This document provides an introduction and overview of small scale industries (SSI) in India. It discusses how SSI makes up an important segment of the Indian economy. It defines micro, small, and medium enterprises based on their level of investment. It outlines the characteristics of small enterprises, including how they are locally focused, labor intensive, flexible, and help promote regional development. The document also discusses the advantages SSI provide like job creation and the rationale for their development in India like addressing unemployment.
This document discusses key aspects of starting small scale enterprises in India. It provides definitions of small enterprises and outlines important rules and regulations. It also summarizes the steps involved in starting a small business, which include selecting a suitable project and location, conducting a feasibility study, and preparing a project profile and business plan. The document highlights the role of small enterprises in economic development through job creation and increased production and exports. Overall, it serves as a guide for entrepreneurs on conceptualizing and establishing small businesses.
The role of small scale industries in indiaArnav Dhankad
Small scale industries play an important role in the Indian economy by contributing significantly to industrial output, exports, and employment. They account for about 40% of industrial output and create the largest number of jobs after agriculture. Food products, non-metallic mineral products, and metal products are some of the largest employment generating small scale industries in India.
This document discusses the roles of small scale industries in India. It defines small scale industries as those owned and run by individuals employing a small number of laborers. Small scale industries play an important role by providing employment, facilitating women's growth, and promoting balanced regional development. They also help mobilize local resources, optimize capital, complement large industries, meet consumer demand, and develop entrepreneurship. Overall, small scale industries are important for expanding employment opportunities and increasing incomes in rural communities.
This document discusses small scale industries in India. It begins with an introduction that defines small scale industries and notes their importance in resolving issues like unemployment, underemployment, and reliance on agriculture. It then covers classifications of small industries, their characteristics, objectives, scope, role in economic development, advantages, and weaknesses. The document also outlines the steps needed to start a small scale industry and government support provided through various policies and plans.
Small scale industries are defined differently in various countries and over time. In India, a small scale industry has fixed assets of less than Rs. 10 million. They employ less than 50 workers if power-driven, or less than 100 without power. Small industries have advantages like close supervision, more employment, and easy management. Their disadvantages include high production costs, outdated techniques, and difficulty accessing loans. They are typically labor-intensive, flexible, and use local resources and raw materials. Small industries play an important role in India's socio-economic development and account for a large portion of employment.
small scale industries opportunities and challlengesShaalvii Sharma
[1] The document discusses small scale industries (SSIs) in India, which are defined as industrial undertakings with capital investment of less than Rs. 1 crore.
[2] SSIs are the second largest employers in India after agriculture, employing around 2 crore people. They account for 6% of GDP, 95% of industrial units, and 34% of exports.
[3] While SSIs play an important role in the Indian economy, they also face challenges such as problems securing financing, marketing, raw materials, and developing managerial and technical skills.
The document discusses Micro, Small and Medium Enterprises (MSMEs) in India. It notes that MSMEs play a crucial role in the Indian economy by providing employment, promoting industrialization in rural areas, and contributing to socioeconomic development. MSMEs account for a significant portion of India's manufacturing output, exports, and employment. The Micro, Small and Medium Enterprises Development Act of 2006 aims to facilitate the promotion and development of MSMEs in India. MSMEs are classified based on investment levels, and registration provides various benefits.
This document discusses key aspects of starting small scale enterprises in India. It provides definitions of small enterprises and outlines important rules and regulations. It also summarizes the steps involved in starting a small business, which include selecting a suitable project and location, conducting a feasibility study, and preparing a project profile and business plan. The document highlights the role of small enterprises in economic development through job creation and increased production and exports. Overall, it serves as a guide for entrepreneurs on conceptualizing and establishing small businesses.
The role of small scale industries in indiaArnav Dhankad
Small scale industries play an important role in the Indian economy by contributing significantly to industrial output, exports, and employment. They account for about 40% of industrial output and create the largest number of jobs after agriculture. Food products, non-metallic mineral products, and metal products are some of the largest employment generating small scale industries in India.
This document discusses the roles of small scale industries in India. It defines small scale industries as those owned and run by individuals employing a small number of laborers. Small scale industries play an important role by providing employment, facilitating women's growth, and promoting balanced regional development. They also help mobilize local resources, optimize capital, complement large industries, meet consumer demand, and develop entrepreneurship. Overall, small scale industries are important for expanding employment opportunities and increasing incomes in rural communities.
