi imparts various types of training in
the field of Electrical, Chemical, Metallurgical and Mechanical testing of
various products.
Such trainings develop human resources, which are beneficial to all
Industries, since they get a trained graduate/diploma holder engineers
and graduate chemists who may contribute for testing and
implementation of quality control activities in their respective
establishments.
NATIONAL INSTITUTE OF MICRO, SMALL &
MEDIUM ENTERPRISES (NIMSME)
NIMSME, (earlier known as NISIET) since its inception in 1960 by the
Government of India, has taken gigantic strides to become the premier
institution for the promotion, development and modernization of the
MSME sector.
An autonomous arm of the Ministry of Micro, Small and Medium
Enterprises (MSMEs), the Institute strives to achieve its avowed
objectives through a gamut of operations ranging from training,
consultancy, research and education, to extension and information
services.
It was in 1984 that the UNIDO had recognized SIET as an institute of
meritorious performance under its Centers of Excellence Scheme to
extend aid.
Subsequently, it was also accorded national status and SIET Institute
became NISIET in the same year. To cope with the precut of
globalization, the Government of India has enacted Micro, Small,
Medium Enterprises Development (MSMED) Bill in the Parliament
which was commenced on 2nd October 2006. Accordingly, the institute
also has emerged as an apex organisation by changing its structure as
well as name as NIMSME from 11th April 2007.
INDIAN INSTITUTE OF ENTREPRENEURSHIP,
GUWAHATI (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.
The policy direction and guidance to the institute is provided by its
Board of Management whose Chairman is the Secretary to Government
of India, Ministry of Micro, Small and Medium Enterprises (MSME).
The Governing Council of the institute is headed by Chairman, NEC and
the Executive Committee is headed by the Secretary, Ministry of
MSME, Government of India.
The activities of the Institute include:
• identification of training needs,
• designing and organizing programmers both for development
functionaries and entrepreneurs;
• evolving effective training strategies and methodologies for
different target groups and locations;
• organize seminars, workshops and conferences for providing
interaction and exchange of views by various agencies and
entrepreneurs;
• undertaking research on entrepreneurship development,
 • documenting and
• disseminating information needed for policy formulation and
implementation on self-employment and entrepreneurship.
The Institute acts as a catalyst for entrepreneurship development by
creating an environment for entrepreneurship in the support system,
developing new entrepreneurship, helping in the growth of existing
entrepreneurs and propagation of entrepreneurial education.

NATIONAL INSTITUTE FOR

ENTREPRENEURSHIP & SMALL BUSINESS
DEVELOPMENT (NIESBUD)
NIESBUD is an Apex Institute in the area of Entrepreneurship and Small
Business Development under the Ministry of Micro, Small and Medium
Enterprises, Government of India.
The basic objects for which the Institute has been established are:
Promotion and Development of Micro, Small and Medium Enterprises
including enhancement of their competitiveness through various
activities.
The Institute has trained more than 7.30 lakh trainees including 3,800
persons from more than 135 countries till date.
The activities of NIESBUD include:
• Evolving effective training strategies and methodology
• Standardizing Model Syllabi for training various target groups
• Formulating Scientific Selection Procedures
• Developing Training Aids, Manual Tools
• Facilitating and supporting Central/State/other agencies in organizing
Entrepreneurship Developing Programmes.

Scheme of Fund for Regeneration of

Traditional Industries (SFURTI)
For the traditional and village industries, Government has significantly
enhanced the ongoing Scheme of Fund for Regeneration of Traditional
Industries (SFURTI) to achieve better and more intensive coverage with
expert inputs.
A special component plan to support 100 Khadi institutions and Self-
Help Groups in the Border, Hill and Left-Wing Extremism affected areas
has been sanctioned at a cost of Rs.76 crore.
In addition, some other schemes relating to capacity building and
mentoring for MSMES are under finalization.
NATIONAL SMALL INDUSTRIES
CORPORATION (NSIC)
National Small Industries Corporation Ltd. (NSIC), is a 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.
Over a period or five decades of transition, growth and development,
NSIC has proved its strength within the country and abroad by
promoting modernization, upgradation of technology, quality
consciousness, strengthening linkages with large medium enterprises
and enhancing exports projects and products from small enterprises.
NSIC operates through countrywide network of offices and Technical
Centres in the Country.
To manage operations in African countries, NSIC operates from its
office in Johannesburg, South Africa.
In addition, NSIC has set up Training cum Incubation Centre & with a
large professional manpower; NSIC provides a package of services as
per the needs of MSME sector.
NSIC carries forward its mission to assist small enterprises with a set
of specially tailored schemes designed to put them in a competitive
and advantageous position.
The schemes comprise of facilitating marketing support, credit support,
technology support and other support services.
It is providing the under mentioned services:
• Marketing
• Consortia and Tender Marketing
• Single point Registration for Government Purchase
• B2B Web Portal for Marketing
• Marketing Intelligence
• Exhibitions and Technology Fairs
• Buyer-Seller meets
• Credit Support:
(a) Financing for procurement of Raw Material (Short term)
(b) Financing for Marketing Activities (Short term)
(c) Finance through syndication with Banks

Performance and Credit Rating Scheme for

small industries
To enable small enterprises to ascertain the strengths and weaknesses
of their existing operations and take corrective measures to enhance
their organizational strength.
NSIC is operating a Performance and Credit Rating Scheme through
empaneled agencies like ICRA, ONICRA, CRISIL, India Ratings & Research
Pvt. Ltd. (India Rating), CARE, BRICKWORK RATINGS and MSMERA.
Small enterprise has the liberty to choose any of the rating agencies
empaneled with NSIC. Rating agencies will charge the credit rating fee
according to their policies.
ORGANIZATIONS UNDER THE CONTROL OF
STATE GOVERNMENT
Directorate of Industries, District Industries Centres, State Financial
Corporations, State Industrial Development Corporation/State
Industrial Investment Corporation ISIDC/SIIC), and State Small
Industries Development Corporations are established by and large in
each State. Their functions are spelt out briefly as under -

Directorate of Industries
For promotion and development of village and small industries sector,
the executive agency in each State is the Directorate of Industries. It
acts under the overall guidance of SIDO which functions as both
regulatory and development agency. It has a network of District
Industries Centres at District level, Industrial Officer at sub-division level
and extension officers at Block level.

