A small scale industry (SSI) is an industrial

undertaking in which the investment in fixed assets in plant & machinery, whether held on ownership term or on lease or hire purchase, does not exceed Rs. 1Crore. However, this investment limit is varied by the Government from time to time.

Introduction

Entrepreneurs in small scale sector are normally

not required to obtain a license either from the Central Government or the State Government for setting up units in any part of the country.

Its registration with the State Directorate or Commissioner of Industries or DIC's makes the unit eligible for availing different types of Government assistance like financial assistance, medium and long term loans from State Financial Corporations and other commercial banks

The Ministry of Micro, Small and Medium

Enterprises acts as the nodal agency for growth and development of SSIs in the country. The ministry formulates and implements policies and programmes in order to promote small scale industries and enhance their competitiveness. It is assisted by various public sector enterprises like:-

Ministry of Micro, Small and Medium Enterprises

Small Industry Development

Organization (SIDO) is the apex body for assisting the Government in formulating and overseeing the implementation of its policies and programmes/projects/schemes.

National Small Industries Corporation Ltd (NSIC) was established by the Government with a view to promoting, aiding and fostering the growth of SSI in the country, with focus on commercial aspects of their operation.

The Ministry has established three National Entrepreneurship

Development Institutes which are engaged in development of training modules, undertaking research and training and providing consultancy services for entrepreneurship development in the SSI sector. These are:-  National Institute of Small Industry Extension

Training (NISIET) at Hyderabad, National Institute of Entrepreneurship and Small

Business Development (NIESBUD) at NOIDA  Indian Institute of Entrepreneurship (IIE) at Guwahati  The National Commission for Enterprises in the

Unorganized Sector (NCEUS) Small Industries Development Bank of India (SIDBI) 

All types of small-scale industries found in India whether

in manufacturing sector or service sector are divided into five types:

1. Manufacturing Industries: Those units which are producing complete articles for direct consumption and also for processing industries are called as manufacturing industries. For example : Power looms, engineering industries, coin industries, khadi industries, food processing industries etc.

2. Ancillary Industries: The industries which are producing parts and components and rendering services to large industries are called as ancillary industries.

Types of Small Scale Industries

3. Service Industries: Service industries are

those which are covering light repair shops necessary to maintain mechanical equipments. These industries are essentially machine- based.

4. Feeder Industries: Feeder industries are those which are specializing in certain types of products and services, e.g. casting, electroplating, welding, etc.

Advertising Agencies Marketing Consultancy Industrial Consultancy Equipment Rental & Leasing Typing Centers Photocopying Centers Industrial Photography Industrial R& D Labs Industrial Testing Labs Desk Top Publishing

List of the activities which are recognized as Small Scale Service and Business (Industry Related)

Enterprises (SSSBEs)

Internet Browsing/Setting up of Cyber Cafes Auto repair, services and garages Documentary Films on themes like Family Planning, Social

forestry, energy conservation and commercial advertising Laboratories engaged in Testing of Raw Materials, Finished

Products "Servicing Industry" undertakings engaged in maintenance,

repair, testing or electronic/electrical equipment/instruments

Laundry and Dry Cleaning X-Ray Clinic Tailoring Servicing of agriculture farm equipment e.g. Tractor, Pump,

Rig, Boring Machine, etc Weigh Bridge.

Photographic Lab Blue Printing and enlargement of drawing/designs

facilities ISD/STD Booths Teleprinter/Fax Services Sub-Contracting Exchanges (SCXs) established by

Industry Associations EDP Institutes established by Voluntary

Associations/Non-Government Organization Colored, Black and White studios equipped with

processing laboratory Ropeways in hilly areas Installation and operation of Cable T.V. Network Operating EPABX under franchises Beauty Parlours and Creches

Advantages Small Scale Industries help the economy in

promoting balanced development of industries across all the regions of the economy.

Small Scale Industries are adept in distributing national income in more efficient and equitable manner among the various participants in the process of good production than their medium or larger counterparts.

Small Scale Industries enjoy a lot of help and encouragement from the government through protecting these industries from the direct competition of the large scale ones, provision of subsidies in the form of capital, lenient tax structure for this industry

SSI’s in India

Before Independence, the present small scale industry was

meant to denote the village and the urban cottage industry. This group included a variety of industries ranging from

manufacturing of Iron safes, locks, carpets, marble jigs, baskets, hand-loom cloth and the like.

In fact, at that time the term „cottage and Small scale industries‟ was used in juxtaposition to large scale industries, which were established under the British patronage.

They received encouragement and support during the freedom movement.

The small scale industries found a prominent place in the economic programme envisaged by the Indian National Congress.

SSI’s Pre Independence

After 1947Jawaharlal Nehru maintained separate entities of small scale industries. He was of the view that a small industry was the middle sector and it would overlap both the cottage and the large industries. 1977 industrial PolicyThe basic policy support of SSI sector had its roots in the Industrial Policy Resolution 1977, laid emphasis on reservation of items. The reservation economically viable and technologically feasible products to be exclusively manufactured by small scale industry began with a list of 47 items which was gradually extended to too many products. At Present 812 items are in the reserved list.The limit on the fixed capital investment for SSI’s was Rs 7.5 lakhs and for ancillaries it was Rs 10 lakhs. After the Industrial Policy, the ceiling for investment for SSI’s was raised to Rs 60 lakhs and Rs 70 lakhs for ancillaries .

SSI’s Post Independence

Production

It contributes almost 40% of the gross industrial value added in the Indian economy.

It has been estimated that a million Rs. of investment in fixed assets in the small scale sector produces 4.62 million.

The number of small scale units has increased from an estimated 8.74 lakhs units in the year 1980-81 to an estimated 31.21 lakhs in the year 1999.

Performance Of Small Scale Industries

Employment

SSI Sector in India creates largest employment opportunities for the Indian populace, next only to Agriculture.

It has been estimated that 100,000 rupees of investment in fixed assets in the small-scale sector generates employment for four persons.

YearEmployment (Lakhs Nos.)

Production per employee (Rs. thousand) at

1993-94 prices1990-91 158.3 541991-92 166 531992-93 174.8 531993-94 182.6 541994-95 191.4 571995-96 197.9 611996-97 205.9 661997-98 213.2 691998-99 220.6 711999-00 229.1 742000-01 238.7 772001-02 249.3 782002-03 260.2 812003-04 271.4 842004-05 282.6 892005-06 294.9 93

SSI Sector plays a major role in India's present export

performance. This takes place through merchant exporters, trading houses and

export houses. They may also be in the form of export orders from large units or the production of parts and components for use for finished exportable goods.

The product groups where the SSI sector dominates in exports, are sports goods, readymade garments, woolen garments and knitwear, plastic products, processed food and leather products.

SSI Sector contributes about 45%-50% of the Indian Exports. Direct exports from the SSI Sector account for nearly 35% of total

exports. It contribute around 15% to exports indirectly. Non traditional products account for more than 95% of the SSI

exports.

Export

Major Export Destinations

Development measures should be

spread Rising productivity needs to be made

sustainable Assistance programs need to be tackled Skill based needs need to be improved

Suggestions

Presentation By: Shubham Presentation By: Shubham GoswamiGoswami