How to Setup a Project

8/7/2019 How to Setup a Project

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How to Setup a Project?

Guidelines for Prospective Entrepreneur

General Information

Financial Assistance

Project Report

Training

Registration

Marketing

Promotional Schemes

General Information

What can be done for self-employment?

A small-scale industry or a tiny unit can easily be set up for self-

employment. You can choose an activity depending upon your interest andsuitability not only to become self-employed but also to generate

employment for others.

What is a Small-Scale industry?

An industrial unit in which the investment in fixed assets in plant and

machinery does not exceed rupees one crore is said to be small scale

industry. Such plant and machinery may be owned or obtained on lease

while calculating the investment in plant and machinery items like land,building and some equipments required for quality control, pollution control

etc. are excluded.

Is it necessary to engage only in manufacturing for self-employment?

It is not necessary to engage in manufacturing activity for self-employment.

One can set up industry-related service and business enterprises. These are

known as Small Scale Service & Business Enterprises (SSSBEs).

What is a Small-Scale Service business enterprise?

Industry related service and business enterprises with an investment in fixed

assets, excluding land and building, upto Rs. 10 lakhs, irrespective of

location are defined as SSSBEs.

What is a tiny unit?


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Tiny unit is an enterprise with an investment in plant and machinery upto

Rs. 25 lakhs, irrespective of location.

How do I select an activity for self-employment?

For selecting an activity or industry, you will have to consider the following

significant issues:

Where do you want to promote the enterprise?

What resources are available near the location of the enterprise?

What kind of market or consumer pattern exists near the site of enterprise?

What kind of contacts you have to exploit to your advantage for marketing

of the product?

What infrastructure is available at the location of your enterprise?How much capital is available?

There are many other considerations including availability of skilled

manpower, raw material, technology etc. before you narrow down your

choice for selection of industry or activity.

Who will assist in identifying the activity?

Small Industries Service Institutes can assist you in identifying the activity

based on the Industrial Potential Survey and product specific market studies.

District Industries Centers/State Directorate of Industries also facilitate in

identification of a suitable activity.

What steps are required for identifying the activity?

A preliminary market study of product(s) or service(s) needs to be

undertaken to analyse consumption and availability pattern. If there is a gap

in demand and supply, the activity considered ideal for selection.

Where is market information available?

Market information is available with SISIs and DICs of respective

states/areas. Market Survey reports on various items and Industrial potential

surveys of particular areas provide the information about the market

potential of items. Industry and Trade associations, specialised institutions

like PPDC can also provide such information.


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How can market potential be ascertained?

Market potential can be ascertained by conducting preliminary study by

prospective entrepreneur to get an in sight of the product/ services to be

setup. An entrepreneur can estimate local demand, demand within the state

or country, export market and future prospects of product(s)/service(s). Visit

to wholesale and retail markets, bulk consumers etc. provides accurate

information on market potential.

Is there any agency providing guidance on marketing potential?

SISIs and State Governments agencies viz.DICs and SIDCs provide

guidance on market potential. The gap in demand & supply can be

established through potential surveys and market assessments with the helpof these agencies.

Where can the enterprise be set up?

The enterprise can be set up in a designated industrial area, where

infrastructure facilities are available and is near to the market identified. It

can also be set up in any other area depending upon nature of activity and

local municipal rules.

What are the inputs required for setting up an enterprise?

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

CapitalAre there any projects suitable for non-technical and inexperienced

entrepreneurs?

There are many projects, which are suitable for non-technical and

inexperienced entrepreneurs. Skilled manpower and technical personnel can

be hired according to needs. Entrepreneurs can also join special short term


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training programmes. SISIs, DICs, NSIC etc. provide intensive

consultancy to such first generation entrepreneurs.

How can a new entrepreneur compete with the existing manufacturers?

A prospective entrepreneur can take the advantage of opting for the latest

technology and production process and operate at higher volume of

operation. This leads to reduced production cost and production of quality

goods and services. A new entrepreneur can thus provide improved quality

goods and services at lower cost and further tap the market with innovative

marketing approach.

Financial Assistance

Which are the agencies providing 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.

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 a package assistance, State Financial

Corporations also provide a composite loan covering plant and machinery

and working capital.

How to choose the most suitable source of funding?

Any of the financial institutions can be approached to get funds keeping in

view their specific schemes. Evaluate and compare the terms and conditions,

including rate of interest and repayment period of loan offered by the

different financial institutions. Select the financial institution, which offersfunds at minimum interest rate as per your repayment plan to suit your

project. Choose the Institution which is in close proximity to the project site

if other terms and conditions are similar.

What are the eligibility criteria for getting a loan?


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The major eligibility criteria is return on the investment and profitability of

the project proposed to be set up. Any financial institution will support the

project if repayment is assured.

How much money the entrepreneur is required to invest out of his own

resources?

Some portion of total investment has to be contributed by the Entrepreneur

out of own sources. This is called margin money. Financial Institutions insist

on 10 to 25 per cent margin money depending upon the category of the

entrepreneur, risk factor and existing scheme under which the project will be

financed

What is the cost of borrowing money?

The cost of borrowing money depends upon the size of loan required. Lesser

the amount of loan, lesser is the cost of borrowing. Normally, loans

involving an amount of Rs. 25,000/- are available at a rate of interest of

about 12.5 %. For loans of higher amount upto Rs. 2 lakhs, the rate may be

13-14% and for amount higher than that, it may be 3-4 % more.

What to do if an entrepreneur does not have any money of his own?

It is simple. One can arrange for loan for margin money under the scheme

being operated by the State Commissioner/Directorate of Industries or State

Bank of India. But this scheme is generally offered to professionally

qualified entrepreneurs. Alternately you may have to prune down the size of

your project in tune with available margin money. The financial institutions

will prefer to support an entrepreneur, who is willing to put his/her own

stake to some extent.

What is the procedure for getting a loan?

An entrepreneur should approach the concerned finanical institution viz.State Financial Corporation, NSIC, Bank branches etc. Application in

prescribed proformae has to be submitted along with project report including

proof of ownership/availability of land/building, proof of residence,

collateral securities (wherever applicable) etc. The loan is given by the

institution if the application meets the norms.


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Can the loan be used to cover all types of investment in the project?

The amount of loan can be used to cover all types of investment required in

the project, such as machinery & equipment, and working capital, land and

building. The lending agency for each component of loan may be same or

different.

Is there any agency for funding the land and building costs?

The Banks and State Financial Corporations offer assistance for

land/building/shed to certain extent. However, some qualifying parameters

have been laid down by these institutions. In addition, Housing

Development Corporation also provides funds for land /building.

What are the general conditions for availing financial assistance?

The general conditions for getting financial assistance are:

Eligibility criteria

Technical /Economic viability

Promoters contribution

Capacity to repay loan

Collateral securities/guarantee

Is loan available from any other source for small projects?

Loan is also offered under some special schemes like P.M.R.Y. which are

directed towards creation of self-employment.

What is PMRY?

Prime Minister Rojgar Yojana is a centrally sponsored self-employment for

educated unemployed youth desirous of setting up an enterprise of his own.

Persons between the age group of 18 to 35 years with annual family incomeof less than Rs.40000/- are eligible. The age limit is relaxed upto 45 years in

case of SC/ST, Women, Physically handicapped and Ex-servicemen. One

can set up any industry/business or service activity and can avail of financial

assistance upto Rupees Two Lakhs for promoting an enterprise as an

individual under PMRY.


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Who Operates PMRY?

PMRY Scheme is primarily operated by Small Industry Development

Organisation, Ministry of SSI & ARI through State Director/ Commissioner

of Industries. The implementation of the scheme is done through DICs in all

the states in the country.

How does an Entrepreneur get assistance under the PMRY?

