Directorate of Industries

• The primary function and objectives of the Directorate of Industries

are supervision and control of District Level functionaries, i.e., the
District Industries Centres in implementation of the various schemes
and programmes of the Department.
District Industries Centres (DIC)
• The government has set-up District Industries Centres in each district to
deal with all requirements of small and village Industries.
• These centres undertake various programs for investment promotion at
the grassroot level by organizing seminars and workshops, extending
support for trade fairs and exhibitions organized by various Industry
associations.
• DICs provide all the services and support to MSME units under single roof,
and through separate wing to look after the special needs of cottage and
household industries.
• DICs are headed by a General Manager who is of Joint/ Deputy
Commissioner level.
• The General Manager is assisted by senior officers, such as Managers,
Officers of diverse fields.
Objectives: Objectives of District Industries Centres (DIC) are to:
• Identify prospective entrepreneurs to take up viable projects.
• Identify viable projects and make demand survey on the available
resources of the district and plan for promotion of viable industries in
the area.
• Prepare viable and feasible project reports.
• Strengthen the guidance cell to solve the problems of the
entrepreneurs.
• Maintain up to date data on SSI sector.
• Recommend financial proposals to state financial corporation,
financial institutions, and banks.
• Allot government land/ shed in industrial estates.
• Recommend for power connection.
• Arrange for EDP training.
• Arrange exhibition, fairs, publicity and visit of industrialists to trade
fairs and industrial estates of other states.
• Solve the problems of industrial units at the district level.
• Monitor the health of existing SSI units and the progress of those in
the pipeline.
• Provide necessary marketing assistance.
• Monitor the implementation of the Prime Minister Rozgar Yojana.
• Assist revival of sick SSI units.
• Update the library in different DICs by procuring handbooks relating
to industries.
Functions of DIC:
Identification of Entrepreneurs: DIC’s develop new entrepreneurs by conducting
entrepreneurial motivation programs throughout the district

Provisional Registration: Entrepreneurs can get provisional registration with DICs

which enables them to take necessary steps to bring the unit into existence.

Permanent Registration: When the entrepreneur completes all formalities required

to commence the production like selection of site, power connection, installing
machinery etc., they can apply to DIC for permanent registration.

Purchases of Fixed Assets: DICs recommend loan applications of the prospective

entrepreneur to concerned financial and developmental institutions for the
purchase of fixed assets.

Clearances from Various Departments: DIC takes the initiative to get clearances
from various departments which is essential to start a unit. It even takes follow up
measures to get speedy power connection.
• Assistance to Village Artisans and Handicrafts:
• Incentives and Subsidies:
• Interest Free Sales Tax Loan:
• Assistance of Import and Export:
• Fairs and Exhibitions:
• Training Programs:
• Self-Employment for Unemployed Educated Youth:
State Financial Corporation (SFC)
The State Governments also execute different promotional and developmental
projects and schemes to provide number of supporting incentives for
development and promotion of MSMEs in their respective states. These are
executed through the State Directorate of Industries, which has District
Industries Centres (DICs) under it, for implementing the central/ state level
schemes.

