Chapter No. 04: Government Policies and Programmes for Entrepreneurship and Industrial Development.

Chapter No. 04: Government Policies and Programmes for Entrepreneurship and Industrial Development. Introduction. Entrepreneurial Scenario in India. Role of Government in Entrepreneurship Development. Ministry of Micro, Small and Medium Enterprises. Entrepreneurship Development Institute of India (EDI). Centre for Entrepreneurship Development (CED). Small Industrial Development Bank of India (SIDBI). Scheme for Assistance for Strengthening of Training Infrastructure of Existing and New Entrepreneurship Development Institutes. National Institute for Micro, Small and Medium Enterprises (NI-MSME), Hyderabad. Indian Institute of Entrepreneurship (IIE), Guwahati. National Institute for Entrepreneurship and Small Business Development (NIESBUD). Maharashtra Industrial and Economic Development Association (MIEDA). MITCON Centre for CSR & Skill Development. 122

The National Skill Certification and Monetary Reward Scheme. Micro, Small, and Medium Enterprises Development Act 2006. Maharashtra Industrial Development Corporation (MIDC). Achievements by Maharashtra Industrial Development Corporations. Contribution of MIDC in the Development of Entrepreneurship in Maharashtra. Maharashtra Centre for Entrepreneurship Development (MCED). EDP Training Centre in Maharashtra. Government of Maharashtra Agro Industrial Policy 2010. Maharashtra's Information Technology / Information Technology Enabled Services Policy 2015. 123

Introduction: Entrepreneurship development is one of the key elements for the promotion of micro and small enterprises, particularly for the first generation entrepreneurs. Entrepreneurship and resultant creation of employment and wealth is a major means for inclusive development. Hence, entrepreneurship development has been one of the priorities of the Ministry of Micro, Small and Medium Enterprises. With this end in view the ministry has been providing financial assistance for setting up of EDIs and also for upgrading and modernizing those that have already been founded hitherto. The scheme is primarily to assist EDIs in developing and modernizing infrastructure related to items like buildings, equipment and training aids besides other support services. The Government, in a way, is supplementing efforts of states in developing entrepreneurship skills among unemployed persons by arranging for conduct of suitable training programmes falling under various trades to cater to requirements of different sets of target groups in the areas of manufacturing, business and services sectors. While the onus of responsibility for conducting courses needed to transform the large section of unemployed persons inhabiting countryside and urban centers into self-employed /wage-employed lot, a lending hand coming from the Union of India administration by way of meeting half the cost of needed infrastructure for the EDIs to conduct training programmes required deserves appreciation since it clearly shows intention of central government to develop entrepreneurial efforts in the country for tackling underemployment/unemployment and poverty alleviation issues in right earnest. 124

The Government had in 1954 set up the Small Industries Development Organization (SIDO) besides starting the setting up of its field organizations, Small Industries Service Institutes SISIs which had come to be known as Micro, Small and Medium Enterprises Development Institutes-MSME-DIs - effective from 2nd October, 2006 after the MSME Development Act,1996 came into force -in the same year whose number had gone up to 58 by end of the tenth five year plan spread in every state and union territory for imparting skills needed to unemployed persons to become self-employed or wage-employed through the conduct of Awareness campaigns, Entrepreneurship Development Programmes, Skill Development Programmes, Management Development Programmes etc., covering different trades in the manufacturing, business and services sectors. SIDO had set up 18 autonomous Tool Rooms around the country to serve interests of small entrepreneurs in the manufacturing / services sectors. But, these MSME-DIs have been found to have been obliged to handle only a minor section of the unemployed persons in the country and hence a need was felt for encouraging the establishment of entrepreneurship development institutes at the state/ut level (under the Entrepreneurship Development Institution Scheme of the Government of India of 1993) so that with active involvement of states/uts more number of unemployed persons could be encouraged to take up entrepreneurial activities. 1 125

Entrepreneurial Scenario in India: During post-independence era, entrepreneurship has begun to grow faster. The Government of India has spelt through industrial policy statements steps for rapid and balanced industrialization of the country. The government recognizes the vital role of the private sector in accelerating industrial development especially after the economic liberalization in 1991. 2 The government pursues the following objectives: To maintain a proper distribution of economic power between public and private sectors. To disseminate the entrepreneurial acumen concentrated in a few dominant communities to a large number of industrially potential people of varied social strata. To encourage the spirit of industrialization by spreading entrepreneurship from the existing centers to other cities, towns and villages. To achieve the above objectives the government has decided to encourage the development of small scale units. It provides various incentives and concessions to SSI in the form of capital, technical knowhow, markets and land to establish industrial units particularly in the backward areas of the country. Role of Government in Entrepreneurship Development: India is a country with over 1.2 billion people, 379 million (31%) of which are between the ages of 18 and 35 (Census of India, 2011) and, many of these young people are in search of jobs, despite being educated. For example, only one in every four urban males under 29 years is employed even though they hold at least a 126