A simplified procedure is in operation. An application in prescribed

Performa has to be submitted to the concerned DICs along with proof of

residency, Affidavit of family income and birth certificate etc. A committee

scrutinizes the applications before forwarding all eligible application to the

designated bank(s). The banks in turn provide funds after formal

examination and acceptance.

What is the interest rate at which PMRY loan is available?

The PMRY is an attractive scheme offering loan @ normal bank rate. The

repayment of the loan is required in 3 to 7 years depending upon the

capacity and viability of the project.

Project Report

What is a project report?

The project report is a document, which gives an account of the project

proposal to ascertain the prospects of the proposed plan/activity. The project

report contains detailed information about:

Land & building required

Manufacturing Capacity per annum

Manufacturing Process

Machinery & equipment along with their prices and specificationsRequirements of raw materials

Power & Water required.

Manpower needs

Marketing

Cost of the project and production.

Financial analyses & economic viability of the project.


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How is a Project Report Prepared?

A project report is prepared with the help of prescribed guidelines available

with SISIs, DICs & financial institutions. Information about prices of

machinery & equipment, raw material and other various inputs required for

setting up an enterprise need to be collected from the market.

Is there any standard model for preparing the project report?

A model proforma for preparing the project report is available with SISIs,

DICs & financial institutions. Every institution has its own model proforma.

However contents of all the proforma are almost similar.

Is a model project report available?

Yes, Model project profiles are available with the Small Industries Service

Institutes & DICs for the guidance of entrepreneurs.. However, these

project profiles have to be recast in accordance with specific needs of the

entrepreneurs and the current prices of inputs.

Which agency assists in preparation of Project Report?

SISIs, NSIC and State Govt. agencies viz. DICs, SFCs can help you in

preparing the Project Report. You can also prepare the Project Report

yourself by collecting detailed information on various points.

What details are required for preparation of Project Report?

In formation in detail is required about the technical process, requirements

of plant and machinery, raw materials, manpower requirement, market

information and statutory representations (like pollution control and public

safety) etc. The details of power and water tariff, land/shed/building and

selling prices etc. needs to be collected as prevalent in the market.

Which agencies can be approached for obtaining information for preparation

of the Project Report?

Entrepreneur can approach SISIs and state Govt. agencies viz. Directorate

of Industries, SFCs, DICs and market channels for getting information.


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Who can help in selecting production process, equipment etc?

Small Industries Service Institutes, Design and Development Centres like

PPDCs/Tool Rooms, Research and Developmental agencies such as

NRDCs and Regional Research Laboratories can help you in selecting the

right production process, suitable equipments etc.

Training

What basic training is required for setting up an enterprise?

Basic training differs from product to product but will necessary involve

sharpening of entrepreneurial skills. Need based technical training is

provided by the Govt. & State Govt. technical Institutions.

What are the other types of training relevant for a new entrepreneur?

One can acquire entrepreneurial skills by under going Entrepreneurial

Development Programme and Management Development programme.

What is the duration of such courses?

These are short-term courses of 2 weeks to 4 weeks duration.

Which are the agencies providing such training?

There are a number of Government organisations as well as NGOs who

conduct EDPs and MDPs. These EDPs and MDPs and are conducted by

SISIs, NIESBUD, NSIC, IIE, NISIET, Entrepreneurship Development

Institutes and other state government developmental agencies.

Is different type of training available for different categories of

entrepreneurs?

Need based training courses are available for different categories of

entrepreneurs. For example, Central Footwear Training Institutes provide

training for footwear. Tool Room and Tool Design Institutes provide

training in Engineering Industry. Likewise other technical training is

provided by various institutions of centre and state govt.


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Are there any preferential criteria for imparting training?

An entrepreneur desirous of setting up of enterprises or his representative is

preferred for attending these training programmes which are offered on a

nominal fee. However, there is no fee charged for imparting training for the

entrepreneurs of NE region. Moreover, preference is accorded to weaker

sections such as SC/ST, Women, Ex-servicemen. and Physically

handicapped persons.

Are there any short terms courses available?

Short term technical training courses are conducted by SISIs and other

technical institutions, which vary from 3 to 6 months of duration depending

on nature of training. In addition, short-term training programmes for

managers & supervisors are also conducted by SISIs to upgrade theirknowledge and skills.

Does any agency give on the spot training for installation and

commissioning of equipment?

Normally the suppliers of machinery & equipment provide on the spot

training as well as facilities on the spot for installation and commissioning of

equipment. However, SISIs also assist the entrepreneurs for installation and

commissioning of machinery equipment at their premises.

Is there any agency providing training for skill upgradation?

Skill development/upgradation courses are offered by SISIs, NSIC, PPDCs

etc. in different disciplines to skilled workers engaged in the small scale

industries with a view to equip them with better and improved technologies

of production.

Which are the organisations providing training to improve management of

an enterprise?

SISIs, Management Development Institutes, NPC, NSIC etc. offer

Management Development Programmes for acquiring knowledge about the

different aspects of the management required for an operation of industry.

Short-term courses of two to four weeks are available on Production

Management, Marketing Management, Financial Management, Export


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Management, Export Procedure & Documentation, Packaging for Exports,

Cost Reduction, Material Management etc.

Are there institutions providing consultancy for development or setting up of

project?

SISIs, DICs and State industrial development corporations can provide

consultancy for development or setting up of project. Suitable technologies

are also offered by CSIR Laboratories, PPDCs, NRDCs, R&D institutions

also offer consultancy at nominal charges.

What kind of consultancy is offered by these agencies?

The consultancy provided by these institutions includes identification of

suitable product, market, technologies, Raw Materials, production method,regulatory requirement etc. In fact any problem can be addressed by these

institutions for setting up or running of the enterprise.

Which agencies provide information on plant and machinery, raw materials

and other equipments?

SISIs, DIC, CSIR Laboratories, PPDCs, NRDC, R&D institutions etc.

provide information on plant and machinery, raw materials and other

equipments.

How does one tackle pollution control needs of the project?

In case your product is covered under the list of the polluting industries as

defined by the state government, it will be necessary to get specific

clearance from the state Pollution Control Board/Committees. Pollution

control equipments/measures will have to be installed by the enterprise as

per need. Such polluting enterprises can only be set up in the designated

industrial areas or locations and may have to link up with the common

affluent treatment facility, if available in the area.

Which institutions provide details of pollution control requirements?

Pollution control board/ Committees and State Directorate of industries

provide details of pollution control requirements. SISIs, and DICs also help

in understanding of pollution needs.


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Does any agency provide training in pollution control?

SISIs provide training in pollution control for different type of industries as

per their local needs. Pollution Control Boards & Ministry of Environment

also support training efforts.

Registration

What is registration of SSI?

Registration of SSI means that you register your proposed/existing

enterprise with the State Directorate or Commissioner of Industries or

DICs. This will make you eligible for availing of Government assistance. A

unit is normally registered provisionally first and accorded permanentregistration later. Registration is not compulsory.

What are the advantages of SSI registration?

SSI registration gives recognition to Industrial units & helps in maintaining

database for policy planning and other purposes. It is an essential

requirements for getting benefits of special schemes for promotion of SSI

viz. Credit guarantee Scheme, Capital subsidy, Reduced custom duty on

selected items, ISO-9000 Certification reimbursement & several other

benefits provided by the State Government.

What is the procedure of registration as SSI?

Application in a prescribed application form is available with State

Directorate/Commissioner of Industries/DIC, is submitted to the concerned

authority along with a set of documents specified separately for provisional

and permanent registration.

What documents are required for registration?

For provisional registration, only a project proposal is required since it is

expression of an intent to set up an enterprise. For permanent registration

NOC from Municipal Corporation, Pollution Control Board and Electricity

Board, Proof of rent/ Ownership of workplace etc. are needed.


