Entrepreneurs are the backbone of a nations progress.

They organize different factors of production like land, labor and capital and in this process provide goods and services to the people. Entrepreneurs create wealth and give employment to large sections of the society. The economically developed nations provide ample evidence to the emergence of entrepreneurial class in those countries. Many underdeveloped countries have realized the fact that the governments in these countries are unable to produce goods and services needed by the people and offer employment. So attempts are being made to develop and sustain entrepreneurial skill in the people, so that they become good entrepreneurs in the years to come. India requires a good entrepreneurial class for developing small scale and large scale industries. Government at the centre and states are unable to solve the problem of teeming unemployed. Besides liberalization has given an added impetus to entrepreneurs to start industries in small scale and large scale sectors. IMPORTANCE OF AN ENTREPRENEUR In the economic development of a country or of any region within the country. Entrepreneur is one of the important inputs. In India, the state and private entrepreneurship competence makes all the difference in the rate of economic growth. Therefore important role has been assigned to the identification and promotion of entrepreneurs. In India the need for a broad based entrepreneurial call arises from the need to speed up the process of activating the factors of production leading to a higher rate of economic growth, dispersal of economic activities, development of backward areas, creation of employment opportunities and improvement in the standard of living of the weaker section of the society. Individuals who initiate, establish maintain and expand new enterprises make the entrepreneurial class. The following factors have a bearing on the growth of entrepreneurship: a) The availability of industrial know-how and technology. b) Socio-political and economic conditions. c) State of art and culture of trading and business. d) Existence of market for products and services and e) Incentives and facilities available for starting an industry or business.

What is rural industry? Micro, Small or Medium Enterprise The earlier concept of Industries has been changed to Enterprises Enterprises have been classified broadly into: (i) Enterprises engaged in the Manufacture / production of Goods pertaining to any industry; & (ii) Enterprises engaged in providing / Rendering of services. Manufacturing enterprises have been defined in terms of investment in machinery (excluding land & buildings) and further classified into : - Micro Enterprises - investment up to Rs.25 lakh. - Small Enterprises - investment above Rs.25 lakh & up to Rs. 5 crore - Medium Enterprises - investment above Rs. 5 crore & up to Rs.10 crore. Service enterprises have been defined in terms of their investment in plant and

equipment (excluding land & buildings) and further classified into: Micro Enterprises investment up to Small Enterprises investment above Rs.10 lakh. Rs.10 lakh & up to Rs.2 crore.

Medium Enterprisesinvestment above Rs. 2 crore & up to Rs. 5 crore

It is not necessary to engage in manufacturing activity for self-employment. One can set up service enterprises as well . The following major inputs are required for setting up an enterprise: Land, building or shed Machinery and equipments Raw Materials Power and Water Skilled manpower Capital

y y y y y y

Financial Assistance Financial assistance is available from institutions such as Nationalised Banks, Small Industries Development Bank of India, Regional Rural Banks, National Small Industries Corporation, State Financial Corporations etc.

y y y y y

depending upon the project requirement and promoters background. Financial assistance has two components. Loan for fixed capital is used to acquire Plant and Machinery, land and building. Working capital loan is used to meet day to day operational cost of the production. State Financial Corporation and National Small Industries Corporation generally provide working capital. However under package assistance, State Financial Corporations also provide a composite loan covering plant and machinery and working capital. What is SIDBI ? INTRODUCTION:- It is a real fact that more than 70% of Indian population resides in rural areas of our country. But the majority of that population is still backward due to less support of external environment. The quoted quote that "wheel is the symbol of

development" is proven false in case of Rural India because there is lack of development which may be because of unfair political environment and government negligence. SIDBI is an apex financial institution which provides financial support to the sick / small scale industries. So, we can say that SIDBI is the institution which engaged in the business of rural industrialization in India. The small Industries Development Bank of India is Principal Financial institution engaged in development initiative in rural sector and improving the SSI unit. The another very

important role is keeping by this Bank is that it is also encouraging SSIS and generating employment in rural India. The Bank also performing the rehabilitation duty and improving the performance of small Industries.

