Press Information Bureau
Government of India
Ministry of Micro,Small & Medium Enterprises
21-December-2010 18:03 IST
Enhancement of Guarantee Cover from 75 Per Cent to 80 Per Cent for MSEs Owned/Operated by Women under Credit Guarantee Scheme
The Ministry of Micro, Small and Medium Enterprises (MSME) is implementing the promotional schemes for the development of mic

Rs. 519.46 Crore was Released to the MSEs under Credit Linked Capital Subsidy Scheme


Rajiv Gandhi Udyami Mitra Yojana to Provide Handholding Support and Assistance to first Generation Entrepreneurs


MDA to Promote Production and Sales of Khadi and Polyvastra


PMEGP- Creation of Job through Entrepreneurship Development


Making Khadi Artisans Centric



The Ministry of Micro, Small and Medium Enterprises (MSME) is implementing the promotional  schemes for the development of micro, small and medium enterprises in the country.


Enhanced Credit Flow to the MSE Sector

          For strengthening the delivery of credit to the micro and small enterprises (MSEs), the Government announced a ‘Policy Package for Stepping up Credit to Small and Medium Enterprises’ in August, 2005 for doubling the credit flow to this sector within a period of five years.  This has resulted in a significant increase in the credit flow from Public Sector Banks (PSBs) to the MSE sector with the outstanding credit of PSBs increasing from Rs.67,800 crore as at the end of March, 2005 to Rs.2,78,398 crore (provisional) as at the end of March, 2010.


Skill Development

          The Government has taken up Skill Development as a high priority area through various measures like enhancing the training capabilities of the Tool Rooms, MSME Development Institutes and other organizations under the Ministry of MSME.  The agencies under the Ministry of MSME conducted programmes for skill development for nearly 3.13 lakh trainees during 2009-10 and the targets set for 2010-11 is 4.16 lakh persons.  The Ministry of MSME provides all such trainings for SCs/STs free of cost.  Special programmes are organised through MSME-DIs for weaker sections of the society viz., SC/STs, women and physically handicapped  free of cost besides providing a monthly stipend of Rs.125/- per week per candidate during the entire period of training.


National Manufacturing Competitiveness Programme

          The Government has launched an all-India campaign under the National Manufacturing Competitiveness Programme (NMCP) for the MSMEs, which has specific components that are aimed at enhancing the competitiveness of the enterprise in this sector.  There are 10 components of the NMCP, which have been approved and are available for MSMEs.  These are:-


(i)       Lean Manufacturing Competitiveness Scheme (LMCS) for MSMEs

(ii)      Design Clinics Scheme for design expertise to MSMEs manufacturing sector

(iii)     Marketing Assistance and Technology Upgradation                                                                       Scheme for MSMEs

(iv)     Enabling manufacturing sector to be competitive through Quality Management Standards (QMS) and Quality Technology Tools (QTS)

(v)      Technology & Quality Upgradation Support for MSMEs

(vi)     Promotion of Information and Communication Technology (ICT) in MSME sector.

(vii)                       Setting up Mini Tool Room & Training Centres under PPP Mode

(viii)                    Marketing Assistance/support to MSEs (Bar Code)

(ix)                         Building Awareness on Intellectual Rights for MSMEs

(x)               Scheme for Providing Support for “Entrepreneurial and Managerial  Development     of SMEs through Incubators”.


MSE-Cluster Development Programme

          The Ministry of MSME has adopted the cluster approach for holistic development of micro and small enterprise in a cost effective manner.  Soft interventions (Technical assistance, capacity building, exposure visits, market development, trust building, etc. for the cluster units), hard interventions (creation of tangible “assets” like Testing Facility, Design Centre, Production Centre, Effluent Treatment Plant, Training Centre, R&D Centre, Raw Material bank/Sale Depot, Product Display Centre, Information Centre, any other need based facility) and Infrastructure Development (Development of land, provision of water supply, drainage, Power distribution, non-conventional sources of Energy for common captive use, construction of roads, etc.) are undertaken in the existing clusters/new industrial areas/estates or existing industrial areas/estates.

          471 clusters have been approved for interventions under the scheme including hard interventions for 66 clusters.  Apart from these cluster development initiatives, 124 industrial infrastructure projects including 29 upgradation of existing industrial have also been undertaken.


