Specialized Institutions to Support Entrepreneurs in India

There is a wide network of institutional infrastructure for providing finance and extension of service support in our country. This network is established through the following institutions:

State financial Corporations (SFCs) Regional rural banks (RRBs) National Industries Corporation (NSIC) Small scale industries corporation (SSIDCS) Khadi and Village Industries Commission (KVIC) National Bank for Agriculture and Rural Development (NABARD) Small Industries Development Bank of India (SIBDI) District Industry Support (DICs) Besides the above there are number of institutions which extend financial support to encouraging entrepreneurs. These are:

Small Industries Development Organization (SIDO) Small Industries Service Institute (SISI) Industrial finance Corporation of India (IFCI) Agriculture Promotion and Investment Corporation of Orissa Ltd. (APICOL) District Rural Development Agency (DRDA) State financial Corporations (SFCs)

State Financial Corporations (SFCs)

State Financial Corporations (SFCs), the state-level institutions have played an important role in the development of small and medium enterprises in their respective states with the main objectives of financing and promoting these enterprises for achieving balanced regional growth, catalyse investment, generate employment and widen the ownership base of industry. With the liberalisation drive getting accelerated, SFCs future business is likely to face SFCS provides a range of financial services that utilizes sound and dynamic investment decisions to select clients aiming to protect and develop their global wealth. The State Financial Corporations (SFCs) are state-level financial institutions, operating as regional development banks playing a crucial role in the development of small and medium enterprises in the states concerned in tandem with national priorities.

There are 18 SFCs in the country, of which 17 were set up under the SFCs Act 1951. Tamil Nadu Industrial Investment Corporation Ltd. established in 1949 under the Companies Act as Madras Industrial Investment Corporation, also functions as a SFC. SFCs provide financial assistance by way of term loans, direct subscription to equity/debentures, guarantees, discounting of bills of exchange and seed/ special capital. The SFCs operate a number of schemes of refinance and equity type assistance on behalf of IDBI/SIDBI in addition to special schemes for artisans and special target groups such as SC/ST, women, ex- servicemen, physically handicapped, etc.

National Small Industries Corporation (NSIC)

The NSIC was set up in 1955 with the objective of supplying machinery and equipment to small enterprises on hire purchase basis and assisting them in procuring government orders for various items of stores with a view to promote any faster the development of SSI in the country. The Head Office of NSIC is at Delhi and it has four regional offices at Delhi, Mumbai, Chennai and Kolkata and eleven branch offices. It has one Central liaison office at Delhi and Depots and Sub-centres.

Functions:
The main functions of NSIC are: 1. To develop small scale units are ancillary units to large-scale industries. 2. To provide machines and equipments to SSIs on hire-purchase basis. 3. To help enterprises to participate in the stores purchase programme of the Central government. 4. To assist small industries in marketing their products. 5. To make available the basis raw materials through their depots. 6. To import and meet the requirement of components and parts to actual small scale users in specific industries. 7. To construct Industrial Estates and establish and run prototype production-cum training centres to carter the need of prospective entrepreneurs.

Khadi and Village Industries Commission

The Khadi and Village Industries Commission (KVIC) is a statutory body formed by the Government of India, under the Act of Parliament, 'Khadi and Village Industries Commission Act of 1956'. It is an apex organization under Ministry of Micro, Small and Medium Enterprises (Govt. of India), with regard to Khadi and village industries within India, which seeks to - "plan, promote, facilitate, organise and assist in the establishment and

development of Khadi and village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary.. In April 1957, it took over the work of former All India Khadi and Village Industries Board. Its head office is based in Mumbai, with its six zonal offices in Delhi, Bhopal, Bangalore, Kolkata, Mumbai and Guwahati. Other than its zonal offices, it has offices in 29 states for the implementation of its various programs.

National Bank for Agriculture and Rural Development (NABARD)

National Bank for Agriculture and Rural Development (NABARD) is an apex development bank in India having headquarters based in Mumbai (Maharashtra) and other branches are all over the country. The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD), set up by the Reserve Bank of India (RBI) under the Chairmanship of Shri B. Shivaraman, conceived and recommended the establishment of the National Bank for Agriculture and Rural Development (NABARD). It was established on 12 July 1982 by a special act by the parliament and its main focus was to uplift rural India by increasing the credit flow for elevation of agriculture & rural non farm sector and completed its 25 years on 12 July 2007. It has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". RBI sold its stake in NABARD to the Government of India, which now holds 99% stake. It is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion NABARD was established on the recommendations of Shivaraman Committee, by an act of Parliament on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981. It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC). It is one of the premier agencies to provide credit in rural areas.