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Is registration given for manufacturing a product/ setting up a unit at a

particular place?

SSI registration is both location specific and product specific. But in certain

state capitals and metropolitan cities, SSI registration is granted to those

units, which are located only in the designated industrial areas/estates.

Changes if any are required to be incorporated in the SSI registration

certificate.

How much time is required for registration as SSI?

Normally three to four weeks time is required for registration. It also

depends upon time taken by the SSI for completion of all formalities.

What are the formalities to be completed before seeking provisionalregistration?

A copy of project report is required to be submitted along with the

application. NOC from local municipal /bodies, State Electricity Board,

proof of ownership/rent deed are also required if Place/ location of unit is

known.

What is permanent registration as SSI?

The permanent registration as SSI is granted only after the commencement

of commercial production. It is given after physical inspection of the

enterprise and scrutiny of certain documents.

What is Provisional registration?

Provisional registration is initially granted for the proposed enterprise. This

enables in applying to various departments/agencies/SFCs etc. for availing

assistance for setting up the enterprise including infrastructure requirements.

It is termed Provisional since the enterprise is yet to come into existence. Itis granted for a specified period of time (3 years) during which the unit is

expected to be setup.

Is provisional registration compulsory for getting permanent registration as

SSI?


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Provisional registration is not compulsory for getting permanent registration.

However, for availing of various facilities from financial institutions/Banks,

State government, it is necessary to obtain provisional registration.

How does permanent registration differ from provisional registration?

Permanent registration is life time registration granted to SSI which have

commenced commercial production and provisional SSI registration is

granted for 3 years to proposed units which have not come into existence.

What are the formalities required to be completed for seeking permanent

registration?

The following formalities are required to be completed for seeking

permanent registration:

Ownership/tenancy rights of the premises where unit is located.

Municipal Corporation clearance

State Pollution Control Board/ Committee clearance

Electricity Board sanction

Copy of partnership deed/Memorandum of articles of association in case of

Pvt. Ltd. Co.

Sale bill of product manufactured

Sale bill of each end product

Purchase bill of each raw material

Purchase bill of machinery installed

BIS/QC certificate if applicable

An affidavit giving status of the unit, machinery installed, power

requirement etc.

Marketing

How does a new entrepreneur market the product?

This is an era of globalization and liberalization. The manufacturers have tooffer goods and services of desired quality at optimum cost. Select the right

market/consumers identified at the time of planning the unit. Establish

Direct marketing channels or a network of dealers as per requirement of the

product based upon initial survey. Highlight strengths of the product.

How does one popularise the new product?


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You may create awareness among the buyers or consumers about your

products strong points in order to convince them of the utility of the

product. Publicity in various available forms has to be arranged within the

budgetary constraints. Sell your quality, to gain consumers confidence.

Review consumer feed back. Resort to live demonstration. SISI /NSIC help

in popularising the product through domestic and international trade

fairs/exhibitions.

Are there any specialized agencies which offer marketing assistance?

There are Governmental and non-governmental specialised agencies which

provide marketing assistance. NSIC & KVIC are the devoted govt. agencies

for providing marketing assistance to SSI units.

Is there any other assistance offered by NSIC for marketing SSI Product?

Besides promotion of SSI products through exhibitions, NSIC directly

market the SSI produce in the domestic and overseas market. NSIC also

manages a single point registration scheme for manufacturers for Govt.

purchase. Units registered under this scheme get the benefits of free tender

documents and exemption from earnest money deposit and performance

guarantee.

Does any agency help in exhibition of the product?

SISI & NSIC help the small-scale enterprise for exhibiting products of SSI

in the domestic and international exhibition.

Does any agency help in promoting exports?

ITPO, DGFT, FIEO & Chambers of commerce in different countries

Ministry of Commerce provide assistance in promoting exports. Office of

the Development Commissioner (SSI), Government of India providesfinancial assistance to small scale entrepreneurs to display their products in

overseas fairs and also for sales-cum-study tours abroad.

Are there any special benefits for exports?


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SSI units gets special benefits such as duty draw back, advance licensing for

import of capital goods and raw materials, pre- shipment and post shipment

credit against firm export orders and marketing development assistance.

Income tax benefit is available on exports earning.

Promotional Schemes

What is the policy of Government for promoting a small scale industry ?

Government accords the highest preference to development of SSI by

framing and implementing suitable policies and promotional schemes.

Besides providing developed land and sheds to the entrepreneurs on actual

cost basis with appropriate infrastructure, special schemes have been

designed for specific purposes like quality upgradation, common facilities,

entrepreneurship development and consultancy services at nominal charges.

What is the incentive provided for quality upgradation ?

Government of India has been executing the incentive scheme for providing

reimbursement of charges for acquiring ISO 9000 certification to the extent

of 75% of the cost subject to a maximum of Rs. 75,000/- in each case. ISO

9000 is a mechanism to facilitate adoption of consistent management

practices and production technique as decided by the entrepreneur himself.

This facilitates achievement of desired level of quality while keeping check

on production process and management of the enterprise.

Is there any concession on Excise Duty payable by small units ?

SSI units with a turnover of Rs. 1 crore or less per year have been exempted

from payment of Excise Duty. Moreover there is a general scheme of excise

exemption for SSI brought out by the Ministry of Finance which covers

most of the items. Under this, units having turnover of less than Rs. 3 crores

are eligible for concessional rate of Excise Duty. Moreover, there is an

exemption from Excise Duty for SSI units producing branded goods in ruralareas.

Is priority there any on providing credit to SSI ?

Credit to small scale sector has been covered under priority sector lending

by banks. Small Industries Development Bank of India (SIDBI) has been


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established as the apex institution for financing the SSI. Specific schemes

have been designed for implementation through SIDBI, SFCs, Scheduled

Banks, SIDCs and NSIC etc. Loans upto Rs. 5 lakhs are made available by

the banks without insisting on collaterals. Further Credit Guarantee Fund for

small industries has been set up to provide guarantee for loans to SSI up to

Rs. 25 lakhs extended by Commercial Banks and some Regional Rural

Bank.

What are the policies and schemes for promotion of SSI being implemented

by State Governments ?

All the State Governments provide technical and other support services to

small units through their Directorates of Industries, and District Industries

Centres. Although the details of the scheme vary from state to state, the

following are the common areas of support.

Development and management of industrial estates

Suspension/deferment of Sales Tax

Power subsidies

Capital investment subsidies for new units set up in a particular district

Seed Capital/Margin Money Assistance Scheme

Priority in allotment of power connection, water connection.

Consultancy and technical support

If I perform well, will my efforts be recognized ?

Yes, Government of India runs a scheme for giving National Awards to

small scale entrepreneurs providing quality products in 11 selected industry

groups of consumer interest. The winners are given trophy, certificate and a

cash price of Rs. 25000/- each.

Technology and Machinery | Arranging Finance | Unit Development

Project Selection .

"... Our best business missions are based on those ideas that often emerge

out of our deepest personal motivations and interests."

-Warren Avis in "Take a Chance to Be First"

It all begins with an Idea


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The overriding reason for anyone to think of establishing a SSI unit can be

summarised in one word - opportunity. An opportunity to provide a product

or service, which can generate sufficient surplus. This is all the more true if

one is a believer in the maxim, "Small is Beautiful".

However, ideas need to be filtered through a multi-layer sieve. This model is

shown in the following flow:

- Does the idea fire up your motivation?

- Is it a viable business proposition in your area?

- Does it match the needs of your clientele?

- Check it out with basic market research

- Test it out at market place

- Consult with the experts- Look out for competition in the field

- Is it a sunrise industry?

