Micro and Small Enterprises

Natesh C P
Assistant
Professor Dept.
of ME
Outlin
eDefinition of Micro & Small Enterprises

 Characteristics of Micro & Small Enterprises
 Advantages of Micro & Small Enterprises
 Steps in Establishing Micro & Small
Enterprises,
 Government of India Indusial Policy 2007 on
MSE
 Case Study : Microsoft, Captain G R Gopinath ,
Infosys
 Institutional Support:
•MSME-DI
•NSIC
•SIDBI
•KIADB
•KSSIDC
•TECSOK
•KSFC
•DIC
Introductio
nt present the Small
A Scale Industry (SSI)
constitutes a Very Important Segment of the
Indian Economy & has emerged as a Dynamic &
Vibrant Sector of the Economy.
Small Scale Industry Sector holds the Key to
Economic Prosperity of the Indian Economy,
Characterized by abundant Labor Supply,
Unemployment & Under Employment , Scarcity
of Finance, Growing Modern Large Industries
providing scope for development of Ancillary
Industries & so on. The Small Scale Industry has
grown phenomenally during the last Six Decades
& has acquired a very prominent place in the
Socio – Economic Development in the Country.
Introductio
n
Definitio
n
A small scale enterprise is the one in which
the investment in fixed assets in plant and
machinery, whether held in ownership term,
on ease or on hire purchase is above Rs 25
lakh and up to Rs 5 crore, subject to the
condition that the unit is not owned,
controlled or subsidiary of any undertaking.
Characteristics
SSI
Need and Rationale: Objectives
of SSI
Advantages of
SSI
Different Policies of
SSI
1)The Project Selection & the Preliminary Activities
involve the following :

a) Product or Service Selection.

b) Location Selection.
c) Project Feasibility Study.
d) Preparation of Project Profile.
e) Business Plan Preparation.
a) Product or Service Selection :
The main factors to be considered in deciding a suitable
project are as follows :
1) Nearness or Proximity to Market.
2) Availability of Raw Materials.
3)Availability of Transformation & Communication
Facilities.
4) Availability of Govt Incentives / Concessions.
5) Govt Industrial Policy.
6) Availability of suitable Infrastructural facilities.
7) Availability of Labor.
8) Convenience for the Entrepreneur’s.
Business Plan Preparation :
This is a Document where the Entrepreneur plans his
Business to have an Organized & effective response to a
situation which may arise in future.
A Business Plan is used to make Crucial Start Up
Decisions to reassure Lenders, Investors, to measure
Operational Progress ; to Test Planning Assumptions ; to
Adjust Forecasts; & to set the standard for good
Operational Management.
 2) Decide on the Constitution :
To start any Enterprise, the Promoter’s have to
decide on the Constitution of the Unit. There are 3
Major Alternatives :
a) Proprietary b) Partnership
c) Company.
In fact, this has to be decided at the initial stages of
the Project & necessary formalities should be completed
by the time the application for Provisional Registration
Certificate (PRC) is made to DIC (District Industries
Centre).
 3) Obtaining SSI Registration :
Entrepreneurs desiring to start a Small
Enterprise have to initially obtain a PRC(Provisional
Registration Certificate). Once the Unit goes into
Production, the PRC has to be converted into a
Permanent Registration Certificate (PMT).
4) Specific Clearances :
There are a number of Statutory Clearances reqd
to start Micro & Small Enterprises.

Some of them are given below :

a)Agricultural Land Conversion into Non – Agricultural
Land (NA Conversion).
b) Building Plan approved by the Local Authorities.
c) Factories Act & Labor Dept.
d) Trade License from the Local Authorities.
e) Pollution Control Board Clearances.
f) Food Adulteration Act License.
 5) Land or Shed Selection :
For any Industrial Project, suitable Industrial Site or a
ready Industrial shed is reqd. The Promoters of the Unit could
consider taking an Industrial Site & constructing a shed as
per their requirement, alternatively, could consider taking a
ready Industrial Shed on Ownership Basis also.

