Annual Report 2007-2008
Chapter III
ROLE & FUNCTIONS OF MICRO,
SMALL AND MEDIUM ENTERPRISES
- DEVELOPMENT ORGANISATION
(MSME-DO)
3.1 Introduction
3.1.1 The organization of the Development
Commissioner (Micro Small and Medium
Enterprises) [(earlier called Development
Commissioner (Small Scale Industries)]
was established as Small Industries
Development Organisation (SIDO) in 1954
on the basis of the recommendations of the
Ford Foundation. Over the years, it has seen
its role evolve into an agency for advocacy,
hand holding and facilitation for the small
industries sector. With the enactment of
the MSMED Act 2006, the organization has
been renamed as Micro, Small and Medium
Enterprises-Development Organisation
(MSME-DO) with the wider mandate of
promotion and development of MSME sector.
It has over 60 offices and 21 autonomous
bodies under its management. These
autonomous bodies include Tool Rooms,
Training Institutions and Project-cum-Process
Development Centres. MSME-DO provides
a wide spectrum of services to the small
industries sector, now enlarged to include all
enterprises, excluding the larger ones. These
include facilities for testing, tool making,
training for entrepreneurship development,
17
preparation of project and product profiles,
technical and managerial consultancy,
assistance for exports, pollution and energy
audits etc. MSME-DO provides economic
information services and advises Government
in policy formulation for the promotion and
development of MSME sector. The field
offices also work as effective links between
the Central and the State Governments in the
area of MSME development.
3.1.2 Consequent upon the increased
globalization of the Indian economy, MSME
sector is facing new challenges. MSME-DO
has recognised the changed environment
and is currently focusing on providing support
in the fields of credit, marketing, technology
and infrastructure to MSMEs. Global trends
and national developments have transformed
MSME-DO’s role into that of a catalyst of
growth of small enterprises in the country.
The main services rendered by MSME-DO
are:
Ø Advising the Government in policy
formulation for the promotion and
development of MSME sector.
MSME
Ø Providing techno-economic and
managerial consultancy, common
facilities and extension services to
the MSME sector.
Ø Extending facilities for technology
upgradation, modernisation, quality
improvement and infrastructure.
Ø Developing Human Resources
through training and skill upgrada-
tion.
Ø Making available economic informa-
tion services.
Ø Maintaining a close liaison with the
Central Ministries, Planning Com-
mission, State Governments, Finan-
cial Institutions and other Organisa-
tions concerned with development
of MSME sector.
Ø Evolving and coordinating Policies
and Programmes for development
of MSME sector as ancillaries to
large industries.
3.1.3 MSME-DO has a network of 30
MSME Development Institutes (MSME
- DIs), 28 Branch MSME-Development
Institutes (Br. MSME-DIs), 4 MSME Testing
Centres (MSME-TCs), 7 MSME Field Testing
Stations (MSME-TSs), 18 Autonomous
Bodies - which include 10 MSME Tool
Rooms ( MSME-TRs), 6 MSME Technology
Development Centres (MSME-TDCs) 2
MSME Central Footwear Training Institutes
(MSME-TDC-CFTIs). There are also 2
MSME Departmental Training Institutes
(MSME-TIs) and one Departmental MSME
Hand Tools Development Centre (MSME-
TDC-Hand Tools).
3.1.4 The network of 30 MSME
Development Institutes (MSME - DIs), and
18
28 Branch MSME Development Institutes
has been set up in State capitals and other
industrial cities all over the country. The
main activities of these institutions are as
follows:-
Ø Conducting Entrepreneurship, Man-
agement and Skill Devlopment Pro-
grammes;
Ø Assistance/Consultancy to prospec-
tive and existing Entrepreneurs;
Ø Preparation of State and District In-
dustrial Profiles;
Ø Preparation of Project Profiles of
Products / Industries feasible in the
MSME Sector;
Ø Energy Conservation, Pollution
Control, Quality Control & Technol-
ogy Upgradation;
Ø Ancillary Development and
Ø Providing Common Facility Services
in Workshop/Lab Laboratories.
MSME Development Institutes (MSME
- DIs), also have common facility workshops
in various trades. There are at present 42
such common facility workshops.
3.1.5 MSME Testing Centres (MSME-TCs)
at Chennai, Delhi, Kolkata and Mumbai have
facilities for quality upgradation, training/
consultancy in testing, quality control,
quality management, process quality control
systems, etc. The 7 MSME Field Testing
Stations (MSME-FTSs) provide focused
testing services in 7 cities viz; Bangalore,
Bhopal, Changanacherry, Jaipur, Hyderabad
Kolhapur and Puducherry having significant
concentration of MSMEs.
 Annual Report 2007-2008

3.1.6 The 10 MSME-Tool Rooms; started
with Indo-German and Indo-Danish
collaborations, assist MSMEs in technical
upgradation, provide good quality tooling
by designing and producing tools, moulds,
jigs and fixtures, components, etc. They also
provide training and consultancy for tool and
die makers.
3.1.7 MSME Technology Development
Centres (MSME-TDCs) are product specific
Centres to look into the specific problems
and render technical services, develop
and upgrade technologies and manpower
development and training in specific product
groups like Foundry & Forging, Electronics,
Fragrance & Flavour, Sport Shoes, Electrical
Measuring Instruments and Glass.
3.1.8 MSME – Technology Development
Centres: Central Footwear Training Institutes
(MSME-TDCs-CFTIs) at Agra and Chennai
develop footwear designing to promote
exports and provide training for manpower
in Footwear Industry.
3.2 PLAN SCHEMES
3.2.1.2 These Tool Rooms were established
by the Government of India in technical
collaboration either with the Govt. of Federal
Republic of Germany or the Govt. of Denmark
for providing services in the area of tooling
(design & manufacture), precision machining,
heat treatment, technical training and technical
consultancy to metal working industry, in
general and micro and small industries in
particular so as to improve the quality and
productivity of such units. These Tool Rooms
were set up to fulfil the tooling and training
needs of the micro and small industries in
the fields of tool design and manufacture
and training of technical personnel in these
fields.
3.2.1.3 Various long-term post-graduate
diplomas in tool design and CADCAM
course and vocational training programmes
are being organized for school drop-outs.
These Tool Rooms have achieved nearly
100% placement for the trainees of its long-
term courses.
3.2.1.4 The achievements (as on November
2007) of these Tool Rooms are as follows:-

3.2.1 MSME Tool Rooms (MSME-TRs) Table - 3.1: Achievements of the Tool Rooms
(As on November 2007)
(i) Revenue Target (2007-08) (Rs. 4515
3.2.1.1 The 9 MSME-TRs started with Indo-
Lakh)
German and Indo-Danish collaborations
(ii) Revenue Earned (Rs.Lakh) 2991
assist MSMEs in technical upgradation,
(iii) No. of Units Serviced 4465
provide good quality tooling by designing
(iv) No. of Trainees (Long Term) 3928
and producing tools, moulds, jigs & fixtures,
(v) No. of Trainees (Short Term) 6748
components, etc. They also provide Training
(vi) No. of SC/ST Trainees 1839
and Consultancy for tool and die makers.
(vii) No. of OBC Trainees 1338
These Tool Rooms are at Ludhiana,
(viii) No. of Minority Trainees 343
Ahmedabad, Indore, Aurangabad, Kolkata,
(ix) No. of Women Trainees 895
Bhubaneshwar, Jamshedpur, Jalandhar &
Guwahati. (x) No. of PH Trainees 26

19
MSME

3.2.2 MSME Technology Development Cen- 3.2.2.3 The achievements (as on November
tres (MSME- TDCs) 2007) of these Centres are as follows:
TABLE - 3.2: Achievements of MSME-TDCs
(As on November 2007)
3.2.2.1 MSME Technology Development
Centres (MSME-TDCs) are product specific (i) Revenue Target (2007-08) (Rs. 1499
Centres to look into their specific problems Lakh)
and render technical services, to develop (ii) Revenue Earned (Rs.Lakh) 831.52
and upgrade technologies and manpower
development and training in specific product (iii) No. of Units Serviced 3635
groups like Foundry & Forging, Electronics, (iv) No. of Trainees (Long Term) 1311
Fragrance & Flavour, Sport Shoes, Electrical (v) No. of Trainees (Short Term) 3082
Measuring Instruments and Glass. MSME-
TDCs include Electronics Service & Training (vi) No. of SC/ST Trainees 800
Centre, Ramanagar; Institute for Design of (vii) No. of OBC Trainees 1134
Electrical Measuring Instruments, Mumbai; (viii) No. of Minority Trainees 42
Fragrance & Flavour Development Centre,
Kannauj; Centre for Development of Glass (ix) No. of Women Trainees 490
Industry, Firozabad; Central Institute of Tool (x) No. of PH Trainees 11
Design, Hyderabad; Process-cum-Product
Development Centre, Agra and Process- 3.2.3 MSME – Technology Development
cum-Product Development Centre, Meerut. Centres: CFTI

3.2.2.2 The main objectives of these
institutes are to develop human resources to
meet the essential requirements for transfer
of technology in various fields viz; electronic
items, instrumentation industries, sports goods,
promote and moderanise the glass industry,
foundry and forge industries and technological
upgradation of essential oils, aroma chemicals,
fragrance and flavour industry in the country.
These institutes are also running training
courses on repair and maintenance of CNC
machines, addition of fibre optics testing facilities
and tailor-made training modules designed as
per the needs of the industry with emphasis
on hands-on training. CDGI, Firozabad
provides technical support to micro and small
glass industry units by promoting installation
of energy efficient glass melting furnaces,
auxiliary furnaces, introduction of new type of
glasses and their standardization, introduction
of developed techniques for the decoration of
glasswares etc.
3.2.3.1 Central Footwear Training Institutes,
(MSME-TDC-CFTIs) at Agra and Chennai
develop footwear designing to promote
exports and provide training for manpower
in Footwear Industry.
3.2.3.2 The basic objective of these
institutes is to develop human resources
for footwear and allied industries through
various training programmes on footwear
technology and allied services. These
institutes conduct long term, short term
and part-time training courses on various
subjects of footwear technology. Besides,
the institutes also provide technical support
services to the user industry by making
their facilities available to them. Further
the institutes also provide services for
development of new products and patterns
as per given sample or concept.

