chapter ii schemes for assisting women...
TRANSCRIPT
CHAPTER II
SCHEMES FOR ASSISTING WOMEN ENTREPRENEURS
2.1 Introduction
2.2 Subsidies
2.3 Financial Assistance
2.4 Training
2.5 Other Schemes
2.6 Summary
2.1 INTRODUCTION
Having recognised the importance of developing women
entrepreneurs, the government of India and State governments
have developed various schemes of assistance to women
entrepreneurs. This chapter describes the various schemes of
assistance to small scale industry and women entrepreneurs
extended by Government of India as well as the Government of
Tamilnadu, financial institutions and banks.
Various schemes of assistance provided by Government of India,
Government of Tamilnadu, financial institutions and banks for
promoting entrepreneurs in general-and women entrepreneurs are
described under the four headings given below.
1. Subsidies
2. Financial Assistance
3. Training
4. Other Schemes
2.2 SUBSIDIES
All the subsidy schemes in operation are explained under two
headings.
1. Subsidy Schemes for Small Scale Industry in general
2. Subsidy Schemes for Women Entrepreneurs
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2.2.1 Subsidy Schemes for Small Scale Industry in general
The following subsidies are provided to the entrepreneurs by
the Government of Tamilnadu
1. State Capital Subsidy
2. Special Capital Subsidy for Selected Categories
of Industries
3. Low Tension Power Tariff Subsidy
4. Power Generation Subsidy
2.2.1.1 State Capital Subsidy
This subsidy is provided to the entrepreneurs by the
Government of Tamil Nadu. Fifteen percent of the fixed capital
investment (cost of land, building, plant and machinery
subject to a ceiling of Rs.15.00 lakhs is provided as subsidy
for units located in the 82 backward Taluks, industrial
complexes and growth centres developed by Government agencies
including the Madras Metropolitan Development Authority,
Madras Export processing zone, State Industries Promotion
Corporation of Tamilnadu and Tamilnadu Small Industries
Development Corporation.
The quantum of subsidy is 20% of the fixed capital investment
subject to a ceiling of Rs.20.Q0 lakhs for units in the 31
most backward Taluks in Tamilnadu.
All new units and also existing units which go for substantial
expansion / diversification are eligible for this subsidy.
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The cost of second hand machinery should be excluded from the
total amount of capital investment for subsidy purpose.
Power intensive industries like Iron and Steel smelting,
Aluminium Smelting and Calcium Carbide units and small service
establishments are not eligible for the subsidy.
Application for this subsidy is to be filed through the
District Industries Centre'.
2.2.1.2 Special Capital Subsidy for Selected Categories ofIndustries:
Special Capital subsidy is provided to the entrepreneurs of
small scale industry by the Government of Tamil Nadu. 20% of
the capital investment upto a ceiling of Rs.35.00 lakhs for
Electronics, Rs.20.00 lakhs for leather and Rs.15.00 lakhs for
other industries (exclusive of value of second hand machinery)
is given as subsidy.
This subsidy is available to the new or existing small scale
industrial units taking up substantial expansion in the
following activities
1. Leather industry
2. Electronic industry
3. Auto Ancillaries
4. Drugs and Pharmaceuticals
5. Solar energy Equipment
6. Gold and Diamond Jewellery for export
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7. Jute processing industry in six Taluks namely
Ambasamudram of Nellai Kattabomman district,
Madurai of Madurai district, Musiri of Trichy
district, Kurnbakonam of Tanjore district,
Chengelpet of Chengelpet district and Paruti of
South arcot Vallalar district.
8. Sports goods and accessories
9. Pollution control equipment
10. Cost effective building materials like aluminium,
PVC doors and windows, Window frames etc.
11. Food processing industries
Existing industries which undertake expansions
diversification without any limit to the number of expansions
/ diversification are eligible for subsidy.
The Government of Tamilnadu has ordered stage by stage release
of capital subsidy.
1. In respect of land and buildings purchased and new
buildings constructed 25% subsidy to be released after
completion of civil work, 50% after installation of plant and
machinery and 25% after commencement of commercial production.
2. In respect of ready building purchased 25% is to be
released after the execution of sale/purchase deed, 50% after
installation of plant and machinery and balance 25% after
commencement of commercial production.
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3. In respect of premises taken on rent or lease or units
being set up in own premises/building without new
construction, 50% to be released after installation of plant
and machinery and 50% after commercial production.
Besides the above special subsidy Government in G.O.Ms.No.150
Industries (MIG) Department dt. 24.4.93 have sanctioned an
export subsidy of 8% equivalent to the sales tax paid on the
REP / EXM scripts for Leather and Electronics industries.
In respect of the units using solar energy equipment and
certain solar energy devices, 10% capital subsidy is eligible.
Older Tanneries which go in for Effluent Treatment plants will
be eligible for 10% of the value of the assets to be created
for the Effluent Treatment plants.
This subsidy is available to industrial units irrespective of
their location in the State. In areas where both the State
capital and special capital subsidies are available, the unit
will have the option of choosing either of them.
