ACTIVITIES OF NSIC AND ITS ACTION PLAN FOR THE NORTH EAST

NAME OF THE ORGANISATION

STATES

NATIONAL SMALL INDUSTRIES CORPN. LTD.

Arunachal Pradesh,
Assam, Manipur,
Meghalaya, Nagaland,
Tripura and Sikkim

NAME OF THE SCHEME

OBJECTIVE OF THE SCHEME

As per Annexure 'A'

ACTIVITIES OF THE STATE GOVERNMENT

AMOUNT SPENT BY THE ORGANISATION DURING THE LAST THREE FINANCIAL YEARS

As per Annexure 'B'



SCHEMES, IF ANY UNDER CONTEMPLATION FOR THE FUTURE

1. Composite Term Loan Scheme

Making available loans to tiny units wherein loan upto Rs. 25 lakhs are provided for Land & Building, Machinery & Equipment and Working Capital. The scheme has recently been launched for first generation entrepreneurs and the entrepreneurs who are unable to provide security against the assistance, Credit Guarantee Fund Trust provides guarantee cover against certain fees i.e. 2.5% of the loan amount initially and 1% annually for unpaid amount.

2. Preparation of Project Reports:

NSIC in association with Small Industries Service Institutes (SISI) and District Industries Centres located in different States/Districts of North Eastern Region can prepare project reports for use by the small scale units preferably tiny units based on the demand/market or resources like local raw materials or agricultural or horticultural surpluses available. Wherever necessary services of qualified consultant firms of Chartered Accountants and Engineers can be taken to formulate product/service specific project reports.

3. Lower Rate of Interest:

The manufacturing cost in NE Region is obviously higher than in other parts of the country because of difficult terrain and lack of entrepreneurial qualities and infirmities in management techniques. The transportation cost also adds to the overall cost of manufacturing. This problem can be minimised to a certain extent by extending the loans to the entrepreneur at a cheaper rate of interest i.e. lower than the PUR and the difference between the PLR or the normal interest and the interest at which loan is to be provided in NE Region can be subsidized as grant by the Government.

 

ANNEXURE 'A'

Name of the Schemes Hire Purchase Scheme Equipment Leasing Scheme Raw Material Assistance Bill Financing Scheme Internal Marketing Scheme Training & Common Facility Seminar & Conferences
Objective of the scheme To provide finance for procurement machinery & equipment to the entrepreneurs on hired basis for five years & ownership is transferred thereafter To provide finance for procurement of of machinery & equipment to the entrepreneurs on lease basis for five years & ownership is transferred thereafter To provide finance for procurement of Raw Materials To provide finance by way of Discounting of bills, which help entreprenurs to overcome block-up of capital due to delay in payment of bills To market the product of SSI units This is. Generally applicable in case of purchase by Deptts/PSUs Govt. where NSIC participates in the tenders on behalf of the SSI Units. To train the entrepreneurs to develop skills for setting up of industry and to improve their marketing skills Through the Demonstration-cum-Training Centre, Guwahati, Commonacility is provided for Mechanical Engg. and Soft Leather Luggage manufacturing To give publicity to the Schemes of NSIC through Intensive Campaign, Conferences etc. To organize Buyer-Seller Meet for bringing the entrepreneurs & buyers on a common platform, and other problem specific as per requirement of SSI Units.
Activities of the State Govt. To assess/ inspect the unit, issue of registration and forwarding of the application for the scheme Representative of the D.I.C. is member of State Level Acceptance Committed To assess/ inspect the unit, issue of registration and forwarding of the application for the scheme Representative of the D.I.C. is member of State Level Acceptance Committed To assess/ inspect the unit, issue of registration To assess/ inspect the unit, issue of registration To assess/ inspect the unit, issue of registration Provide personnel from State Govt Deptts. To elaborate the Industial policies vis-vis benefits extended to the entrepreneurs

Provide personnel as per requirement for the conferences to elaborate the views of the State Govt.