The main objectives of SFCs are

(i) to provide term loans for the acquisition of land, building, plant, and
machinery,
(ii) to promote of self-employment,
(iii) to encourage women entrepreneurs,
(iv) to bring about expansion of industry, and
(v) to provide seed capital assistance.
Organization and Management of SFC
• A Board of ten directors manages the State Finance Corporations.
• The State Government appoints the managing director generally in
consultation with the RBI and nominates the names of three other
directors.
• All insurance companies, scheduled banks, investment trusts, co-
operative banks, and other financial institutions elect three directors.
• Thus, the state government and quasi-government institutions
nominate the majority of the directors.
Functions of State Finance Corporations
The various important functions of State Finance Corporations are:
(i) The SFCs provides loans mainly for the acquisition of fixed assets like
land, building, plant, and machinery.
(ii) The SFCs help financial assistance to industrial units whose paid-up
capital and reserves do not exceed Rs. 3 crore (or such higher limit up
to Rs. 30 crores as may be notified by the central government).
(iii) The SFCs underwrite new stocks, shares, debentures etc., of
industrial units.
(iv) The SFCs grant guarantee loans raised in the capital market by
scheduled banks, industrial concerns, and state co-operative banks to
be repayable within 20 years.
State Small Industries Development
Corporation (SSIDC)
• SSIDC were set up in various states under the companies act 1956 as state
government undertakings to cater to the primary developmental needs of small,
tiny and village industries in the state/ union territories under their jurisdiction.
• SSIDCs are provided greater operational flexibility and wider scope for undertaking
a variety of activities for the benefit of small sector.
• These activities include
(i) procuring and distributing the scarce raw materials,
(ii) supplying machinery on hire purchase system,
(iii) providing assistance for marketing of the products of small-scale industries,
(iv) constructing industrial estates/ sheds,
(v) providing allied infrastructure facilities and their maintenance,
(vi) and to extend seed capital assistance on behalf of the state government
concerned.
Khadi and Village Industries Commission (KVIC)
KVIC, established under the Khadi and Village Industries Commission
Act, 1956, is a statutory organization engaged in promotion and
development of khadi and village industries for providing employment
opportunities in rural areas, thereby strengthening
the rural economy. Main objectives of its formation are:
(i) The KVIC has been identified as one of the major organizations in the
decentralized sector for generating sustainable rural non-farm
employment opportunities at low per capita investment,
(ii) It helps in checking migration of rural population to urban areas in
search of employment opportunities,
(iii) New reform programs are undertaken which aim at revitalizing the
khadi sector for enhanced sustainability of khadi;
(iV) increasing incomes for spinners and weavers;
(V) increasing employment;
(Vi) enhancing artisan’s welfare and gradually enabling khadi
institutions to stand on their own feet.
Technical Consultancy
Organizations (TCO)
Services of TCOs include
(i) Preparation of project profiles,
(ii) undertaking industrial potential surveys,
(iii) identification of potential entrepreneurs,
(iv) Undertaking market research
(v) project supervision and rendering technical and administrative
assistance, and
(vi) conducting EDPs.
Small Industries Service Institutes (SISI)
• The Small Industries Service Institutes (SISIs) are set-up in capital of all
the states.
• These Institutes through their wide network provide consultancy and
training service to small and prospective entrepreneurs.
• SISIs function under the Ministry of SSI, Government of India and
provide services such as preparation of project reports, conducting
training programs in different areas, extending technical assistance,
and offering guidance on industrial policy of the government.
The SISIs also render assistance in the following areas:
(1) Economic consultancy/information/EDP consultancy.
(2) Trade and market information.
(3) Project profiles.
(4) State industrial potential surveys.
(5) District industrial potential surveys.
(6) Modernization and in plant studies.
(7) Workshop facilities.
(8) Training in various trade/activities
National Small Industries Corporation (NSIC)
• The National Small Industries Corporation Ltd. was set up in 1955 with
a view to promoting, aiding and fostering the growth of small scale
industries in the country with focus on commercial aspects of these
functions.
• NSIC continues to implement its various programmes and projects
throughout the country to assist the SSI units.
The Corporation has been assisting the sector through the following
schemes and activities:
Composite Term Loan Scheme:
To promote small-scale sector, NSIC has launched a Composite Term
Loan Scheme for the benefit of existing and prospective entrepreneurs
to acquire land and building, machinery and equipment and working
capital under one roof to the tiny units.
Hire Purchase Scheme