SIDBI is an apex financial institution in the field of rural development. SIDBI is a locally owned subsidiary of IDBI. It was setup under the SIDBI act 1989 and commenced operation from April 1990. Small Industries Development Bank of India (SIDBI), set up on April 2, 1990 under an Act of Indian Parliament, is the Principal Financial Institution for the Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector and for Coordination of the functions of the institutions engaged in similar activities. ROLE OF SIDBI The main functions of SIDBI are:1. Refinance assistance 2. Direct assistance 3. Bills receivable Products and services of SIDBI :1. Direct finance 2. Refinance 3. Bills finance 4. International finance 5. Microfinance 6. Government subsidy scheme 7. Other schemes 8. Promotional activities 9. Fixed deposit scheme

Operations Any banks operational excellence is measured by aggregate sanctions, subsequent disbursement of the sanctioned amount, the amount of revenue generated from the difference in spread over the loan taken and advances granted, higher amount of fee based income and the last and the most important timely recovery of dues. In addition, the banks assistance towards promotional and developmental efforts in the form of loans and advances for project financing as well as its overall utilization of available resources lying with the bank under study is another significant indicator of operational effectiveness.

However, an analyst has to keep in mind that these are not the eventual pointers of the efficiency of any bank since it varies from bank to bank depending upon the area of operations, profile and status of the bank (Public, private, foreign, cooperative bank), geographical spread, its target groups and historical achievements. SIDBIs aggregate sanctions under all schemes during the FY 2004-05 were Rs. 9090.60 crore registering a growth of 10.24 % over the previous year. The disbursements during the year were Rs. 6187.83 crore recording an impressive growth of 40.18 % over the disbursement in previous year.

Source- official website of SIDBI

Objectives of direct finance:SIDBI had been providing refinance to State Level Finance Corporations / State Industrial Development Corporations / Banks etc., against their loans granted to small scale units.

Since the formation of SIDBI in April, 1990 a need was felt/ representations were made that SIDBI being the principal financial institution for the small sector, should take up the financing of SSI projects directly on a selective basis.

So it was decided to introduce direct assistance schemes to supplement the other available

channels of credit flow to the small industries sector. Since then, SIDBI has evolved itself into a supplier of a range of products and services to the Small & Medium Enterprises [SME] sector. Scheme for Development of Industrial Infrastructure for SSI Sector Purpose Setting up of industrial estates / development of industrial areas including such projects found eligible under KVIC model. Strengthening of existing industrial clusters / estates by providing increased amenities for smooth working of the industrial units. Setting up of warehousing facilities for SSI products / units. Providing support services viz., common utility centres such as convention halls, trade centres, raw material depots, warehousing, tool rooms / testing centres, housing for industrial workers, etc. Any other infrastructural facilities which will benefit predominantly SSI units / entrepreneurs.

Eligible Borrowers One of the major factors inhibiting the growth of Small Medium Enterprises (SMEs) is the availability of adequate owners capital. Most of the SMEs are also not able to attract external equity including venture capital funding due to high perceived risk, limited exit options and high transaction cost.

Also as more than 90% of the SMEs are in non-corporate structure and hence can not absorb equity. SIDBI, based on the best international practices, has come out with various risk capital products - quasi equity/ mezzanine financial instruments which are provided on the backing of cash flows from the business rather than asset cover/ collaterals. Risk capital is offered in flexible manner with respect to the structuring of return and repayments to the risk capital provider, thereby ensuring greater chances of success of the ventures. Norms Cost of Project : Not to exceed Rs.100 million. Debt Equity Ratio: Not more than 3:1 Repayment Period - Not exceeding 10 years including initial moratorium period of upto 3 years.

