The micro, small, and medium enterprises (MSME) sector is undoubtedly important to the Indian economy as it stimulates innovation, creates jobs, and triggers inclusiveness in the economy’s growth levels. MSME contributes up to 30% of GDP and almost 50% share of the total export volume. This would grant opportunities for regional development and entrepreneurship generation in and around rural and semi-urban areas. The challenges that inhibit the progress of MSMEs are diverse, from restricted access to financial resources and technology to market opportunities for expansion. The National Small Industries Corporation plays a critical role as the primary facilitator and promoter of MSME development. Founded in 1955, NSIC works under the Ministry of MSME and has been promoting developing industries through various services like the provision of raw materials, loan assistance, marketing support and skills development. Through these initiatives, NSIC fills the gap between resources and MSMEs, which helps enhance their competitiveness in domestic and international markets. Here lies the important aspect concerning the economic substratum formed by the interplay between MSME and NSIC.
What is the National Small Industries Corporation (NSIC)?
The National Small Industries Corporation (NSIC) is a national government organisation incorporated under the ambit of the Ministry of Micro, Small and Medium Enterprises. It was formed back in 1955 to promote MSMEs to further expand them across the whole country. Its primary purpose is to provide extensive support services for small enterprises, such as overcoming financial, technological, and marketing problems and capacity enhancements. Thus, the NSIC makes MSMEs competitive and sustainable by linking them with all critical resources.
The services of NSIC include loans and direct financing by banks, assistance with raw materials, technology transfer marketing, etc. Some of the supporting schemes to the Ministry of MSME – the most popular among them are the Government Purchase Program, which enables MSMEs to have easy access to public procurement, and the Single Point Registration Scheme (SPRS), which eases the process of tendering. It is also pioneering skills and entrepreneurship development through training centres and incubation programs, further enabling NSIC to empower medium and small enterprises to grow and compete in the domestic and global markets via redressal of some typical barricades with reference to accessibility to markets, finance, and technology. The mission corresponds in scientific ways with what India is moving toward in more comprehensive inclusive economic growth geared toward enhancing the nation’s economy.
Roles and Functions of NSIC
It seeks to ensure and actualise a lively environment for the development of micro, small, and medium enterprises in the country; NSIC is east in its actualising dynamism and inducing concrete action. These comprise various operational thrusts of NSIC to meet general and specific challenges faced by MSMEs and enhance competitiveness.
This is achieved through specific efforts of NSIC, including:
- Marketing Support – The Government Purchase Program allows MSME suppliers to enter government procurement by getting them registered under the Single Point Registration Scheme. They are exempted from earnest money deposits and also receive exclusive tenders. It conducts trade fairs and exhibitions, and buyer-seller meets at national and international levels to display MSME products. The B2B Portal is the platform where the global buyers and sellers connect with the MSMEs that NSIC has developed.
- Finance Support – Loan support to MSMEs by providing facilities of working capital and capital expenditure and raw material support for the procurement of raw materials required by the MSME sector at competitive prices and ensuring a constant supply with cost savings to the units.
- Technology Support – Technological support is provided by NSIC by promoting technology transfer in MSMEs for the proper working of the operations. Incubation centers train aspiring entrepreneurs who want to start their own small enterprises with technical and managerial training. It also advises and guides regarding quality certification, energy efficiency and upgrading to modern technologies.
- Skill Development and Training – NSIC offers training programs relating to skills in technical and managerial fields to enhance the skill levels of MSME employees and entrepreneurs throughout. Entrepreneurship Development Programmes begin the development of a person’s capacity and opportunities for self-employment.
- Support for International Business Development – Motivating MSMEs to look for export opportunities by educating them on the market, providing them with the procedures and facilitating their attendance to trade fairs abroad and maintaining foreign cooperation for this program, the growth of MSME exports and technology transfer are jointly developed with world organisations and institutions.
- Performance and Credit Ratings – It helps to collaborate with the rating agency so that MSMEs can join a subsidised performance and credit rating scheme and improve their credibility and access to financial resources.
- Cluster Development – In NSIC, the idea of developing MSME clusters has been followed to enhance the overall development through support services like finance, marketing and technology.
- Advocacy and Policy Support – NSIC collaborates with the government to disseminate policies and programs relevant and applicable to the diverse needs and challenges of MSMEs.
