2. WHAT IS AN SSI
“An industrial undertaking in which the investment in fixed assets in plant and
machinery does not exceed Rs. 1 crore whether such plant and machinery is held on
ownership terms or on lease or by hire-purchase.”
Initially SSI were classified into two categories- those using power with less than 50
employees and those not using power with the employee strength being more than
50 but less than 100.
An industrial unit can be categorized as a small- scale unit if it fulfils the capital
investment limit fixed by the Government of India for the small-scale sector.
Small scale industries can be characterized with the special feature of adopting
the labor intensive approach for commodity production. As these industries lack
capital, so they utilize the labor power for the production of goods. The main
advantage of such a process lies in the absorption of the surplus amount of
labor in the economy who were not being absorbed by the large and capital
intensive industries. This, in turn, helps the system in scaling down the extent
of unemployment as well as poverty.
For small scale industry , the Planning Commission of India uses terms ‘village and
small scale industries’. These include modern small enterprises as well as the
traditional cottage and household industry.
3. SSIs ARE THE SECOND LARGEST
EMPLOYERS OF HUMAN RESOURCES,
AFTER AGRICULTURE AND PRODUCE A
VARIETY OF PRODUCTS FOR THE
ECONOMY.
The public policy in India had been attaching lot of
importance to village and SSI on many grounds such as, SSI
being labor-intensive, helped to increase the volume of
employment, particularly in rural areas, it is estimated that
about 2 crore persons are engaged in India in these
industries. The handloom industry alone employs 50 lakh
people. They account for 6% of GDP, 95 % of all industrial
units, and 34% of total exports. Around 39 lakh SSIs in India
has emerged versatile producing over 8000 products, from
traditional handicrafts to high-end technical instruments.
7. OBJECTIVES
[1-]
• To create more employment opportunities with less investment.
[2-]
• To remove economic backwardness of rural and less developed regions of
the economy.
[3-]
• . To reduce regional imbalance
[4-]
• To mobilize and ensure optimum utilization of unexploited resources of the
country.
[5-]
• To improve standard of living of people.
[6-]
• To ensure equitable distribution of income and wealth.
[7-]
• To solve unemployment problem.
[8-]
• To attain self reliance.
[9-]
• To adopt latest technology aimed at producing better quality products at
lower costs.
9. ROLE OF SSI IN INDIA
India has traditionally always had a very vibrant and
competitive SSI. Even after the industrialization, British
producers of textiles found handmade Indian textiles such a
threat that they lobbied hard to have its import banned,
succeeding in the late eighteenth century.
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, woollen garments and knitwear, plastic products,
processed food and leather products.
--SSI Sector contributes about 45%-50% of the Indian Exports.
--Direct exports from the SSI Sector account for nearly 35% of total exports.
--Non traditional products account for more than 95% of the SSI exports.
11. CHALLENGES FOR SSI
PROBLEM OF FINANCE
PROBLEM OF MARKETING
PROBLEM OF RAW MATERIAL
DEFICIENCY OF MANAGERIAL
AND TECHNICAL SKILLS
Generalizations are also difficult because though there are
firms which are growing rapidly, there also exists 138,000 sick
units within the sector in India. The contribution of SSI in India
to national development was too little as compared to the
contribution of SSI in other countries of the world. India's SSI
shared 95 % of all establishments, 40 % of output, 45% of
employment and 35 % of exports. But Taiwan ranked first with
a share of 97% of establishments, 81 % of output, 7% of
employment, 48 % of exports followed by Japan contributing
highly with 99 % of establishments, 52 % of output, 72 % of
employment and 13 % of exports (SIDBI Report, 2000).