- Your business opportunity

- Project conceptualisation

Once the ideas are screened and a viable business opportunity emerges the

project has to be conceptualised in all its dimensions. The 4 Ps of Project

Conception is:

- PRODUCT (Shape, Size and Nature)

- PROCESS (Technology to produce the product)

- PLACE (Location of Plant)

- PARTNER (Technological of Financial Collaborator)

Making a Product Choice

In a project conceptualisation stage while making a product choice following

factors are related to product need to be considered:

- Product Line - Depth, Width

- Packaging

- Branding

- Warranties

- After Sales Service


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Some other factors that one should consider while finalising the product

choice are:

- Ease of availability of raw-material

- Process Technology

- Accessibility to the market

- Incentive and support from Government

Market information is also important for product selection. Products, which

are likely to have a number of players in the market, are best avoided. Some

such products in the recent past have been plastic footwear, audio cassettes,

disposable gloves and bulk drugs.

In case the entrepreneur is looking for a product, which has export potential,

the following additional questions need to be asked:

- What should be the contents of export-product portfolio?

- What are the special requirements for packaging if one has to export the

products?

- What product adaptations are needed to be made for exporting a product to

a specific country?

- Are any WTO conditionalities involved e.g. "child labour free", ISO 9000

certified, GMP followed etc.

The development of export-product portfolio can be done by considering 4

parameters viz.

- External demand conditions

- Internal supply capability

- Complexity of marketing tasks

- Amount of investment required to penetrate the market

Analysis can be conducted using this four dimensional model. The obvious

choice is a product which scores a high rating on first two parameters andlow rating on last two parameters.

EXIM (Export Import Bank of India) Bank has also developed an excellent

model to conduct the export-product portfolio analysis based on three

parameters viz.


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- Supply Capability In Product Group

- Domestic Environment

- Export Market Attractiveness

This analysis gives rise to product groups with high potential or low

potential.

With regard to special packaging requirements one has to be careful about

laws of the country one is exporting to. For instance, while exporting to

Australia, wooden-packaging cannot be done.

Product adaptations for country's specific needs look into things like whether

voltage supply is 220V or 110V for electric appliances and for automobiles

whether left-hand drive or right-hand drive is appropriate.

It has now become important to understand the implications of the various

agreements which form part of WTO.

How to Setup a Project?

Technology and Machinery | Arranging Finance | Unit Development

Project Selection

"... Our best business missions are based on those ideas that often emerge

out of our deepest personal motivations and interests."

-Warren Avis in "Take a Chance to Be First"

It all begins with an Idea

The overriding reason for anyone to think of establishing a SSI unit can be

summarised in one word - opportunity. An opportunity to provide a product

or service, which can generate sufficient surplus. This is all the more true if

one is a believer in the maxim, "Small is Beautiful".

However, ideas need to be filtered through a multi-layer sieve. This model is

shown in the following flow:

- Does the idea fire up your motivation?

- Is it a viable business proposition in your area?

- Does it match the needs of your clientele?


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- Check it out with basic market research

- Test it out at market place

- Consult with the experts

- Look out for competition in the field

- Is it a sunrise industry?

- Your business opportunity

- Project conceptualisation

Once the ideas are screened and a viable business opportunity emerges the

project has to be conceptualised in all its dimensions. The 4 Ps of Project

Conception is:

- PRODUCT (Shape, Size and Nature)

- PROCESS (Technology to produce the product)

- PLACE (Location of Plant)- PARTNER (Technological of Financial Collaborator)

Making a Product Choice

In a project conceptualisation stage while making a product choice following

factors are related to product need to be considered:

- Product Line - Depth, Width

- Packaging

- Branding

- Warranties

- After Sales Service

Some other factors that one should consider while finalising the product

choice are:

- Ease of availability of raw-material

- Process Technology

- Accessibility to the market- Incentive and support from Government

Market information is also important for product selection. Products, which

are likely to have a number of players in the market, are best avoided. Some

such products in the recent past have been plastic footwear, audio cassettes,

disposable gloves and bulk drugs.


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In case the entrepreneur is looking for a product, which has export potential,

the following additional questions need to be asked:

- What should be the contents of export-product portfolio?

- What are the special requirements for packaging if one has to export the

products?

- What product adaptations are needed to be made for exporting a product to

a specific country?

- Are any WTO conditionalities involved e.g. "child labour free", ISO 9000

certified, GMP followed etc.

The development of export-product portfolio can be done by considering 4

parameters viz.

- External demand conditions

- Internal supply capability

- Complexity of marketing tasks

- Amount of investment required to penetrate the market

Analysis can be conducted using this four dimensional model. The obvious

choice is a product which scores a high rating on first two parameters and

low rating on last two parameters.

EXIM (Export Import Bank of India) Bank has also developed an excellent

model to conduct the export-product portfolio analysis based on three

parameters viz.

- Supply Capability In Product Group

- Domestic Environment

- Export Market Attractiveness

This analysis gives rise to product groups with high potential or low

potential.

With regard to special packaging requirements one has to be careful about

laws of the country one is exporting to. For instance, while exporting to

Australia, wooden-packaging cannot be done.


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Product adaptations for country's specific needs look into things like whether

voltage supply is 220V or 110V for electric appliances and for automobiles

whether left-hand drive or right-hand drive is appropriate.

It has now become important to understand the implications of the various

agreements which form part of WTO.

Technology and Machinery

Project Selection | Arranging Finance | Unit Development

Process Selection

Choices of process technology emerge once the product is finalised. For

some complex products, process know how has to be imported. In suchcases agreements for technology transfer should be made with due care to

safeguard interest. A lot of appropriate technology is being developed at

CSIR and Defense Research Labs and some of this technology can now be

bought. Indigenously developed process know-how has intrinsic benefits

such as appropriateness and relative inexpensiveness.

While checking out on a process technology, the following things need to be

considered with utmost care:

- Whether process requires very high level of skilled workers or complex

machines?

- Whether process requires large quantities of water and/or power?

- Whether any process or product patent needs to be honoured while utilising

the selected process technology.

- Any special pollution or environmental regulations.

- Finally, the appropriateness to the indian environment and conditions.

Machinery and equipment

One of the major deficiencies in the small industry scenario is the prevalence

of outdated production and management methods hindering the efficient


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operation of small-scale units. It was also found that the most important

reason for the reluctance of the small industrialists to install modern

machinery and equipment was the lack of investible funds. The main

objective of National Small Industries Corporation (NSIC) is to provide

machinery and equipment to small industrial units offering them long

repayment period with moderate rate of interest.

NSIC procedures for hire purchase of machinery

- The hire purchase application is to be made on the prescribed form.

- The Director of Industries of the State under whose jurisdiction the

applicant falls, forwards the application to the head office of the NSIC atDelhi with his recommendation and comments.

- All applications for indigenous or imported machines are considered by

acceptance committees comprising of the representatives of the Chief

Controller of Imports, Development Commissioner, Small Scale Industries

and other concerned departments.

- Decision of these committees is conveyed to the parties concerned with

copies to the regional offices of the NSIC and the concerned Directorate of

Industries.

- Once all these formalities are completed by the hirer, instructions are sent

to the suppliers to dispatch the consignment (duly insured for transit risk) to

the hirer and to send the R/R or C/R as the case may be, to the regional

office

- The NSIC after ensuring that all dues have been paid by the hirer, releases

the R/R or C/R to him for taking delivery of the machines.

- In case of imported machines, the procedure is slightly different in as much

as the shipping documents are sent to the clearing agents for clearing the

consignment from the Customs and dispatching it to the hirer.

Value of machines that can be supplied


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Rs. 7.5 Lacs, F.O.R. or landed cost as the case may be.

