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In India-Small Scale Industries Policy & Problems

The document discusses small scale industries in India. It provides historical context, noting small scale industries served as cottage and village industries before independence. After independence, the government under Nehru established policies to promote small scale industries. Currently, small scale industries contribute significantly to employment, exports, and the Indian economy. The government uses various measures like reservation policies, concessions, and financial incentives to promote growth of small scale industries.

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sagar
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35 views

In India-Small Scale Industries Policy & Problems

The document discusses small scale industries in India. It provides historical context, noting small scale industries served as cottage and village industries before independence. After independence, the government under Nehru established policies to promote small scale industries. Currently, small scale industries contribute significantly to employment, exports, and the Indian economy. The government uses various measures like reservation policies, concessions, and financial incentives to promote growth of small scale industries.

Uploaded by

sagar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Small Scale Industries In India-

Policy & Problems

BBA 209 9/30/20 1


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Outline

• Small Scale Industry


• Pre-Independence status
• Post-Independence
• Scope of Different Sectors:
• Manufacturing
• Trading
•Service Why
need SSI
Measures to promote SSI

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SSI means small scale industries, which is an
industrial undertaking with the investment not
exceeding Rs.100 lakhs in plant and
machinery. In cases of auxiliary industries the
investment ceiling on plant and machinery is
also Rs.100 lakhs.
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 ACCORDING TO FISCAL COMMISSION -1950: “A UNIT OPRATING
WITH HIRED LABOUR , USUALLY 10 TO 50 HANDS “.

 ACCORDING TO SSI BOARD -1955:” A UNIT EMPLOYING LESS THAN


50 PERSONS IF POWER AND LAESS THAN 100 PERSONS WITHOUT THE
USE OF POWER AND WITH A CAPITAL INVESTMENT RUPEES 5 LAKH”.

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SMALL SCLAE INDUSTRIES PERIOD

SSI PRE- SSI POST


INDEPENDANCE INDEPENDANCE

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 Before Independence, the present small scale industry
was meant to denote the village and the urban cottage
industry.
 This group included a variety of industries ranging from
manufacturing of Iron safes, locks, carpets, marble jigs,
baskets, hand-loom cloth and the like.
 In fact, at that time the term „cottage and Small scale
industries‟ was used in juxtaposition to large scale
industries, which were established under the British
patronage.
 They received encouragement and support during the
freedom movement.
 The small scale industries found a prominent place in
the economic programme envisaged by the Indian
National Congress.

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After 1947
 Jawaharlal Nehru maintained separate entities of small scale
industries. He was of the view that a small industry was the middle
sector and it would overlap both the cottage and the large
industries.
1977 industrial Policy
 The basic policy support of SSI sector had its roots in the Industrial
Policy Resolution 1977, laid emphasis on reservation of items.
 The reservation economically viable and technologically feasible
products to be exclusively manufactured by small scale industry
began with a list of 47 items which was gradually extended to too
many products.
 At Present 812 items are in the reserved list.

 The limit on the fixed capital investment for SSI’s was Rs 7.5 lakhs
and for ancillaries it was Rs 10 lakhs. After the Industrial Policy, the
ceiling for investment for SSI’s was raised to Rs 60 lakhs and Rs 70
lakhs for ancillaries .

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BBA 209 9/30/20 8
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VILLAGEAND
COTTAGE
INDUSTRIES

HANDLOOMS &
HANDICRAFTS

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Person or firm that buys large
quantity of goods from various
producers or vendors, warehouses
them, and resells to retailers.

A business or person that sells goods t


o the consumer, as opposed to
a wholesaler or supplier, who normally
sell their goods to another business.

