Role
of central government in entrepreneurship
An
entrepreneur requires a continuous flow of funds not only for setting up of
his/ her business, but also for successful operation as well as regular up
gradation/ modernization of the industrial unit. To meet this requirement, the
Government (both at the Central and State level) has been undertaking several
steps like setting up of banks and financial institutions; formulating various
policies and schemes, etc. All such measures are specifically focused towards
the promotion and development of small and medium enterprises.
The government of India has been taking
active steps to promote entrepreneurship in various industry & service
sectors. It has declared several policy measures and is implementing schemes
and programmes to enhance the global competitiveness of small enterprises
across the country. Government Support Policies
and Incentives The Ministry of Micro,
Small and Medium Enterprises is the nodal Ministry for formulation of policies,
programmes and schemes, their implementation and related co- ordination, for
the promotion and development of small scale industries in India.
The role of
the Ministry is to assist the States in their efforts for the growth of the
small scale sector, by enhancing their competitiveness in an increasingly
liberalized economy. It is assisted by an attached office and two public sector
enterprise, namely:- Micro, Small and Medium Enterprises Development
Organization (MSME-DO)ü
National Small Industries Corporation Ltd (NSIC)ü Khadi and Village Industries Commission (KVIC)ü Coir Boardü
Micro, Small
and Medium Enterprises Development Organization (MSME-DO) :- the Office of the
Development Commissioner (Micro, Small and Medium Enterprises) [earlier known
as the O/o the DC (SSI)] is also known as Micro, Small and Medium Enterprises-
Development Organization (MSME-DO). It is the apex body for assisting the
Government in formulating, coordinating, implementing and monitoring policies
and programmes for micro, small and medium enterprises (MSMEs) in the country.
MSME-DO provides a comprehensive range of common facilities, technology support
services, marketing assistance, entrepreneurial development support, etc.
Coir Board :- is a statutory body,
established under the Coir Industry Act, 1953, for the promotion and
development of coir industry in India as well as for uplifting the living
conditions of the workers engaged in this industry.
National
Small Industries Corporation Ltd (NSIC) :-
was established by the Government
with a view to promoting, aiding and fostering the growth of micro, small and
medium enterprises in the country, with a focus on commercial aspect of their
operations. It implements several schemes to help the MSMEs in the areas of raw
material procurement, product marketing, credit rating, acquisition of
technologies, adoption of improved management practices, etc. Khadi and Village Industries Commission
(KVIC) :- established under the Khadi and Village Industries Commission Act,
1956, as a statutory organisation engaged in promotion and development of khadi
and village industries for providing employment opportunities in the rural
areas.
The other
important policies for the sector relate to: I. Excise duty II. Foreign direct
investment approval III. Labour laws ,Excise duty
Value of Clearance (Rs.) Rate of duty Remarks Upto 100 Lakhs 60% of normal rate
Cenvat credit is of duty available from the beginning itself 100-300 Lakhs
Normal rate of duty Can avail Cenvat Rate of duty in respect of Clearances of
Specified goods Rate of duty in respect of Clearances of Specified goods Value
of Clearance (Rs.) Rate of duty Remarks Upto 100 Lakhs Nil Not to avail Cenvat
100-300 Lakhs Normal rate of duty Can avail Cenvat Rate of duty in respect of Clearances
of Excisable Goods
Foreign
direct investment approval An industrial
undertaking, i.e., a company with interests in industry can invest up to 24%
equity in a SSI unit. If the equity goes
beyond 24%, the industrial unit loses its SSI status. There is no restriction on the extent of
equity that can be held by a Non-resident Indian (NRI) as an individual/partner
in a SSI unit. Investors need to file an
application with the Reserve Bank of India (RBI) in the prescribed format and
approval is ordinarily granted within 15 days.
For foreign investment outside the automatic route, clearance has to be
obtained from Foreign Investment Promotion Board (FIPB). Applications for setting up a 100% Export
Oriented Unit are also required to be filed with the SIA. For setting up a unit in an Export Processing
Zone (EPZ), application has to be filed with the Development Commissioner of
the concerned EPZ.
