entrepreneurship and small business management unit iv

Unit I
Entrepreneurship: Concept and Definitions; Entrepreneurship and Economic Development;
Classification and Types of Entrepreneurs; Entrepreneurial Competencies; Factor Affecting
Entrepreneurial Growth – Economic, Non-Economic Factors; EDP Programmes; Entrepreneurial
Training; Traits/Qualities of an Entrepreneurs; Entrepreneur; Manager Vs. Entrepreneur.
(14 Hours)
Unit II
Opportunity / Identification and Product Selection: Entrepreneurial Opportunity Search and
Identification; Criteria to Select a Product; Conducting Feasibility Studies; Project Finalization; Sources
of Information. (14 Hours)
Unit III
Small Enterprises and Enterprise Launching Formalities : Definition of Small Scale; Rationale;
Objective; Scope; Role of SME in Economic Development of India; SME; Registration; NOC from
Pollution Board; Machinery and Equipment Selection; Project Report Preparation; Specimen of Project
Report; Project Planning and Scheduling using Networking Techniques of PERT / CPM; Methods of
Project Appraisal.
(14 Hours)
Unit IV
Role of Support Institutions and Management of Small Business : Director of Industries; DIC;
SIDO; SIDBI; Small Industries Development Corporation (SIDC); SISI; NSIC; NISBUED; State
Financial Corporation SFC; Marketing Management; Production Management; Finance Management;
Human Resource Management; Export Marketing; Case Studies-At least 4 (four) in whole course.
(14 Hours)
2

 The Small Scale industries & Export Promotion department
holds the key towards economic development of the state.
State Government has been devoting considerable attention
to the growth of industry by creating necessary infrastructure
to ensure sustained industrialization in Uttar Pradesh.
Objectives of the department
 To provide competitive cost effective and fast services to the
industry
 To have industry base that is recognized world wide for
quality environmentally friendly & cost effective
 Providing facilitation forums for resolving industrial problems
to enhance the growth of industrial environment
 To plug in the information gaps and thereby increase the
industry awareness department
4

Objectives of the department
 Generate gainful/meaningful employment
 To provide training to entrepreneurs
 To develop industrial data base in all major fields
 To provide support for trade information's & fairs
 To provide quality support testing, patents, copyrights
information & support system
 To assist craftsman by adequate industrial & social database
and marketing support by Urban meats virtual sites etc
 Promote & Assist Export from the State.
5

 In each district one agency to deal with all requirements of
small and village Industries. This is called “District Industries
Centre”
 The District Industries Centres have undertaken various
programmes for investment promotion at the grassroot level
such as a organizing seminars workshops, extending support
for trade fairs and exhibitions organized by various Industries
associations.
 All the services and support required by for MSME units under
the single roof of the District Industries Centre. The Centre
has a separate wing to look-after the special needs of cottage
and house-hold industries as district from small industries.
6

Administration
General Manager is the head of the District Industries Centre.
The post of General Manager is of Joint / Deputy
Commissioner level. The General Manager has senior officers
to assist him, such as Manager (Raw Material), Manager
(Credit), Manage (Economic Investigation), Manager
(Marketing) Industrial Promotion Officer(IPO) and Technical
Officer cum Project Manager (PM)
Monitoring of DICs
The functioning of DICs and their achievement is monitored by
Industries Commissioner, Meeting of General Managers are
organized frequently to evaluate the performance and also
help in resolving difficulties in implementation of different
schemes.
7

To resolve the problems of industries/industrialists, there are two types
of committee at the district level:
 District Industrial Executive Committee (DIEC)
DIEC is constituted for solving industry related problems And
promoting industrial growth. District Collector is the Chairman of this
Committee and General Manager of DIC is the Member Secretary. The
other members of the DIEC are President of District Panchayat, DDO,
MP, MLAs, Prominent persons active in Industries in the district and
members of all district level industries associations.
 Single Window Industrial Follow up Team (SWIFT)
Entrepreneurs face many difficulties when they start new industries.
They have to deal with many government agencies and get many
clearances. SWIFT helps them in guiding solving their problems at a
single spot. This committee is working under the District Collector,
General Manager of DIC is the Member Secretary and District
Development Officer is Vice President of SWIFT. All industries related
officers in the district are members of this committee.
8