Commission agents thrive in a variety


of businesses. International agents
work in the export/import arena.
Insurance and real estate agents also
often work on a sales-based
commission.
BBA 209 9/30/20 10
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PROFESSIONAL
• (LAW,MEDICINE,ACCOUNTING )

SERVICES

COMMISSION • (TRANSPORT,

SERVICES WAREHOUSING,REPAIR SHOP)

PERSONAL • (FASHION SHOPS, DRY

SERVICES CLEANING )

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 FOR EMPLOYMENT GENRATION
 FOR BALANCE REGIONAL GROWTH
 FOR MOBILISATION OF LOCAL
RESOURCES
 FOR EXPORT PROMOTION
 FOR CONSUMER SURPLUS
 FOR DEVELOPMENT
OF
ENTERPRENEURSHIP
 FOR LARGE SCALE EMPLOYMENT
WITH LOW INVESTMENT
 FOR ATTAINING SELF
RELIANCE AND SELF
DEPENDANCE
 FOR ENSURING EQUAL
DISTRIBUTION OF INCOME
AND WEALTH

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 It contributes Production (Rs. '000 crores) at
almost 40% of the
gross industrial 1993-94 prices
value added in the 300000
Indian economy.
250000

 It has been
estimated that a 200000

million Rs. of 150000


investment in fixed Production (Rs. 000'

assets in the small


crores) at 1993-94
100000 prices
scale sector
produces 4.62 50000
million.
0

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Rural
 Non-metallic products
contributed 22.7% to employment
generated in rural areas. Food
Products accounted for 21.1%,
Wood Products and Chemicals and
chemical products shared
between them 17.5%.
Urban
 As for urban areas, Food Products
and Metal Products almost equally
shared 22.8% of employment.
Machinery parts except electrical,
Non-metallic mineral products,
and Chemicals & chemical
products between them accounted
for 26.2% of employment.

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Punjab(5.6%) Tamil Nadu
(14.5%)

Karnataka Maharashtra
(6.7%) (9.7%),

Uttar
Gujarat(7.6%) Pradesh(9.5%)

West
Bengal(8.5%)

DATA REALISED BY SIDO

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 SELF ACTUALISATION
 ECONOMIC INDEPENDENCE
 SELF IDENTIFICATION AND SOCIAL STATUS
 INCREASE CONFIDENCE
 SELF RESPECT

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PSIEC Ltd. helps creative and skillful
artists in Punjab by selling their
handicrafts in the Showrooms at
various places in India. It owns a
chain of emporia which is famously
called Phulkari in the major cities of
Punjab (Amritsar, Ludhiana,
Jalandhar, Patiala), Chandigarh,
Delhi and Kolkata. Phulkari
Showrooms are a home to the best
of the handicrafts in the world. Visit
any Showroom near you and you will
be amazed at the creativity in
everything they make- carpets,
furniture, textiles and many
household items like crockery

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BBA 209 9/30/20 18
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S. NO PRODUCT GROUP MAIN DESTINATION

1 READYMADE GARMENT USA,WEST ASIA,NORTH AFRICA


2 SPORTS GOODS UK,USA,GERMANY
3 SPICES EAST ASIA, UNION ,NORTH AFRICA
4 LEATHER &LEATHER ITEMS GERMANY , UK, ITALY,USA,FRANCE
5 WOOL& WOOLEN KNITED GARMENT EUROPE,BANGLADESH ,JAPAN ,SHRI
LANKA , BHUTAN ,
6 PROCESSED FOOD ITEMS EUROPE,BANGLADESH ,JAPAN, USA
7 TABACCO AND TABACCO ITEMS EAST EUROPE
8 ELECTRONIC ITEM AND COMPUTER USA , UK , HONGKONG UAE,JAPAN
SOFTWARE
9 CASHEW ITEM USA ,UK , JAPAN ,NEATHERLAND
1 0
7BBA 209 9MARIENE PRODUCT
/ 25/201 BBA 209
9/30/20 UK,USA,GERMANY
19
20 EUROPE,BANGLADESH
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RESERVATION
POLICY