Credit Guarantee Scheme

          The Government is implementing the Credit Guarantee Fund Scheme for Micro and Small Enterprises with the objective of facilitating flow of credit to the MSEs, particularly to micro enterprises by providing guarantee cover for loans upto Rs.100 lakh without collateral/third party guarantees.  For making the scheme more attractive to both lenders as well as borrowers, several modifications have been undertaken which, inter alia, include : (a) enhancement in the loan limit to Rs.100 lakh; (b) enhancement of guarantee cover from 75% to 85% for loans upto Rs.5 lakh; (c) enhancement of guarantee cover from 75% to 80% for MSEs owned/operated by women and for loans in North Eastern Region (NER); (d) reduction in one-time guarantee fee from 1.5% to 1% and annual service charges from 0.75% to 0.5% for loans upto Rs.5 lakh; and (e) reduction in one-time guarantee fee for NER from 1.5% to 0.75% etc.  As on 30th November, 2010, more than 4.52 lakh proposals (for loans of over Rs.18,948 crore) have been covered under the scheme.


Credit Linked Capital Subsidy Scheme for Micro and Small Enterprises

          Under the CLCSS, 15 per cent capital subsidy is provided on loan amounts upto Rs.100 lakh for technology upgradation by adoption of well-established and improved technology approved under the scheme.  So far, the scheme includes 49 products/sub-sectors with nearly 1400 well-approved technologies/machines for subsidy under the scheme.  Recently 179 new technologies machines for pharma sectors have been added to this list.  The scheme is implemented through 10 Nodal Agencies i.e. SIDBI, NABARD, SBI, BOB, PNB, Andhra Bank, SBBJ, Canara Bank, TIIC.  Upto November, 2010, 11022 proposals of subsidy were approved and Rs.519.46 crore was released to the MSEs under the scheme.


ISO 9000  /ISO 14001/HACCP   Reimbursement Scheme

                The Government introduced an incentive scheme for its technological up gradation / quality improvement and environment management. The scheme envisages one time reimbursement of charges for acquiring ISO 9000/14001/HACCP (or its equivalent) certification to the extent of 75% of the cost subject to a maximum of Rs.75000/-in total. The Scheme is administered by Office of Development Commissioner, Ministry of MSME. The Scheme has been decentralized w.e.f. 1.4.2007 and Directors, MSME Development Institutes have been empowered to receive and make reimbursement to the MSMEs following in their jurisdiction. The Government has extended the Scheme upto 11th Five Year Plan.

          Total 20065 number of units amounting to Rs.97.81 cr. have been reimbursed since inception (1994) till date (31st Marchr-2010).  During 2010-11, about 609 units amounting to Rs.3.07 cr. have been reimbursed upto Novemberr-2010.


National Awards

          The President of India, Smt. Pratibha Devi Patil presented National Awards to the Micro, Small and Medium Enterprises in New Delhi on 30th August, 2010.  The awards were in three categories : (a) Outstanding Entrepreneurs of Micro, Small and Medium Enterprises (Entrepreneurship, R&D & Quality Products), (b) Khadi and Village Industries and c) Coir Industries; Special awards to women and SC/ST Entrepreneurs and Banks for excellence in Micro and Small Enterprises Lending.  A total of 171 entrepreneurs including six banks received awards in various categories.  28 entrepreneurs received awards from the President of India, while Shri Dinsha Patel, Minister of State (Independent Charge) for Micro, Small and Medium Enterprises presented awards to the rest of the awardees. 



          Micro, Small and Medium Enterprises Expo was organised by the Office of the Development Commissioner (MSME) during the IITF from 14th-27th November, 2010 in the Pragati Maidan, New Delhi.  Exhibits of Micro, Small and Medium Enterprises  from all over the country were displayed.  In addition to this, NSIC also exhibited the technical capabilities of the MSMEs through TECH MART-2010 at IITF.  Products of Khadi and Village Industries were exhibited by the Khadi and Village Industries Commission and Coir Board also displayed their products during IITF, 2010 in Pragati Maidan, New Delhi.