The Small Industries Development Organization (SIDO) is the national
SME Development Agency of India.
It is a major constituent of the Ministry of Small Scale Industries of the
Government of India. A senior official of the Government of India, who
is designated as the Development Commissioner for Small Scale
Industries (DCSSI), heads SIDO.
He is also the ex-officio Additional Secretary in the Ministry of Small
Scale Industries; that is, he is second in command in the bureaucratic
hierarchy of the Ministry.
Set up in 1954, SIDO provides services to small industry throughout the
country by implementing a broad program of activities and services
including the following:
Entrepreneurship Development Tool Room Services
Testing Centres Extension Services
R&D Services Consultancy Services
Policy Development
9

The strength of SIDO lies in its countrywide spread of almost 100
offices/service centres, which employ over 2500 staff, mostly
technical.
SIDO partners and networks with other national providers of support
and financial services to SMEs such as the Small Industries Development
Bank of India (SIDBI), the National Small Industries Corporation (NSIC),
the Bureau of Indian Standards (BIS), the Reserve Bank of India (RBI)
(India's Central Bank) and relevant agencies of the Governments of the
28 States of the country.
Various Services provided by SIDO to the SMEs:-
 facilities for testing, tool-menting, training for entrepreneurship
development
 preparation of project and product profiles
 technical and managerial consultancy
 assistance for exports
 pollution and energy audits
10

SIDO is as apex body and nodal agency for formulating, policy-making,
coordinating and monitoring agency for the development of small scale
entrepreneurs.
SIDO is the nodal agency that advises the Ministry of Industry (and other
Ministries) in formulating policies and programmers for the
development of SSIs.
SIDO provides economic information services and advises to the
government in policy formulation for the promotion and development
of SSIs.
It has over 60 offices and 21 autonomous bodies under its management.
SIDO provides a wide spectrum of services to the small industries sector
like testing, training for entrepreneur’s preparation of projects and
product profiles, technical and managerial consultancy, export
assistance, etc.
11

Functions of SIDO
 To formulate policies regarding the promotion and development of
SSI at national level.
 The implement those plans, programmers and policies of the
government in respect of industrial development of the country.
 To coordinate the activities of all departments, institutions and
agencies involved in promoting the SSI.
 To render all way support and encourage the entrepreneurs to set up
and sort out the hurdles.
 To conduct regular and ad hoc training courses through SISI’s, Branch
SISI’s and extension/production centers;
 To organize EDPs, motivational campaigns etc. for rural artisans,
educated unemployed, women entrepreneurs, and physically
handicapped persons;
 To secure reservations of certain products to be manufactured only
by SSI’s.
12

Functions of SIDO
 To assist and encourage entrepreneurs to set up industrial units in
rural and industrially backward areas and industrially backward
areas;
 To estimate the requirements of raw materials of SSI units and to
arrange their supplies.
Other than this, SIDO conducts the following types of management
courses.
 Training in Technical grades
 Training in Management Disciplines.
 Training of SIDO Officers.
 SIDO keeps its officers abreast of the latest developments in their
respective fields of specialization. Global trends and national
developments have accentuated SIDO’s role as a catalyst of growth
of small enterprises in the country.
13

 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 Co-
ordination of the functions of the institutions engaged in similar
activities.
 The business domain of SIDBI consists of Micro, Small and Medium
Enterprises (MSMEs), which contribute significantly to the national
economy in terms of production, employment and exports.
 MSME sector is an important pillar of Indian economy as it
contributes greatly to the growth of Indian economy with a vast
network of around 3 crore units, creating employment of about 7
crore, manufacturing more than 6,000 products, contributing about
45% to manufacturing output and about 40% of exports, directly and
indirectly. In addition, SIDBI's assistance also flows to the service
sector including transport, health care, tourism sectors etc.
14