6) Plant & Machinery :

This requirement for a Particular Project could be

purchased from recognized manufacturer’s / dealers. This
could also be taken on Hire Basis operated by National Small
Industries Corporation Limited (NSIC).
 7) Infrastructure Facilities :
For Micro or Small Enterprises the main infrastructure
facilities are Land or Shed for the Project , Power
Connection , Water Supply & Telephone & Internet Facility.

8) Project Report :
A detailed Project Report provides such a plan for
the Project. The Report is useful to the Entrepreneur for
Planning & Implementing the Project. This is essential for
Obtaining Finance & other clearances for the Project.
 8) Project Report :
For any New Project or Enterprise to be set up,
Proper Planning is necessary.

A detailed Project Report provides such a plan for

the Project. The Report is useful to the Entrepreneur for
Planning & Implementing the Project. This is essential for
Obtaining Finance & other clearances for the Project.

In fact, the Project Report gives a detailed insight

of the Techno – Economic Viability of the Project. This
is generally prepared to cover the following :
10) Implementation of the
Project
The: Entrepreneurs will have to take necessary steps to
physically implement the Project after obtaining the various
Licenses, Clearances, Infrastructural Facilities etc.
Following are the Major Activities that the Entrepreneurs
have to undertake for implementing the Project.

 Construct Shed :
 Order for Machinery :
 Recruit Personnel :
 Arrange for Raw Materials:
 Marketing :
 Obtain Final Clearances :
Institutional
support
MSME
Board
 Micro, Small and Medium Enterprises
Board
 Headed by Ministry of Micro, Small and
Medium Enterprises
 Objective:
 To facilitate coordination & inter
institutional linkages among various
ministries, banks, financial institutions etc..
MSME Development
Institute
 There are 30 MSME DI‟s and 28 branch
MSME development institutes set up in
state capitals and industrial cities.
 Functions are
MSME Development
Institute
Functions
are
NSI
CNational Small Industries Corporation

Ltd.
 Oldest agencies
 Established in 1955
 Enterprise under Union Ministry of
Industries
 Provides wide range of services,
predominantly promotional in character
to SSI
 Nature of support
Wide ranging industrial input
NSIC
Objectives
 To promote, aid foster the growth of
SSIs in country with a focus on
commercial aspects.
 To enable the SSI to gain competitive
advantage & to contribute effectively to
the development of the economy.
 To evolve special schemes to meet the
needs of handicapped, SC & ST
entrepreneurs.
NSIC
Functions
 To provide machinery on hire purchase
Scheme to SSIs
 To promote govt orders for SSI
 To develop SSIs as ancillaries to large units
 To import & distribute scarce & rare raw
material
 To undertake construction of industrial
estates
 To help exporting products of SSIs
 To develop prototype of machineries &
equipment
SIDB
IEstablished in 1990 under an Act of Indian


Small Industries Development Bank of India

Parliament.
 Ownership : Public sector
banks/FIs/Insurance Cos owned or controlled
by the Government of India.
 Structural Linkage: With Ministry of
Finance and Ministry of SSI.
 Subsidiary of IDBI
 Head office @ Lucknow
 Among the top 25 development banks in
India
SIDB
I Nature of

Support
 Financial
Service
 Objectiv
es
 Promote
finance
&
develop
small
scale
sector
SIDBI
Functions
 Provide financial assistance to new
project
 It refinances loans and advances
provided by the existing lending
institutions to the small- scale units.
 It discounts and rediscounts bills
arising from sale of machinery to and
manufactured by small-scale industrial
units.
 It extends seed capital/soft loan
assistance under National Equity Fund,
Mahila Udyam Nidhi and Mahila Vikas
Nidhi and seed capital schemes.
 It grants direct assistance and refinance
SIDBI
Functions
 It provides services like factoring,
leasing, etc. to small units.
 It extends financial support to State Small
Industries Corporations for providing
scarce raw materials to and marketing
the products of the small-scale units.
 It provides financial support to National
Small Industries Corporation for
providing; leasing, hire pur•chase and
marketing help to the small-scale units.
KIAD
BKarnataka Industrial Areas Development

