Small Scale Industries

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By: abi78958 (84 month(s) ago)


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Small Scale Industries and Their Role in Indian Economy  :

Small Scale Industries and Their Role in Indian Economy

Overview :

Overview Since the time of independence, the small-scale sector in India has been a major contributor to country’s Gross Domestic Product (GDP). This traditional sector in India is considered to have huge growth prospect with its wide range of products. With 40 percent share in total industrial output and 35 percent share in exports, the small-scale industrial sector in India is acting as Engine of Growth in the new millennium.

Small sector and ancillary industries:

Small sector and ancillary industries Small scale industrial units are those engaged in the manufacture, processing or preservation of goods and whose investment in plant and machinery (original cost) does not exceed Rs. 3 crore. These would, inter alia, include units engaged in mining or quarrying, servicing and repairing of machinery. In the case of ancillary units, the investment in plant and machinery (original cost) should also not exceed Rs. 1 crore to be classified under small-scale industry.


MAIN FEATURE OF SMALL BUSINESS Small businesses are normally privately owned corporations , partnerships , or sole proprietorships . In addition to number of employees, other methods used to classify small companies include annual sales (turnover), value of assets and net profit (balance sheet), alone or in a mixed definition.

Small scale businesses operating in India:- :

Small scale businesses operating in India:- In order to encourage growth, expansion and more investment in the small-scale sector the Government has adopted a policy of reservation for allowing certain products to be exclusively manufactured by the small-scale sector. The reservation policy was initiated in 1967 with 47 items. The number of items in the reserve list has changed over time. As on today, there are 836 items reserved for exclusive manufacture in the small scale sector.


NATURE OF SBU( SMALL BUSINESS UNITS) IN INDIA In India ,village & small industries sector consists of both the traditional & modern small industries . This sector has 8 sub group which are Handlooms Handicraft Coir Sericulture Khadi Small scale industries Village Industries Power looms

The details of the items reserved for SSIs are given below: :

The details of the items reserved for SSIs are given below: Food and allied industries (9) Wood and wood products (9) Paper products (19) Plastic products (53) Chemicals and chemical products (7) Natural essential oils (2) Organic chemicals, drugs and drug intermediates (33) Other chemicals and chemical products (67) Glass and ceramics (27) Mechanical engineering excluding transport equipment (137) Electrical machines, appliances & apparatus (17) Electronic equipments and components (1) Transport equipment boats and truck body building (3) Auto parts components and ancillaries and garage equipments (36) Bicycle parts, tricycles and perambulators (41) Miscellaneous transport equipment (4) Sports goods (7) Stationery items (13) Others (21)


CLASSIFICATION OF SMALL BUSINESS IN INDIA The small business in India can be classified as:- Type Investment Limit(Rs) Remarks Small Scale Industry One Crore For specific product it is 5 Crore(71 product so far) Ancillary Industry One Crore Half the output supplied to the parent unit Tiny Enterprise 25 Lakhs No Location Limit Service & business enterprise 10 Lakhs No Location Limit Women Enterprise Any Of the Above 51% equity hold & managed by women Export Oriented Units(EOU`s) One Crore 100% EOU Can Sell their 25% in domestic market

Small Scale Business Opportunities in India :- :

Small Scale Business Opportunities in India :- Less Capital Intensive Extensive Promotion & Support by Government Reservation for Exclusive Manufacture by small scale sector Project Profiles Funding - Finance & Subsidies Machinery Procurement Raw Material Procurement Manpower Training


CONTI..... Technical & Managerial skills Tooling & Testing support Reservation for Exclusive Purchase by Government Export Promotion Growth in demand in the domestic market size due to overall economic growth Increasing Export Potential for Indian products Growth in Requirements for ancillary units due to the increase in number of Greenfield units coming up in the large scale sector. Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification.


ROLE OF SMALL BUSINESS IN INDIA Small Scale Industries contribute 40% of gross industrial value & provide foreign exchange. Small industries are second largest employer in India as it has large capacity to absorb man power. Small Scale industries lead to Balanced regional balance. It is also provide a space for entrepreneurship ,low cost of production. Due to Small size of industries , quick& timely decision can be taken. Small Scale industries have an abalitity of adopting to situation.

Government of India has nurtured this sector with special care with the following aims: - :

Government of India has nurtured this sector with special care with the following aims: - To develop this sector as a major source of employment To encourage decentralized industrial expansion To ensure equitable distribution of income. To mobilize capital investment and entrepreneurship skills.

Problem Faced By Small Industries:

Problem Faced By Small Industries Finance Raw Material Managerial Skills Technology Shortage Of Working Capital Global Competition

Institutional Support By Govt.:

Institutional Support By Govt. National Bank For Agriculture & Rural Development(NABARD) Rural Small Business Development Centre (RSBDC) National Small Industries Corporation (NSIC) Small Industries Development Bank Of India (SIDBI) The National Commission For Enterprises in Unorganised Sector(NCEUS) District Industries Centres(DICs )

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