ANNEXURE 'A'

 

Amount Spent by the Organisation during the last three years:
(From 1998-1999 to 2000-2001)

Figures are Rs. in Lakhs

 

Name of the State

Arunachal Pradesh

Assam

Meghalaya

Manipur

Mizoram

Nagaland

Tripura

Sikkim

Total

Name of the Scheme

                 

Hire Purchase

nil

471.29

nil

11.28

4.04

nil

nil

nil

486.61

Equipment leasing

14.85

1.52

nil

nil

nil

nil

10.62

nil

26.99

Raw Material

nil

601.56

ni

nil

nil

nil

nil

nil

601.56

Bill discounting

nil

143.18

nil

nil

nil

nil

nil

nil

143.18

Internal Marketing

nil

2.17

nil

nil

nil

nil

nil

nil

2.17

Training & Common Facility Services

2.46

43.69

4.34

2.32

nil

1.03

nil

nil

53.84

Seminars & Conferences

0.17

3.43

nil

0.26

nil

0.22

nil

nil

4.08

TOTAL

17.48

126.84

4.34

13.86

4.04

1.25

10.62

NIL

1318.43

National Small Industries Corporation Limited
Okhla Industrial Estate,
New Delhi

ACTION PLAN FOR NORTH EAST REGION

The North East Region comprises of 7 states namely Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim can also be included in this Region. The Region has large International boundary with China in the North, Bangladesh in the South, Bhutan and Nepal in the West and Myanmar (Burma) in the East. The Region is connected with the rest of the country only through a narrow corridor of approximately 21 K.M. in width in the western side. Out of total population and area of the region, Assam alone covers nearly 71.03 per cent of the population and 30.70 per cent of geographical area of the Region.

The region is predominantly agricultural and the vast majority of people depend on agriculture and forest products. The number of horticulture crops such as Orange, Pineapple, Banana, Coconut, Apple, other Citrus fruits, Peach, Palm, Pear, Litchi, Mango, Papaya, Guava etc. are also grown in the hill districts of the region and there is urgent need to intensify this area for boost in the economy and for setting up food processing units. Concerned departments in the Region in different states must be doing the needful. The region is rich in natural resources both forest and mineral resources. Industrial growth, however, in the region has taken a slow pace and concentrated mostly in the state of Assam only.

PROBLEMS:

Predominant causes of economic backwardness of the region are very many and some of these can be identified as under:

  • Over dependence on agriculture
  • Perpetual flood problems
  • Disadvantaged geographical location and week communication linkages with the rest of the country
  • Lack of entrepreneurship
  • Absence of adequate market facilities.

NSIC ACTIVITIES:

NSIC has been stimulating and supporting the development of small scale industries in North East Region through operation of various schemes and programmes. It has been providing assistance by

  1. Making available loans to tiny units under 'Composite Term Loan Scheme' wherein loan upto Rs. 25 lakhs are provided for Land & Building, Machinery & Equipment and Working Capital. The scheme has recently been launched for first generation entrepreneurs and the entrepreneurs who are unable to provide security against the assistance, Credit Guarantee Fund Trust provides guarantee cover against certain fees i.e. 2.5% of the loan amount initially and 1% annually for unpaid amount.
  2. Making available machinery & equipment, both imported and indigenous on easy Hire Purchase terms to first generation entrepreneurs and for expansion and diversification of the existing SSI units.
  3. Making available machinery & equipment to existing viable Small Scale Units, on easy Lease terms for upgradation of technology, diversification and expansion.
  4. Making available raw materials like Aluminum etc. from primary manufacturers like NALCO and wherever needed short term finaces also made available.
  5. Registering the competent and capable small scale industrial units under its 'Single Point Registration Scheme' to enable the registered unit to participate in the 'Government Store Purchase Programme' as a marketing assistance. The registered units will get tender forms free of cost and are exempted from payment of earnest money deposit upto a specified limit of the order value.
  6. Providing training in technical trades and entrepreneurship development.

NSIC NETWORK:

NSIC has been extending the assistance through the above programmes and schemes in North Eastern Region and to reach out the concerned entrepreneurs and people it has got following network in the region:-

  1. Regional Office headed by a Regional Manager is functioning at Guwahati for the last many years.

Cost of training can be shared by the North Eastern Council (NEC) as well as Director of Industries and NSIC can organise and co-ordinate the training programmes through its Demonstration-cum-Training Centre.

The potential entrepreneurs as well as manpower for training can be sponsored by various State Directorate of Industries or DICs from different states in NE Region.