The unit should file an application before the General
Manager, District Industries Centre for sanction of Capital
Subsidy within one year from the date of commencement of
2commercial production.
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2.2.1.3 Low Tension Power Tariff Subsidy
Low tension power tariff subsidy is provided to the
entrepreneurs of small scale industry by the Government of
Tamil Nadu. This subsidy is available for three years from the
date of commencement of production or date of power
connection whichever is later, at 40% of actual energy charges
paid for the first year, 30% for second year and 20% for the
third year to all small scale industrial units consuming low
tension power excluding areas falling under Madars
Metropolitan Development authority / Urban land tax
jurisdiction and Urban land ceiling jurisdiction namely Madras
and its environs of 15 Kms. and towns of Coimbatore, Madurai,
Salem, and Trichy with 8 Kms. belt area3.
All registered small scale industries which commenced
production on or after 01.01.1980 and which consume Low
Tension Power are eligible for subsidy. The registered Small
Scale Units taking up substantial expansion and
diversification will be eligible for the subsidy from
20.01.1992. All industries using low tension Power
irrespective of the fact whether the industry happens to be
small or medium or large are also eligible for the subsidy.
An Eligibility Certificate should be obtained from the General
Manager, District Industries Centre, concerned within three
months from the date of commencement of production or date of
power connection whichever is later by any Prime Mover. Power
subsidy claim can be made and should be submitted once in six
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months that is, for the bills raised by the Electricity Board
from January to June before August 31st of the year and from
July to December before 28th of February of the succeeding
year. The claim should be made along with the following
a) . Permanent Registration Certificate.
b) . Photostat copies of the Electricity Board
consumption card and the Receipt from the Electricity Board
for having paid the charge4.
2.2.1.4 Power Generation Subsidy:
Power generation subsidy is provided to the entrepreneurs of
small scale industry by the Government of Tamil Nadu. All High
Tension/ Low Tension power consuming units are eligible to get
15% of the cost of the generator not exceeding Rs.5.00 lakhs
as subsidy. Generator purchased for replacement of old
generator is also eligible for subsidy. Conventional resources
based and power intensive industries are not eligible for this
subsidy.
The terms and conditions for availing of the subsidiary given
below.
1. The Subsidy will be available only for brand new
equipment.
2. Prior permission of Tamilnadu Electricity Board
should be obtained for the installation of new
generator sets.
all
3. The generator should be purchased from the
manufacturer or from a dealer accredited by the
manufacturer.
The unit should file an application for sanction of Generator
Subsidy before the General Manager, District Industries Centre
within one year from the date of purchase of the generator set
or installation of the generator set whichever is later5.
2.2.2 Subsidy Schemes for Women Entrepreneurs
The following subsidies are available for the women
entrepreneurs in Tamil Nadu.
1. Additional capital subsidy for employing women
2. Industrial Finance Corporation of India Scheme of
Interest Subsidy for women entrepreneurs
2.2.2.1 Additional capital subsidy for Employing women
This subsidy is provided to the women entrepreneurs by the
Government of Tamil Nadu. Five percent additional capital
subsidy subject to a maximum of Rs.5.00 lakhs is available for
units in which more than 30% of the workers are women. This is
not applicable to industries such as
- Food products
- Garments
- Leather products
- Hosiery and6
- Matches in which traditionally women are employed.
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2.2.2.2 Industrial Finance Corporation of India Scheme ofInterest Subsidy for Women Entrepreneurs
The main objective of the "Scheme of Interest Subsidy for
Women Entrepreneurs" is to provide incentives to the women
having business acumen and entrepreneurial traits to
contribute their mite in the industrial development of the
country.
i. Scope
All industrial projects whether in rural, cottage, tiny, small
(including ancillary ) scale sectors (with project cost upto
Rs.10.00 lakhs ) if set up by women entrepreneur on her own
with minimum financial stake of 51% in the unit are covered
under the scheme.
ii. Operation
The scheme is operated through the State Financial
Corporations (SFCs)/State level financial institutions
performing the role of SFC5/ banks granting assistance to
women entrepreneurs for setting up their industrial ventures
in the rural, tiny, cottage, and small sectors.
iii. Eligibility Criteria
To be eligible for the subsidy the women entrepreneurs should
fulfil the following criteria
1. The women entrepreneurs should have preferably
undergone a full course of an Entrepreneurship
Development Programme.
2. The women entrepreneur should be unemployed before
taking up the industrial venture and after taking up
the venture should not have engaged herself on a
part-time or whole time basis in any other business,
trade, profession or vocation.
3. The enterprise should be owned and administered by the
women entrepreneur herself with a minimum financial
interest of 51% in the share capital of the venture
and must be giving minimum 50% of the employment
generated in the enterprise to women.
4. The industrial venture undertaken by the women
entrepreneur should be her first venture and she
should be devoting full time to her venture.