Integrated Infrastructure Development Purpose For setting up of IID centres with facilities like water supply, power, telecommunication, common services centre including for technological back up services for small scale industries in rural backward areas as envisaged under the policy for promoting and strengthening small, tiny village enterprises announced by Govt. of India (GOI) on August 6, 1991. The cost of improving / upgrading the deficient infrastructural facilities to increase the productivity and optimum utilisation of the existing centres / clusters in backward / rural areas may also be covered under the scheme. Eligible Borrowers Implementing agencies (a public sector corporation or a corporate body or a good NGO having sound financial position) entrusted with the task of implementing the scheme by the concerned State / Union Territory (UT) Govt. Norms Selection of IID centre should be preceded by a comprehensive industrial potential survey of the area. Suitable land would be provided by State / U.T. Govt. cost of which may be recovered from implementing agencies. Normally, agricultural land may not be used for setting up of an IID centre. The size of IID centre would be about 15 to 20 hectares. The centre should provide for various facilities like water supply, power, telecommunication, effluent treatment etc. The ceiling on project cost is Rs.50 million. Cost in excess of Rs.50 million may be met by State / UT Govt. Cost of Rs.50 million to be financed by Grant from Govt. of India (GoI) Rs.20 million and loan from SIDBI, from any other bank / FI of Rs.30 million. In case of North-Eastern Region, the amount of Grant from GoI and loan from SIDBI, from any other bank / FI would be Rs.40 million and Rs.10 million respectively.

Vendor Development Scheme Purpose Vendor Development Scheme (VDS) SME (manufacturing and service sector) vendors of OEMs/ large Corporates. OEM Any large well run Corporate, PSU, MNC having a good SME vendor base and a satisfactory external rating.. Purpose y y SIDBI would sign an MOU with the OEM for the vendor development arrangement. Under the arrangement flexible term loan assistance would be provided for capital expenditure for expansion, modernisation, diversification, WC of SME vendors based on comfort provided by OEM. y Need based customised Invoice discounting/ bill discounting facility can be structured for the vendors of OEM.

Bills Finance Schemes Objective Bills Finance Scheme involves provision of medium and short-term finance for the benefit of the small-scale sector. Bills Finance seeks to provide finance, to manufacturers of indigenous machinery, capital equipment, components sub-assemblies etc, based on compliance to the various eligibility criteria, norms etc as applicable to the respective schemes.

To be eligible under the various bills schemes, one of the parties to the transactions to the scheme has to be an industrial unit in the small-scale sector within the meaning of Section 2(h) of the SIDBI Act,1989. Bills financing have been another feather in the cap for SIDBIs portfolio of financing for assistance of the SMEs. The objective of the scheme is to mitigate the problem of delayed payments to SSI units. The schemes operating under Bills financing are Bills Re-discounting, Bills direct discounting, receivables financing scheme. This is for short term purposes and

entrepreneurs in need of such short term requirements for working capital have favored this scheme along with their financing options.

Source- official website of SIDBI

Total sanctions and disbursements for the FY 2003 and FY 2004 can be seen in this figure where the sanctions have increased by 37.19% in the year 2003 and disbursements have increased by 40.69% in the year 2004 which shows that the sanctions and disbursements have been at par with the target of SME s being able to attain the credit available.
Refinance Assistance SIDBI has remained the premier refinancing institute for the promotion and development of small and medium enterprises. The mechanism used by SIDBI is it lends to Primary Lending Institutions (PLIs) and they deliver the credit facility to existing entrepreneurs and first generation entrepreneurs. In this figure reveals the total sanctions and disbursement under refinancing assistance.

Source- official website of SIDBI

The aggregate sanctions and disbursements under refinance schemes during 2004-05 were Rs. 4419.19 crore and Rs. 2693.60 crore respectively. It shows the net growth of 3.98 % increase in Sanctions and impressively 56.69 % increase in disbursement. This is the result of the extra efforts in policy making and aggressive help provided by the bank for the overall welfare of the small scale industries.

Receivable Financing Scheme

Purpose To enable SSI / SME / Eligible Service sector units (including construction / small road transport operators) selling components, parts, sub-assemblies, services, etc. to Medium & Large scale units realise their sale proceeds quickly

Eligibile Borrowers Limits are sanctioned by SIDBI to well established industrial units using components / parts / sub-assemblies / accessories / services manufactured / provided by by SSI / SME / Eligible Service sector units. Either seller or Purchaser need to qualify as SSI / SME / Service Sector unit

Norms Unexpired usance - Not more than 90 days Others Facility without bills of exchange / LC backed receivables can also be considered on the basis of merit.