Earnest Money

5% or 10% of the value of machinery depending on whether the equipment

is imported or indigenous. In the case of furnaces and a few other items of

equipment, the rate of earnest money is different. Interest 9 per cent per

annum with a rebate of 2 per cent on prompt payment. This interest is

calculated on the value of machines outstanding after deducting payment of

earnest money.

Administrative Charge

2 per cent on the sales value of machines and its recovery by the NSIC is

spread over the total installment period.

Period of Repayment

The value of the machines, after deducting the earnest money received,

called the Balance Value, is payable alongwith interest and administrative

charge in 7 years.

- The first installment is payable after one year and six months from the

delivery of machines

- The second and subsequent installment are payable half-yearly thereafter.

Gestation Period

In case of certain type of machines which become operative immediately on

installation in the service sector industries and job order establishment, a

gestation period of only 6 months shall be allowed both to the new and

existing units.

A rebate of 2% per annum is allowed on the interest rates, in case an

installment is paid on or before the due date.

In case the payment of installment is not made within one month of thespecified due date, interest @ 2% per annum over and above the normal rate

is charged on the defaulted amount from the date of default to the date of

actual payment. Remission in interests is allowed in case one or more than

one installment is paid in advance of the due date(s).


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Now the Place and Right Partner has to be selected and Project Report has to

be prepared.

Arranging Finance

Technology and Machinery | Project Selection | Unit Development

No SSI unit can take off without monetary support. This need for finance

can be classified into following types:

- Long and medium term loans

- Short term or working capital requirements

- Risk Capital

- Seed Capital/Marginal Money

- Bridge loans

Financial assistance in India for SSI units is available from a variety ofinstitutions. The important ones are

- SIDBI: Small Industries Development Bank of India (refinance and direct

lending)

- SFCs: State level Financial Corporation e.g. Delhi Financial Corporation.

- NSIC: National Small Industry Corporation.

- Small Industry Development Corporations of various states.

- Commercial/Co-operative Banks.

- DIC: District Industry Centre.

Long and medium term loans are provided by State Financial Corporations,

SIDBI and State Industrial Development Corporations. Banks also finance

term loans. This type of financing is needed to fund purchase of land,construction of factory building/shed and for purchase of machinery and

equipment. Term loans are secured against mortgage of assets such as land,

building, machines, equipment and other stocks. The short-term loans are

required for working capital requirements, which fund the purchase of raw

material and consumable, payment of wages and other immediate


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manufacturing and administrative expenses. Such loans are generally

available from commercial banks.

There is, however, a SINGLE WINDOW SCHEME, for SSI units. Under

the scheme, one agency, either the bank or the financial institution, funds

both the term loan and working capital requirements. This scheme applies to

all SSI projects with project cost upto Rs. 5 million. The working capital

loan is generally secured against

- Pledging of stocks, raw materials and finished goods,

- Advances against work-in-progress (WIP),

- Advance against bills.

For loans from financial institutions and commercial banks a formal

application needs to be made. The details of documentation that need to be

provided with the loan application are shown here.

- Documentation for Loan Application

- Balance Sheet and Profit Loss Statement for last three consecutive years of

firms owned by promoters

- Income Tax Assessment Certificates of Partners/Directors

- Proof of Possession of Land/Building

- Architects estimate for construction cost

- Partnership deed/Memorandum and Articles of Associations of Company.

- Project Report

- Budgetary Quotations of Plant and Machinery

A sanction or rejection letter is issued by bank after its assessment of the

application. After receiving a sanction letter applicants need to indicate in

writing their acceptance of terms and conditions laid down by FI/ Banks.

Subsequent loan is disbursed according to the phased implementation of the

project. In today's environment there are other choices apart from


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commercial banks and Government owned financial institutions. These

options include venture capital funds and non-government finance

companies.

Unit Development

Technology and Machinery | Arranging Finance | Project Selection

Construction of Building

Getting the Utility Connections

Getting 3M's Right

Machinery

Materials

After deciding the issues of product and process, the next important questionis where to set the unit up?

For many tiny units and service-based units, the home is perhaps the best

starting point.

Setting up an establishment is much more than putting a signboard up and

waiting for customers to walk in. It requires negotiating a favourable plot or

shed purchase, organising for proper construction of building, design of

interiors and finding good deals for equipment and machinery.

Construction of Building

Once an industrial plot for the unit is secured, then the next job is that of

finding a suitable architect. Design of factory building has to be in

consonance with the type of industry and have an appropriate plant layout.

An architect's estimate of building construction is essential for loan

applications. Further, architect's certificate for money spent on building isneeded for disbursement of loan.

Getting the Utility Connections


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Among the utilities of prime importance are power and water. In many cases

getting power connection causes delay in setting up of plant. Therefore it is

imperative to commence work on these aspects with diligent follow up.

Power connections are generally of either LT (Low Tension) or HT (High-

tension) type. If connected load is upto 75 HP, LT connection is provided.

For connected loads of 130 HP or higher only HT connection is provided.

A formal application needs to be made in a specified form to the state

electricity board. An electrical inspector is deputed for evaluation of

application to factory site, after which the load is sanctioned. In areas of

power shortage, it is advisable to augment the power supply with a captive

generating set.

Water connection is also obtained likewise by applying in advance in formal

forms. The water supply can be augmented by installation of tubewell.

Getting 3M's Right

Men

Projections for manpower and staffing are made in the project report.

However it is necessary to time the induction of manpower in a planned

manner. The engineers and operatives must be available before the

installation of the machinery.

Machinery

Choosing and ordering of right machinery is also of paramount importance.

In many cases technology or process provides us with specifications whichis not provided, then an extensive techno-economic survey of machinery and

equipment available must be carried out. International trade fairs and

engineering fairs are good places to look at available options. The

entrepreneur must also consult experts, dealers / suppliers as well as users,

prior to making a selection of equipment and machinery. The advice of DIC,

SISI and NSIC can also be sought.


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Materials

Materials procurement and planning are critical to success, of a start-up with

a SSI unit. Inventory management can lead to manageable cash flow

situations; otherwise if too much is ordered too soon considerable amount of

working capital gets locked up. On the other hand, non-availability may

result in production hold-ups, and idle machine and manpower. For essential

imported raw material whose lead-time is large proper planning is all the

more essential

Performance

Economic Indicators

Production

Employment

Export

Opportunity

Production

The small-scale industries sector plays a vital role in the growth of the

country. It contributes almost 40% of the gross industrial value added in the

Indian economy.

It has been estimated that a million Rs. of investment in fixed assets in the

small scale sector produces 4.62 million worth of goods or services with an

approximate value addition of ten percentage points.

The small-scale sector has grown rapidly over the years. The growth rates

during the various plan periods have been very impressive. The number of

small-scale units has increased from an estimated 0.87 million units in the

year 1980-81 to over 3 million in the year 2000.


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When the performance of this sector is viewed against the growth in the

manufacturing and the industry sector as a whole, it instills confidence in the

resilience of the small-scale sector.

Year

Target

Achievement

1991-92

3.0

3.1

1992-93

5.0

5.6

1993-94

7.0

7.1

1994-95

9.1

10.1

1995-96

9.1

11.4

1996-97

9.1

11.3

1997-98

*

8.43

1998-99


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*

7.7

1999-00

*

8.16

2000-01 (P)

*

8.90

P-Projected (April-December)

* Target not fixed at constant prices

Employment

SSI Sector in India creates largest employment opportunities for the Indian

populace, next only to Agriculture. It has been estimated that 100,000 rupees

of investment in fixed assets in the small-scale sector generates employment

for four persons.

Generation of Employment - Industry Group-wise

Food products industry has ranked first in generating employment, providing

employment to 0.48 million persons (13.1%). The next two industry groups


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were Non-metallic mineral products with employment of 0.45 million

persons (12.2%) and Metal products with 0.37 million persons (10.2%).