Board
 Established in 1966
 Headquarters @ Bangalore with 9 zonal
offices
 Objectives
 To establish industrial area
 To provide infrastructural facilities
 To assist implementation of govt policies.
 To function on „No profit No lass basis
KIADB
Functions
 To acquire lands for industrial activity &
form industrial area with infrastructure
facilities like road, electricity, water
supply etc..
 acquires and provides developed land
suited for industrialization, by drawing
up well laid-out plots of varying sizes to
suit different industries with requisite
infrastructure facilities.
 Banks, post offices, fire stations,
police outposts, ESI dispensaries
etc are also provided.
Applications duly filled must be
accompanied
 by:
A brief project report.
 Details of constitution of the company
 Provisional registration certificate
 EMD(Earnest Money Deposit) of Rs 500/-
per acre, subject to a maximum of Rs
10,000/- along with 20%, 15% and 5% of
the land cost for various districts.
KSSID
CKarnataka State Small Industries

Development Corporation Ltd.
 Established on 29th April 1960
 Nature of support
 Infrastructure & Industrial Inputs
 Objectives
 To assist SSI in procurement of raw
material
 Rapid development of SSI
KSSIDC
Functions
1. Establishment and Management of
Industrial Estates.
2. Procurement and distribution of raw
materials.
3. Assistance towards marketing.
4. Dissemination of information by
participating in the internal and
international exhibitions.
5. Supply of machinery under Hire
Purchase Scheme.
6. Providing Guidance to SSI
Entrepreneurs.
 LIST OF MAJOR PROJECTS HANDLED BY
KSSIDC

 Government Tool Room Training Centre

(GTTC) was established at Industrial Estate
Rajajinagar.
 An exclusive garment complex has been
established at
Rajajinagar
 Multi-storied complexes were established at
Electronic City industrial estate Bommasandra to
accommodate electronic industries and Software
Technology units.
 ISI Complex at peenya established to test and
certify the
product manufactured by SSI units.
 Multi-storied Commercial Complex established at
Industrial Estate Shimoga Multi-storied
Commercial Complex was established at Industrial
Estate Gulbarga.
 Power loom sheds for KSPDC at Siguli was
 TECSO
K
 Technical Consultancy Services of
Karnataka
 Established in 1976 by Govt of Karnataka
 Nature of support
 Multi disciplinary technical, industrial &
management consultancy
 Objectives
 To provide reliable consultancy
support for entrepreneurs to startup
self employment
 To provide consultancy services to
various Depts &
Agencies of State & Central Govt
TECSOK
activities:
 Guidance in product selection and
project identification.
 Market survey and market
development advice.
 Consultancy for agro-based industries of
a nodal agency of the government of
India.
 Diagnostic studies and rehabilitation
of sick industries.
 Environment impact assessment studies
environment management plans and
propagation of cleaner production
TECSOK
activities:
 Energy management and audit.
 Valuation of assets for mergers and
takeovers.
 Infrastructure development project reports.
 Port tariff study and related areas.
 System study and software development.
 Management studies, company formation,
corporate plan, enterprise restructuring etc.
 Designing and organizing training
programme
KSF
CKarnataka State Financial Corporation

