ROLE AND PROBLEMS OF SMALL SCALE INDUTRIES
- MICRO.SMALL AND MEDIUM ENTERPRISES
- PROJECT MANAGEMENT/ENTREPRENEURSHIP/BUSINESS
ENVIRONMENT
- DR SHASHI AGAGRWAL
- MICRO,SMALL AND MEDIUM ENTERPRISES
- AN SMALL SCALE ENTERPRISES AS PRIVATELY OWNED AND
OPERATED BUSINESS UNIT THAT IS COMPOSED OF SMALL NUMBER OF EMPLOYEES AND
HAS RELATIVELY LOW TURNOVER.
- IN INDIA MSME ARE THE BACKBONE OF THE ECONOMY
- THE MSME SECTOR CONTRIBUTES TO 45% OF INDIA’S
TOTAL INDUSTRIAL EMPLOYMENT
- 50% OF INDIA’S TOTAL EXPORTS
- 95% OF ALL INDUSTRIAL UNITS
- AS PER MSME .GOV.IN MORE THAN 6000 TYPES OF
PRODUCTS ARE MANUFACTURED IN THESE INDUSTRIES
- THESE INDUSTRIES ARE ALSO KNOWN AS SMALL SCALE
INDUSTRIES
- AS PER MSME ACT 2006 : CLASSIFICATION
- THE MANUFACTURING ENTERPRISES: ENGAGED IN THE
MANUFACTURE OF PRODUCTION OF GOODS (AS PER DEVELOPMENT AND REGULATION ACT,
1951) OR EMPLOYING PLANT AND MACHINERY IN THE PROCESS OF VALUE ADDITION TO
THE FINAL PRODUCT HAVING A DISTINCT NAME OR CHARACTER OR USE.
- SERVICE ENTERPRISE: INVOLVED IN PROVIDING OR
RENDERING OF SERVICES SUCH AS TAILORING, DRY CLEANING AND BEAUTY PRODUCTS.
- FURTHER CLASSIFIED ON THE BASIS OF AMOUNT INVESTED
ON PLANT AND MACHINERY IN THE MANUFACTURING SECTOR AND ON EQUIPMENT ( IN
THE SERVICE SECTOR )
- INVESTMENT CEILING FOR MSMES
- NEW CLASSIFICATION OF MSME FOR BOTH THE GOODS AND
SERVICES ON THE BASIS OF TURNOVER
- FEATURES OF SMALL SCALE INDUSTRY
- LABOUR INTENSIVE : EMPLOYMENT OPPORTUNITIES TO
INDIVIDUALS IN URBAN AND RURAL AREAS
- FLEXIBILITY
ADAPT THEMSELVES AS PER THE DYNAMIC
INDUSTRIAL ENVIRONMENT
- ONE MAN SHOW: MOSTLY SET UP BY INDIVIDUALS. SOME
ARE RUN BY PARTNERSHIP FIRM OR COMPANY. DECISION MAKING PROCESS IS FAST
- USE OF INDIGENOUS RAW MATERIALS: PROMOTE
INTERMEDIATE AND CAPITAL GOODS. FACILITATES BALANCED ECONOMIC GROWTH.
- LOCALIZED OPERATIONS: GENERALLY RESTRICT THEIR
OPERATION TO LOCAL AREAS IN ORDER TO MEET REGIONAL DEMAND OF THE PEOPLE.
- FEATURES OF SMALL SCALE INDUSTRY
- LESSER GESTATION PERIOD:-GESTATION IS THE PERIOD
AFTER WHICH THE RETURN OR INVESTMENT STARTS. IT IS THE TIME PERIOD BETWEEN
SETTING THE UNITS AND COMMENCEMENT OF PRODUCTION. HELP THE ENTREPRENEUR TO
EARN AFTER SHORT PERIOD
- EDUCATIONAL LEVEL: EDUCATIONAL LEVEL OF THE
EMPLOYEES IS MODERATE OR LOW.