20

3.2.3.3 The achievements (as on Novenber
2007) of these Centres are given below:
TABLE - 3.3: Achievements of MSME-TDCs; CFTI
(As on November 2007)
(i) Revenue Target (2007-08)
(Rs.Lakh)
(ii) Revenue Earned (Rs.Lakh)
(iii) No. of Units Serviced
(iv) No. of Trainees (Long Term)
(v) No. of Trainees (Short Term)
(vi) No. of SC/ST Trainees
(vii) No. of OBC Trainees
(viii) No. of Minority Trainees
(ix) No. of Women Trainees
(x) No. of PH Trainees
3.2.4 Credit Linked Capital Subsidy
Scheme (clcss)
3.2.4.1 The Ministry of Micro, Small &
Medium Enterprises (MSME) is operating
a scheme for technology upgradation of
Small Scale Industries (now MSEs) called
the Credit Linked Capital Subsidy Scheme
(CLCSS). The Scheme aims at facilitating
technology upgradation by providing
upfront capital subsidy to SSI units (now
MSEs), including tiny, khadi, village and
coir industrial units, on institutional finance
(credit) availed by them for modernisation
of their production equipment (plant and
machinery) and techniques in specified
sub-sectors/products approved under the
Scheme.
3.2.4.2 The ceiling for eligibility of loans
under the Scheme is Rs. 1 crore and
rate of subsidy is 15 per cent. Further,
in the light of the experience gathered
through implementing the Scheme, certain
Annual Report 2007-2008
modifications have been made in taking up
technology upgradation on a larger scale.
3.2.4.3 Monitoring of the Scheme: The
267 Scheme is monitored by the Governing
and Technology Approval Board (GTAB) of
216.40 the CLCSS. The Secretary (MSME) is the
331 Chairperson of the Board with the Additional
385 Secretary & Development Commissioner
6049 (MSME) as its Member-Secretary. The GTAB
2841 also periodically reviews the functioning
673 of the Scheme. There is a Technical Sub-
219 Committee under the GTAB to consider
2402 inclusion of new sub-sectors/products and
1
Well Established and Improved Technologies
under the Scheme.
3.2.4.4 NodalAgencies:The Scheme is being
implemented through eligible Primary Lending
Institutions (PLIs) which include Scheduled
Commercial Banks, Scheduled Cooperative
Banks [including urban cooperative banks
co-opted by the SIDBI under the TUFS of the
Ministry of Textiles], Regional Rural Banks
(RRBs), State Financial Corporations (SFCs)
and North Eastern Development Financial
Institution (NEDFI). The capital subsidy is
released to SIDBI and NABARD for on-ward
disbursement to the beneficiary units through
eligible PLIs. An advance of Rs. 5 crore and
Rs. 3 crore has been placed with SIDBI and
NABARD respectively for operationalising
the Scheme.
Besides, an advance of Rs. 1 crore
each has also been placed with the eight
Public Sector Banks/Government Agencies
namely State Bank of India, Canara Bank,
Bank of Baroda, Punjab National Bank, Bank
of India, Andhra Bank, State Bank of Bikaner
21
MSME
& Jaipur and Tamil Nadu Industrial Investment
Corporation Ltd., which have been inducted
as nodal agencies/banks for disbursement
of subsidy under the Scheme. The National
Small Industries Corporation Ltd. has also been
inducted as nodal agency for disbursement
of subsidy under the Scheme. These nodal
banks/ agencies consider proposals only in
respect of credit approved by their respective
branches with effect from 04.04.2006.
3.2.4.5. Progress of the Scheme: The year-
wise details of units assisted and amount of
subsidy sanctioned under the CLCSS since
2001-02 are given in Table 3.4
TABLE - 3.4: Details of Units Assisted and Subsidy Sanstived Under CLCSS
Year No. of Units Assisted
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08( As on 31.12.07)*
Total
* Progress of the Scheme during the year is
however, NIL as formal approval for continuation
of the Scheme in XI Plan has been received
recently only. It is expected that entire allocation for
subsidy in areas other than NER will be utilised.
Consequent upon the increase of
ceiling for eligibility of loans from Rs. 40 lakh
to Rs. 1.0 crore and in the rate of subsidy from
12 per cent to 15 per cent from September
29, 2005, the progress under the CLCSS
has been quite encouraging. The cumulative
progress of CLCSS before amendment of the
scheme i.e. before 29.9.2005 was only 930
units (subsidy amount approximately Rs. 24
crore) in about 5 years. However, during the
period of one and half years after amendment
in the scheme (From 29.9.05 to 31.03.07),
2399 units availed of subsidy of Rs. 80 crore
(approx.).
3.2.5 I so - 9 0 0 0 / I so - 1 4 0 0 1 / H accf
Certification Reimbursement Scheme
3.2.5.1 In order to enhance the competitive
strengths of the Small Scale Sector (now MS
Sector), the Government of India, introduced
an incentive scheme for technological
Up-gradation/quality improvement and
Amount of Subsidy Sanctioned
(Rs. lakh)
9 21.36
47 93.97
150 368.47
526 1346.29
699 1800.99
1898 6733.03
NIL NIL
3329 10364.11
environment management. The scheme
provides incentive to undertakings in the
Sector for having acquired ISO certifications.
3.2.5.2 The salient features of the Scheme:
l The Scheme envisages reimburse-
ment of expenses for acquiring
ISO9000/14001(or its equivalent)
certification, to the extent of 75% of
the cost subject to a maximum of
Rs. 75,000/- in total.
l All Micro and Small Scale Enter-
prises having Entrepreneus Memo-
22

randum (EM) Number are eligible to
avail the reimbursement.
l The units can apply for reimburse-
ment under the Scheme only after
obtaining ISO9000/14001/HACCF
(or its equivalent) certification.
l The Scheme is an all India Scheme
administered by MSME-DO, Ministry
of MSME, Govt. of India. The Scheme
has been decentralised to state level
through MSME-DIs w.e.f. 1.4.2007.
l The Scheme provides one time reim-
bursement. The amount of subsidy /
financial support if already received
from the State Govt./ financial insti-
tution shall be adjusted against the
entitlement of reimbursement under
this Scheme.
l The Govt. of India has extended the
Scheme in the XIth. Five Year Plan.
3.2.5.3 Status of Reimbursement under
ISO 9000/14001 Reimbursement
Scheme: Total 15807 number of units
have been reimbursed expenses
involving an amount of Rs.80.30
crore up to 31st December, 2007
since inception of the scheme in
1994.
3.2.6 Micro, Small & Medium Enterprise-
Development Institutes (Msme-
DIs)
3.2.6.1 The Scheme has been in operation
since the 6th Five Year Plan. Since 1983-
84, 12 new Branch Institutes, mostly in the
backward and hilly areas of the country have
been sanctioned, making a total of 15 such
Institutes under the Scheme.
23
Annual Report 2007-2008
3.2.6.2 The main activities of MSME-DIs
and their Branches are as follows:
l Assistance/Consultancy to prospec-
tive and existing entrepreneurs
l Preparation of State Industrial Pro-
files and District Industrial Potential
Surveys
l Preparation/updation of Project Pro-
files
l Entrepreneurship Development Pro-
grammes
l Motivational Campaigns
l Production Index
l Management Development Pro-
grammes
l Skill Development Programmes
l Energy Conservation
l Pollution Control
l Quality Control & Upgradation
l Export Promotion
l Ancillary Development
l Common Facility Workshop/Lab.
l Preparation of Directory of specific
industries
l Intensive Technical Assistance
l Coordination with DICs
l Linkages with State Government
functionaries
l Market Surveys
l Other Action Plan activities assigned
by the Headquarters
MSME
3.2.7 Modernisation Of Msme Workshops
3.2.7.1 This is an ongoing Plan Scheme with
the allocation of Rs. 500 lakhs during the 10th
Plan for the Workshops attached to MSME DIs/
Br.MSME DIs. Funds are generally provided
to MSME DIs/Br. MSME DIs for replacing their
outdated/out of order machines. Funds are
also being provided for purchase of accessories
and equipments which are required for these
machines for developing Jigs, Fixtures, Dies,
Tools etc. On these machines, training is also
imparted to the workers sponsored by MSE
units and unemployed youths seeking jobs in
MSE units.
3.2.8 Upgradation of Msme Workshops
Into Mini Tool Rooms
3.2.8.1 A Scheme titlid “Upgradation
of MSME-DO Workshops into Mini Tool
Rooms” was approved in 1992-93 envisaging
conversion of a few Workshops into Mini Tool
Rooms from Common Facility Workshops
attached to MSME-DIs/Br.MSME-DIs.
Consequently, hi-tech machines, CAD/CAM
Softwares, CNC machines etc. have been
provided to the selected Workshops like
MSME-DI, Mumbai, Chennai, Bangalore,
Jaipur, Delhi, Kolkata, Kanpur, Ludhiana,
Indore, Patna, Goa, Thrissur, Guwahati,
Jammu, Ranchi, Br. MSME-DI at Mangalore,
Varanasi, and Gwalior etc.
3.2.9 Msme-Ti, Ettamanur
3.2.91 The MSME-TI, Ettamanur, Kerala,
functioning under the Ministry of MSME,
Government of India, is imparting training
to artisans / entrepreneurs of Kerala State
in various technical disciplines and also
inculcating entrepreneurial culture among
them since 1 December, 1999.
24
3.2.9.2 With a view to enhance the self /
paid employability potential for educated
unemployed / underemployed youth and
MSE personnel/artisans, this Institute had
identified certain employment oriented trades
in which it was proposed to impart both
theoretical and practical training in functions
like Information Technology, technical trades
like repairs of Electric Motors / Domestic
Appliances / Screen Printing, Medical Lab.
Technology, Herbal Health Technology. etc.
This Institute is also conducting several EDPs
and MDPs of two month’s duration at regular
intervals on Aluminium Fabrication, Mobile
Phone Servicing, Computer Hardware and
Networking, Auto Cad, Repair & Servicing
TABLE - 3.5: Details of Revenue Earnings and
Persons Trained: MSME-TI; Ettamanur
Year Revenue Earned Persons
Trained
2002-03 Rs. 13,51,549 621
2003-04 Rs. 11,69,363 514
2004-05 Rs. 13,16,641 600
2005-06 Rs. 26,25,371 1062
2006-07 Rs. 23,23,163 769
TOTAL Rs. 87,86,087 3566
of Air Conditioners etc. The revenue earning
of the Institute during the last five years are
given Table 3.5
3.2.9.3 During the current financial year,
this Institute has collected a revenue of
Rs. 2,76,953/- and trained 314 persons upto
the end of November, 2007.
3.2.10 MSME-TI, Tiruvalla
3.2.10.1 The MSME-TI, Tiruvalla functioning
under the Ministry of MSME, Government of
India, was set up in 1994 with the avowed
objective to train unemployed youth of the
 Annual Report 2007-2008