Four basic objectives are set out in the SIDBI Charter. They are:
 Financing
 Promotion
 Development
 Co-ordination
The Charter has provided SIDBI considerable flexibility in adopting
appropriate operational strategies to meet these objectives. The
activities of SIDBI, as they have evolved over the period of time, now
meet almost all the requirements of small scale industries which fall
into a wide spectrum constituting modern and technologically superior
units at one end and traditional units at the other.
As an apex institution, SIDBI makes use of the network of the banks and
state level financial institutions, which have retail outlets. SIDBI
supplements the efforts of existing institutions through its direct
assistance schemes to reach financial assistance to the ultimate
borrowers in the small scale sector.
15

Its Functions are:
It provides Foreign Currency Loan to:
A) Import equipment by existing export oriented SSIs and new units
having definite plans for entering export markets.
B) Execute confirmed export orders by way of pre-shipment
credit/letter of credit and provides post shipment facilities.
SIDBI’s Venture Capital Fund provide assistance to:
A. Small scale entrepreneurs using innovative indigenous technology
and expertise.
SIDBI refinances:
A) Loans granted for new SSI projects and for expansion, technology,
up-gradation, modernization, quality promotion.
B) Loans sanctioned by SIDBI to small road transport operators,
qualified professionals for self employment, small hospitals and
nursing homes, and to promote hotel and tourism related
activities.
16

Small Industries Development Corporations (SIDC) are state-owned
companies or agencies in the states of India which were established at
various times under the policy of Government of India for the
promotion of small scale industries.
 In 1960, the first State Industrial Development Corporation (SIDC)
was established in Bihar. These mainly autonomous bodies are
controlled by the State government, who may own a stake in the
corporation. There are approximately 28 SIDCs in India.
 Their main functions include the promotion of rapid industrialization
in India. They mainly work at the grass roots level, providing
development in the backward and less frequented parts of India.
 They offer financial leases and offer guarantees. They also
administer the schemes of the central and state governments. The
projects and surveys of the industrial potential areas are conducted
by them.
17

It has been playing a key role for development of MSME through
counselling, consultancy and training.
Established in 1960 as Small Industries Service Institute in 1975, the
Institute has made significant contributions for promotion and
development of Micro, Small and Medium Enterprises.
Spectrum of Services:
 Assistance / Consultancy to Prospective Entrepreneurs.
 Assistance / Consultancy to existing Micro and Small Enterprises .
Preparation / Upgradation of District Industrial Potential Surveys.
Preparation of Project Reports / Project Profiles.
 Entrepreneurship Development Programmes
 Motivation Campaigns.
 Project Appraisal for Bank / Financial Institutions.
 Management Development Programmes.
 Skill Development Programmes
18

Spectrum of Services:
 Awareness Programmes on Energy Conservation / Pollution Control.
 Quality Improvement & Technology up gradation.
 Export Promotion.
 Ancillary Development.
 Linkage with State Govt. Functionaries.
 Market Surveys.
 Marketing Support through NSIC Enlistment by giving Technical
Inspection Report.
 Registration of Micro and Small Enterprises under Ozone Depleting
Substances (Regulation & Control) Rules, 2000.
 Revival of Sick Micro and Small Enterprises .
The Institute is manned with highly qualified and experienced technical
officers for rendering techno-managerial consultancy services to the
Micro and Small Enterprises.
19

