CHAPTER II SCHEMES FOR ASSISTING WOMEN ENTREPRENEURS 2.1 Introduction 2.2 Subsidies 2.3 Financial Assistance 2.4 Training 2.5 Other Schemes 2.6 Summary
43 2.1 INTRODUCTION Having recognised the importance of developing women entrepreneurs, the government of India and State governments have developed various schemes of assistance to women entrepreneurs. This chapter describes the various schemes of assistance to small scale industry and women entrepreneurs extended by Government of India as well as the Government of Tamilnadu, financial institutions and banks. Various schemes of assistance provided by Government of India, Government of Tamilnadu, financial institutions and banks for promoting entrepreneurs in general-and women entrepreneurs are described under the four headings given below. 1. Subsidies 2. Financial Assistance 3. Training 4. Other Schemes 2.2 SUBSIDIES All the subsidy schemes in operation are explained under two headings. 1. Subsidy Schemes for Small Scale Industry in general 2. Subsidy Schemes for Women Entrepreneurs
44 2.2.1 Subsidy Schemes for Small Scale Industry in general The following subsidies are provided to the entrepreneurs by the Government of Tamilnadu 1. State Capital Subsidy 2. Special Capital Subsidy for Selected Categories of Industries 3. Low Tension Power Tariff Subsidy 4. Power Generation Subsidy 2.2.1.1 State Capital Subsidy This subsidy is provided to the entrepreneurs by the Government of Tamil Nadu. Fifteen percent of the fixed capital investment (cost of land, building, plant and machinery subject to a ceiling of Rs.15.00 lakhs is provided as subsidy for units located in the 82 backward Taluks, industrial complexes and growth centres developed by Government agencies including the Madras Metropolitan Development Authority, Madras Export processing zone, State Industries Promotion Corporation of Tamilnadu and Tamilnadu Small Industries Development Corporation. The quantum of subsidy is 20% of the fixed capital investment subject to a ceiling of Rs.20.Q0 lakhs for units in the 31 most backward Taluks in Tamilnadu. All new units and also existing units which go for substantial expansion / diversification are eligible for this subsidy.
45 The cost of second hand machinery should be excluded from the total amount of capital investment for subsidy purpose. Power intensive industries like Iron and Steel smelting, Aluminium Smelting and Calcium Carbide units and small service establishments are not eligible for the subsidy. Application for this subsidy is to be filed through the District Industries Centre'. 2.2.1.2 Special Capital Subsidy for Selected Categories of Industries: Special Capital subsidy is provided to the entrepreneurs of small scale industry by the Government of Tamil Nadu. 20% of the capital investment upto a ceiling of Rs.35.00 lakhs for Electronics, Rs.20.00 lakhs for leather and Rs.15.00 lakhs for other industries (exclusive of value of second hand machinery) is given as subsidy. This subsidy is available to the new or existing small scale industrial units taking up substantial expansion in the following activities 1. Leather industry 2. Electronic industry 3. Auto Ancillaries 4. Drugs and Pharmaceuticals 5. Solar energy Equipment 6. Gold and Diamond Jewellery for export
46 7. Jute processing industry in six Taluks namely Ambasamudram of Nellai Kattabomman district, Madurai of Madurai district, Musiri of Trichy district, Kurnbakonam of Tanjore district, Chengelpet of Chengelpet district and Paruti of South arcot Vallalar district. 8. Sports goods and accessories 9. Pollution control equipment 10. Cost effective building materials like aluminium, PVC doors and windows, Window frames etc. 11. Food processing industries Existing industries which undertake expansions diversification without any limit to the number of expansions / diversification are eligible for subsidy. The Government of Tamilnadu has ordered stage by stage release of capital subsidy. 1. In respect of land and buildings purchased and new buildings constructed 25% subsidy to be released after completion of civil work, 50% after installation of plant and machinery and 25% after commencement of commercial production. 2. In respect of ready building purchased 25% is to be released after the execution of sale/purchase deed, 50% after installation of plant and machinery and balance 25% after commencement of commercial production.
47 3. In respect of premises taken on rent or lease or units being set up in own premises/building without new construction, 50% to be released after installation of plant and machinery and 50% after commercial production. Besides the above special subsidy Government in G.O.Ms.No.150 Industries (MIG) Department dt. 24.4.93 have sanctioned an export subsidy of 8% equivalent to the sales tax paid on the REP / EXM scripts for Leather and Electronics industries. In respect of the units using solar energy equipment and certain solar energy devices, 10% capital subsidy is eligible. Older Tanneries which go in for Effluent Treatment plants will be eligible for 10% of the value of the assets to be created for the Effluent Treatment plants. This subsidy is available to industrial units irrespective of their location in the State. In areas where both the State capital and special capital subsidies are available, the unit will have the option of choosing either of them. The unit should file an application before the General Manager, District Industries Centre for sanction of Capital Subsidy within one year from the date of commencement of 2 commercial production.