This document discusses small scale industries in India. It begins with an introduction that defines small scale industries and notes their importance in resolving issues like unemployment, underemployment, and reliance on agriculture. It then covers classifications of small industries, their characteristics, objectives, scope, role in economic development, advantages, and weaknesses. The document also outlines the steps needed to start a small scale industry and government support provided through various policies and plans.
Small scale industries are defined differently in various countries and over time. In India, a small scale industry has fixed assets of less than Rs. 10 million. They employ less than 50 workers if power-driven, or less than 100 without power. Small industries have advantages like close supervision, more employment, and easy management. Their disadvantages include high production costs, outdated techniques, and difficulty accessing loans. They are typically labor-intensive, flexible, and use local resources and raw materials. Small industries play an important role in India's socio-economic development and account for a large portion of employment.
small scale industries opportunities and challlengesShaalvii Sharma
[1] The document discusses small scale industries (SSIs) in India, which are defined as industrial undertakings with capital investment of less than Rs. 1 crore.
[2] SSIs are the second largest employers in India after agriculture, employing around 2 crore people. They account for 6% of GDP, 95% of industrial units, and 34% of exports.
[3] While SSIs play an important role in the Indian economy, they also face challenges such as problems securing financing, marketing, raw materials, and developing managerial and technical skills.
The document discusses Micro, Small and Medium Enterprises (MSMEs) in India. It notes that MSMEs play a crucial role in the Indian economy by providing employment, promoting industrialization in rural areas, and contributing to socioeconomic development. MSMEs account for a significant portion of India's manufacturing output, exports, and employment. The Micro, Small and Medium Enterprises Development Act of 2006 aims to facilitate the promotion and development of MSMEs in India. MSMEs are classified based on investment levels, and registration provides various benefits.
An Analysis of Micro, Small and Medium Enterprises in IndiaABDUL MOIZZ
The presentation is about a brief study of MSME sector in India regarding GDP, employment and inclusive growth. The study also covers various challenges facing by this sector and also the governmental intervention for solutions of these challenges.
This document discusses small scale industries (SSIs) in India. It begins by defining SSIs and listing their key characteristics, which include small capital investment, family ownership, poor management, and high risk of closure. It then outlines the need for SSIs in terms of employment creation, income generation, and catering to individual tastes. The objectives, scope and industries reserved for the small scale sector are provided. The role of SSIs in economic development through job creation and dispersal of industries is examined. Steps to start a SSI and the various government policies to promote SSIs from 1948 to 2005 are summarized.
The document summarizes key Indian government policies towards small scale industries (SSIs) from 1948 to 1991. The policies aimed to promote SSIs for employment generation, equitable income distribution, and tapping unused resources. They protected SSIs through production reservations and import restrictions. Investment ceilings for SSIs were progressively increased over time. The 1991 policy aimed to impart more growth and competitiveness to the small sector.
This document analyzes the role of MSMEs in the Indian economy before and after the COVID-19 pandemic. It finds that MSMEs contribute 30-40% of India's GDP and provide the highest rates of employment. However, the pandemic severely impacted MSMEs. The government launched several measures like credit guarantees and delayed loan repayments to support MSMEs. There is an expectation that MSMEs will help revitalize the economy by boosting demand, employment, and reducing imports. Suggestions include efficiently allocating relief funds, promoting local production and exports, and developing rural enterprises.
Small scale industries (SSIs) are defined as businesses with less than 150 employees and fixed asset investments of less than 10 million rupees. SSIs are important for employment generation in India as they employ more people per unit of capital compared to large industries. They also promote balanced regional development by dispersing industries across many locations. Some key roles of SSIs include providing employment, being capital light, requiring less skills and imports, mobilizing resources, supporting agriculture and large industries, and contributing to exports and industrial output.
This document discusses small scale industries (SSI) in India. It defines SSI and outlines how the investment limit for SSI classification has increased over time from Rs. 5 lakhs to Rs. 3 crore. It discusses the role of SSI in economic development through job creation, production increase, exports growth, and regional development. The document also outlines the steps to start an SSI, including project selection, registration, clearances, financing, and implementation. Government policies over time including IPR 1948, 1956, and 1977 provided support and protection to the small sector.