In Chemicals & chemical products, Machinery parts except Electrical parts,

Wood products, Basic Metal Industries, Paper products & printing, Hosiery

& garments, Repair services and Rubber & plastic products, the contribution

ranged from 9% to 5%, the total contribution by these eight industry groups

being 49%.

In all other industries the contribution was less than 5%.

Per unit employment

Per unit employment was the highest (20) in units engaged in beverages,

tobacco & tobacco products mainly due to the high employment potential of

this industry particularly in Maharashtra, Andhra Pradesh, Rajasthan, Assam

and Tamil Nadu.

Next came Cotton textile products (17), Non-metallic mineral products

(14.1), Basic metal industries (13.6) and Electrical machinery and parts

(11.2.) The lowest figure of 2.4 was in Repair services line.

Per unit employment was the highest (10) in metropolitan areas and lowest

(5) in rural areas.


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However, in Chemicals & chemical products, Non-metallic mineral products

and Basic metal industries per unit employment was higher in rural areas as

compared to metropolitan areas/urban areas.

In urban areas highest employment per unit was in Beverages, tobacco

products (31 persons) followed by Cotton textile products (18), Basic metal

industries (13) and Non-metallic mineral products (12).

Location-wise Employment Distribution - Rural

Non-metallic products contributed 22.7% to employment generated in rural

areas. Food Products accounted for 21.1%, Wood Products and Chemicals

and chemical products shared between them 17.5%.

Urban

As for urban areas, Food Products and Metal Products almost equally shared

22.8% of employment. Machinery parts except electrical, Non-metallic

mineral products, and Chemicals & chemical products between them

accounted for 26.2% of employment.

In metropolitan areas the leading industries were Metal products, Machineryand parts except electrical and Paper products & printing (total share being

33.6%).

State-wise Employment Distribution


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Tamil Nadu (14.5%) made the maximum contribution to employment.

This was followed by Maharashtra (9.7%), Uttar Pradesh (9.5%) and West

Bengal (8.5%) the total share being 27.7%.

Gujarat (7.6%), Andhra Pradesh (7.5%), Karnataka (6.7%) and Punjab

(5.6%) together accounted for another 27.4%.

Per unit employment was high - 17, 16 and 14 respectively - in Nagaland,

Sikkim and Dadra & Nagar Haveli.

It was 12 in Maharashtra, Tripura and Delhi.

Madhya Pradesh had the lowest figure of 2. In all other cases it was around

the average of 6.

Export

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 directexports, 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. 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.


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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, plasticproducts, processed food and leather products.

The SSI sector is reorienting its export strategy towards the new trade

regime being ushered in by the WTO.

Year

Exports

(Rs. Crores)

(at current prices)

1994-95

29,068

(14.86)

1995-96

36,470

(25.50)

1996-97

39,249

(7.61)

1997-98


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43946

(11.97)

1998-99

48979

(10.2)

1999-00 (P)

53975

(10.2)

P-Provisional

Opportunity

The opportunities in the small-scale sector are enormous due to the

following factors:

Less Capital Intensive

Extensive Promotion & Support by Government

Reservation for Exclusive Manufacture by small scale sector

Project Profiles

Funding - Finance & Subsidies

Machinery Procurement

Raw Material Procurement

Manpower TrainingTechnical & Managerial skills

Tooling & Testing support

Reservation for Exclusive Purchase by Government

Export Promotion

Growth in demand in the domestic market size due to overall economic

growth


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Increasing Export Potential for Indian products

Growth in Requirements for ancillary units due to the increase in number of

greenfield units coming up in the large scale sector. Small industry sector

has performed exceedingly well and enabled our country to achieve a wide

measure of industrial growth and diversification.

By its less capital intensive and high labour absorption nature, SSI sector has

made significant contributions to employment generation and also to rural

industrialisation. This sector is ideally suited to build on the strengths of our

traditional skills and knowledge, by infusion of technologies, capital and

innovative marketing practices. This is the opportune time to set up projects

in the small-scale sector. It may be said that the outlook is positive, indeed

promising, given some safeguards. This expectation is based on an essential

feature of the Indian industry and the demand structures. The diversity in

production systems and demand structures will ensure long term co-

existence of many layers of demand for consumer products / technologies /processes. There will be flourishing and well grounded markets for the same

product/process, differentiated by quality, value added and sophistication.

This characteristic of the Indian economy will allow complementary

existence for various diverse types of units. The promotional and protective

policies of the Govt. have ensured the presence of this sector in an

astonishing range of products, particularly in consumer goods. However, the

bugbear of the sector has been the inadequacies in capital, technology and

marketing. The process of liberalisation coupled with Government support

will therefore, attract the infusion of just these things in the sector.

Small industry sector has performed exceedingly well and enabled our

country to achieve a wide measure of industrial growth and diversification.

By its less capital intensive and high labour absorbtion nature, SSI sector has

made significant contributions to employment generation and also to rural

industrialisation. This sector is ideally suited to build on the strengths of our

traditional skills and knowledge, by infusion of technologies, capital and

innovative marketing practices. So this is the opportune time to set up

projects in the small scale sector. It may be said that the outlook is positive,indeed promising, given some safeguards. This expectation is based on an

essential feature of the Indian industry and the demand structures. The

diversity in production systems and demand structures will ensure long term

co-existence of many layers of demand for consumer products / technologies

/ processes. There will be flourishing and well grounded markets for the

same product/process, differentiated by quality, value added and


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sophistication. This characteristic of the Indian economy will allow

complementary existence for various diverse types of units. The promotional

and protective policies of the Govt. have ensured the presence of this sector

in an astonishing range of products, particularly in consumer goods.

However, the bug bear of the sector has been the inadequacies in capital,

technology and marketing. The process of liberalisation will therefore,

attract the infusion of just these things in the sector.

SSI Registration

Small Scale and ancillary units (i.e. undertaking with investment in plant

and machinery of less than Rs. 10 million) should seek registration with the

Director of Industries of the concerned State Government.

Registering your SSI Unit

The main purpose of Registration is to maintain statistics and maintain a roll

of such units for the purposes of providing incentives and support services.

States have generally adopted the uniform registration procedures as per the

guidelines. However, there may be some modifications done by States. It

must be noted that small industries is basically a state subject. States use the

same registration scheme for implementing their own policies. It is possible

that some states may have a 'SIDO registration scheme' and a 'State

registration scheme'.

Benefits of Registering

Objectives and Features

Provisional Registration

Permanent Registration

Procedure

De-registration

Download Registration Forms & Related Documents (Proformas)

Application for Provisional Registration

Provisional Registration Certificate

Application for Permanent Registration

Certificate of Registration

Additional Sheet-1 (for Additions/Deletions)


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Appendix "A" (Production Details

Appendix "B" (Details of Plant and Machinery

Affidavit


The registration scheme has no statutory basis. Units would normally get

registered to avail some benefits, incentives or support given either by the

Central or State Govt. The regime of incentives offered by the Centre

generally contains the following:

- Credit prescription (Priority sector lending), differential rates of interest

etc.

- Excise Exemption Scheme

- Exemption under Direct Tax Laws.- Statutory support such as reservation and the Interest on Delayed

Payments Act.

(It is to be noted that the Banking Laws, Excise Law and the Direct Taxes

Law have incorporated the word SSI in their exemption notifications.

Though in many cases they may define it differently. However, generally the

registration certificate issued by the registering authority is seen as proof of

being SSI).

States/UTs have their own package of facilities and incentives for small

scale. They relate to development of industrial estates, tax subsidies, power

tariff subsidies, capital investment subsidies and other support. Both the

Center and the State, whether under law or otherwise, target their incentives

and support packages generally to units registered with them.