Supply of indigenous and imported machinery and equipment on easy
financial terms with special focus on women entrepreneurs, weaker
sections, handicapped and ex-servicemen and SC/ST entrepreneurs.
Equipment leasing
It is done mainly to facilitate SMEs to expand their capacities or diversify
and/or upgrade their technology according to the needs of the market.
Working Capital Finance
This Scheme aims at augmenting working capital of viable and well
managed units, on selective basis in case of emergent requirements to
enable them to pay-off their purchase of consumable stores, spares and
production related overheads particularly electricity bills, statutory
dues.
Raw Material Assistance
It facilitates availability of scarce raw material either through domestic
market or importing..
Marketing Support Programme:
NSIC has been trying to act as a major agency to bring SMEs closer to
various Governmental purchasing agencies, with the intention of
creating confidence in the purchasing agencies about SMEs, and their
capabilities to supply goods and services of requisite quality, economic
prices and adherence to agreed delivery schedules.
Integrated Marketing Support
NSIC has been operating an Integrated Marketing Support Programme
in which bills pertaining to supplies made by small scale units to eligible
purchasers are discounted by NSIC up to a certain limit.
Govt stores purchase programme
The units registered with the corporation for participation in
government purchase programme are considered at or with individual
purchase organizations and derive all the benefits like free supply of
Tender forms, exemption from payment of earnest money, security
deposits etc.
Technology upgradation
Excellent technical support is provided to SSIs/SMEs through five NSIC
training centres. These centres are recognized by CSIR (council of
scientific and industrial research for in house R&D.
Software technology parks
NSIC has set up a NSIC-STP complex under software technology parks
facilitates small scale units to establish their units for 100% export of
software.
Small Industries Development Bank of India (SIDBI)
• For ensuring larger flow of financial and non-financial assistance to
the small scale sector, the government of India set up the Small
Industries Development Bank of India (SIDBI) under Special Act of
Parliament in 1989 as a wholly owned subsidiary of the IDBI.
• The SIDBI has taken over the outstanding portfolio of the IDBI relating
to the small scale sector.
• The SIDBI was established in 1990 as the apex refinance bank.
• The SIDBI is operating different programmes and schemes through 5
Regional Offices and 33 Branch Offices.
• The financial assistance of SIDBI to the small scale sector is
channelized through the two routes – direct and indirect.
1. Indirect assistance
a) SIDBI’s financial assistance to small sector is primarily channelised
through the existing credit delivery system, which consists of state level
institutions, rural and commercial banks.
b) SIDBI provides refinance to and discounts bills of Primarily Lending
Institutions (PLI).
c) The assistance is available for
• Marketing of SSI product
Setting up of new ventures
Availability of working capital
Expansion
Modernization
Human resource development
Diversification of existing units for all activities
2. Direct assistance
a) The loans are available for new ventures, diversification technology
upgradation, modernization and expansion of well run small scale
enterprises. Assistance is also available for private sector.
b) Small scale sector is eligible for maximum debt-equity ratio of 3:1
c) Foreign currency loan for import of equipment are also available to
export oriented small scale enterprises.
d) SIDBI also provide venture capital assistance to the entrepreneurs for
their innovative ventures if they have a sound management team, long
term competitive advantage and a potential for above average
profitability leading to attractive return on investment.
• New Initiatives of SIDBI
a) Two Subsidiaries viz. SIDBI Venture Capital Limited and SIDBI
Trustee Company Limited formed to oversee Venture Capital.
b) Technology Bureau for Small Enterprise formed to oversee
Technology Transfer, Match making Services, Finance Syndication and
facilitating Joint Ventures.
(c) SIDBI Foundation for Micro Credit has been launched to provide
financial assistance to the poor and to meet emerging needs of the
micro finance sector especially in rural areas.
The important functions of IDBI are as follows
1.To initiate steps for technological up gradation and modernization of
existing units.
2.To expand the channels for marketing the products of SSI sector in
domestic and international markets.
3.To promote employment oriented industries especially in semi-urban
areas to create more employment opportunities and thereby checking
migration of people to urban areas.
Salient provision under Indian factories act
• Indian factories act 1948 (Amended in 1987) was enacted with the
object of protecting the factory workers from subjecting them from
unduly long hours of bodily strain or manual labour.
• It lays down that employees should work in healthy and sanitary
conditions so far as the manufacturing will allow and that precautions
