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Indian Economy

Enterprise Development Centres

  • 30 Sep 2019
  • 3 min read

The Union Micro, Small and Medium Enterprises Sector (MSME) Minister will soon launch Enterprise Development Centres (EDCs) for developing a cadre of indigenous entrepreneurs in the MSMEs.

  • Planned for every district, the ministry is targeting the launch of 20 EDCs out of a planned 500 by the end of the current financial year (2019-20).
  • Structure
    • The EDCs will be similar to incubators for start-ups.
    • The centres will be broad-based and shall be run by special purpose vehicles in partnership with the private sector, business management organisations, local industry associations.
  • Focus Areas
    • Incubation:
      • For the first time, an integrated unit will help new and existing businesses develop by providing services such as management training, and office space etc.
      • It will also offer “enterprise development courses, vocational guidance and skill development for budding entrepreneurs”.
    • For Struggling Firms:
      • The EDCs will also have “enterprise clinics” for struggling firms, which the government hopes will reduce the number of small businesses falling into a debt trap financed by bank loans.
    • Plugging Financial Difficulties:
      • The centres would offer credit facilitation and syndication, export promotion and supplier inclusion.
      • In the distant future, incentives and loans by the government for the sector will also flow through the EDCs, after determining the capabilities of the firm through set parameters.
    • Expanding Entrepreneur Base: The government hopes that EDCs will also expand the entrepreneur base by drawing individuals from diverse demographics such as youth, women, scheduled castes and tribes and disabled backgrounds.

Micro, Small and Medium Enterprises

  • In India, enterprises have been classified broadly into two categories:
    • Manufacturing.
    • Those engaged in providing/rendering of services.
  • Both categories of enterprises have been further classified into micro, small and medium enterprises based on their investment in plant and machinery (for manufacturing enterprises) or on equipment (in the case of enterprises providing or rendering services).
  • The present ceiling on investment to be classified as micro, small or medium enterprises is as under:
Classification Manufacturing Enterprises Services Enterprises
Micro Up to Rs.25 lakh Upto Rs.10 lakh
Small Above Rs.25 lakh & upto 5 crore Above Rs.10 lakh & upto 2 crore
Medium Above Rs.5 crore & upto 10 crore Above Rs.2 core & upto 5 crore

Source: BS

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