Marketing Assistance Scheme

The main objectives of Marketing Assistance Scheme are to enhance the marketing competitiveness of the micro, small and medium enterprises (MSMEs), to provide them a platform for interaction with the individual / institutional buyers, to update them with prevalent market scenario and to provide them a forum for redressing their problems. NSIC acts as a facilitator to promote marketing efforts and enhance the competency of the  MSMEs for capturing the new market opportunities by way of organizing / participating in various domestic & international exhibitions/trade fairs, buyers-seller meets, intensive campaigns/seminars and other marketing promotion activities.

 BE for 2010-11 is Rs. 10.00 crore and it is targetted to participate in 13 international and 70 national exhibitions/trade fairs. 


Performance and Credit Rating Scheme                                                              


NSIC has been implementing “Performance & Credit Rating Scheme” for micro and small enterprises (MSEs) on behalf of the Government. The scheme is being operated through 06 accredited rating agencies i.e. CRISIL, SMERA, ONICRA, CARE, FITCH and ICRA. The Scheme is aimed to create awareness amongst micro, small & medium enterprises about the strengths and weakness of their existing operations and to provide them an opportunity to enhance their organizational strengths and credit worthiness. The rating under the scheme serves as a trusted third party opinion on the capabilities and creditworthiness of the micro, small & medium enterprises. An independent rating by an accredited rating agency has a good acceptance from the Banks/Financial Institutions, Customers/Buyers and Vendors. Under this Scheme, rating fee to be paid by the micro, small & medium enterprises is subsidized for the first year only and that is subject to maximum of 75% of the fee or Rs. 40000/-, whichever is less. BE for 2010-11 is Rs. 35.00 crore and it is targetted to cover 9400 units for rating. 


International Cooperation Scheme


International Cooperation (IC) Scheme, being implemented by M/o MSME, is an ongoing Scheme of the Ninth Plan (under implementation since 1996), which is continuing in the Eleventh Plan (2007-2012) with an outlay of Rs. 10.00 crore.  Technology infusion and/or upgradation of Indian micro, small and medium enterprises (MSMEs), their modernisation and promotion of their exports are the important objectives of the Scheme.  

The Scheme encompasses the following activities:

     (i)            Deputation of MSME business delegations to other countries for exploring new areas of technology infusion/upgradation, facilitating joint ventures, improving market of MSMEs products, foreign collaborations, etc.

  (ii)            Participation by Indian MSMEs in international exhibitions, trade fairs and buyer-seller meets in foreign countries as well as in India, in which there is international participation.

(iii)            Holding international conferences and seminars on topics and themes of interest to the MSMEs.

BE for 2010-11 is Rs. 2.00 crore and it is targetted that 150 entrepreneurs would be facilitated to participate in 30 international events.  During the last three years, the responses under the scheme has increased.


Assistance to Training Institutions                                                                     


Under the scheme assistance is provided to existing and new training Institutions for establishment of Entrepreneurship Development Institute (EDI) and strengthening of their training infrastructure on a matching basis. The Ministry  provides assistance  on a matching basis, not exceeding 50 percent of the project cost or  Rs. 150 lakh whichever is less (90 percent or Rs. 270 lakh of the project cost whichever is less, for State level EDIs in Union Territories of Andaman & Nicobar and Lakshadweep Islands) excluding cost of land and working capital. The balance 50 percent of the matching contribution (10 percent for State level EDIs in Union Territories of Andaman & Nicobar and Lakshadweep Islands) should come from the concerned Institute, State/UT Government, public funded institution(s), NGOs/Trusts/ Banks/Companies/ Societies/ Voluntary organizations etc.

The assistance is for creation of infrastructure. The land will have to be provided by the State Government or any other institution or by the applicant. Financial assistance would be for construction of building, purchase of training aids/equipments, office equipments, computers and for providing other support services e.g. libraries/data bases etc. The costs of land, construction of staff quarters etc. would not qualify for calculation of matching grant from the Central Government. All the proposals under this scheme are required to be recommended by and routed through the concerned State/UT Government.

Now a  new component of training has been added under this scheme.  Assistance would be provided under the scheme to the below mentioned Training Institutions, for conducting Entrepreneurship Development Programmes (EDPs) and Entrepreneurship cum Skill Development Programmes (ESDPs) and Training of Trainers (ToTs) programmes in the areas of Entrepreneurship and/or Skill Development.