The Khadi and Village Industries Commission (KVIC) was established in 1956 by the Government of India to promote khadi and village industries in rural areas. Its objectives are to provide employment, produce saleable goods, and promote self-reliance among rural communities. KVIC plans training programs, supplies raw materials, promotes marketing, and provides financial assistance. It works to encourage cooperation, research, and the development of industries like mineral, forest, food, and polymer-based products. KVIC faces challenges in making village industry products more attractive to urban consumers and supporting more entrepreneurial activities through its existing schemes.
This document discusses small scale industries in India. It defines small scale industries as those with investments in plant and machinery up to Rs. 1 Crore that produce a variety of goods and services. Small scale industries play a vital role in India's economy by generating employment, utilizing local resources, and promoting balanced economic growth. They are an important sector from both financial and social perspectives. The document outlines the classification, objectives, examples, characteristics, and importance of small scale industries in India's development.
Small scale industries in India are defined as industrial undertakings with investment not exceeding Rs. 100 lakhs in plant and machinery. Historically, small scale industries referred to cottage and village industries ranging from manufacturing iron safes to hand-loom cloth. The small scale sector received support during the independence movement and was seen as important in India's economic program. Currently, small scale industries account for 40% of industrial output, 80% of employment, and contribute significantly to exports. They serve as a seed bed for entrepreneurship by providing opportunities for new businesses to start with low investment.
Potential for entrepreneurship in rural indiaVaishnav Kumar
The document discusses the potential for entrepreneurship in rural India. It notes that while agriculture employs 70% of the workforce, population growth is leading to overcrowding of farmland. Rural entrepreneurship could provide alternative employment opportunities. Some key points made include: rural entrepreneurship can generate employment and reduce income disparities; developing entrepreneurial skills through training is important; and sowing the idea of entrepreneurship in rural youth could revolutionize the economy if nurtured properly. Barriers like lack of funding, technical skills, and infrastructure need to be addressed to further develop rural entrepreneurship.
Small Scale Industries & There Governance in IndiaShubham Goswami
Small scale industries (SSIs) are defined as industries where investment in plant and machinery does not exceed Rs. 1 crore. SSIs do not require licenses and can register with state authorities to access government assistance. The Ministry of Micro, Small and Medium Enterprises promotes SSIs through organizations like SIDO and NSIC. SSIs contribute significantly to Indian employment, production, and exports. They employ over 29 crore people and account for 40% of industrial output and 35-50% of exports. However, SSIs need improved assistance programs and skills to boost long-term sustainability and productivity.
This document discusses parallel or black economies. It defines parallel economies as unreported economic activities and explains how they pose threats such as loss of government revenue and incorrect GDP estimations. The document outlines effects of parallel economies like unequal income and wealth distribution and corruption. It then discusses measures governments can take to reduce parallel economies, such as voluntary disclosure schemes, privatization, and international cooperation on foreign black money holdings. Major tax evasion scams in India are also listed with estimated amounts. The conclusion estimates India has the highest amount of black money globally at $1,456 billion.
This document discusses Micro, Small, and Medium Enterprises (MSMEs) in India. It defines MSMEs based on the number of employees and investment levels. In India, MSMEs are defined by investment levels in plant/machinery or equipment, with micro enterprises having less than 25 lakh investment, small between 25 lakh to 5 crore, and medium more than 5 crore to 10 crore. MSMEs make up 13 million units employing over 42 million people and contribute significantly to manufacturing, exports, and GDP. The government supports MSMEs through various schemes for credit, technology, marketing, exports, and cluster development.
Entrepreneurship development - Micro Small and Medium EnterprisesSOMASUNDARAM T
Meaning; Definition; Types; product range; capital investment; ownership patterns; Importance and role played in the development of the Indian economy; Problems and Remedies; Sickness in MSME’s; Meaning and definition of a sick industry; Causes of industrial sickness; Preventive and remedial measures for sick industries.
The document discusses small scale industries in India. It notes that small scale industries are a dynamic and vibrant sector of the Indian economy, holding the key to prosperity. The objectives of developing small enterprises include generating employment, eradicating unemployment, encouraging development in rural areas, and ensuring equitable distribution of wealth. Small industries contribute significantly to manufacturing, trading, and services. They have grown enormously over the past decades in number, production, employment, and exports. Small enterprises play a major role in India's economic development and exports through job creation, regional growth, and mobilizing local resources.