5. The women entrepreneur must have been sanctioned and
disbursed financial assistance by SFC or a State Level
Financial Institution performing the role of SFC or a
bank for block capital/meeting capital cost of the
proj ect.
iv. Subsidy Assistance
The assistance under the scheme shall be equivalent to the
amount of interest payable by the individual unit set up by
the women entrepreneur to the State Financial Corporation
/bank for the loan assistance disbursed for the project for a
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period of one year subject to a ceiling of Rs,20,000/- per
annum provided the unit is promoted wholly by women
entrepreneur and there is no other corporate investment
otherwise. However if the women entrepreneur has availed
herself of loan assistance both from State Financial
Corporation as also the bank, interest subsidy would be
available in respect of one loan assistance only.
v. Disbursement of Subsidy
The disbursement of subsidy is made by Industrial Finance
Corporation of India upon receiving an application for
interest subsidy under the scheme from the women entrepreneur
concerned with due recommendations and certificates from State
Financial Corporation/bank. The actual disbursement of the
subsidy shall be made to the State Financial Corporation/bank
which will acknowledge the amount and certify that the same
has been utilised for setting off the interest on the loan
amount granted to the unit'.
2.3 FINANCIAL ASSISTANCE
There are number of financial assistances provided to the
entrepreneurs of small scale industry in general and women
entrepreneurs in particular by Government of India, Government
of Tamilnadu, financial institutions and banks. The financial
assistance schemes are grouped and studied under the following
three headings.
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1. Financial assistance schemes to entrepreneurs in
general
2. Financial assistance schemes where reservations are
made for women
3. Financial assistance schemes exclusively for women
entrepreneurs
2.3.1 Financial assistance schemes to entrepreneurs in general
The following financial assistance schemes are offered to
entrepreneurs in general.
1. Self Employment to Educated Unemployed Youth Scheme
(SEEUY)
2. Self Employment Programme for Urban Poor (SEPUP)
3. New Entrepreneur Development Agency Scheme (NEDA)
4. Prime Ministers's Rozgar Yojana Scheme (PMRY)
2.3.1.1 Self Employment to Educated Unemployed Youth Scheme(SEEUY)
This scheme popularly known as 'Gramodaya Scheme' was
introduced by the Late. Prime Minister Mrs. Indira Gandhi on
15th August, 1983 as an attack on unemployment among educated
youth. This scheme is initiated to assist educated unemployed
youth to start industries/service units / small business
ventures and to generate employment. This scheme aims at
covering one person from one village and one job enterprise
for every village in the country.
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The various features of the scheme are given below.
This scheme caters to all educated unemployed youth in the age
group of 18 - 35 years. The minimum educational qualification
required is SSLC pass/ITI certificate course in any trade.
Applicants family income should not exceed Rs. 10,000/- per
annum. The maximum loan assistance is Rs.35,000/- for starting
a small industry, for a service type Rs.25,000/- and for
trading business Rs.15,000/-. Assistance is provided only for
proprietary units and not for partnership units. For enabling
the enterprise to make prompt payment, 25% subsidy is given by
the Government and six months holiday period is given from the
date of receipt of the loan.
Further 30 06 of the scheme has been reserved for scheduled
caste and scheduled tribes. The rate of interest on composite
loan sanctioned under the scheme bears 10% per annum for
backward areas and 12% per annum for other areas 8 . The District
Industries Centre with District Task Force has been the nodal
agency for the implementation of the scheme. The target fixed
for the scheme coverage is 2.5 lakhs youths a year in the
country. Initially, the scheme was to be implemented only in
1983-84. Subsequently it was extended to 1984-85 and again to
1985-86. In 1986-87 it was decided to extend the scheme to the
remaining period of the Seventh Plan9.
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2.3.1.2 Self Employment Programme for Urban Poor (SEPIJP)
The Government of India has implemented a programme for
providing self employment to the urban poor living in
Metropolitan / Urban and Semi urban centres. The objective of
this programme is to enable families living below subsistence
level to undertake self employment.
The various features of the scheme are given below.
The scheme will cover all metropolitan cities, urban and semi
urban centres with population exceeding 10000 according to
1981 census. The total income of the family members of the
benefiiary should not be more than Rs.600/-. The scheme
covers the activities such as Rick Shaw pulling, Carpentry,
Book binders, Vegetable vendors, Plumbers, Caning of chairs,
Pan biddy shop, Tea shop, Tailoring, Ready made garments, News
paper boys, Milk vendors, Shoe repairers, Scooter repair shop,
Furnishers and Painting shop etc.
Assistance upto Rs.5000/- depending on unit cost will be
admissible to a beneficiary for undertaking the above
activities. Subsidy at the rate of 25% of the total
assistance will be provided by the Government through Reserve
Bank of India. Rate of interest on the loan is 10% . Security
will be hypothecation of the asset created out of the
assistance. The borrower has to repay the amount in 33 equal
monthly instalments after a holiday period of 3 months'°.
