2012: Achievements and initiatives of the Ministry of MSME

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SME Times News Bureau | 28 Dec, 2012
Micro, Small and Medium Enterprises (MSMEs) has proved to be an engine of growth in the economic development of the country. For their promotion and development, The Ministry of Micro, Small and Medium Enterprises (MSME) has been implementing various programmes and schemes.

Procurement Policy

The Government has notified a Public Procurement Policy for goods produced and services rendered by Micro & Small Enterprises (MSEs) order, 2012 effective from 1st April, 2012.

The policy mandates that all the Central Ministries / Departments / CPSUs shall procure minimum of 20% of their annual value of goods / services required by them from Micro and Small Enterprises. Further, policy has earmarked a sub-target of 4% procurement out of this 20% from MSEs owned by SC / ST Entrepreneurs.

The policy has been circulated by the Secretary (MSME) to all the Central Ministries / Departments / CPSUs for success and effective implementation and the policy along with other related documents is available on the office website. All the Chief Ministers of State Governments have been requested by the then Central Minister, MSME to formulate similar policy for Micro and Small Enterprises in their state as per the provisions in MSMED Act, 2006. Queries / doubts raised by the Ministries / Departments / CPSUs for implementation of the policy are clarified from time to time.

A concept paper on the policy has been prepared and requisite information for developing data bank for match making between suppliers and buyer are being compiled. For developing MSEs vendors, all the Ministries / Departments / CPSUs have been requested to organize vendor development programmes and buyer-seller meets between MSEs suppliers and government procuring agencies. The Ministry through the field offices i.e. Micro, Small and Medium Enterprises â Development Institutes has planned for the year 2012-13 to organize 50 national vendor development programmes and 350 state vendor development programmes throughout the country in order to develop MSE vendors.

MSE- Cluster Development Programme

The Ministry of MSME has adopted the cluster approach for holistic development of micro and small enterprises in a cost effective manner. Soft Interventions are undertaken in the existing clusters/new industrial areas/ estates or existing industrial areas/estates.

To ensure the transparency and speedy implementation of MSE-CDP this office has started online application system from 1st April 2012.

National Manufacturing Competitiveness Programme

The National Manufacturing Competitiveness Programme (NMCP) for the MSMEs, aims at enhancing the competitiveness of enterprise in this sector. There are 10 components of the NMCP, which have been approved and are available for MSMEs. These are:-

- Lean Manufacturing Competitiveness Scheme (LMCS) for MSMEs;
- Design Clinics Scheme for design expertise to MSMEs manufacturing sector;
- Marketing Assistance and Technology Upgradation Scheme for MSMEs;
- Enabling manufacturing sector to be competitive through Quality Management Standards (QMS) and Quality Technology Tools (QTS);
- Technology of Quality Upgradation Support for MSMEs;
- Promotion of Information and Communication Technology (ICT) in MSME sector;
- Setting up Mini Tool Room & Training Centres under PPP Mode;
- Marketing Assistance/Support to MSEs (Bar Code);
- Building Awareness on Intellectual Rights for MSMEs;
- Scheme for Providing Support for "Entrepreneurial and Managerial Developments of SMEs through Incubators".

Prime Minister's Employment Generation Programme (PMEGP)

A national level credit linked subsidy scheme, namely, 'Prime Minister's Employment Generation Programme (PMEGP)'was introduced in August 2008 by merging erstwhile PMRY and REGP schemes of this Ministry with a total plan outlay of Rs.4485 crore towards margin money subsidy for generating an estimated 37.38 lakh additional employment opportunities during the four terminal years of XI plan (2008-09 to 2011-12). An amount of Rs.250 crore has also been kept towards backward â forward linkages. Under this programme, financial assistance is provided for setting up of micro enterprises each costing upto Rs.10 lakh in service sector and Rs.25 lakh in manufacturing sector. The assistance is provided in the form of subsidy upto 25 per cent (35 per cent for Special category including weaker sections) of the project cost in rural areas while it is 15 per cent (25 per cent for Special category including weaker sections) for urban areas.

During 2012-13 (upto 31.10.12), Out of allocations of Rs.12.38 crore as margin money under PMEGP, Rs.7.24 crore have been released which have benefited 13,868 units.

