The institution agencies are regarded as first category of institutions. The primary advisory bodies are Development Commissioner, Small Scale Industries, the state small industries board, directorate of Industries, export promotion council and small scale industries association.
These are second category of institutions. These are commodity board. National Small Industries Corporation and Small Industries Service Institute.
These are third category of institutions. These are State Trading Corporation, Central Institution of tool Design and IDBI.
Small Industries Development Bank of India (SIDBI):
SIDBI was set up in April 1990 as a wholly owned subsidiary of IDBI (Industrial Development Bank of India) t provide financial assistance to the entrepreneurs under an Act of the Parliament, namely Small Industries Development Bank of India Act 1989.
The Bank has been delinked from IDBI with effect from March 27, 2002. The Bank caters all SSIs –tiny, village and cottage—through its Head Official at Lucknow.
Channels of SIDBI’s Assistance:
1. Indirect Finance:
By way of refinance and bills discounting through more than 901 primary lending institutions having over 65000 outlets across the country.
2. Direct Finance:
Direct finance is given through SIDBI’s own 38 offices by means of several tailor-made schemes to reach assistance to specific target groups.
3. Promotional and Development Activities:
Involving accredited Non-Government organizations voluntary organizations, Scientific and Research Institutions, Technology Institutions, Management Institutions, etc.
Thus SIDBI is the principle financial institution for promotion, financing and development of small scale industries in India. It co-ordinates functions of existing institutions engaged in similar activities.
Accordingly, SIDBI has taken over the responsibility of administering Small industries Development Fund and nation Equity fund which were earlier administered by IDBI
Functions of SIDBI:
The important functions of SIDBI are:
(i) To initiate steps for technological up-gradation and modernization of existing units.
(ii) To expand the cannels for marketing the products of SSI sector in domestic and international markets.
(iii) To promote employment oriented industries especially in semi-urban areas to create employment opportunities and thereby checking migration of people to urban areas.
(iv) To refinance loans and advances extended by the primary lending institutions to SSI units and also provides resources to them.
(v) To discount and rediscount bills arising from sale of machinery to or manufactured by industrial units in the SSI sector.
(vi) To provide services like leasing, factoring etc. to industrial concerns in the SSI sector.
(vii) To expand financial support to State Small Industries Development Corporation for providing scare raw-materials to industrial units in SSI sector.
(viii)To grant loan and advances to any person engaged in exporting or executing any turnkey project abroad.
(ix) To subscribe to or purchasing stocks and shares, bonds and debentures of any state /financial Corporations.
Scope of SIDBI:
The SIDBI covers all industrial undertakings like any concern engaged in business activities and which is regarded as a small scale undertaking under Section 11-B of the Industrial Development and Regulation Act, 1951.
The following business activities undertaken by small scale sector are covered under the scope of SIDBI:
(i) The manufacturing preservation or processing of goods;
(ii) Shipping industry;
(iii) Mining industry;
(iv) Hotel industry
(v) Transport of passengers or goods by road/water/air;
(vi) Generation or distribution of electricity or any other form of power;
(vii) Maintenance, repair, testing or servicing of machinery of any description or vehicle or vessels or motor boats or trailers or tractors;
(viii) Assembling, repairing or packing any article with the aid of machinery or power;
(ix) The development of any contiguous area of land as an Industrial Estate;
(x) Fishing or providing stores facilities for fishing or maintenance thereof;
(xi) Providing special or technical knowledge or other services for the promotion of industrial growth; or
(xii) The research and development of any process or product in relation to any of the matters aforesaid.
The financial assistance of SIDBI is channelized through the existing credit delivery system comprising SFC, State Industrial Development Corporation, Commercial Banks and DRRBs.