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    Role of Small Scale Industries

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    thensuresh
    Small scale industries (SSIs) are defined as businesses with less than Rs. 10 million in fixed assets and less than 150 employees. SSIs are important for employment generation in India as they employ more people per unit of capital compared to large industries. Some key roles of SSIs include providing employment, being capital light which is suitable for developing countries, requiring less skills and imports, mobilizing resources, supporting agriculture and large industries, promoting regional development and balanced growth, and reducing income inequality. SSIs contribute significantly to India's industrial output and exports.

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    Role of Small Scale Industries

    Uploaded by

    thensuresh
    40 views11 pages
    Small scale industries (SSIs) are defined as businesses with less than Rs. 10 million in fixed assets and less than 150 employees. SSIs are important for employment generation in India as they employ more people per unit of capital compared to large industries. Some key roles of SSIs include providing employment, being capital light which is suitable for developing countries, requiring less skills and imports, mobilizing resources, supporting agriculture and large industries, promoting regional development and balanced growth, and reducing income inequality. SSIs contribute significantly to India's industrial output and exports.

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    Small scale industries (SSIs) are defined as businesses with less than Rs. 10 million in fixed assets and less than 150 employees. SSIs are important for employment generation in India as they employ more people per unit of capital compared to large industries. Some key roles of SSIs include providing employment, being capital light which is suitable for developing countries, requiring less skills and imports, mobilizing resources, supporting agriculture and large industries, promoting regional development and balanced growth, and reducing income inequality. SSIs contribute significantly to India's industrial output and exports.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    40 views11 pages

    Role of Small Scale Industries

    Uploaded by

    thensuresh
    Small scale industries (SSIs) are defined as businesses with less than Rs. 10 million in fixed assets and less than 150 employees. SSIs are important for employment generation in India as they employ more people per unit of capital compared to large industries. Some key roles of SSIs include providing employment, being capital light which is suitable for developing countries, requiring less skills and imports, mobilizing resources, supporting agriculture and large industries, promoting regional development and balanced growth, and reducing income inequality. SSIs contribute significantly to India's industrial output and exports.

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    of 11

    ROLE OF SMALL SCALE

    INDUSTRIES
    WHAT ARE SSIs?
    As per the latest definition which is effective since
    December 21, 1999, for any industrial unit to be
    regarded as Small Scale Industrial unit the following
    conditions are to be satisfied: -

    • Investment in fixed assets like plants and


    equipment's either held on ownership term on lease
    or on hire purchase should not be more than Rs 10
    million.
    • Less than 150 employees in a unit.
    • The policy reservation of items for manufacturing in SSIs was introduced in
    1967. Initially only 47 items were reserved, but as of today about 675
    items are reserved.
    • SSIs are the second largest employers of Human resources after
    agriculture in India.
    • They generate more employment opportunities per unit of capital
    invested than large-scale industries.
    • Employment provided to more than 273. 97 lakh persons.
    Classification of SSIs
    TRADITIONAL SSIs MODERN SSIs
    • It includes khadi and • Modern SSIs produce wide
    handloom, village range of goods from
    industries,handicrafts, seric comparatively simple items
    ulture, etc to sophisticated products
    such as television
    sets, electronics, control
    system, various engineering
    products etc.
    IMPORTANCE OF SMALL SCALE
    INDUSTRIES
    1. EMPLOYMENT
    • SSIs are labor intensive so there is a great employment potential.
    • Large-scale industries are capital intensive, hence not in a position to solve
    acute unemployment problems in India.
    • SSI employed 129.80 lakh people in 1991-92 which increased to 239.09
    lakh in 2000-01 and further to 294.91 lakh in 2005-06.

    2. CAPITAL LIGHT
    • India is a capital scarce country, which is why we need to make optimum
    use of all the capital and resources available in terms of employment and
    productivity.
    • SSIs are capital light and hence more suitable to underdeveloped nations.
    • Limited capital is needed to start an SSI, the returns are quick, and those
    returns can again be reinvested.
    3. SKILL LIGHT AND IMPORT LIGHT
    • No technological skill or managerial skill required.
    • More suitable to underdeveloped countries where literacy rate is low and
    skilled labor is scarce.
    • Require less import of machinery, technical skill hence placing little or no
    strain on the scarce foreign exchange reserves of developing nations.

    4. MOBILIZATION OF CAPITAL RESOURCE AND


    ENTREPRENEURIAL SKILL
    • Easy mobilization of capital, entrepreneurial skill and other sources all
    over the country.
    • Savings in rural areas can be mobilized by SSIs more easily then large scale
    industries.
    • Idle resources can be put to effective use.
    5. SUPPORT TO AGRICULTURE AND LARGE-
    SCALE INDUSTRIES
    • They help supply inputs , processing facilities as well as consumer goods to
    rural masses.
    • Rural based SSIs help absorb all the surplus labor in villages and towns thus
    improving the productivity in the agricultural sector.
    • SSIs also help large scale industries by supplying spare parts, components etc.

    6. REGIONAL DISPERSAL OF INDUSTRIES AND


    BALANCED REGIONAL DEVELOPMENT
    • Political, social and economic factors affect the development of all regions.
    • Some regions are more developed while others continue to lag behind.
    • Large scale industries are mostly centered in some big cities, while SSIs help
    decentralize industries thus helping avoid, space crunch, slum development
    problems etc.
    • Since SSIs are easy to set up, they can be set up anywhere and hence contribute to
    a balanced regional development.
    7. REDUCTION IN INCOME-INEQUALITIES AND
    EQUITABLE DISTRIBUTION OF NATIONAL INCOME
    • SSIs help equitable distribution of national income because of 2 reasons:
    a) Ownership of SSI is more widespread than large-scale industries.
    b) SSIs possess large employment potential.

    8. CONTRIBUTION TO EXPORTS AND INDUSTRIAL


    OUTPUT
    • 45%-50% of the Indian Exports is being contributed by SSI Sector.
    • Direct exports from the SSI Sector account for nearly 35% of total exports.
    • It is estimated that small scale industrial units contribute around 15% to
    exports indirectly.
    • The exports from SSI sector has been clocking excellent growth rates mostly
    fuelled by the performance of garment, leather and gems and jewellery units
    from this sector.
    • No. of industrial units has grown from 23.9L in ‘93-94 to 118. 59L in ‘04-05.
    Output has increased from 241,648 cr in ‘93-94 to 4,18,263 cr in ‘04-05.
    9. LESS INDUSTRIAL DISPUTES

    • Do not face problem of frequent strikes and lockouts. Hence no loss of


    man-days and output in SSIs.
    THANK YOU

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