48 2.2.1.3 Low Tension Power Tariff Subsidy Low tension power tariff subsidy is provided to the entrepreneurs of small scale industry by the Government of Tamil Nadu. This subsidy is available for three years from the date of commencement of production or date of power connection whichever is later, at 40% of actual energy charges paid for the first year, 30% for second year and 20% for the third year to all small scale industrial units consuming low tension power excluding areas falling under Madars Metropolitan Development authority / Urban land tax jurisdiction and Urban land ceiling jurisdiction namely Madras and its environs of 15 Kms. and towns of Coimbatore, Madurai, Salem, and Trichy with 8 Kms. belt area3. All registered small scale industries which commenced production on or after 01.01.1980 and which consume Low Tension Power are eligible for subsidy. The registered Small Scale Units taking up substantial expansion and diversification will be eligible for the subsidy from 20.01.1992. All industries using low tension Power irrespective of the fact whether the industry happens to be small or medium or large are also eligible for the subsidy. An Eligibility Certificate should be obtained from the General Manager, District Industries Centre, concerned within three months from the date of commencement of production or date of power connection whichever is later by any Prime Mover. Power subsidy claim can be made and should be submitted once in six
49 months that is, for the bills raised by the Electricity Board from January to June before August 31st of the year and from July to December before 28th of February of the succeeding year. The claim should be made along with the following a). Permanent Registration Certificate. b). Photostat copies of the Electricity Board consumption card and the Receipt from the Electricity Board for having paid the charge4. 2.2.1.4 Power Generation Subsidy: Power generation subsidy is provided to the entrepreneurs of small scale industry by the Government of Tamil Nadu. All High Tension/ Low Tension power consuming units are eligible to get 15% of the cost of the generator not exceeding Rs.5.00 lakhs as subsidy. Generator purchased for replacement of old generator is also eligible for subsidy. Conventional resources based and power intensive industries are not eligible for this subsidy. The terms and conditions for availing of the subsidiary given below. 1. The Subsidy will be available only for brand new equipment. 2. Prior permission of Tamilnadu Electricity Board should be obtained for the installation of new generator sets.
all 3. The generator should be purchased from the manufacturer or from a dealer accredited by the manufacturer. The unit should file an application for sanction of Generator Subsidy before the General Manager, District Industries Centre within one year from the date of purchase of the generator set or installation of the generator set whichever is later5. 2.2.2 Subsidy Schemes for Women Entrepreneurs The following subsidies are available for the women entrepreneurs in Tamil Nadu. 1. Additional capital subsidy for employing women 2. Industrial Finance Corporation of India Scheme of Interest Subsidy for women entrepreneurs 2.2.2.1 Additional capital subsidy for Employing women This subsidy is provided to the women entrepreneurs by the Government of Tamil Nadu. Five percent additional capital subsidy subject to a maximum of Rs.5.00 lakhs is available for units in which more than 30% of the workers are women. This is not applicable to industries such as - Food products - Garments - Leather products - Hosiery and 6 - Matches in which traditionally women are employed.
51 2.2.2.2 Industrial Finance Corporation of India Scheme of Interest Subsidy for Women Entrepreneurs The main objective of the "Scheme of Interest Subsidy for Women Entrepreneurs" is to provide incentives to the women having business acumen and entrepreneurial traits to contribute their mite in the industrial development of the country. i. Scope All industrial projects whether in rural, cottage, tiny, small (including ancillary ) scale sectors (with project cost upto Rs.10.00 lakhs ) if set up by women entrepreneur on her own with minimum financial stake of 51% in the unit are covered under the scheme. ii. Operation The scheme is operated through the State Financial Corporations (SFCs)/State level financial institutions performing the role of SFC5/ banks granting assistance to women entrepreneurs for setting up their industrial ventures in the rural, tiny, cottage, and small sectors. iii. Eligibility Criteria To be eligible for the subsidy the women entrepreneurs should fulfil the following criteria
1. The women entrepreneurs should have preferably undergone a full course of an Entrepreneurship Development Programme. 2. The women entrepreneur should be unemployed before taking up the industrial venture and after taking up the venture should not have engaged herself on a part-time or whole time basis in any other business, trade, profession or vocation. 3. The enterprise should be owned and administered by the women entrepreneur herself with a minimum financial interest of 51% in the share capital of the venture and must be giving minimum 50% of the employment generated in the enterprise to women. 4. The industrial venture undertaken by the women entrepreneur should be her first venture and she should be devoting full time to her venture. 5. The women entrepreneur must have been sanctioned and disbursed financial assistance by SFC or a State Level Financial Institution performing the role of SFC or a bank for block capital/meeting capital cost of the proj ect. iv. Subsidy Assistance The assistance under the scheme shall be equivalent to the amount of interest payable by the individual unit set up by the women entrepreneur to the State Financial Corporation /bank for the loan assistance disbursed for the project for a
53 period of one year subject to a ceiling of Rs,20,000/- per annum provided the unit is promoted wholly by women entrepreneur and there is no other corporate investment otherwise. However if the women entrepreneur has availed herself of loan assistance both from State Financial Corporation as also the bank, interest subsidy would be available in respect of one loan assistance only. v. Disbursement of Subsidy The disbursement of subsidy is made by Industrial Finance Corporation of India upon receiving an application for interest subsidy under the scheme from the women entrepreneur concerned with due recommendations and certificates from State Financial Corporation/bank. The actual disbursement of the subsidy shall be made to the State Financial Corporation/bank which will acknowledge the amount and certify that the same has been utilised for setting off the interest on the loan amount granted to the unit'. 2.3 FINANCIAL ASSISTANCE There are number of financial assistances provided to the entrepreneurs of small scale industry in general and women entrepreneurs in particular by Government of India, Government of Tamilnadu, financial institutions and banks. The financial assistance schemes are grouped and studied under the following three headings.