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2.3.1.3 New Entrepreneur Development Agency Scheme (NEDA)
Under this scheme unemployed graduates and diploma holders
from any institution recogriised by the Government, between the
age group of 18-35 years and want to start an industrial unit
coming under the purview of small scale industry and have
relevant educational background/training can apply to NEDA
cell for credit assistance upto Rs.lO.00 lakhs through
sponsoring agencies viz. University employment Information
and Guidance bureau / Small Industries Services Institute /
Technical Consuslyancy Organisations / District Industries
Centres / Engineering Colleges / Recognised Polytechnics
Reputed medium and large scale units with potential for
ancillary units. No margin money and no security except assets
created out of finance is needed. Maximum period of repayment
is seven years. Rate of interest is as applicable to small
scale industry from time to time. Women entrepreneurs are also
eligible for the above scheme".
2.3.1.4 Prime Ministerss Rozgar Yojana Scheme (PMRY)
The Prime Ministers T s Rozgar Yojana is an ideal and dynamic
scheme for generating jobs to the millions of job seekers
through self employment. The scheme was formally announced by
the Prime Minister on 15th August, 1993 and launched on 2nd,
October, 1993.
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i. Eligibility
The scheme intends to cover whole of the country. Any
unemployed educated person living in any part of the country
rural or urban, fulfilling the following conditions will be
eligible for assistance:
1. Age - between 18 and 35 years
2. Qualification - Matric (passed or failed) or ITI
passed or having undergone Government sponsored
technical course for a minimum duration of six months.
3. Residency - Permanent resident of the area for atleast
three years.
4. Family Income - Upto Rs. 24,000 per annum.
They should not be defaulters to any nationalised
bank/financial institution/co-operative bank. Preference is
given to weaker sections including women. The scheme envisages
22.5 percent reservation for Scheduled Caste/Scheduled Tribe
and 27 percent for other backward classes.
ii. Project Cost
Projects upto one lakh rupees are covered under the scheme in
case of individuals. If two or more eligible persons join
together in a partnership, the project with higher costs would
also be covered provided share of each person in the project
cost is one lakh rupees or less.
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Entrepreneur is required to contribute 5 percent of project
cost as margin money in cash. Balance 95 percent would be
sanctioned as composite loan by bank at the rates of interest
applicable to such loans under the guidelines of Reserve Bank
of India (RBI) issued from time to time.
The loans would not require any collateral security. Only
assets created under the scheme would be hypothecated
/mortgaged/pledged to the bank advancing the loan.
iii. Subsidy
The Government of India would provide subsidy at the rate of
15 percent of the project cost subject to ceiling of Rs. 7500
per entrepreneur. In case more than one entrepreneur join
together and set up a project under partnership, subsidy would
be calculated for each partner separately at the rate of 15
percent of his share in the project cost, limited to Rs. 7500
(per partner)
iv. Repayment Schedule
The repayment schedule ranges from three to seven years after
an initial moratorium of six to eighteen months as decided by
the bank12.
2.3.2 Financial assistance schemes where reservations are
made for women
In the following financial assistance schemes certain
percentage of reservations are made for women
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1. Integrated Rural Development Programme (IRDP)
2. Training for Rural Youth for Self Employment (TRYSEM)
2.3.2.1 Integrated Rural Development Programme (IRDP)
The main self employment programme for the rural areas is the
Integrated Rural Development Programme (IRDP) which is
regarded as a major instrument of the Government of India
strategy to alleviate poverty. Its objective is to enable
families below the poverty line to cross the poverty line
through the use of productive assets. The various features of
the scheme are given below.
i. Beneficiaries
Under IRDP atleast 40% of the total beneficiaries should be
women. Households headed by women have to be given priority.
Therefore families headed by women having an annual income of
upto Rs.35,000/- will get priority under IRDP programme. Women
who came under the category of small and marginal farmers,
agricultural labourers and rural artisans etc. whose annual
family income is upto Rs.3,500/- will be assisted under the
programme. Selection of beneficiaries and ascertaining their
skill levels, aptitudes and needs will be done by a household
survey.
ii. Purposes
The project/activities chosen for the families should match
their needs and aptitudes and the local resource profile. The
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size and the number of activities should be determined in
relation to the income gap required to be covered to bring the
family above poverty line. The project/activities should be
financially viable and should be in primary, secondary and
tertiary sectors.
Loans will be provided by the branch of the bank which has
been allocated the village where the beneficiary has land or
where she lives. The loan amount would be equal to the project
cost minus the amount of subsidy. No contribution is to be
made by the beneficiary. Interest on the bank loan will be
charged as per the latest instruction of the Reserve bank. The
security for the loan will be the hypothecation of the assets
created out of bank loan. Th period of the loan will be fixed
by the bank based on the economic life of the asset financed
and the repaying capacity13.