State in various technical disciplines and and calibration facilities to industries in general
also to inculcate an entrepreneurial culture and Micro, Small & Medium Enterprises in
among them. Since the inception, this particular, for raw materials, semi-finished
Institute has been conducting different types and finished products, manufactured by them.
of skill development training programmes for The Centers are equipped with the state-of-
candidates drawn from all over the State like the-art indigenous and imported equipments
Repair of Household Electrical Appliances, in the disciplines of Chemical, Mechanical,
cnc Programming, Electric Motor Winding, Metallurgical and Electrical Engineering to
TABLE - 3.6: Details of Revenue Earnings and
undertake Performance Test, Type Test and
Persons Trained: MSME-TI; Tiruvalla Acceptance Test of semi-finished, finished
Year Revenue Earned Persons
products etc. The Centres also undertake
Trained calibration works for Measuring Instruments
2002-03 Rs. 13,33,875 855 and Equipments conforming to international
2003-04 Rs. 14,72,875 764 standards. These Centres are accredited by
2004-05 Rs. 16,22,500 874 internationally recognized NationalAccreditation
2005-06 Rs. 19,94,975 970 Board of Testing & Calibration Laboratories
2006-07 Rs. 12,72,460 806 (NABL) Certification as per ISO(17025).
TOTAL Rs. 76,96,685 4269
3.2.11.2 Besides, these Testing Centres
Fire Fighting & Safty Management, Computer
also render technical support to Micro, Small
Application, Computer Hardware Servicing,
& Medium Enterprises in upgrading the
Mobile Phone Servicing, Aluminium quality of products manufactured by them.
Fabrication, etc. The revenue earning of the They also provide consultancy services
Institute during the last five years are given in testing and quality management and in-
in Table 3.6 process quality system to MSMEs. Further,
in order to cope up with the emerging trends
3.2.10.2 During the current financial year, in manpower requirements in the industry
this Institute has collected a revenue of Rs. , these Testing Centres impart training in
4,000/- and trained 65 persons upto the end testing products to young personnel for
of November, 2007. gainful employment in Quality Control
Laboratories of various industries. Apart from
3.2.11 Msme Testing Centres, this, they also conduct training courses for
Msme Testing Stations and the benefit of workers sponsored by MSMEs
Testing Centres by Industries on product specific testing and quality control
Associations so that their units may be in a position to set
up their in-house testing facilities. MSME
a) Msme Testing Centres TCs also organize awareness programmes
on total quality for household electrical
3.2.11.1 MSME-DO is operating four MSME appliances and allied appliances and ISO-
Testing Centres(formerly RTCs) located at 9000 Quality Management Systems for
New Delhi, Mumbai, Chennai and Kolkata. the benefit of micro, small and medium
The MSME Testing Centres provide testing scale entrepreneurs. MSME TCs are also

25
MSME

providing the testing facilities to Bureau b) Msme Testing Stations

of Indian Standards for the products
manufactured by various industries and also
assist various Government Departments
in testing the materials procured by them,
apart from providing Testing & Calibration
facilities directly to MSMEs and organized
sector units.
3.2.11.5 In order to provide testing facilities
in the areas with cluster of industries and some
strategic areas, the Government of India have
set up MSME Testing Stations (formerly FTSs)
at Jaipur, Bhopal, Kolhapur, Hyderabad,
Bangalore, Pondicherry and Ettumanur

TABLE - 3.7: Performance of the MSME Testing Centres

Year Revenue Recurring %age of No.of Jobs No.of Tests

Earned Expenditure Revenue/ Completed Performed
(Rs.lakhs) (Rs.lakhs) Expenditure
(self-
sufficiency
level)
2003-04 268.50 343.18 75.32 12409 139569
2004-05 259.74 267.89 96.95 10872 136362
2005-06 247.60 393.50 62.92 11616 134454
2006-07 320.33 405.69 78.96 12459 154891
2007-08 211.19 296.28 71.28 7876 110025
(up to 30th Nov’07)
Dec’07 to March’08 105.60 148.14 71.28 3938 55013
(Anticipated)

3.2.11.3 During the 10th Plan Period, a
sum of Rs.9.60 crore was provided for
modernization of these MSME Testing
Centres. However, Rs.8.32 crore had
been utilized out of the allocated
funds.
(formerly at Chenganacherry ). These Testing
Stations extend facilities for testing of various
products viz; chemicals, dye-stuffs, lamps,
rubber products, castings and forgings, paints
and varnishes, domestic electrical appliances,
general engineering etc.

3.2.11.6 The presence of MSME TSs in the

During the 11th Five Year Plan, an
amount of Rs.29 crores has been proposed
for modernization of MSME Testing
Centres.
3.2.11.4 The performance of MSME TCs
during last five years and the percentage of
self-sufficiency (of these Centres) are given
in Table 3.7
field has enabled the cluster of industries in
the micro and small scale sector to utilize the
testing facilities. These Testing Stations, in fact,
act as extension of the MSME TCs thereby
serving the needs of the industries situated in
far-flung areas. The MSME Testing Stations
are regularly modernizing/upgrading their
facilities to cater to the needs of industries in
general and Micro, Small & Medium sector in
particular, situated in their respective areas.

26
 Annual Report 2007-2008

3.2.11.7 The budget provision is made for
meeting both the recurring and non-recurring
expenditure of MSME Testing Stations. The
performance of MSME Testing Stations in
terms of number of jobs executed, tests
conducted and the revenue earning is
monitored regularly.
day to day functioning and modernization of
MSME Testing Stations.
3.2.11.9 The performance of MSME
TSs during last five years and the
percentage of self-sufficiency (of
these Stations) are given in Table 3.8.

TABLE - 3.8: Performance of the MSME Testing Stations

Year Revenue Recurring %age of No. of Jobs No.of Tests

Earned Expenditure Revenue/ Completed Performed
(Rs. lakhs) (Rs. lakhs) Expenditure
(self-
sufficiency
level)

2002-03 50.38 81.36 61.79 8004 34508

2003-04 61.62 78.35 78.65 11035 43306

2004-05 82.69 87.79 94.42 15150 57269

2005-06 85.25 96.59 88.26 16378 57963

2006-07 96.26 104.54 92.08 16248 56801

2007-08 69.46 77.81 89.27 8882 37649

(up to 30th)
Nov’ 07

Dec’07 to 34.73 38.90 89.27 4441 18825

March’ 08
(Anticipated)

3.2.11.8 During the 10th Plan Period, a c) Setting Up of Testing Centres By

sum of Rs. 5.80 crore was provided for
modernization of MSME Testing Stations and
a sum of Rs. 4.51 crores had been utilized.
Industries Associations & Modernisation/
Expansion of Quality Marking Centres Under
the Aegis of State Governments

3.2.11.10 Under the plan scheme,

During the 11th Plan, an amount of Government of India provides one time
Rs. 26.60 crores has been proposed for capital grant-in-aid equal to 50% of the

27
MSME

cost of testing equipment and machinery 3.2.11.13 During the 10th Plan Period, an
(restricted to Rs. 50 lakhs) to the Industries’ outlay of Rs. 4.80 crores was provided under
Associations, which wish to set up and the Scheme and the amount disbursed was
operate testing laboratories of international Rs.0.72 crores. 3 Testing Centres have
standards and also for modernization/ been provided central grant-in-aid during
expansion of existing Quality Marking the period, out of these, 1 Testing Centre
Centres of State Governments and their was set up by Industries Associations and 2
autonomous bodies. The rest of the Quality Marking Centres were set up under
expenditure of testing equipment and the aegis of different State Governments.
machines is borne by the Industries The States which availed benefits of the
Association/State Governments. Scheme so far are Tamil Nadu, Karnataka
and Kerala.
3.2.11.11 The objective of the scheme was
to promote setting up of Testing Centres 3.2.11.14 In view of the lukewarm response,
to offer facilities mainly to Industrial units received during the past years, the Scheme
including MSEs units located in the State for has been discontinued w.e.f. 1st April 2007.
testing quality of raw materials, components However budget provision of an amount of
and the end products as per the relevant Rs. 4.40 crores has been proposed for the
standards/specifications. 11th Five Year Plan for grant-in-aid for those
Testing Centres by Industries’ Associations
3.2.11.12 The Scheme covered the Testing which have already been approved by 31st
Laboratories established by Industries March 2007.
Associations including Chambers of
Commerce, Industrial Co-operatives 3.2.11.15 The year-wise expenditure
registered under the Societies Registration incurred so far and the number of Testing
Act or under any statutory Act. It also Centres assisted during the Xth plan are
covered expansion/modernization of the furnished in Table 3.9
existing Centers under the aegis of State
Governments and State Government funded
3.2.12 Training Programmes (Imcs/
autonomous bodies.
Edps/Esdps/Mdps and Bsdps)
TABLE - 3.9: Testing Centres by I As
conducted By Msme-dis
Sl . Year Expenditure No. of
No. incurred Centres
(Rs. in assisted 3.2.12.1 MSME-DIs, organize a number of
crore) training programmes to train potential first
1. 2002-03 0.095 1 generation entrepreneurs for upgradation
2. 2003-04 Nil - of their techno/managerial knowledge and
3. 2004-05 0.41 1 skills with ultimate object to start MSEs in
4. 2005-06 Nil - various fields.
5. 2006-07 0.218 2
6 2007-08 Nil -
The training programmes
(up to 30th)
Nov’07 conducted are:

28

Ø Industrial Motivation Campaigns
(IMCs)
Ø Entrepreneurship Development Pro-
grammes (EDPs)
Ø Entrepreneurship Skill Development
Programmes (ESDPs) Programmes (Edps)
Ø Management Development Pro-
grammes (MDPs)
Ø Business Skill Development Pro-
grammes (BSDPs)
a) Industrial Motivation Campaigns various aspects that are necessary to be
(Imcs)
3.2.12.2 Industrial Motivation Campaigns
( of duration of 1 day or 2 days) are organized
to identify and motivate traditional / non-
traditional entrepreneurs having potential for
setting up MSEs so as to lead them towards
self-employment. Emphasis is being given
on organizing the maximum number of
programmes in rural areas particularly for
weaker sections of the society.
3.2.12.3 During the year 2007-08, 925 IMCs
will be conducted for motivating about 1 lakh
persons towards self-employment. 400
programmes have already been conducted
29
Annual Report 2007-2008
for motivating 42000 persons upto December
2007. The remaining programmes are under
progress and are likely to be completed by
the end of the financial year.
b) Entrepreneurship Development
3.2.12.4 Entrepreneurship Development
Programmes are being organized as a
regular training activity to cultivate the latent
qualities of youth by enlightening them on
considered while setting up Micro, Small &
Medium Enterprises. These programmes
are conducted generally for technicians /
artisans for motivating them towards self-
employment. The course contents of the
Entrepreneurship Development Programmes
are so designed as to provide useful
information on product/process design,
manufacturing practices involved, testing
and quality control, selection and usage of
appropriate machinery and equipments,
project profile preparation, marketing
avenues/techniques, product/service pricing,
export opportunities, infrastructure facilities
available, support and financial institutions,
cash flow, etc. There is no fees for SC /
ST, Women and Physically Handicapped
participants. A stipend of Rs. 500/- per
participant per month is provided to SC /
ST, Women and Physically Handicapped
participants under Promotional Package.
Emphasis is being given on organizing the
maximum number of programmes in rural
areas particularly for weaker sections of the
society.
3.2.12.5 During the year 2007-08, 244
EDPs will be conducted for providing training
to about 6100 persons. Out of these, 51
MSME
programmes for weaker sections of the
society (SC/ST/Women/PH), 53 programmes
for Minorities and 140 programmes in ITIs,
Engg. Colleges, Polytechnics etc. will be
organized for providing training to 1275,
1325 and 3500 persons respectively. Out of
244 EDPs,133 programmes have already
been conducted for providing training to
3100 persons upto December 2007. The
remaining programmes are under progress
and are likely to be completed by the end of
the financial year.
c) Entrepreneurship Skill Development High Fashion Garments, Hosiery, Food &
Programmes (Esdps)
3.2.12.6 Comprehensive training
programmes are organized to upgrade existing
skills and to create new skills among workers
and technicians of MSEs by organising various
technical training courses for them. The basic
objective has been to provide training to
skilled workers engaged in MSEs and to equip
them with better and improved technological
skills of production . Emphasis is being
given on organizing the maximum number
of programmes in rural areas particularly for
weaker sections of the society.
3.2.12.7 Specific tailor made programmes
are organized for the skill development
30
of socially disadvantaged groups (OBC,
SC,ST, Minorities and Women ) in various
regions of the country , including the less
developed areas. The target groups for
these programmes are SC,ST, OBC,Women,
Minorities and other weaker sections.
3.2.12.8 These programmes are also
called “Out-reach Programmes” as they are
conducted in rural / less developed areas.
3.2.12.9 Programmes so far organized,
inter-alia covered Herbal Cosmetics,
Fruit Processing Industries, Information
Technology, Hardware Maintenance,
Soap and Detergents, Leather Products/
Novelties, Servicing of Household Electrical
Appliances and Electronic Gadgets, Gem
Cutting & Polishing, Engineering Plastics
, Tour Operators, Mobile Repairing,
Beautician,CAD/CAM, etc
3.2.12.10 There is no fees for SC / ST,
Women and Physically Handicapped
participants. A stipend of Rs. 500/- per
participant per month is provided to SC /
ST, Women and Physically Handicapped
participants under Promotional Package.
3.2.12.11 During the year 2007-08, 970
ESDPs will be conducted for providing
training to about 24250 persons. Out
of these, 135 programmes for weaker
sections of the society (SC/ST/Women/
PH), 92 programmes for Minorities and 743
programmes for educated un-employed youth
will be organized for providing training to
3375, 2300 and 18575 persons respectively.
Out of 970 ESD Ps,344 programmes have
already been conducted for providing training

to 7700 persons upto December 2007. The
remaining programmes are under progress
and are likely to be completed by the end of
the financial year.
d) Management Development Materials
Programmes (MDPs)
3.2.12.12 Organizing Management
Development Training Programmes
constitutes an integral part of the activities
besides counseling and consultancy
services.
3.2.12.13 The basic objective of imparting
training in management subjects is to improve
decision-making capabilities resulting
in higher productivity and profitability of
existing and potential entrepreneurs and
developing new enterprises. Inputs on a
variety of topics of managerial functions are
provided to the participants in short duration
training sessions, by experts, which aim at
dissemination of knowledge of scientific/
modern management trends/practices.
3.2.12.14 Management Training Courses
in various areas of industrial management
initiatives are also devised for owner-cum-
manager and supervisory level personnel
of MSEs. These training programmes are
continuously re-structured in their contents
keeping in view the demands of the area
and the local requirements of the industries.
The nature of target groups and their
profile determine the modification in course
content in order to make them suitable
for contemporary managerial trends and
practices which may be used by MSEs
executives for attaining desired strength of
managerial action. The subjects covered
31
Annual Report 2007-2008
under these training programmes pertain to
different aspects of management covering
Industrial Management, Human Resource
Management, Marketing Management,
Export Management & Documentation,
Management, Financial
Management, Information Technology &
Exports, ISO 9000, WTO, IPRs etc.
3.2.12.15 During the year 2007-08, 280
MDPs will be conducted for providing
training to about 7000 persons. Out of
280 MDPs,190 programmes have already
been conducted for providing training to
4400 persons upto December 2007. The
remaining programmes are under progress
and are likely to be completed by the end of
the financial year.
e) Business Skill Development
Programmes (BSDPs)
3.2.12.16 A tailor-made course namely
Business Skill Development Programme
(BSDP) has been introduced for new
entrepreneurs through Select Business
Schools/Technical Institutions etc. The
programme has been devised to encourage
educated unemployed youth basically from
Business Schools/Technical Institutes to start
self-employment ventures of micro or small
enterprises and thus become instrumental in
employment generation.
3.2.12.17 During the year 2007-08, 65
BSDPs will be organised for providing
training to 1625 persons. Out of these, 10
BSDPs will be conducted exclusively for
women for providing training to 250 women.
A total of, 35 programmes have already
been conducted for providing training to
MSME
850 persons upto December 2007. The
remaining programmes are under progress
and are likely to be completed by the end of
the financial year.
3.2.13 The Wto Cell
3.2.13.1 A separate WTO Cell in the Office
of the Development Commissioner (Small
Scale Industries) now known as MSME-
DO was set up during 1999 to co-ordinate
the latest developments in regard to World
Trade Organization. The objectives of the
Cell inter-alia include (a) to keep abreast
with the latest developments in WTO,
(b) to disseminate information to MSE
Associations and other stakeholders about
the various aspects of WTO and their likely
implications for micro and small enterprises,
(c) to coordinate with other Ministries and
Departments of Govt. of India, (d) to prepare
policy for MSMEs in conformity with the
provisions of WTO Agreements and (e) to
organize WTO Workshops/ Seminars for
creating awareness, capacity building and
conducting sectoral studies.
3.2.13.2 With a view to create awareness
among the MSMEs, MSME Associations and
other stakeholders about WTO Agreements
and their implication for them, The Ministry
is organizing Sensitization Workshops/
Seminars all over the country. Since the
year 2000, 49 such Workshops/Seminars
have been organized. As part of this
endeavor, eight awareness programmes on
various aspects of WTO are proposed to be
organized during 2007-08.
3.2.13.3 The Cell is maintaining a close
liaison with other concerned Ministries and
32
Departments like Ministry of Commerce &
Industry, Directorate General of Foreign
Trade, Directorate General of Anti-dumping
& Allied Duties and DG (Safeguard), so as
to keep itself updated with regard to WTO
Agreements for protecting the interests of
MSMEs.
3.2.13.4 As part of the Inter-Ministerial
consultation process, inputs to Ministry of
Commerce and Industry, were provided
in regard to negotiations on various
trade agreements for exchange of tariff
concessions. These Agreements inter-
alia included SAARC Preferential Trading
Arrangement (SAPTA), Agreement on
Economic Cooperation between India
& ASEAN countries, India - Singapore
Comprehensive Economic Cooperation
Agreement (CECA), Preferential Trade
Agreement between India and MERCOSUR,
Agreement on SAFTA and its Implementation
(TLP), Preferential Trade Agreement with
Chile, Free Trade Agreement (FTA) with
GULF Co-operation Council (GCC), PTA
between India & Mauritius under Framework
of Comprehensive Economic Partnership
Agreement, India-Thailand FTA, BIMSTEC-
FTA, Negotiations under Global System
of Trade Preferences (GSTP) and on
Environmental Goods, Bilateral trade with
Bangladesh, sectoral proposals for tariff
liberalization under NAMA Negotiations,
India-Korea CEPA Negotiations, FTA with
Israel, India-Japan CEPA Negotiations,
Agreement with South African Custom
Union (SACU) and India-EU bilateral
relations and trade negotiations Unilateral
Tariff Preference Scheme for the Least
Developed Countries etc.
 Annual Report 2007-2008

The Hon’ble Prime Minister, Dr. Manmohan Singh lighting the lamp at National Awards Function
alongwith Union Minister for MSME, Shri Mahabir Prasad.

