Sidbi which provides assistance to small-scale industrial (SSI) units and tiny units by way of refinance and direct finance has been allowed to direct 60 per cent of its refinance flow to the tiny sector. NSIC provides assistance to tiny units under various schemes for supply of machinery on hire purchase, marketing support, technology assistance and training facilities.

Under the scheme being implemented by the development commissioner (SSI) of the department of small scale and agro and rural industries, the central government has decided to allocate 40 per cent of plots to tiny units. Under the scheme every infrastructure centre is given Rs 2 crore as grant and Rs 3 crore is provided as loan by Sidbi.

Tiny enterprises are at present defined as those having investment in plant and machinery up to Rs 25 lakh and constitute about 95 per cent of the small scale sector. The policy measures for the promotion of small, tiny and village industries announced in 1991 envisaged a separate package of facilities and incentives for the promotion of tiny industries.

Since the announcement of the policy the government has taken various steps for the promotion of tiny enterprises. These steps include revision in the definition of tiny sector in December 1997 by enhancing the investment ceiling in plant and machinery to Rs 25 lakh from Rs 5 lakh. Earmarking of 60 per cent of credit flowing to SSI sector under priority sector lending programme of banks in March 1998 for tiny units. Enhancement of loan limit under composite loan scheme of Sidbi in September 1994 from Rs 50,000 to Rs 2 lakh in order to ensure availability of term loan and working capital at one place.

Under the policy the scope of Sidbi's National Equity Fund scheme was expanded since 1995-96 to cover expansion, modernisation, diversification and technology upgradation along with removal of locational restrictions. The prime minister's Rozgar Yojana was launched in October 1993 as a special scheme of employment generation through setting up of micro enterprises for unemployed youth.