ENTERPRISE DEVELOPMENT

STEPS TO START AN ENTERPRISE – Part V

INCENTIVES & PROMOTIONAL SCHEMES

Government accords the highest preference for the Promotion & Development of MSMEs by framing and implementing suitable policies and promotional Programs/schemes. Besides providing developed land and sheds to the entrepreneurs on actual cost basis with appropriate infrastructure, special schemes have been designed for specific purposes like quality up gradation, common facilities, entrepreneurship development and consultancy services.

Credit to micro, small and medium scale sector has been covered under priority sector lending by banks. Small Industries Development Bank of India (SIDBI) has been established as the apex institution for financing the MSMEs. Specific schemes have been designed for implementation through SIDBI, State Finance Corporations (SFC), Scheduled Banks, SIDCs and NSIC.

Under the Reserve Bank Guidelines loans up to Rs. 5 lakhs are made available by the Banks without insisting on collaterals.

Credit Guarantee Fund for micro, small and medium enterprises has been set up by Govt. of India to provide guarantee for loans to MSEs up to Rs.100 lakhs extended by Scheduled Commercial Banks and some Regional Rural Bank ( up to Rs.50 lakhs). Under CGTMSE Scheme collateral free loan will be provided where ever the Entrepreneur can not provide the necessary security. The Entrepreneur has to put a request to the Financial Institute at the time of submitting the Project Report. For details kindly visit www.cgtsi.org.in.

Under the National Equity Fund Scheme seed capital to the extent of 25% will be provided by Govt. of India with nominal service charges to meet the Equity (Promoter Contribution) in case the Entrepreneur can not raise the required funds. The Scheme is operated by SIDBI and is provided to under re-finance scheme to Financial Institutions.

Similarly Mahila Udyama Nidhi Scheme is avialbel under the above guidelines, exclusively for Women Enterprises. SIDBI and all the Nationalized Banks operate this scheme. An Enterprise with more than 51% of equity is designated as Women Enterprise.

Credit Linked Capital Subsidy scheme aims at facilitating technology up gradation by providing 15 per cent upfront capital subsidy to MSEs units, including tiny, khadi, village and coir industrial units, on institutional finance availed of by them for induction of well established and improved technologies in the specified sub-sectors / products approved under the scheme. The revised ceiling on loan amount for availing the benefit under this scheme is Rs. 100. You may please visit www.laghu-udyog.com and www.msme.gov.in

Under Prime Minister’s Employment Generation Program (PMEGP) covers loans up to Rs.25 Lakhs for manufacturing Sector and Rs.10 Lakhs for Service sector with a subsidy component. Khadi & Village Industries Commission is the implementing agency

Min. of Food Processing Scheme for Technology Up Gradation / Establishment /Modernization of Food Processing Industries. The scheme will provide 25% of cost of plant & Machinery and Technical Civil works subject to a maximum of Rs.50 lakhs. Web site: www. mofpi.nic.in

Government of India has been executing the incentive scheme for providing reimbursement of charges for acquiring ISO 9000/14000 accreditation to the extent of 75% of the cost subject to a maximum of Rs. 75,000/- in each case.

There are many more schemes operated by Min.of Agriculture, Science& Technology etc.

State Government provides technical and other support services to MSMEs through the Directorate of Industries and District Industries Centers. Although the details of the scheme vary from state to state, the following are the common areas of support.

• Development and management of industrial estates

• Suspension/deferment of Sales Tax

• Power subsidies

• Capital Investment subsidies for New Enterprises

• Seed Capital/Margin Money Assistance Scheme

• Priority in allotment of power connection, water connection.

• Consultancy and technical support

Note: These are the salient features of the schemes only.For more details kindly visit the respective web sites.