2.3.2.2 Training for Rural Youth for Self Employment (TRYSEM)
To achieve the objective of providing technical skill to rural
youths to enable them to take up self employment this scheme
of Training Rural Youth for Self Employment (TRYSEM) was
launched as a National scheme in all blocks of the country
from August 15, 1979. This scheme is a facilitating component
of IRIJP. The various features of the scheme are given below.
i. Target Group
The target group comprises of rural youth between the age of
18 - 35 from families living below the poverty line. The upper
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age limit is 35 years which is relaxed to 40 in case of widows
for receiving TRYSEM training. Under this scheme 40% of youth
trained should be women and one third of youth trained should
belong to SC and ST.
ii. Training
The identified youth are to be put through a period of
training, either with a training institution or a master
craftsman to provide necessary technical and entrepreneurial
skills. On the successful completion of training, they will
receive a combination of subsidy and institutional credit
under IRDP for acquisition of income generating assets. The
duration of the training will be six months . Trainees are
given stipends during the training period as under
1. Stipends upto Rs.150/- per trainee per month if the
training is conducted in the village of the trainee.
2. Upto Rs.250/- per trainee per month if the training
is conducted in a place other than trainee's village
and arrangements for free accommodation have been made
3. Upto Rs.300/- per trainee per month if the training
is conducted in a place other than trainee's village
and no arrangements for free accommodation have been
made.
iii. Selection of youth and Identification of vocation
The Block Development Office will invite applications from
youth belonging to the target group in his area. There are no
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educational qualifications prescribed for selection of
trainees. The District Rural Development Agency (DRDA) will
identify the necessary vocation in consultation with the
district level officers of different departments keeping in
view their sectoral plans. Selection of vocation will be done
keeping in view of the skills, goods and services required.
iv. Free Tool Kit and Financial Assistance
A free tool kit costing not more than Rs.600/- may be given in
kind to the trainees during the course of the training. On
successful completion of training, if the trainees need
financial assistance to set up projects for self empioyment
loan assistance will be available from banks under Integrated
Rural Development Prpgramme or Training Rural Youth for Self
Employment scheme".
2.3.3 Financial assistance schemes exclusively for womenentrepreneurs
The following assistance schemes are in operation exclusively
for the benefit of women entrepreneurs.
1. Development of Women and childre .n in Rural Areas
(DWACRA)
2. Mahila Udhayam Nidhi Scheme
3. The Small Industries Development Bank of India's
Scheme of Assistnce for Women Entrepreneurs
4. The State Bank of India - Sree Shakthi Package
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2.3.3.1 Development of Women and children in Rural Areas
(DWACRA)
The scheme Development of Women and Children in Rural Areas is
a national scheme implemented by the Government of India. It
is a sub scheme of Integrated Rural Development Programme
started with the primary objective of providing rural women
with self employment opportunities. In recognition of the fact
that women have benefited only marginally under various rural
development programme a pilot scheme was visualised in
1982-83. This was to be implemented in 50 selected districts
all over the country to give a boost to the involvement of
women in anti poverty programmes. The target group for
Development of Women and Children in Rural Areas is same as of
Integrated Rural Development Prpgramme.
Since reaching women in isolation was considered to be very
difficult, it was decided to adopt a group approach to reach
women in large numbers. Groups of 15-20 women belonging to
families below poverty line are expected to be organised under
the programme for self employment. These groups are provided
financial assistance (loan and subsidy) , technical assistance
including training, marketing linkages and other follow up
support to take up selected enterprises successfully. The
various features of the scheme are given below.
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i. Objectives
The specific objective of Development of Women and Children in
Rural Areas are
1. To improve women's participation in rural development
2. To improve their earnings
3. To help them acquire new skills
4. To provide them better access to credit and to other
social services
S. To reduce their daily work load
6. To establish meaningful linkages with various other
programmes for the development of the rural and
backward sections of the society and
7. To generate marketable output of women from these
activities.
ii. Strategy
The women members of Development of Women and Children in
Rural Areas scheme will form groups of 10-15 women each for
taking up economic activities suited to their skill, aptitude,
and local conditions. One woman from amongst the members will
function as Group Organiser. The group may be registered under
the Societies Registration Act or State Co-operative Societies
Act. At present a majority of groups under DWACRA are
unregistered or informal groups.
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1±i. Selection of Activity
The selection of activity will be decided by the group members
themselves. However the activity selected should be viable one
for which skill training, raw materials and marketing are
available locally".
iv. Financial Assistance
In addition to the benefits of loan and subsidy of IRDP to
individual members, each group of women under DWACRA will be
given a lump sum grant of Rs.15,000 as Revolving Fund. The
fund is meant for use by the group for purposes like -
1. Purchase of raw materials and marketing
2. Honorarium to group organiser at Rs.50/- per month for
a period of one year.
3. Infrastructure support for income generating and
other group activities.
4. One time expenditure on child care activities
5. One time expenditure not exceeding Rs.500/- to meet
travel allowance of group members for visit to banks
etc.
A group which is registered under Societies Registration Act
or State Co-operative Societies Act can approach a bank for
getting loan in the name of group for production purposes. In
the case of unregistered and informal groups, banks are having
legal difficulty in providing finance.