certificate or diploma. The aim of the government has been to create employment opportunities for youth while focusing on rapid economic growth. Entrepreneurship development is one of the mechanisms adopted by the Government of India towards the creation of job opportunities. The government's assumption is that support for innovation will enhance entrepreneurship development, which will in turn accelerate economic growth. 3 The roots of India's current economic systems extend back to the time of colonial rule and its autocratic and fragmented structure. The country was made to forcefully serve as a market to its colonial bosses and their industrial products. Independence in 1947 brought many changes, but the country did not have to start from scratch. The foundations of the today's legal, financial, educational, bureaucratic governance systems were inherited from the colonial period. Even the roots of publicly funded research structures, which have grown large today, date back to the colonial days. However, one key area of change following independence involved the adoption of a closed economy that relied heavily on central planning, restricted imports, and nationalization of industries. Not until 1991 did India open its economy, which led to real competitiveness and a need for innovation in all industries. India today is a vast democratic country with a population of over 1.2 billion people with diverse ethnicities, religions, and languages. Nearly 70 per cent of Indians live in rural areas, and over past 20 to 30 years there has been a continuous flow of people from villages towards cities, mainly in search of work. 4 The Indian economy is mostly based on agriculture, which depends on the 127

unpredictable South-West monsoon. Given the large population, it is a considerable task for the government ensures adequate and affordable supplies of food, drinking water, clothing, housing, education, and healthcare. The people of India, especially the young, crave employment. There is a limitation to employment opportunities offered by the various sectors of economy, but the government does provide employment guarantee programs. However, these programs are targeted at providing basic needs and tend to provide labourintensive jobs that have no link with innovation. There is a realization that, to sustain rapid growth and alleviate poverty, India needs to aggressively harness its innovative potential, relying on innovation-led, rapid, and inclusive growth to achieve economic and social transformation. The innovative potential of the young Indian population, if supported through an effective innovation ecosystem, holds potential for developing entrepreneurship and providing the growth and job opportunities that India needs. To develop and nurture the entrepreneurial sector, the support of the government is crucial. Policies need to be adopted that can give a fillip to this sector. The Indian government has taken several steps to ensure the growth of this sector and instituted several bodies to promote entrepreneurial development in the country. SIDBI was set up in 1990 as the main financial institution for financing the small scale sector, providing development and support services for promoting small industries, and engaging with other institutions engaged in similar activities. 128

The National Science and Technology Entrepreneurship Board promote entrepreneurship development through Science and Technology. This initiative has encouraged researchers and academicians in the field of Science and Technology to take interest in socially relevant entrepreneurial roles. Under the flagship of NSTEB, various institutes and training programmes have been formulated such as Science and Technology Entrepreneurs Park, Innovation and Entrepreneurship Development Cell, Entrepreneurship Development Program and many more. To boost the services and manufacturing sectors, the Govt. of India chalked out a separate SMSE department so that these industries could receive sufficient attention and support. The MSMED Act was passed in 2006, which aims at providing guidelines for skill development of employees, management and entrepreneurs in addition to resolving many other issues. 5 Ministry of Micro, Small and Medium Enterprises: The Scheme envisages financial assistance for establishment of new institutions (EDIs), strengthening the infrastructure of the existing EDIs and for supporting entrepreneurship and skill development activities. The main objectives of the scheme are development of indigenous entrepreneurship from all walks of life for developing new micro and small enterprises, enlarging the entrepreneurial base and encouraging self-employment in rural as well as urban areas, by providing training to first generation entrepreneurs and assisting them in setting up of enterprises. The assistance shall be provided to these training institutions in the form of capital grant for creation/strengthening of infrastructure and programme support for conducting entrepreneurship 129

development and skill development programmes. Assistance is provided under the Scheme to following 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. 6 (a) National level EDIs, (b) Training Institutions established by Partner Institutions (PIs) of national level EDIs, (c) Training/Incubation Centres of NSIC, (d) Training cum Incubation Centres (TICs) set up by Franchisees of NSIC and (e) Other Training institutions with proven professional competency, capacity and experience, approved under the scheme. Entrepreneurship Development Institute of India (EDI): EDI is the premier institute of small to medium sized enterprise management in India. It is an autonomous not for-profit body founded in 1983 with corporate partners including the State Bank of India and IBDI Bank Ltd, as well as significant involvement with the Indian Industry Development Commission and the United Nations Industry Development Organization. The EDI has two main functions: 7 1) Educating graduate-level students regarding advanced entrepreneurial procedures and strategies as well as the social impact of entrepreneurship. 130