District Industries Centre (DIC)

DICs were established during 1980 to promote SSI and cottage
industries beyond big cities and to generate employment among local
and backward areas. The District Industries Centres have budgetary
provisions and extend the following services:
Investigation of Local Resources, Supply of Machinery and equipment,
Provision of Raw Materials, arrangement for credit facilities, marketing
and quality inputs.
Consultancy and extensions services - a study of the various DICS by
some study groups revealed the following lapses in their functioning:
(1) Lock of adequate budgetary support;
(2) Lack of trained Man Power;
(3) equipped in terms of technology and resources;
(4) Do not have viable location/specific projects;
(5) Their information system is weak
(6) They promote Central Government Scheme like PMRY;
(7) They are seen as registering agencies rather than promoting and
developing agencies

State Financial Corporations (SFCS)

There are 18 SFCs across the country mandated to serve as Regional
Development Banks for promoting industrial growth. These
Corporations were envisaged to function as Development Financial
Institutions (DFIS) mainly for SSIs.
Besides providing term loans for setting up new, expansion,
modernization, etc., of industrial units, they are also mandated to
provide equity support wherever needed.
The SFCS set up under the State Financial Corporation (SFCS) Act, 1951
have made significant contribution in developing industrial sector
including the Small-Scale Industry
Over the years their activities have expanded considerably. However,
with the passage of time, several problems connected with the
structure, management and resources have confronted the SFCS.
As such, their overall financial health has reached a critical state, with
many of the SFCS having eroded their net worth. With the introduction
of financial sector reforms, the business environment for SFCS, as also
other players in the financial system, became increasingly competitive.
To enable SFCS to adapt themselves to the emerging environment and
promote the growth of the small scale and tiny industries sector in the
desired manner, Government of India (Gol) had enacted amendments
to the SFCS in the year 2000 with a view to enlarging their shareholders
base, providing them with greater functional autonomy and operational
flexibility and enabling them to respond to the needs of the changing
financial system.
Alongside the amendments to SFCs Act, a need was also felt to
restructure the SFCS for strengthening and revitalizing them.
The financial assistance provided by the SFCS is by way of term loan,
debentures etc.
Their main resource is refinance provided by SIDBI (earlier IDBI).
Schemes for artisans and specific target groups are formulated which
are tailor-made to suit different categories.
Under the single window concept, working capital finance is also
sanctioned.
A study of some of the SFCs revealed huge portfolio of non-performing
assets even though the powers for recovery of dues under Section 29 of
SFCS Act empower them seizure and auction of defaulters' assets.
Since FY 2004, SIDBI, with the support and guidance of Government of
India, has taken several steps for revival of these Corporations through
a tripartite Memorandum, wherein, the concerned State Governments
were also made a party, besides SIDBI and the SFC concerned. The MoU
envisaged re-scheduling of refinance, cheaper resources support,
reduction in interest rate on refinance outstanding, reduction of NPAS,
recapitalization, professionalization, capacity building assistance, risk
management, etc.
MoUs were executed with 11 SFCS, majority of which have shown
marked improvement in the performance. With the buoyancy in MSME
sector, these Corporations are expected to improve their operations
and provide another window of assistance to MSMES in their areas of
operations. Out of the remaining Corporations, those which are
potentially viable are in the process of revival and others have
suspended their operations.

State Industrial Development Corporations/State

Industries Investment Corporation (SIDC/SIIC)
The above two organizations developed in 1956 are wholly owned
subsidiaries of the State Government to act as catalysts for industrial
growth.
These Corporations were created for industrial promotion by way of
providing industrial infrastructure such as industrial areas/ estates/
margin money/ project feasibilities. While some of the IDCs set up their
own industrial units for a demonstration purpose, SIIC, has basically
devoted for promotion of industries as a development banking
institution.
However, as there were many overlapping in their functions and shift in
a Government's policies, majority of these Corporations became
unviable.
Small Scale Industries Development Corporation (SSIDC)
SSIDC is an undertaking established under the Companies Act, 1956. Its
main objective is to cater to the needs of small and tiny village
industries in the State/Union territories concerned. The various
activities undertaken by them are:
(1) Supply of machinery
(2) Raw material procurement and distribution
(3) Marketing assistance
(4) Providing Management assistance
(5) Construction of industrial estates
A study of the above Corporation has revealed that their outfit of the
State Government is expensive and ineffective as they perform
overlapping functions, and even operations are cost intensive. In a few
States, these institutions are wound up for their uneconomic
operations.

OTHER AGENCIES
There are a few other agencies established by the
Government/Public/Private sectors indirectly to promote the growth
and development of the MSME sector.
Housing & Urban Development Corporation (HUDCO)
Housing & Urban Development Corporation Ltd. (HUDCO) is a public
sector company fully owned by Government of India for financing of
housing and urban infrastructure activities in India.
HUDCO was incorporated on April 25, 1970 under the Companies Act,
1956. HUDCO, as a premier techno financing institution of the country,
continuously strives to improve and take innovative initiatives.
The cardinal objective of HUDCO is to undertake housing and urban
infrastructure development programmes in the country, provide long-
term finance for construction of houses for residential purposes in
urban & rural areas and finance or undertake, the setting up of the new
or satellite towns and industrial enterprise for building material,
subscribe to the debentures and bonds to be issued by the State
Housing (and/or Urban Development) Boards, Improvement Trust,
Development Authorities, etc. for financing housing and urban
development programmes, to promote, establish, assist collaborate
and provide consultancy services for the projects of designing and
planning of works relating to Housing and Development programmes in
India and abroad, Administration of the moneys received from time to
time from GOI and other sources as grants or otherwise for the purpose
of financing or undertaking housing and urban development
programmes in the country, etc.
Institute for the Design of Electrical Measuring
Instruments
This institute was set up in 1969 with the assistance of UNDP and
UNIDO mainly to render services to the Instrument Industries. Its
services include -
Training & Consultancy in the areas of:
(1) Instrumentation;
(2) Design & Development of new electrical instruments
(3) Testing and calibration of instruments
(4) Tool designing and tool making
This institution is engaged in import substitution, export of electrical,
electronic instruments and appliances manufactured by Small Scale
Industries.