should be taken for the safety and for prevention of accidents.
• The factories act however is applicable to factories that employ 10 or
more workers and it covers only a small proportion of workers.
• As per this act, ‘worker’ is any person employed directly or through
any agency, whether for remuneration or not in any manufacturing
process. It is required that the work performed should be connected
to the product which is produced in the manufacturing process.
Objectives of factories act, 1948
• Working hours: According to provision of working hours, no adult
worker shall be required to work in a factory more than 48 hours a
week. There should be a weekly holiday.
• Health: For protecting the health of workers, every factory shall be
kept clean and necessary precautions shall be taken in this regard.
The factory should have proper drainage system, adequate lighting,
ventilation, temperature etc.
• Safety: The machinery should be fenced, no young person shall work
at dangerous machine, in confined spaces there should be provision
for manholes of adequate sizes so that workers can escape in case of
emergency.
• Welfare: Adequate and suitable facilities for washing should be
provided and maintained for the use of workers. Facilities for storing,
and drying clothing, facilities for sitting, first aid facilities, shelters, rest
rooms, should be there.
• Penalties: The provisions of factories act 1948 is violated in any case,
it is an offence. Following penalties may be imposed.
(i) Imprisonment for a term which may extend to one year
(ii) Fine may extend to one lakh rupees
(iii) Some times both fine and imprisonment
In case if a worker misuses related to welfare, safety and health, or in
relation to discharge of duties he can be imposed a fine of Rs. 500/-.
Payment of Bonus Act
• The Payment of Bonus Bill having been passed by both the Houses of
Parliament received the assent of the President on 25th September,
1965.
• It extends to the whole of India.
• Save as otherwise provided in this Act, it shall apply to
(a) every factory; and
(b) every other establishment in which twenty or more persons are
employed on any day during an accounting year.
OBJECTIVES OF THE ACT
• To impose a legal responsibility upon the employer to pay bonus to
his employees
• To regulate the amount of bonus to be paid to the workers
• To fix the maximum and minimum bonus that can be paid.
• To prescribe a formula for computing the bonus.
• To reward the workers by sharing the profits earned by the
organization.
• To link the bonus with productivity of the workers.
• It extends to whole of India.
• It shall apply on:
➢Every factory
➢Every other establishment engaging 20 or more workers / 10 or
workers in a factory during any accounting year.
• The establishment shall be profitable.
• It has 40 sections.
DEFINITIONS
• Accounting Year – means the year on which the books of accounts
are closed and balanced i.e., year commencing from 1st April and
ending on 31st March.
• Allocable Surplus – (a) for companies (except banking institutions)
which have no prescribed arrangements for declaration and payment of
dividends under the Income Tax Act- 67% of the available surplus (b) in
any other case, 60% of the available surplus.
• Appropriate Government – (a) for establishments covered under the
Industrial Dispute Act, the Central government (b) for any other
establishment, the respective State government.
• Employee – means any person employed in an organization not
earning more than INR 21,000 per month for any type of job.
• Employer – means owner or occupier of the factory or establishment
or manager , managing director of the establishment.
• Salary or Wages – all remuneration in monetary terms except HRA,
allowances for light, water , gas, medical attendance, concessional
supply of food grains, travelling allowances, bonuses, contributions
made by employer to gratuity, pension fund, provident fund,
retrenchment, any commission
• Calculation of bonus with respect to certain employees. [Sec 12] (2015
amendment)
• Where the salary or wage of an employee exceeds Rs.7,000/- per mensem,
the bonus payable to such employee under Sec.10, or as the case may be,
under Sec.11, shall be calculated as if his salary or wage were Rs.7,000/- per
mensem. The Government has decided to enhance the eligibility limit for
payment of bonus 3500/- per month Disqualification for bonus.
• Under [Sec 9] an employee shall be disqualified from receiving bonus under
this Act, if he is dismissed from service for
• Fraud; or (b) Riotous or violent behaviour while on the premises of the establishment;
or
• Theft, misappropriation or sabotage of any property of the establishment.
• Payment of minimum bonus. [Sec 10]
• Bonus should be paid along with the salary
• Every year, every employer shall be bound to pay bonus to every employee.
• a minimum bonus which shall be 8.33% cent of the salary or wage earned by
the employee during the accounting year or 100/- rupees, whichever is
higher.
• Bonus shall be payable in case of profits or losses in the accounting year.
Employees State Insurance Act,
1948
• An Act to provide for certain benefits to employees in case of
sickness, maternity and ' employment injury ' and to make provision
for certain other matters in relation thereto.

