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SMALL SCALE SECTOR IN INDIA Small as a designation in industries differentiates one set of industries from others comparatively small in operation, employment, products, capital, technology. The Small scale Industries Board define the SSI A Unit employing less then 50 persons, if using power and less then 100 person without the use of power, and with a capital assets not exceeding Rs. 5 lakhs .

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The employment criterion was dropped in the year 1960 and a small-scale industrial unit was defined in terms on investment in fixed assets only. The Ministry of commerce and Industries defined a small scale industries as A Unit with a capital investment of not more than Rs. 5 lakhs irrespective of the number of person employed and in case of Ancillary units. The definition of small- scale industries was get modified again in 1966. The Ministry of industry defined a small scale industries as follows An Undertaking having capital investment in plant and machinery of not more than 10 lakhs and Rs. 15 lakhs in case of Ancillary units.

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The Government of India, in its new Policy Initiative for Small Scale industry announced in 1990 -2000 has change the investment limits for Small Scale industries from Rs. 1 crore . The Definition of Village industry has been changed the capital investment ceiling from Rs. 15,000 to Rs. 1 lakh .

Small and Medium Enterprise:

Small and Medium Enterprise Units with investment in Plant and Machinery in excess of SSI limit and upto Rs.10 crore may be treated as medium enterprises. The Micro, Small and Medium Enterprise Development Act 2006 has changed in the concepts of small scale industries. Enterprises engaged in the Manufacturing/ Production of the goods. Enterprises engaged in providing/ rendering services.

Manufacturing Enterprise :
Manufacturing Enterprise The Manufacturing Entreprise has been defined in terms of investment in plant and machinery. A unit is called Micro Enterprise if the Investment is upto Rs. 15 lakhs . As for Small Enterprise, the investment should be above Rs. 25 lakhs and upto Rs. 5 crores . And for Medium Enterprise the investment should be above Rs. 5 crore and upto Rs.10 Crores .

Service Enterprise :
Service Enterprise For a Micro Enterprise, the ceiling on investment is of Rs. 10 lakhs . Small Enterprise it is more than Rs. 10 lakhs and upto Rs. 2 crore . . In Respect of medium enterprise, the investment should be in the range of Rs. 2 crore or Rs. 5 crore .

Importance of Small-Scale Industry :

Importance of Small-Scale Industry Employment Generation Use of Local Raw Material. Balanced Regional Development Decentralization of Industries . Mobilization of Capital Developing Entrepreneurship Equitable Distribution of Wealth Training Ground for Local Entrepreneur. Efficient Use of Productive Factors. Promotion of Exports

Problems of Small Scale Industries:

Problems of Small Scale Industries Finance Raw Material Marketing Technology Underutilization of Capacity Recovery Institutional Constraints. Other Problems.

Classification of Small Scale Industries:

Classification of Small Scale Industries Small Scale Industries are broadly classified into two sectors: Traditional Classification: Khadi And Village Industries Handlooms Handicrafts Coir Sericulture

Benefits of Registering The SSI:

Benefits of Registering The SSI Credit benefit (priority Sector lending) Excise Exemption Exemption Under Direct Tax Laws. Protection from the large scale units. Incentives and Concessions in power tariff etc. Price and Purchase preferences for goods produced.


PROCEDURES FOR REGISTRATION A unit can apply for PRC for any item that does not requires industrial licenses which means items listed in Schedule III and items not listed in Schedule-I Units employing lee than 50/100 workers with/without power can apply for registration even those items included in Scheme-II. Units Applies for PRC in prescribed applications form. No field enquiry is done and PCR is issued PRC is valid for Five years. If the entrepreneur is unable to set up the unit in this period, he can apply afresh at the end of five year period.

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Once the unit commence production, it has to apply for permanent registration on the prescribed form. The following forms are requires for Basis of Evolutions: The units has obtained all necessary clearness NOC from Pollution Drug License, whether statutory or administrative, Unit does not violate any locational restriction in force Control board Unit is notValuation of plant and machinery is within prescribed limits. owned, controlled, or a subsidiary of any other industrial undertaking

The Strength Of Small Business:

The Strength Of Small Business Innovative and Techno-managerial skills The Enterprising Spirit Employment Generation Distribution of Economic Power Exports Potentiality Adjustability and Adaptability Decentralization of Industry Investment and Capital Oriented. Mobilization of Resources Variety in the Product offered Social Equilibrium Optimum use of capital/ local resouces

The weakness :
The weakness Dependability on Various factors of production Knowledge awareness. Lack of Financial and institutional Support. Geographical barriers. Traditional barriers. Competition faced by large scale industries. Indigenous product Lack of Market reach Improper Management of Capital invested. Lack of technology uses in these kind of units.

Items Reserved For Small Scale Industries in India

Small Scale Industries (SSI) have played a vital role in strengthening the industrial structure of the country. They facilitate the tapping of resources for productive purposes with minimum amount of capital investment. SSI have contributed greatly in bringing down regional imbalance; generating employment opportunities, output, and exports, fostering entrepreneurship and in accelerating economic development. As per the government definition an industrial undertaking in which the investment in fixed assets in plant and machinery whether held on ownership terms on lease or on hire purchase does not exceed Rs 10 million, can be categorized as small scale undertaking. To encourage the growth of small scale industries in India, Government has reserved certain products for manufacture in the small scale sector in areas where there is techno-economic justification for such an approach. Large/Medium units can, however, manufacture such reserved items provided they undertake to export 50% or more of their production. As on 10 October 2008, following items are reserved for exclusive manufacture by micro and small enterprise sector:

Food and Allied Industries: Pickles & Chutneys, Bread, Mustard Oil (except solvent extracted), Ground nut oil (except solvent extracted). Wood and Wood Products: Wooden furniture and fixtures Paper Products: Exercise books and registers Injection Moulding Thermo Plastic Product: PVC Pipes, including conduits upto 110 mm dia, Fittings for PVC pipes Other Chemicals & Chemical Products: Wax candles, Laundry soap, Safety matches, Fire works, Agarbatties Glass & Ceramics: Glass Bangles Mechanical Engg. Excluding Transport Equipment: Steel almirah, Rolling shutters, Steel chairs all types, Steel tables all other types, Steel furniture all other types, Padlocks, Stainless steel utensils, Domestic utensils - Aluminium