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Mantra for MSMEs By Sridhar V General Manager, SIDBI, Guwahati

Mantra for MSMEs By Sridhar V General Manager, SIDBI, Guwahati. Indian MSME s - Strengths. Employ 41 Million People Number – 26 Million MSMEs Give 45% of Industrial Production Account for 40%+ of Exports Contribute 8% to GDP Exports: Rs. 1.5 lakh cr. ($ 38 Bn)

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Mantra for MSMEs By Sridhar V General Manager, SIDBI, Guwahati

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  1. Mantra for MSMEs By Sridhar V General Manager, SIDBI, Guwahati

  2. Indian MSMEs - Strengths • Employ 41 Million People • Number – 26 Million MSMEs • Give 45% of Industrial Production • Account for 40%+ of Exports • Contribute 8% to GDP • Exports: Rs. 1.5 lakh cr. ($ 38 Bn) • Production: Rs. 5.9 lakh cr. ($ 140 Bn)

  3. MSMEs in India – An Overview • A paradigm shift in the concept from SSIs to MSMEs • GoI passed the Micro, Small & Medium Enterprises Development (MSMED) Act in 2006. • The Act has given new impetus to development of MSMEs in India. • Micro and small enterprises fall under the priority sector for institutional finance. • MSMEs in India constitute micro, small and medium enterprises defined in terms of investments in plant & machinery.

  4. MSMEs - Definition

  5. Services Sector under MSMEs • Services sector brought under the ambit of MSMEs as per MSMED Act. • Micro enterprises – investment in equipments upto Rs.10 lakh. • Small enterprises – investment in equipments above Rs.10 lakh and upto Rs.200 lakh. • Medium enterprises – investment in equipments above Rs.200 lakh and upto Rs.500 lakh.

  6. SIDBI • Set up by an Act of Parliament • Apex financial institution for • Promotion • Financing • Development of industries in MSME & • Coordinating the functions of other institutions engaged similar activities • SIDBI Act amended in 2000 and present shareholding is held by institutions / Banks

  7. SIDBI – Empowering the MSMEs Mission To empower the micro, small and medium enterprises with a view to contributing to the process of economic growth, employment generation and balanced regional development. Vision To emerge as a single window for meeting the financial and developmental needs of the MSME sector to make it strong, vibrant and globally competitive, to position SIDBI Brand as preferred and customer friendly institution and for enhancement of shareholder wealth and highest corporate values through modern technology platform . Business Domain The entire spectrum of micro, small and medium enterprises (including service sector) constitutes the business domain of SIDBI.

  8. Traditional Credit Products SIDBI/ BANK Fund Based Non Fund Based Term Loan WC limits WC finance INLC LCs Guarantees Guarantees

  9. Credit Linked Capital Subsidy for Tech Upgradation of MSEs • To Facilitate Technology Up gradation of Micro and Small Scale Industries. • Specified Products /Sub-Sectors. • Provides 15% Capital subsidy for Induction of Well Established & Improved Technologies. • Industry graduating from Small Scale to Medium Scale on account of sanction of additional loan under CLCSS. • Labour intensive and or Export oriented New Units in New Sectors.

  10. Eligibility Criteria • Capital Subsidy shall be available ONLY for projects where Term Loans have been sanctioned by eligible PLI’s on or after April 01, 2007. - [Scheduled Commercial Banks/ Co-operative Banks/RRB’s/NSIC {including Hire Purchase}/SFCs/NEDFi.] • Sole Proprietorship • Partnerships • Co-operative Societies • Private & Public ltd.Companies (SSI’S) • Priority shall be given to Women entrepreneurs

  11. Types of Units to be Covered • Registered Existing MSE units which Upgrade with State of the Art Technology • With or Without Expansion • New MSE Units set up with the appropriate eligible technology duly approved by GTAB (Governing & Technology Approval Board) & Registered with Directorate of Industries

  12. CLCSS – Scope of the Scheme • The scheme would cover the following Products/sub-sectors in the MSE : - • Bio Tech Industries • Common Effluent Treatment Plant • Corrugated Boxes • Drugs &Pharmaceuticals • Dyes & Intermediateries • Medicinal & Aromatics Industries • Plastic moulded & extruded products and parts and components

  13. CLCSS – Scope of the Scheme • Rubber Processing including Cycle/Rickshaw Tyres • Food Processing (including Ice Cream Manufacturing) • Poultry Hatchery & Cattle Feed Industry • Dimensional Stone Industry (excluding quarrying and mining) • Glass and Ceramic Items including Tiles; • Leather and Leather Products including Footwear and Garments • Electronic equipment viz. test & measuring Industrial process control, Analytical ….

  14. CLCSS – Scope of the Scheme ….Medical Electronic, Consumer & Communication equipments etc. • Fans & Motors Industry • General Light Service (GLS) • Information Technology (Hardware) • Mineral Filled Sheathed Heating Element • Transformer/electrical Stampings/Laminations/Coils/Chokes including solenoid coils • Wires & Cable Industry

  15. CLCSS – Scope of the Scheme • Auto Parts and Components • Bicycle Parts • Combustion Devices/appliances • Forging & Hand Tools • Foundries – Steel and Cast Iron • General Engineering Works • Gold Plating and Jewellery • Locks • Steel Furniture • Toys

  16. CLCSS – Scope of the Scheme • Non-Ferrous Foundry • Sports Goods • Cosmetics • Readymade Garments • Wooden Furniture • Mineral Water Bottle • Paints, Varnishes, Alkyds and Alkyd products • Agricultural Implements • Beneficiation of Graphite & Phosphate

  17. CLCSS – Scope of the Scheme • Khadi & Village Industries • Coir & Coir Products • Steel Re-rolling/Pencil Ingot making industries • Zinc Sulphate • Welding Electrodes • Sewing Machine Industry • Industrial Gases • Printing Industry • Machine Tools

  18. Scheme for Food Processing Industries • The scheme covers the following food processing industries :- • Fruits & Vegetables, • Milk Products, • Meat, Poultry, • Fishery, • cereal / other consumer food products, • oil seeds products, • rice milling,

  19. Scheme for Food Processing Industries • flour milling, • pulse processing • Agri-horticultural sectors including food flavours & colours, • oleoresins, • spices, • coconuts, • mushrooms and hops • Not covered : Aerated Water, packaged drinking water and soft drinks.

  20. Scheme for Food Processing Industries • Element of subsidy : 25% of cost of plant & machinery and technical civil works subject to a maximum of Rs.50 lakh (33% - Rs75 lakh in areas like J&K, HP, Uttarakhand, Sikkim, North East, etc) • Only new P&M eligible • Scope of technical civil works : Technical civil works include civil works for functional purposes but exclude boundary wall, guest house, canteen, roads and office buildings • Availment of loan not compulsory

  21. SIDBI has Co-promoted • Factoring Companies -Canbank Factors -SBI Factors • North Eastern Development Finance Corporation - NEDFI • Indian Institute of Entrepreneurship

  22. International Development Partners • Japan Bank for International Cooperation, Japan • World Bank • Kreditanstalt fur Wiederaufbau (KfW), Germany • Department for International Development (DFID), UK and • International Fund for Agriculture Development (IFAD), Rome • Asian Development Bank

  23. Mantra to MSMEs • Upgrade Technology • Better Access to Finance • Sharpen Skills • In Short……. • Better Quality and Lower Prices • Technology is the Focus

  24. Thank You

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