• The ESI scheme offers benefits to both workers and their dependents
in case of any unfortunate eventualities. Under the ESI Act,
employees, and workers employed at the categories mentioned
above, earning wages up to Rs. 21,000 per month are entitled to this
social security scheme.
Medical
• Under this scheme, the insured’s medical expenses are covered through
affordable and reasonable healthcare facilities. Also, the worker or an
employee is covered from day one of the person’s employment.
Maternity
• Under this scheme, the beneficiary can avail 100% of the daily wages
for up to 26 weeks, which can be further extended to one month based
on medical advice. In the case of a miscarriage, the benefit is 6 weeks,
while in the case of adoption, it is 12 weeks.
Disability
• In the temporary disablement of the worker, they are eligible for the
monthly wage of 90% until they recover. In the case of any permanent
disability, 90% of the monthly wage can be availed for a lifetime.
Sickness
• During medical leave, a scheme offers cash flow during the said period. The worker
can avail upto 70% of the daily wage for a maximum of 91 days. This must be
availed in two consecutive periods.
Unemployment
• For a period of 24 months, this scheme offers a maximum of up to 50% of the
average monthly wage in a case of involuntary loss of non-employment or due to
permanent invalidity due to injury.
Dependents
• Through this scheme, dependents of the insured receive financial assistance in
case of illnesses or injuries while at work. For instance, dependents are eligible for
the monthly payments, which must equally be distributed among surviving
dependents.
Coverage
• Under a scheme, workers and employees are covered from day one of their
employment. It includes both the insured and their dependents.
Funeral Costs
• The ESIC gives an amount of Rs. 15 000 towards funeral costs. This is paid to the dependents
or to the individual who does the last rites of the insured person.
Confinement Costs
• In case of the confinement occurs at a location where required medical care under the
scheme is not available, the insured or their dependent can have an available confinement
cost.
Vocational Rehabilitation
• The ESIC provides this scheme benefit based on the requirement of the insured. This is
extended to permanently disabled, injured individuals for Vocational Rehabilitation (VR)
training.
Physical Rehabilitation
• This scheme benefit is also provided based on the need, especially in the case of any
disability due to employment injury.
Old Age Medical Care
• When any insured person gets to retire and attains retirement age or takes VRS and ERS or
when a person has to leave the employment because of permanent disability, the insured
and spouse will receive medical Care.
The legislation’s objective is to provide a security system to these vast
numbers of workers, especially during health-related eventualities
through the ESI scheme.
Workmen’s compensation Act 1923
• This act provides workmen and/ or their dependents some relief in
case of accidents arising out of and in the course of employment and
causing either death or disablement of workmen.
1. The amount of compensation payable to a workman depends on:
• The nature of injury caused by accident,
• The monthly wages of the workman concerned, and
• The relevant factor for working out lump sum equivalent of
compensation amount as specified in Schedule IV
2. There is no distinction between an adult and a minor worker with
respect to the amount of compensation
Compensation For Death:
• In case of death resulting from injury, the amount of compensation shall
be equal 50% of the monthly wages of the deceased workman multiplied
by the relevant factor. Or an amount of Rs 1,40,000/- whichever is more.
Compensation For Permanent Total Disablement:
• In case of permanent total disablement resulting from the injury, the
amount of compensation shall be 60% of the monthly wages of the
injured workman multiplied by the relevant factor or Rs. 1,20,000/-
thousand whichever is more
Compensation For Permanent Partial Disablement:
• Where permanent partial disablement occurs, the amount of
compensation payable shall be as follows:
• In case of an injury specified in part II of the schedule I, the amount of
compensation shall be such percentage of the compensation which
would have been payable is the percentage of loss of earning
capacity caused by that injury.
Compensation For Temporary Disablement(Total or Partial):
• If the temporary disablement, whether total or partial results from
the injury, the amount of compensation shall be a half monthly
payment of the sum equivalent to 25% of the monthly wages of the
workman to be paid in accordance with the provisions.
• The half monthly payment shall be payable on the sixteenth day from
the date of disablement.
EMPLOYER SHALL NOT BE LIABLE:
In respect of any injury not resulting in death, caused by an accident
which is directly attributable to-
• the workmen having been at the time thereof under the influence of
drugs, or
• the willful disobedience of the workman to an order expressly given,
or to a rule expressly framed, for the purpose of securing the safety of
workmen, or
• the willful removal or disregard by the workmen of any safeguard or
other device which he knew to have been provided for the purpose of
securing the safety of workmen.