National Small Industries Corporation Ltd. (NSIC), is an ISO 9001-2008
certified Government of India Enterprise under Ministry of Micro, Small
and Medium Enterprises (MSME).
NSIC has been working to fulfil its mission of promoting, aiding and
fostering the growth of small industries and industry related micro,
small and medium enterprises in the country.
NSIC carries forward its mission to assist small enterprises with a set of
specially tailored schemes designed to put them in a competitive and
advantageous position.
NSIC acts as a facilitator to promote small industries products and has
devised a number of schemes to support small enterprises in their
marketing efforts, both in and outside the country.
20

The schemes comprise of facilitating marketing support, credit support,
technology support and other support services.
 NSIC operates a single Point Registration Scheme under the
Government Purchase Programme, wherein the registered SSI units
get purchase preference in Government purchase programme,
exemption from payment of Earnest Money Deposit etc.
 Issue of the Tender Sets free of cost;
 Exemption from payment of Earnest Money Deposit (EMD),
 In tender participating MSEs quoting price within price band of L1+15
per cent shall also be allowed to supply a portion upto 20% of
requirement by bringing down their price to L1 Price where L1 is non
MSEs.
21

For the last five decades, NSIC has acquired various skill sets in the
development process of small enterprises. The inherent skills are being
networked to offer consultancy services for other developing countries.
The areas of consultancy are as listed below:
 Capacity Building
 Policy & Institutional Framework
 Entrepreneurship Development
 Business Development Services
22

The National Institute for Entrepreneurship and Small Business
Development is a premier organisation of Ministry of Micro, Small and
Medium Enterprises engaged in training, consultancy, research, etc. in
order to promote entrepreneurship.
The major activities of the Institute are Training of Trainers,
Management Development Programme, Entrepreneurship-cum-Skill
Development Programme, Entrepreneurship Development Programme
and Cluster Intervention.
The Institute has trained more than 2.98 lakh trainees including 3,000
persons from more than 125 countries till 31st July, 2014.
The Objectives are as follows:-
 To evolve standardised materials and processes for selection,
training, support and sustenance of entrepreneurs, potential and
existing.
 To help/support and affiliate institutions/organisations in carrying
out training and other entrepreneurship development related
activities.
23

 To serve as an apex national level resource institute for accelerating
the process of entrepreneurship development ensuring its impact
across the country and among all strata of the society.
 To provide vital information and support to trainers, promoters and
entrepreneurs by organising research and documentation activities
relevant to entrepreneurship development
 To train trainers, promoters and consultants in various areas of
entrepreneurship development
 To offer consultancy nationally/internationally for promotion of
entrepreneurship and small business development.
 To provide national/international forums for interaction and
exchange of experiences helpful for policy formulation and
modification at various levels.
 To share international experience and expertise in entrepreneurship
development.
 To share experience and expertise in entrepreneurship development
across national frontiers.
24

In order to provide medium and long term credit to industrial
undertaking, which fall outside the normal activities of commercial
banks, a central industrial finance corporation was set up under the
industrial Finance Corporations act, 1948.
The state governments wished that similar corporations should be set
up in their states to supplement the work of industrial financial
corporation.
The intention is that the State corporations will confine to financing
medium and small scale industrial and will , as far as possible consider
only such access which are outside the purview of industrial finance
corporation .
The main features of the State financial Corporations Act 1951:
i. The bill provides that the state government may,
by notification in the official gazette, establish a financial corporation
for the state.
25

ii. The share capital shall be fixed by the State government but
shall not exceed Rs 2crores . The issue of the shares to the public will
be limited to 25 % of the share capital and the rest will be held by the
State Governments, The Reserve Bank, Scheduled Banks, Insurance
Companies, Investment Trusts, Co- operative banks and other
financial institutions.
iii. Shares of the corporation will be guaranteed by the Sate
government as to the re – payment of principal and the payment of
a minimum dividend to be prescribed in consultation with the
central government.
iv. The corporation will be authorized to issue bonds and debentures
for amounts which together with the contingent liabilities of the
corporations shall not exceed five – times the amount of the paid – up
share capital and the reserve fund of the corporations. These bonds and
debentures will be guaranteed as to payment of the principal and
payment of interest at such rate as may be fixed by the State
government. 26