Worldwide, the wind has been changing in the finance sector in general and bankinginvestment sector in particular. Such a panorama teaches us that now, is the time of cooperation rather than a competition, now its a time of convergence rather than cutting each others neck over customers and markets, now its a time of consolidation rather than antagonism. Curing the fatal disease requires the doses of small pills; impressive thoughts come out from the small brain, similarly, India requires prominence of small and medium enterprises for curing its problem of low economic growth vis--vis developed nations. To cure the overall disease of lack of appropriate growth of Indian SMEs Small and Medium Enterprises, India needs several small pills such as adequate credit delivery to SMEs, better risk management, technological upgradation of Banks esp. Public Sector Banks, attitudinal change in Bankers and so on. Among them, the major problem of inadequate financing to SMEs needs an urgent attention. Having said this, it is pertinent to mention that Small Industrial Development Bank of India has achieved landmark results in the domain of small and medium enterprise financing and fulfilling their credit requirements time to time in various forms such as long term project finance, working capital finance, bill discounting etc. However considering the level of appetite for credit facilities of Indian small and medium enterprises, private and public sector banks in India need to work out an unique and innovative model of financing to this vital sector (SME) of Indian Economy. SMALL and MEDIUM enterprises (SMEs) play a catalytic role in the development of any country. They are the engines of growth in developing and transition economies. In India they account for a significant proportion in manufacturing, exports and employment, and are major contributors to GDP.

SIDBI (small industrial development bank of India) was started with the motto of refinancing as the sole business. RBI considers SIDBI and NABARD as two refinancing institutions. As the main focus always has been this rather than direct financing, the brand image of SIDBI has not changed in so many years. In the banking sector as a whole, there are too many middle level banks that come in direct contact with the customer and this has been the main reason SIDBI is considered as the last resort for financing. SIDBI almost had

a monopoly in refinancing the small scale units but now there have been competition form other commercial banks as well that have started initializing the SME finance like ICICI and SBI. SIDBI has also started tying up with other nationalized and commercial banks in this regard that can help it gain some more visibility and selling the products that need aggressive marketing. SIDBI has a special corporate status because it has got an expertise since 1964 and has been an agent in government schemes and finance is provided considering all expenses related to the project from conceptualization of the project to the successful execution of the project. They target the SME as they are serving the niche market. It is also synonym to developmental banking as they have soft corner for the SMEs and for this section of industry they have liberal policies, promote and develop small scale industries. Helping entrepreneur is also one of the functions and duties of SIDBI. Thus its broad functions are promotion, financing and development of Industries in the small scale sector and Coordinating the functions of other institutions engaged in similar activities. SIDBI was established on April 2, 1990. The Charter establishing it, The Small Industries Development Bank of India Act, 1989 envisaged SIDBI to be "the principal financial institution for the promotion, financing and development of industry in the small scale sector and to coordinate the functions of the institutions engaged in the promotion and financing or developing industry in the small scale sector and for matters connected therewith or incidental thereto. The business domain of SIDBI consists of small scale industrial units, which contribute significantly to the national economy in terms of production, employment and exports. Small scale industries are the industrial units in which the investment in plant and machinery does not exceed Rs.10 million. About 3.1 million such units, employing 17.2 million persons account for a share of 36 per cent of India's exports and 40 per cent of industrial manufacture. In addition, SIDBI's assistance flows to the transport, health care and tourism sectors and also to the professional and self-employed persons setting up small-sized professional ventures. SIDBI retained its position in the top 30 Development Banks of the World in the latest ranking of The Banker, London. As quoted in the May 2001 issue of The Banker, London, SIDBI ranked 25th both in terms of Capital and Assets. State-owned SIDBI provides financial assistance to units in the small-scale sector. SIDBI provides refinance against term loans granted by banks to SSIs, equity assistance, bills financing, project financing and resource support to institutions that are engaged in the development of SSIs.