Objectives of the Registration Scheme

They are summarised as follows:

To enumerate and maintain a roll of small industries to which the package of

incentives and support are targeted.

To provide a certificate enabling the units to avail statutory benefits mainly

in terms of protection.

To serve the purpose of collection of statistics.


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To create nodal centres at the Centre, State and District levels to promote

SSI.

Features of the Scheme

Features of the scheme are as follows:

DIC is the primary registering centre

Registration is voluntary and not compulsory.

Two types of registration is done in all States. First a provisional registration

certificate is given. And after commencement of production, a permanent

registration certificate is given.

PRC is normally valid for 5 years and permanent registration is given in

perpetuity.

Provisional Registration Certificate (PRC)

This is given for the pre-operative period and enables the units to obtain the

term loans and working capital from financial institutions/banks under

priority sector lending.

Obtain facilities for accommodation, land, other approvals etc.

Obtain various necessary NOCs and clearances from regulatory bodies such

as Pollution Control Board, Labour Regulations etc.

Permanent Registration Certificate

Enables the unit to get the following incentives/concessions:

Income-Tax exemption and Sales Tax exemption as per State Govt. Policy.

Incentives and concessions in power tariff etc.

Price and purchase preference for goods produced.

Availability of raw material depending on existing policy.

Permanent registration of tiny units should be renewed after 5 years.

Procedure for RegistrationFeatures of the present procedures are as follows:

A unit can apply for PRC for any item that does not require industrial license

which means items listed in Schedule-III and items not listed in Schedule-I

or Schedule-II of the licencing Exemption Notification. Units employing


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less than 50/100 workers with/without power can apply for registration even

for those items included in Schedule-II.

Unit applies for PRC in prescribed application form. No field enquiry is

done and PRC is issued.

PRC is valid for five years. If the entrepreneur is unable to set up the unit in

this period, he can apply afresh at the end of five years period.

Once the unit commences production, it has to apply for permanent

registration on the prescribed form.

The following form basis of evaluation:

The unit has obtained all necessary clearances whether statutory or

administrative. e.g. drug license under drug control order, NOC from

Pollution Control Board, if required etc.

Unit does not violate any locational restrictions in force, at the time of

evaluation.Value of plant and machinery is within prescribed limits.

Unit is not owned, controlled or subsidiary of any other industrial

undertaking as per notification.

De-Registration

A Small Scale Unit can violate the regulations in the following ways which

will make it liable for de-registration:

It crosses the investment limits.

It starts manufacturing any new item or items that require an industrial

license or other kind of statutory license.

It does not satisfy the condition of being owned, controlled or being a

subsidiary of any other industrial undertaking.

PLASTIC PRODUCTS

SL No. SL. (As per gazette notification) PRODUCT CODE NAME OF

PRODUCT

303

PLASTIC PRODUCTS

96.

126

301201


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Full PVC footwear chappals, sandals and shoes

97.

128

42713

Acrylic sheets except by continuous extrusion process.

98.

129

303303

Fibre-Glass reinforced plastic products other than the following:

SMC & DMC and its mouldings.

Continuous Filament Winding (Pipes above 600 mm diameter)

Pultruded productsFRP sheets by continuous process

99.

130

30330402

Hessian, paper and cloth to polythylene laminations-Straight and

sandwiched by extrusion coating process except paper to polythelene

laminations for integrated packing.

100.

131

303402

H.D. Polythylene Mono-Filament (Except for captive use for rope

manufacturers)

101.

132

303403Polypropylene Mono-Filament (Except for captive use for rope

manufactures)

102.

133

30350101


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Polythylene Films with thickness less than 0.10 mm except co-extruded

film cross linked polymer films and high density molecular films

103.

134

30350102

Products of polythylene films as coloured printed films & bags.

104.

135

303601

Spectacle frames by fabrication or by injection moulding

105.

136303702

Polypropylene tubular films (except biaxially oriented)

106.

137

30370301

Industrial items from engg. plastics material by fabrication process only.

107.

139

303705

Polypropylene box strapping

108.

140

30370601

Polythylene and PVC flexible hoses (except wire braided hoses)

INJECTION MOULDING THERMO PLASTIC PRODUCTS

SL No. SL. (As per gazette notification) PRODUCT CODE NAME OF

PRODUCT

109.


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140 A

303707

1. Handles

110.

140 B

303802

2. Soap cases

111.

140 C

303804

3. Buckets

112.140 D

303808

4. Cups

113.

140 E

303810

5. Lunch Boxes

114.

140 F

303812

6. Water jugs

115.

140 G

303816

7. Saucers

116.

140 H

303818

8. Tumblers

117.


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140 HH

30382200

8A. Plastic cane

118.

140 I

303831

9. Bins for various sizes

119.

140 J

303832

10. Washing bowls

120.140 K

303833

11. Salad baskets

121.

140 L

303834

12. Dust pans and bins

122.

140 M

303835

13. Hair brushes

123.

140 N

303836

14. Umbrella frames

124.

140 O

303837

15. Hinged hair pins

125.


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140 P

303838

16. Babies bath tubs

126.

140 Q

303839

17. Mugs

127.

140 R

303840

18. Plates and dishes

128.140 S

303841

19. Salt containers

129.

140 U

303843

21. Pencil boxes

130.

140 V

303844

22. Coffee pots

131.

140 W

303845

23. Coffee pot covers

132.

140 X

303846

24. Table calendar stands

133.


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140 Y

303847

25. Office table tray

134.

140 Z

303848

26. Waste paper baskets.

135.

142

30390102

Flexible polyurethane foam products

136.143

42960

Polystyrene foam products from expandable polystyrene beads (except slabs

for expandable polystyrene beads manufacturers)

137.

144

303903

Plastic buttons

138.

145

Fabricated plastic products as follows-

30390401

1. Advertising novelties

30390402

2. Desk calendar

30390403

3. Pen stand


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30390405

5. Decorative and industrial fixtures

30390406

6. Street lights

30390407

7. Corridor lights

303904088. Passage lights

30390409

9. Building models (Prototype)

30390410

10. Machine model (Prototype)

139.

145 A

303907

HDPE Woven sacks (Except sacks manufactured on circular looms)

140.

146

303909

Plastic combs

141.

147

30391201

PVC Pipes including conduits-Upto - 110 mm dia


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30393501

Fittings for PVC pipes including conduits upto - 110 mm dia.

142.

148

303913

Zip fasteners-Non-metallic (Except in the case of integrated plants

manufacturing all components).

143.

150

303916

Plastic rain coats

144.

151

303925019

Plastic bottle caps (excluding plastic bottle caps capable of retaining

pressure of at least 100 psi for a minimum period of 12 weeks)

145.

152

303926

Flash light torch cases-plastic

146.

153

303927

Polyester sheets

147.

154

303928Other thermo-welded plastic product such as:

30392801

1. Shopping bags


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30392802

2. Diaries

30392803

3. File cover

30392804

4. Badges/Folders

30392805

5. Advertising materials

30392806

6. Wallets

30392807

7. Passport covers

30392808

8. Tool kit covers

30392810

9. Industrial packings for calculators, Microphones etc.

3039281110. Inside assembly of brief cases

30392812

11. Key chains


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30392813

12. Identity cards and visiting cards

30392814

13. Albums

30392815

14. Textile welding for garments

148.

156

303930Watch straps PVC

contd...

SIDO SCHEMES

SIDO operates a number of schemes for the SSI sector. At a glance these

are:-

Credit Linked Capital Subsidy Scheme for Technology Upgradation -

Capital subsidy @ 12% upto Rs. 4.8 lakhs on loans taken for technology

upgradation - for individual SSIs.

Credit Guarantee Scheme - Collateral free loans upto a limit of Rs.25 lakhs -

for individual SSIs.

