Micro Small Medium Enterprises MSME NMCP SCHEMES Jawhar

Micro, Small & Medium Enterprises (MSME) NMCP SCHEMES Jawhar Sircar Additional Secretary & Development Commissioner Ministry of Micro, Small & Medium Enterprises Government of India 09 May 2008 MEETING OF DIRECTORS OF MSME DIs New Delhi 1

NATIONAL MANUFACTURING COMPETITIVENESS PROGRAMME - COMPONENTS Full Name of the Scheme Short Name n Marketing Support/Assistance to MSMEs BAR CODE n Support for Entrepreneurial and Managerial Dev INCUBATORS n Enabling Manufacturing Sector to be competitive thru Quality Mgt. Standard & Quality Tech. Tools QMS/QTT n National Campaign for Investment in Intellectual Property IPR n National Programme on Application on Lean Mnf. LEAN n Mini Tool Rooms proposed to be set up by Min. of MSME MTR n Promotion of ICT in Indian Manufacturing Sector ICT n Technology & Quality Upgradation Support TECH UP n Design Clinic Scheme for design expertise to Mnf. sector DESIGN n Marketing Assistance/SMEs and Technology Upgradation Activities - Ministry of SSI in co-operation with TIFAC/CSIR MARKETING 2

NMCP – New Activities (Over next 4 years) No Name of the Component Rs. Crore 4 years Total Project Cost GOI Share 2008 -09 GOI Share (BE) 1 BAR CODE 1. 50 0. 20 2 INCUBATORS 79. 45 66. 50 8. 00 3 QMS / QTT 50. 00 40. 00 7. 00 4 IPR 55. 00 50. 00 8. 00 5 LEAN 230. 00 185. 20 20. 00 6 MTR 350. 00 135. 00 20. 00 7 ICT 100. 00 65. 50 10. 00 8 TECH UP 214. 56 78. 60 10. 00 9 DESIGN 50. 00 41. 00 5. 00 10 MARKETING 53. 00 26. 50 4. 00 1183. 51 689. 80 92. 20 TOTAL 3

STATUS OF NMCP SCHEMES S. No. Name of Scheme (Cost of Scheme / Rs Cr. ) Rs. in Crore EFC Clearance RE 2007 - 08 BE 2008 - 09 i Bar Coding (1. 5) Operational from 01/6/07 0. 1 0. 20 ii Incubators (79. 45) 0. 1 8. 00 iii QMS / QTT (50) 0. 1 7. 00 iv IPR (55) 0. 1 8. 00 v Lean (280. 80) 0. 1 20. 00 vi MTR (210) 0. 1 20. 00 vii ICT (100) 0. 1 10. 00 viii TECH UP (93. 50) 0. 1 10. 00 ix Design (50) 0. 1 5. 00 x C Watch (53) 0. 1 4. 00 01. 0 92. 20 Total 4

1. BAR CODE n Existing MDA Scheme modified to popularize Bar Coding n Bar Coding an effective Tool to improve marketability n Reimbursement allowed : Ø One Time Registration Fee Ø 75% of Annual Fee for 1 st 3 years (Bar Code Certificate) n 1400 SMEs to be Benefitted during 11 th FY Plan n Need to Ramp-up Scheme Ø n In the Context of Retail Boom / Exports Guidelines on www. dcmsme. gov. in 5

1/2 2. INCUBATORS (E & MD) n n Object : Ø Assist Incubation of Innovative Ideas Ø Encourage Ideas to Become SMEs Total Project cost – Rs. 79. 45 cr Ø GOI Share – Rs. 66. 50 cr Ø 2008 -09 BE – Rs. 8. 00 cr Final Approval Awaited Ø Guidelines on www. dcmsme. gov. in Ø Forms under Issue Rs. 80 cr Project for 100 Business Incubators (BIs) 6

2/2 2. INCUBATORS (E & MD) n 100 BIs to be Located in R&D Institutes @ 25 p. a n Govt. Grant (Max. 85%) = Rs. 4 to 8 lakhs per Idea n Each BI to Assist 10 Ideas / Units n R&D Institutions and BIs to Suggest & Nurture n Can also be Dovetailed with other Schemes n Tie Up ‘Successes’ with VC / Angel Funds n Publicity & Proposals Essential for Success 7