There are two main types of institutions that provide support to small scale industries (SSI) in India - state level institutions and central government institutions. State level institutions include State Directorates of Industries, State Small Scale Industries Development Corporations, District Industries Centers, State Finance Corporations, and Technical Consultancy Organizations. Central government institutions that support SSI include the Department of Small Scale Industries, Small Scale Industries Board, Small Industries Development Organisation, National Small Industries Corporation, Industrial Credit and Investment Corporation of India, and Industrial Finance Corporation of India. These institutions provide various services like financing, training, marketing assistance, infrastructure development, and policy guidance to small businesses.
The document discusses small scale industries in India. It states that small scale industries are a very important segment of the Indian economy, providing employment and contributing to exports. It defines micro, small and medium enterprises based on their investment in plant and machinery or equipment. Small enterprises have advantages like creating more jobs, being set up easily in rural areas, and fostering local entrepreneurship. They play an important role in socio-economic development.
This document discusses small scale industries in India. It notes that small scale industries are an important part of the Indian economy, providing employment opportunities and contributing to balanced regional development. The objectives of developing small enterprises include generating employment, eradicating unemployment, encouraging development in rural and backward areas, and improving socio-economic conditions. Small scale industries play a key role in the manufacturing, trading, and services sectors. Over the decades, they have significantly increased production, employment, and exports in India.
An Analysis of Micro, Small and Medium Enterprises in IndiaABDUL MOIZZ
The presentation is about a brief study of MSME sector in India regarding GDP, employment and inclusive growth. The study also covers various challenges facing by this sector and also the governmental intervention for solutions of these challenges.
This document discusses small scale industries (SSIs) in India. It begins by defining SSIs and listing their key characteristics, which include small capital investment, family ownership, poor management, and high risk of closure. It then outlines the need for SSIs in terms of employment creation, income generation, and catering to individual tastes. The objectives, scope and industries reserved for the small scale sector are provided. The role of SSIs in economic development through job creation and dispersal of industries is examined. Steps to start a SSI and the various government policies to promote SSIs from 1948 to 2005 are summarized.
The document summarizes key Indian government policies towards small scale industries (SSIs) from 1948 to 1991. The policies aimed to promote SSIs for employment generation, equitable income distribution, and tapping unused resources. They protected SSIs through production reservations and import restrictions. Investment ceilings for SSIs were progressively increased over time. The 1991 policy aimed to impart more growth and competitiveness to the small sector.
This document analyzes the role of MSMEs in the Indian economy before and after the COVID-19 pandemic. It finds that MSMEs contribute 30-40% of India's GDP and provide the highest rates of employment. However, the pandemic severely impacted MSMEs. The government launched several measures like credit guarantees and delayed loan repayments to support MSMEs. There is an expectation that MSMEs will help revitalize the economy by boosting demand, employment, and reducing imports. Suggestions include efficiently allocating relief funds, promoting local production and exports, and developing rural enterprises.
Small scale industries (SSIs) are defined as businesses with less than 150 employees and fixed asset investments of less than 10 million rupees. SSIs are important for employment generation in India as they employ more people per unit of capital compared to large industries. They also promote balanced regional development by dispersing industries across many locations. Some key roles of SSIs include providing employment, being capital light, requiring less skills and imports, mobilizing resources, supporting agriculture and large industries, and contributing to exports and industrial output.
This document discusses small scale industries (SSI) in India. It defines SSI and outlines how the investment limit for SSI classification has increased over time from Rs. 5 lakhs to Rs. 3 crore. It discusses the role of SSI in economic development through job creation, production increase, exports growth, and regional development. The document also outlines the steps to start an SSI, including project selection, registration, clearances, financing, and implementation. Government policies over time including IPR 1948, 1956, and 1977 provided support and protection to the small sector.
