SMALL SCALE INDUSTRIES IN INDIA ROLE AND GOVERMENT POLICY

MADE BY: ITEE BERI MBA 1st SEM. ROLL NO. 16 FMS-BHU
DEFINITION OF SSIs
The definition for small-scale industrial undertakings has changed over time. Initially the
CLASSIFICATION OF SSIs:
A common classification is between traditional small industries and modern small industries
ROLE OF SMALL SCALE INDUSTRIES IN INDIAN ECONOMY
The small-scale industrial sector plays a pivotal role in the Indian economy in terms of em
1.
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The small-scale industries sector plays a vital role in the growth of the country. It contr
COMPARATIVE GROWTH RATES OF SSI SECTOR AND TOTAL INDUSTRIAL SECTOR
Year Total Industrial Sector Growth Rate 1994-95 10.44 9.10 1995-96 11.49 13.00 1996-97 1.2
2. EMPLOYMENT SSI Sector in India creates largest employment opportunities for the Indian p
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Office of the Development Commissioner M/O Micro & Small Enterprises Cluster Development Pr
Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 (Projected)
3. EXPORT: SSI Sector plays a major role in India's present export performance. SSI Sector
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The exports from SSI sector have been clocking excellent growth rates in this decade. It ha
Year
Exports (Rs. Crores) (at current prices) 29,068 (14.86) 36,470 (25.50) 39,249 (7.61) 43946
1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 (P)
4. OPPORTUNITY: The opportunities in the small-scale sector are enormous due to the followi
• • • • • • • • • • • •
Less Capital Intensive Extensive Promotion & Support by Government Reservation for Exclusiv
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•
Growth in demand in the domestic market size due to overall economic growth Increasing Expo
I.
• Creative • High Value Addition • Coverage (Extensive) • Clothes • Dresses • Garments • Te
• Travel Goods
• Fashion Accessories (purses, bags, carryon, watches etc.) • Personal Embellishment (Face,
Perfumes etc.)
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II.
Information Technology OPPORTUNITIES • Media & Entertainment
•
• •
Contents, Animation, Games,
III.
Design Technology OPPORTUNITIES • Interiors - (Furniture & Furnishing – homes, work places,
WELFARE: These industries are also very important for welfare reasons. People of small mean
3.
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income, and on the other hand, the very people among whom these are distributed generate th
INDIAN SME SECTOR – AT A GLANCE 2005-06
• SSI units :
million
12.3 29.5 Rs.4762.01 Rs. 1215
• Employment generated in SSIs :
million
• Production : At current Prices
billion
• Exports :
billion • SSI account: Industrial Production: Exports: GDP Share: • Ownership pattern :
40% 35% (50% of Direct & Indirect) 7%
– Proprietorships : – Partnerships : – Corporate & Others : • Industrial Units : • Service
78% 16% 6% 96% 3%
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• Ancillary Units :
1% • Produces Diverse range of products (more than 8000- consumer items, capital goods and
DISABILITIES
Small enterprises are presently seriously handicapped in comparison with larger units by an
1.
OUTPUT vs EMPLOYMENT One argument is that the emphasis on employment is irrelevant, as the
2.
3.
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No doubt, the fact of large scale entails, what is described as economies of scale, lowerin
5.
• Inadequacy of finance: A serious problem of these industries is in
respect of credit both for long-term and short-term purposes. This is evident from the fact
TRENDS OF LENDING BY BANKING SECTOR TO SSI Rs. in Crores As at end March 1999 2000 2001 200
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Source : RBI Report on Trend and Progress of Banking in India * Provisional
• Difficulties of Marketing: These industries are also up against the • Shortage of raw mat
crucial problem of marketing their products. The problem arises from such factors as small
materials which continues to plague these industries. Raw materials are available neither i
• Low-level technology: The methods of production, which the small
and tiny enterprises use, are old and inefficient. The result is low productivity and high
• Competition from large-scale industries: Another serious problem,
which these industries face, is that of competition from large-scale industries. Large-scal
Problems Faced by SSIs as Barriers to Growth Market Related Finance Related 70% 25%
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Government Policy Related Power Related/Infrastructure Technology MEASURES
12.78% 14.0% 14.60%
To help the SSIs in meeting the challenges of globalization, the Government has taken sever
•
MSMED Act – 2006 and its Impact
Clause Salient Features Impact 1. Establishment of Specific representation for Statutory St
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4. Filing of memoranda Replacement of registration Facilitates SMEs to avail the benefits o
Clause 5. Procurement Policies
Salient Features
Impact Facilitates opportunity for supply of goods/services without any hassles. Public Pro
Notification of preference policies by central or State Governments for goods and services
Easy financial planning and no waste of human resources for chasing/follow up. This will en
9. Closure of Business Statutory notification of Facilitates expedition of liquidation sche
10. Notification of guidelines or instructions for promotion of SMEs – wrt. To Funds
Statutory
Mandatory on all facilitating development of SMEs ensuring fast growth
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appropriation and release 11. Facilitating Credit Statutory Mandatory on all providing cred
Other major initiatives taken by the government are setting up of National Manufacturing Co

National Small Industries Corporation Ltd (NSIC) NSIC, since its inception in 1955 has bein
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for meeting the change aspirations of micro and small enterprises. The main objective of al
II. Marketing Assistance Scheme This is an ongoing old scheme. Marketing, a strategic tool
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are to be reserved for tiny units. For the promotion and development of MSEs in the country
i.
ii.
Assistance to industry association for setting up of testing centres and to State Governmen
iii.
iv.
v.
Further, a scheme on Credit Linked Capital Subsidy was launched in the year 2000 to facilit
i. ii. iii.
Products of MSE exporters are displayed in international exhibitions and the government rei
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fairs/exhibition, overseas tours, or tours of individuals as member of a trade delegation g
REFERENCES

INDIAN ECONOMY by RUDDAR DATT AND K.P.M. SUNDHARAM

INDIAN ECONOMY by A.N. AGRAWAL
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INDIA 2008 by MINISTRY OF INFORMATION AND BROADCASTING

BUSINESS ENVIROMENT by Francis Cherunilam

Websites: http://indiabudget.nic.in

http://dcmsme.gov.in/ssiindia
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