Micro, Small and Medium Enterprises (MSME)

Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly  vibrant and dynamic sector of the Indian economy over the last five decades. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country. Khadi is the proud legacy of our national freedom movement and the father of the  nation. Khadi and Village Industries (KVI) are two national heritages of India. One of the most significant aspects of KVI in Indian economy is that it creates employment at a very low per capita investment. The KVI Sector not only serves  the basic needs of processed goods of the vast rural sector of the country, but also provides sustainable employment to rural artisans. KVI today represent an exquisite, heritage product, which is 'ethnic' as well as ethical. It has a potentially strong clientele among the middle and upper echelons of the  society.

Coir Industry is an agro-based traditional industry, which originated in the state of Kerala and proliferated to the other coconut producing states like Tamil Nadu, Karnataka, Andhra Pradesh, Orissa, West Bengal, Maharashtra, Assam, Tripura,  etc. It is an export oriented industry and having greater potential to enhance  exports by value addition through technological interventions and diversified products like Coir Geotextiles etc. The acceptability of Coir products has increased rapidly due to its 'environment friendly' image. Ministry of Micro, Small & Medium Enterprises (M/o MSME) envision a vibrant  MSME sector by promoting growth and development of the MSME Sector,  including Khadi, Village and Coir Industries, in cooperation with concerned Ministries/Departments, State Governments and other Stakeholders, through providing support to existing enterprises and encouraging creation of new  enterprises. The Micro; Small and Medium Enterprises Development (MSMED) Act was notified in 2006 to address policy issues affecting MSMEs as well as the coverage and investment ceiling of the sector. The Act seeks to facilitate the development of these enterprises as also enhance their competitiveness. It provides the first-ever legal framework for recognition of the concept of "enterprise" which comprises both manufacturing and service entities. It defines  medium enterprises for the first time and seeks to integrate the three tiers of these enterprises, namely, micro, small and medium. The Act also provides for a statutory consultative mechanism at the national level with balanced representation of all sections of stakeholders, particularly the three classes of enterprises; and with a wide range of advisory functions. Establishment of specific funds for the promotion, development and enhancing competitiveness of these enterprises, notification of schemes/programmes for this purpose, progressive credit policies and practices, preference in Government procurements to products and services of the micro and small enterprises, more  effective mechanisms for mitigating the problems of delayed payments to micro and small enterprises and assurance of a scheme for easing the closure of business by these enterprises are some of the other features of the Act. On 9 May 2007, subsequent to an amendment of the Government of India  (Allocation of Business) Rules, 1961, erestwhile Ministry of Small Scale Industries and the Ministry of Agro and Rural Industries were merged to form the Ministry of Micro, Small and Medium Enterprises (M/o MSME). This Ministry now designs policies and promotes/ facilitates programmes, projects and schemes and monitors their implementation with a view to assisting MSMEs and help them to scale up. The primary responsibility of promotion and development of MSMEs is of the State Governments. However, the Government of India, supplements the efforts  of the State Governments through various initiatives. The role of the M/o MSME and its organizations is to assist the States in their efforts to encourage entrepreneurship, employment and livelihood opportunities and enhance the competitiveness of MSMEs in the changed economic scenario. The schemes/ programmes undertaken by the Ministry and its organizations seek to facilitate/provide: i) adequate flow of credit from financial institutions/banks; ii) support for technology upgradation and modernization; iii) integrated infrastructural facilities; iv) modern testing facilities and quality  certification; v) access to modern management practices; vi) entrepreneurship development and skill upgradation through appropriate training facilities;  vii) support for product development, design intervention and packaging; viii) welfare of artisans and workers; ix) assistance for better access to domestic  and export markets and x) cluster-wise measures to promote capacity-building  and empowerment of the units and their collectives. Organisational Setup The M/o MSME is having two Divisions called Small & Medium Enterprises (SME) Division and Agro & Rural Industry (ARI) Division. The SME Division  is allocated the work, inter- alia, of administration, vigilance and administrative  supervision of the National Small Industries Corporation (NSIC) Ltd., a public sector enterprise and the three autonomous national level entrepreneurship development/training originations. The Division is also responsible for  implementation of the schemes relating to Performance and Credit Rating and Assistance to Training Institution, among others. SME Division is also  responsible for preparation and monitoring of Results- Framework Document (RFD) as introduced in 2009 by the Cabinet Secretariat under Performance  Monitoring and Evaluation System (PMES). The ARI Division looks after the  administration of two statutory bodies viz. the Khadi and Village Industries Commission (KVIC), Coir Board and a newly created organization called  Mahatma Gandhi Institute for Rural Industrialization (MGIRI). It also supervises the implementation of the Prime Minister's Employment Generation  Programme (PMEGP). The Implementation of policies and various programmes schemes for providing  