54 1. Financial assistance schemes to entrepreneurs in general 2. Financial assistance schemes where reservations are made for women 3. Financial assistance schemes exclusively for women entrepreneurs 2.3.1 Financial assistance schemes to entrepreneurs in general The following financial assistance schemes are offered to entrepreneurs in general. 1. Self Employment to Educated Unemployed Youth Scheme (SEEUY) 2. Self Employment Programme for Urban Poor (SEPUP) 3. New Entrepreneur Development Agency Scheme (NEDA) 4. Prime Ministers's Rozgar Yojana Scheme (PMRY) 2.3.1.1 Self Employment to Educated Unemployed Youth Scheme (SEEUY) This scheme popularly known as 'Gramodaya Scheme' was introduced by the Late. Prime Minister Mrs. Indira Gandhi on 15th August, 1983 as an attack on unemployment among educated youth. This scheme is initiated to assist educated unemployed youth to start industries/service units / small business ventures and to generate employment. This scheme aims at covering one person from one village and one job enterprise for every village in the country.
55 The various features of the scheme are given below. This scheme caters to all educated unemployed youth in the age group of 18-35 years. The minimum educational qualification required is SSLC pass/iti certificate course in any trade. Applicants family income should not exceed Rs. 10,000/- per annum. The maximum loan assistance is Rs.35,000/- for starting a small industry, for a service type Rs.25,000/- and for trading business Rs.15,000/-. Assistance is provided only for proprietary units and not for partnership units. For enabling the enterprise to make prompt payment, 25% subsidy is given by the Government and six months holiday period is given from the date of receipt of the loan. Further 30 06 of the scheme has been reserved for scheduled caste and scheduled tribes. The rate of interest on composite loan sanctioned under the scheme bears 10% per annum for backward areas and 12% per annum for other areas 8. The District Industries Centre with District Task Force has been the nodal agency for the implementation of the scheme. The target fixed for the scheme coverage is 2.5 lakhs youths a year in the country. Initially, the scheme was to be implemented only in 1983-84. Subsequently it was extended to 1984-85 and again to 1985-86. In 1986-87 it was decided to extend the scheme to the remaining period of the Seventh Plan9.
56 2.3.1.2 Self Employment Programme for Urban Poor (SEPIJP) The Government of India has implemented a programme for providing self employment to the urban poor living in Metropolitan / Urban and Semi urban centres. The objective of this programme is to enable families living below subsistence level to undertake self employment. The various features of the scheme are given below. The scheme will cover all metropolitan cities, urban and semi urban centres with population exceeding 10000 according to 1981 census. The total income of the family members of the benefiiary should not be more than Rs.600/-. The scheme covers the activities such as Rick Shaw pulling, Carpentry, Book binders, Vegetable vendors, Plumbers, Caning of chairs, Pan biddy shop, Tea shop, Tailoring, Ready made garments, News paper boys, Milk vendors, Shoe repairers, Scooter repair shop, Furnishers and Painting shop etc. Assistance upto Rs.5000/- depending on unit cost will be admissible to a beneficiary for undertaking the above activities. Subsidy at the rate of 25% of the total assistance will be provided by the Government through Reserve Bank of India. Rate of interest on the loan is 10%. Security will be hypothecation of the asset created out of the assistance. The borrower has to repay the amount in 33 equal monthly instalments after a holiday period of 3 months'.