Technical Consultancy Organization (TCO)

Technical Consultancy Organisations (TCOs) were created for facilitating
technical consultancy for industrial projects. These organisations were
established by the All India Financial Institutions (IDBI, ICICI, IFCI, etc.)
in collaboration with the state level financial/development
organisations and commercial banks. There are in all 18 state-level
TCOS across India.
Over the years, the TCOS have transformed from being consultancy
firm handling project reports, market surveys, etc. to multi-functional,
multi-disciplinary organisations offering a wide range of services to the
industrial and infrastructure sector.
Some of the activities of TCOS can be summed up as below:
• Development of Industry Clusters
• Conducting Industry Potential Surveys/Techno-Economic Viability
(TEV) studies
• Infrastructure Planning
• Energy and Environment Research and Management
• NPA Resolution
• Vocational Training
• Technology Facilitation/Preparation of Project Profiles
• Conducting Entrepreneurship Development Programs
• Carrying out Market Research for specific products
• Offering Merchant Banking Services
• Offering Consultancy for Export-oriented Enterprises

The liberal economic policy of 1991 saw emergence of various non-

governmental agencies both State, Central, and autonomous bodies
providing Training, Finance, and Marketing support to MSME sector.
The role of these agencies is very significant and a closer study of these
organisations revealed that they:
1. are cost effective
2. provide adequate timely assistance
3. do not have the presence and compulsions of Government/ anti
Government agencies
4. have professionals to handle the services
5. do not need budget allocation as most of them are self-financed or
having financing arrangements without any government support.

Khadi & Village Industries Commission

The Khadi & Village Industries Commission is a statutory body formed
by the Government of India. It is an apex organisation under Ministry of
Micro, Small & Medium Enterprises with regard to khadi and village
industries within India. Its head office is based in Mumbai with six zonal
offices in Delhi, Bhopal, Bengaluru, Kolkata, Mumbai, and Guwahati,
besides offices in 29 states for the implementation of various
programmes.
KVIC was established in 1957. It is an autonomous body set up for
promoting khadi and village industries. It has three fold objectives of :
1. Social objective of creating employment
2. Economic objective of producing saleable articles and thereby
improve the rural economy.
3. Creating self reliance
The functioning of the KVIC includes training rural artisans, marketing
of products, supply of raw material, research activities and areas of
production of khadi and village products.
The Commission's programmes are implemented through KVIB,
Commercial concerns and Cooperatives, Panchayats, Zilla Parishads,
Charitable Trusts, etc.
Entrepreneurship Development Institute of India (EDII)
EDII is an autonomous and not-for-profit Institute, set up in 1983. It is
situated in Ahmedabad. Leading Financial Institutions in India viz. IDBI
Bank Ltd., IFCI Ltd., ICICI Bank Ltd., and State Bank of India (SBI), and
the Government of Gujarat, jointly sponsored this institution.
Its main objectives are to augment supply of trained entrepreneurs to
promote micro enterprise at the rural level and inculcate the spirit of
entrepreneurship among the youth.
EDII conducts training programmes as Entrepreneurship Education,
Micro Finance and Micro entrepreneur development.
Innovative training techniques and updated interactions are furnished.
Sharing of information and experiences of Chief Executives is organized.
Based on the experience of this Institute several State Governments
have recognized the importance of Entrepreneur Development and set
up separate institutions.

Commercial Banks and initiatives by Government/

Reserve Bank of India
Recognizing the important role played by MSMEs in economic
development and its sizeable contribution to employment and GDP,
and realizing that financial access is critical for MSMES growth and
development, Government and Reserve Bank of India are taking the
lead in supporting initiatives that improve access to finance.
1. With an objective of ensuring uniform progress in provision of
banking services in all parts of the country, banks were advised to draw
up a roadmap to provide banking services through a banking outlet in
every un-banked village having a population of over 2,000. The Reserve
Bank of India advised banks that such banking services need not
necessarily be extended through a brick and mortar branch but could
be provided also through any of the various forms of Information and
Communication Technology (ICT) - based model including Business
Correspondents (BCs).
2. To ensure enhanced credit flow to the sector, in terms of the
recommendations of the Prime Minister's Task Force on Micro, Small
and Medium Enterprises (MSMES) (Chairman: Shri T.K.A. Nair, Principal
Secretary, Government of India) constituted by the Government of
India, banks were advised to achieve a 20 per cent year-on-year
growth in credit to micro and small enterprises; the allocation of 60%
of the MSE advances to the micro enterprises is to be achieved.
3. Further, based on the recommendations of the Working Group
(Chairman: Shri V.K. Sharma, Executive Director, RBI) constituted by the
Reserve Bank of India to review the Credit Guarantee Scheme (CGS) of
the Credit Guarantee Fund Trust for Micro and Small Enterprises
(CGTMSE), the limit for collateral free loons to the MSE was increased
from the level of Rs.5 lacs to Rs. 10 lacs and it has been made
mandatory for banks.
The Working Group has also made recommendations regarding
increase in the extent of guarantee cover, absorption of guarantee fees
for the collateral free loans by CGTMSE subject to certain conditions,
simplification of procedure for filing claims with CGTMSE and increasing
awareness about the scheme.
CGTMSE, which is implementing agency for Credit Guarantee Scheme,
has been advised to expedite implementation of the recommendations.
Role of Banks and Industry Associations in empowering
MSMES
In order to expedite sanction and disbursement of loan to MSMES
particularly to small units, say Micro enterprises, these may be
sanctioned at the level of the branch.
A Centralized Credit Processing Cell (CPC) for MSMES has been
introduced in most Banks throughout the country.
These Cells are utilized for single point appraisal, sanction,
documentation, renewal and enhancement.
The arrangement helps in reduction of delay in processing, utilization of
the available talent in an optimal fashion besides building reliable MIS,
developing fair practices and easier tracking.
Banks have also of late realized that lending to MSMES is a profitable
business. If is seen that many of the scheduled commercial banks have
achieved more than 20% growth in their credit to MSMES.
Regulatory directions also include, in case of micro and small
enterprises, simplified procedure of loan application / sanction, score
based lending up to Rs 20 lacs, working capital limits by projected
turnover method, and term loans to be sanctioned without the burden
of data collection, project report / projections preparation for MSMES.
The disposal of applications in a time bound manner, which should be
within the overall time limit prescribed by RBI.
All banks are now tapping the available technology and have set up
Central Registration of Loan Applications.
The same set up can be used by the borrower for tracking of the status
of application on the internet on the basis of the receipt issued to him.
The borrower is also provided option of tracking his application over
telephone on the toll-free helpline.
The same technological setup may also be used for making online
applications. Online applications have been popularized and publicized
by all branches.
Rural Self Employment Training Institutes (RSETIS) are working in this
direction.
A scheme for utilizing NGOS to provide training services to tiny micro
enterprises could be encouraged. Entrepreneurship development is
important in view of its visible impact on wealth creation and
employment generation.

