Micro and Small Enterprises

Outline
 Definition 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
•District Level Single Window Agency
 Introduction to IPR.
Introduction
At present the Small 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.
Introduction
Definition

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 DIs
‟ and 28 branch MSME
development institutes set up in state capitals and
industrial cities.
Functions are
MSME Development Institute
Functions are
NSIC
National 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
SIDBI
 Small Industries Development Bank of India
 Established in 1990 under an Act of Indian 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
SIDBI
Nature of Support
Financial Service
Objectives
Promote finance & develop small scale sector
Coordinating Functions of institutions engaged in
similar activities
Finance Infrastructure projects
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 loans
extended by primary lending institutions for
financing exports of products manufactured by
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.
KIADB
Karnataka 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.
KSSIDC
Karnataka 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.
7. Providing Technical Library facilities.
 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 established.
 Morarji Desai Residential School Complexes at five places in
Karnataka was established.
 TECSOK
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 techniques.
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
KSFC
Karnataka 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 sector.
Located in growth 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 priorities.
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
Marketing
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 broadcasters in
their radio and television programs.
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 from authorshipmaterial
of scientific,interests
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 for further innovation.
Third, the promotion protection
intellectual
and property spurs economic
of 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.