Skill Development

Skill Development has been taken up as a high priority area by Ministry of MSME through various measures like enhancing the training capabilities of the Tool Rooms, MSME Development Institutes and other organizations under the Ministry of MSME. The agencies under the Ministry of MSME conducted programmes for skill development for nearly 4.29 lakh trainees during 2011-12 and the targets set for 2012-13 is 4.94 lakh persons. The Ministry of MSME provides all such trainings for SCs/STs free of cost. Special programmes are organized through MSME-DIs for weaker sections of the society viz., SC/STs, women and physically handicapped free of cost besides providing a monthly stipend of Rs. 125/- per week per candidate during the entire period of training.

Credit Guarantee Scheme

The Government is implementing the Credit Guarantee Fund Scheme for Micro and Small Enterprises with the objective of facilitating flow of credit to the MSEs, particularly to micro enterprises by providing guarantee cover for loans upto Rs.100 lakh without collateral / third party guarantees. For making the scheme more attractive to both lenders as well as borrowers, several modifications have been undertaken which, inter alia, include: (a) enhancement in the loan limit to Rs.100 lakh; (b) enhancement of guarantee cover from 75% to 85% for loans upto Rs. 5 lakh; (c) enhancement of guarantee cover from 75% to 80% for MSEs owned/operated by women and for loans in North Eastern Region (NER); (d) reduction in one-time guarantee fee from 1.5% to 1% and annual service charges from 0.75% to 0.5% for loans upto Rs. 5 lakh and (e) reduction in one-time guarantee fee for NER 1.5% to 0.75% etc.

As on 30th November, 2012, cumulatively, 9,56,447 proposals have been approved for guarantee cover for a total sanctioned loan amount of Rs. 46388.72 crore.

Credit Linked Capital Subsidy Scheme for Micro and Small Enterprises

Under the CLCSS for technology up-gradation of Micro, Small and Medium Enterprises. The scheme was launched in October-2000 and revised from 29.9.2005. The revised scheme aims at facilitating technology up-gradation of Micro and Small Enterprises (MSEs) by providing 15% capital subsidy (limited to maximum Rs. 15 lakhs) for purchase of Plant & Machinery. Maximum limit of eligible loan for calculation of subsidy under the scheme is Rs. 100/- lakhs. Presently, 48 well established and improved technologies/sub sectors have been approved under the Scheme.

The CLCSS is implemented through 11 nodal banks/agencies including SIDBI, NABARD and Tamil Nadu Industrial Investment Corporation Limited, Chennai (TIIC) and NSIC Ltd.

Marketing Assistance Scheme

The main objectives of Marketing Assistance Scheme are to enhance the marketing competitiveness of the micro, small and medium enterprises (MSMEs), to provide them a platform for interaction with the individual / institutional buyers, to update them with prevalent market scenario and to provide them a forum for redressing their problems. The National Small Industries Corporation Ltd., (NSIC) a public sector undertaking under the administrative control of this Ministry acts as a facilitator to promote marketing efforts and enhance the competency of the MSMEs for capturing the new market opportunities by way of organizing / participating in various domestic & international exhibitions/trade fairs, buyers-seller meets, intensive campaigns/seminars and other marketing promotion activities.

BE for 2012-13 is Rs. 11.00 crore and it is targeted to support participation in 10 international and 90 domestic exhibitions/trade fairs, 15 buyer-seller meets and 700 marketing campaigns.

Performance and Credit Rating Scheme

The National Small Industries Corporation Ltd. (NSIC), a public sector undertaking under the Ministry of MSME has been implementing "Performance & Credit Rating Scheme" for micro and small enterprises (MSEs) on behalf of the Government. The scheme is being operated through 07 accredited rating agencies i.e. CRISIL, SMERA, ONICRA, CARE, FITCH, ICRA and M/s Brickworks. The scheme is aimed to create awareness amongst micro, small & medium enterprises about the strengths and weakness of their existing operations and to provide them an opportunity to enhance their organizational strengths and credit worthiness. The rating under the scheme serves as a trusted third party opinion on the capabilities and creditworthiness of the micro, small & medium enterprises. An independent rating by an accredited rating agency has a good acceptance from the Banks/Financial Institutions, Customers/Buyers and Vendors. Under this Scheme, rating fee to be paid by the micro, small & medium enterprises is subsidized for the first year only and that is subject to maximum of 75% of the fee or Rs. 40000/-, whichever is less.

BE for 2012-13 is Rs. 100.00 crore and it is targeted to support rating of 18000 MSEs during the year.