(a)       National level EDIs (including branches),

(b)       Training Institutions established by Partner Institutions (PIs) of national level EDIs,

(c)       Training/Incubation centers of NSIC,

(d)       Training cum Incubation Centers (TICs) set up by Franchisees of NSIC

(e)       Other Training institutions with proven professional competency, capacity and experience, approved under the scheme.

Skill Development (SDP) training would be of 100 to 300 hours (1 to 3 months). Entrepreneurship Development (EDP) training would be of 72 hours (2 weeks) and Trainer’s Training for 300 hours.

BE for 2010-11 is Rs. 54.25 crore and it is targetted to provide financial assistance to 4 existing/new EDIs and to train 40,000 persons. The scheme is likely to take off with the addition of new component, i.e. provision of financial assistance for imparting training through national EDIs/NSIC and their Partner Institutions.


Rajiv Gandhi Udyami Mitra Yojana

The objective of Rajiv Gandhi Udyami Mitra Yojana (RGUMY) is to provide handholding support and assistance to the potential first generation entrepreneurs, who have already successfully completed Entrepreneurship Development Training Programme (EDP)/Skill Development Training Programme (SDP)/ Entrepreneurship cum Skill Development Training Programme (ESDP) /Vocation Training Programmes (VT), through the selected lead agencies i.e.  'Udyami Mitras', in the establishment and management of the new enterprise, in dealing with various procedural and legal hurdles and in completion of various formalities required for setting up and running of the enterprise.

A ‘Udyami Helpline’ (a Call Centre for MSMEs) with a toll free No. 1800-180-6763 has been set up to provide information, support, guidance and assistance to first generation entrepreneurs as well as other existing entrepreneurs to guide them regarding various promotional schemes of the Government, procedural formalities required for setting up and running of the enterprise and help them in accessing Bank credit etc. 

BE for 2010-11 is Rs. 7.75 crore and it is targetted to assist 4,000 new Udyamis.  There is a demand from Udyami Mitras for enhancing the scale of financial assistance.  The recently launched Udyami Helpline is getting very good.



ARI Sector

          The  Ministry of MSME in Agro and Rural Industries (ARI) sector has been involved in a focused manner, for the development of agro and rural industries based on local raw materials and skills, for creating more employment opportunities essentially in the rural non-farm sector.  The Ministry of MSME in ARI Sector operates  mainly in the Khadi and Village Industries and Coir Sub-Sectors through the Khadi and Village Industries Commission. (KVIC)  and the Coir Board (CB) respectively and coordinates  the implementation of various schemes launched by the Government in the Sector including the latest employment generation programme, i.e., Prime Minister’s Employment Generation Programme (PMEGP) with the co-operation of State/ Union Territory Governments, State KVI Boards and the implementing banks.


          The  following  main  schemes  are  being   implemented   by   KVIC   and Coir Board:


Prime Minister’s Employment Generation Programme (PMEGP)

          Prime Minister’s Employment Generation Programme (PMEGP)  is a significant initiative with an attractive level of subsidy and was launched in August 2008.  This programme has been formulated by merging erstwhile PMRY  and REGP schemes of the Ministry with a total plan outlay of Rs. 4735 crore including Rs. 250 crore for backward and forward linkages.  It is estimated to generate around 38 lakh additional employment opportunities in the terminal four years (2008-09 to 2011-12) of XI  Plan. Under this programme, financial assistance is provided for setting up of microenterprises costing upto  Rs.  10 lakh in service sector and Rs. 25 lakh in manufacturing sector.  The assistance is provided in the form of subsidy upto 25 percent ( 35 percent  for weaker sections) of the project cost in rural areas while it is 15 percent (25 percent for weaker sections) for urban areas.

          Under PMEGP, an amount of Rs. 906 crore (including Rs. 70 crore towards backward and forward linkages) has been provided in BEs 2010-11.  Against this,  an amount of Rs. 700.51 crore has been released to KVIC.  Upto  November 30, 2010, 2,65,474 applications have been received by various implementing agencies under PMEGP, of which 1,13,332 candidates  have already been selected by District Level  Task Force concerned for assistances  under PMEGP.  Financial assistance for 30,881 projects has been sanctioned by banks for generating an estimated 3.09 lakh additional employment opportunities. Loans were disbursed in 23,059 cases by bank giving employment opportunities to about 2.31 lakh  persons upto 30 November, 2010.   An estimated 6 lakh additional employment opportunities are targeted to be generated in 2010-11.