57 2.3.1.3 New Entrepreneur Development Agency Scheme (NEDA) Under this scheme unemployed graduates and diploma holders from any institution recogriised by the Government, between the age group of 18-35 years and want to start an industrial unit coming under the purview of small scale industry and have relevant educational background/training can apply to NEDA cell for credit assistance upto Rs.lO.00 lakhs through sponsoring agencies viz. University employment Information and Guidance bureau / Small Industries Services Institute / Technical Consuslyancy Organisations / District Industries Centres / Engineering Colleges / Recognised Polytechnics Reputed medium and large scale units with potential for ancillary units. No margin money and no security except assets created out of finance is needed. Maximum period of repayment is seven years. Rate of interest is as applicable to small scale industry from time to time. Women entrepreneurs are also eligible for the above scheme". 2.3.1.4 Prime Ministerss Rozgar Yojana Scheme (PMRY) The Prime Ministers T s Rozgar Yojana is an ideal and dynamic scheme for generating jobs to the millions of job seekers through self employment. The scheme was formally announced by the Prime Minister on 15th August, 1993 and launched on 2nd, October, 1993.
58 i. Eligibility The scheme intends to cover whole of the country. Any unemployed educated person living in any part of the country rural or urban, fulfilling the following conditions will be eligible for assistance: 1. Age - between 18 and 35 years 2. Qualification - Matric (passed or failed) or ITI passed or having undergone Government sponsored technical course for a minimum duration of six months. 3. Residency - Permanent resident of the area for atleast three years. 4. Family Income - Upto Rs. 24,000 per annum. They should not be defaulters to any nationalised bank/financial institution/co-operative bank. Preference is given to weaker sections including women. The scheme envisages 22.5 percent reservation for Scheduled Caste/Scheduled Tribe and 27 percent for other backward classes. ii. Project Cost Projects upto one lakh rupees are covered under the scheme in case of individuals. If two or more eligible persons join together in a partnership, the project with higher costs would also be covered provided share of each person in the project cost is one lakh rupees or less.
59 Entrepreneur is required to contribute 5 percent of project cost as margin money in cash. Balance 95 percent would be sanctioned as composite loan by bank at the rates of interest applicable to such loans under the guidelines of Reserve Bank of India (RBI) issued from time to time. The loans would not require any collateral security. Only assets created under the scheme would be hypothecated /mortgaged/pledged to the bank advancing the loan. iii. Subsidy The Government of India would provide subsidy at the rate of 15 percent of the project cost subject to ceiling of Rs. 7500 per entrepreneur. In case more than one entrepreneur join together and set up a project under partnership, subsidy would be calculated for each partner separately at the rate of 15 percent of his share in the project cost, limited to Rs. 7500 (per partner) iv. Repayment Schedule The repayment schedule ranges from three to seven years after an initial moratorium of six to eighteen months as decided by the bank12. 2.3.2 Financial assistance schemes where reservations are made for women In the following financial assistance schemes certain percentage of reservations are made for women
60 1. Integrated Rural Development Programme (IRDP) 2. Training for Rural Youth for Self Employment (TRYSEM) 2.3.2.1 Integrated Rural Development Programme (IRDP) The main self employment programme for the rural areas is the Integrated Rural Development Programme (IRDP) which is regarded as a major instrument of the Government of India strategy to alleviate poverty. Its objective is to enable families below the poverty line to cross the poverty line through the use of productive assets. The various features of the scheme are given below. i. Beneficiaries Under IRDP atleast 40% of the total beneficiaries should be women. Households headed by women have to be given priority. Therefore families headed by women having an annual income of upto Rs.35,000/- will get priority under IRDP programme. Women who came under the category of small and marginal farmers, agricultural labourers and rural artisans etc. whose annual family income is upto Rs.3,500/- will be assisted under the programme. Selection of beneficiaries and ascertaining their skill levels, aptitudes and needs will be done by a household survey. ii. Purposes The project/activities chosen for the families should match their needs and aptitudes and the local resource profile. The
61 size and the number of activities should be determined in relation to the income gap required to be covered to bring the family above poverty line. The project/activities should be financially viable and should be in primary, secondary and tertiary sectors. Loans will be provided by the branch of the bank which has been allocated the village where the beneficiary has land or where she lives. The loan amount would be equal to the project cost minus the amount of subsidy. No contribution is to be made by the beneficiary. Interest on the bank loan will be charged as per the latest instruction of the Reserve bank. The security for the loan will be the hypothecation of the assets created out of bank loan. Th period of the loan will be fixed by the bank based on the economic life of the asset financed and the repaying capacity13. 2.3.2.2 Training for Rural Youth for Self Employment (TRYSEM) To achieve the objective of providing technical skill to rural youths to enable them to take up self employment this scheme of Training Rural Youth for Self Employment (TRYSEM) was launched as a National scheme in all blocks of the country from August 15, 1979. This scheme is a facilitating component of IRIJP. The various features of the scheme are given below. i. Target Group The target group comprises of rural youth between the age of 18-35 from families living below the poverty line. The upper