The MSME Associations and Chambers of Commerce also have an

important role to play in stepping up credit to this segment.
Asymmetry of information and lack of transparency and reliability of
data has been a major concern for organizations dealing with MSMES
world over. The Association needs to therefore, proactively engage
themselves in organizing workshops and training programmes for their
members to enlighten them about cash flow cycles, various financial
products, accounting practices, etc.
Institutional Framework for providing Financial
Assistance to MSME sector:
The Reserve Bank of India has played a significant role in building up
the requisite institutional structure to meet the credit requirements of
the MSMES. The same is as under-
1. Reserve Bank of India:
Reserve Bank of India lays down the policies of lending, supervision and
follow-up of advances to MSES which is recognized as Priority Sector.
*The guidelines issued by Reserve Bank of India to various banks and
financial institutions cover aspects relating to timely and adequate
sanction of working capital limits, rejection of proposals, co-ordination
between commercial banks and state financial corporations,
submission of periodical reports to boards of banks/ institutions with
respect to credit assistance to the Micro and Small enterprises as also
rehabilitation of sick industrial units in this sector.
*Reserve Bank of India also constituted a high-level standing committee
in December 1991 under the chairmanship of Shri PR Nayak, the then
Deputy Governor, Reserve Bank of India to review the flow of
institutional credit to the small sector known as the "Nayak
Committee".
RBI has also constituted a High-Level Committee headed by Shri S.L.
Kapoor (IAS Retd.) former Secretary, GÓI to suggest measures for
improving the credit delivery system and simplification of procedures
for credit for this Sector. The recommendations of the committee are
conveyed to the branches along with action by the bank from time to
time.
II. All India Lending Institutions:
(a) Small Industries Development Bank of India (SIDBI):
SIDBI is a wholly owned subsidiary of IDBI set up in April, 1990 specially
to cater to the credit needs of the small-scale sector as also to provide
refinance facilities to lending agencies.
(b) Export Import Bank of India (EXIM)
(c) National Bank for Agriculture and Rural Development (NABARD)
(d) National Co-operative Development Corporation (NCDC)
III. Other Financial Institutions
(e) Commercial Banks
(f)State Financial Corporations (SFCS)
(g) Co-operative Banks
(h) Regional Rural Banks (RRBs)
IV. Credit Guarantee Schemes;
Credit guarantee schemes for guaranteeing the advances granted by
banks and other credit institutions to small borrowers and MSES are
extended by the following institutions:
(i) Deposit Insurance and Credit Guarantee Corporation (DICGC)
(ii) Export Credit Guarantee Corporation (ECGC)
(iii) Credit Guarantee Fund Trust for Micro & Small Enterprises
(CGTMSE)
(iv) National Credit Guarantee Trustee Company Ltd
Others
i) National Small Industries Corporation (NSIC)
j) State Small Industries Development Corporation (SSIDC)
(k) Khadi & Village Industries Commission (KVIC)
l) Handloom Board
(m) Coir Board

Brief Details of Various Banks, Institutions and Agencies

Regional Rural Banks
To promote Agriculture, Trade, Commerce and Industry in Rural areas,
RRBS have been set up.
RRBs concentrate on rural artisan farmers and entrepreneurs. The
restructuring of the Regional Rural Banks recently by the Government
of India has also brought a shift in the working of RRBs with mergers
and amalgamations.

Co-operative Banks
The PACS (Primary Agriculture Cooperative Society) and Primary Coop.
Banks (PCBs) provide finance to Agriculture and related industries, and
cottage and tiny industries respectively.
National Bank for Agriculture & Rural Development
(NABARD)
NABARD is set up as an apex Development Bank with a mandate for
facilitating credit flow for promotion and development of agriculture,
small-scale industries, cottage and village industries, handicrafts and
other rural crafts.
It also has the mandate to support all other allied economic activities in
rural areas, promote integrated and sustainable rural development and
secure prosperity of rural areas.
In discharging its role as a facilitator for rural prosperity NABARD is
entrusted with:-
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
Besides this pivotal role, NABARD also:
• Acts as a coordinator in the operations of rural credit institutions
• Extends assistance to the government, the RBI, and other
organizations in matters relating to rural development
• Offers training and research facilities for banks, cooperatives and
organizations working in the field of rural development
• Helps the state governments in reaching their targets of providing
assistance to eligible institutions in agriculture and rural development
• Acts as regulator for cooperative banks and RRBS
Export Import (EXIM) Bank
The EXIM Bank of India set up by an Act of Parliament for the purpose
of financing, facilitating and promoting India's foreign trade also
extends support to MSMES in a big way.
EXIM Bank has various facilities under its schemes for pre-shipment,
post-shipment, investment abroad, advisory services, import finance,
export product development, export promotion and export marketing.

Banking Codes and Standard Board of India (BCSBI)

The Banking Codes and Standard Board of India (BCSBI) has formulated
a Code of Bank's Commitment to Micro and Small Enterprises.
This is a voluntary Code, which sets minimum standards of banking
practices for banks to follow when they are dealing with Micro and
Small Enterprises (MSES) as defined in the Micro Small and Medium
Enterprises Development (MSMED) Act, 2006.
It provides protection to MSE and explains how banks are expected to
deal with MSE for their day to day operations and in times of financial
difficulty.
The Code does not replace or supersede regulatory or supervisory
instructions issued by the Reserve Bank of India (RBI) and banks will
have to comply with such instructions/ directions issued by the RBI
from time to time.
Objectives of the BCSBI Code
The Code has been developed to:
(a) Give a positive thrust to the MSE sector by providing easy access to
efficient banking services.
(b) Promote good and fair banking practices by setting minimum
standards in dealing with MSE.
(c) Increase transparency so that a better understanding of what can
reasonably be expected of the services.
(d) Improve understanding of business through effective
communication.
(e) Encourage market forces, through competition, to achieve higher
operating standards.
(f) Promote a fair and cordial relationship between MSE and banks and
also ensure timely and quick response to banking needs.
(g) Foster confidence in the banking system.
The focal points which Branches are expected to comply with in the
area of processing of proposals as per BCSBI code are as under.
• Banks to make available free of cost, simple, standardized and stand
application forms for loans to MSES.
• All loan applications should be acknowledged in writing.
• All loan applications should be disposed of within the stipulated time
as under from the date of receipt of application complete in all
respects and accompanied by documents as per the check list:
(i) For credit limits up to Rs. 5 lacs: Within 2 weeks
(ii) For credit limits above Rs. 5 lacs and up to Rs.25 Lacs : Within 4
weeks
(iii) For credit limits exceeding Rs. 25 lacs Within 8 weeks
• It should be ensured that sanctioned loans are disbursed within 2
working days from date of compliance of all terms and conditions of
sanction documentation.
* In case of rejection of application, as per procedure, reasons for
rejection should be conveyed in writing to the applicant for credit
facilities.
Apart from the above, banks with Centralised Processing Cells for
MSMES have their own operational guidelines such as fixing that the
entire sanction procedure should take maximum 14 days from the date
of receipt of complete information and disbursement should be
completed in next 7 days.
In case Techno Economic Viability (TEV) study is required, the time
taken should be maximum 30 days.

SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA

(SIDBI)
Small Industries Development Bank of India (SIDBI) was established on
April 02, 1990 under an Act of Indian Parliament as the principal
financial institution for the financing, promotion and development of
the SSI sector and Co-ordination of the functions of the institutions
engaged in similar activities.
Presently, the Bank provides financial and developmental support to
the micro, small and medium enterprises (MSMES), While refinance
support is provided to a vast network of eligible primary lending
institutions for onward lending to MSMES, direct assistance is
channelized through SIDBI.
SIDBI also extends Micro Finance support in the form of loans and
grants to accredited NGOS/Micro Finance Institutions, Self Help Groups
for on-lending and providing other support services to economically
weaker sections of society enabling them to take up income generating
activities on a sustainable basis.
The authorized capital of the Bank is Rs.1,000 Crore and paid-up
capital is Rs.450 Crore, which is held by thirty six institutions/public
sector banks/insurance companies owned or controlled by Government
of India.
Since its inception, SIDBI has been endeavoring to meet the diverse
needs of the MSMES through various tailor-made schemes.

Direct Finance
Although it started functioning as a refinancing institution, SIDBI now
provides assistance to MSME units directly. Its assistance is by way of:
Term Loan
Term loans are provided for
(i) setting up new projects and for modernization, diversification,
expansion, etc. of existing MSMES,
(ii) Service sector entitles like hotels, entertainment parks,
hospitals/nursing homes, retail chains, logistic support services,
IT and IT enabled services etc. and
(iii) Infrastructure development and up gradation.
 It also provides working capital term loans, bill discounting facilities
in various forms as also equity support to potentially growth
oriented MSME units.
Direct assistance is available in rupee as well as foreign currency.

Resource Support
The Bank provides resource support to institutions/Non-Banking
Finance Companies to facilitate channelizing assistance to a large
number of MSMES and infrastructure projects having linkages to
MSMES.
SIDBI as the Nodal/Implementing Agency
SIDBI extends Nodal Agency services to the Government of India for
Schemes sponsored by its various Ministries for encouraging
implementation of modernization and technology upgradation by
manufacturing units in the MSMES sector such as Credit Linked Capital
Subsidy Scheme (CLCSS), Technology Upgradation Fund Scheme (TUFS)
for textile industry and Integrated Development of Leather Sector
Scheme (IDLSS).
Micro Finance
To meet the micro credit demand, SIDBI constituted a specialized
department called SIDBI Foundation for Micro Credit to create a
national network of strong, viable and sustainable Micro Finance
Institutions (MFIS) from the formal and informal sectors to provide
micro finance services to the poor, especially women.
SFMC provides a complete range of financial and non-financial services,
such as, loan funds, grant support, equity and institution building
support to the retailing MFIS so as to facilitate their development into
financially sustainable entities, besides developing a network of service
providers for the sector.
The Bank has also set up a SIDBI Growth Fund for MFIS for providing
pure equity and quasi-equity support to eligible MFIS.
Indirect Finance
The indirect assistance of the Bank consists of refinance and resource
support in the form of short term loans/ line of credit to Primary
Lending Institutions (PLIS), comprising State Level Financial Institutions
and banks. It also provides rediscounting of bills facilities to banks.

Promotional and Developmental Support

As the apex developmental financial institution, SIDBI undertakes
various Promotional and Developmental (P & D) activities for the MSME
sector in India designed to achieve two prime objectives of national
importance
a) Enterprise creation in the MSME sector, thereby generating
employment and alleviating poverty through its select programmes,
such as, Rural Industries Programme (RIP), Entrepreneurship
Development Programme (EDP), Vocational Training Programme (VTP)
and Small Industries Management Programme (SIMAP)
(b) Strengthening the existing MSMES to face the emerging challenges
of growing internationalization and intensifying competition, through
its select programmes, such as, Cluster Development Programme (CDP),
Skill-cum-Technology Upgradation Programme (STUP), Environmental
Initiatives, Marketing Assistance and Information Dissemination.
SIDBI has re-oriented its business strategy towards filling up the
financial and non-financial gaps in the MSME eco-system. Some of the
niche financial gaps being addressed by SIDBI are risk capital/equity
assistance, sustainable finance, factoring and reverse factoring, services
sector financing, etc. The direct finance to these niche areas is
supplementing and complementing the efforts of the banks/Fls to meet
varied credit needs of the MSMES.
SIDBI has also taken strategic initiatives for addressing various non-
financial gaps for capacity building of the MSME sector, as well as
bankers. These activities include Credit Advisory Services, Loan
Facilitation, and information dissemination through website 'www.
smallB.in', capacity building of small banks, etc.
SIDBI Venture Capital Limited (SVCL)
In order to provide venture capital support to innovative, knowledge-
based first generation entrepreneurs having neither equity nor
collateral, SVCL - an asset Management Company is established as a
wholly-owned subsidiary of SIDBI, for managing venture capital funds
sponsored by SIDBI.
At present, it manages the National Venture Fund for Software and
Information Technology (NFSIT) set up in 1999 and the MSME Growth
Fund, launched in 2004.
The Growth Fund focuses on sectors like life sciences, retailing, light
engineering, food processing, information technology, infrastructure
related to services like healthcare, logistics and distribution, etc.
SIDBI has also a Fund of Fund approach for providing venture capital
assistance to MSME units in terms of which SIDBI has provided corpus
funds to a large number of venture funds set up by various State
Governments and Fls.