v. The corporation may accept deposits from the public
repayable after not less than five years, subject to the maximum not
exceeding the paid up capital.
vi. The corporation will be managed by a board consisting of
a majority of Directors nominated by the Sate governments ,
The Reserve banks and the industrial Finance corporation of India.
Broad functions of State Financial Corporations
 Project advisory and Finance as a catalyst in small scale industrial
growth the SFC’s provide the Investment appraisal
 Project conceptualization and related services, including guidance in
relation to selection of projects, preparation of feasibility studies,
capital structuring, techno – economic feasibility, financial
engineering, project management design etc.
 Credit Syndication including assistance in legal documentation etc.
 Documentation of various project documents
27

Marketing is very essential though strenuous, in developing countries
like India. The importance of Small Scale Industries (SSIs) is such that
their development is concomitant with the balanced growth of Indian
economy.
Small, Medium or Large scale industries prospects depend upon how
well they market their products in the dynamic competitive markets. So
with the importance of marketing management in small scale industries
increasing and sell the products effectively in the markets.
In other words, effective marketing of small scale industrial products
would ensure higher levels of income, consumption, and employment
which increase the standard of living of the people. Marketing is
demanding greater attention not only from industrialists especially of
the small scale sector but also from our planners and economists.
Marketing is a dynamic process as it is highly situational. It is concerned
with the activities involved in the flow of goods and services from
producer to consumer.
28

Marketing is an essential input for the success of small scale industries
which produce wide range products. Companies have to move from
traditional marketing to modern marketing.
Some of the factors which contribute to the marketing problems of the
small scale industry in recent days have been identified.
i. Increasing competition from within the small scale sector as well as
from large industries with established brand names and marketing
setup;
ii. Consumer awareness, even in rural and semi urban areas, for quality
goods.
iii. The need to set up distribution networks for reaching out widely
dispersed markets and
iv. Inability of the SSI units to exploit the export markets
29

Small scale industries are weak in differentiation strategy .As small
scale industries are following low cost pricing strategies, so it is also
essential to follow product differentiation for product development.
The small manufactures need to use selective product positioning
strategies for different products because same product positioning
strategies for all products are not beneficial.
For maximum coverage of the market latest technology e- marketing or
web marketing may help the small manufacturer to place the product
to large number of buyer. Customers also highly dissatisfied from the
distribution channel and current method of convenience of the small
scale industries.
Small manufacturer should adopt new methods of the convenience to
the customers. It is not possible to carry out all strategies
simultaneously but a set of strategies that can serve as a skeletal
framework for customized approach is necessary to contact more
customers towards the small scale industries products.
30

The Advantages and Disadvantages of Small Scale Production
Advantages of Small Scale Production:
The following are the merits of small scale production:
1. Close Supervision:
 The small producer can himself supervise the minutest details of the
business.Nobody is allowed to spoil machinery or waste materials.
The master’s eye is everywhere. There can be no fraud or idleness.
He will exercise utmost economy to achieve the aim of maximum
profits.
2. Nature of Demand:
 The small producer has an advantage over the large producer, when
the demand is either small or is constantly changing. He has thus a
sphere of his own where he has an advantage over the large scale
producer.
31

3. More Employment:
 In the face of large scale unemployment existing in the country, the
development of cottage and small scale industries is of great help to
create more employment opportunities. Small scale production is
more labour-intensive i.e., there is more use of labour than
machinery. Thus, many unemployed persons are employed in the
newly developed small scale industries.
4. Need of small Capital:
 The small scale production can be started with small capital. Where
there is shortage of capital, the small scale industries are of great
advantage for the development of industries.
32

