NSIC: Functions and Support
Provided by National Small
Industries Corporation Ltd
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Read this article to learn about the various functions and
support provided by National Small Industries Corporation
Ltd (NSIC) !
The National Small Industries Corporation Ltd. (NSIC), an ISO 9000
certified company, since its establishment in 1955, has been working
to fulfill its mission of promoting, aiding and fostering the growth of
small-scale industries and industry related small-scale
services/businesses in the country.
Over a period of six decades of transition, growth and development,
the NSIC has proved its strength within the country and abroad by
promoting modernization, up gradation of technology, quality
consciousness, strengthening linkages with large and medium
enterprises and enhancing export projects and products from small-
scale enterprises.
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At present, the NSIC operates through 6 Zonal Offices, 26 Branch
Offices, 15 Sub-offices, 5 Technical Services Centres, 3 Extension
Centres and 2 Software Technology Parks supported by a team of over
5000 professionals spread across the country. To mange operations in
Gulf and African countries, the NSIC operates from its offices in Dubai
and Johannesburg.
Functions of NSIC:
NSIC provides a wide range of services, predominantly promotional in
character, to small-scale industries.
Its main functions are to:
a. Provide machinery on hire-purchase scheme to small-scale
industries.
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b. Provide equipment leasing facility.
c. Help in export marketing of the products of small-scale industries.
d. Participate in bulk purchase programme of the Government.
e. Develop prototype of machines and equipments to pass on to small-
scale industries for commercial production.
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f. Distribute basic raw material among small-scale industries through
raw material depots.
g. Help in development and up-gradation of technology and
implementation of modernization programmes of small-scale
industries.
h. Impart training in various industrial trades.
i. Set up small-scale industries in other developing countries on turn-
key basis.
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j. Undertake the construction of industrial estates.
NSIC carries forward its mission to assist small enterprises with a set
of specially tailored schemes designed to put them in competitive and
advantageous position. The schemes comprise of facilitating
marketing support, credit support, technology support, and other
support services.
These are discussed in seriatim as follows:
Marketing Support:
Marketing, a Strategic tool for business development, is critical to the
growth and survival of small enterprise in today’s intensely
competitive market. NSIC acts as a facilitator to promote small
industries products and has devised a number of schemes to support
small enterprises in their marketing efforts, both in and outside the
country.
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These schemes are briefly discussed as under:
Consortia and Tender Marketing:
Small enterprises in their individual capacity face problems to procure
and execute large orders, which inhibit and restrict their growth. NSIC
accordingly adopts Consortia approach and forms consortia of units
manufacturing the same products; thereby easing out marketing
problems of SSIs. NSIC explores the market and secures orders for
bulk quantities. These orders are then distributed to small units in
tune with their production capacity.
Single Point Registration for Government Purchase:
NSIC operates a Single Point Registration Scheme under the
Government Purchase Programme, wherein the registered SSI units
get purchase preference in Government Purchase Programme,
exemption from payment of Earnest Money Deposit etc.
The units registered under this scheme get the following
facilities:
a. Issue of tender sets free of cost.
b. Advance intimation of tenders issued by DGS&D.
c. Exemption from payment of earnest money.
d. Waiver of security deposit up to the monetary limit for which the
unit registered.
e. Issue of competency certificate in case the value of an order exceeds
the monetary limit, after due verification.
Exhibitions and Technology Fairs:
To showcase the competencies of Indian SSIs and to capture market
opportunities, NSIC participates in select International and National
Exhibitions and Trade Fairs every year. NSIC facilitates the
participation of the small enterprises by providing concessions in
rental, etc. Participation in these events exposes SSI units to
international practices and enhances their business skills.
Buyer-Seller Meets:
Bulk and departmental buyers such as the Railways, Defence,
Communication departments and large companies are invited to
participate in buyer-seller meets to enrich SSI units’ knowledge
regarding terms and conditions, quality standards, etc. required by the
buyer.
Export of Products and Projects:
NSIC is a recognized export house and exporting products and
projects of small industries of India to other countries.
The major areas of operation are:
a. Exports of products such as handicrafts, leather items, hand tools,
pipes/ fittings, builders’ hardware etc.
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b. Supply of small industry products on turnkey basis.
Credit Support:
NSIC provides credit support to small enterprises in the
following areas:
Equipment Financing:
The Corporation is facilitating small enterprises in securing loans for
purchase of equipment and machinery.
Tie-up with Commercial Banks:
To meet the credit requirements of small enterprises, NSIC has tied up
with commercial banks for sanction of term loans and working capital
facilities as per the convenience of the small enterprises. The accreted
small enterprises under the performance and credit rating scheme of
NSIC will stand at a good chance to get the credit from these
commercial banks at liberal rates.
Financing for Procurement of Raw Material (Short-Term):
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NSIC’s Raw Material Assistance Scheme aims at helping small-scale
industries/enterprises by way of financing the purchase of raw
material (both indigenous and imported).