Workshed Scheme for Khadi Artisans

          Workshed Scheme for Khadi Artisans was introduced in July 2008 for providing assistance for construction of Worksheds for Khadi artisans for better work environment.  Funds to the tune of Rs. 13.95 crore have been released to KVIC in 2009-10.  Against the target of providing assistance to 6000 worksheds, assistance to 5951 artisans (provisional) were provided upto March, 2010.   It is estimated that assistance will be provided to 10000 worksheds in 2010-11.


Scheme for Enhancing Productivity & Competitiveness of Khadi Industry and Artisans

Scheme for Enhancing Productivity & Competitiveness of Khadi Industry and Artisans was  approved in July 2008 to assist 200 Khadi institutions to make Khadi  Industry competitive with more market driven and profitable production by replacement of obsolete, old machinery and equipment .  During 2009-10, 20 projects  have been sanctioned by KVIC   utilizing an amount of Rs.  2.23 crore.  An amount of Rs. 21 crore has been provided in BE 2010-11.


Strengthening Infrastructure of existing Weak Khadi Institutions and Assistance for Marketing Infrastructure

‘Strengthening Infrastructure of existing Weak Khadi Institutions and Assistance for Marketing Infrastructure’  has been introduced recently which envisages renovation of selected 30 khadi sales outlets and providing assistance for strengthening of infrastructure of existing 100 weak selected Khadi  institutions.  An amount of Rs. 5 crore has been provided in BE 2010-11.


Product Development, Design Intervention and Packaging (PRODIP)

Product Development, Design Intervention and Packaging (PRODIP) was launched in November, 2002 with the aim to diversify and develop products under Khadi & Village Industries and also to improve the packaging of various KVI products.  During 2009-10, 169 projects (118 Khadi and   51 VI) have been assisted under this scheme and a target of  213   projects has been fixed for 2010-11.


Market Development Assistance (MDA) Scheme to promote sales of Khadi and Khadi Products

A flexible, growth stimulating and artisans centric scheme named  Market Development Assistance (MDA) to promote  production and sales of Khadi and polyvastra has been introduced from 2010-11.  The scheme provides for assistance @20% of the value of production to be shared among artisans, producing institutions and selling institutions in the ration 25:30:45.


Khadi Reform Programme

          The Department of Economic Affairs, Ministry of Finance has tied up financial aid from Asian Development Bank amounting to US$150 million over a period of three years for implementing a comprehensive Khadi Reform Programme worked out in consultation with ADB and KVIC.  Under this  Reform Package, it is proposed to revitalize the Khadi sector with enhanced sustainability of Khadi, increased incomes and employment to artisans, increased artisans welfare and to enable KVIC to stand on its own with gradually decreasing dependence on Government Grants. Initially, the programme will be initiated in 300 khadi institutions keeping the needs of regional balance, geographical spread and inclusion of backward areas.  The first tranche fund  of Rs. 96 crore has already been released to KVIC for its implementation.


Mahatma Gandhi Institute for Rural Industrialization

“Mahatma Gandhi  Institute for Rural Industrialization”  a national level institute has been established by revamping Jamnalal Bajaj Central Research Institute at Wardha, Maharashtra in association with IIT, Delhi to strengthen the R&D activities in Khadi and village industry sectors. Funds to the tune of Rs. 3 crore were released during 2008-09 and Rs. 3 crore was again released  during 2009-10, which has been enhanced  to Rs.  6 crore for the year 2010-11. 



Coir Board

The Coir Board is a statutory body established by the Coir Industry Act, 1953 for promoting the overall development of the coir industry and upliftment of 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, as provided in section 4 of the Coir Industry Act, 1953.  All sections interested in the welfare of the coir industry are represented on the Coir Board.  The functions of the Coir Board for the development of coir industries include undertaking scientific, technological and economic research and development activities; collection of statistics relating to exports and internal consumption of  coir and coir products; development of new products and designs; publicity for promotion of exports and internal sales; marketing of coir and coir products in India and abroad; preventing unfair competition among producers and exporters; assisting in the establishment of units for the manufacture of products; promoting co-operative organizations among producers of husks, coir fibre, coir yarn and manufacturers of coir products, facilitating remunerative returns to producers and manufacturers, etc.