3.2.14 National Award for Research &
Development Efforts in Small
Scale Industries from West Bengal. The awards were given
3.2.14.1 The objective of the Scheme is
to encourage in-house R&D efforts and to
promote this spirit in the larger interest of
qualitative development in MSEs. Under this
Scheme, First, Second and Third Awards
are conferred (once in a calendar year) upon
deserving registered small scale industries
(now MSEs) which may be in continuous
production for at least 4 years before the
year of Award. The First, Second and Third
Awards carry a Cash Prize of Rs.1,00,000/-,
Rs.75,000/- and Rs.50,000/- respectively
besides a Certificate and a Trophy.
3.2.14.2 For the year 2006, the First and
Second Awards have been conferred upon
two Entrepreneurs from Andhra Pradesh
and the Third Award upon an Entrepreneur
away by the Hon’ble Prime Minister of India
in a public function held in Vigyan Bhavan.
3.2.15 National Award for Small Scale
Entrepreneurs
3.2.15.1 The Scheme of giving away
National Award for Small Scale Entrepreneurs
for displaying exceptional entrepreneurial
skills and traits, was instituted by the
Government of India in the year 1983. Under
the Scheme, three National Awards (First,
Second and Third) and Special Recognition
Awards for an entrepreneur exhibiting
outstanding performance from each of the
participating States/UTs and Special Awards

33
MSME
at par with the First National Award to honour
an outstanding woman entrepreneur and an
outstanding entrepreneur from SC/ST are
given. Besides a Trophy and a Certificate,
the First Award carries a cash prize of
Rs.1,00,000/-, the Second and the third
Awards carry cash prizes of Rs.75,000/-
and 50,000/- respectively. The Special
Recognition Awards carry a cash prize of
Rs.50,000/-, a Trophy and a Certificate.
3.2.15.2 The First National Award for Small
Scale Entrepreneurs for 2006 has been
bagged by an entrepreneur from Andhra
Pradesh. The Second & Third Awards have
been awarded to entrepreneurs from West
Bengal and Andhra Pradesh respectively.
The Special Award for Woman Entrepreneur
has been won by an entrepreneur from
Andhra Pradesh and Rajasthan and the
Special Award for SC/ST Entrepreneur
went to a women entrepreneur from West
Bengal. Besides, an entrepreneur each
from 15 applicant States have been given
Special Recognition Awards. The awards
were given away by the Hon’ble Prime
Minister of India in a public function held in
Vigyan Bhavan.
3.2.16 National Award for Quality Prod-
ucts in Small Scale Industries
3.2.16.1 Under this Scheme, every year
certain products are selected for conferring the
Award. One National Award is given for each
category of the selected products. The Award
carries a trophy, a certificate and a cash prize
of Rs.1,00,000/-.
3.2.16.2 The National Award for
Quality Product 2006 has been given
to 18 entrepreneurs for 18 products viz;
34
(1) Ladies Footwear (2) Industrial Leather
Hand Gloves (3) Cosmetics, Toiletries,
Essential Oil and Perfumers Products
(4) Extruded & Thermoformed Plastic
Products (5) Scientific Glass Apparatus and
Equipments (6) Refractory (7) Soya Products
(8) Bread, Buns & other Bakery Products (9)
Sanitary Fittings (10) Machine Tools (11) Air
Conditioners (12) Stainless Steel Utensils
(13)Electric Fans (14) Electric Wet Grinder
(15) Inverter (16) Home Furnishing/Home
Textiles (17) Sports-wear and (18) Medical
Implant Products. The Awards were given
away by the Hon’ble Prime Minister of India
in a public function held in Vigyan Bhavan.
3.2.17 Sub-Contracting Exchange for
Ancillary Development
3.2.17.1 The main objective of the “Sub-
contracting Exchange Scheme” is to store
such data as to arrange match-making
through an appropriate software between
a buyer and seller that may result in
increased business opportunities. 35 Sub-
contracting Exchanges have been set up
in MSME Development Institutes/Branch
MSME Development Institutes under MSME
Development Organisation (MSME DO)
and 67 Sub-contracting Exchanges have
been sanctioned which have been set up
by Industries Associations/NGOs in various
parts of the country up to 30.11.07. Four
more Sub-contracting Exchanges which were
already approved in the 2006-07 are likely to
be set up during the remaining months of the
financial year 2007-08.
3.2.17.2 One more on going component
under the Scheme i.e. Vendor Development
Programme-cum-Domestic Fair (VDP cum
DF) both at National and State Level are also
conducted by MSME Development Institutes.

These VDP-cum-DF provide a common
platform for large scale enterprises i.e.
purchasing organizations and Micro, Small &
Medium Enterprises as sellers, to interact with
each other and establish long term linkages.
3.2.17.3 About 35-40 VDP-cum-DF are
conducted in a year of which 8-10 are at
National level. 34 Vendor Development
Programmes were conducted during the
financial year 2006-07. 12 VDP-cum-
DF have been conducted by the MSME
Development Institutes in different parts of
the country till 30.11.2007 and 29 VDP-cum-
DF are likely to be orgenised in the remaining
months of the financial year 2007-08.
3.2.17.4 Now the Scheme of “ Sub-
Contracting Exchange for Ancillary
Development” has been discontinued from
01.04.2007 .
3.2.18 Scheme for Capacity Building,
Strengthening of Database and
Advocacy by Industry/Enter-
prise Associations
3.2.18.1 A reliable database is the key
input in any policy decision-making process.
This is more so for the micro and small
enterprise (MSE) in view of its large size
and wide disparity among the enterprises
within the sector. The MSME-DO conducts
periodic Census for strengthening/updating
the database on MSE sector. So far, it has
conducted three Censuses in the year
1971-72, 1992-93 and 2001-02. However,
the limiting factor is the long gap between
two Censuses and the high cost involved
in conducting Census. In the intermittent
period, two sources are used for obtaining
information/data on the status of the
35
Annual Report 2007-2008
MSE sector. First is the District Industries
Centres (DICs) of the State Governments,
which furnish the updated information on
the number of registered enterprises. But
registered enterprises constitute only a
small percentage of the total number of
enterprises, thereby leaving a huge data
gap. The second important source is the
MSE Associations, which are spread across
the country. The present database with
MSME-DO suggests the number of such
Associations in the vicinity of 350, including
both National and State level, and are mainly
sector/product specific. MSME-DO has been
using the services of these Associations
from time to time, especially with regard to
data on number of unregistered enterprises,
production, exports, etc. relating to specific
product groups like pump industry, drugs
and pharmaceuticals, etc. However, limited
availability of funds is the main constraint
faced by these Associations in building a
reliable database.
3.2.18.2 The Associations of Micro and
Small Enterprises (MSEs) do not have
adequate capacity to collect and interpret data
relating to changes in the market scenario,
owing to the limited availability of funds and
the absence of expertise in the matter. As a
result, their articulation of views on specific
issues concerning their product groups
leaves much to be desired. In spite of the
fact that the Associations of the MSEs have
been made members of the SSI Board and
the members of the Steering Committees of
certain national programmes for development
of some products, their existing weakness
in this regard, prevents them from playing
the expected role effectively. Therefore,
to strengthen their role and increase their
efficiency, it was decided to provide financial
MSME
assistance annually for the secretarial and
advisory/ extension services to selected
National Associations up to a maximum
of Rs. 5 lakh depending upon the size and
reach of the Association. Under the Scheme,
the beneficiary Associations are required to
provide the regular manpower at their own
cost and office space and also make an
equivalent/ matching contribution towards
cost of modernisation of their facilities/
equipment and training of their personnel.
The scope of the Scheme is being further
widened to provide financial assistance
to the MSE Associations for organizing
seminars/ workshops/ symposiums on
issues of relevance to the MSE sector.
3.2.18.3 During 2006-07, 31 MSE
Associations received financial assistance
under the Scheme with total amount
sanctioned standing at Rs. 97 lakh. Out of
this, Rs. 46.62 lakh has been disbursed to
industry associations under the first phase.
3.2.19 Land and Building for Office
Accommodation and Residential
Accommodation in Backward
Areas
a) Construction of Office Accommoda-
tion for Msme-DO Field Offices
3.2.19.1 The Scheme has been in operation
since 1961 with the basic objective of acquiring
sheds/land from State Govts. for construction
of permanent office buildings of field offices
located in various parts of the country. Since
the inception of the Scheme, 90% of the offices
have their own permanent buildings, which were
constructed out of the funds allotted under the
Scheme. The remaining 10% of the buildings
36
will be constructed during 11th Five Year Plan.
Further, under this Scheme, funds are also being
provided for special maintenance/renovation of
the buildings.
b) Construction of Residential
Accommodation for The Officers & Staff of
Msme-DO in NE Region, Hilly Areas, Union
Territories, Backward and Difficult Areas
3.2.19.2 The Scheme was sanctioned during
7th Five Year Plan (1985-86) with the objective
to provide residential accommodation to the
officers and staff of MSME-DO posted in
North Eastern, Hilly Areas etc. where suitable
rented accommodation at reasonable rates is
not available.
3.2.19.3 Since the inception of the Scheme,
residential accommodation at Srinagar,
Guwahati, Aizwal and Port Blair have been
constructed and construction is in progress
at Tura and Tezpur. The construction of
residential quarters at remaining institutes
will be taken up during 11th Five Year Plan.
3.2.20 Public Awareness
3.2.20.1 The Advertising and Publicity
Division of MSME-DO disseminates
information about the Government
policies and programmes, incentives and
facilities and institutional support services
available to MSMEs. It coordinates with the
Directorate of Audio Visual Publicity (DAVP)
and field offices for timely appearance
of advertisements on entrepreneurship
development programmes, skill development
courses, etc., in local language newspapers
in different parts of the country. During the
year under report, 900 advertisements have
been released up to December, 2007.

