The Union Micro, Small and Medium Enterprises Sector (MSME) Minister is gearing up to launch a new initiative aimed at developing indigenous entrepreneurs in the MSME sector. This novel strategy involves the establishment of Enterprise Development Centres (EDCs), each with a focus on specific districts. The current goal is to launch 20 such EDCs out of a planned 500 by the end of the fiscal year 2019-2020.
Structure of Enterprise Development Centres
EDCs are being designed to function in a similar vein to start-up incubators. Their operations will be broad-based and managed by special purpose vehicles. These bodies will work in collaboration with private sector, business management organisations, and local industry associations to ensure the efficient running of the centres.
Areas of Focus for EDCs
The areas targeted by the EDCs are quite varied and have been thoughtfully constructed to provide holistic support to businesses at varying stages of operation.
Firstly, for the first time, an integrated unit will serve to bolster both new and existing businesses. This will be achieved through services such as management training and the provision of office space. They will also provide enterprise development courses, vocational guidance, and skill development initiatives for budding entrepreneurs.
Another unique feature of the EDCs is their planned “enterprise clinics” for struggling firms. The government hopes that these clinics will help combat the debt trap problem many small businesses face due to bank loans.
Moreover, the EDCs will offer facilitation and syndication of credit, export promotion, and supplier inclusion. As the centres mature, they may also begin to administer incentives and loans from the government based on the capabilities of individual firms.
In terms of broadening the overall entrepreneur base, the EDCs aim to attract a more diverse demographic including youth, women, scheduled castes and tribes and persons with disabilities.
Classification of Enterprises in India
In India, businesses are broadly classified into two categories: Manufacturing and Service. Each category is then further divided into micro, small, and medium enterprises based on their investment in plant and machinery (for manufacturing) or equipment (for the service sector).
This classification is currently defined as follows:
| Type of Enterprise | Manufacturing Enterprises | Services Enterprises |
|---|---|---|
| Micro | Up to Rs. 25 lakh | Up to Rs. 10 lakh |
| Small | Above Rs. 25 lakh & up to 5 crore | Above Rs. 10 lakh & up to 2 crore |
| Medium | Above Rs. 5 crore & up to 10 crore | Above Rs. 2 core & up to 5 crore |
Source: BS
Final Remarks
The launch of Enterprise Development Centres (EDCs) by the MSME Minister represents a significant step towards providing comprehensive and systemic support to businesses within the sector. By offering a diverse range of services tailored to meet the needs of businesses at different stages of operation, these centres promise to stimulate growth and facilitate the success of entrepreneurs in the MSME sector.