1/2 3. MINI TOOL ROOMS ON PPP MODE n 10 Major Tool Rooms set up - German, Dutch, etc. n They are essential for MSMEs for Tools & Industrial Trng. n Tooling & Training Needs of MSMEs rising rapidly Ø n As Govt. Funding is Limited, PPP is Emphasised Total Project cost – Rs. 210. 00 cr. Ø GOI Share – Rs. 135. 00 cr. Ø 2008 -09 BE – Rs. 20. 00 cr. n EFC and FM have Cleared. CCEA Note with CAB SECT n ILFS appointed Transactional Advisor Ø Guidelines by early June 8

2/2 3. MINI TOOL ROOMS ON PPP MODE n MTR cost may range from Rs. 2 cr. to Rs. 25 cr. Ø n Govt’s VGF @ 40% maximum Expected Govt. Funding = Rs. 135 cr. Ø Total Cost of Projects : Rs. 350 cr. in 4 years n To be Managed by Private Partners only n Local Industry to gain from Services / Skills n Traditional Centre-State Option also open Ø n Go. I - Rs. 9 cr. and State - 6 cr. Another Option Ø Go. I – Rs. 9 cr. and State + Pvt. (Rs. 6 cr. ) 9

1/3 4. IPR CAMPAIGN n IPR Tools Trade Secret Patents Indl. Design Copyrights G. I. Trademark n Most MSMEs unaware of IPR Benefits / Norms n Total Project cost – Rs. 55. 00 cr. (Go. I = Rs. 50. 00 cr. ) Ø 2008 -09 BE – Rs. 8. 00 cr. n EFC has Cleared. Details Thrashed with Stakeholders n Scheme Ready. Guidelines Awaiting Approval n 7 FOCUSSED ACTIVITIES : Ø Immediate Publicity Required 10

2/3 4. IPR CAMPAIGN 1) 150 Awareness & Sensitization Programmes Ø Rs. 1 lakh per Programme, by Assn etc. = Rs. 1. 5 cr. 2) 30 Pilot Studies with Assns. /Clusters = Rs. 75 Lakh Ø Rs. 2. 5 lakh each for Diagnosis & Actions 3) 50 Interactive Seminars / Workshops Ø To Ø@ Discuss Study Reports and Implementation Rs. 2 lakh = Rs. 1 cr. 4) Short / Long Term Training of IPR Cadre for MSMEs Ø 50 ST (2 -3 weeks) and 10 LT (6 months) Ø@ Rs. 6 lakh (ST) and Rs. 45 lakh (LT) = Rs. 7. 5 cr. 11

3/3 4. IPR CAMPAIGN 5) 40 IP Facilitation Centres by SPV on PPP Ø For Ø@ Handholding SMEs in IPR, on Low Fees Rs. 65 lakh = Rs. 26 cr. 6) Financial Assistance for Patents and GIs (Rs. 10 cr. ) Ø Patent Ø GI @ Rs. 25, 000 for Domestic, Rs. 2 lakh for Int’l Regn. – Rs. 1 lakh per case 7) Activities with International Agencies (Rs. 2 cr. ) Ø Best Ø 25 Practices, Capacity Building, Exchanges nos. Domestic @ Rs. 5 lakh / 10 Int’l @ Rs. 7. 5 lakh 8) Miscellaneous and Contingency (Rs. 1. 25 cr) 12

1/3 5. QUALITY MGT. SYSTEMS / TOOLS ( QMS / QTT ) n MSME’s ISO Reimbursement Scheme Successful n QMS: ISO-22000 (Food), ISO-18000 (Health) etc. n QTT: Introduce proven Tools like 6 -Sigma, 5 -S, Kaizen, TPM, TQM etc. n Total Project cost – Rs. 50. 00 cr (Go. I = 80%) Ø n 2008 -09 BE – Rs. 7. 00 cr Scheme Ready. Guidelines Awaiting Approval 13

2/3 5. QUALITY MGT. SYSTEMS / TOOLS ( QMS / QTT ) n 5 Activities to Further Propagate Quality Mgt: 1) Compulsory Courses in ITIs / Polytechnics Ø QCI/NPC to prepare Course Curricula Ø 1800 ITIs / Rs. 4. 25 cr p. a = Rs. 17 cr 2) Assist International Study Missions Ø For Detailed Study of Best QM Institutions Ø 2 missions / Rs. 1 cr p. a = Rs. 4 cr 3) Special Programmes for Threatened Products Ø Detailed Analysis of Selected Imports Ø Leading to Improved Indian Products Ø 2 Sectors / Rs. 0. 6 cr p. a = Rs. 4 cr 14