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During 1992-93 the scheme was in operation in 290 districts
where rural women's poverty was believed to be most acute16.
2.3.3.2 Mahila Udhayam Nidhi Scheme
The Industrial Development Bank of India has been operating
since June, 1986, a scheme of assistance for women
entrepreneurs with twin objectives of
1. Providing support by way of training and extension
services to women entrepreneurs for upgrading their skill and
developing / improving their entrepreneurial and managerial
capabilities and
2. Extending financial assistance on concessional terms
to enable them to set up industrial units in the small scale
sector.
After recognising that women entrepreneurs as a separate
target group deserve special attention it has introduced a new
scheme called Mahila Udhayam Nidhi Scheme (MTJN) for providing
equity type assistance to women entrepreneurs in setting up a
new industrial projects with cost upto Rs.10.00 lakhs in the
small scale industrial sector. The main features of the scheme
are given below.
1. Eligibility
All new industrial projects in the small scale sector eligible
for refinance assistance and set up by new women entrepreneurs
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would be eligible for assistance under the scheme, provided
the cost of the project does not exceed Rs.10.00 lakhs.
ii. Debit-Equity Ratio
Debit-Equity Ratio shall not exceed 3:1. Central/State
investment subsidies if any may be retained for working
capital requirements.
iii. Promoters Contribution
Minimum promoters contribution shall be 10% of the project
cost.
iv. Extent of Seed Capital assistance
Seed capital assistance by way of soft loan will be given
upto a maximum of 15% of the project cost to meet the gap in
equity after taking into account the promoters own
contribution.
v. Interest/Subsidy charge
A nominal rate of interest (by way of service charge) of 1%
per annum would be payable annually. The rate of interest will
be subject to review during the currency of seed capital
assistance. In case of the financial position and
profitability of the unit so warrant a higher rate of service
charge, but not exceeding the normal rate of interest on term
loan will be applied.
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vi. Repayment period
The soft loan assistance will be repayable over a period not
exceeding 10 years, including an initial moratorium of not
more than 5 years.
vii. Operating agencies
State Financial Corporations and Small Industries Development
Corporations will act as agents of Industrial Development Bank
of India for sanction, disbursement and recovery of soft seed
capital assistance. The credit risk on such seed capital
assistance will be borne by Industrial Development Bank of
India 17
2.3.3.3 The Small Industries Development Bank of India'sScheme of Assistnce for Women Entrepreneurs
The Small Industries Development Bank of India extends
refinance assistance to provide training and extension
services support to women entrepreneurs according to their
skills and socio economic status and extend financial
assistance on concessional terms to enable them to set up
industrial units in small scale sector.
The refinance assistance is provided to the following
institutions:
1. State Financial Corporations
2. Small Industries Development Corporations
3. Commercial Banks
4. State Cooperative Banks
S. Regional Rural Banks
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All projects in the small scale industrial sector promoted and
managed by women entrepreneurs including those in the cottage,
village and tiny sector industries are covered by the
refinance facility. For the purpose of getting refinance the
promoters contribution is to be 12.5% of the project cost for
units set up in category 'A' backward districts. 15% for all
other cases irrespective of location.
The ceiling interest rate chargeable by primary lenders not to
exceed the concessional rate specified by the Small Industries
Development Bank of India. The repayment period of the loan is
not to exceed 10 years including moratorium upto 2 years. The
security for loan is to be decided by the primary lenders.
However, no collateral security is to be insisted upon.
The intending borrowers have to approach any of the eligible
institutions i.e. State Financial Corporations, Small
Industries Development Corporations, Commercial Banks and the
like for assistance. The eligible institutions are required to
first sanction assistance and seek refinance from Small
Industries Development Bank of India.
The Small Industries Development Bank of India also organises
the programmes for training consultancy support and extension
services for women entrepreneurs through designated agencies,
such as Technical Consultancy Organisations, Entrepreneurship
VAN
Development Institute of India, central and State Welfare
Boards, Khadhi and village Industries Commission or other
recognised training and management institutes18.
2.3.3.4 The State Bank of India - Sree Shakthi Package
The State Bank of India has introduced Sthree Shakthi Package
(SSP) to make entrepreneurs out of women. The scheme was
introduced on the 19th November, 1988 coinciding with the
birth anniversary of the late. Prime Minister Mrs. Indra
Gandhi. The package envisages:
-Reduction in margin money i.e. entrepreneurs stake by 5%
(since not effective with the introduction of Bank of
Nayak Committee recommendations of adequate of working
capital, which has reduced margins, making more or less
uniform)
- Reinforcing behavioural and managerial traits through
training programmes.
- Loan proposals will be processed within 30 days except
where it involves other financial institutions or are of
high value.
-Concession in the interest normal rates by 0.5% was
also introduced (since not effective due to reduction of
interest rates by Reserve bank of India)'9
2.4 TRAINING
The training facilities offered to the entrepreneurs are
discussed under two headings given below.
