SMALL SCALE INDUSTRIES

Meaning , role and Govt. policies

Meaning
A cottage industry is one which is carried on wholly or primarily with the help of members of the family either as a whole or apart time occupation. Is operated mainly with hired labour, usually 10 to 50 hands.

Contd.
a small scale industry is one having investment in plant and machinery up to Rs. 60 lakh. For ancillary unit (the units which supply parts and equipments to large scale industries) the limit of capital investment is Rs. 75 lakh. Tiny industry is or having investment in plant and machinery upto Rs. 2 lakh. It is important to mention here that capital investment for this purpose means the investment in plant and machinery and excludes the investment in land and building.

Objectives
Increase income level of artisans Create new avenues of employment Assists in the growth and widespread dispersal of industries To use regional resources

Contd ..
Preserve craftsmanship and heritage of the country Develop entrepreneurial skills at grassroot level Transfer economic power to the grassroot level Promote balanced regional growth.

Role
The SSI Sector in India is the second largest manpower employer in the country next only to the agriculture helps in industrialization of rural and backward areas and reduce regional imbalance. It can also facilitate effective mobilization of local resources and skill which might otherwise remain untapped

Contd.
By the end of March 2000, the SSI sector accounts for 95 per cent of the industrial units contributing about 40 per cent of value addition in the manufacturing sector More than 32 lakh units (which include both registered and unregistered units) are spread all over the country producing over 7500 items and providing employment to more than 178 lakh persons.

Contd.
Also contributes in earning foreign exchange for India. The share of SSIs in the total exports is about 45%. the export of SSIs around 90% consists of non traditional items like readymade garments, sport goods, finished leather products, woollen garments ,processed food etc.

Contd.
The ownership of SSIs is more widespread than that of large scale industries and they posses much larger employment potential as compared to the large industries so they ensure a more equitable distribution of national income and wealth.

Contd.
They satisfy local demands and play a critical role in the development of regions. As 92% of woollen hosiery units are in Ludhiana, 82% of cotton hosiery in Coimbatore, Ludhiana, Calcutta and Delhi, 63% of bicycle parts and accessories in Ludhiana. Lesser Industrial Disputes.

Role of Govt.
The Government of India has helped the SSS through supportive policy measures since the adoption of planned economy model.

Contd..
The main item of policy support are: Reservation of a large number of items for SSS, Excise exemption, Credit under priority sector lending from banks and financial institutions,

Contd
Marketing support by reserving items of SSS products for Government purchases, Providing infrastructure facilities like sheds, plots in industrial estates, Technical support, Training and entrepreneurship development, etc.

Policy Package
The Govt. announced a policy package for small, tiny and village Industries in August 1991. this policy raised the ceiling of investment in the case of tiny enterprises to Rs.5 lakhs from Rs.2 lakhs. A credit guarantee fund (scheme) has launched to provide guarantee for loans upto Rs.25 lakhs.

Institutional Infrastructure for SSIs

Small Industries Development Organization (SIDO): formulates, coordinates and monitors the policies and programmes for promotions and development of SSIs National Small Industries Corporation(NSIC): supplies machinery, indigenous as well as imported, to assist SSIs obtain a share in Govt. purchases and provides marketing and export assistance

Contd.
Small Industrial Development Bank of India(SIDBI):provides direct and indirect financial assistance to SSIs.

Others are.
Industrial Extension Training National Institute for Entrepreneurship and Small Business Development National Research Development Corporation Khadi and Village Industries Commission(KVIC)