Labour
laws Employment Exchange (Compulsory
Notification of Vacancies) Act, 1959
Equal Remuneration Act, 1976 The
Factories Act, 1948 The Industrial
Disputes Act The Industrial Employment
(Standing Orders) Act,1946 The
Inter-state Migrant Workmen (Regulation of Employment and Conditions of
Service) Act, 1979 Labour Laws
(Exemption from Furnishing Returns & Maintaining Registers by Certain
Establishments) Act, 1988 The Sales
Promotion Employees (Conditions of Service) Act, 1976 The Shops and Establishments Act, 1953 The Trade Union Act, 1926 Workmen’s Compensation Act, 1923 The Weekly Holidays Act, 1942 Apprentices
Act, 1961 The Bidi and Cigar Workers (Conditions of Employment) Act, 1966
Bonded Labour System (Abolition) Act, 1976 Child Labour (Prohibition &
Regulation) Act, 1986 The Children (Pledging of Labour) Act, 1933 The Contract
Labour (Regulation & Abolition) Act, 1970 The Employees Provident Funds and
Misc. Provisions Act, 1952 Employees State Insurance Act, 1948 Employers
Liability Act, 1938 Maternity Benefit Act, 1961 The Minimum Wages Act, 1948 The
Payment of Bonus Act, 1965 The Payment of Gratuity Act, 1972 The Payment of
Wages Act, 1936
Schemes and
Programmes: Besides, several schemes and
programmes have been undertaken by the Government with the aim of facilitating
access to:- i. adequate credit from financial institutions; ii. funds for
technology upgradation and modernisation; iii. integrated infrastructural
facilities; iv. modern testing facilities and quality certification
laboratories; v. modern management practices, entrepreneurship development and
skill up gradation through appropriate training facilities; etc. The schemes so
announced include:- (next slide)
Schemes and
Programmes:…contd… Tax Holiday Scheme Composite Loan Scheme Industrial Estate Scheme Scheme for International Cooperation Scheme of Surveys, Studies and Policy
Research Scheme of Fund for Regeneration
of Traditional Industries (SFURTI)
Scheme of Product Development, Design Intervention and Packaging
(PRODIP) Scheme of Khadi Karigar
Janashree Bima Yojana for Khadi Artisans
Scheme of Interest Subsidy Eligibility Certification (ISEC)
Composite
Loan Scheme Debt-equity Ratio Promoter's Contribution Margin for Term Loan Rate of Interest : (Effective) Repayment
Security Terms and Conditions
Scheme of
Interest Subsidy Eligibility Certification (ISEC) The Interest Subsidy Eligibility Certificate
(ISEC) Scheme is the major source of funding for the khadi programme. It was
introduced in May 1977 to mobilize funds from banking institutions to fill the
gap in the actual fund requirement and its availability from budgetary sources.
Under the ISEC Scheme, credit at the concessional rate of interest of 4 per
cent per annum for capital expenditure as well as working capital is given as
per the requirement of the institutions.
The extent of credit flow to the institutions under the scheme during
2002-03 to 2005-06 was Rs. 329.73 crore, Rs. 362.70 crore, Rs. 278.74 crore and
Rs. 233.23 crore and subsidy provided by the Government through KVIC were Rs.
21.99, Rs. 18.77 crore, Rs. 26.09 crore and Rs. 22.38 crore respectively.
Interest Subsidy Eligibility Certificates worth Rs.392.63 crore have been
issued up to December 2006 to meet part of the working capital requirement of
the institutions during 2006-07, against which loans actually availed by the
institutions was around Rs. 260 crore compared to Rs. 356.94 crore sanctioned
and Rs. 174.92 crore availed by the institutions as on 31 December 2005.
National
Small Industries Corporation Ltd (NSIC) schemes for small scale industries
relate to:- Bill Financing Working Capital Finance Export Development Finance Equipment Leasing Scheme Raw Materials Procurement Support Marketing Assistance Programme and Exports
Assistance; Stores Purchase Programme Single Point Registration Scheme and other
services.
1 comments:
Write commentsNice information ...thankuu so much
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