72
1. Entrepreneurship Training
2. Technical Training
2.4.1 Entrepreneurship Training
Training is one way of expanding the entrepreneurial base, and
Entrepreneurship Development Programmes (EDPs) aim at the
comprehensive development of trainees as entrepreneurs. An
entrepreneur should possess such basic qualities as
personality, leadership endurance, aptitude for developing
entrepreneurial skills and above all emotional attachment to
the venture. Without these an entrepreneur is less likely to
succeed in her venture. EDPs develop these qualities in
potential entrepreneurs.
There are now 686 institutions in India that are engaged full
or part time in Entrepreneurship Development Programmes. These
institutions operate at either the national or state level.
Prominent among national institutions are the Entrepreneurship
Development Institute of India (EDI-I), the National Institute
for Entrepreneurship and Small Business Development (NIESBUD)
and the Small Industry Extension Institute (SIET) . At the
state level, there are Small Industry Service Institutes
(SISI) and Technical consultancy Organisations (TCOs)
Institutes of Entrepreneurship Development (lED) and Centres
for Entrepreneurship Development (CEDs)20.
In Tamil Nadu, the Small Industries Services Institute (SISI)
Industrial Technical Consultancy Organisation of Tamilnadu
73
(ITCOT) in collaboration with all India and State level
financial institutions and banks organises EDPs at different
centres in Tamilnadu from time to time. The training courses
are usually of four weeks duration. Seperate training courses
are organised for technocrats, graduates, housewives and
weaker sections of the society. Apart from imparting training
effective assistance is also provided in the preparation,
scrutiny and finalisation of project reports of the trainees
and forwarding the same to the financial institutions for
necessary financial assistance.
2.4.2 Technical Training
The Small Industries Services Institute (SISI), Madras
conducts the following skill development training facilities
through the workshops attached to the institute:
1. Machine Shop Practice (Turner)
2. Machine Shop Practice (Miller)
3. General Carpentary
4. Electroplating
5. Printing
6. Simple Chemical Products Manufacture
7. Blue Print reading
The institute also conducts some training courses through
Mobile Vans for the benefit of rural population They are:
1. Machine Shop Practice
2. Glass Toys and Screen Printing
3. Simple Chemical Products Manufacturing
74
The central Footware Training Centre at the campus of SISI
Madras conducts training courses in Footwear Technology. The
branch of SISI at Coimbatore offers the following courses:
1. Moulding Practice in Grey Iron Foundry
2. Electric Motor Winding
3. Blue Print Reading
The workshop of Branch SISI at Trinelveli conducts the
following courses:
1. Machine shop Practice
2. welding Practice"
2.5 OTHER SCHEMES
Other schemes available are grouped as,
1. Schemes for entrepreneurs in general
2. Schemes for women entrepreneurs.
2.5.1 Schemes for Entrepreneurs in General
The Government of Tamilnadu offers Liberalised Sales Tax
waiver/defferal scheme to entrepreneurs.
2.5.1.1 Liberalised Sales Tax Waiver / Def feral Scheme
The Government of Tamilnadu offers three Liberalised Sales Tax
schemes. They are given below.
2.5.1.1.1 Sales Tax Waiver
Full waiver of sales tax for a period of five years upto a
ceiling of total investment in fixed assets made in new units
75
and a similar concession for existing units undertaking
expansion / diversification but, the ceiling for the waiver
will be total investment made in fixed assets under such
expansion / diversification only. Waiver / Deferral concession
extended to existing industries undertaking expansion/
diversification, without any limit to the number of expansion
/ diversifications.
New units and existing units undertaking expansion
/diversification in the 31 most backward taluks and in the
three Sipcot Industrial complexes at Pudukottai, Tuticorin and
Manamadurai and in Dr. Vikram Sarabai Instronic Estate,
Thiruvanmiyur, Developed plots, Industrial Estate at Perungudi
and Electronic City in Sholinganallur in Chengalpattu MGR
District. Industries in the most backward Taluks and in the
three Sipcot Complexes and in the Electronic Estates can opt
either for the full waiver scheme given above or for deferral
given below.
2.5.1.1.2 Sales Tax Defferal in Other Specified Areas
The various features of the scheme are given below.
i. Quantum of Assistance
Sales Tax Deferral for 9 years to the full extent of the total
investment made in fixed assets for the new units and to the
extent of 80% of the additional investment made in fixed
assets under expansion/diversifidation in the case of existing
76
units. There is no limit to the number of expansion/
diversification.
ii. Eligible Units
New units and the existing units which undertake expansion /
diversification in the 82 Taluks declared as backward Taluks
and in the industrial areas developed by any of the Government
agencies including Madras Export Processing Zone and Madras
Metropolitan Development Authority.
2.5.1.1.3 Sales Tax Defferal in Other Areas
The various features of the scheme are given below.
i. Quantum of Assistance
Sales tax Deferral for five years subject to a maximum of 60%
of the total investment made in fixed assets in the case of
new industries and 50% of the additional investment made in
fixed assts in the case of expansion/diversification of
existing units. There is no limit to the number of such
expansion/diversification (with effect from 01.04.1991).
ii. Eligible Areas
Other than mentioned under A and B above where the scheme was
not in vogue earlier.