2) Consulting on behalf of India s central government to foster and develop specific industries with large employment potential for India s developing economy. In 2007, the central government of India nominated EDI to work as an implementing agent in executing a series of strategic goals for the industry. As such, EDI has been assigned the job of formalizing clusters, creating shareholding entities, and maintaining employment within the handloom economy. EDI's success led by its strong sense of commitment culminated in recognition of its achievements by the Government of India and various state governments. In the international arena, efforts to develop entrepreneurship by way of sharing resources and organising training programmes, have helped the EDI earn accolades and support from the World Bank, Commonwealth Secretariat, UNIDO, ILO, FNSt, British Council, Ford Foundation, European Union and several other renowned agencies. The Institute has also successfully carried out the prestigious task assigned by the Ministry of External Affairs, Govt. of India, to set up Entrepreneurship Development Centres in Cambodia, Lao PDR, Myanmar and Vietnam. The Institute is presently working towards creating ED Centres in Uzbekistan & Kazhakistan. 8 Centre for Entrepreneurship Development (CED): Recognizing that a quantitative increase in the number of entrepreneurs and a qualitative improvement in entrepreneurship could considerably accelerate the industrial and there by economic development, the Industrial Development Corporations first 131

thought of developing small entrepreneurs in a systemic manner long back in 1969. In the year 1970 a small cell was created within GIIC to impart the entrepreneurship training. The pioneering stepit was the first attempt of its kind in the whole of country and this experiment turned out to be a phenomenal success. Later on, over a period of nine years, 80 Entrepreneurship Development Programmes (EDPs) were conducted and over 50 per cent after completing the training successfully set up their own industrial ventures. 9 In order to strike a deep and long lasting impact on the State economy, CED has constantly been on an innovating spree, consistently coming out with imaginative programs aimed at specified target groups. The Myth Entrepreneurs are born, not made was believed by too many, for too long, This perpetrated a perennial shortage of entrepreneurs and entrepreneurship, inputs perhaps more vital to economic development than even the physical infrastructures. Recognizing the myth for what it was and upon realizing that a quantitative increase in the number of entrepreneurs and a qualitative improvement in entrepreneurship could considerably accelerate industrial development and growth. Small Industrial Development Bank of India (SIDBI): The aim of SIDBI s EDP is to build and nurture a reservoir of entrepreneurs. Such EDP is conducted through the specialized agencies in Entrepreneurship Development Institute of India, Institute of Entrepreneurship Development (IEDs), Centre for Entrepreneurship Development (CEDs), Technical Consultancy Organization (TCOs) and Non-Government Organizations (NGOs). 132

Management deficiency and a low level of skills and technology have been some of the major weaknesses of small industries. SIDBI is constantly endeavoring to address these problems by bringing reputed management and technical institutions close to the small scale industries and arranging specially designed programmes viz. Small Industries Management Assistants Programme (SIMAP) and skill cum Technology Up-gradation Programme (STUP). 10 The objective of SIMAP is to develop a cadre of industrial managers specifically trained to assist the SSI entrepreneurs in their multiple responsibilities. STUP is structured to improve the performance of the existing SSI units by developing/ strengthening managerial skills and technical competence of the entrepreneurs and senior executives of the small enterprises. Scheme for Assistance for Strengthening of Training Infrastructure of Existing and New Entrepreneurship Development Institutes: The scheme envisages providing financial assistance to Statelevel existing / proposed institutions meant for supporting entrepreneurship development and self-employment activities. Under this scheme, grant is given for setting up of new entrepreneurship development institutions (EDIs) and also for upgradation and modernization of existing EDIs in the country. Under the scheme, a matching grant of 50 per cent, subject to a ceiling of Rs.100 lakh, is provided for building, equipment, training aids etc., the balance being contributed by the State/Union Territory Governments and other agencies. 11 133

The financial assistance provided under this scheme is only catalytic and supportive to the contribution and efforts of State / Union Territory Governments and other agencies. Under no circumstances grant funds provided under the scheme can be used to meet the recurring expenditure of the institute. The institutions seeking assistance under this scheme should be registered as notfor-profit organization with entrepreneurship development as its main objective, should possess a clear title of the land required for setting up of the proposed/ existing institution, have a separate bank account in a scheduled bank in which all receipts/funds received by the institute should be credited and payments made on the basis of authorization by the Governing Council of the institute. All the proposals under this scheme are required to be recommended by and routed through the concerned State Government. National Institute for Micro, Small and Medium Enterprises (NI-MSME), Hyderabad: NI-MSME, formerly known as National Institute of Small Industry Extension Training (NISIET), was set up in 1960 at New Delhi as a Department of Central Government under the Ministry of Commerce and Industry and was initially known as Central Industrial Extension Training Institute (CIETI). Subsequently, in 1962, it was shifted to Hyderabad and converted into an autonomous society. In 1984, the Institute was renamed as National Institute of Small Industry Extension Training (NISIET). After enactment of the MSMED Act, 2006, the Institute has been renamed as National Institute for Micro, Small and Medium Enterprises (NI-MSME), w.e.f. 11th April 2007. 12 134