- PROFIT MOTIVE :
- OBJECTIVES OF SMALL SCALE INDUSTRY
- TO CREATE MORE EMPLOYMENT
- HELP IN DEVELOPING RURAL AREAS AND BALANCED
DEVELOPMENT
- TO REDUCE REGIONAL IMBALANCES
- TO ENSURE OPTIMUM UTILIZATION OF UNEXPLOITED
RESOURCES OF THE COUNTRY
- TO IMPROVE THE STANDARD OF LIVING
- TO ENSURE EQUAL DISTRIBUTION OF INCOME AND WEALTH
- TO SOLVE THE PROBLEM OF UNEMPLOYMENT
- TO ADAPT THE LASTES TECHNOLOGY
- REGISTRATION PROCESS
- IS AN OPTIONAL
- REGISTRATION IS PROVIDED BY MICRO,SMALL AND MEDIUM
ENTERPRISES THROUGH THE STATE GOVERNMENT DIRECTORATE INDUSTRIES IN ORDER
TO PROMOTE THE SMALL BUSINESS IN INDIA
- OBJECTIVES OF SSI REGISTRATION :
- AIMS TO MAINTAIN THE ROLL OF SMALL SCALE
INDUSTRIES
- AIMS TO OFFER STATUTORY BENEFITS
- APART FROM CREATING NODAL CENTRES AT THE DISTRICT,STATE AND
CENTRAL LEVEL TO PROMOTE SSI
- TO COLLECT ACCURATE STATISTICS
- STEPS
- APPLY FOR PROVISIONAL SSI REGISTRATION
CERTIFICATES. THE TERM PROVISIONAL IS USED AS THE UNIT IS YET TO COME INTO
EXISTENCE. THIS CERTIFICATE IS GIVEN WHEN THE SSI UNIT BEING TALKED ABOUT
IN PREOPERATIVE PERIOD. THE PRC WILL HELP
THE UNITS TO OBTAIN WORKING CAPITAL AND TERM LOANS FROM BANKS OR
FINANCIAL INSTITUTIONS UNDER PRIORITY SECTOR LENDING
- COMMENCE THE BUSINESS WITH THE PROVISIONS SSI
REGISTRATION CERTIFICATE AND START THE MANUFACTURING PROCESSES
- THE SSI UNIT ONCE SUCCESSFULLY COMMENCED GRANTED A
PERMANENT REGISTRATION CERTIFICATE. AFTER PROPER DUE SCRUTINIZING OF THE
INVOLVED DOCUMENTS,SSI CAN APPLY AND OBTAIN PERMANENT REGISTRATION VALID
FOR LIFE TIME
- FORMALITIES LIKE APPROVALS AND CLEARANCES OF NOC
FROM THE MUNICIPAL CORPORATION, STATE AND CENTRAL POLLUTION CONTROL BOARD,
ELECTRICITY BOARDS. ARE REQUIRED TO BE COMPLETES BY AN SSI TO OBTAIN
PERMANENT REGISTRATION
- REGISTRATION
- ONLINE SSI REGISTRATION CAN ALSO BE OBTAINED
THROUGH VARIOUS PORTALS THROUGHOUT THE NATION
- RE BRANDED AS UDYOG AADHAR REGISTRATION ( UAM)
- IS FREE OF COST AND IS ACCESSED EASILY
- FILL A SINGLE FORM
- DOCUMENT REQUIRED : AADHAR NUMBER,INDUSTRY NAME,ADDRESS AND BANK
ACCOUNT AND SOME COMMON INFORMATION
- DOCUMENTS REQUIRED FOR REGISTRATION
- MEMORANDUM AND AOA/PARTNER SHIP DEED
- CONSENT OF POLLUTION CONTROL BOARD
- A POWER LOAD INSTALLED AS PROOF
- COPY OF PURCHASE BILL
- COPY OF SALE BILL
- COPY OF THE PURCHASE BILL OF ALL THE MACHINES
- AN AFFIDAVIT IN PRESCRIBED FORM
- BENEFITS OF OBTAINING SSI REGISTRATION
- VARIOUS TAX REBATES ARE OFFERED TO SSI
- A CREIDT FOR MAT IS ALLOWED TO BE FORWARDED FOR UP TO 15 YEARS INSTEAD OF 10 YEARS
- MANY
GOVERNMENT TENDERS OPEN ONLY TO SSI
- GET EASY TO ACCESS CREDIT
- REGISTER SSI ARE GIVEN HIGHER PREFERENCE FOR
GOVERNMENT LICENCE AND CERTIFICATION
- ROLE OF SMALL SCALE ENTERPRISES IN ECONOMIC
DEVELOPMENT
- EMPLOYMENT GENERATION: EMPLOY LABOUR INTENSIVE,
THEY GENERATE HUGE NUMBER OF EMPLOYMENT. POWERFUL TOOL OF JOB CREATION.