3.2.20.2 An effective media plan was
prepared for wide publicity of the special events
organised by the Ministry of Micro, Small and
Medium Enterprises. Advertisements for
“MSME Expo – 2007” and National Awards
Function were designed and released in all
leading English/Hindi newspapers for wide
publicity across the country. The Division
also arranged the press conferences, press
meets and coordinated the press coverage
and releases of important events.
a) Laghu Udyog Samachar and
other Publications
3.2.20.3 Laghu Udyog Samachar, a
Quarterly Journal in English and Hindi for
MSMEs is disseminating updated information
for the benefit of the prospective and existing
entrepreneurs. Laghu Udyog Samachar is
an important window in print for the MSMEs,
providing access to the latest information on
a variety of topics. It creates awareness and
disseminates information on policies and
programmes of the Central and the State
Governments, Government of India orders,
circulars, gazette notifications, field activities,
statistical and economic information as well
as articles on various issues pertaining to the
MSMEs.
3.2.20.4 During the year 2007-08, the
following publications were brought out:
l Laghu Udyog Samachar January -
March, 2007 (Bilingual)
l Laghu Udyog Samachar April –
June, 2007 (Bilingual)
l Laghu Udyog Samachar July – Sep-
tember, 2007 (Bilingual)
37
Annual Report 2007-2008
l Laghu Udyog Samachar October -
December, 2007 (Bilingual)
l A Guide to Self- employment (2nd
Edition) (English)
l Eleven Folders/Brochures on dif-
ferent Schemes/ Programmes of
MSME-DO (Hindi)
l SC/ST Sub-Plan (Policies & Pro-
grammes) (Hindi & English)
l Micro and Small Enterprising Clus-
ter Development Guide (English &
Hindi)
l “Inclusive Growth is on the Top of
our Ministry’s Agenda” (English)
l Speeches delivered by Hon’ble
Prime Minister, Minister of MSME
and Secretary (MSME) on the
occasion of National Awards
Function (English & Hindi).
b) Information & Facilitation Counter (Ifc)
3.2.20.5 The Information and Facilitation
Counter (IFC) in MSME-DO is disseminating
updated information for the benefit of the
prospective and existing entrepreneurs.
The IFC provides speedy and easy access
to information to the public on the services
and activities of MSME-DO and related
institutions in the area of MSMEs promotion
and development. Copies of important
brochures, pamphlets, books, etc. are made
available to the entrepreneurs at IFC. Other
activities of IFC include: (i) counseling &
information on how to set up an enterprise
and provide proper guidance, (ii) documents
on technical schemes, project report and
details of various programmes being
implemented by the MSME-DO, (iii) policies
concerning MSMEs and schemes of various
MSME
State Governments for promotion of MSMEs,
(iv) information about filing of Memorandum,
(v) information on the Micro, Small and
Medium Enterprises Development Act, 2006,
(vi) credit policies of the Government, (vi)
statistics related to micro, small and medium
enterprises, (vii) technical and marketing
information concerning MSMEs, (vii) list of
Items reserved for exclusive manufacture in
MSMEs, etc. IFC is the nodal office to accept
the applications under RTI Act and forward
the same to the concerned Division/Section
of the Ministry for further necessary action.
3.2.21 Small Enterprise Information
& Resource Centre Network
(Senet)
3.2.21.1 “Small Enterprise Information &
Resource Centre Network” (SENET), was
launched in April 1997 by the then Office of
the Development Commissioner (SSI) (now
MSME-DO) with the following objectives.
This Scheme was modified subsequently
by enlarging its scope to also include office
automation tools, in its ambit;
l To pioneer, create and promote
web-based database of all relevant
information, data, etc., for the ben-
efit of MSME Sector.
l To facilitate easier on-line access for
information seekers, especially the
Micro, Small & Medium sector, by
networking to the extent possible, all
relevant data from Central & State
Governments, Government agen-
cies engaged directly or indirectly
in the promotion, development, etc
of the MSME sector, national and
state-level Industry Associations,
NGOs, etc.
38
l To establish possible linkages with
existing databases and the end-
entrepreneurs for development and
promotion of the MSME Sector.
l To standardize by introducing auto-
mation tools and related soft-wares
for streamlining data storage activ-
ity in MSME-DO with the objective
of bringing out transparency of rel-
evant real-time data through on-line
access by the public.
l To create and maintain a website for
hosting all relevant data, to the ex-
tent possible, as available within the
MSME-DO.
l To also hyperlink other websites, es-
pecially field formations of MSME-
DO, Autonomous bodies, other gov-
ernment departments, etc in order
to enable one-stop-access for the
information seekers, industry asso-
ciations, individual industries, etc.
3.2.21.2 ACTUAL PERFORMANCE
(Achievements):
(i) Office of the MSME-DO:
l IT-Infrastructure in the Main Centre
has been developed with a dedi-
cated Server Room having several
independent Servers, including two
Web-servers for hosting website of
MSME-DO.
l Three database Servers have been
commissioned along with NIC`s
dedicated leased-line connectivity
with a structured LAN. The NIC`s
leased line had been installed in the
MSME-DO during December 2006.
l An English website was created
and launched in 2000 and main-

tained regularly. It was upgraded
to a knowledge-based database
driven, interactive Portal, which was
launched on 30th August 2001. This
Portal now has more than 8000 pag-
es of static information and is being
updated regularly.
l A Hindi language website has also
been created and is regularly main-
tained through a hyperlink.
l The MSME-DO’s Website has been
restructured in respect to change in
the nomenclature of the Office (af-
ter comming into force of MSMED
Act, 2006) and a new URL www.
dcmsme.gov.in has been created in
NIC Server during 2007.
l All officers of MSME-DO have been
allotted new e-mail address of NIC
for official use during 2007.
l The entire IT-infrastructure has
been protected by installation of a
highly sophisticated Intruder Detec-
tion System (IDS).
l Local Area Networking (LAN) has
been introduced by providing com-
puters to almost all the officers.
l All computers have been networked
with LAN and are also provided with
internet connections.
l Few computers have been provided
with facility to view live parliamen-
tary proceedings.
l On-line data for ISO-9000 Reim-
bursement Scheme is maintained.
l The latest MSMED Act-2006 and oth-
er related matters like notifications,
O.M. etc. have been hosted on the
Website.
39
Annual Report 2007-2008
l All automation applications of NIC
like Document Management Infor-
mation System (DMIS), Personnel
Information System, Payroll, Budget
& Library have been introduced in
MSME-DO during the year 2007.
(ii) Field Offices of MSME-DO
l 20 SENET Centres were initially
given networking equipment for 64
kbps leased-line connection to the
main-center and database building.
10 more MSME DIs were provided
with networking hardware. Almost
all MSME DIs now are networked.
l All 30 MSME DIs have been allot-
ted new e-mail address of NIC for
official use during 2007.
l All MSME DIs have been hyper-
linked to website of MSME-DO. 25
MSME DIs have already hosted
their web site on NIC Server.
l Thirty numbers of ‘Touch Screen Ki-
osks’ have been installed in all the
field offices, namely Micro, Small &
Medium Enterprise- Development
Institutes (MSME DIs) throughout the
country to enable information seek-
ers get any web-based data pertain-
ing to MSME-DO.
3.2.21.3 Future Planned Activities:
The following long-term activities are
planned to be taken up, subject to approval
of the competent authority.:-
l Integrating with National Informatics
Centre (NIC), by using their infra-
structure to the maximum. This will
enable better economics in future-
budgeting for SENET.
MSME
l Introduce any automation tools de-
veloped by National Informatics
Centre (NIC) to bring in an element
of standardization.
l Introduce web-enabled data pertain-
ing to the “The ‘Right to Information
Act (RTI)’ matters.
l Maintenance of Website of MSME-
DO.
3.2.22 Modernisation Of Msme-do
Libraries
3.2.22.1 MSME-DO is maintaining a Library at
its Headquaters at Nirman Bhawan and all its
field institutes in the country. These Libraries
are the valuable source of information and are
maintained with an objective of making available
different technical information required for the
development and promotion of micro and small
enterprises. The officers of the institutes and
the entrepreneurs of the areas use the library
to know about the new developments taking
place in the different segments of industrial
and business environment.
3.2.22.2 The libraries are equipped with
technical books, journals, reports, project
profiles and statistical surveys including
other related government publication etc.
The libraries are needed to be upgraded
regularly with the latest publications and
technical books. MSME-DO libraries are also
being equipped with Computers, Photostat
Machines, Internet connectivity etc.
3.2.23 Participation in Overseas Inter-
national Trade Fairs/ Exhibitions
3.2.23.1 The MSME-DO has decided to
participate in 13 Fairs, as approved by
the Hon’ble Minister (MSME) for the year
40
2007-08. Upto 18 January, 2008, MSME-
DO has participated in nine Fairs: Expo Riva
Schuh, Garda, Italy (June 16 – 19, 2007), 22nd
International Exhibition for Machine Tools &
Machinery, Argentina (July 13 - 18, 2007),
Africa’s Big Seven Exhibition, Johannesburg
(SA) (July 15 – 17, 2007), Fiera-del-Levante,
Bari, Italy, (Sept. 8 – 16, 2007), 7th Tehran
International Fair, Iran (Sept. 8 – 12, 2007),
GDS International Footwear Fair, Dusseldorf,
Germany (Sept. 14 – 16, 2007), South Asian
Country Commodity Fair, Beijing, China (Dec.
28 – 30, 2007), Intermoda – International
Apparel & Textile Fair, Mexico (Jan. 15 – 18,
2008) & Rwanda Fair (Kirgi) held in August
2007. The exhibits of 52 MSEs were displayed
by their representatives under MSME
India stall. The exhibits from 48 MSEs are
expected for display by their representatives
in the remaining four International Trade Fairs
under MSME India stall upto March, 2008.
However, participating units are selected
by MSME-DIs and for their confirmed
participation, they have to pay 40% rental
charges of their booked space (min. 6 sq.mtr.)
and also to carry/ manage their exhibits (to
and fro) including custom clearance etc.
3.2.24 Micro and Small Enter-
prises Cluster Development Pro-
gramme (MSE-CDP)
3.2.24.1 A scheme on Technology
Upgradation and Management Programme
called UPTECH was launched in February,
1998 to address the issues related to
Technology Upgradation and Modernisation
of Small Scale Industries (now MSEs) on
cluster approach basis. It was later renamed
as Small Industry Cluster Development
Programme(SICDP) in the year 2003 while
adopting a holistic approach for cluster