CREDIT GUARANTEE FUND TRUST FOR MICRO AND

SMALL ENTERPRISES (CGTMSE)
The Credit Guarantee Fund Trust for Micro and Small Enterprises
(CGTMSE) helps micro and small enterprises in accessing institutional
credit, both term loan and working capital, for their viable projects
without facing the difficulties of arranging collateral security and/ or
third party guarantee.
With the enactment of MSMED Act 2006, the earlier Credit Guarantee
Trust Fund for Small Enterprises was renamed as Credit Guarantee
Fund Trust for Micro & Small Enterprises and the scheme as Credit
Guarantee Scheme for Micro & Small Enterprises (CGMSE).
Credit facilities eligible under the Scheme
The Trust shall cover credit facilities (Fund based and/or Non-fund
based) extended by Member Lending Institution(s) to a single eligible
borrower in the Micro and Small Enterprises sector for credit facility,
(i) not exceeding Rs. 50 lakh (Regional Rural Banks/ Financial
Institutions) and
(ii) not exceeding Rs.100 lakh (Scheduled Commercial Banks and
select Financial Institutions),
by way of term loan and/or working capital facilities on or after
entering into an agreement with the Trust, without any collateral
security and/or third party guarantees or such amount as may be
decided by the Trust from time to time:
Provided that the lending institution applies for guarantee cover in
respect of credit proposals sanctioned in the quarter April-June, July-
September, October-December and January-March prior to expiry of
the following quarter viz. July-September, October-December, January-
March and April-June respectively:
Provided further that, as on the material date
i. The dues to the lending institution have not become bad or doubtful
of recovery; and
ii. The business or activity of the borrower for which the credit facility
was granted has not ceased; and/or
iii. The credit facility has not wholly or partly been utilized for
adjustment of any debts deemed bad or doubtful of recovery, without
obtaining a prior consent in this regard from the Trust.
Credit facilities extended by more than one bank and/or financial
institution jointly and/ or separately to eligible borrower up to a
maximum up to Rs. 200 lakh per borrower subject to ceiling amount of
individual MLI (Member Lending Institution) or such amount as may be
specified by the Trust.
The Guarantee cover under the scheme is for the agreed tenure of the
term loan/composite credit. In case of working capital, the guarantee
cover is of 5 years or block of 5 years.

Credit facilities not eligible under the Scheme:

The following credit facilities shall not be eligible for being guaranteed
under the Scheme:
1. Any credit facility in respect of which risks are additionally covered
under a scheme operated/administered by Deposit Insurance and
Credit Guarantee Corporation or the Reserve Bank of India, to the
extent they are so covered.
2. Any credit facility in respect of which risks are additionally covered
by Government or by any general insurer or any other person or
association of persons carrying on the business of insurance, guarantee
or indemnity, to the extent they are so covered.
3. Any credit facility, which does not conform to, or is in any way
inconsistent with, the provisions of any law, or with any directives or
instructions issued by the Central Government or the Reserve Bank of
India, which may, for the time being, be in force.
4. Any credit facility granted to any borrower, who has availed himself
of other credit facility covered under this scheme or under the schemes
mentioned in (i), (ii), (iii) above, by reason of any default on the part of
the borrower in respect of that credit facility.
5. Any credit facility which has been sanctioned by the lending
institution against collateral security and/or third party guarantee.
6. Any credit facility which has been sanctioned by the lending
institution with interest rate more than 3% over the Prime Lending Rate
(PLR) of the lending institution.
All proposals for sanction of guarantee approvals for credit facilities
above Rs. 50 lakh and up to Rs. 200 lakh will have to be rated internally
by the MLI and should be of investment grade.
SIDBI has set up a Foundation for Micro Credit with Rs. One Billion to
assist NGOs/ voluntary organizations for on-lending at micro level; to
build capacities of MFIS; Rating of MFIS and to help Micro Finance
Product innovations.

SMALL AND MEDIUM ENTERPRISES RATING AGENCY

(SMERA)
SME Rating Agency of India Ltd (SMERA) is a third party rating agency
exclusively set up for micro, small, and medium enterprises in India for
ratings on credit worthiness.
SMERA is promoted by SIDBI and Dun & Bradstreet along with various
government, public and private sector banks.
It provides ratings which enable MSME units to raise bank loans at
competitive rates of interest.
SMERA's ratings are an independent third-party assessment of the
overall status of the MSMES as performing entities.
The ratings comprise a composite appraisal indicator and a size
indicator.
Its ratings enhance the market standing of the MSMEs among their
trading partners and customers.
In addition, the agency factors in industry dynamics in its ratings
through a system of comparison of strengths and weaknesses of the
MSME with other companies in the same line of business,
It is also risk profiling the clusters through special studies and these
would fill the information gap between the lender and the sector.
Banks offer concessions in pricing for credit to MSMES rated by SMERA.
Other MSME Rating Agencies approved by RBI are ICRA, CARE, India
Ratings & Research Pvt. Ltd. (India Rating) & CRISIL, who are rating the
units on various parameters which are acceptable to the financial
institutions/Banks and in the marketability of the products.
RBI has granted accreditation to SMERA as an External Credit
Assessment Institution (ECAI) in Sept. 2012 and accordingly banks have
been permitted by RBI to use the ratings of SMERA for the purpose of
risk weighting their claims for capital adequacy purposes in addition to
the existing five domestic credit rating agencies, It has paved way for
SMERA to rate/grade various instruments such as: IPO, Bonds, Security
Receipts, Bank Loan Instruments etc.

SSI ASSOCIATIONS IN INDIA

Role and Relevance of SSI Associations
As could be seen over a period of time, several organizations, Central
Government, State/Quasi Government, Public Sector, and Private
Sector have come into existence with the avowed objectives to help:-
(1) Setting up of Micro, Small, Medium enterprises in Rural, Urban,
Semi-Urban and Metro centers;
(2) The entrepreneurs in formulate fruitful projects;
(3) Procure adequate finance for long & short terms requirements;
(4) Improve their technology;
(5) Them Market their products at reasonable rates;
(6) Export the products;
(7) Units manufacture crucial items; and Business Development Service
providers.
(8) To train entrepreneurs various skills required not merely in
manufacturing and marketing as also management
A large number of associations of MSME have been very active in
recent years. Some of the prominent industry associations are:-
Federation of Association of Small Industries of India (FASII)
Established in 1959, it has a nationwide constituent membership with
the objectives of promoting, developing MSME. FASII in furthering the
cause of the MSME has established Trade Centres and test centers.
It offers services like organizing seminars/conferences; analysis and
interpretation of policies and taking up the grievances of the members
with the Government.