- HIGHER PRODUCTIVITY: - WITH LOW INVESTMENT TEND TO
ACHIEVE HIGHER PRODUCTIVITY OF CAPITAL. GENERALLY IT IS SAID THAT INVESTMENT
OF ONE LACS INVESTMENT IN SMALL SECTOR PRODUCES 4.62 LACS WORTH OF GOODS
AND SERVICES
- POVERTY ALLEVIATION : MITIGATING POVERTY
ALLEVIATION BY PROVIDING EMPLOYMENT OPPORTUNITIES IN RURAL AND URBAN AREAS
- BETTER UTILIZATION OF RESOURCES :- MAKE THE
EFFICIENT USE OF LOCALLY AVAIL ABE RESOURCES AND FOCUSED ON FULFILLING THE
NEEDS OF DOMESTIC MARKET
- TAPPING OF SAVING: - HAVE POTENTIAL FOR SAVING A
LARGE PORTION OF THEIR INCOME. THE ENTREPRENEUR MOTIVATED TO SAVE FOR
FUTURE INVESTMENTS. THIS ALSO HELPS IN REDUCING THEIR DEPENDENCE ON
INSTITUTIONAL SOURCES OF FINANCING
- UTILIZATION OF DOMESTIC TECHNOLOGY :- USE
SIMPLE,GENERAL PURPOSE MACHINERY THAT IS OFTEN OBSOLETE AS PER STANDARDS
OF DEVELOPED COUNTRIES
- REGIONAL BALANCE AND RURAL DEVELOPMENT: DUE TO
THEIR LOCATIONAL FLEXIBILITY REQUIRES LESS INFRASTRUCTURE AND SERVE NARROW
GEOGRAPHICALLY AREA.
- EXPORT CONTRIBUTION: - THE OVERALL CONTRIBUTION IS
ESTIMATED TO BE 35%. SSI INCLUDES MERCHANT EXPORTERS, TRADING AND EXPORT HOUSES.
THE MAJOR ITEMS OF EXPORT BY SSI ARE LOW SKILLED LABOUR INTENSIVE GOODS
SUCH AS READY GARMENTS,LEATHER PRODUCTS,GEMS AND JEWELLERY ETC
- EQUITABLE DISTRIBUTION OF INCOME: PREVENT THE
CONCENTRATION OF POWER IN FEW HANDS AND ENSURE EQUAL DISTRIBUTION OF
WEALTH.
- COMPLEMENTARY TO LARGE SCALE INDUSTRIES: PRODUCES
VARIOUS COMPONENTS AS SPARE PARTS, TOOLS AND ACCESSORIES WHICH ARE
REQUIRED BY LARGE SCALE INDUSTRIES.
- PROVIDES OPPORTUNITIES FOR DEVELOPMENT OF
TECHNOLOGY : TREMENDOUS CAPACITY TO GENERATE OR ABSORB INNOVATIONS.AMPLE
OPPORTUNITIES FOR THE DEVELOPMENT
OF TECHNOLOGY AND CREATES CONDUCIVE ENVIRONMENT FOR DEVELOPMENT OF SMALL
SCALE INDUSTRY,
- POOR CAPACITY UTILIZATION: NOT EVEN 50%. CAPITAL
IS NECESSARY BLOCKED AND MACHINERY IS IDLE
- INCOMPETENT MANAGEMENT : RUN BY POORLY QUALIFIED
ENTREPRENEUR
- INADEQUATE FINANCE : FACE THE PROBLEM OF SCARCITY
- RAW MATERIALS SHORTAGE :: NOT AVAILABLE AND IF
AVAILABLE AT HIGH PRICES
- LACK OF MARKETING SUPPORT
- PROBLEM OF WORKING CAPITAL
- PROBLEM IN EXPORT
- LACK OF TECHNOLOGY UPGRADING
- MULTIPLICITY OF LABOUR LAWS
- WIDESPREAD SICKNESS
- GOVERNMENT INTERFERENCE
- STRAIN ON GOVERNMENT FINANCES
- POOR INDUSTRIAL RELATION
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