A Presentation

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Since the time of independence, the small-scale sector in India has been a major contributor to country’s Gross Domestic Product (GDP). This traditional sector in India is considered to have huge growth prospect with its wide range of products. With 40 percent share in total industrial output and 35 percent share in exports, the small-scale industrial sector in India is acting as Engine of Growth in the new millennium.

Small scale industrial units are those engaged in the manufacture, processing or preservation of goods and whose investment in plant and machinery (original cost) does not exceed Rs.1 crore. These would, inter alia, include units engaged in mining or quarrying, servicing and repairing of machinery. In the case of ancillary units, the investment in plant and machinery (original cost) should also not exceed Rs. 1 crore to be classified under small-scale industry.

Small businesses are normally privately owned corporations, partnerships, or sole proprietorships.In addition to number of employees, other methods used to classify small companies include annual sales (turnover), value of assets and net profit (balance sheet), alone or in a mixed definition. These criteria are followed by the European Union, for instance (headcount, turnover and balance sheet totals). Small businesses are usually not dominant in their field of operation.

In order to encourage growth, expansion and more investment in the small-scale sector the Government has adopted a policy of reservation for allowing certain products to be exclusively manufactured by the small-scale sector.The number of items in the reserve list has changed over time. As per the revision done on March 2005, total 506 items are there in the reserve list for SSIs.

In India ,village & small industries sector consists of both the traditional & modern small industries . This sector has 8 sub group which are

1.Handlooms 2.Handicraft3.Coir4.Sericulture5.Khadi 6.Small scale industries7.Village Industries8.Power looms

Food and allied industries (9)

Wood and wood products (9)

Paper products (19)

Plastic products (53)

Chemicals and chemical

products (7)

Natural essential oils (2)

Organic chemicals, drugs and

drug intermediates (33)

Other chemicals and chemical

products (67)

Glass and ceramics (27)

Mechanical engineering excluding transport

equipment (137)

Electrical machines, appliances & apparatus (17)

Electronic equipments and components (1)

Transport equipment boats and truck body

building (3)

Auto parts components and ancillaries and garage

equipments (36)

Bicycle parts, tricycles and perambulators (41)

Miscellaneous transport equipment (4)

Sports goods (7)

Stationery items (13)

Others (21)

• The small business in India can be classified as:-Type Investment Limit(Rs) Remarks

Small Scale Industry One Crore For specific product it is 5 Crore(71 product so far)

Ancillary Industry One Crore Half the output supplied to the parent unit

Tiny Enterprise 25 Lakhs No Location Limit

Service & business enterprise

10 Lakhs No Location Limit

Women Enterprise Any Of the Above 51% equity hold & managed by women

Export Oriented Units(EOU`s)

One Crore 100% EOU Can Sell their 25% in domestic market

Less Capital IntensiveExtensive Promotion & Support by GovernmentReservation for Exclusive Manufacture by small scale sectorProject ProfilesFunding - Finance & SubsidiesMachinery ProcurementRaw Material ProcurementManpower Training

Technical & Managerial skillsTooling & Testing supportReservation for Exclusive Purchase by GovernmentExport PromotionGrowth in demand in the domestic market size due to overall economic growthIncreasing Export Potential for Indian productsGrowth in Requirements for ancillary units due to the increase in number of Greenfield units coming up in the large scale sector. Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification.

1. Small Scale Industries contribute 40% of gross industrial value & provide foreign exchange.

2. Small industries are second largest employer in India as it has large capacity to absorb man power.

3. Small Scale industries lead to Balanced regional balance.

4. It is also provide a space for entrepreneurship ,low cost of production.

5. Due to Small size of industries , quick& timely decision can be taken.

6. Small Scale industries have an abalitity of adopting to situation.

• To develop this sector as a major source of employment

• To encourage decentralized industrial expansion

• To ensure equitable distribution of income.

• To mobilize capital investment and entrepreneurship skills.

• Finance• Raw Material• Managerial Skills• Technology• Shortage Of Working Capital• Global Competition

1. National Bank For Agriculture & Rural Development(NABARD)

2. Rural Small Business Development Centre (RSBDC)

3. National Small Industries Corporation (NSIC)

4. Small Industries Development Bank Of India (SIDBI)

5. The National Commission For Enterprises in Unorganised Sector(NCEUS)

6. District Industries Centres(DICs)