Financing:

NSIC can finance technically, financially and economically viable projects uner its various schemes enumerated above like Composite Term Loan Scheme, Hire Purchase and Equipment Leasing Scheme, it can also provide financing for procurement of raw materials. Incidentally, it is pointed out that here some NGOs or local industrial, Commerce & Business Associations can be of much relevance in acting as a liasioning agency between NSIC and the entrepreneurs to evolve a suitable credit delivery mechanism and also for collection of repayments. The NGO for the Association can collect data on the requirement of raw material locally available and on raw materials to be bulked together and NSIC can finance the bulk raw materials which can be distributed by the NGO to the concerned entrepreneurs an can collect the dues from the entrepreneur for repayment to NSIC.

Marketing:

NSIC will provide and is providing registration under the 'Single Point Registration Scheme' to enable the competent and capable small scale units to market their products for services to various Government Departments and their agencies including Public Sector units. It can also stimulate formation of consortium of SSI unit manufacturing the same products or offering the similar services and then obtain bulk order from purchasers for supply by the consortium member units. Here, bill financing can also be undertaken by the NSIC in order to assist the units in maintaining their cash flows.

Costing:

The manufacturing cost in NE Region is obviously higher than in other parts of the country because of difficult terrain and lack of entrepreneurial qualities and infirmities in management techniques. The transportation cost also adds to the overall cost of manufacturing. This problem can be minimised to a certain extent by extending the loans to the entrepreneur at a cheaper rate of interest i.e. lower than the PLR and the difference between the PLR or the normal interest and the interest at which loan is to be provided in NE Region can be subsidized as grant by the Government.

STATEWISE LOAN FINANCED IN N.E. REGION BY NSIC LTD. SINCE ITS INCEPTION UNDER ITS DIFFERENT SCHEMES UPTO MARCH, 2001

(Value Rs. in lacs)

   

ASSAM

MANIPUR

NAGALAND

MEGHALAYA

MIZORAM

TRIPURA

ARUNACHAL

SIKKIM

TOTAL

Hire Purchase

No. of Units Assisted

Value of Machines Supplied

474

 

1374.53

232

 

270.73

14

 

32.07

12

 

26.01

12

 

32.53

30

 

63.85

2

 

6.32

2

 

3.27

778

 

1809.31

Equipment Leasing

No. of Units Assisted

Value of Machines Supplied

28

 

125.66

5

 

12.05

0

 

0

1

 

5.98

1

 

31.68

1

 

10.63

1

 

20.77

0

 

0

37

 

206.77

Marketing Including Raw Material Assisted

No. of Unit

Value of Assisted Provided

54

1314.2

1

15

0

0

0

0

0

0

0

0

0

0

0

0

55

1329.2

Single Point Regn. Scheme

No. of Units Assisted

180

0

2

6

0

120

0

2

202

Total

No. of Units Assisted

Value of Assistance provided

736

 

2814.39

238

 

297.78

16

 

32.07

19

 

31.99

13

 

64.21

43

 

74.48

3

 

27.09

4

 

3.27

1072

 

3345.28

Training

No. of Course

No. of Trainees

102

 

2748

5

 

91

4

 

89

6

 

189

1

 

20

1

 

17

2

 

48

1

 

28

122

 

3230

During the last 5 years NSIC has provided assistance to a number of units as data given below:-

(Value Rs. in lacs)

 

 

 

   

1996-97

1997-98

1998-99

1999-2000

2000-01 till Feb 2001

Total

Hire Purchase

No. of units assisted

Value of machines supplied

28

 

53.04

14

 

54.00

16

 

56.87

13

 

176.23

18

 

140.31

89

 

480.45

Equipment Leasing Scheme

No. of units Assisted

Value of machines assistance

4

 

31.32

7

 

57.80

1

 

20.48

1

 

14.85

0

 

0

13

 

124.45

Raw Material Assistance

No. of units Assisted

13

362.04

15

220.25

9

250.36

7

264.55

7

177.56

51

1274.76

Single Point Regn. Scheme

No. of units Assisted

4

15

9

8

8

44

Total

No. of units Assisted

Value of Assistance

49

 

446.40

51

 

332.05

35

 

327.71

29

 

455.63

33

 

317.87

197

 

1879.66

Training through Demonstration cum Training Centre

No. of Trainees

358

439

457

507

470

2231