Small Industries Development Bank of India

Small Industries Development Bank of India is an independent financial institution aimed to aid the growth and development of micro, small and medium-scale enterprises (MSME) in India. Set up on April 2, 1990 through an act of parliament, it was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India. Current shareholding is

widely spread among various state-owned banks, insurance companies and financial institutions. Beginning as a refinancing agency to banks and state level financial institutions for their credit to small industries, it has expanded its activities, including direct credit to the SME through 100 branches in all major industrial clusters in India. Besides, it has been playing the development role in several ways such as support to micro-finance institutions for capacity building and on lending. Recently it has opened seven branches christened as Micro Finance branches, aimed especially at dispensing loans up to Rs. 5.00 lakh. It is the Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector and for Co-ordination of the functions of the institutions engaged in similar activities. SIDBI has also floated several other entities for related activities. Credit Guarantee Fund Trust for Micro and Small Enterprises provides guarantees to banks for collateral-free loans extended to SME. SIDBI Venture Capital Ltd. is a venture capital company focused at SME. SME Rating Agency of India Ltd. (SMERA -) provides composite ratings to SME. Another entity founded by SIDBI is ISARC - India SME Asset Reconstruction Company in 2009, as specialized entities for NPA resolution for SME. Mr. Sushil Mahnot is the chairman of SIDBI since April 4, 2012

District Industries Centres (DICs)

District Industries Centres (DICs) have emerged since 1978 as the model agency for development of small and village industries. It provides all the support services needed for development of SSI in the country. The DICs were established with a view to provide integrated administrative framework at the district level with professionally qualified personnel in technology, marketing, credit, economic investigation, raw materials, so that DICs would be the single window raw materials, through which all type of assistance would be channeled to the small-scale sector. They are virtually acting as per the plans and programmes of both central as well as state government for the implementation of various promotional measures from grass root level to develop SSI in the country. The DIC is an integrated institution at the district level which provides all type of services and facilities to the entrepreneurs. The entrepreneurs can get assistance from DIC for setting up and running an industry. Up to1991, 422 DICs were in operation in the country, almost one for each district. These DICs have assisted more than 1.5 lakh units generating employment for more than 10.3 lakh

persons. The four metropolitan cities Mumbai, Chennai, Delhi and Kolkata have been kept outside the preview of DICs.

Small Industries Development Organisation (SIDO)

Small Industries Development Organisation (SIDO) an apex body at Central level for formulating policy for the development of Small Scale Industries in the country, is headed by the Additional Secretary & Development Commissioner (Small Scale Industries) under Ministry of Small Scale Industries Govt. of India. SIDO is playing a very constructive role for strengthening this vital sector which has proved to be one of the strong pillars of the economy of the country. It functions through a network of the field offices namely 30 SISIs, 28 Br. SISIs, 4 RTCs, 7 FTSs, various training and production centers and specialized institutes spread over different parts of the country. It is rendering the services in the following areas: Advising the Govt. in policy matters concerning small scale sector. Providing techno-economic and managerial consultancy, common facilities and extension services. Providing facilities for technology up-gradation, modernization quality improvement & infrastructure. Human resources development through training and skill up-gradation. Providing economic information services. Maintaining close liaison and vital linkage with the Central Ministries, Planning Commission, Financial Institutions, State Govts. & similar other developmental organizations/agencies related to the promotion and development of SSI Sector. Evolving and coordinating policies for development of ancillaries. Monitoring of PMRY Scheme Monitoring the working of different Tool Rooms & PPDC's

Small Industries Service Institute (SISIs)

At the heart of all agencies dealing with development of small industry is small industries development organization, SIDO. It was originally know as central small industries organization (CSIO). Attached to the ministry, SIDO administers small industries service institute (SISIs). The small industries service institutes (SISIs) are set-up one in each state to provide consultancy and training to small and prospective entrepreneurs. The activities of SISs are co-ordinate by the industrial management training division of the DC, SSI office (New Delhi).

In all there are 28 SISIs and 30 Branch SISIs set up in state capitals and other places all over the country. SISI has wide spectrum of technological, management and administrative tasks to perform.

