Were ready to facilitate IT, e-commerce ventures

Written by Rajat Arora | Updated: Mar 28 2014, 22:43pm hrs
Till now the National Small Industries Corporation (NSIC), which trains and hand-holds budding entrepreneurs, has been focusing on the traditional brick-and-mortar industries. But the corporation is slowly opening up to new avenues provided by IT and e-commerce. HP Kumar, chairman and managing director, NSIC, talks to FEs Rajat Arora about the corporation's programmes.

Job creation has been very slow. How is NSIC helping the situation

Enterprise development is a thrust area for the economic development of any country. This can be achieved by providing hand-holding support to budding entrepreneurs. NSIC has developed a unique model of rapid technology incubation for setting up small enterprises and creating self-employment opportunities. We impart training in entrepreneurship building and skill development to unemployed persons. The incubators envisage transformation of unemployed youth into budding entrepreneurs in three months time. The incubators intend to provide training in several trades in the manufacturing and service sectors.

Also see: Financial Express: India's Best Banks

The incubators provide an opportunity to first-generation entrepreneurs to acquire skills on basic technical trades and gain exposure to all areas of business operation such as business skills development, identification of appropriate technology, hands-on experience on working projects, project/ product selection, guidance to spot opportunities, commercial aspects of business, etc. Supply of machinery and credit support are arranged to the trained entrepreneurs for setting up micro and small enterprises through tie-up with financial institutions. Once established, the entrepreneur generates job opportunities for others. We have set up 72 such centres, and are now setting up such models in 12 countries.

Which small industries are getting the maximum response

Food processing, garments, hosiery and packaging are getting the maximum response as the investment is not high and there is a ready market for them. We offer a list of 125 industries to the trainees. Some traditional industries such as candle-making and soap manufacturing still get very good response. Assembling of solar lamps and furniture making also have a lot of takers.

Also read: Sunny Leone: I had fun, no regrets about working in adult entertainment industry

But many industries, such as garments and hosiery, are facing stiff competition from China. How are you battling the situation

No doubt, theres stiff competition, but where we can beat them is in quality. We are working on a two-pronged strategy to make our products more competitive vis-a-vis China. The focus is on improving technology and increasing production to make our products price competitive. The products of Indian small industry are better in quality than those coming from China, and now more and more people have started recognising this fact.

Your focus is still on brick-and-mortar industries. What about people who want to start an IT unit or an e-commerce business

NSIC doesnt have the mandate to focus on research and development. We work with existing technology and projects. Our focus till date has been to train the youth and help them set up a unit in a short time. Setting up an IT unit needs time and research, and it depends more on the intellectual capital of people doing it. However, we are ready to facilitate people who want to get into IT and e commerce industries. We can help them in getting loan and also provide them with the necessary infrastructure. We are gradually opening up to these aspects, too, as people are more interested in these new avenues now.

Whats the qualification required to join your schemes

The basic qualification needed is of matriculate level. As far as finance is concerned we have tied up with 26 banks. So, potential entrepreneurs doesn't have to run for funds. Banks provide around 75% of the required funds. Then we also train them and help them find a market for their products, including government orders.

Is NSIC also tying up with NGOs to impart training

We follow the franchisee model and involve private partners such as institutions, management colleges and NGOs. We charge a royalty for our services, machines and exam certificates. We approve the fees, keeping in mind the viability of the centre.

How has been your financial performance

Last year, the corporation achieved new heights on all parameters. There was substantial improvement in enhancing the corporations outreach and volume of operations. Our gross sales for 2012-13 went up to R1,209.38 crore from R1,087.49 crore in the previous year, registering a growth of 11%. The gross margin went up to R225.67 crore from R153.33 crore, a growth of 47%. The gross income (net of purchases and grants) went up to R341.80 crore from R252.71 crore, a growth of 35%. The credit facilitation to MSMEs increased to R4,392.02 crore from R3,823.42 crore, up 15%. The revenue from the schemes of Government Purchase and our B2B Portal increased to R12.41 crore, posting a growth of 14% over the previous year.

Under the Performance & Credit Rating Scheme, 19,676 units were rated during the year as against the target of 18,000.

Also read: Complaint against Amitabh Bachchan for promoting superstition in TV commercial