infrastructure and support services to MSME's is undertaken through its attached office, namely the Office of the Development Commissioner (010 DC (MSME)), National Small Industries Corporation (NSIC), Khadi and Village Industries Commission (KVIC); the Coir Board, and three training institutes viz., National Institute for Entrepreneurship and Small Business  Development (NIESBUD), NOIDA, National Institute for Micro, Small and Medium Enterprises (NI-MSME), Hyderabad, Indian Institute of Entrepreneurship (lIE), Guwahati and Mahatma Gandhi Institute for Rural Industrialization (MGIRI), Wardha a society registered under Societies Registration Act, 1860. The National Board for Micro, Small and Medium Enterprises (NBMSME) was established by the Government under the Micro, Small and Medium Enterprises  Development Act, 2006 and Rules made thereunder. It examines the factors affecting promotion and development of MSME, reviews existing policies and programmes and make recommendations to the Government  in formulating the policies and programmes for the growth of MSME. Office of the Development Commissioner [MSME] The Micro, Small and Medium Enterprises- Development Organisation  (MSME-DO) is headed by the Additional Secretary & Development Commissioner (MSME). The Office of the Development Commissioner (Micro, Small & Medium Enterprises) assists the Ministry in formulating,  co-ordinating, implementing and monitoring different policies and programmes  for the promotion and development of MSMEs in the country. In addition, it provides a comprehensive range of common facilities, technology support  services, marketing assistance, etc. through its network of 30 Micro, Small and Medium Enterprises-Development Institutes (MSME-Dls); 28 Branch MSME-Dls; 4 MSME Testing Centres (MSME-TCs); 7 MSME-Testing Stations (MSME-TSs); 2 MSME-Training Institutes (MSME-Tls); and 1  MSME-Technology Development Center-Hand Tools (MSME-TDC-Hand Tools).  The % DC (MSME) also operates a network of Tool Rooms and Technology  Development Centres (including 2 Footwear Training Institutes) which are autonomous bodies registered as Societies under the Societies Act. The Office  implements a number of schemes for the MSME sector, the details of which  have been duly incorporated in the booklet. Khadi & Village Industries Commission  The Khadi & Village Industries Commission (KVIC), established under the Khadi and Village Industries Commission Act, 1956 (61 of 1956), is a statutory  organization engaged in promoting and developing khadi and village industries for providing employment opportunities in rural areas, thereby strengthening the rural economy. The Commission is headed by full time Chairman and consists of 10 part-time Members. The KVIC has been identified  as one of the major organizations in the decentralized sector for generating  sustainable rural non-farm employment opportunities at a low per capita  investment. This also helps in checking migration of rural population to urban areas in search of the employment opportunities. The main functions of the KVIC are to plan, promote, organize and assist in implementation of  the programmes/projects/schemes for generation of employment opportunities  through development of khadi and village industries. Towards this end, it undertakes activities like skill improvement, transfer of technology, research & development, marketing, etc. KVIC co-ordinates its activities through State KVI boards, registered societies and cooperatives. It has under its aegis a large number of industry-specific institutions spread in various parts of the country. Coir Board The Coir Board is a statutory body established under the Coir Board Industry Act, 1953 (NO. 45 of 1953) for promoting overall development of the  coir industry and improving the living conditions of the workers engaged in  this traditional industry. The Coir Board consists of a full-time Chairman and 39 part- time Members. The activities of the Board for development of coir industries, inter-alia include undertaking scientific, technological and economic  research and development activities; collecting statistics relating to exports and  internal consumption of coir and coir products; developing new products and designs; organizing publicity for promotion of exports and internal sales; marketing of coir and coir products in India and abroad; preventing unfair  competition between producers and exporters; assisting the establishment of units for manufacture of the products; promoting co-operative organization among producers of husks, coir fibre, coir yarn and manufactures of coir products;  ensuring remunerative returns to producers and manufacturers, etc. The Board has promoted two research institutes namely, Central Coir Research  Institute (CCRI), Kalavoor, Alleppey, and Central Institute of Coir Technology  (CICT), Bengalooru for under taking research activities on different aspects of coir industry which is one of the major agro based rural industries in the country.  The two major strengths of the coir industry are it being export oriented and  generating wealth out of the waste (coconut husk). National Small Industries Corporation Limited (NSIC) NSIC, established in 1955, is headed by Chairman-cum-Managing  Director and managed by a Board of Directors. The main function of the Corporation is to promote, aid and foster the  growth of micro and small enterprises in the country, generally on  commercial basis. NSIC provides a variety of support services to micro and small  enterprises catering to their different requirements in the areas of raw  material procurement; product marketing; credit rating; acquisition  of technologies; adoption of modern management practices, etc. NSIC implements its various programmes and projects throughout the country through its 9 Zonal Offices, 39 Branch Offices, 12 Sub Offices, 5 Technical Services Centres, 3 Technical Services Extension Centres, 2 Software Technology Parks, 23 NSIC-Business Development Extension Offices and 1  Foreign Office