Role of SIDBI for the Promotion and Development of MSME’S in India

Abstract

Industrial is the crucial part of economic development of our country.before we discuss about industry that will be better to know economic development. “An increase in real per capita income of an individual in improvement of in the level of living. The percapita income is calculated through gross domestic product with divided by total population of the country. Economic development is a process by which result in the reduction or elimination of poverty, inequality and
unemployment which sustain annual increase in the GDP with the context of growing economy. According to Michael p.todaro “economic development therefore, be conceived as a multi-dimensional process involving major changes in the social structure ,popular attitude, and national  institution as well as the acceleration of economic growth, the reduction in inequality and the eradication of absolute poverty developments in its essence must represent the entire amount of change by which an entire social system turned to the diverse basic needs and desires of individual and social groups within that system moves away from a conditions of life widely perceived as unsatisfactory and towards situation or condition of life regarding as materially and spiritually letter.Michael p.todaro , economic development in the third world “new york” 1983.

Each industry start with capital in the fixed asset of plant & machinery land and building etc.. inorder to bank is a crucial part to provide finance assistance for development of industry. There are two major banking sector in india. Oneis commercial bank, another one is developing bank like., ICICI., IDBI., IFCI., IBRD., etc. The main aims to start developing bank is to promotion and development of industry in india. In order to small scale industrial developing bank of india (SIDBI)
one of the developing bank in India. The main aim of SIDBI is to provide short-term and long-term loan to the small scale industry (SSI).Earlier small enterprises were called Small Scale Industries (SSI). The SSI became a MSME’s (micro, small and medium enterprises) after the amendment of 2006 act.they are addressed as Small and Medium Enterprises (SMEs). Thus, service enterprises were included in the MSME sector realizing the importance of service sector .The level of employment and /or sales turnover is what most countries follow as the criterion for defining the small scale sector. However, in India, it is defined the enterprises are now grouped under two major heads namely manufacturing and service enterprises

The Micro, Small and Medium Enterprise (MSME) sector plays a vital role in the growth of our country in creating employment, exports, gross industrial value of output, gross value added, investment in fixed assets, contribution to GDP, and giving boost to manufacture, service and infrastructure sectors. The opportunities in MSME sectors are enormous due to the factors like Less Capital Intensive, Extensive Promotion & Support by Government, Reservation for Exclusive Manufacture, Funding by way of Finance & Subsidies, Reservation for Exclusive Purchase by Government, Export Promotion, great demand in the domestic market , export potential and so on. The number of MSMEs functioning in the country as per Quick Results of 4th All India Census (2006-07), in the registered and unregistered categories are 1.55 Million (5.94%) and 24.55 Million (94.06%) respectively.

The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 has given choice to entrepreneur that the filing of Memorandum (Registration) by Entrepreneur intending to establish a Micro, Small or Medium Enterprise is discretionary and not mandatory. In this study, besides making a brief review of the overall performance of the MSME sector, this role played by the Small Industries Development Bank of India (SIDBI) in empowering MSMEs and acting as the nodal agency for MSME schemes of Government of India.