62 age limit is 35 years which is relaxed to 40 in case of widows for receiving TRYSEM training. Under this scheme 40% of youth trained should be women and one third of youth trained should belong to SC and ST. ii. Training The identified youth are to be put through a period of training, either with a training institution or a master craftsman to provide necessary technical and entrepreneurial skills. On the successful completion of training, they will receive a combination of subsidy and institutional credit under IRDP for acquisition of income generating assets. The duration of the training will be six months. Trainees are given stipends during the training period as under 1. Stipends upto Rs.150/- per trainee per month if the training is conducted in the village of the trainee. 2. Upto Rs.250/- per trainee per month if the training is conducted in a place other than trainee's village and arrangements for free accommodation have been made 3. Upto Rs.300/- per trainee per month if the training is conducted in a place other than trainee's village and no arrangements for free accommodation have been made. iii. Selection of youth and Identification of vocation The Block Development Office will invite applications from youth belonging to the target group in his area. There are no
63 educational qualifications prescribed for selection of trainees. The District Rural Development Agency (DRDA) will identify the necessary vocation in consultation with the district level officers of different departments keeping in view their sectoral plans. Selection of vocation will be done keeping in view of the skills, goods and services required. iv. Free Tool Kit and Financial Assistance A free tool kit costing not more than Rs.600/- may be given in kind to the trainees during the course of the training. On successful completion of training, if the trainees need financial assistance to set up projects for self empioyment loan assistance will be available from banks under Integrated Rural Development Prpgramme or Training Rural Youth for Self Employment scheme". 2.3.3 Financial assistance schemes exclusively for women entrepreneurs The following assistance schemes are in operation exclusively for the benefit of women entrepreneurs. 1. Development of Women and childre.n in Rural Areas (DWACRA) 2. Mahila Udhayam Nidhi Scheme 3. The Small Industries Development Bank of India's Scheme of Assistnce for Women Entrepreneurs 4. The State Bank of India - Sree Shakthi Package
64 2.3.3.1 Development of Women and children in Rural Areas (DWACRA) The scheme Development of Women and Children in Rural Areas is a national scheme implemented by the Government of India. It is a sub scheme of Integrated Rural Development Programme started with the primary objective of providing rural women with self employment opportunities. In recognition of the fact that women have benefited only marginally under various rural development programme a pilot scheme was visualised in 1982-83. This was to be implemented in 50 selected districts all over the country to give a boost to the involvement of women in anti poverty programmes. The target group for Development of Women and Children in Rural Areas is same as of Integrated Rural Development Prpgramme. Since reaching women in isolation was considered to be very difficult, it was decided to adopt a group approach to reach women in large numbers. Groups of 15-20 women belonging to families below poverty line are expected to be organised under the programme for self employment. These groups are provided financial assistance (loan and subsidy), technical assistance including training, marketing linkages and other follow up support to take up selected enterprises successfully. The various features of the scheme are given below.
65 i. Objectives The specific objective of Development of Women and Children in Rural Areas are 1. To improve women's participation in rural development 2. To improve their earnings 3. To help them acquire new skills 4. To provide them better access to credit and to other social services S. To reduce their daily work load 6. To establish meaningful linkages with various other programmes for the development of the rural and backward sections of the society and 7. To generate marketable output of women from these activities. ii. Strategy The women members of Development of Women and Children in Rural Areas scheme will form groups of 10-15 women each for taking up economic activities suited to their skill, aptitude, and local conditions. One woman from amongst the members will function as Group Organiser. The group may be registered under the Societies Registration Act or State Co-operative Societies Act. At present a majority of groups under DWACRA are unregistered or informal groups.
66 1±i. Selection of Activity The selection of activity will be decided by the group members themselves. However the activity selected should be viable one for which skill training, raw materials and marketing are available locally". iv. Financial Assistance In addition to the benefits of loan and subsidy of IRDP to individual members, each group of women under DWACRA will be given a lump sum grant of Rs.15,000 as Revolving Fund. The fund is meant for use by the group for purposes like - 1. Purchase of raw materials and marketing 2. Honorarium to group organiser at Rs.50/- per month for a period of one year. 3. Infrastructure support for income generating and other group activities. 4. One time expenditure on child care activities 5. One time expenditure not exceeding Rs.500/- to meet travel allowance of group members for visit to banks etc. A group which is registered under Societies Registration Act or State Co-operative Societies Act can approach a bank for getting loan in the name of group for production purposes. In the case of unregistered and informal groups, banks are having legal difficulty in providing finance.