5. Direct Relation between the Workers and the Employers:
 In small scale production less workers are employed. Therefore, a
close relationship exists between the employer and the workers.
Because of this close relationship, the employer can look after the
well-being of his employees and employees, too, consider their work
as their own and the work goes on smoothly without any disputes
between the two parties.
6. Direct Relation between the Customers and the Producers:
 The small scale producers generally cater to the local demand.
Hence, they remain in touch with their customers. A small producer
personally knows his customers. Therefore, he can produce goods
according to the taste and fashion of each individual customer.
33

7. Easy Management:
 The management of small business is easy and economical. Simple
accounts and a few persons can manage the job well.
8. Freedom of Work:
 There is complete freedom of work in a small business organisation.
Workers are more or less self-sufficient. They are not dependent on
the capitalists and carry on their jobs freely.
9. External Economies:
 The small scale production secures all kinds of external economies,
which are available to large units also. These economies are: better
transport, electricity, and communication facilities; banking and
insurance services; technical workers, etc.
34

10. No Evils of Large Scale Production:
 The small scale production cannot fall victim to the evils of the large
scale production i.e., evils of the factory system, overcrowding, etc.
11. Other Advantages:
 In the small scale production, there are some important advantages
over the large scale production:
 (i) Whenever demand changes, the supply can be adjusted
accordingly.
 (ii) There are less possibilities of strike and lockouts and no moral
degradation of the workers is feared.
 (iii) There are no dangers of monopolistic institutions.
35

Disadvantages of Small Scale Production:
The following are the demerits of small scale production:
1. High Cost of Production:
 The cost of production per unit increases because there is a high cost
of labour, a very little scope for division of labour and lesser use of
machinery.
2. Wastage of By-products:
 In the small scale production, it is not possible to make economic use
of the by-products, as in the large scale production. By-products of
the small producers generally go waste.
3. Less Use of Machines:
 In the small scale production, there is less scope for the use of
machines. As a result, these firms cannot take advantages of the use
of the machinery.
36

4. Lack of Division of Labour:
 In the small scale industries, the size of production is small, and
there is lack of division of labour and less profits to the
entrepreneurs.
5. Difficulty in Getting Loans:
 It cannot enjoy the financial economies. Funds are either not
available and if available, they have to pay higher rate of interest.
6. Difficult to Face Economic Crisis:
 Because of the limited resources and financial weakness, the small
scale producers cannot face economic crisis. The producers do not
have the capacity to bear losses for long. In fact, under a small
economic crisis, many small factories are closed down.
37

7. Costly Raw Materials:
 In the small scale production, raw materials are purchased in small
quantities which are available to the small producer at higher prices.
8. Lack of Standardised Goods:
 The quality of goods is not standardised or upto the mark in the
small scale production. It is difficult to sell goods because of their
low standard and inferior quality.
9. Old Techniques:
 In the small scale industries, the production is undertaken with the
help of old techniques or old and obsolete machines. It is not within
their capacity to bear the risk of installing new machinery.
38

10. Lack of Research:
 The small scale industries have limited means at their disposal. They
cannot spend much on research in the field of science and
technology. In this way, the small scale industries are a hurdle in the
way of technical research and, industrial development.
11. Difficult to Face Competition with Large Scale Producers:
 If some large scale producers enter the market, the small producers
find it difficult to compete with them. The small producers perish at
the hands of the large scale producers.
39

 Managing the finances of the firm in an efficient manner is the most
important aspect of managing a business. It means controlling and
managing the firm's financial resources. The process of managing
finances involves cash flow management which is concerned with the
inflow and outflow of money in and out of a business.
 For this a cash flow statement is prepared which records a company's
income and expenses in a systematic form. Cash flow statement is a
financial tool used by the companies to measure its cash receipts and
disbursements over a period of time. It lists cash to and cash from
operating, investing and financing activities along with the net
increase or decrease in cash for the period.
 For proper management of a company's finances, the knowledge of
accountancy, particularly the principles of double entry book keeping
is an essential requirement.
40