development comprising of diagnostic
study, trust building, exports, marketing, skill
development, technology upgradation of the
enterprises, setting up of common facility
centres, etc. After announcement of the
package for promotion of Micro and Small
Enterprises, the Scheme has again been
renamed as Micro and Small Enterprises
Cluster Development Programme(MSE-
CDP) and the scope of Scheme further
enlarged by inclusion of provisions for
development/ upgradation of physical
infrastructure also.
3.2.24.2 156 clusters covering twenty four
states in the country have so far been
taken up for development under MSE-
CDP including five National Programmes
for development of Toy, Stone , Machine
Tool, Lock and Hand Tool industries being
implemented in collaboration with UNIDO.
Efforts are being made to include the clusters
of all the states under the Programme.
In addition, 172 diagnostic studies were
undertaken to find out the problems of the
clusters so that further intervention can be
initiated for development of these clusters.
3.2.24.3 Two Centres, one at National
Institute for Micro, Small & Medium
Enterprises (NI-MSME), Hyderabad
and the other at International Centre for
Cluster Competitiveness and Growth at the
Entrepreneurship Development Institute
of India (EDII), Gandhinagar, have been
established by the Ministry for imparting
training to Cluster Development Executives
(CDEs), monitoring cluster development
work, assisting formulation of programmes
and policies for cluster development and
guidance.
41
Annual Report 2007-2008
3.2.24.4 During the financial year 2007-08,
sixty six clusters have been approved till 15
December 2007 for development including
setting up of common facility centres in
seven clusters under MSE-CDP. During
remaining period of the year, 58 additional
clusters are likely to be approved. BE for the
Scheme for the year 2007-08 is Rs. 43.0
crore including Rs. 4.3 crore for NE Region.
Till December 15, 2007, an expenditure of
Rs. 5.0 crore approximately has been
incurred. RE for the year has been proposed
at Rs. 9 crore including Rs. 1.0 crore for
NE region, which is likely to be fully utilized
during the current financial year.
3.2.25 Credit Guarantee Fund Scheme
for Micro and Small Enterprises
3.2.25.1 The Government of India launched
the Credit Guarantee Fund Scheme for Micro
and Small Enterprises in August, 2000, with the
objective of making available credit to micro
and small enterprises (MSEs), particularly
micro enterprises, without collateral/ third
party guarantees. The Scheme is being
operated by the Credit Guarantee Fund Trust
for Micro and Small Enterprises (CGTMSE)
set up jointly by the Government of India and
SIDBI.
3.2.25.2 The Scheme covers collateral-free
credit facility (term loan and/ or working capital
including non fund based working capital)
extended by eligible lending institutions to
new and existing micro and small enterprises
up to Rs. 50 lakh per borrowing unit. The
guarantee cover is up to 75% of the credit
sanctioned (80% for loans up to Rs. 5 lakh
provided to micro enterprises, MSEs owned/
operated by women and loans provided
MSME
in the NE region). The Member Lending
Institutions (MLIs) availing guarantee from
the Trust have to pay one time Guarantee
Fee of 1.5% (0.75% for loans provided in the
NE region) and Service Fee of 0.75% per
annum, of the credit sanctioned.
3.2.25.3 The Credit Guarantee Scheme
was initially approved for one year with a
corpus of Rs. 125 crore contributed by the
Government of India and SIDBI in the ratio
of 4:1. Subsequently, Government decided
to continue the scheme beyond one year.
The corpus of CGTMSE has been enhanced
to Rs. 1,584.05 crore with the contribution
of Rs.1, 267.25 crore from the GoI and Rs.
316.80 crore from SIDBI. As announced in
the ‘Package for Promotion of Micro and
Small Enterprises’, the corpus fund will be
raised to Rs.2, 500 crore during the XIth
Plan.
3.2.25.4 As on 30th November, 2007, 62
eligible institutions comprising 28 Public
Sector Banks, 13 Private Sector Banks,
18 Regional Rural Banks (RRBs), National
Small Industries Corporation (NSIC), North
Eastern Development Finance Corporation
(NEDFI) and Small Industries Development
Bank of India (SIDBI) have become Member
Lending Institutions (MLIs) of CGTMSE
under the Credit Guarantee Scheme. 84,507
proposals amounting to Rs. 2,293.96 crore
have been approved for guarantee cover
under the Scheme up to 30th November,
2007.
3.2.26 Micro Finance Programme
3.2.26.1 Since 2003-04, the Ministry has
been operating a Scheme of Micro Finance
42
Programme which has been tied up with
the existing Micro Credit Scheme of SIDBI.
Under the Scheme, the Government of India
provides funds to SIDBI under a ‘Portfolio
Risk Fund’ (PRF), which is used for security
deposit requirement of the loan amount
from the MFIs/NGOs. At present, SIDBI
takes fixed deposit equal to 10% of the loan
amount. Under the PRF, the share of MFIs/
NGOs is 2.5% of the loan amount (i.e. 25%
of security deposit) and balance 7.5% (i.e.
75% of security deposit) is adjusted from the
funds provided by the Government under the
Scheme.
3.2.26.2 As on 30th November, 2007, the
Government has released an amount of Rs.
25 crore towards ‘Portfolio Risk Fund’ (PRF).
Of this, Rs.18.86 crore has been utilized by
SIDBI up to November, 2007. As on 30th
November, 2007, cumulative loan amount
of Rs. 251.52 crore has been provided to
MFIs/NGOs under the Scheme benefiting
approximately 5.09 lakh persons. Of this,
more than 90% are estimated to be women
beneficiaries.
3.2.26.3 While the funds under PRF are to be
utilized for extending loans in all States/UTs,
the focus has been to cover maximum loans
from the underserved States, particularly the
North Eastern region.
3.2.27 SSI-MDA Scheme
3.2.27.1 As per modified guidelines,
participating MSEs in International Trade
Fair/ Exhibition may get total subsidy upto
Rs. 1.25 lakhs per unit (Rs. 1.5 lakh in case
of micro manufacturing enterprise) once
in a year towards subsidy on space rent,

shipping cost & air fare. 90 participating
MSEs (in 2006-07 & upto Sept. 2007 during
2007-08) were reimbursed subsidy upto
18 January, 2008 and 50 MSEs are likely
to get subsidy for their participation upto
March, 2008. Rs. 10.08 lakhs has been
reimbursed to 58 MSEs for adoption of
Bar Code Certification obtained from GS1
India as one-time registration fee and Rs.
67,500/- to 18 MSEs as subsidy on annual
recurring fee also. It is expected that about
42 SMEs will avail subsidy for adoption of
Bar Code upto March, 2008. Five one-
day Seminars/ Sensitization Programmes
on Bar Code have been organized by 05
MSME-DIs. 211 MSEs have participated in
these programmes. 12 one-day Seminar/
Sensitization Programmes will be organized
by concerned Director, MSME-DIs upto
March, 2008.
3.2.28 Intellectual Property Rights (IPRs)
3.2.28.1 IPR protection and management of
rapid up scaling through infusion of technology
is important for the development of small
enterprises in these areas. With the onset
of the trade related aspects of Intellectual
Property Rights (TRIPS) agreement under
WTO and the consequent changes made by
various countries in their IPR laws, including
India, the issues of IPR have gained special
importance in the Small Scale Industry (now
MSE) sector. It was noticed that changes
of far reaching consequences were being
effected in the business landscape without
the sector being aware of it. It was also felt
that IPRs require understanding and attention
by the industry. To meet this objective, the
IPR Cell was created in MSME-DO in the
year 2001-02 for generating awareness
amongst the enterprises on IPR related
43
Annual Report 2007-2008
issues. The small scale entrepreneurs are
being sensitised to the need for protection
and methodology to be adopted for IPR
management through not only diffusion
and upgradation of technology, but also
through employing existing IPR resources
for the purpose. Till date, more than 90 such
programmes have been organised through
MSME-DIs all over the country. With the
initiatives of MSME-DO, Kulu Shawls (Kulu)
and Wet Grinder (Coimbatore) have been
registered under Geographical Indications
(GI) Act and efforts are being made to assist
other group of industries/clusters to register
under G.I. Act.
3.2.28.2 Under the National Manufacturing
Competitive Programme (NMCP) drawn by
the National Manufacturing Competitiveness
Council (NMCC), Building Awareness on
Intellectual Property Rights for the MSME
is one of the 9 schemes drawn under the
NMCP. The IPR Cell in MSME-DO has
been entrusted with the responsibility of
implementation of this scheme. The objective
of NMCP is to revive the manufacturing
sector, particularly the MSMEs, and to
enable them to adjust to the competitive
pressures caused by liberalization and
modernization of tariff rates. The objectives
of the interventions proposed under IPRs
are mainly concerned with the creation of
IPRs awareness to enable MSMEs to protect
their ideas/strategies, utilization of IPR tools
by MSMEs for technology upgradation and
enhancing competitiveness and ensuring
access to technical facilities and expertise for
value addition. The implementation of this
scheme will be in Public Private Partnership
(PPP) mode with the active participation
of National/International Agencies and
MSME
Departments looking after the IPRs issues.
The scheme has been recommended by
the EFC meeting held on 15-11-2007 under
the Chairmanship of the Secretary (MSME).
The Hon’ble Minister has also approved the
scheme. The guidelines for implementation
of this scheme are under preparation. The
Seheme will be implemented after the
necessary concurrence of the competent
authority.
3.2.29 Scheme on “Collection Of Sta-
tistics of MSEs”
3.2.29.1 Introduction: Statistics and Data
Bank Division of MSME-DO collects, compiles
and disseminates statistical information on
various economic parameters like number of
MSME units, employment and production in
the small scale (now MS) sector under the
centrally sponsored scheme of “Collection
of Statistics on SSIs”. The data/information
helps in policy formulation/ implementation.
3.2.29.2 The Scheme was started during
Fifth Five Year Plan period in 1975 with the
objective to collect, compile and disseminate
statistical data/information on SSI sector.
Conduct of periodic census for the SSI
sector, sample survey, and collection of
Index of Industrial Production (IIP) data and
updation of frame, are covered under the
Scheme.
3.2.29.3 The Scheme is implemented
through State Directorates of Industries
(SDIs) and their respective District Industries
Centres (DICs). Under the scheme, 538 posts
were sanctioned on ad-hoc basis, which are
continuing on a year-to-year basis. Of these,
187 posts, which could not be filled up by the
44
State Directorates of Industries (SDIs) and
were lying vacant for more than one year,
have been abolished and currently, 351
persons are working in various States/ UTs
under the Scheme.
3.2.29.4 During the 8th Plan (1992-1997),
a component of computerization of District
Industries Centres (DICs) was added under
the Scheme to automate the functions of DICs
for better utilization of staff, decentralized
data analysis and dissemination and
expeditious flow of data through computer
communication network. Thereafter, 138
DICs and 25 State/UT Directorates of
Industries were computerized through
National Informatics Centre (NIC).
3.2.29.5 The coverage of the Scheme has
been extended to collect data on the Micro,
Small and Medium Enterprises since 2nd
October 2006 (Subsequent to coming into
effect of the MSMED Act 2006). A decision
has also been taken to conduct a new
census for the MSMEs.
3.2.29.6 The Scheme is primarily concerned
with the following:
l Computation of Index of Industrial
Production for the MSME sector for
estimating production trends in the
MSME sector.
l Providing monthly production data
to Central Statistical Organisation
(CSO) pertaining to small scale sec-
tor for compilation of the Index of In-
dustrial Production (IIP) brought out
by CSO.
l Estimation of information on number
of un-registered units.
 Annual Report 2007-2008

l Estimation of production and em- item basket has 465 items grouped
ployment for both registered & un- into 29 major industry groups as
registered units. compared to 356 items in the earlier
basket.
l Updation of frame.
l The revised series has 126 products
l Conducting census and sample sur- in common with the old basket (i.e.
vey/diagnostic survey, from time to 1970 base basket).
time.
l The revised Series has followed
3.2.29.7 Performance under the Scheme the National Industrial Classifica-
during 2006-07 tion (NIC 1998) and ASICC 2000
(A Standard Industrial Commodity
l Collection/collation of data for com- Classification) instead of NIC-1987.
pilation of IIP for MSE sector (with
l The revised IIP is compiled quarterly
base year 1970).
and will be released with a time lag
l Updation in the base year for IIP for of about six weeks from the refer-
SSI from 1970 to 2001-02. ence quarter.