Some Important Schemes By NSIC
The different schemes undertaken by NSIC aim at facilitating the promotion and development of MSMEs in India. These schemes are primarily focused on countering the major problems of finance, technology marketing and capacity improvement in the MSMEs. Schemes of NSIC intend to provide an enabling environment for MSMEs to establish themselves and fight their way through difficulties to achieve sustainable growth in competitive markets. Some of these schemes are:
- Single Point Registration Scheme (SPRS): for MSMEs to participate in government tendered procurements. This scheme allows MSMEs to avail themselves of the incentives under the Government Purchase Program, and the registered MSMEs are not required to deposit any earnest money. It ensures that terms related to government procurement on tenders are given preferential consideration.
- Raw Material Assistance Scheme: To provide raw materials on a regular basis at cheaper rates, financial support for raw materials, including imports, helps to enhance the capability of obtaining materials at bulk purchase rates and support a smooth production process in the MSMEs with minimum procurement costs.
- Credit Facilitation through Banks: This scheme enhances credit access to the MSME sector. The NSIC has tie-ups with banks and various other financial institutions for competitive interest rates on term loans and working capital loans and facilitation of loan applications through processing and documentation for the MSMEs.
- Marketing Support Initiative: NSIC assists MSMEs to reach their full potential by promoting their products and services in both domestic and international markets. There can be support for staging trade fairs, exhibitions, and buyer-seller meets, as well as marketing and branding support through advertising and public relations and giving access to B2B and e-commerce platforms to expand market reach.
- Performance and Credit Evaluation Statement: The purpose of this scheme is to evaluate and guide the credibility of MSMEs by providing independent performance and credit assessments of accredited agencies. This helps to facilitate finances to cater for the rating charges, thereby making it cost-effective for the MSMEs to attain enhanced market positioning and access to finance.
- NSIC Venture Capital Financing Scheme: The thrust of NSIC lies in encouraging innovative entrepreneurial concepts by MSMEs, thereby supporting them in equity capital sourcing. This gives the sources of equity investment to the MSMEs for feasible projects and encourages innovation and entrepreneurship-driven businesses.
- International Cooperation Scheme: NSIC promotes MSMEs in global trade competition by encouraging participation in international trade fairs, expos, and trade delegations to foreign countries. It fosters technology transfer, joint ventures and collaborative efforts with the industries of foreign nations. This leads to an entry into the international markets and access to state-of-the-art operating methods.
Significance of NSIC
NSIC, an Indian registered development corporation under the Ministry of Micro, Small and Medium Enterprises, plays an important role in establishing and furthering MSMEs in the country. NSIC is undertaking several initiatives to address the challenges faced by MSMEs in order to enhance their overall performance. Since it is a developmental organisation, NSIC functions as a major facilitator of MSME. With access to finance, markets, and technology issues being handled, MSMEs are the best bet for thriving, innovating, and contributing substantially to India’s socio-economic growth. Hence, the role played by this organisation is of pivotal importance in forging a robust, self-sustaining economy.
- NSIC offers holistic support for MSMEs in terms of finance, raw materials, technology, and market access. It also helps small enterprises effectively compete in domestic and international markets by filling gaps in resources.
- NSIC’s credit facilitation services, along with joint collaboration with financial institutions, provide low-cost loans for MSMEs, even in inaccessible locations, thereby promoting financial inclusiveness and optimum use of resources.
- NSIC conducts incubation and training programs to encourage entrepreneurship, as it imparts technical and managerial skills to budding entrepreneurs. Further, innovations and self-employment opportunities that would enable the creation of jobs for others are also promoted.
- The NSIC ensures all technological upgrades in the adoption of advanced technologies and purity certifications to MSME units, hence enabling them to grow competitively for the business. The performance and credit rating scheme generates credibility for the MSMEs, elevating the market position.
- NSIC has been organising trade fairs, exhibitions, and buyer-seller meets to display products from small-scale industries in India. This digital B2B marketplace of NSIC bridges the developed MSMEs with international digital marketplaces.
- NSIC helps to really drive exports by MSMEs, offering opportunities and partnerships in the area of export. They collaborate on technology transfer and trade to help enhance the global competitiveness of MSMEs.
- NSIC creates jobs in rural and semi-urban areas by supporting those who generally have small and micro enterprises as employers. Bridging the gaps in regional economic disparity also takes care of the inclusivity that the initiative promises.
- NSIC works as a substitute for government initiatives like “Make in India” and “Atma Nirbhar Bharat” by making efforts toward self-reliance in manufacturing and services. These measures make a lot of difference to the GDP of the country, export performance and industrialisation in total.
Conclusion
NSIC serves as an apex catalyst for developing and sustaining MSMEs in India. NSIC is involved in a much wider ambit by providing financial, technical, marketing, and skill development support to small enterprises to face challenges and develop competitive strengths to make valuable contributions to India’s economy and self-reliance.
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