CONCESSION
PURCHASE
IN CENTRAL
ASSITANCE
EXCISE

SALE TAX
SIDBI EXEMPTION

Role ofgovernmentfor
promotingssi

SUPPLYOF
TCO’S RAW
MATERIAL

MARKETINF FINACIAL
ASSITANCE INCENTIVE

INDUSTRIAL
ESTATES

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INDUSTRIAL
INDUSTRIAL INDUSTRIAL INDUSTRIAL INDUSTRIAL INDUSTRIAL
POLICY
POLICY POLICY POLICY POLICY POLICY ON
PACKAGE
RESOLUTION RESOLUTION RESOLUTION RESOLUTION SSIS 2004-
FOR SSI
1948 1956 1977 1991 05
2001-02

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 LOAN UPTO RS 5 LAKH TO ALL SSI UNITS WAS
ANNOUCED BY RBI IN YEAR 2000.LATER IN 2002
THE LOAN LIMIT WAS INCREASE TO RS 15 LAKH.
(WITOUT TAKING ANY COLLATERAL SECURITY )

 OPEN ATLEAST ONE BRANCE IN EVERY DISTRICT


WHERE SSI UNITS HAVE CLUSTER
(417 SPECIAL;ISED BRANCES OPRATING IN THE
COUNTRY AT THE END OF MARCH 2006)
BBA 209 9/30/20 25
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 RBI ISSUED DETAILED GUIDELINES TO
SCHEDULED COMMERCIAL BANK FOR TIMELY
ASSISTANCE TO POTENTIALLY VIABLE SSI
UNITS AT REDUCED RATE IN 2002.

 RBI ADVISED SOFT LOAN ASSISTANCE TO


WOMEN ENTREPRENEURS BESIDE USUAL TERM
LOAN IN SSI, TINY AND SERVICE TO PROMOTE
WOMEN ENTREPRENEURS.

BBA 209 9/30/20 26


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NATIONAL SMALL INDUSTRIES CORPORATION LTD. (NSIC)

SMALL INDUSTRIES DEVELOPMENT ORGANIZATION (SIDO)

SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI)

SMALL INDUSTRIES –SERVICE INSTITUTE (SISI)

SMALL INDUSTRIES DEVELOPMENT CORPORATION (SIDC)

TECHNICAL CONSULTANC ORGANISATION (TCOs)


BBA 209 9/30/20 27
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ADVANTAGES OF ESTABLISH SSI
EMPLOYMENT
GENRATION

MAKE USE OF
INDUSTRIAL WASTE

MEETS THE DEMAND


OF THE MARKET ADVANTAGES
OF ESTABLISH
SSI REDUCESREGIONAL
DISPARITY

SHARE IN NATIONAL
INCOME

EXPORT PROMOTION

SOCIAL ADVANTAGES

MOBILIZATION OF
LOCAL RESOURCES

BBA 209 9/30/20 28


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INTERNAL EXTERNAL
PROBLEMS PROBLEMS

FAULTY
LOCATION
PLANNING

POOR PROJECT POWER


IMPLEMENTATION PROBLEMS

POOR
INPUT
MANAGEMENT

INADEQUATE
MARKET
FINACE
PROBLEMS
PROBLEMS

LABOUR
GOVT. POLICY
PROBLEMS

BBA 209 9/30/20 29


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SEED BED REFERS TO
PREPARING THE SOIL
FOR SOWING OF SEEDS
FOR A GOOD CROP. AS
IT PROVIDES CONDUCIVE
CONDITIONS FOR THE
DEVLOPMENT AND
GROWTH OF
ENTREPRENEURS

E.g:-AMUL,TOPS,VARDHMAAN, HIMALYA.PVT.LTD
BBA 209 9/30/20 30
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 TO SUM UP WE CAN SAY THAT SSI SERVES AS
A SEED BED OF ENTREPRENEURISHIP AS IT
PROVIDES CONDUCIVE CONDITIONS FOR THE
DEVLOPMENT AND GROWTH OF
ENTREPRENEURS . SMALL ENTREPRISES
REQUIER LOW INVESTMENT AND SIMPLE
TECHNOLOGY AND USE LOCAL RESOURCES
TO MEET LOCAL DEMANDS THROUGH
PERSONAL CONTACTS.

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