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Contribution next only to agriculture as dynamic and vibrant sector of the economy
modern enterprise
Fragmented across various ministries for the purpose of development and concessions
Provide livelihood
Also includes small scale service and small scale business enterprises
Tiny enterprise
Investment limit is Rs. 25 lacs, irrespective of the location of the unit (Prior to this it was
industries situated in villages with a population of less than 5000 and should also cover cottage industries in rural and semi urban area)
Investment in fixed assets in plant and machinery whether held on ownership terms, or on lease or on hire-purchase does not exceed Rs. 100 lacs and has an obligation to export 30 percent of production
Women Enterprises
Small scale units where one or more women entrepreneurs have not less than 51% financial holding
Investment in fixed assets excluding land and building upto Rs. 10 lakhs irrespective of locations as on 31st March 2001 Eg: advertising agencies, beauty parlours, documentary filming, creches
Micro enterprises
Generally artisan based , located mostly in rural and semi urban areas
Use local skills and resources and sell their products locally
Lower level investment in machinery Provide largely part time employment Mostly involved in activities such as handloom, khadi, handicrafts, sericulture, bidi making, embroidery, knitting, wood carving
Cottage Industries
Produce mainly traditional goods Use pre dominantly manual labour Technically backward
Produce a variety of non-traditional products such as electrical, engineering goods, chemical products
Use of power and modern techniques Use modern methods of production and are technically advanced
Ancillary Industries
Investment in plant and machinery can go upto Rs. 1 Cr It supplies 50% of the production to
Investment in fixed assets in plant and machinery not exceeding Rs. 1.5 Cr, 5 Cr in respect of 71 hi-tech export oriented items in the hosiery, knitwear, hand tool, drug pharmaceuticals, stationery and goods sector
Engaged in the manufacture of parts, components, sub assemblies toolings and render services to the parent units
No such restriction placed Produce mainly consumer goods such as watches, transistors
Small fixed investment Labour intensive Personal character Local area operation Limited scope of expansion Unorganised labour Small uneconomic size Proprietorship and partnership Decentralized location Independent management
Large investment Capital intensive Impersonal Wider area Economies of scale & great scope for expansion Labour organised Large economic size Joint stock company Centralized location Divorce between ownership and management
Supplementary
Competitive
Industries such as tiles, perishable foods, bakery products require less engineering skills and more craftsmanship can co exist and compete with large scale sector
Complementary
Enjoy protected market under the cover of the large scale unit
Eg: Plastic dust cover for video recorders, electronic passive components
Ancillarisation
Many small firms provide small components, parts, accessories to large firms Eg: Tata motors, Bajaj
Jobbing
Large enterprises provide components and materials to small scale units. Small units process these materials into finished parts or sub-assemblies
Merchandising
Small scale units produce products which are then marketed by large companies Eg: Soaps, refrigerators etc
Servicing
Small firms are assigned the job of repairing and maintenance of products manufactured by large scale units Eg: Acs , personal computers, etc
Cottage industries, artisans can start business with very less capital
Generates employment
Labour intensive and hence generate more employment Helps solve underemployment issues in an under developed economy like India
Personal contact
Personal supervision of all activities such as production, purhase etc is done by the entrepreneur himself
Location
Generally located in rural and semi urban areas Local raw material, labour and finance should be readily available
Entrepreneurial growth
Technology
Ownership
Export potential
Nearly 20% of the total value of export is from small scale industry Eg: leather, ready made cotton garment, pharmaceuticals etc
Innovative and productive Products can earn a substantial foreign exchange Favorable capital output ratio Meet substantial part of increasing demand for consumer goods including human consumption goods Requires only a short gestation period
An outright subsidy of 15% on the fixed capital investment up to a maximum of Rs 15 lakhs is admissible to new units being set up in backward areas The central/ state government directly or through its subsidiary concern- the state
Loans and advances to SSI units under the State Aid to Industries
Act and Rules framed there under for the construction of factory
buildings, purchase of machinery and equipment and working capital on easy terms
The state Financial Corporations grant loans of acquisition of fixed asset up to Rs. 30 lacs in the case of limited companies and registered co-operative societies and up to Rs. 15 lacs for other at liberalised margins and rate of interest and this is done over a longer span of repayment and moratorium period
New units are exempted from property tax for a period of 5 years
New units established in the districts are completely exempted from the
payment of electricity duly up to a period of 7 years Industrial units set up within the municipal limits are exempted form octroi on capital equipment and building materials subject to a
State government have set up independent testing laboratories on behalf of the Indian Standard Institution, the export inspection Council, the department of Defense, Govt of India and various other govt organizations for making industrial products of good quality
Provision of essential, controlled raw material to the SSI units on priority and
Interest free loans in lieu of inter-state sales tax paid / payable by SSI units are available up to 7 years , provided the loan in particular year will not exceed 8% of the capital investment
Concessions to SSI
836 items reserved for small scale sector List available at the District Industries centre
15% price preference to assist small scale sector in marketing their products
Govt institutes help the small scale industries in selling their products. Physically help is given to DGS&D , NSIC, SSIDC, Directorate of Industries, Defence railway and Central Govt purchase from SSI. Industries need to register their names with these institutions
Small scale sector is given concession in rent for space in exhibition In Maharashtra , concessions are given by SSIDC, NSSIC
Tender forms are sent free of cost by DGS&D, Directorate of Industries to registered small scale units
Concessions in security deposit Priority is given to products manufactured by small scale sector
Training is provided by the State and the Central government Has started many institutes for giving guidance in respect of technology and orientation courses for entrepreneurs
Financial assistance
Gives loans to small scale sector at lower rate of interest Govt gives assistance by way of seed money and loans at lower rate of interest State government also grants subsidy to this sector under its corporation schemes of incentives
At 142 places, SSI estates are established with the help of MIDC in the state of Maharashtra
Supply of electricity
MIDC shares part of expenditure on electricity for the units which require less than 100 H.P load for their industry who get the electricity at cheaper state
This duty is paid by industries for whom it is made applicable by the government Small scale industries are exempted from paying any excise duty till their sale does not exceed Rs. 30 lacs
Special concessions are granted to SSI units for import of raw material and machineries required for the industry
their profits
On availing a loan , small scale units are required to mortgage their immovable
Govt of Maharashtra has granted concessions for stamp duty on Mortgage deeds to be executed for that purpose