If you're calling yourself a small-scale entrepreneur, think again. Probably, youre only a Micro. Quick results of the fourth MSME census shows only 4.74% of the registered units in operation are Small enterprises, and 0.21% are Medium enterprises. The rest are all Micro enterprises, that is a neat 95.05%.
Now, how have you become a Micro By the latest criteria, any manufacturing unit with up to R25 lakh investment in plant & machinery is a Micro unit. The Small hangs between R25 lakh and R5 crore. Then, R5-10 crore is the band for the Medium. The limit comes down for service enterprises to R10 lakh, R2 crore and R5 crore for Micro, Small and Medium enterprises.
Have you got an idea that can be put to commercial use Then, you can get as much as R4-8 lakh from the government to make yourself fit for venture capital assistance. Though the ceiling is R6.25 lakh per person, it is flexible. You will have to put in 15-25% of the amount, depending on the criteria. The first step is to look for a technology/engineering institute that is entrusted with the job in your area/state from the demsme.gov.in website.
The break-up of the R6.25 lakh is like this: You get a technology fee of R2 lakh, another R25,000 for telephone, computer etc, R1 lakh for hiring equipment, R1 lakh for electricity, accommodation etc. That comes to R4.25 lakh. The remaining R2 lakh is for your mentor.
Interested Try your luck with
Dr Amarnath, assistant director, Office of DC(MSME), 7th Floor, Nirman Bhawan, New Delhi-110108
What all happened to good ol reservation
There are only 20 items in the reserved list for exclusive manufacture by micro and small enterprises (see table). There is a catch there as well. Non-MSME units can still manufacture these items, provided they undertake 50% export obligations. Not only that, there is no regulation or restriction on marketing these reserved items by large industries.
When the reservation policy kicked in through the Industries (Development and Regulation) Act, 1951, small units were a privileged lot. But the WTO-obligation to remove Quantitative Restrictions saw the beginning of the end of reservation. The de-reservation initiative that has gathered momentum from 1997 axed about 844 items from the reserved list since, the last being in July 30, 2010 (just one item).
Subsidy is also available from NSIC for displaying your products and services in domestic exhibitions.
Micro/small/medium units can get 75/60/25% subsidy on space rent. If the unit belongs to NE region, women or SC/ST, the subsidy level goes up to 95/85/50%, respectively.
No subsidy is available to general category units for this. But NE/women/SC/ST units can get subsidies of 95% for micro, 85% for small and 50% for medium enterprises.
A clinic for design
If youre looking for design improvements for your product/packaging, the Design Clinic Scheme of the MSME ministry is there to help. The programme is run under the National Institute of Design (NID), Ahmedabad. You can also conduct design awareness seminar (up to R60,000 for each seminar), workshop (up to R4 lakh) or encourage design professionals/students to take up design programmes (up to R2 lakh) . A total of R15 lakh per project is available. Details can be had from www.designclinicsmsme.org.
Dial U for help
For any help/guidance on MSME matters call the Udyami toll-free number 1800-180-6763, available between 6 am to 10 pm on all days. The call centre, set up under the Rajiv Gandhi Udyami Mitra Yojana (RGUMY) to provide hand-holding and mentoring support to first generation entrepreneurs, will give you information on a range of subjects like how to set up a unit, access to loan, project profiles and various MSME schemes, etc.
Get a rating
Reimbursement is available on Performance and Rating Fee paid to approved rating agencies. This is based on the turnover criteria. Fee up to R25,000 would be reimbursed (75% of total) if the unit's annual turnover is less thanR50 lakh. The maximum reimbursement is R40,000 for turnover up to R2 crore
Know your CGTMSE
The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE), began in 2000, provides collateral-free credit to the MSE sector. Both existing and new enterprises are eligible for such loans. To implement the scheme,the MSME ministry and Sidbi have floated a trust called the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
Scheduled commercial banks, select regional rural banks, National Small Industries Corporation (NSIC), North Eastern Development Finance Corporation (NEDFi) and Sidbi are eligible to lend under the scheme. As on March 31, 2010, there were 112 eligible lending institutions. Both term loans and working capital up to R1 crore per borrowing unit is extended without any collateral security or third-party guarantee. Sick units can get a rehabilitation assistance. If the credit facility exceeds R50 lakh, a sick unit may still be covered under the scheme, but the guarantee cover will be extended only for R50 lakh. All credit should be availed of from a single lending institution. But a unit already assisted by the State Level Institution/NSIC/NEDFi can be covered under the scheme by a member bank.
The guarantee cover under the scheme is for up to 75% of the sanctioned credit. The extent of guarantee cover is 80% for (i) micro enterprises for loans up to R5 lakh; (ii) MSEs operated and/or owned by women; and (iii) all loans in the North-East Region. In case of default, the Trust settles the claim up to 75% (or 80%) of the default amount. The guarantee cover is for the agreed tenure of the term loan/composite credit. For working capital, the guarantee cover is for five years or a block of five years.
Operations of CGTMSE are conducted through www.cgtsi.org.in.