 This whole process of financial management gives the true financial position
of the company. A good financial standing of a company so indicated
reinforces its credit worthiness and competitive position in the market. It is
thus essential for smooth and successful functioning of the enterprise in a
profitable manner on a long term basis.
 A firm can manage its cash flows by following certain basic rules of
accounting in the manner as described below:-
 Understand the cash flows in a broader perspective in order to any avoid
financial troubles in future. It is also considered as a fuel to run your business
efficiently.
 Measure the cash flows and the changes in it over a time-period and
categorize company's cash receipts and outlays for every financial year. This
can be done by preparing a statement of cash flows on monthly, weekly or
daily basis depending upon the requirement of business.
 All the business transactions of a company are recorded in a general ledger
account. A 'general ledger account' is the main accounting record of a
business in which the financial transactions are represented by means of the
two entries i.e. debit and credit.
41

 Manpower management is an integral part of the process of the management
of a business. It is a pervasive function and is performed by all managers at
all levels in an organisation .
 Personnel managers or human resource managers interpret the progressive
needs of the organisation and direct individual potential towards a common
goal.
 Today human factor is considered to be the most important resource because
the effective utilisation of the other resources of the organisation depends
upon the management of the personnel of the organisation. Human resources
appreciates in value as the time progresses in terms of acquisition of
knowledge and experience. They have inherent dynamism and potential for
development.
 The specific objectives of personnel management are:-
 To build and maintain cordial relations between people working at different
levels of the organisation.
 To ensure effective utilisation of the available human resources.
 To provide fair working conditions, wages and amenities to the employees.
 To achieve the development of each individual employee to his/her fullest
potential.
42

 Small and medium industries can include variable pay component to their pay
structures. Apart from the regular pay scales, pay-hike linked to performance
may be integrated.
 Pay decisions should have a linkage with the outcomes of performance
appraisal mechanism in force. The practice of paying a consolidated pay at
present in vogue need to be replaced with regular pay structure.
 Similarly these SMES should put in place individual and group incentive
schemes. The units may take consultancy from the business schools, at a
nominal charge in this regard.
 A majority of small and medium units under review do not follow promotion
system. This may be one of the reasons for larger quits. The performance of
employee is deeply connected with his career advancement.
 These units may adopt appropriate promotion policy. A seniority may be the
basis for promotion decisions for non-technical nature of work and
‘performance’ ought to be the criterion for the skill and competency based
jobs.
43

 The capability of Indian MSME products to compete in international markets
is reflected in its share of about 34% in national exports. In case of items like
readymade garments, leather goods, processed foods, engineering items, the
performance has been commendable both in terms of value and their share
within the MSME sector while in some cases like sports goods they account for
100% share to the total exports of the sector.
 In view of this, export promotion from the small scale sector has been
accorded high priority in India’s export promotion strategy which includes
simplification of procedures, incentives for higher production of exports,
preferential treatments to MSMEs in the market development fund,
simplification of duty drawback rules, etc.
 Products of MSME exporters are displayed in international exhibitions free of
cost under SIDO Umbrella abroad.
 SSI Sector plays a major role in India's present export performance. 45%-50%
of the Indian Exports is contributed by SSI Sector. Direct exports from the SSI
Sector account for nearly 35% of total exports. Besides direct exports, it is
estimated that small-scale industrial units contribute around 15% to exports
indirectly. This takes place through merchant exporters, trading houses and
export houses.
44

 They may also be in the form of export orders from large units or the
production of parts and components for use for finished exportable goods.
 It would surprise many to know that non-traditional products account for
more than 95% of the SSI exports.
 The exports from SSI sector have been clocking excellent growth rates in this
decade. It has been mostly fuelled by the performance of garments, leather
and gems and jewellery units from this sector.
 The product groups where the SSI sector dominates in exports, are sports
goods, readymade garments, woollen garments and knitwear, plastic
products, processed food and leather products.
 The SSI sector is reorienting its export strategy towards the new trade regime
being ushered in by the WTO.
45

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