29  Small Industries Service Institute (SISI), National Small Industries Corporation (NSIC)

Small-scale industries (SSIs) form the backbone of India’s entrepreneurial ecosystem. To strengthen and sustain them, the government established Small Industries Service Institutes (SISIs) and the National Small Industries Corporation (NSIC). These institutions aim to support entrepreneurs through training, consultancy, technology, and market linkages.

Khanka (2020) observes that SISIs provide essential technical and managerial guidance, while Desai (2014) notes that NSIC plays a pivotal role in bridging the gap between small industries and larger markets.

29.1 Role of SISIs

SISIs (now restructured as MSME-Development and Facilitation Offices – MSME-DFOs) were set up under the Ministry of MSME to promote and support small industries.
- Training & Skill Development: Conduct Entrepreneurship Development Programs (EDPs) and vocational training.
- Technical Consultancy: Assist entrepreneurs in project selection, process improvement, and technology adoption.
- Market Support: Help small units identify buyers and suppliers.
- Policy Implementation: Act as field offices for government MSME policies.
- Cluster Development: Support regional and sectoral industry clusters.

Case: SISI Mumbai organized capacity-building programs for small engineering units, improving productivity and competitiveness.

29.2 Role of NSIC

Established in 1955, NSIC provides integrated support services to MSMEs.
- Credit Support: Facilitates access to bank finance through credit ratings and collateral-free loans.
- Raw Material Assistance: Supplies critical raw materials at reasonable prices.
- Marketing Assistance: Organizes trade fairs, buyer-seller meets, and e-marketing platforms.
- Technology Support: Operates incubation centers, testing labs, and technology parks.
- Government Procurement: Ensures MSME participation in public procurement through reserved quotas.

Case: NSIC’s “Single Point Registration Scheme (SPRS)” enabled MSMEs to participate in government tenders without repeated paperwork.

29.3 Comparative Roles of SISIs and NSIC

Institution Primary Role Example
SISI (MSME-DFO) Training, consultancy, cluster development EDPs for engineering units in Mumbai
NSIC Credit, raw materials, marketing, technology SPRS enabling MSME participation in tenders

29.4 Institutional Support Diagram

graph LR
    A["MSME Support Institutions"] --> B["SISI (Now MSME-DFO)"]
    A --> C["NSIC"]

    B --> B1["Training & Skill Development"]
    B --> B2["Technical Consultancy"]
    B --> B3["Cluster Development"]

    C --> C1["Credit & Finance Support"]
    C --> C2["Raw Material Assistance"]
    C --> C3["Marketing & Procurement Support"]
    C --> C4["Technology & Incubation"]

    %% Style
    classDef dark fill:#004E64,color:#ffffff,stroke:orange,stroke-width:3px,rx:10px,ry:10px;
    class A,B,C,B1,B2,B3,C1,C2,C3,C4 dark;

29.5 Indian Perspective

  • SISIs have been restructured into MSME-DFOs to modernize services.
  • NSIC continues to act as a nodal agency linking MSMEs with finance, markets, and government procurement.
  • Both institutions are key in implementing MSME policies under initiatives like Startup India and Make in India.

29.6 Global Perspective

  • USA: Small Business Administration (SBA) provides training, finance, and market support.
  • Europe: Enterprise Europe Network connects SMEs with international markets.
  • China: SME bureaus provide subsidies, technology support, and export facilitation.

29.7 Challenges

  • Awareness gap: Many small entrepreneurs are unaware of SISI/NSIC programs.
  • Operational delays: Bureaucracy in fund disbursement and approvals.
  • Technology gap: Limited digitalization of services in rural areas.
  • Overlap of functions: Duplication with state-level agencies.

29.8 Future Outlook

  • Digital Platforms: Expansion of online portals for credit and procurement.
  • Global Linkages: Integrating MSMEs into global supply chains.
  • Technology Upgradation: Stronger focus on Industry 4.0 for small industries.
  • Inclusive Reach: Extending services to women, rural, and marginalized entrepreneurs.

29.9 Summary

  • SISIs (MSME-DFOs): Provide training, consultancy, and cluster support for small entrepreneurs.
  • NSIC: Facilitates finance, raw materials, marketing, and technology support.
  • Together, they form a complementary framework to strengthen MSMEs and ensure their participation in competitive markets.

Strengthening and modernizing SISI and NSIC services, particularly through digitalization and global integration, will be crucial for sustaining MSME-led entrepreneurial growth in India.