Management of Small Scale Industries

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MANAGEMENT OF SMALL SCALE INDUSTRIES

SYBMS A

CONTENTS:-

SMALL SCALE INDUSTRIES

SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI)

SSI 1: TAJ PAPER BOX

SSI 2: NATIONAL DIARY

SMALL SCALE INDUSTRIES

An industrial undertaking in which the investment in fixed assets in plant and machinery whether held on ownership terms on lease or on hire purchase does not exceed Rs 10 million is defined as a small scale industry or an SSI. There are different categories of industries that qualify as SSI. They are known by the abbreviation MSME which stands for Micro, Small and Medium Enterprises. Micro industries are also known as tiny industries. Tiny industries are ones in which investment limit in plant and machinery in respect of tiny enterprises is Rs 2.5 million irrespective of location of the unit. These limits are created according to norms set by the RBI. However they do not serve as a detriment to acquiring finance in any way. It is just a mere classification. In the course of our interview with SIDBI officials we learnt that SIDBI does not adhere to any hard and fast rule while segregating these industries. Loans are given depending upon the financial viability of the unit and not the category to which it belongs.

However the govt. has certain certain prescribed limits over the years for SSI. The details of investment limits upto the year 1997 are as follows:

|YEAR |INVESTMENT LIMITS |ADDITIONAL CONDITIONS | |1950 |Upto Rs 5 lacs in fixed assets |Less than 50/100 | | | |persons with | | | |or without power | |1960 |Upto Rs 5 lacs in Plant & Machinery |No condition | |1966 |Upto Rs 7.5 lacs in Plant & Machinery |No condition | |1975 |Upto Rs 10 lacs in Plant & Machinery |No condition | |1980 |Upto Rs 20 lacs in Plant & Machinery |No condition | |1985 |Upto Rs 35 lacs in Plant & Machinery |No condition | |1991 |Upto Rs 60 lacs in Plant & Machinery |No condition | |1997 |Upto Rs 100 lacs in Plant & Machinery |No condition | |(Dec) | | |

IMPORTANCE OF THE SSI SECTOR

Employment Generation
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SSI Sector in India creates largest employment opportunities for the Indian populace, next only to Agriculture. It has been estimated that a lakh rupees of investment in fixed assets in the small scale sector generates employment for four persons. [pic]

According to the SSI Sector survey conducted by the Ministry and National Informatics Centre with the base year of 1987-88, the following interesting observations were made related to employment in the small scale sector.

Production

The small scale industries sector plays a vital role for the growth of the country. It contributes 40% of the gross manufacture to the Indian economy.

It has been estimated that a lakh rupees of investment in fixed assets in the small scale sector produces 4.62 lakhs worth of goods or services with an approximate value addition of ten percentage points.

The small scale sector has grown rapidly over the years. The growth rates during the various plan periods have been very impressive.

[pic]

The number of small scale...
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