Federation of Indian Micro & Small and Medium Enterprises

(FIMSME)
Federation of Indian Micro & Small and Medium Enterprises (FIMSME),
though established in the year 1995, traces its origin to 1967 when the
National Alliance of Young Entrepreneurs (NAYE) was established to
promote small industries.
In the pre - liberalized era (prior to 1991), the agenda of an
interventionist and highly protectionist India was adequately met by
NAYE. However, post liberalization (after 1991), India needed to adopt
a different approach for the promotion of Small and Medium
Enterprises (MSME).
Subsequently, in the year 1995, NAYE along with eight states level
associations formed FIMSME to lead MSME in the refurbished
economic environment.
The national and global changes in the post liberalized era have
shaped FIMSME's twin objectives of:
1. Promoting entrepreneurship and facilitating the creation of a
competitive environment in the country.
2. Improving the market access for Indian Micro & Small and Medium
Enterprises (MSME's) in India and abroad.
Main activities of FIMSME can be broadly categorized into the following
headings:
1. Networking and Training
FIMSME has signed MoU with like-minded associations in a few
countries and also has representatives in some countries. Their partner
associations and representatives give the opportunity to use extensive
network for the development of Indian MSME's.
They regularly organise focused seminars, B2B meetings both within
and outside the country, take trade delegations to foreign countries,
extend hand-holding support to members etc.
2. Research and Publication
They are continuously involved in research work and strive to apprise
members and partner associations on various trade related issues that
attract attention from time to time.
FIMSME is the progressive face of Indian MSMES and is regarded as
such by Government of India. FIMSME is a member of National MSME
Board formed under MSMED Act, 2006.
FIMSME is well represented in and consulted by MSME policy making
set-up of the country and also works in close cooperation with major
multilateral and bilateral bodies in India such as UNIDO, ILO, UNCTAD,
DFID, GTZ etc.

Indian Industries Association (IIA)

Indian Industries Association (IIA) is an apex representative body of
Micro, Small and Medium Enterprises (MSME) with a strong
membership base of about 5000 Micro, Small and Medium Enterprises
(MSMES).
IIAS motto is to create an enabling environment for the development of
MSMES in today’s ever changing and extremely competitive industrial
scenario.
In 1985, a group of committed young professionals joined forces and
conceived the idea of an organization that can act as a catalyst for the
promotion and growth for Micro, Small & Medium Enterprises.
It was thus that U.P Chapter of NAYE (National Alliance of Young
entrepreneurs) came into being. In July 1992, however, NAYE was
renamed Indian Industries Association (IIA) with the roles and
objectives of the organization further widened to suit the needs of
changing socio-economic environment.
IIA operates on the board based objective of fostering co-operation and
support for the promotion of Micro, Small & Medium Enterprises.
The Chamber of Small Industry Associations (COSIA)
The Chamber of Small Industry Associations is an apex body of All India
Associations serving Small Scale Industries (now MSME) & Tiny Sector
industries.
It was established in 1990 and registered as a Non-profit company u/s
25 of the Companies Act, 1956 in the year 1992.
COSIA was formed to have a wider forum by enlisting the membership
of associations of SSIs (Small Scale Industries) from all over India.
COSIA is also working to better serve the Small Scale Industries in India
in this era of globalization & liberalization.
The vital role played by SSI units in national and state economics is well
known, Small Scale Industries face frequent and perpetual problems
such as harassment by Government Inspectors, constant hikes in duty
and taxes by authorities, lack of technological upgradation schemes,
reference libraries, test laboratories, troubles in getting timely and
enough bank finance, marketing difficulties and many more.
Individual association in individual cities caters to local requirements.
A need is felt to have a representation of all associations by a single
body at the center/ international/ state/ local levels to solve common
problems of SSls.
In the days of globalization, competitiveness, has gained importance in
the industrial world.
MSME units are facing stiff competition within the country & from the
MNC's abroad.
They can survive & grow only by maintaining high quality standards for
their products. Export market also demands high quality standards.
It has become inevitable for many SSI units to go for ISO series of
certification because it has become necessary for vendor registration in
any large organization.
Apart from quality, the SSI Unit also needs interaction, exposure and
advance know-how. For this purpose high-tech equipment, meetings,
workshops on a regular basis are necessary.
SSI Units cannot afford all this individually. Hence, it is essential to
organize such facilities common for the cluster of SSI Units.
Hence, in addition to abovementioned representation, COSIA also
intends to set up infrastructure suitable for facilitating growth of SSI
units in the current scenario of free market and globalization.
It also provides Technology exposure by training & refreshers courses
and to improve co-ordination between SSI Units & Government
dignitaries to address SSI manufacturers on various issues. In a nutshell,
COSIA is a Friend, Philosopher and Guide to Small Scale Industries in
India.

Laghu Udyog Bharati

• All India organization to assist and promote the Small Scale Industries.
• Operating infrastructure catering to the needs of SSI in 23 States.
• Representation in International Labour Organization. Geneva
(Switzerland).
• Representations in various Committees in Ministry of Labour, Ministry
of Finance, Ministry of Industries etc.
• Enlisted in MSME Board, Ministry of Industry, and Government of
India.
• Laghu Udyog Bharati is a member of National Productivity Council
(NPC).
• Organized various national level seminars and conferences.
• Laghu Udyog Bharati is called for discussion regarding Small Scale
Industry in Parliamentary Standing Committee of Small Scale Industries.
• Relief from Inspector Raj in UP, Rajasthan & Gujarat.

