Amity School of Business

Module-5
 Amity School of Business

Micro, Small and Medium

Enterprises Development Act ,
2006
PERFORMANCE AND CONTRIBUTION OF
MSMEs Amity School of Business

13 Million MSMEs
> 8000 products

45% industrial 40% Exports

production
MSMEs

31 Million
Employment
 MSMED Act, 2006 Amity School of Business

The Act was formed for overseeing and regulating

the development of MSMEs in India .

The major highlight of the MSMED act is that the

MSM enterprises in the service sector are also
covered under the act.
 Objectives Amity School of Business

• To facilitate the promotion and

development of micro, small and medium
scale enterprises.
• To enhance the competitiveness of MSM
enterprises.
• To concentrate on the related matters of
MSM enterprises.
• To extend the scope of benefits from SSI
undertaking and ancillary industries to
MSM enterprises.
Amity School of Business
 Micro, Small and Medium
Enterprises Development
Amity School ofAct,
Business

2006
Salient Features

1. Industry replaced by enterprise which

include service enterprises also.
2. Ambit of sector enlarged to cover
medium enterprises.
3. Constitution of MSME Board
4. Simplification of registration procedure
 Amity School of Business

5. Policy of preferential procurement

from MSMEs
6. Progressive credit support
7. Penalty for delayed payments
8. Provision for exit policy
 MSME Amity School of Business

MSME’s are supported by Govt. of India & its

agencies as
• Ministry of MSME
• National Small Industries Corporation
• Small Industries Development Bank
• District Industries Centre
For
• Modernization
• Productivity
• Technological Needs
• Skill Development & Up gradation
• Adequate & Affordable assistance in Finance

9
 Amity School of Business

MAJOR SCHEMES
FOR
MSME’s SUPPORT
 Credit Linked Capital Subsidy Scheme for
Amity School of Business
Technology Up gradation

• The Scheme aims at facilitating technology up

gradation by providing upfront capital subsidy to
SSI units
• Subsidy on institutional finance (credit) availed
of by them for modernization of their production
equipment (plant and machinery) and
techniques.
• The maximum limit of eligible loan is Rs. 100
lakh. The ceiling on subsidy would be Rs.15 lakh
or 15 per cent of the investment in eligible plant
and machinery, whichever is lower.
 Credit Guarantee Scheme Amity School of Business

• Launched by the Government of India to

make available collateral-free credit to the
micro and small enterprise sector.
• The credit facilities under the scheme are
both term loans and working capital facility
up to Rs.100 lakh per borrowing unit,
extended without any collateral security or
third party guarantee, to a new or existing
micro and small enterprise.
 Amity School of Business

• The fee payable to the Trust under the

scheme is one-time guarantee fee of 1.5%
and annual service fee of 0.75% on the
credit facilities sanctioned.
 Micro & Small EnterprisesAmity
Cluster
School of Business
Development Programme
1. To support the sustainability and growth of MSEs by
addressing common issues such as improvement of
technology, skills and quality, market access, access to
capital, etc.
2. To build capacity of MSEs for common supportive
action through formation of self help groups,
consortium, upgradation of associations, etc.
3. To create/upgrade infrastructural facilities in the
new/existing industrial areas/clusters of MSEs.
4. To set up common facility centres (for testing, training
centre, raw material depot, effluent treatment,
complementing production processes, etc).
 Credit SupportAmity School of Business

1. Public sector banks advised to double the flow of credit

to MSMEs within 5 years (20% annual growth)
2. A minimum of 40% of bank credit earmarked for priority
sector lending which includes loans to MSMEs
3. Specialized SME Bank branches in industrial clusters
for smooth flow of credit to MSMEs
4. One Time Settlement (OTS) scheme for settling NPAs
of MSMEs
5. Interest band prescribed
 Performance and Credit
AmityRating
School of Business

Scheme
1. Helps MSMEs in accessing credits from banks &
financial institutions, orders from foreign buyers
2. Helps in assessing their strengths and weaknesses.
3. Rating by one of the empanelled national or
international Rating agencies.
4. Government subsidises 75% of the cost of Rating
fee
5. Concessional credits from Banks/FIs to such rated
units
 Marketing Assistance and Export
Amity School of Business