Industrial Finance Corporation of India

At the time of independence in 1947, India's capital market was relatively underdeveloped. Although there was significant demand for new capital, there was a dearth of providers. Merchant bankers and underwriting firms were almost non-existent. And commercial banks were not equipped to provide long-term industrial finance in any significant manner. It is against this backdrop that the government established The Industrial Finance Corporation of India (IFCI) on July 1, 1948, as the first Development Financial Institution in the country to cater to the long-term finance needs of the industrial sector. The newly-established DFI was provided access to low-cost funds through the central bank's Statutory Liquidity Ratio or SLR which in turn enabled it to provide loans and advances to corporate borrowers at concessional rates. This arrangement continued until the 1990s when it was recognized that there was need for greater flexibility to respond to the changing financial system. It was also felt that IFCI should directly access the capital markets for its funds needs. It is with this objective the constitution of IFCI was changed in 1993 from a statutory corporation to a company under the Indian Companies Act, 1956. Subsequently the name of the company was also changed to 'IFCI Limited ' with effect from October 1999. IFCI has fulfilled its original mandate as a DFI by providing long term financial support to all segments of Indian Industry. It has also been chiefly instrumental in translating the government's development priorities into reality. Until the establishment of ICICI in 1956, IFCI remained solely responsible for implementation of the government's industrial policy initiatives. Its contribution to the modernization of Indian Industry, export promotion, import substitution, entrepreneurship development, pollution control, energy conservation and generation of both direct and indirect employment is noteworthy.

Agricultural Promotion and Investment Corporation of Odisha Limited (APICOL)

The Agricultural Promotion and Investment Corporation of Odisha Limited (APICOL) were incorporated on 01-03-1996 with the intention of bringing enterprise into agriculture as envisaged in the State Agriculture Policy - 1996. It started functioning since 01-06-1996 with the sole objective of promoting agro based industries/food processing industries including commercial agriculture/ horticulture/animal husbandry/fishery etc., in broad terms to promote investment in agriculture and allied sector. Duties/Role of Public Authority

The organization is engaged in promotion of commercial agriculture in the state by way of rendering various services such as technical guidance, training of entrepreneurs, dissemination of information regarding the scope of commercial and export oriented agriculture in the state and preparing bankable project report. It provides escort services to business houses engaged in agric business. Incentives under the State Agriculture Policy and various other schemes of the department are also canalized through APICOL. Besides, APICOL acts as Nodal Agency for Ministry of Food Processing Industries (MFPI), Government of India and operating the virtual office of the Agricultural & Processed Food Products Export Development Authority (APEDA), Ministry of Commerce, and Government of India. The organization is playing different roles and carrying out all the roles as listed below: 1. 2. 3. 4. Counselling Escort Services Entrepreneurship Building Single window channelizing agency with respect to Agriculture Policy and various other schemes, 5. Facilitating service including Institutional Linkage Building 6. Consultancy service 7. Information dissemination

District Rural Development Agencies (India)

District Rural Development Agencies (DRDAs) are district level development execution and monitoring agencies created under the Indian Societies Registration Act. Substantial sums of rural development funds of government of India were transferred and routed through them under various Centrally Sponsored Schemes. From purely a financial resource from Rural Development point of view the DRDAs are extremely important institutions at the district level. With the adoption of the Constitutional mandate for decentralization of powers that privileged those self-government institutions in planning for economic development and social justice, the proposal to re-think the status of DRDAs and also to merge them with the panchayats had emerged. Under the section on 'devolution of functionaries' the 1st Round Table had adopted a resolution, number IV(i), for preconceiving the role of District Rural Development Agencies (DRDAs). DRDAs were to be progressively merged with the District Panchayats and their technical expertise made available to all tiers of Panchayats. At an all India level, the progress reported in this regard is far from satisfactory. There are some vexed issues, one among which is the 'reported' reluctance on the part of some of the institutions of Union Government for the proposal of merger of DRDAs with the district Panchayats. The complete merger seems to have happened only in Kerala and Karnataka. The latter has a much longer history of doing this. In both the States the DRDAs function as if they were the cells for poverty alleviation/ rural development schemes within the Zilla Panchayats. West Bengal is reported to have taken similar steps; yet, it does not measure up to the yardstick of complete merger. Rajasthan and Lakshadweep State/ UT Profile make a similar assertion; this report is unable to confirm this.