Subcontracting Exchanges for Ancillary Development

Under the programme of ancillary development, sub-contracting Exchanges have been set up.

What is a subcontracting Exchange :

A Sub-contracting Exchange is a Store House of Data with regard to the capacities of the small- scale units in terms of products manufactured/services rendered, idle capacities available on particular processes/machines on one hand and storing data with regard to the requirements of the buyers which could be product/components/sub assemblies/services. The exchange also stores data about the specifications, class of accuracy, quantities, etc. in the above cases.

The main objectives of these Sub-contracting Exchanges are:

  1. To register capacities of manufacturing or services available with the small scale and tiny units.
  2. To obtain details of items required regularly by other large units which can be manufactured in the small scale sector.
  3. To arrange Buyer-Seller Meet/Vendor Development Programmes so as to display the items/products required by large undertakings/organizations and to discuss the specifications and other requirements with the small scale units participants in such meets.

The Exchange is, therefore, in a position to a great extent to provide sufficient information to vendees to have access to the details of facilities available with the Sub-Contractors who could meet their requirements. On the other hand it also help to provide information to Sub-contractors/Vendors about the Vendees who are looking for outsourcing.

Following the announcement of the liberalized policy package in 1991, a Scheme for the setting up of SCXs backed by Industry Association/-NGOs was also launched. Under this particular Scheme, SCXs are sanctioned for various parts of the country by providing financial assistance up to Rs.4.7 lakhs to set up Sub Contracting Exchanges to provide impetus to outsourcing.

Launching of scheme :

In order to provide marketing support to small scale industries initially two SCX’s were setup in 1970 in SISI’s. The plan scheme for setting up SCX’s was taken up in 1974 -75. The scheme was extended in 1995 for providing financial assistance to Industry associations/ NGO’s for setting up SCX’s.

Setting of the SCX’s by Industrial associations :

The Govt. of India is operating the scheme to assist industrial associations/NGOs in setting up the Sub-contracting Exchanges through out the country. The NGOs/Industry Associations having suitable building and other infrastructure are required to prepare a Project Profile of the proposal giving all details about their operation, member industries in nearby areas etc. The proposals are to be sent to the O/o DCSSI, Nirman Bhawan, duly recommended by respective State Govt. and the Director of Small Industries Institute of the respective Region.

Quantum of assistance provided :

Industry Associations / NGOs at the National/State/Regional level are provided with one time grant upto Rs. 4.7 lakhs for procurement of hardware such as Plain Paper Copier, Telephone, Fax Machine, Computers, suitable furniture, Binding & Cutting Machine etc. The grant is paid on reimbursement basis by the O/o DC(SSI), Ministry of SSI , Govt. of India

To ensure that these Exchanges become fully operational from the beginning, the Govt. of India, under the scheme provides a matching grant to these Exchanges on tapering basis at 50%, 30% and 10% of the running expenses not exceeding Rs. 1.25, 0.75 and 0.25 lakhs per year respectively during the initial three years subject to a ceiling of Rs. 1.57 lakhs per SCX.

Up to date progress :

Under the scheme 51 S.C.X’s have been set up till March,2004 by Industries Association / NGOs in different parts of the country with the financial assistance from the office of DC( SSI), New Delhi. Apart from it 35 SCX’s are functioning in SISI’s. Around 40 - 50 Vendor Development Programmes are conducted annually in different parts of the country which are of National / State / Regional level. The programmes are giving satisfactory contributions to the objective of ancillary / vendor development in the country. Such programmes are also contributing to enrich the data bank of the exchanges both from buyers as well as from sellers point of view.