Small scale industry

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.Small Scale Industries(SSI)

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INTRODUCTIONDEFINITIONEMERGENCE OF SSISCOPE OF SSIWHY WE NEED SSI?PERFORMANCE OF SSI IN INDIAEXPORT ORIENTED SSI UNITSSTEPS IN SETTING UP SSIROLE OF GOVT.FOR PROMOTING SSICOMMERCIAL BANK SERVICES AND PROMOTING SSIADVANTAGES OF SSIPROBLEM FACE BY SSISMALL BUSINESS SERVES AS A SEED BED FOR LARGE BUSINESSCONCLUSION

CONTENTS

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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.

Small scale industry

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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”.

DEFFINATION OF SSI ACCORDING TO DIFFERENT ACTS:-

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Emergence OF SSI UNITS IN INDIA

SMALL SCLAE INDUSTRIES PERIOD

SSI PRE-INDEPENDANCE

SSI POST 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.

SSI Pre-independence

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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 .

SSI Post-Independence

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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

WHY WE NEED SSI?

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PERFORMANCE OF

SMALL SCALE INDUSTRIES IN

INDIA

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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.

PRODUCTION

1990-9

1

1992-9

3

1994-9

5

1996-9

7

1998-9

9

2000-0

1

2002-0

3

2004-0

50

50000

100000

150000

200000

250000

300000

Production (Rs. '000 crores) at 1993-94 prices

Production (Rs. 000' crores) at 1993-94 prices

According to small industries development (sidco)

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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.

Employment Distribution

DATA REALISED BY :-NATIONAL INSTITUTE FOR ENTREPRENEURSHIP AND SMALL BUSINESS DEVELOPMENT(NISEBOD)

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Tamil Nadu

(14.5%)

Maharashtra

(9.7%),

UttarPradesh (9.5%)

WestBengal (8.5%)

Gujarat (7.6%)

Karnataka

(6.7%)

Punjab (5.6%)

State-wise Employment Distribution

DATA REALISED BY SIDO

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

ROLE OF SSI IN DEVLOPEING MORALE OF WOMEN

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PROGRAME RELATED TO WOMEN IN PUNJAB (Phulkari )

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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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.

EXPORT

Data realised by commerce ministry of india

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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 SOFTWARE

USA , UK , HONGKONG UAE,JAPAN

9 CASHEW ITEM USA ,UK , JAPAN ,NEATHERLAND

10 MARIENE PRODUCT UK,USA,GERMANY EUROPE,BANGLADESH

Major Export Destination

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PRELIMINARY STAGE ◦ SCANNING OF BUSINESS ENVIROMENT ◦ SELECTION OF IDEA◦ DECIDING ORGANISATIONAL STRUCTUER ◦ PROJECT APPRAISAL ◦ SELECTION OF ILOCATION AND SITE

IMPLIMENTATION STAGE ◦ STATUTORY LICENCES ◦ ARANGEMENT OF FINANCE ◦ POWER AND WATER CONNECTION ◦ RECRUITMENT OF PERSONNEL AND TRAINING ◦ RAW MATERIAL PRECURMENT ◦ MARKETING AND PROFIT GENRATION

STEPS IN SETTING UP SSI

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Role of government for promoting SSI

Role of government for promoting ssi

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INDUSTRIAL

POLICY RESOLU

TION 1948

INDUSTRIAL

POLICY RESOLUTION 1956

INDUSTRIAL

POLICY RESOLUTION 1977

INDUSTRIAL

POLICY RESOLUTION 1991

INDUSTRIAL

POLICY PACKAGE FOR SSI 2001-02

INDUSTRIAL

POLICY ON SSIS 2004-05

GOVERNMENT POLICIES FOR SSI

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Out of 836 items reserved in 1989,39 items were dereserved in four phases viz.,

15 items in 1997’ 9 items on 1999 15 item on 2001 51 item were reserved in 2002, 75 item in 2003 and 85 items in 2004, 108 in March 2005 and 180 in May 2006. Now 298 items stand reserved for this sector.

RESERVATION POLICY

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CONTRIBUTION OF COMMERCIAL BANKS IN PROMOITING AND SERVICING SSI

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COMMERCIAL BANKS IN PROMOITING SSI

STATE BANK OF INDIA (SBI)

BANK OF INDIA

PUNJAB NATIONAL BANKS (PNB)

UNION BANK OF INDIA

SYNDICATE BANK

CANRA BANK

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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)

STEP TAKEN BY COMMERCIAL BANKS TO IMPROVE THE FLOW OF CREDIT TO SMALL BUSINESS

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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.

Cont……………

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)

OTHER INSTITUTION ALSO HELP TO PROMOTE SSI

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EMPLOYMENT GENRATION

MEETS THE DEMAND OF THE MARKET

SHARE IN NATIONAL INCOME

SOCIAL ADVANTAGES

MAKE USE OF INDUSTRIAL WASTE

REDUCES REGIONAL DISPARITY

EXPORT PROMOTION

MOBILIZATION OF LOCAL RESOURCES

ADVANTAGES OF

ESTABLISH SSI

ADVANTAGES OF ESTABLISH SSI

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PROBLEMS FACE BY SSI

INTERNAL PROBLEMS

FAULTY PLANNING

POOR PROJECT IMPLEMENTATION

POOR MANAGEMENT

INADEQUATE FINACE PROBLEMS

LABOUR PROBLEMS

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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

SMALL BUSINESS AS A SEED BED OF LARGE BUSINESS

E.g:-AMUL,TOPS,VARDHMAAN, HIMALYA.PVT.LTD

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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.

CONCLUSION