The Institute has benefited not only the Indian micro, small and medium enterprises (MSMEs) but also those in other developing countries through a plethora of activities and thus helped in promoting self-employment and enterprise development. The Institute is constantly evolving in accordance with the changing times, modifying its focus with the emerging needs of MSMEs and providing solutions in the form of consultancy, training, research, and education. NI-MSME s programmes are designed to have universal relevance for successfully training the entrepreneurs to face challenges and emerging competition in the era of globalization. The academic activities of the Institute are organized through centres of excellence focusing on specific needs of the MSMEs. The Academic Council of the Institute is the central coordinating body for benchmarking, formulation and evaluation of academic activities and programmes. Over the years, the Institute has gained immense experience and expertise in the areas of entrepreneurship development, technology, management and information services. NI-MSME s inherent capacity to innovate, together with its modern infrastructure, has enabled the Institute to excel in its endeavour of MSME promotion. NI-MSME has always been conceiving specialized need-based programmes, workshops and seminars in tune with the changing policy and economic scenario. The primary aim of these activities has been to enable the enterprises and the supporting systems to deal effectively with aspects that directly or indirectly affect the success of enterprises. NI-MSME has developed profitable interface with several international agencies like CFTC (Commonwealth Fund for Technical Co-operation), 135

UNESCO (United Nations Educational, Scientific and Cultural Organization), UNDP (United Nations Development Programme), Ford Foundation, GTZ of Germany, USAID (United States Agency for International Development), and ILO (International Labour Organization), to name a few. 13 Indian Institute of Entrepreneurship (IIE), Guwahati: The Indian Institute of Entrepreneurship (IIE) was set up at Guwahati in 1993. It took over NI-MSME s NER Centre w.e.f. 1st April, 1994. The Institute is completing 22 nd year of its operation on 31st March 2015. During this period, the Institute has expanded its activities to a great extent covering all facets of MSME activities. Since its establishment, the Institute has organized 1167 training programmes / workshops / seminars / meets with a cumulative participation of 38,524 persons. The Institute has expanded its canvas of activities not only in terms of geographical coverage but also in terms of diversification into various related areas of the activities pertaining to socio-economic development. The Institute regularly organizes training programmes and undertakes research and consultancy services in the field of promotion of MSMEs and entrepreneurship. The promotion of new entrepreneurs has been the major focus of training activities organized by the Institute. In order to promote new entrepreneurs, the Institute organizes rural, general and women EDPs and sector specific EDPs. The Institute has organized 29 such programmes covering 838 participants during the first 3 quarters of the current year. Besides, while continuing with its Rural Industries Programme (RIP) in Meghalaya, Manipur 136

and Assam, the Institute also started its RIP at Nongpoh in Meghalaya with the help of SIDBI. The Institute also organized two programmes on handloom sector under SFURTI, where 32 participants were benefitted. 14 Creating awareness amongst college and university teachers and students about entrepreneurship has been one of the focus areas of the Institute. The Institute organized one faculty development programme in entrepreneurship for school, college and university teachers in which 18 teachers participated. During the year, the Institute organized 10 awareness camps for the students of colleges and 2 such programmes for polytechnic students. The Institute has also been instrumental in setting up Information and Career Guidance Cell (ICGC) in a number of colleges through its Teachers Training Programmes. Till the year 2015, 80 colleges have opened such ICGCs in different parts of the Region. National Institute for Entrepreneurship and Small Business Development (NIESBUD): The National Institute for Entrepreneurship and Small Business Development (NIESBUD), NOIDA was set up in 1983 as an apex institution in the field of entrepreneurship development to promote, support and sustains entrepreneurship and small business through training, education, research and consultancy services. The major activities of the Institute include evolving model syllabi for training various target groups; providing effective training strategies, methodology, manuals and tools; facilitating and supporting Central / State Governments and other agencies in 137

executing programs of entrepreneurship and small business development; maximizing benefits and accelerating the process of entrepreneurship development; and conducting programs for motivators, trainers and entrepreneurs. The Institute helps other Entrepreneurship Development Institutions in various ways, such as developing syllabi in entrepreneurship for different target groups, training of faculty, developing training aids etc. The performance of the Institute during 2006-07 and actual performance for the first three quarters of 2007-08 along with projections for the last quarter are given in Table 7.5. 7.5.4 In order to strengthen efforts for realizing the cherished goal of inclusive growth with focus on bottom of pyramid, the Institute has made an attempt to organize exclusive training programmes for the officials engaged in implementation of the policies for tribal, backward classes and other down-trodden sections of the society. These programmes included - training programmes on Project Management for Small Business Enterprises in Tribal Areas for officials of Department of Tribal Development, Govt. of Madhya Pradesh; programme on Performance Motivation for the officers of the Department of Sericulture; Government of Madhya Pradesh and Management Development Programmme (MDP) for the officials of West Bengal Backward Classes Development & Finance Corporation (WBCDFC). 15 138

