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Manoj Gupta | 23 Jun, 2008
Looking for a job? Why not be an entrepreneur instead? The Small Scale Industries in India have a tremendous potential for turning our teeming millions into entrepreneurs. The small scale sector has a long history of promoting inclusive employment-oriented economic growth. The Micro, Small & Medium Enterprises are contributing significantly to employment generation and poverty alleviation. The micro and small enterprises constitute an important segment of Indian economy in terms of their contribution to countryâs industrial production, exports, employment and creation of entrepreneurial base. The Central and State Governments have been implementing several schemes and programmes for promotion and development of these enterprises.

Training:
Entrepreneurship development or training is one of the key elements for development and promotion of micro and small enterprises, particularly, for the new or first generation entrepreneurs. Entrepreneurship Development Programmes (EDPs) of various durations are being organized on a regular basis by a number of organizations e.g. national and state level Entrepreneurship Development Institutes (EDIs), Micro, Small and Medium Enterprises Development Institutes (MSMEDIs) [earlier known as Small Industries Service Institutes (SISIs)], national and state level Industrial Development Corporations, Banks and other training institutions/agencies in private and public sector etc., to create new entrepreneurs by cultivating their latent qualities of entrepreneurship and enlightening them on various aspects necessary for setting up micro and small enterprises. Besides, various Industrial Training Institutes (ITIs) and private training institutions are also organising vocational training (VT) programmes, skill development programmes (SDPs) and entrepreneurship-cum-skill development programmes (ESDPs).

After Training, What:
There are wide spread variations in the success rate, in terms of actual setting up and successful running of enterprises, by the EDP/SDP/ESDP/VT trained entrepreneurs. It has been observed that new entrepreneurs generally face difficulties in availing full benefits under available schemes of the Government/financial institutions, completing and complying with various formalities and legal requirements under various laws/regulations, in selection of appropriate technology, tie-up with buyers and sellers etc. In order to bridge the gap between the aspirations of the potential entrepreneurs and the ground realties, there is a need to support and nurture the potential first generation entrepreneurs by giving them handholding support during the initial stages of setting up and managing their enterprises.

A Handholding Scheme:
Mahabir Prasad, Minister of Micro, Small and Medium Enterprises launched a new handholding scheme for the prospective first generation entrepreneurs called 'Rajiv Gandhi Udyami Mitra Yojana' (RGUMY) in New Delhi on February 7. The scheme aims to provide handholding assistance to first generation or new entrepreneurs through lead agencies or Udyami Mitra, who shall provide guidance to the potential entrepreneurs and help them in completion of various tasks and formalities necessary for the establishment of the enterprise.

Objective:
The objective of Rajiv Gandhi Udyami Mitra Yojana is to provide handholding support and assistance to the potential first generation entrepreneurs, who have already successfully completed EDP/SDP/ESDP/VT programmes, through the selected lead agencies i.e. 'Udyami Mitras', in the establishment and management of the new enterprise, in dealing with various procedural and legal hurdles and in completion of various formalities required for setting up and running of the enterprise.

Target Group:
The scheme is targeted to assist potential first-generation entrepreneurs, who have already successfully completed entrepreneurship/skill development training of at least two weeksâ duration, or have undergone vocational training from ITIs.

Eligibility For Udyami Mitras:
Under RGUMY, financial assistance would be provided to the selected lead agencies i.e. Udyami Mitras for rendering assistance and handholding support to the potential first generation entrepreneurs. Following agencies/ organizations can be appointed as the lead agency i.e.Udyami Mitra:

Existing national level Entrepreneurship Development Institutions (EDIs);

Micro, Small and Medium Enterprises Development Institutes (MSMEDIs)/Branch MSMEDIs.

Central/ State Government Public Sector Enterprises (PSEs) involved in promotion and development of MSEs e.g. National Small Industries Corporation (NSIC) and State Industrial Development Corporations etc.

Selected State level EDIs and Entrepreneurship Development Centers (EDCs) in public or private sectors;

Khadi and Village Industries Commission (KVIC)

Special Purpose Vehicles (SPVs) set up for cluster development involved in entrepreneurship development;

Capable associations of MSEs/SSIs;

ROLE AND RESPONSIBILITIES OF UDYAMI MITRAS:

The selected lead agencies i.e. Udyami Mitras would be expected to render following services:
Networking, coordinating and follow up with various Government departments/agencies/ organizations and regulatory agencies on the one hand and with support agencies like Banks/financial institutions, District Industries Centers (DICs), technology providers, infrastructure providers on the other hand, to help the first generation entrepreneurs in setting up their enterprise. Udyami Mitras are expected to help the first generation entrepreneurs in:

Identification of suitable project/product/enterprise and preparation of bankable project report for the same; creation of the proprietorship firm/ partnership firm/ Company/ Society/ Self Help Group (SHG) etc.; filing of Memorandum (as prescribed under MSMED Act 2006); accessing bank loans, admissible capital subsidy/ assistance under various schemes of the Central /State Government and other agencies/organizations/financial institutions/ Banks etc. by networking with respective agencies; assistance and support in establishment of work shed/office; sanction of Power load/Electricity connection; selection of appropriate technology and installation of plant and machinery/office equipment etc.; obtaining various registrations/ licences/ clearances / No Objection Certificates (NOCs) etc. from the concerned regulatory agencies/ Government departments/ local bodies/ Municipal authorities etc.; allotment of Income Tax Permanent Account Number (PAN) and Service Tax/Sales Tax/ VAT registration etc.; sanction of working capital loan from the banks; arranging tie up with raw material suppliers; preparation and implementation of marketing strategy for the product/ service and market development; establishing linkage with a mentor for providing guidance in future and creation of web page and email address.

Once the enterprise has been successfully set up, the Udyami Mitras would also monitor and follow up on the functioning of the enterprise for a further period of minimum 6 months and provide help in overcoming various managerial, financial and operational problems.

Handholding Charges:
Would you mind paying a small service charge for all the help rendered by the Udyami Mitras? Udyami Mitras would be provided handholding charges with nominal contribution from the entrepreneurs as under:

Category of enterprise	Handholding Charges (Rs.)
	Govt. grant	Beneficiaryâs Contribution	Total
(i) Service Enterprises	3000	1000*	4000
(ii)Manufacturing enterprises (Micro i.e. Rs.25,00,000/-)	5000	1000*	6000
(iii)Manufacturing enterprises (Small i.e. Rs.25,00,000/-)	5000	1000*+âXâ	6000*+âXâ
	âXâ = additional contribution to be paid @0.1 per cent of the project cost in excess of Rs.25,00,000/-, subject to a ceiling of Rs.10,000/-.

*For the beneficiaries from special categories i.e. SC/ST/physically handicapped/women/beneficiaries from North-Easter Region, the beneficiaryâs contribution of Rs. 1,000/- shall also be provided as government grant.

The handholding charges shall be released to the Udyami Mitra in three instalments on achievement of various milestones/activities.

Monitoring and Evaluation:
The progress of the scheme will be reviewed and monitored on a regular basis by the Ministry of Micro, Small and Medium Enterprises as well as by the Commissioner/ Director of Industries of the concerned States/ UTs. The scheme will also be evaluated by an independent agency to assess its success/impact and to ascertain constraints/shortcomings, if any.

* The author is the Deputy Director of Press Information Bureau (PIB), New Delhi.