Indian Council of Small Industries (ICSI)

Indian Council of Small Industry (ICSI) is recognized by the Government
of India as a premier National Apex of Small Scale Enterprises.
ICSI encompasses within it fold over 1500 Associations of the
decentralized sector.
It was founded in the year 1979. ICSI caters to the need of Small, Tiny,
Rural, Cottage enterprises and artisans.
ICSI fosters the spirit of self-employment amongst the youth in
preference to the wage employment and in the process tries to build up
a nationwide movement for self-employment.
It is committed to protect, project and promote the interest of the
Village and Small Industry Sector.
Being an apex body, ICSI is representing in various Committees of the
Central and State Governments, Autonomous Bodies and has emerged
as strong advocacy organization of the SSI sector.
Federation of Small & Medium Industries (FOSMI)
Federation of Small & Medium Industries (FOSMI), West Bengal, is the
largest organisation set up in 1952.
It represents the needs of small and tiny enterprises with a
membership of over a thousand entrepreneurs.
It also has affiliated members of 20 dynamic SSI Associations which
represent groups of enterprises in different segments.
FOSMI's objective is to facilitate industrial development especially in
the micro and small sectors:
• By trying to alleviate the problems of existing units.
• By encouraging, training and helping entrepreneurs in setting up new
units in this sector.
FOSMI represents the interests of its members through collective
efforts. It has regular dialogues and exchange of views with various
Government and Semi-Government organisations, Financial
Institutions, Banks, Promotional Agencies and others connected to the
MSME Sector.
Over the years, FOSMI has established itself as an important
communication channel between the MSME Sector and the
Government.
Associated Chamber of Commerce & Industries in India
(ASSOCHAM)
ASSOCHAM is one of the apex trade associations of India.
It represents the cross section of business and industry located all over
the country.
Its target is to provide infrastructure for accelerating economic growth.
The main objective of ASSOCHAM is to promote both domestic and
international trade, and reduce trade barriers while creating conducive
environment for the growth of trade and industry of India.
ASSOCHAM was established in 1920 by promoter chambers
representing all regions of India.
Its head office is in New Delhi and regional offices at Ahmedabad,
Bengaluru and Kolkata.
It covers a membership of over 400,000 companies and professionals
across the country.
The members of the ASSOCHAM represent trade (national and
international), Industry (domestic and international), Professionals,
Trade and Industry Associations and other chambers of commerce.
It operates through 59 Expert Committees to facilitate economic and
social growth.
ASSOCHAM is authorised by the Government of India to issue
Certificates of Origin, certify commercial invoices and recommend
business visa.
World Association of Small & Medium Enterprises
(WASME)
(i) World Association for Small and Medium Enterprises (WASME)
- a global non-governmental organization headquartered at
Noida, India has been spearheading the cause and
development of Small and Medium Enterprises (SMES) world
over since its inception in 1980.
(ii) It has emerged, over the years, as one of the most
representative, effective and leading international
organisations, working towards the promotion of MSMES.
(iii) The vision behind establishment of WASME was to build a
world private community of small business, their supporting
and financial institutions as a non-governmental organization,
not influenced by any government(s).
(iv) WASME has members, associates and network partners in
different countries across the world.
(v) It enjoys consultative/observer status with concerned agencies
in UN system such as ECOSOC, UNCTAD, WIPO, UNIDO,
UNICITRAL, UNESCAP, ITC and ILO.
(vi) It also cooperates actively with several inter-governmental and
international organizations such as WCO, OECD, ICSB, APCTT,
etc.
(vii) WASME works closely with MSME Experts located in different
parts of the world designated as Senior Advisors in specific
disciplines.
(viii) WASME is managed by a competent staff supplemented by
pool of experts specialized in Information services, Human
Resources Development, Economic Research, Marketing,
 Finance, Technology Transfer, Rural Development and related
subjects.
(ix) WASME is an organization governed by the representatives
from financial institutions, banks, Department of MSME of
various governments.
Its functions include, among others:-
(1) Disseminating policies, strategies, and support system for
promotion of MSMES in member centres;
(2) Providing Marketing opportunities;
(3) Training facilities for MSM Enterprises

Consortium of Women Entrepreneurs of India (CWEI)

(i) CWEI was registered in 1996 as a civil society non-profit
organization in New Delhi with a mandate to work in the sub-
continent.
(ii) CWEI is accredited to Government of India and is a Member of
National Board, Ministry of MSME and is working closely with
Ministry of Rural Development in the PPP mode to support BPL
families in India.
(iii) CWEI is the Knowledge Partner to the State Government of
Andhra Pradesh, working for the sustainable economic
empowerment of women and their families through income
generating activities and entrepreneurship development.
(iv) CWEI strongly claims to have achieved success in motivating
women to opt for entrepreneurship as a challenging career –
the only answer to unemployment.
 (v) Outreach Entrepreneurship & Skill Development trainings
(ESDP), financial inclusion and support services are being
provided to set up micro enterprises amongst women
minorities, SCs and tribal in various states in the country.
(vi) CWEI launched SAWE with the help of UN Women in 1996,
with the aim to reach every corner of the country, SAARC &
Asia Pacific region & developing countries.
(vii) It delivers technological knowhow, new design techniques, skill
development and training by acting as a catalyst, providing all
escort services leading to higher productivity, competitive
prices and monitoring stringent quality control.
(viii) This is a consortium of NGOS, Voluntary Organizations and Self
Help Groups helping women entrepreneurs in finding
techniques of production, marketing and finance.

Federation of Indian Women Entrepreneurs (FIWE)

Federation of Indian Women Entrepreneurs (FIWE), founded in 1993, is
one of the India's premier institutions for women entrepreneurship
development. It is based in Hyderabad and having membership base
beyond 15000 individual members/professionals and more than 28
Member Associations spread throughout the country.
The main objective of the organization is to foster economic
empowerment of women particularly the MSME segment by helping
them to become successful entrepreneurs and become a part of the
mainstream industry.
The key objectives of the Federation of Indian Women Entrepreneurs
(FIWE) are as follows:
• To provide training facilities in Export Marketing and Management,
Domestic Marketing, Quality Control and Standardization, Management
of Enterprise Laws, Regulations, Procedures and Systems for running
Small & Medium sized enterprises and sustaining their growth.
• To facilitate Enterprise to Enterprise Cooperation within the country
and with MSME and Women Entrepreneur counterparts in 96 countries
of the world as on 30th June, 1994, having Members and Associates of
World Association of small and Medium Enterprises (WASME), with
which FIWE is affiliated.
• To provide greater access to latest technologies, know-how, related
equipment and services for modernization and expansion of existing
small & medium sized enterprises run by Women Entrepreneurs.
• To facilitate participation in International and Regional exhibitions,
buyers-sellers meet, trade fairs, seminars and symposia, to help women
entrepreneurs to get greater exposure to Regional and Global business
environment and opportunities.
• To effectively articulate the problems and constraints faced by
women entrepreneurs to get greater exposure to regional and global
business environment and opportunities.
• To strengthen affiliated Associations of Women Entrepreneurs by
providing them package of services including information, contracts,
training facilities and other related supporting measures.
• To bring out a quarterly newsletter to educate and inform women
entrepreneurs on business opportunities, management and exchange
of experience and expertise.
• To enhance access to term loan working capital.
• Assisting in the identification of investment opportunities.