It provides assistance to wide-range of industrial sectors including transport, health care, hotel and tourism and infrastructure. It also provides funds to the professional and self-employed persons setting up small-sized professional ventures.

SIDBIs objective was to help the masses and the industry that is the base of all development, i.e. small scale industries. Thus came up the idea of financing these industries directly and on selective basis. So it was decided to introduce direct assistance schemes to supplement the other available channels of credit flow to the small industries sector. Since then, SIDBI has evolved itself into a supplier of a range of products and services to the Small & Medium Enterprises [SME] sector. Considering the level of competition in banking business due to globalized environment, SIDBI has now started spreading its wings either by way of diversifying its product portfolio or entering into the strategic alliance with other leading private sector banks, public sector banks and Non Banking Financial Institutions in order to achieve market development of its existing portfolio of services. It aims to provide all the services a Small and Medium Enterprise needs under one roof. Secondly, with the adoption of cluster development as the key strategy to develop manufacturing sectors competitiveness, SIDBI has envisaged to adopt the cluster financing method to assist SMEs. Finally, the bank is planning to get into the business of commercial banking in a bid to serve the banking needs of the existing customers since they have to approach commercial bank for daily routine transactions. However, considering the quantum of competition in commercial banking business in India, SIDBI is not aiming to enter into commercial banking business in haste.

SIDBI has floated an excellent programme to meet gap in prescribed minimum promoters' contribution and/or in equity considering the practical constraints faced by the promoters. For instance, an entrepreneur visualizes an outstanding project on biotechnology which requires Rs. 10 Lacs as an initial investment. Suppose, he approaches to a commercial bank for financial assistance. The first question he faces is how much he (an entrepreneur) is contributing towards the project. Now, assume that banks conventional practice is that a loan applicant must contribute at least 25 % of the total project cost. He has to contribute at least Rs 2.5 lacs as a promoters contribution in the above example. He may not able to initiate the project unless he has the amount stated above (i.e. < 2.5 lacs) howsoever

innovative, profitable and unique his proposition is. SIDBI has started National Equity Fund Scheme in a bid to impart financial assistance for gap in promoters contribution.

INDUSTRIAL SICKNESS IN INDIA Industrial sickness specially in small-scale Industry has been always a demerit for the Indian economy, because more and more industries like cotton, Jute, Sugar, Textile small steel and engineering industries are being affected by this sickness problem. As per an estimate 300 units in the medium and large scale sector were either closed or were on the stage of closing in the year 1976. About 10% of 4 lakhs unit were also reported to be ailing. And this position also remain same in the next decades. At the end of year 1986, the member of sick units in the portfolio of scheduled commercial banks stood at 1.47,740 involving an out standing bank credit of Rs. 4874 crores. * Where the total number of large Industries which are sick were 637 units at the end of year 1985 increased to 714 units in the end of next year 1986. * Likewise on the other hand the number of sick small scale units were also increased 1.18 lacks at the end of 1985 to 1.46 lakhs at the end of 1986. * The bank amount which was outstanding in case of large industries for the same period also increased from Rs.2,900 crores to Rs. 3287 crores at the end of year 1986 * Dues of Small Scale sector also increased from Rs.1071 crores to Rs.1306 at the end of the year 1986. * Of the 147, 740 sick industrial units which contains large medium as well as small scale involving the total bank loan (credit) of Rs. 4874 at the end of the year 1986. CAUSES OF SICKNESS OF SSI'S Most of the Indian authors and researchers have classified the different types of industrial sickness under two important categories. They are : 1) Internal Cause for sickness

We can say pertaining to the factors which are within the control of management. This sickness arises due to internal disorder in the areas justified as following:

a) Lack of Finance: This including weak equity base, poor utilization of assets, inefficient working capital management, absence of costing & pricing, absence of planning and budgeting and inappropriate utilization or diversion of funds.