67 During 1992-93 the scheme was in operation in 290 districts where rural women's poverty was believed to be most acute16. 2.3.3.2 Mahila Udhayam Nidhi Scheme The Industrial Development Bank of India has been operating since June, 1986, a scheme of assistance for women entrepreneurs with twin objectives of 1. Providing support by way of training and extension services to women entrepreneurs for upgrading their skill and developing / improving their entrepreneurial and managerial capabilities and 2. Extending financial assistance on concessional terms to enable them to set up industrial units in the small scale sector. After recognising that women entrepreneurs as a separate target group deserve special attention it has introduced a new scheme called Mahila Udhayam Nidhi Scheme (MTJN) for providing equity type assistance to women entrepreneurs in setting up a new industrial projects with cost upto Rs.10.00 lakhs in the small scale industrial sector. The main features of the scheme are given below. 1. Eligibility All new industrial projects in the small scale sector eligible for refinance assistance and set up by new women entrepreneurs
68 would be eligible for assistance under the scheme, provided the cost of the project does not exceed Rs.10.00 lakhs. ii. Debit-Equity Ratio Debit-Equity Ratio shall not exceed 3:1. Central/State investment subsidies if any may be retained for working capital requirements. iii. Promoters Contribution Minimum promoters contribution shall be 10% of the project cost. iv. Extent of Seed Capital assistance Seed capital assistance by way of soft loan will be given upto a maximum of 15% of the project cost to meet the gap in equity after taking into account the promoters own contribution. v. Interest/Subsidy charge A nominal rate of interest (by way of service charge) of 1% per annum would be payable annually. The rate of interest will be subject to review during the currency of seed capital assistance. In case of the financial position and profitability of the unit so warrant a higher rate of service charge, but not exceeding the normal rate of interest on term loan will be applied.
69 vi. Repayment period The soft loan assistance will be repayable over a period not exceeding 10 years, including an initial moratorium of not more than 5 years. vii. Operating agencies State Financial Corporations and Small Industries Development Corporations will act as agents of Industrial Development Bank of India for sanction, disbursement and recovery of soft seed capital assistance. The credit risk on such seed capital assistance will be borne by Industrial Development Bank of India 17 2.3.3.3 The Small Industries Development Bank of India's Scheme of Assistnce for Women Entrepreneurs The Small Industries Development Bank of India extends refinance assistance to provide training and extension services support to women entrepreneurs according to their skills and socio economic status and extend financial assistance on concessional terms to enable them to set up industrial units in small scale sector. The refinance assistance is provided to the following institutions: 1. State Financial Corporations 2. Small Industries Development Corporations 3. Commercial Banks
70 4. State Cooperative Banks S. Regional Rural Banks All projects in the small scale industrial sector promoted and managed by women entrepreneurs including those in the cottage, village and tiny sector industries are covered by the refinance facility. For the purpose of getting refinance the promoters contribution is to be 12.5% of the project cost for units set up in category 'A' backward districts. 15% for all other cases irrespective of location. The ceiling interest rate chargeable by primary lenders not to exceed the concessional rate specified by the Small Industries Development Bank of India. The repayment period of the loan is not to exceed 10 years including moratorium upto 2 years. The security for loan is to be decided by the primary lenders. However, no collateral security is to be insisted upon. The intending borrowers have to approach any of the eligible institutions i.e. State Financial Corporations, Small Industries Development Corporations, Commercial Banks and the like for assistance. The eligible institutions are required to first sanction assistance and seek refinance from Small Industries Development Bank of India. The Small Industries Development Bank of India also organises the programmes for training consultancy support and extension services for women entrepreneurs through designated agencies, such as Technical Consultancy Organisations, Entrepreneurship
VAN Development Institute of India, central and State Welfare Boards, Khadhi and village Industries Commission or other recognised training and management institutes18. 2.3.3.4 The State Bank of India - Sree Shakthi Package The State Bank of India has introduced Sthree Shakthi Package (SSP) to make entrepreneurs out of women. The scheme was introduced on the 19th November, 1988 coinciding with the birth anniversary of the late. Prime Minister Mrs. Indra Gandhi. The package envisages: -Reduction in margin money i.e. entrepreneurs stake by 5% (since not effective with the introduction of Bank of Nayak Committee recommendations of adequate of working capital, which has reduced margins, making more or less uniform) - Reinforcing behavioural and managerial traits through training programmes. - Loan proposals will be processed within 30 days except where it involves other financial institutions or are of high value. -Concession in the interest normal rates by 0.5% was also introduced (since not effective due to reduction of interest rates by Reserve bank of India)'9 2.4 TRAINING The training facilities offered to the entrepreneurs are discussed under two headings given below.