Maharashtra Industrial and Economic Development Association (MIEDA): Maharashtra Industrial and Economic Development Association (MIEDA) is a leading organisation, represents large number of members from manufacturing and service sector Industries, Infrastructure, finance, realty, power, IT, SMEs, cooperative and other businesses. It also represents various organisations, Associations and Chambers of the State to take up the problems and issues with the State and Central Government. MIEDA is founded with the objective to put efforts for achieving inclusive and sustainable growth of the State. 16 MIEDA assist and support for the growth of business, exports, finance, and technology up gradation and identify opportunities for investment, international business, technology transfer, joint ventures, contract manufacturing tie-ups, collaborations and other emerging business opportunities. MIEDA is working for the development of industry, improvement of infrastructure, business and export promotion, industrialisation in rural areas, Technology Transfer and Joint Ventures, SME and Entrepreneurship Development, Environmental Conservation, Tourism Promotion and other Sectors in Maharashtra. MIEDA also carries out research & studies on various potential areas to improve the growth and industrial development and remove the bottlenecks to encourage more investment in various sectors. MIEDA acts as a Think Tank and provides necessary inputs to the State and Central Government, Corporate, Banks, Financial Institutions and Government Agencies to improve the facilities towards industrial and economic growth of the State and Nation. 139

MIEDA focuses and reviews the growth plan and the needs for developmental activities in various sectors. Though Maharashtra is developing industries and achieving remarkable economic growth, there are many areas that require careful attention viz. projects delays, reviving of sick units, effective water management, improved power supply, skill development amongst young generation, entrepreneurial education, district level industrialisation and reducing the political and bureaucratic bottlenecks in industry and trade to enhance economic growth. MIEDA regularly organises State, National and International Level Conferences, Exhibitions, Seminars, Workshops and Interactive Meetings with Ministers, Senior Government Officials, Bankers, Industrialists and other eminent personalities to share their viewpoint. MIEDA is actively involved with various State, National and International level organisations and Chambers of Commerce as well as Government Departments, Investment Boards, SME organisations, Young Entrepreneurs Forums, Export Promotion Councils and Importers. MIEDA arranges trade promotion delegations to various countries to promote bi-lateral trade, business opportunities and cooperation, B2B Meets, visits to SEZs, Infrastructure and Power Projects, Food Processing Industry and specific industrial zones as per requirement. MITCON Centre for CSR & Skill Development: MITCON Centre for CSR & Skill Development is a part of MITCON Consultancy & Engineering Services Ltd., a trusted name acting as a catalyst to industrial & entrepreneurship development for more than 30 years. MITCON Centre for CSR & Skill 140

Development has well recognized the importance of skilled youth in rapidly changing environment in the industry. The youth should not only be technically skilled in any particular domain but also need to be capable enough to cope up with rapidly changing economy & its global perspectives. Taking this agenda ahead, MITCON Centre for CSR & Skill Development offers various kinds of value added training programmes which are industry endorsed and job oriented. MITCON Centre for CSR & Skill Development is engaged in variety of innovative interventions to address the capacity building, training & other requirements of students, entrepreneurs and executives. As Globalization has propelled India s economic growth, infusion of capital, technology and knowhow in every major sector like, Capital Goods, Telecom, Hospitality & Hotel Industry, Health Care, Travel & Tourism, Banking & Finance, Automobiles, Media And Entertainment, have created vibrant market place. MITCON Centre for CSR & Skill Development offers varied range of programs in above mentioned sectors, which makes an individual employable. Besides this, these varied training programmes support the industries, by providing resourceful and skilled manpower. MITCON Centre for CSR & Skill Development always strive hard to offer the best knowledge and recourses to the participant for the course they have opted with us, along with state-of-art infrastructure and learning ambience ensuring optimum results. 17 141

The National Skill Certification and Monetary Reward Scheme: The Finance Minister in his Budget Speech of 2013 proposed a scheme to encourage skill development for youth by providing monetary rewards for successful completion of approved training programs. The objective of this Scheme is to encourage skill development for youth by providing monetary rewards for successful completion of approved training programs. Specifically, the Scheme aims to: 18 Encourage standardization in the certification process and initiate a process of creating a registry of skills; and Increase productivity of the existing workforce and align the training and certification to the needs of the country. Provide Monetary Awards for Skill Certification to boost employability and productivity of youth by incentivizing them for skill trainings Reward candidates undergoing skill training by authorized institutions at an average monetary reward of 10,000. Benefit 10 lakh youth at an approximate total cost of 1,000 Crores. This Scheme shall be implemented through Public-Private and Public-Public partnerships. NSDC will be the implementing agency for this Scheme and NSDF shall monitor the implementation of the Scheme, using mutually agreed criteria with NSDC. The Scheme will provide monetary incentives for successful completion of, market-driven skill training to approximately ten lakh youth in a span of one year from the date of implementation of the scheme. All trainings will be specifically oriented for 142

developing skills in specific growth sectors. Assessment and training bodies for all purposes of the Scheme will be separate and no overlap of roles will be allowed to maintain transparency and objectivity. The monetary reward will be wholly funded by the Ministry of Finance, Government of India, and will be affected through direct bank transfer to the beneficiaries accounts. Appropriate consideration will be provided to the economically backward sections. Micro, Small, and Medium Enterprises Development Act 2006: MSME is fast growing sector in the Indian Economy. Every Bank has given highest importance to financing MSMEs in their strategically growth plan. It has become necessary to bring policy shift and create free market environment from regulations and interventions in economic activity. Growth resulting from globalization and liberalization is visible most profoundly in the MSME segment. The relationship between the banker and the customer has become most crucial and competitive. The technology has entered the scene almost as a natural corollary of liberalization. Liberalized policies provide ample opportunities to Indian Market to compete with developed and developing countries. The clearance of the Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 is a turning point for the development of Indian industry, as it addresses and streamlines entire frame work along with key governance & operational issues being faced by the SMEs. 19 143