Promotion
1. Support for participation in trade fairs and
exhibitions – national as well as international
2. Training programmes on packaging for exports
3. Purchase preference in Government
procurement
4. Market Development Assistance Scheme for
publicity, market studies and adoption of
modern market practices
 Amity School of Business

Role of government & its nodal

agencies in entrepreneurial
development
 Amity School of Business

• Entrepreneurship development
programme means “ a programme
designed to help a person in strengthening
and fulfilling his entrepreneurial motive
and in acquiring skills and capabilities
necessary for playing his entrepreneurial
role effectively”
 Organizations for EDPs Amity School of Business

1. National institute for entrepreneurship and small business development

(NIESBUD):-
It was established in 1983 by the ministry of industry. Its main functions
are
• Training strategies and methodology
• Formulating scientific selection procedures
• Facilitating and supporting agencies engaged in Ed
• Developing training aids, manuals & other roots
2. Entrepreneurship development Institute of India (EDII)
• Promote micro enterprises at rural level
• Inculcate the spirit of “Entrepreneurship amongst youth”
• Participate in institution- building efforts
• Improve managerial capabilities of small scale industries
3. Small industries development Organization (SIDO)
Amity School of Business

• Recognizing the need for training in improving and

upgrading the skill of worker. SIDO has formulated many
training programs
– Appreciation course in industrial management
– Specialized course in the area of production, marketing, financial,
export and material management
– Adhoc incentive course on inspection and quality control, work study,
salesmanship

4. Indian Investment Center (IIC)

•It is responsible for promoting mutually rewarding joint
ventures and conducting EDP’s
•IIC setup an entrepreneurial guidance bureau to guide
entrepreneurs for establishment of new enterprise.
 5. National Institute for Small Industry
Amity School of Business
Extension and Training (NISIET), Hyderabad

• It was established in early 1950’s to provide

training and extension services.
• Integrated training at Nilokheri provides
technical training to artisans, workers and
entrepreneurs, managers.
• It organizes about 45 national and 15
international programs every year.
 6. Small Industrial Bank of India Amity School of Business

(SIDBI)
• It was established in April 1990 and earlier it was a wholly
owned subsidiary of IDBI.
• The aim of SIDBI is too nurture entrepreneurs through
training, motivation and guidance. The EDP’s are normally
of six weeks duration
• Agencies specialized in conducting EDP’s like
entrepreneurs development institute of India, Institute of
entrepreneurship development, center for entrepreneurship
development, technical consultancy organizations
• A few specialized technical institutes liked central institute of
plastic engineering and technology, rural technology
institute have also been extended assistance of conduct of
product specific EDP’s.
 Amity School of Business

Funding opportunities
for
start up in India
 Institutions providing funds to start ups
Amity School of Business
• Department of science and Industrial Research
• Ministry of MSMEs
• Department of science and technology
• SIDBI VENTURE SME Growth Fund
• Department of Biotechnology
• National Research development corporation
• Department of Information Technology
• Risk capital and Technology Finance
Corporation ltd. Now called as IFCI Venture
• Angel capital to start ups
• Venture capital funding in India
 Amity School of Business

Banks and financial Institutions

Funding Ventures
Amity School of Business
 Institutions assisting Amity School of Business

Entrepreneurs

Small Scale Unit

• National small Industries corporation (NSIC)
• Small Industries Development Orgzn.(SIDO)
• Khadi Village Industries Commission(KVIC)
• Handloom Board
• Silk Board
 Amity School of Business

Medium and Large scale unit

• Industrial finance corporation of India(IFCI)
• State industrial development corporation
(SIDC)
• ICICI bank, IDBI bank, SIDBI.
 Services of SIDO Amity School of Business

• Technical resource centre

• Consultancy
• Marketing support
• Vendor development – Buyer seller meet
• Quality/ Technical up gradation
• Training facility – EDP, MDP, Skill
development
 Schemes of NSIC Amity School of Business

• Bank credit facilitation

• Export credit insurance
• Performance & credit rating
• Raw materials assistance
• Bills discounting
• Government purchase
• Exhibitions
 Amity School of Business

• Evolving effective training strategies and methodology

• Standardizing model syllabi for training various
target groups
• Developing training aids, manuals and tools
• Facilitating and supporting Central / State/
Other agencies in organizing entrepreneurship
development programmes
• Conducting training programmes for promoters,
trainers and entrepreneurs
• Undertaking research and exchange experiences
globally in development and growth
of entrepreneurship.