          Coir Board has promoted two research institutes namely, Central Coir Research Institute (CCRI), Kalavoor, Alleppey and Central Institute of Coir Technology (CICT), Bangalore for undertaking research activities in different aspects of coir industry.  Coir is highly labour intensive industry employing more than 6.5 lakh workers in coconut producing States.  Nearly 80 per cent of the coir workers in the fibre extraction and spinning sector are women.  Two strengths of coir industry are that it is export oriented and it generates wealth out of waste (coconut husk).

            The main schemes being implemented by Coir Board for development of coir industries are:

·        Export market Promotion – In association with trade and industry Coir Board is participating in major international fairs/exhibitions on a country/product specific basis, product promotion programmes, catalogue shows, extending external market development assistance to exporters etc.  During 2009-10 coir and coir products worth Rs.804.05 crore have been exported which reflects about 8% increase on the export of previous year.

·        Domestic Market Promotion-  This scheme is for enhanced sale of coir products through Board’s showrooms and sales outlets, and also popularizing coir and coir products.  Further, to promote the sale of coir and coir products manufactured by the Co-operatives and Public Sector Enterprises, a Market Development Assistance (MDA) Scheme was launched  in 2000-2001 under which financial assistance @ 10% (50% each by Coir Board and State Government) to the sales outlets in the cooperative and public sector on the basis of the annual sales turn over of the coir products is provided.

·        Development of Production Infrastructure Scheme is for extending financial assistance upto 25 percent of the cost of equipment and infrastructural facilities subject to ceiling of Rs.6.00 lakh for setting up coir units and Rs.2.00 lakh for modernization of existing coir units.  Under this scheme 11 units have been assisted during 2009-10.

·        Mahila Coir Yojana – This scheme envisages distribution of motorized ratts for spinning coir yarn to women artisans after being trained.  The beneficiary under the scheme gets a subsidy of 75 per cent of the cost of the motorized ratt subject to maximum of Rs.7500/- and 75 per cent of the cost or  Rs. 3200/- whichever is less, for motorized traditional ratts.  During 2009-10 264 motorised ratts have been distributed and 3960 persons have been trained under Mahila Coir Yojana.

·        The Scheme for Rejuvenation, Modernisation and Technological Upgradation of Coir Industry was introduced in March 2008 to assist spinners and tiny household sector.  Under this scheme, assistance is provided for replacement of outdated ratts/looms and for constructing worksheds so as to increase production and earnings of workers.  Under this scheme, full amount of Rs.9.73 crore  was utilized for assisting 706 units during 2009-10. The year 2010-11 has a target for assisting 1200 units, with a BE of Rs.21crore.


Scheme of fund for Regeneration of Traditional Industries (SFURTI)

          The scheme titled “Scheme of Fund for Regeneration of Traditional Industries (SFURTI)” was introduced  in October, 2005 with a view to developing around 100 clusters in Khadi, Village and coir Industry sectors with a total cost of Rs.97.25 crore to make these industries more productive and competitive and to increase the employment opportunities in rural areas of the country.

          The scheme envisages need-based assistance for replacement of production equipment, setting up of common facility Centres (CFC), product development, quality improvement improved marketing training and capacity building, etc. Under this scheme, 105 clusters (29 Khadi, 50 village industries and 26 coir) have been taken up with the approval of Steering Committee for their development under this programme. 17 National Level Committee for their designated as Technical Agencies to provide technical support in these clusters. Upto 2009-10, Rs.71.29 crore (54.64 crore to KVIC and Rs.16.65 crore to Coir Board) has been released for implementing this scheme. MoU among Nodal Agencies, Implementing Agencies, Technical Agencies, appointment of Cluster Development Executives formation of Cluster Development Coordination group, Diagnostic Study Reports and Annual Plans, etc. in most of the cases have been completed. As reported, 49 KVI clusters are in operation while coir clusters have been planned to be operationalised in 2009-10. After implementation of the SFURTI, average increase of 40% to 60% in wages of the artisans have been achieved in the functional KVI cluster.