Small scale industries (SSIs) are defined as industries where investment in plant and machinery does not exceed Rs. 1 crore. SSIs do not require licenses and can register with state authorities to access government assistance. The Ministry of Micro, Small and Medium Enterprises promotes SSIs through organizations like SIDO and NSIC. SSIs contribute significantly to Indian employment, production, and exports. They employ over 29 crore people and account for 40% of industrial output and 35-50% of exports. However, SSIs need improved assistance programs and skills to boost long-term sustainability and productivity.

2. Introduction

 A small scale industry (SSI) is an industrial
undertaking in which the investment in fixed assets
in plant & machinery, whether held on ownership
term or on lease or hire purchase, does not
exceed Rs. 1Crore. However, this investment limit is
varied by the Government from time to time.

3. 
 Entrepreneurs in small scale sector are normally not
required to obtain a license either from the Central
Government or the State Government for setting up
units in any part of the country.
 Its registration with the State Directorate or
Commissioner of Industries or DIC's makes the unit
eligible for availing different types of Government
assistance like financial assistance, medium and long
term loans from State Financial Corporations and
other commercial banks

4. Ministry of Micro, Small and
Medium Enterprises

 The Ministry of Micro, Small and Medium
Enterprises acts as the nodal agency for growth and
development of SSIs in the country. The ministry
formulates
and
implements
policies
and
programmes in order to promote small scale
industries and enhance their competitiveness. It is
assisted by various public sector enterprises like:-

5. 
 Small
Industry
Development
Organization
(SIDO) is the apex body for assisting the
Government in formulating and overseeing the
implementation
of
its
policies
and
programmes/projects/schemes.
 National Small Industries Corporation Ltd
(NSIC) was established by the Government with a
view to promoting, aiding and fostering the growth
of SSI in the country, with focus on commercial
aspects of their operation.

6. 

The Ministry has established three National Entrepreneurship
Development Institutes which are engaged in development of
training modules, undertaking research and training and
providing consultancy services for entrepreneurship development
in the SSI sector. These are:-
 National Institute of Small Industry Extension Training
(NISIET) at Hyderabad,
 National Institute of Entrepreneurship and Small Business
Development (NIESBUD) at NOIDA
 Indian Institute of Entrepreneurship (IIE) at Guwahati
 The National Commission for Enterprises in the Unorganized
Sector (NCEUS)
 Small Industries Development Bank of India (SIDBI)

7. Types of Small Scale
Industries

All types of small-scale industries found in India whether in
manufacturing sector or service sector are divided into
five types:
 1. Manufacturing Industries: Those units which are
producing complete articles for direct consumption and
also for processing industries are called as manufacturing
industries. For example : Power looms, engineering
industries, coin industries, khadi industries, food
processing industries etc.
 2. Ancillary Industries: The industries which are
producing parts and components and rendering services
to large industries are called as ancillary industries.

8. 
 3. Service Industries: Service industries are those
which are covering light repair shops necessary to
maintain mechanical equipments. These industries
are essentially machine- based.
 4. Feeder Industries: Feeder industries are those
which are specializing in certain types of products
and services, e.g. casting, electroplating, welding, etc.

9. List of the activities which are recognized as
Small Scale Service and Business (Industry
Related) Enterprises (SSSBEs)











Advertising Agencies
Marketing Consultancy
Industrial Consultancy
Equipment Rental & Leasing
Typing Centers
Photocopying Centers
Industrial Photography
Industrial R& D Labs
Industrial Testing Labs
Desk Top Publishing

10. 



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
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
Internet Browsing/Setting up of Cyber Cafes
Auto repair, services and garages
Documentary Films on themes like Family Planning, Social
forestry, energy conservation and commercial advertising
Laboratories engaged in Testing of Raw Materials, Finished
Products
"Servicing Industry" undertakings engaged in maintenance, repair,
testing or electronic/electrical equipment/instruments
Laundry and Dry Cleaning
X-Ray Clinic
Tailoring
Servicing of agriculture farm equipment e.g. Tractor, Pump, Rig,
Boring Machine, etc
Weigh Bridge.

11. 

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


Photographic Lab
Blue Printing and enlargement of drawing/designs facilities
ISD/STD Booths
Teleprinter/Fax Services
Sub-Contracting Exchanges (SCXs) established by Industry
Associations
EDP Institutes established by Voluntary Associations/NonGovernment Organization
Colored, Black and White studios equipped with processing
laboratory
Ropeways in hilly areas
Installation and operation of Cable T.V. Network
Operating EPABX under franchises
Beauty Parlours and Creches

12. SSI’s in India

Advantages
 Small Scale Industries help the economy in promoting
balanced development of industries across all the regions
of the economy.
 Small Scale Industries are adept in distributing national
income in more efficient and equitable manner among the
various participants in the process of good production
than their medium or larger counterparts.
 Small Scale Industries enjoy a lot of help and
encouragement from the government through protecting
these industries from the direct competition of the large
scale ones, provision of subsidies in the form of capital,
lenient tax structure for this industry

13. 




SSI’s Pre Independence
 small scale industry was
Before Independence, the present
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.

14. SSI’s Post Independence

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
.

15. Performance Of Small Scale
Industries
Production

 It contributes almost 40% of the gross industrial value
added in the Indian economy.
 It has been estimated that a million Rs. of investment in
fixed assets in the small scale sector produces 4.62 million.
 The number of small scale units has increased from an
estimated 8.74 lakhs units in the year 1980-81 to an
estimated 31.21 lakhs in the year 1999.

16. 
Employment
 SSI Sector in India creates largest employment
opportunities for the Indian populace, next only to
Agriculture.
 It has been estimated that 100,000 rupees of
investment in fixed assets in the small-scale sector
generates employment for four persons.

17. Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
Employment
(Lakhs Nos.)
158.3
166
174.8
182.6
191.4
197.9
205.9
213.2
220.6
229.1
238.7
249.3
260.2
271.4
282.6
294.9
Production per
employee (Rs.
thousand) at
1993-94 prices
54
53
53
54
57
61
66
69
71
74
77
78
81
84
89
93

18. Export

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
SSI Sector plays a major role in India's present export performance.
This takes place through merchant exporters, trading houses and
export houses. They may also be in the form of export orders from
large units or the production of parts and components for use for
finished exportable goods.
The product groups where the SSI sector dominates in exports, are
sports goods, readymade garments, woolen garments and knitwear,
plastic products, processed food and leather products.
SSI Sector contributes about 45%-50% of the Indian Exports.
Direct exports from the SSI Sector account for nearly 35% of total
exports.
It contribute around 15% to exports indirectly.
Non traditional products account for more than 95% of the SSI exports.

19. Major Export Destinations

20. Suggestions

 Development measures should be spread
 Rising productivity needs to be made
sustainable
 Assistance programs need to be tackled
 Skill based needs need to be improved

21. Presentation By: Shubham
Goswami