72 1. Entrepreneurship Training 2. Technical Training 2.4.1 Entrepreneurship Training Training is one way of expanding the entrepreneurial base, and Entrepreneurship Development Programmes (EDPs) aim at the comprehensive development of trainees as entrepreneurs. An entrepreneur should possess such basic qualities as personality, leadership endurance, aptitude for developing entrepreneurial skills and above all emotional attachment to the venture. Without these an entrepreneur is less likely to succeed in her venture. EDPs develop these qualities in potential entrepreneurs. There are now 686 institutions in India that are engaged full or part time in Entrepreneurship Development Programmes. These institutions operate at either the national or state level. Prominent among national institutions are the Entrepreneurship Development Institute of India (EDI-I), the National Institute for Entrepreneurship and Small Business Development (NIESBUD) and the Small Industry Extension Institute (SIET). At the state level, there are Small Industry Service Institutes (SISI) and Technical consultancy Organisations (TCOs) Institutes of Entrepreneurship Development (led) and Centres for Entrepreneurship Development (CEDs)20. In Tamil Nadu, the Small Industries Services Institute (SISI) Industrial Technical Consultancy Organisation of Tamilnadu
73 (ITCOT) in collaboration with all India and State level financial institutions and banks organises EDPs at different centres in Tamilnadu from time to time. The training courses are usually of four weeks duration. Seperate training courses are organised for technocrats, graduates, housewives and weaker sections of the society. Apart from imparting training effective assistance is also provided in the preparation, scrutiny and finalisation of project reports of the trainees and forwarding the same to the financial institutions for necessary financial assistance. 2.4.2 Technical Training The Small Industries Services Institute (SISI), Madras conducts the following skill development training facilities through the workshops attached to the institute: 1. Machine Shop Practice (Turner) 2. Machine Shop Practice (Miller) 3. General Carpentary 4. Electroplating 5. Printing 6. Simple Chemical Products Manufacture 7. Blue Print reading The institute also conducts some training courses through Mobile Vans for the benefit of rural population They are: 1. Machine Shop Practice 2. Glass Toys and Screen Printing 3. Simple Chemical Products Manufacturing
74 The central Footware Training Centre at the campus of SISI Madras conducts training courses in Footwear Technology. The branch of SISI at Coimbatore offers the following courses: 1. Moulding Practice in Grey Iron Foundry 2. Electric Motor Winding 3. Blue Print Reading The workshop of Branch SISI at Trinelveli conducts the following courses: 1. Machine shop Practice 2. welding Practice" 2.5 OTHER SCHEMES Other schemes available are grouped as, 1. Schemes for entrepreneurs in general 2. Schemes for women entrepreneurs. 2.5.1 Schemes for Entrepreneurs in General The Government of Tamilnadu offers Liberalised Sales Tax waiver/defferal scheme to entrepreneurs. 2.5.1.1 Liberalised Sales Tax Waiver / Def feral Scheme The Government of Tamilnadu offers three Liberalised Sales Tax schemes. They are given below. 2.5.1.1.1 Sales Tax Waiver Full waiver of sales tax for a period of five years upto a ceiling of total investment in fixed assets made in new units
75 and a similar concession for existing units undertaking expansion / diversification but, the ceiling for the waiver will be total investment made in fixed assets under such expansion / diversification only. Waiver / Deferral concession extended to existing industries undertaking expansion/ diversification, without any limit to the number of expansion / diversifications. New units and existing units undertaking expansion /diversification in the 31 most backward taluks and in the three Sipcot Industrial complexes at Pudukottai, Tuticorin and Manamadurai and in Dr. Vikram Sarabai Instronic Estate, Thiruvanmiyur, Developed plots, Industrial Estate at Perungudi and Electronic City in Sholinganallur in Chengalpattu MGR District. Industries in the most backward Taluks and in the three Sipcot Complexes and in the Electronic Estates can opt either for the full waiver scheme given above or for deferral given below. 2.5.1.1.2 Sales Tax Defferal in Other Specified Areas The various features of the scheme are given below. i. Quantum of Assistance Sales Tax Deferral for 9 years to the full extent of the total investment made in fixed assets for the new units and to the extent of 80% of the additional investment made in fixed assets under expansion/diversifidation in the case of existing
76 units. There is no limit to the number of expansion/ diversification. ii. Eligible Units New units and the existing units which undertake expansion / diversification in the 82 Taluks declared as backward Taluks and in the industrial areas developed by any of the Government agencies including Madras Export Processing Zone and Madras Metropolitan Development Authority. 2.5.1.1.3 Sales Tax Defferal in Other Areas The various features of the scheme are given below. i. Quantum of Assistance Sales tax Deferral for five years subject to a maximum of 60% of the total investment made in fixed assets in the case of new industries and 50% of the additional investment made in fixed assts in the case of expansion/diversification of existing units. There is no limit to the number of such expansion/diversification (with effect from 01.04.1991). ii. Eligible Areas Other than mentioned under A and B above where the scheme was not in vogue earlier.