The salient features of the scheme are:
a. Financial assistance for procurement of raw materials up to 90 days.
b. Bulk purchase of basic raw materials at competitive rates.
c. NSIC facilitates import of scarce raw materials.
d. NSIC takes care of all the procedures, documentation & issue of
letter of credit in case of imports.
Financing of Marketing Activities:
NSIC facilitates financing of marketing activities such as Internal
Marketing, Exports and Bill Discounting, Finance through syndication
with banks. In order to ensure smooth credit flow to small enterprises,
NSIC is entering into strategic alliances with commercial banks to
facilitate long-term/working capital financing of the small enterprises
across the country. The arrangement envisages forwarding of loan
applications of the interested small enterprises by NSIC to the banks
and sharing the processing fee.
Performance and Credit Rating Scheme for Small
Industries:
By providing performance and credit rating scheme, NSIC enables
small enterprises to ascertain the strengths and weaknesses of their
existing operations and take corrective measures to enhance their
organizational strength.
The scheme is operated through empanelled agencies like CARE,
CRISIL, ICRA ONICRA and SMERA. Small enterprises have the
liberty to choose among any of the rating agencies empanelled with
NSIC. Rating agencies will charge the credit rating fee according to
their policies.
The benefits the small enterprises derive from these
agencies are as follows:
a. An independent, trusted third party opinion on capabilities and
credit worthiness of SSI units.
b. Facilitate prompt credit decisions from banks on proposals of SSI
units.
c. 75 % of the credit rating fee subject to a maximum of Rs. 25,000/-
will be reimbursed to the small enterprise having a turnover up to Rs.
50 lakh by way of grants.
d. 75 % of the credit rating fee subject to a maximum of Rs. 30,000/
reimbursed to the small enterprise having a turnover above Rs. 50
lakh to Rs. 200 lakh by way of grants.
e. 75 % of the credit rating fee subject to a maximum of Rs. 40,000/-
will be reimbursed to the small enterprise having a turnover above Rs.
200 lakh by way of grants.
f. The accredited small enterprises under the scheme will benefit from
commercial banks.
g. The credit rating also improves the market image of the small
enterprise in domestic and international markets.
Technology Support:
Technology is the key to enhancing an enterprise’s competitive
advantage in today’s dynamic information age. Small enterprises need
to develop and implement a technology strategy in addition to
financial, marketing and operational strategies and adopt the one that
helps integrate their operations with their environment, customers
and suppliers.
NSIC offers small enterprises the following support services
through its Technical Services Centers and Extension
Centres:
a. Advising on application of new techniques.
b. Material testing facilities through accredited laboratories.
c. Product design including CAD.
d. Common facility support in machining, EDM, CNC, DNC etc.
e. Energy and environment services at selected centres.
f. Classroom and practical training for skill up gradation.
4 Main Support Services of
National Small Industries
Corporation (NSIC)
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Some of the important support services of national small industries
corporation are: 1. Infomediary Services, 2. Software Technology
Parks, 3. Science and Technology Park/Technology Business
Incubators and 4. International Cooperation.
1. Infomediary Services:
Information plays a vital role in the success of any business.
Recognizing the importance of information and its relevance to SSI
units, NSIC provides Infomediary Services to small units. Besides
hosting a website ( nsic dot co dot in). NSIC hosts sector specific
portals for focused information dissemination.
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Some of the important services are:
a. Supplier database
b. Market intelligence
c. Technology providers
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d. Information providers
e. Linkages with relevant institutions
f. E to E services
g. E to B services
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2. Software Technology Parks:
NSIC Software Technology Parks (STPs) facilitate small industries in
setting up 100 % export-oriented units for software exports. They also
act as nodal point to activate software exports directly through NSIC.
These STPs extend support in terms of the requisite infrastructure to
the SSI units to start business operations with a minimum lead time.
The scheme is governed by STPI regulations of the Ministry of
Information Technology, Government of India. NSIC established the
first STP in Okhla, New Delhi in 1995 and second in Chennai in 2001.
Several small-scale enterprises have taken advantage of these parks
and contributed export earnings to the exchequer.
3. Science and Technology Park/Technology Business
Incubators:
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Emerging technological and knowledge-based entrepreneurial ideas
have to be fostered and developed in a supportive environment before
they become attractive for commercial investments. Hence, the need
arises for incubation centers.
The Corporation is in the process of setting up a Science and
Technology Entrepreneur’s Park in the premises of NTSC-Rajkot in
association with Department of Science and Technology (DST),
Government of India during 2004- 05 in the general engineering
discipline. IT incubator is set up very recently.
4. International Cooperation:
NSIC facilitates sustainable international partnerships. The emphasis
is on sustainable business relations rather than on one-way
transactions. Since its inception, NSIC has contributed to
strengthening enterprise-to-enterprise cooperation, south-south
cooperation, and sharing best practices and experiences with other
developing countries.
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The salient features of the scheme are:
a. Exchange of business/technology mission with various countries
b. Exploration of new markets & areas of cooperation
c. Identification of new export markets by participating in sector-
specific exhibitions all over the world
d. Sharing of Indian experiences with other developing countries.
