It is a real fact that more than 70% of Indian population resides in rural areas of our country.

But the majority of that population is still backward due to less support of external environment. The quoted quote that "wheel is the symbol of development" is proven false in case of Rural India because there is lack of development which may be because of unfair political environment and government negligence.

Entrepreneurs are the backbone of a nations progress. They organize different factors of production like land, labor and capital and in this process provides goods and services to the people. Entrepreneurs create wealth and give employment to large sections of the society. The economically developed nations provide ample evidence to the emergence of entrepreneurial class in those countries. Many underdeveloped countries have realized the fact that the governments in these countries are unable to produce goods and services needed by the people and offer employment. So attemps are being made to develop and sustain entrepreneurial skill in the people, so that they become good entrepreneurs in the years to come. India requires a good entrepreneurial class for developing small scale and large scale industries. Government at the centre and states are unable to solve the problem of teeming unemployed. Besides liberalization has given an added impetus to entrepreneurs to start industries in small scale and large scale sectors. IMPORTANCE OF AN ENTREPRENEUR In the economic development of a country or of any region within the country. Entrepreneur is one of the important inputs. In India, the state and private entrepreneurship competence makes all the difference in the rate of economic growth. Therefore important role has been assigned to the identification and promotion of entrepreneurs. In India the need for a broad based entrepreneurial call arises from the need to speed up the process of activating the factors of production leading to a higher rate of economic growth, dispersal of economic activities, development of backward areas, creation of employment opportunities and improvement in the standard of living of the weaker section of the society. Individuals who initiate, establish maintain and expand new enterprises make the entrepreneurial class. The following factors have a bearing on the growth of entrepreneurship: a) b) c) d) e) The availability of industrial know-how and technology. Socio-political and economic conditions. State of art and culture of trading and business. Existence of market for products and services and Incentives and facilities available for starting an industry or business.

What is a Micro, Small or Medium Enterprise?

MSMEs play a vital role in the Indian economy. The sector has proved to be appropriate to address the national priorities of employment, removing poverty and regional imbalances. Government of India (GoI) has been taking proactive steps in the direction of strengthening the competency of Indian MSMEs. The Five-year plans of the Government have placed emphasis on the MSME sector for achieving various growth parameters. Launching various sectoral competency schemes, comprehensive MSMED Act 2006, Financial Package etc. are few of the proactive steps in the direction of creating enabling environment. Ministry of MSME, GoI is the nodal ministry which coordinates & supervises the issues of the MSME sector.

The earlier concept of Industries has been changed to Enterprises Enterprises have been classified broadly into: (i) Enterprises engaged in the Manufacture / production of Goods pertaining to any industry; & (ii) Enterprises engaged in providing / Rendering of services. Manufacturing enterprises have been defined in terms of investment in (excluding land & buildings) and further classified into : plant and machinery

- Micro Enterprises - investment up to Rs.25 lakh. - Small Enterprises - investment above Rs.25lakh & up to Rs. 5 crore - Medium Enterprises - investment above Rs. 5 crore & up to Rs.10 crore. Service enterprises have been defined in terms of their investment (excluding land & buildings) and further classified into: - Micro Enterprises investment up to Rs.10 lakh. - Small Enterprises investment above Rs.10 lakh & up to Rs.2 crore. - Medium Enterprisesinvestment above Rs. 2 crore & up to Rs. 5 crore in equipment

It is not necessary to engage in manufacturing activity for self-employment. One can set up service enterprises as well . The following major inputs are required for setting up an enterprise:

Land, building or shed Machinery and equipments Raw Materials Power and Water Skilled manpower Capital

Financial Assistance

Financial assistance is available from institutions such as Nationalized Banks, Small Industries Development Bank of India,

Regional Rural Banks, National Small Industries Corporation, State Financial Corporations etc.

Depending upon the project requirement and promoters background. Financial assistance has two components. Loan for fixed capital is used to acquire Plant and Machinery, land and building. Working capital loan is used to meet day to day operational cost of the production. State Financial Corporation and National Small Industries Corporation generally provide working capital. However under a package assistance, State Financial Corporations also provide a composite loan covering plant and machinery and working capital.

What is SIDBI?
SIDBI is an apex financial institution in the field of rural development. SIDBI is a locally owned subsidiary of IDBI. It was setup under the SIDBI act 1989 and commenced operation from April 1990.
SIDBI is an apex financial institution which provides financial support to the sick / small scale industries. So, we can say that SIDBI is the institution which engaged in the business of rural industrialization in India. The small Industries Development Bank of India is Principal Financial institution engaged in development initiative in rural sector and improving the SSI unit. The another very important role is keeping by this Bank is that it is also encouraging SSIS and generating employment in rural India. The Bank also performing the rehabilitation duty and improving the performance of small Industries. LENDING (FINANCING SCHEMES OF SIDBI) A) Direct Financial Assistances For the development of Industrial infrastructure for SSIs * * * * * * * * * * * * * Venture capital/development scheme Equipment Finance Scheme Integrated Infrastructural Development Scheme Project Finance Scheme Schemes related to Marketing of SSI's Product ISO 9000 Scheme Micro credit financing scheme Short term & long term loan schemes Direct Discounting of bill TDMF Schemes Factoring scheme Pre & Post shipment financial assistance scheme Export bill financing scheme & so on

B) Indirect Finance by SIDBI I) Refinance Assistance a) b) c) d) e) f) g) h) i) j) k) Composite loan scheme for cottage, Village & tiny Industries Scheme for women entrepreneurs Mahila Udyam Nidhi SEMFEX Scheme Single window scheme RTDM Scheme RISO-9000 Scheme NEF Scheme RSR Scheme Scheme for SRTOs Scheme for ST/SC & Physically Challenged Other General Schemes