 Established in 1951through a State
Financial Corp Act 1951
 KSFC has a branch office in each
district
 Objectives
 Cater to financial requirements of small
Scale units
 To extend medium & long term credits to
units
KSFC give preference to the projects
which are
 Promoted by technician
entrepreneur.
 In
 the small-scale
Located in growthsector.
centres and developing
areas of the state;
 Promoted by entrepreneurs belonging to
scheduled castes and scheduled tribes,
backward classes and other weaker
sections of society.
 Characterized by high employment
potential.
 Capable of utilizing local resources; and
 In tune with the declared national
DIC – A Single Window
Agency
 District Industries Centre
 Lunched in 1978
 400 DIC‟s in India
 Nature of Support
 Information & Consultancy Services, Industrial
Inputs
 Objectives
 To promote cottage & SSI in rural area/small
towns.
 To help entrepreneur with all information under
1 roof.
 To serve as an integrated administrative
framework at district level for industrial
development.
DIC
Functions
 Surveys:
 Action
Plan
 Appraisal
 Guidance
 Marketin
g
R & D
 Training
What is Intellectual
Property?
 Intellectual property refers to creations of the
mind: inventions; literary and artistic works;
and symbols, names and images used in
commerce.
 Intellectual property is divided into two
categories:
 Industrial Property: includes patents for
inventions, trademarks, industrial designs and
geographical indications.
 Copy Right: covers literary works (such as novels,
poems and plays), films, music, artistic works
(e.g., drawings, paintings, photographs and
sculptures) and architectural design. Rights
related to copyright include those of performing
artists in their performances, producers of
phonograms in their recordings, and
What are intellectual property
rights?
 Intellectual property rights are like any
other property right. They allow creators,
or owners, of patents, trademarks or
copyrighted works to benefit from their
own work or investment in a creation.
 These rights are outlined in Article 27 of
the Universal Declaration of Human
Rights, which
provides for the to benefit from
protection of
right the and
moral
resulting material
from authorship interests
of scientific,
literary or artistic productions.
Why promote and protect
intellectual property?
 An efficient and equitable intellectual
property system can help all countries to
realize intellectual property‟s potential as a
catalyst for economic development and
social and cultural well-being.
 The intellectual property system helps
strike a balance between the interests of
innovators and the public interest,
providing an environment in which
creativity and invention can flourish, for
the benefit of all.
Why promote and protect
intellectual property?
 First, the progress and well-being of
humanity rest on its capacity to create and
invent new works in the areas of
technology and culture.
 Second, the legal protection of new
creations encourages the commitment of
 additional resources
Third, the promotion for further
protection
innovation.
and
intellectual property spursof economic
growth, creates new jobs and industries,
and enhances the quality and enjoyment of
life.
What is a
Patent?
 A patent is an exclusive right granted for
an invention – a product or process that
provides a new way of doing something, or
that offers a new technical solution to a
problem.
 A patent provides patent owners with
protection for their inventions.
 Protection is granted for a limited period,
generally 20 years.
What is a
trademark?
 A trademark is a distinctive sign that
identifies certain goods or services
produced or provided by an individual or a
company. Its origin dates back to ancient
times when craftsmen reproduced their
signatures, or “marks”, on their artistic
works or products of a functional or
practical nature.
 The system helps consumers to identify and
purchase a product or service based on
whether its specific characteristics and
quality – as indicated by its unique
trademark – meet their needs.
What is an Industrial
Design?
 An industrial design refers to the
ornamental or aesthetic aspects of an
article. A design may consist of three-
dimensional features, such as the shape or
surface of an article, or two-dimensional
features, such as patterns, lines or color.
 Industrial designs are applied to a wide
variety of industrial products and
handicrafts: from technical and medical
instruments to watches, jewelry and their
luxury items; from house wares and
electrical appliances to vehicles and
architectural structures; from textile
designs to leisure goods.
What is a Geographical
Indication?
 A geographical indication is a sign used on
goods that have a specific geographical
origin and possess qualities or a
reputation due to that
place of origin.
 Most commonly, a geographical
indication consists of the name of the
place of origin of the goods.
 Agricultural products typically have
qualities that derive from their place of
production and are influenced by specific
local geographical factors, such as
climate and soil.
What are Copyright and Related
Rights?
 Copyright laws grant authors, artists and
other creators protection for their literary
and artistic creations, generally referred
to as “works”. A closely associated field is
“related rights” or rights related to
copyright that encompass rights similar or
identical to those of copyright, although
sometimes more limited and of shorter
duration.