The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 on June 16, 2006. With the enactment of MSMED Act 2006, the paradigm shift that has taken place is the inclusion of the services sector in the definition of Micro, Small & Medium enterprises, apart from extending the scope to medium enterprises. The MSMED Act, 2006 has modified the definition of micro, small and medium enterprises engaged in manufacturing or production and providing or rendering of services. SME would henceforth be meant to include Micro Small and Medium Enterprises (MSMEs). As per the MSMED Act 2006, the activities of these enterprises are classified into Manufacturing and Service Categories. The definitions of Micro, Small and Medium Enterprises would thus be in place of the existing definitions of Small & Medium Industries and SSSBEs/Tiny Enterprises. The MSME loan policy is designed with the following objectives: 20 1. To improve flow of credit to MSME Sector so as to double the credit to the Sector by the year 2015. 2. To formulate liberal norms of lending to MSME sector, to ensure availability of adequate and timely credit to the sector. 3. To provide guidelines to the branches to dispense credit to MSME Sector on liberalized terms. 4. To devise an organizational structure at all levels for handling MSME credit portfolio in a more focused manner. 5. To comply with guidelines received from Reserve Bank of India from time to time for Implementation. 144

Maharashtra Industrial Development Corporation (MIDC): Maharashtra is a leader in twenty out of twenty six sectors in the country and possess a colossal potential for development in varied sectors due to the wide spread of vital resources across different regions in the state. As a result the state houses several investment regions. In addition to this Maharashtra is perhaps one of the most premier states in the country to launch a SWC service that permits both - online submission and approval system through a dynamic interactive portal. These services include sector-wise and industry, categories has been done distinctly under different central and state departments for the benefit of its existing customers and plot holders along with prospective investors. In order to achieve planned and systematic growth throughout the state, MIDC is developing industrial areas with essential infrastructure like internal roads, water, electricity and other internal services to entrepreneurs. To achieve decentralized as well as faster industrial development, the State Government is implementing the following important programmes through MIDC: 145

Table No. 4.01: MIDC Industrial Areas in the State of Maharashtra. Sr. No. Region MIDC Industrial Areas Industrial Units No. of Major Mini Growth Total No's Invest Employ Plot Centre ments ment Allotted (Rs. Crore) 1 Mumbai 1 0 0 1 305 346 28670 332 2 Konkan 22 3 3 28 9570 6000 166201 14552 3 Nashik 10 9 11 30 5374 3363 98411 7682 4 Pune 28 18 17 63 7901 10779 151552 12972 5 Aurangabad 14 19 12 45 3895 1200 49272 8253 6 Amravati 7 32 8 47 1269 394 16564 3046 7 Nagpur 11 25 10 46 2019 6965 73881 4321 Total: 93 106 61 260 30333 29047 584551 51158 Source: Economic Survey of Maharashtra The Maharashtra Industrial Development Corporation popularly known as MIDC-is one of the most widely known organizations across Maharashtra not only among those involved with industry but among the public at large. After the formation of Maharashtra State on the 1st day of May, 1960 under Government of Maharashtra Constituted a Board of Industrial Development (BID) in 1960 under the chairmanship of Shri S. G. Barve. The Board of Industrial Development framed the legislation and it was passed in the form of Maharashtra Industrial Act which gave birth to MIDC as a separate corporation on the 1st day of August, 1962 under the chairmanship of the former Chief Minister Shri Yashwantrao B. Chavan. 146

Shri Y. B. Chavan, presented the house of Industrial Development Corporation Bill for discussion on 27th November, 1962. The Industrial Development Corporation was vested with tremendous powers so as to accomplish industrial development. The corporation would be empowered to raise loans to meet its requirements and would be responsible for the industrial development of the state. Prosperity to all through industrialization is the corporate philosophy of MIDC units. This key historical policy decision taken by MIDC certainly changed the socio-economic scenario of the Maharashtra State as its activities spread in the interior parts of Maharashtra. Along with the production of various goods and services, MIDC provides basic and essential infrastructures like water supply, roads, street constructions, tree plantation, electricity supply etc. It was the most intelligent step taken by MIDC unit s right in the beginning. Till now 229 industrial estates have been developed all over Maharashtra on approximately 53,120 hectors of land with an elaborate network of industrial and domestic water supply. MIDC has planned the culture of industrialization firstly in India and then in other states followed by the same. MIDC does not fly from social responsibility but keeps pace with it. The planned and systematic industrial development in the state of Maharashtra has continuously placed Maharashtra at number one position in India for highest productivity, economic performance and business efficiency of overall competitiveness. MIDC units play a vital role in the national economy by setting up the industrial area all over the state of Maharashtra. It 147