77 iii. How to Apply The application for the issue of eligibility should be filed before the General Manager, District Industries Centre concerned within one year from the date of commencement of commercial production. Waiver / Deferral period will commence from the date of commencement of commercial production and their commencement should be on or after 18.04.1990 for being eligible for benefits under the scheme. However the units which had commenced commercial production before 18.04.1990 will be eligible for the sales tax loan/deferral scheme in operation at the time if they had applied for the same earlier as per existing rules. Units which have availed of assistance from Tamilnadu Industrial Investment Corporation may apply to the above organisation for assistance under this scheme als022. 2.5.2 Schemes for Women Entrepreneurs Other schemes offered to the women entrepreneurs are, 1. 30% Reservation in Industrial Estates and 2. Awards to women entrepreneurs 2.5.2.1 30% Reservation in Industrial Estates The Tamil Nadu Government has made 30% reservation to the women entrepreneurs in the allotment of Industrial sheds and
78 I Developed plots in all new Industrial Estates and Industrial Complexes developed by Government organisations. 2.5.2.2 Awards to women entrepreneurs In order to encourage the women entrepreneurs, State level awards are being given by the Tamil Nadu State governemnt23 2.6 SUMMARY The various schemes of assistance for women entrepreneurs extended by Government of India as well as the Government of Tamilnadu is discussed in this chapter. The Government of Tamilnadu offers capital subsidy, low tension power tariff subsidy, power generation subsidy, sales tax waiver to all small scale industry. Apart from these the Government of Tamilnadu offers additional capital subsidy and has made 30% reservation in industrial estates and gives awards to encourage women entrepreneurs. The Government of India and other institutions have implemented schemes of assistance for small scale industry with reservation for women like Integrated Rural Development Programme, Training for Rural Youth for Self Employment, and schemes exclusively for women like Development of Women and children in Rural Areas (DWACRA). The Industrial Development Bank of India has offered scheme of interest subsidy for women entrepreneurs.for promoting women entrepreneurship, the Small Industries Development Bank of India also offers a Scheme of Assistnce
80 FOOTNOTES 1. A Handbook for Entrepreneurs, 1992, Madras, Small Industries Services Institute, P. 60 2. ibid., p. 61 3. ibid., pp. 61&62 4. A Guide to Small Entrepreneurs - Incentives and Subsidies for Small Scale Industries, 1994, Madras, Directorate of Industries and commerce, P.5 5. ibid., pp. 6&7 6. A Handbook for Entrepreneurs. op. cit., p. 60 7. Proceedings of Ei gth National Convention of Women Entrepreneurs, March 1990, New Delhi, National Alliance of Young Entrepreneurs, pp. 50&51. 8. C.Subbarayalu and others, 'Self Employment to Educated Unemployed", Yoiana, Vol.34, No.8, May 1-15, 1990, P.28. 9. "Evaluation of SEEUY scheme", State Bank of India Monthly Review, Vol. xxviii, No.5, May 1989, P.256. 10. A.J.Nayyar, " Self Employment programme for Urban Poor', The Banker - A monthly Economic and Banking Journal, Vol. xxxiv, No. 4, June 1987 P.67,68 12. "Entrepreneurship and Management of Small Business", Course material, Madurai, Centre for Entrepreneur Development, pp.80 &81 13. Proceedings and Background Material- National level Women Cooperators and Entrepreneurs Seminar, February 1992, National Centre for Management Development in Agricultural and Rural Banking, pp. 56-59.
81 14. ibid., pp. 60&61 15. Proceedings and Background Material- National level Women Cooperators and Entrepreneurs Seminar, op. cit., 52&63. 16. Yadappanavar, "Self Employment Generation for Women - A DWACRA Experiment in Karnataka", Southern Economist, Vol.34, No.5, July 1, 1995, P.5. 17. Proceedings of Eigth National Convention of Women Entrepreneurs, op. cit., p.49 18. Lalitha Iyer, Women Entrepreneurs Challen g es and Strategies, New Delhi, Friedrich Ebert Stiftung (fes), 1991, p.93&94 19. TNarasimha Murthi, "State Bank's Role in Promotion of women enterprises", Fourth International Women entrepreneurs Conference, Hyderabad, December, 1993, National Alliance of Women entrepreneurs, New Delhi, p.51 20. S.K. Gupta, Entrepreneurship Development Training Programmes in India, Small Enterprise Development, Vol.1, No. 4, December, 1990, p.15&16 21. A Handbook for Entrepreneurs, op. cit., p.46 &47. 22. A Guide to Small Entrepreneurs - Incentives and Subsidies for Small Scale Industries, op. cit., p. 7-9 23. ibid., p.10