International Cooperation Scheme

International Cooperation (IC) Scheme, being implemented by M/o MSME, is an ongoing Scheme of the Ninth Plan (under implementation since 1996), which is continuing in the Eleventh Plan (2007-2012) with an outlay of Rs. 10.00 crore. Technology infusion and/or upgradation of Indian micro, small and medium enterprises (MSMEs), their modernisation and promotion of their exports are the important objectives of the Scheme. Under the scheme, financial assistance is provided to industry associations/agencies for participation in international trade fairs as well as for organising international conferences in India and aboard for the promotion of MSMEs.

The Scheme encompasses the following activities:

(i) Deputation of MSME business delegations to other countries for exploring new areas of technology infusion/upgradation, facilitating joint ventures, improving market of MSMEs products, foreign collaborations, etc.

(ii) Participation by Indian MSMEs in international exhibitions, trade fairs and buyer-seller meets in foreign countries as well as in India, in which there is international participation.

(iii) Holding international conferences and seminars on topics and themes of interest to the MSMEs.

BE for 2012-13 is Rs. 4.00 crore and it is expected that 300 entrepreneurs would be facilitated to participate in 30 international events.

Assistance to Training Institutions

Under the scheme assistance is provided to existing and new training Institutions for establishment of Entrepreneurship Development Institute (EDI) and strengthening of their training infrastructure on a matching basis. Ministry provides assistance on a matching basis, not exceeding 50 percent of the project cost or Rs. 150 lakh whichever is less (90 percent or Rs. 270 lakh of the project cost whichever is less, for State level EDIs in Union Territories of Andaman & Nicobar and Lakshadweep Islands) excluding cost of land and working capital. The balance 50 percent of the matching contribution (10 percent for State level EDIs in Union Territories of Andaman & Nicobar and Lakshadweep Islands) should come from the concerned Institute, State/UT Government, public funded institution(s), NGOs/Trusts/ Banks/Companies/ Societies/ Voluntary organizations etc.

The assistance would be for creation of infrastructure. The land will have to be provided by the state Goverment or any other institution or by the applicant. Financial assistance would be for construction of building, purchase of training aids/equipments, office equipments, computers and for providing other support services e.g. libraries/data bases etc. The costs of land, construction of staff quarters etc. would not qualify for calculation of matching grant from the Central Government. All the proposals under this scheme are required to be recommended by and routed through the concerned State/UT Government.

A new component of training has been added under this scheme, i.e. assistance would be provided under the scheme to following Training Institutions, for conducting Entrepreneurship Development Programmes (EDPs) and Entrepreneurship cum Skill Development Programmes (ESDPs) and Training of Trainers (ToTs) programmes in the areas of Entrepreneurship and/or Skill Development:

(a) National level EDIs (including branches),

(b) Training Institutions established by Partner Institutions (PIs) of national level EDIs,

(c) Training/Incubation centers of NSIC,

(d) Training cum Incubation Centers (TICs) set up by Franchisees of NSIC

(e) Other Training institutions with proven professional competency, capacity and experience, approved under the scheme.

Entrepreneurship Skill Development (ESDP) training would normally be of 100 to 300 hours (1 to 3 months). Entrepreneurship Development (EDP) training would be of 72 hours (2 weeks) and Trainer's Training for 300 hours.

BE for 2012-13 is Rs. 71 crore and it is targeted to provide financial assistance to 4 existing/new EDIs and to train 2,24,365 persons. The scheme is likely to take off with the addition of new component, i.e., provision of financial assistance for imparting training through national EDIs/NSIC and their partner institutions.

Rajiv Gandhi Udyami Mitra Yojana

The objectives of Rajiv Gandhi Udyami Mitra Yojana (RGUMY) is to provide handholding support and assistance to the potential first generation entrepreneurs, who have already successfully completed or undergoing Entrepreneurship Development Training Programme (EDP) / Skill Development Training Programme (SDP)/ Entrepreneurship cum Skill Development Training Programme (ESDP) /Vocation Training Programmes (VT), 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.

A 'Udyami Helpline' (a Call Centre for MSMEs) with toll-free number 1800-180-6763 is in operation to provide information, support, guidance and assistance to first generation entrepreneurs as well as other existing entrepreneurs to guide them regarding various promotional schemes of the Government, procedural formalities required for setting up and running of the enterprise and help them in accessing Bank credit etc. The Udyami Helpline has become a useful tool for entrepreneurs and general public to gather information about various schemes of the Ministry. The target for 2012-13 is to assist 3000 udyamis under the Scheme. (Source: PIB)