can be stated that MIDC has played a pivotal role not only in Industrial development but also importantly in the socio-economic development of the state and its people. Maharashtra Industrial Development Corporation (MIDC) areas are spread all over the state of Maharashtra. The MIDC started in 1st August, 1962. Thane as its first industrial area and as the premier industrial infrastructure development agency of Government of Maharashtra; conceiving basic objectives of MIDC units are explained as under: 1. To set up Industrial Areas for planned and systematic industrial development. 2. To function as a special planning authority in development of industrial areas. 3. Prosperity to all though Industrialization is the corporate Philosophy of MIDC. In view of globalization, the local industries, specifically MSMEs, need support from the Governments, both at Centre and State. The State Government is taking steps towards ease of administration and enforcement, to minimize compliance burdens, to address competitive concerns, financial and technical support, etc. through the state level agencies like MSFC, MIDC, MSSIDC, etc. and central level financing agencies such as SIDBI, IFCI ect. 148

Achievements by Maharashtra Industrial Development Corporations: There are some prominent achievement s has made by Maharashtra Industrial Development Corporations in India. MIDC has built 233 industrial complexes with 58,889.65 hectares of land. It has developed specialized parks for different industrial sectors, including IT, BT, Special Economic Zones, Wine (Grape Processing) parks, Silver Zone Gems and Jewellery, Textiles, Leather, Chemical Industry, Electronics, Food Processing and so on. There are tremendous development and changes made by Maharashtra Industrial Development Corporation in the State of Maharashtra. They have been as follows: 21 1. Industrial Development: There is prominent industrial development has taken place due to establishment of Maharashtra Industrial Development Corporation in State of Maharashtra. It always helped in providing the basic requirements for the development of business industries, hence as compared to other states; Maharashtra state is able to make sufficient development in industrial sector. 2. Employment Opportunity: Due to formation of Maharashtra Industrial Development Corporation in Maharashtra State, there are a number of industrial sectors that came in to existence. As a result, the qualified unemployed as well as less qualified people were able to get employment opportunities in various industries. It helps to improve their standard of living, in this way MIDC units 149

helped in providing employment opportunities to large number of people in India. 3. Economic Development: Maharashtra Industrial Development Corporation helps in economic development of our country by providing employment opportunities and at the same time helps in increase the market size in terms of production and income, it makes possible for Government of Maharashtra to increase the national income by imposing tax on production of various kinds of goods and services. In this way MIDC units also help to make economic development of the nation. 4. Standard of living: Before existence of Maharashtra Industrial Development Corporation, the life style of people in Maharashtra district was very simple and financially weak. After formation of MIDC units in state of Maharashtra, it helped to increase standard of living of the people by providing various job facilities and supply of various quality of goods towards ultimate consumer, it also help to create awareness among them relate to their health etc. In this way MIDC units in Thane district enable people to improve their day to day life. 5. Education development: MIDC Units provides maximum number of employment opportunities, it induce to get highly qualified employees in order to handle new advance machineries, adapt new techniques in production etc. hence indirectly there are number of ITI colleges, 150

Engineering Colleges, Bio-technology colleges etc came into existence to fulfill the requirement of various industries existing into the market. Ultimately there is development taken place in education field and its credit goes to MIDC only. 6. Social development: There are maximum numbers of changes that have taken place in the society due to existence of MIDC units in Maharashtra state. Every person in the society gets goods services and employment. It helps them to become self-sufficient. MIDC units also help to upgrade the standard of living of people by providing good facilities, good education, quality goods etc. In this way there is overall social development taken place due to MIDC units existing in state of Maharashtra. Contribution of MIDC in the Development of Entrepreneurship in Maharashtra: Acquisition & Disposal of Land: The land for industrial areas is acquired by the Government of Maharashtra and handed over to the Corporation for further disposal. Likewise, wherever available, the Government land is also handed over to the Corporation as an industrial area. The Government pays for the compensation for the private land from its own fund. The Corporation in turn plans the area and disposes the land in suitable plots by leasing out for 95 years. For this purpose the Corporation recovers the premium lease money at different rates for different industrial areas. Also the 151

Corporation constructs built-up accommodations like Sheds and Flatted units and sale them out to the prospective industrialists together with the land there under on lease basis. Provision of Infrastructure Facilities: In terms of the provision of the MID Act, 1961 and the relationship prescribed by the government in that regard, the corporation is required to provide infrastructure facilities like roads, streetlight, drainage, water supply schemes and buildings for common facilities like post and telegraphs, canteen, bank, and telephone etc. The corporation meets the expenditure on such facilities generally from the premium lease money received by it from the allottees. The relationship further prescribes that the industrial area, after it is fully developed, should be returned back to the Government / handed over to such agency or authority as the State Government may directs, after striking out the account of the industrial area concerned. The surplus/deficit generated out of such operations is to be made good to or recovered from the state government as the case may be. As the development of an industrial area is a long process and instant objective, the government has prescribed certain scale of interim annual payments which are termed as on account advance payment to government. In this connection it may state that the powers to fix the rates of premium for land for different industrial areas rest with the corporation. Since it is the aim of the government and the corporation to achieve a balanced development of the entire State with special emphasis on the development of backward 152