3/3 5. QUALITY MGT. SYSTEMS / TOOLS ( QMS / QTT ) 4) Implement Quality Mgt Techniques in Clusters Ø 400 Units (in Clusters) to be Studied for QM Ø Relevant Ø 100 QMS/QTT to be Implemented Units / Rs. 2. 5 cr p. a = Rs. 10 cr 5) QM Awareness Programmes among MSMEs Ø 400 Ø To Programmes in 4 years in Selected Areas Address Both Middle Mgt. & Shop Floor Levels Ø 100 nos. p. a @ Rs. 1. 25 lakh x 4 years = Rs. 5 cr 15

1/2 6. LEAN MANUFACTURING n Lean Manufacturing (LM) is Production of Goods Ø Using less of all Inputs n SMEs either Don’t Know or Can’t Afford n This, Flagship Scheme of NMCP n Total Project cost – Rs. 230. 00 cr. Ø Ø n GOI Share – Rs. 185. 20 cr. Ø Rs. 224 cr. for 700 Mini Clusters (80% by Go. I) Ø Rs. 2 cr. Admn. /Monitoring Ø Rs. 4 cr. For Awareness/ Publicity 2008 -09 BE – Rs. 20. 00 cr. EFC Cleared. Discussion with FM (? ) 16

2/2 6. LEAN MANUFACTURING n LMP to Cover 7, 000 to 10, 000 units in 4 years n Thru Mini Clusters @ 10 units per LM Consultant n 100 to 300 LM Consultants required p. a. – Expensive n Govt : Private Funding = 80 : 20 (1 st Yr), 0 : 100 (2 nd Yr) n Rs. 32 lakh per Mini Cluster / Rs. 24 lakh per Consultant n Industry Associations to Execute, thru IAs & SPVs Ø Lead / Locate / Appoint / Pay / Monitor n IAs to be paid Rs. 8 lakh for Project Management Services n Industry to Drive & Create Capacities in Private Sector n EFC has ordered Review/Stop Work after 1 st 100 ! 17

3/3 OTHER NMCP COMPONENTS: UNDER FORMULATION 7) TECH UP Ø Scheme under Total Redrafting 8) MARKETING Ø Scheme under Total Redrafting 9) ICT Ø Scheme under Total Redrafting 10) DESIGN Ø Adviser appointed. Guidelines by June 08 18

THANK YOU 19

OTHER SCHEMES RAJIV GANDHI UDYAMI MITRA YOJANA n RGUMY to Handhold New Entrepreneurs Ø Support thru Lead Agencies – Udyami Mitras, i. e: -- To Link Entrepreneurs, Projects, Banks & Admn. n UMs to assist Project Selection & Preparation Ø Pursue with Banks and Government Agencies n UMs to Receive Payment Per Case – Rs. 6000 & above n Support to 1. 5 lakh entrepreneurs n Awareness & UM Identification are Essential. 20

1/3 7. TECHNOLOGY UPGRADATION n Total Project cost – Rs. 93. 50 cr. Ø GOI Share – Rs. 76. 54 cr. 2008 -09 BE – Rs. 10. 00 cr. Revised EFC Finalised. Under Submission Focuses on Energy and Certification 6 Activities Proposed: 1) Renewable Energy : 5 Demonstration Projects in 4 yrs Ø UNIDO / GEF Programme on Bio Fuel / Gas Ø R&D Centre of Excellence at IISC Bangalore Ø Training / Website / Propagation Ø Rs. 1 cr. p. a = Rs. 4 cr. Ø GEF Funding – Rs. 0. 8 cr. Ø n n n 21

2/3 7. TECHNOLOGY UPGRADATION 2) Implement Energy Audit Advice in 1200 units Ø Based on PCRA’s Audit of 2000 units (own cost) Ø Rs. 9 cr. (on 60% Government Aid) p. a. = Rs. 36 cr. 3) Assessment Study & SPV for CDM Ø To set up 4 SPVs p. a Ø Rs. 0. 15 cr. per SPV = Rs. 2. 4 cr. for 16 SPVs 4) Awareness Progs. For CER/CDM (Carbon Credits) Ø 150 Progs. p. a @ Rs. 33, 000 each = Rs. 2 cr. (4 yrs) Ø May revise CDM Intervention, if successful 22