77
iii. How to Apply
The application for the issue of eligibility should be filed
before the General Manager, District Industries Centre
concerned within one year from the date of commencement of
commercial production.
Waiver / Deferral period will commence from the date of
commencement of commercial production and their commencement
should be on or after 18.04.1990 for being eligible for
benefits under the scheme. However the units which had
commenced commercial production before 18.04.1990 will be
eligible for the sales tax loan/deferral scheme in operation
at the time if they had applied for the same earlier as per
existing rules. Units which have availed of assistance from
Tamilnadu Industrial Investment Corporation may apply to the
above organisation for assistance under this scheme als022.
2.5.2 Schemes for Women Entrepreneurs
Other schemes offered to the women entrepreneurs are,
1. 30% Reservation in Industrial Estates and
2. Awards to women entrepreneurs
2.5.2.1 30% Reservation in Industrial Estates
The Tamil Nadu Government has made 30% reservation to the
women entrepreneurs in the allotment of Industrial sheds and
I78
Developed plots in all new Industrial Estates and Industrial
Complexes developed by Government organisations.
2.5.2.2 Awards to women entrepreneurs
In order to encourage the women entrepreneurs, State level
awards are being given by the Tamil Nadu State governemnt23
2.6 SUMMARY
The various schemes of assistance for women entrepreneurs
extended by Government of India as well as the Government of
Tamilnadu is discussed in this chapter. The Government of
Tamilnadu offers capital subsidy, low tension power tariff
subsidy, power generation subsidy, sales tax waiver to all
small scale industry. Apart from these the Government of
Tamilnadu offers additional capital subsidy and has made 30%
reservation in industrial estates and gives awards to
encourage women entrepreneurs. The Government of India and
other institutions have implemented schemes of assistance for
small scale industry with reservation for women like
Integrated Rural Development Programme, Training for Rural
Youth for Self Employment, and schemes exclusively for women
like Development of Women and children in Rural Areas
(DWACRA). The Industrial Development Bank of India has offered
scheme of interest subsidy for women entrepreneurs.For
promoting women entrepreneurship, the Small Industries
Development Bank of India also offers a Scheme of Assistnce
FOOTNOTES
1. A Handbook for Entrepreneurs, 1992, Madras, SmallIndustries Services Institute, P. 60
2. ibid., p. 61
3. ibid., pp. 61&62
4. A Guide to Small Entrepreneurs - Incentives and Subsidiesfor Small Scale Industries, 1994, Madras, Directorate ofIndustries and commerce, P.5
5. ibid., pp. 6&7
6. A Handbook for Entrepreneurs. op. cit., p. 60
7. Proceedings of Ei gth National Convention of WomenEntrepreneurs, March 1990, New Delhi, National Allianceof Young Entrepreneurs, pp. 50&51.
8. C.Subbarayalu and others, 'Self Employment to EducatedUnemployed", Yoiana, Vol.34, No.8, May 1-15, 1990, P.28.
9. "Evaluation of SEEUY scheme", State Bank of IndiaMonthly Review, Vol. xxviii, No.5, May 1989, P.256.
10. A.J.Nayyar, " Self Employment programme for Urban Poor',The Banker - A monthly Economic and Banking Journal, Vol.
xxxiv, No. 4, June 1987 P.67,68
12. "Entrepreneurship and Management of Small Business",Course material, Madurai, Centre for EntrepreneurDevelopment, pp.80 &81
13. Proceedings and Background Material- National level WomenCooperators and Entrepreneurs Seminar, February 1992,National Centre for Management Development inAgricultural and Rural Banking, pp. 56 -59.
80
14. ibid., pp. 60&61
15. Proceedings and Background Material- National level WomenCooperators and Entrepreneurs Seminar, op. cit., 52&63.
16. Yadappanavar, "Self Employment Generation for Women - ADWACRA Experiment in Karnataka" , Southern Economist,Vol.34, No.5, July 1, 1995, P.5.
17. Proceedings of Eigth National Convention of WomenEntrepreneurs, op. cit., p.49
18. Lalitha Iyer, Women Entrepreneurs Challenges andStrategies, New Delhi, Friedrich Ebert Stiftung (fes),
1991, p.93&94
19. TNarasimha Murthi, "State Bank's Role in Promotion ofwomen enterprises", Fourth International Womenentrepreneurs Conference, Hyderabad, December, 1993,National Alliance of Women entrepreneurs, New Delhi, p.51
20. S.K. Gupta, Entrepreneurship Development TrainingProgrammes in India, Small Enterprise Development, Vol.1,No. 4, December, 1990, p.15&16
21. A Handbook for Entrepreneurs, op. cit., p.46 &47.
22. A Guide to Small Entrepreneurs - Incentives and Subsidiesfor Small Scale Industries, op. cit., p. 7-9
23. ibid., p.10
81