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ARTICLE : RGUMY - Providing Handholding Support to First Generation Entrepreneurs
Saturday, 21 July 2012 04:54

RGUMY - Providing Handholding Support to First Generation Entrepreneurs

Entrepreneurship development and training is one of the key elements for development and promotion of micro and small enterprises, particularly, the first generation entrepreneurs. Entrepreneurship Development Programmes (EDPs) of various durations are being organized on regular basis by a number of organizations e.g. national and state level Entrepreneurship Development Institutes (EDIs), Micro, Small and Medium Enterprises Development Institutes (MSMEDIs), national and state level Industrial Development Corporations, Banks and other training institutions and agencies in private and public sector etc., to create new entrepreneurs by cultivating their latent qualities of entrepreneurship and enlightening them on various aspects necessary for setting up micro and small enterprises.  Besides, various Industrial Training Institutes (ITIs), other private training institutions are also organizing vocational training (VT) programmes, skill development programmes (SDPs) and entrepreneurshipcum-skill development programmes (ESDPs).

However, there are still wide spread variations in the success rate, in terms of actual setting up and successful running of enterprises, by the EDP/SDP/ESDP trained entrepreneurs. It has been observed that entrepreneurs particularly new entrepreneurs, generally face difficulties in availing full benefits under available schemes of the Governments/financial institutions, completing and complying with various formalities and legal requirements under various laws/regulations, in selection of appropriate technology, tie-up with buyers and sellers etc. In order to bridge the gap between the aspirations of the potential entrepreneurs and the ground realties, there is a need to support and nurture the potential first generation as well as existing entrepreneurs by giving them handholding support, particularly during the initial stages of setting up and managing their enterprises.  To achieve this objective, Rajiv Gandhi Udyami Mitra Yojana (RGUMY) has been launched.

Selected lead agencies i.e. 'Udyami Mitras' aim to help these entities in the establishment and management of the new enterprise, in dealing with various procedural and legal hurdles and in completion of various formalities required for setting up and running of the enterprise.

The Yojana also helps in providing information, support, guidance and assistance to first generation entrepreneurs as well as other existing entrepreneurs through an ‘Udyami Helpline’ (a Call Centre for MSMEs), to guide them regarding various promotional schemes of the Government, procedural formalities required for setting up and running of the enterprise and help them in accessing Bank credit etc.

Under RGUMY, financial assistance would be provided to the selected lead agencies i.e. Udyami Mitras for rendering assistance and handholding support to the potential first generation entrepreneurs. Following agencies/organizations can be appointed as the lead agency i.e. Udyami Mitra:

  • Existing national level Entrepreneurship Development Institutions (EDIs);

  • Micro, Small and Medium Enterprises Development Institutes (MSMEDIs)/Branch MSMEDIs;

  • Central/ State Government public sector enterprises (PSEs) involved in  promotion and development of MSEs e.g. National Small Industries Corporation (NSIC) and State Industrial Development Corporations etc.;

  • Selected State level EDIs and Entrepreneurship Development Centers (EDCs) in public or private sectors;

  • Khadi and Village Industries Commission (KVIC);

  • Special Purpose Vehicles (SPVs) set up for cluster development involved in entrepreneurship development;

  • Capable associations of MSEs/SSIs;

  • Other organizations/training institutions/NGOs etc. involved in entrepreneurship development/ skill development.

The Scheme does not help existing entrepreneurs. It only helps beneficiaries who would like to become prospective entrepreneurs.  Beneficiaries, who have not undergone such training, but are willing for getting handholding support, should be advised to undergo such training for at least two weeks.

The selected lead agencies i.e. Udyami Mitras render assistance and handholding support for following services: Networking, coordinating and follow up with various Government departments/ agencies/ organizations and regulatory agencies on the one hand and with support agencies like Banks and financial institutions, District Industries Centers (DICs), technology providers, infrastructure providers on the other hand, to help the first generation entrepreneurs in setting up their enterprise. Udyami Mitras are expected to help the first generation entrepreneurs in:

Identification of suitable project/product/enterprise and  preparation of bankable project report -

  • Creation of the proprietorship firm/ partnership firm/ Company/Society/ Self Help Group (SHG) etc.;
  • Filing of Memorandum (as prescribed under MSMED Act 2006);

  • Accessing bank loans, admissible capital subsidy/ assistance under various schemes of the Central /State Government and other agencies/organizations/financial institutions/ Banks etc. by networking with respective agencies;

  • Assistance and support in establishment of work shed/office;

  • Sanction of Power load/connection;

  • Selection of appropriate technology and installation of plant and machinery/office equipment etc.;

  • obtaining various registrations/ licenses/ clearances / No Objection Certificates (NOCs) etc. from the concerned regulatory agencies/ Government departments/ local bodies/Municipal authorities etc.;

  • Allotment of Income Tax Permanent Account Number (PAN) and Service Tax/ Sales Tax/ VAT registration etc;

  • Sanction of working capital loan from the banks;

  • Arranging tie up with raw material suppliers;

  • Preparation and implementation of marketing strategy for the  product/ service and market development; and

  • Establishing linkage with a mentor for providing guidance in future

  • Creation of web page and email identity;

Once the enterprise has been successfully set up, the Udyami  Mitras would also monitor and follow up on the functioning of the enterprise for a further period of minimum 6 months and provide help in overcoming various managerial, financial and operational problems.

The beneficiaries i.e., Udyamis are required to pay Rs. 1000/- to Udyami Mitras, as their initial contribution at the time of registration.  However, the initial contribution is also waived off for the beneficiaries belonging to SC, ST, Physically Handicapped, Women and all beneficiaries belonging to North-Eastern Region.