3/3 7. TECHNOLOGY UPGRADATION 5) Voluntary Product Cert. Reimbursement (Rs. 47. 10 cr. ) Ø 800 Units/Licences (ISI Mark) p. a Ø Rs. 1 lakh (max. ) per Unit/Licence = Rs. 27. 52 cr. (4 yrs) Ø 325 Units/Licences for Int’l Cert. for CE, ANSI etc. p. a Ø Rs. 2 lakh (max. ) per Unit/Licence = Rs. 19. 58 cr. (4 yrs) 6) Continuous Appraisal & Miscellaneous (Rs. 2. 0 cr. ) Ø For Mid-Course Changes Ø Outsourcing / Hiring Experts etc. 23

1/3 8. MARKET ASSISTANCE & TECH. UPGRADATION (MARKETING) n n To Survive competition, Indian MSMEs need Ø Modern Packaging & Marketing Techniques Ø To Technically Study Competitors’ Products and Counter-respond NER Requires integration in Mainstream Markets Wide Ranging exposure to be Encouraged Total Project cost – Rs. 53. 00 cr. Ø GOI Share – Rs. 26. 50 cr. Ø 2008 -09 BE – Rs. 4. 00 cr. Preparing Revised EFC by 15 th April Ø n § 24

2/3 8. MARKET ASSISTANCE & TECH. UPGRADATION (MARKETING) n Activities Proposed (Still under Preparation): 1) Tech. Upgradation in Packaging with IIP, NID, IITs Ø Exposure to Best Technologies Ø Cluster-based Ø Unit-based Studies for Status/Actions Interventions on Cost Sharing 2) Study Competition for Self-improvement Ø Exposure to Competitors’ Products in India & Abroad Ø Detailed study of specific ‘Defeats’, with reasons Ø Enterprise-led Improvement Programmes 25

3/3 8. MARKET ASSISTANCE & TECH. UPGRADATION (MARKETING) 3) Modern Management Techniques Adoption Ø Basically Skill Development in Latest Technologies 4) NER Exposure and Marketing Assistance Ø Connect NER Entrepreneurs to Mainstream Ø Through Subsidised Exposure Visits to India’s best Ø Participation in National Fairs, Study Missions and Workshops 26

1/2 9. PROMOTING ICT IN SMEs n n n Low ICT Usage by SMEs – A Cause of Concern Most ICT Cos. Focusing on SMEs – but Slow Progress Intensive Discussions with Stakeholders of Major ICT Cos. Final EFC Draft being Finalised – Costing being Worked Out Total Project cost – Rs. 100. 00 cr. Ø GOI Share – Rs. 60. 00 cr. Ø 2008 -09 BE – Rs. 10. 00 cr. Original Project Cost – Rs. 207. 00 cr. Ø Ø n GOI Share – Rs. 104. 00 cr. 2008 -09 BE – Rs. 10 cr. Proposal for PPP / Cost-sharing on Most Activities 27

2/2 9. PROMOTING ICT IN SMEs n Activities under Consideration: No. 1 Activities 25 Clusters a. Diagnostic Studies b. E-Readiness Infrastructure (25 locations) c. Web Portals (25) d. HRD e. Training Sub Total (Rs. 68. 50 cr) Go. I Cluster 2. 00 13. 00 15. 00 7. 00 5. 00 0. 00 4. 50 10. 00 3. 00 9. 00 42. 00 26. 50 2 Association Websites (@ Rs. 8 L per Assn for 40 Assn. ) 8. 40 6. 00 3 E-Catalogue Building & Hosting (10, 000 units) 3. 50 4 SME Networking Portals (PPP) 6. 00 4. 00 5 Project Office 0. 10 0. 00 60. 00 40. 00 TOTAL (Rs. 100 cr. ) Æ Hosted Models & Rolling Fund – Under Consideration 28

1/2 10. DESIGN CLINICS / SUPPORT n Designs make SME Products Competitive Ø Ballpoint Pens, Tooth-brushes, etc. n Design Input Essential for Survival of MSMEs n Cluster-based Design “Clinics” Proposed n Ø Suggestions / Specific Packages Required Ø Need to Work Out Cost and Sharing Formula Previous Proposal mainly Governmental Ø One National Centre with NID Ø 6 Regional Centres and 225 Design Clinics 29

2/2 10. DESIGN CLINICS / SUPPORT n n Total Project cost – Rs. 50. 00 cr. Ø GOI Share – Rs. 41. 00 cr. Ø 2008 -09 BE – Rs. 5. 00 cr. Scheme held up due to lack of Specificities Ø n Discussions with FICCI, CII etc. on DPR has been Insisted. Bids called. Ø Thereafter, EFC and CCEA to follow Ø 3 months target 30