ISO 9000/ISO 14001 Certification Reimbursement Scheme - Incentive

Scheme of Reimbursement of expenses for acquiring Quality Management

System (QMS) ISO 9000 certification/environment management (EMS) ISO

14001 certification to the extent of 75% or Rs.75,000/- whichever is lower.


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- For individual SISIs/Ancillary/tiny/SSSBE units

Participation in International Fairs - Full subsidy on space rent and shipment

of exhibits of SSI units - for individual SSIs

Purchase and Price Preference Policy - This is administered through the

Single Point Registration Scheme of NSIC. Under this, 358 items are

reserved for exclusive purchase from SSI by Central Government. Other

facilities include tender documents free of cost, exemption from earnestmoney and security deposit and 15% price preference in Central

Government purchases - for individual SSIs

Prime Minister's Rozgar Yojana-PMRY (Scheme of Ministry of ARI) -

Project limit upto Rs. 1 lakh for business and Rs.2.00 lakhs for other

activities, subsidy and margin money upto 20% of project with balance as

loan. Subsidy for NE twice that of rest of India - for entrepreneurs. SSIs

UPTECH Scheme - For promoting technology upgradation in clusters for a

group of SSI units of one industry.

Integrated Infrastructure Development (IID Scheme) - Assistance upto 40%

or Rs.2.00 crores, whichever is less for setting up industrial estates for SSIunits. For NE, assistance is 80% or Rs.4.00 crores - for State

Governments/industry associations/ NGOs.


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Mini Tool Rooms - Assistance upto 90% or Rs.9.00 crores, whichever is less

for setting up new Mini Tool Rooms. For upgradation of existing Tool

Rooms, assistance is 75% or Rs.7.5 crores - for State Governments.

Testing Centres - Assistance upto a 50% or Rs.50 lakhs, whichever is less

for setting up Testing Centres - for industry associations.

Sub-Contracting Exchanges - One time grant for procurement of hardware

and thereafter matching grant on tapering basis at 50%, 30% and 10% of

running expenses, not exceeding Rs. 1.25 lakhs, Rs. 0.75 lakhs and Rs. 0.25

lakhs respectively during the initial three years, subject to a ceiling of Rs.1.57 lakhs per exchange - for industry associations.

SSI MDA - The scheme offers funding upto 90% in respect of to and fro air

fare for participation by SSI Entrepreneurs in overseas fairs/trade

delegations. The scheme also provide for funding for producing publicity

material (upto 25% of costs) Sector specific studies (upto Rs. 2 lakhs) and

for contesting anti-dumping cases (50% upto Rs. 1 lakh) - for individual

SSIs & Associations.

Assistance to Entrepreneurship Development Institutes - For strengthening

training infrastructure in EDIs, assistance upto 50% or Rs. 50 lakhs

whichever is less - for State Governments.

SSI Registration

Small Scale and ancillary units (i.e. undertaking with investment in plant

and machinery of less than Rs. 10 million) should seek registration with the

Director of Industries of the concerned State Government.


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Registering your SSI Unit

The main purpose of Registration is to maintain statistics and maintain a roll

of such units for the purposes of providing incentives and support services.

States have generally adopted the uniform registration procedures as per the

guidelines. However, there may be some modifications done by States. It

must be noted that small industries is basically a state subject. States use the

same registration scheme for implementing their own policies. It is possible

that some states may have a 'SIDO registration scheme' and a 'State

registration scheme'.


Objectives and Features

Provisional RegistrationPermanent Registration

Procedure

De-registration

Download Registration Forms & Related Documents (Proformas)

Application for Provisional Registration

Provisional Registration Certificate

Application for Permanent Registration

Certificate of Registration

Additional Sheet-1 (for Additions/Deletions)

Appendix "A" (Production Details

Appendix "B" (Details of Plant and Machinery

Affidavit


The registration scheme has no statutory basis. Units would normally get

registered to avail some benefits, incentives or support given either by the

Central or State Govt. The regime of incentives offered by the Centregenerally contains the following:

- Credit prescription (Priority sector lending), differential rates of interest

etc.

- Excise Exemption Scheme

- Exemption under Direct Tax Laws.


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- Statutory support such as reservation and the Interest on Delayed

Payments Act.

(It is to be noted that the Banking Laws, Excise Law and the Direct Taxes

Law have incorporated the word SSI in their exemption notifications.

Though in many cases they may define it differently. However, generally the

registration certificate issued by the registering authority is seen as proof of

being SSI).

States/UTs have their own package of facilities and incentives for small

scale. They relate to development of industrial estates, tax subsidies, power

tariff subsidies, capital investment subsidies and other support. Both the

Centre and the State, whether under law or otherwise, target their incentives

and support packages generally to units registered with them.

Objectives of the Registration Scheme

They are summarised as follows:

To enumerate and maintain a roll of small industries to which the package of

incentives and support are targeted.

To provide a certificate enabling the units to avail statutory benefits mainly

in terms of protection.

To serve the purpose of collection of statistics.

To create nodal centres at the Centre, State and District levels to promote

SSI.

Features of the Scheme

Features of the scheme are as follows:

DIC is the primary registering centre

Registration is voluntary and not compulsory.

Two types of registration is done in all States. First a provisional registrationcertificate is given. And after commencement of production, a permanent

registration certificate is given.

PRC is normally valid for 5 years and permanent registration is given in

perpetuity.

Provisional Registration Certificate (PRC)


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This is given for the pre-operative period and enables the units to obtain the

term loans and working capital from financial institutions/banks under

priority sector lending.

Obtain facilities for accommodation, land, other approvals etc.

Obtain various necessary NOCs and clearances from regulatory bodies such

as Pollution Control Board, Labour Regulations etc.

Permanent Registration Certificate

Enables the unit to get the following incentives/concessions:

Income-Tax exemption and Sales Tax exemption as per State Govt. Policy.

Incentives and concessions in power tariff etc.

Price and purchase preference for goods produced.

Availability of raw material depending on existing policy.Permanent registration of tiny units should be renewed after 5 years.

Procedure for Registration

Features of the present procedures are as follows:

A unit can apply for PRC for any item that does not require industrial license

which means items listed in Schedule-III and items not listed in Schedule-I

or Schedule-II of the licencing Exemption Notification. Units employing

less than 50/100 workers with/without power can apply for registration even

for those items included in Schedule-II.

Unit applies for PRC in prescribed application form. No field enquiry is

done and PRC is issued.

PRC is valid for five years. If the entrepreneur is unable to set up the unit in

this period, he can apply afresh at the end of five years period.

Once the unit commences production, it has to apply for permanent

registration on the prescribed form.

The following form basis of evaluation:

The unit has obtained all necessary clearances whether statutory or

administrative. e.g. drug license under drug control order, NOC from

Pollution Control Board, if required etc.

Unit does not violate any locational restrictions in force, at the time of

evaluation.

Value of plant and machinery is within prescribed limits.


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Unit is not owned, controlled or subsidiary of any other industrial

undertaking as per notification.

De-Registration

A Small Scale Unit can violate the regulations in the following ways which

will make it liable for de-registration:

It crosses the investment limits.

It starts manufacturing any new item or items that require an industrial

license or other kind of statutory license.

It does not satisfy the condition of being owned, controlled or being a

subsidiary of any other industrial undertaking.

PROVISIONAL REGISTRATION

The application is accepted for Provisional Registration as a SSI/SSSBE

Unit for the manufacture of items/activities as stated in the application form.

Provisional Registration No :

Date of issue :


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Category of unit (S. No. 3) : __________________________

Signature

Name & Designation of Registering Authority

1. The endorsed application form is a part of the certificate of registration.

2. The provisional registration is valid for a period of five years from the

date of issue.

3. The provisional registration will automatically lapse at the

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