II) Scheme for Rediscounting of bills a) For equipments b) For Inland supply bills III) Other support through various institutions a) SFC's, SIDC, SSIDC, Bank to Intermediacies b) To leasing / hire purchase companies. c) To factoring companies d) To special corporate entities and institutions which are engaged in the business of development of SSIs SECTOR APPRAISAL In general we can say that the small scale sector of India has grown slowly and occupied the very important position in the Indian economy. The small scale sector is providing employment to the rural unemployment to the rural unemployed people. The number of registered units in the SSI sector has increased from 0.42 million as at end of March 1974 to 03.37 million at the end of year 2001 march. It means the sector has achieved the growth of 2.95 millions in the period of 27 years. But we have also unregistered small scale Industries who were working and their contribution was also very valuable for the economy. The small scale sector is also playing significant role by their contribution to the socioeconomic objective which is related to the employment generation Output Export & Fostering Entrepreneurship

It is well to say that the small scale sectors account for around 95% of the industrial units in the country contributing 40$ of the manufacturing sector output and near by 1/3 of nations export. In the area of employment generation the small scale sector has provided

employment with the help of their more than 3.37 million modern small scale units around 1.86 million peoples. BANK CREDIT TO SMALL SCALE SECTOR The commercial and rural regional banks as well as co-operative banks have been regular finance provides for the small scale sector. The interest charged to the small scale units located in backward have to pay the rate of interest @12.5% p.a. Where the units which are situated in developed areas they can get finances at rate of 13.50% p.a. interest on the loan amount up to Rs.25 lakhs and @ 14% if they are taking the loan more than 25 lakhs. SIDBI with the mode of its refinance and rediscount provided and providing financial assistance to the sector. The Bank SIDBI through SFC's , SIDC's and other RRB"s providing finance to the developing sector. The small scale sector specially the small scale units are getting refinance facility through SIDBI & its subsidiaries more than 85%. TOTAL BANK CREDIT
(R Rs. IN CRORES) YEAR 1991 1992 1993 1994 1995 1996 1997 1998 1999 CREDIT TO INDUSTRY 61576 65240 78662 80482 102953 124937 138548 161038 178799 CREDIT TO SSI"s 17118 17830 20026 22620 27612 31726 34113 43508 48483 % SHARE OF SSI's 14.72 14.47 13.17 13.75 13.05 12.49 12.25 13.43 17.88

ASSISTANCE BY SIDBI TO SSI'S The apex financial institution in the field of development of small scale sector The bank (SIDBI) by the mode of refinance discounting and rediscounting as well as financial assistance through indirect & direct functions encouraging the rural India.
Rs. In Crores YEAR 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 SANCTIONED 2408.7 2846.0 2909.2 3356.3 4706.3 6065.6 6485.3 7484.2 8879.0 10265.0 10821.0 DISBURSMENT 1838.5 2027.4 2146.3 2672.7 3389.8 4800.8 4584.7 5240.7 6285.2 6964.2 6441.0

At the end of year 2001 March, SIDBI has sanctioned Rs.66299 crores and disbursed Rs.46,392 crores by the various mode of its services like Refinance, Bills rediscounting,

other scheme and direct finance. With its refinance scheme the name has sanctioned Rs.22792.3 crores and disbursed Rs.17225.2 crores. With bill discounting facility the bank has sanctioned Rs.2260.8 crores and Rs.1622.9 crores disbursed to the sector. With its direct finance scheme SIDBI has sanctioned Rs. 12,975.6 crores for the SSI's and disbursed Rs. 9948.6 crores. From its other various schemes bank has sanctioned Rs. 7115.1 crores and disbursed Rs. 4190.3 crores for the development of SSI's till year 2001.

SSIs AND FIVE YEAR PLANS When the First Five Year Plan introduced the industrial base of India was not so good and was very limited. Generally, the industrial development based on consumer goods producing industries. Some important industries of that period were cotton industry, paper industry, salt industry, sugar industry, soap industry and leather industry which were facing a lot of financial and technological problems and fighting for their survival. When the Government of India had introduced Second Five Year plan it was given first priority to the industrialization in rural, semi-urban and areas of our country. That was a good decision. But, it is sad to say that the government has given priority to all the large scale and heavy industries and neglected the small scale sector which cause the sickness in small scale industries. After neglecting in 3rd, 4th, 5th, 6th, 7th, and 8th Five Year plans, we can say more than 25-30 years the government realized its mistake and then they had taken actions for rehabilitation of small sick industries by technological reform with sufficient credit facilities and various training programs for the workers engaged in small scale sector. The industries like powerlooms, handlooms , coir, sericulture and silk, handicrafts and other similar industries got affected due to the negligence of the government which results sickness in small scale sector. If we go through the business area of SIDBI we find that SIDBI governs small scale industrial units which contribute significantly to the national economy in terms of production employment and exports via rural development through rural industrialization. CONCLUSION In conclusion we can say that the SIDBI, by the mode of refinancing, discounting and rediscounting as well as financial assistance through indirect functions regarding lending to primary institutions, through its direct assistance to small units and through its various developmental and supporting services, encouraging small scale sector in Rural India.

SIDBI obviously engaged in the business of reforming SSIs with its different Rural Industrialization Programs (RIP) with the following aims: * * * * * Expansion of small scale sector and increase its share in industrial output. Development of rural areas where more than 70% of the population resides. Increase the efficiency of SSIs. Increase the contribution of SSIs in export. More employment generation in rural areas of rural India.

By keeping in mind the optimistic approach, we can say that SIDBI will provide better and essential services for the betterment of SSIs with its rehabilitation programs and Rural Industrialization Programs (RIP) and then the quoted quote will prove true that "Wheel is the symbol of development".