regions of the state, the Corporation follows a policy of cross subsidization rate structure on A B C D zones pattern, in that the rates of land premium in developed and semi developed parts of the State are higher compared to the rates in developing and backward regions. Providing of Services: The Corporation provides the following services to the units in its industrial areas: 22 o Assured Water Supply: From among the various services provided by the Corporation, an assured pure water supply can be regarded as a unique specialty of the MIDC. The investment on the water supply scheme made by MIDC as on 31st March, 2002 is over Rs.5 crores with installed capacity of water supply of 25 MLD. For the purpose of regulating the water supply operations of the Corporation the Government of Maharashtra has prescribed a legal and financial relationship between the Government and the Corporation. 23 o Maintenance of Industrial Areas This is a municipal function requiring the Corporation to maintain the Roads, Street lights, Fire stations during the transitory period up to handing over of the industrial area either to Government or other agency as the Government may decide. The MIDC Act, vide Section 56, provides for the exits policy after the purpose of industrial development as contemplated in the Act is fulfilled. However, this has seldom become possible in the absence of a substitute agency to take over the responsibility where the Corporation could hand over only 153

the roads and street lights to local Municipal Corporations. In other areas, the Corporation carries on this function as a committed obligation. For this purpose the Corporation recovers service charges to defray the expenditure on such services. o Other Services: These include providing and maintaining Common Facility Centers like P&T, Banks etc. Though the Corporation does not levy any specific cess for the purpose, the C. F. C. building is subject to rentals. Such rental together with other miscellaneous income from the area covers the maintenance cost of such CFCs. The policy decisions taken by TTC MIDC certainly changed the social economic scenario of the city as its activities spread in the interior. The important policy decision of setting up independent filtered /potable water supply system of adequate capacity as essential infrastructure for industrial development was the most intelligent step taken by TTC MIDC right in the beginning. It stabilized the population base near the industrial areas. The strategically wise decision taken simultaneously to provide water supply to nearby domestic population from the capabilities created by TTC MIDC of their own water supply system resulted in a phenomenal urban growth in the nearby small towns and villages. 154

Maharashtra Centre for Entrepreneurship Development (MCED): Maharashtra Centre for Entrepreneurship Development (MCED) is a Nodal Agency promoted by Government of Maharashtra as a joint venture of its State Level Industrial Development Corporations to conduct training activities related to Entrepreneurship Development. MCED conducts a variety of training programs aimed at promoting entrepreneurship across the state, catering to the training related needs of society. To mention a few, Entrepreneurship Development Programme, Skill Development Programme, Performance Improvement Programme, Faculty Development Programme etc. constitute its core activities, which are popular and have been very useful to the entrepreneurs. Apart from this, MCED is instrumental in imparting training to beneficiaries identified under various Self-Employment Schemes of States as well as Central Government. To promote entrepreneurship on mass level, MCED conducts Awareness Programmes for students in educational institutions. MCED has its own pool of 45 Trainers, accredited by National Level Institutions to impart training for Entrepreneurship Development. Moreover, a dedicated team of around 150 coordinators supported by more than 5000 resource persons covering cross section of entire disciplines drawn from state as well as national level is associated with MCED to help and facilitate the cause of Entrepreneurship Development. To help facilitate the support work, MCED has a Project Officer in each district with office. Additionally the Technical Support Team is a cohesive group of professionals supporting, strengthening and nurturing the network. 155

EDP Training Centre in Maharashtra: 24 1. Asian Academy of Education & Research, Pune. 2. Kasturba Mahila Khadi Gramodyog Vidyalaya Agakhan Palace, Pune, Kora Institutes of Village Industries, Shimpoli Road, Borivali (West), Mumbai 3. Dr. B. R. Ambedkar Institute of Rural Technology & Management, KVIC, Nashik 4. Gajanan Naik Multi-Disciplinary Training Centre, Agar Road, Dahanu, Dist. Thane. 5. Central Institute of Plastics Engineering & Technology (CIPET), Aurangabad. 6. Rahi Shikshan Mandal, Shivaji Nagar, Varangaon Road, Tal. Bhusawal, Dist. Jalgaon. 7. Maharashtra Centre for Entrepreneurship Development (MCED), Aurangabad. 8. MITCON Consultancy Services Ltd., Pune Government of Maharashtra Agro Industrial Policy 2010: Maharashtra has diverse agro climatic conditions suitable for the cultivation of a wide range of crops, and a progressive farming community. The State has a large urban population with high purchasing power. It is one of the major horticulture States in India, with more than 13 lakh ha under different fruit crops. Maharashtra is a pioneer and leader in the use of water saving technology like drip and sprinkler irrigation, and accounts for 60 percent of the total area under drip irrigation in the country. Almost all the area under grapes and more than 60 percent of the area under banana in the state has access to drip irrigation. The 156