l Data collection on 18 reserved items 3.2.29.10 Based on the data received from
for inclusion in the general index of the sampled units, the quarterly index with
CSO the base year 2001-02 for the period April
2002 to March 2006 has been compiled. The
l Analysis of Registration Data. growth rates of MSE sector for the year 2002-
l Preparatory work concerning the 4th 03, 2003-04, 2004-05 , 2005-06 and 2006-
Census of MSMEs. 07 estimated on the basis of the new series
of IIP vis-à-vis old series of IIP and with total
3.2.29.8 The Index of Industrial Production manufacturing sector are given in Table 3.10
(IIP) for the MSE sector had 1970 as the base
year. It was considered necessary to update TABLE - 3.10: Growth Rates: MSE and
the base year to reflect the changing MSE Manufacturing Sector
(erstwhile SSI) sector. Accordingly based Year Growth Growth Growth
upon the data of the Third All India Census rates of rates rates of
on the sector, a new IIP with new item basket MSE with of MSE Manufacturing
and weighting diagram with 2001-02 as the 1970 base with Sector with
base year, has been compiled. The item IIP 2001-02 base year
basket in the updated index is fixed at 465 base 1993-94
items and 12303 units. IIP
2002-03 7.68 % 8.68 % 6.0
2003-04 8.59 % 9.64 % 7.4
3.2.29.9 Following are the salient features of 2004-05 9.96 % 10.88 % 9.2
the new IIP with base year as 2001-02: 2005-06 10.40 % 12.32 % 9.1
2006-07 abandoned 12.60% 12.5 #
l The revised Index of Industrial Pro- *
duction (IIP) is at All India level. * Based on the index of first three quarters i.e. April-
December, 2006.
l To have wider coverage, the revised # Source: http://mospi.nic.in/iip_table3.htm

45
MSME

3.2.29.11 It may be seen that the overall 3.3 Performance Of Mses

industrial growth rate of the Small Scale
Industries (MSE) sector in terms of Index of
Industrial Production (IIP) (Base: 2001-02=100)
rose to 12.60% during the year 2006-07 as
compared to 12.32% during the year 2005-
06. The MSE sector has also consistently
registered a higher growth rate as compared
to the overall manufacturing sector.
3.3.1 MSME-DO provides estimates in
respect of various performance parameters
relating to the growth of MSME Sector.
The table showing the time series data
on various economic parameters is
given below.

TABLE- 3.11: MSEs Performance: Units, Investment, Production, Employment & Exports

Sl. Year Total SSI Fixed Production( Rs. crore) Employment Exports
No. units (lakh Investment Current Constant (lakh persons) (Rs.
numbers) (Rs. Crore) Prices Prices crore)
(1993-94)
1 1990-91 67.87 93555 78802 84728 158.34 9664
2 1991-92 70.63 100351 80615 87355 165.99 13883
(4.07)* (7.26) (2.30) (3.1) (4.83) (43.66)
3 1992-93 73.51 109623 84413 92246 174.84 17784
(4.07) (9.24) (4.71) (5.6) (5.33) (28.10)
4 1993-94 76.49 115795 98796 98796 182.64 25307
(4.07) (5.63) (17.04) (7.1) (4.46) (42.30)
5 1994-95 79.60 123790 122154 108774 191.40 29068
(4.07) (6.9) (23.64) (10.1) (4.79) (14.86)
6 1995-96 82.84 125750 147712 121175 197.93 36470
(4.07) (1.58) (20.92) (11.40) (3.42) (25.46)
7 1996-97 86.21 130560 167805 134892 205.86 39248
(4.07) (3.82) (13.60) (11.32) (4.00) (7.62)
8 1997-98 89.71 133242 187217 146262.9 213.16 44442
(4.07) (2.05) (11.57) (8.43) (3.55) (13.23)
9 1998-99 93.36 135482 210454 157525.1 220.55 48979
(4.07) (1.68) (12.41) (7.7) (3.46) (10.21)
10 1999-00 97.15 139982 233760 170379.2 229.10 54200
(4.07) (3.32) (11.07) (8.16) (3.88) (10.66)
11 2000-01 101.1 146845 261297 184401.4 238.73 69797
(4.07) (4.90) (11.78) (8.23) (4.21) (28.78)
12 2001-02 105.21 154349 282270 195613 249.33 71244
(4.07) (5.11) (8.03) (6.06) (4.44) (2.07)
(At 2001-02 prices)
13 2002-03 109.49 162317 314850 306771 260.21 86013
(4.07) (5.16) (11.54) (8.68) (4.36) (20.73)
14 2003-04 113.95 170219 364547 336344 271.42 97644
(4.07) (4.87) (15.78) (9.64) (4.31) (13.52)
15 2004-05 118.59 178699 429796 372938 282.57 124417
(4.07) (4.98) (17.90) (10.88) (4.11) (27.42)
16 2005-06 123.42 188113 497842 418884 294.91 150242
(4.07) (5.27) (15.83) (12.32) (4.37) (20.76)
17 2 0 0 6 - 128.44 207307 585112 471663 312.52 NA
07(P) (4.07) (4.67) (17.53) (12.60) (4.23)
* The figures in bracket indicate growth rate over the previous year

46
 Annual Report 2007-2008

3.3.2 Comparison of the MSE sector with with the reference year of 2001-02 was 249.33
the overall Industrial Sector lakh persons. As per the estimates made for
the year 2006-07, total employment in the
3.3.2.1 The MSE sector has maintained a MSE sector stood at 312.52 lakh persons.
higher rate of growth vis-à-vis the overall
industrial sector. The comparative growth 3.4 THE DATABASE ON THE
rates of production for both the sectors during MSME SECTOR
recent years are given in Table 3.12
TABLE - 3.12: Comparative Growth Rates 3.4.1 The MSMED Act came into effect
Year Growth Overall on 2nd October 2006. Accordingly, the
Rate of MSE industrial coverage and the investment ceiling have
Sector (%) Sector (%) been widened and the sector is now referred
2002-03 8.68 5.75 to as micro, small and medium enterprises
2003-04 9.64 7.02 sector. There is an immediate requirement
2004-05 10.88 8.36 to update the database accordingly.
2005-06 12.32 8.15
2006-07* 12.60 10.8 # 3.4.2 Under the new scheme “Quinquennial
* April-December, 2006 Census and Annual Sample Surveys”,
#Source:http://commerce.nic.in/PressRelease/ henceforth a Census would be conducted
pressrelease_detail.asp?id=1980
once every five years and annual sample
surveys will be conducted in the intervening
3.3.3 Contribution of MSE in the
years. A fresh Census (4th) is being launched
Gross Domestic Product (GDP)
during 2007-08 accordingly. In 4th Census
TABLE - 3.13: Contribution of MSE in GDP of MSME, a complete enumeration of
Year Contribution of MSE (%) at registered enterprises and a sample survey
1999-2000 prices in of unregistered enterprises will be done. For
Total Gross the first time, medium enterprises will also
Industrial Domestic be covered under this Census.
Production Product
(GDP)
3.4.3 The objectives of the proposed
2001-02 39.12 5.79
Census are as follows-
2002-03 38.89 5.92
2003-04 38.74 5.79
l Creation of database for registered
2004-05 38.62 5.84
MSME sector-Statistics and infor-
2005-06 38.56 5.83
mation is proposed to be collected
3.3.4 Employment in MSE Sector in respect of number of enterprises,
employment, cluster, production,
3.3.4.1 The total employment in the MSE extent of closure/sickness and other
sector including SSSBEs (erstwhile SSI relevant economic parameters per-
sector) in the country estimated on the basis of taining to micro, small and medium
the Third All India Census of SSIs conducted enterprises.

47
MSME

l Data on enterprises owned and/or under Prime Minister’s Rozgar Yojana

managed by women and other so- (PMRY) Scheme.
cial categories.
l Estimate the size of the unregistered
l Information on Khadi & Village Industry MSME sector, including Khadi & Vil-
units set up under Rural Employment lage Industries and Coir Industries.
Generation Programme (REGP), Coir
3.4.4 The 4th Census for the MSMEs is ex-
Sector units and the units registered
pected to be launched during 2007-08.
3.4 Charts Representing the Performance of MSE Sector
1. Number of MSE Units

NO. OF REGISTERED UNITS NO. OF UNREGISTERED UNITS TOTAL

128.44
123.42
140.00

118.59
113.95
109.49

108.12
104.12
100.35
120.00
96.83
93.46
Lakh Numbers

100.00
80.00
60.00

20.32
19.30
18.24

40.00
17.12
16.03

20.00
0.00
2002-03 2003-04 2004-05 2005-06 2006-07
Year

2. Fixed Investment in MSE Sector

REGISTERED UNITS UNREGISTERED UNITS ALL UNITS

250000
Fixed Investment (in Rs. Crore)

207307
198050
200000 188793
178269
169579

150000 126814 133329

112014 120133
105629
100000
68660 71237 73978
63950 66254
50000

0
2002-03 2003-04 2004-05 2005-06 2006-07

Year

48
 Annual Report 2007-2008

3. Production in MSE sector

REGISTERED UNITS UNREGISTERUNITSED ALL UNITS

585112
600000

497842

453877
429796
Production (in Rs.)

386181
500000

364547

333397
314850

282783
400000
244232
300000

131235
111661
96399
200000

81764
70618

100000

0
2002-03 2003-04 2004-05 2005-06 2006-07
Year

4. Employment in MSE Sector

EMPLOYMENT IN REGISTERED UNITS(Nos.)

EMPLOYMENT IN UNREGISTERED UNITS(Nos.)
EMPLOYMENT IN TOTAL MSE SECTOR UNITS(Nos.)
Employment (in person)

31251682
29984658
28755473

35000000
27530222
26367980

30000000
21378996
20605591

22201644
19883698
19192152

25000000
20000000
15000000
8605662
7175828

8149881
7646523

9050038

10000000
5000000
0
2002-03 2003-04 2004-05 2005-06 2006-07
Year

49
MSME

50