b) Bad Production Policies : The another very important reason for sickness is wrong selection of site which is related to production, inappropriate plant & machinery, bad maintenance of Plant & Machinery, lack of quality control, lack of standard research & development and so on. c) Marketing and Sickness : This is another part which always affects the health of any sector as well as SSI. This including wrong demand forecasting, selection of inappropriate product mix, absence of product planning, wrong market research methods, and bad sales promotions.

d) Inappropriate Personnel Management: The another internal reason for the sickness of SSIs is inappropriate personnel management policies which includes bad wages and salary administration, bad labour relations, lack of behavioural approach causes

dissatisfaction among the employees and workers. e) Ineffective Corporate Management: Another reason for the sickness of SSIs is ineffective or bad corporate management which includes improper corporate planning, lack of integrity in top management, lack of coordination and control etc. 2) External causes for sickness: a) Personnel Constraint: The first for most important reason for the sickness of small scale industries are non availability of skilled labour or manpower wages disparity in similar industry and general labour invested in the area.

b) Marketing Constraints: The second cause for the sickness is related to marketing. The sickness arrives due to liberal licensing policies, restrain of purchase by bulk purchasers, changes in global marketing scenario, excessive tax policies by govt. and market recession.

c) Production Constraints: This is another reason for the sickness which comes under external cause of sickness. This arises due to shortage of raw material, shortage of power, fuel and high prices, import-export restrictions. d) Finance Constraints: The another external cause for the sickness of SSIs is lack of finance. This arises due to credit restrains policy, delay in disbursement of loan by govt., unfavorable investments, fear of nationalization. MICROFINANCE AND SIDBI In recent years, micro finance has gained growing recognition as an effective tool in improving the quality of life and living standards of very poor people. This recognition has given rise to a movement that now has a global outreach and has penetrated in the remote rural areas, besides slums and towns. Micro Finance programmes extend small loans to poor people for their varied needs such as consumption, shelter, income generation and self-employment, etc. In some cases, micro fi nance programmes offer a combination of several services to their clients, in addition to credit. These include linkages with savings and insurance avenues, skill development training and marketing network. Micro credit programmes, thus, assume significance since they facilitate poverty reduction through promotion of sustainable livelihoods and bring about women empowerment through social and collective action at the grassroots. In addition, micro finance interventions lead to increased social interaction for poor women within their households and in the community, besides, greater mobility that increases their self-worth and self-assertion in the social circle. In India, the micro finance movement has almost assumed the shape of an industry, embracing thousands of NGOs/MFIs, community-based self-help groups and their

federations, co-operatives in their varied forms, credit unions, public and private banks. During the last decade, the sector has witnessed a sharp growth with the emergence of a number of Micro Finance Institutions (MFIs) that are providing financial and non-financial support to the poor in an effort to lift them out of poverty. The MFI channel of credit delivery, coupled with the national level programme of SHG-Bank Linkage, today, reaches out to millions of poor across the country. In view of its large-scale intervention in the micro finance sector, SIDBI had, in 2001, commissioned an Impact Assessment Study of its micro finance programme vis--vis objectively verifi able socio-economic indicators. The seven-year longitudinal study was conducted in two stages during the period 2001-2007 by independent research agencies

with a view to assessing the impact of its micro credit programme on the ultimate benefi ciaries/clients intervention. and improving the practices by understanding the process of MFI

BANK CREDIT TO SMALL SCALE SECTOR The commercial and rural regional banks as well as co-operative banks have been regular finance provides for the small scale sector. The interest charged to the small scale units located in backward have to pay the rate of interest @12.5% p.a. Where the units which

are situated in developed areas they can get finances at rate of 13.50% p.a. interest on the loan amount up to Rs.25 lakhs and @ 14% if they are taking the loan more than 25 lakhs. SIDBI with the mode of its refinance and rediscount provided and providing financial assistance to the sector. The Bank SIDBI through SFC's , SIDC's and other RRB"s providing finance to the developing sector. The small scale sector specially the small scale units are getting refinance facility through SIDBI & its subsidiaries more than 85%.

TOTAL BANK CREDIT

(Rs. IN CRORES) YEAR CREDIT INDUSTRY 1991 1992 1993 1994 1995 1996 1997 1998 1999 61576 65240 78662 80482 102953 124937 138548 161038 178799 17118 17830 20026 22620 27612 31726 34113 43508 48483 14.72 14.47 13.17 13.75 13.05 12.49 12.25 13.43 17.88 TO CREDIT TO SSI"s % SHARE OF SSI's

ASSISTANCE BY SIDBI TO SSI'S The apex financial institution in the field of development of small scale sector The bank (SIDBI) by the mode of refinance discounting and rediscounting as well as financial assistance through indirect & direct functions encouraging the rural India.

Rs. In Crores YEAR 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 SANCTIONED 2408.7 2846.0 2909.2 3356.3 4706.3 6065.6 6485.3 7484.2 8879.0 10265.0 10821.0 DISBURSMENT 1838.5 2027.4 2146.3 2672.7 3389.8 4800.8 4584.7 5240.7 6285.2 6964.2 6441.0

At the end of year 2001 March, SIDBI has sanctioned Rs.66299 crores and disbursed Rs.46,392 crores by the various mode of its services like Refinance, Bills rediscounting, other scheme and direct finance. With its refinance scheme the name has sanctioned Rs.22792.3 crores and disbursed Rs.17225.2 crores. With bill discounting facility the bank has sanctioned Rs.2260.8 crores and Rs.1622.9 crores disbursed to the sector. With its direct finance scheme SIDBI has sanctioned Rs. 12,975.6 crores for the SSI's and disbursed Rs. 9948.6 crores. From its other various schemes bank has sanctioned Rs. 7115.1 crores and disbursed Rs. 4190.3 crores for the development of SSI's till year 2001. SSIs AND FIVE YEAR PLANS When the First Five Year Plan introduced the industrial base of India was not so good and was very limited. Generally, the industrial development based on consumer goods

producing industries. Some important industries of that period were cotton industry, paper industry, salt industry, sugar industry, soap industry and leather industry which were facing a lot of financial and technological problems and fighting for their survival. When the Government of India had introduced Second Five Year plan it was given first priority to the industrialization in rural, semi-urban and areas of our country. That was a good decision. But, it is sad to say that the government has given priority to all the large scale and heavy industries and neglected the small scale sector which cause the sickness in small scale industries. After neglecting in 3rd, 4th, 5th, 6th, 7th, and 8th Five Year plans, we can say more than 25-30 years the government realized its mistake and then they had taken actions for rehabilitation of small sick industries by technological reform with sufficient credit facilities and various training programs for the workers engaged in small scale sector. The industries like

powerlooms, handlooms , coir, sericulture and silk, handicrafts and other similar industries got affected due to the negligence of the government which results sickness in small scale sector. If we go through the business area of SIDBI we find that SIDBI governs small scale industrial units which contribute significantly to the national economy in terms of production employment and exports via rural development through rural industrialization.

CONCLUSION In conclusion we can say that the SIDBI, by the mode of refinancing, discounting and rediscounting as well as financial assistance through indirect functions regarding lending to primary institutions, through its direct assistance to small units and through its various developmental and supporting services, encouraging small scale sector in Rural India. SIDBI obviously engaged in the business of reforming SSIs with its different Rural Industrialization Programs (RIP) with the following aims: * Expansion of small scale sector and increase its share in industrial output. * Development of rural areas where more than 70% of the population resides. * Increase the efficiency of SSIs. * Increase the contribution of SSIs in export. * More employment generation in rural areas of rural India. By keeping in mind the optimistic approach, we can say that SIDBI will provide better and essential services for the betterment of SSIs with its rehabilitation programs and Rural Industrialization Programs (RIP) and then the quoted quote will prove true that "Wheel is the symbol of development". References: Economic Survey of India-2008 Economic Survey of India-2007 Employment News, Publication Division , Govt of India. Yojana (Magazine) Publication Division , Govt of India Kurukshetra (Magazine) Publication Division , Govt of India www.sidbi.com