The Khadi and Village Industries Commission (KVIC) was established in 1956 by the Government of India to promote khadi and village industries in rural areas. Its objectives are to provide employment, produce saleable goods, and promote self-reliance among rural communities. KVIC plans training programs, supplies raw materials, promotes marketing, and provides financial assistance. It works to encourage cooperation, research, and the development of industries like mineral, forest, food, and polymer-based products. KVIC faces challenges in making village industry products more attractive to urban consumers and supporting more entrepreneurial activities through its existing schemes.
This document discusses small scale industries in India. It defines small scale industries as those with investments in plant and machinery up to Rs. 1 Crore that produce a variety of goods and services. Small scale industries play a vital role in India's economy by generating employment, utilizing local resources, and promoting balanced economic growth. They are an important sector from both financial and social perspectives. The document outlines the classification, objectives, examples, characteristics, and importance of small scale industries in India's development.
Small scale industries in India are defined as industrial undertakings with investment not exceeding Rs. 100 lakhs in plant and machinery. Historically, small scale industries referred to cottage and village industries ranging from manufacturing iron safes to hand-loom cloth. The small scale sector received support during the independence movement and was seen as important in India's economic program. Currently, small scale industries account for 40% of industrial output, 80% of employment, and contribute significantly to exports. They serve as a seed bed for entrepreneurship by providing opportunities for new businesses to start with low investment.
Potential for entrepreneurship in rural indiaVaishnav Kumar
The document discusses the potential for entrepreneurship in rural India. It notes that while agriculture employs 70% of the workforce, population growth is leading to overcrowding of farmland. Rural entrepreneurship could provide alternative employment opportunities. Some key points made include: rural entrepreneurship can generate employment and reduce income disparities; developing entrepreneurial skills through training is important; and sowing the idea of entrepreneurship in rural youth could revolutionize the economy if nurtured properly. Barriers like lack of funding, technical skills, and infrastructure need to be addressed to further develop rural entrepreneurship.
Small Scale Industries & There Governance in IndiaShubham Goswami
Small scale industries (SSIs) are defined as industries where investment in plant and machinery does not exceed Rs. 1 crore. SSIs do not require licenses and can register with state authorities to access government assistance. The Ministry of Micro, Small and Medium Enterprises promotes SSIs through organizations like SIDO and NSIC. SSIs contribute significantly to Indian employment, production, and exports. They employ over 29 crore people and account for 40% of industrial output and 35-50% of exports. However, SSIs need improved assistance programs and skills to boost long-term sustainability and productivity.
This document discusses parallel or black economies. It defines parallel economies as unreported economic activities and explains how they pose threats such as loss of government revenue and incorrect GDP estimations. The document outlines effects of parallel economies like unequal income and wealth distribution and corruption. It then discusses measures governments can take to reduce parallel economies, such as voluntary disclosure schemes, privatization, and international cooperation on foreign black money holdings. Major tax evasion scams in India are also listed with estimated amounts. The conclusion estimates India has the highest amount of black money globally at $1,456 billion.
This document discusses Micro, Small, and Medium Enterprises (MSMEs) in India. It defines MSMEs based on the number of employees and investment levels. In India, MSMEs are defined by investment levels in plant/machinery or equipment, with micro enterprises having less than 25 lakh investment, small between 25 lakh to 5 crore, and medium more than 5 crore to 10 crore. MSMEs make up 13 million units employing over 42 million people and contribute significantly to manufacturing, exports, and GDP. The government supports MSMEs through various schemes for credit, technology, marketing, exports, and cluster development.
Entrepreneurship development - Micro Small and Medium EnterprisesSOMASUNDARAM T
Meaning; Definition; Types; product range; capital investment; ownership patterns; Importance and role played in the development of the Indian economy; Problems and Remedies; Sickness in MSME’s; Meaning and definition of a sick industry; Causes of industrial sickness; Preventive and remedial measures for sick industries.
The document discusses small scale industries in India. It notes that small scale industries are a dynamic and vibrant sector of the Indian economy, holding the key to prosperity. The objectives of developing small enterprises include generating employment, eradicating unemployment, encouraging development in rural areas, and ensuring equitable distribution of wealth. Small industries contribute significantly to manufacturing, trading, and services. They have grown enormously over the past decades in number, production, employment, and exports. Small enterprises play a major role in India's economic development and exports through job creation, regional growth, and mobilizing local resources.
There are two main types of institutions that provide support to small scale industries (SSI) in India - state level institutions and central government institutions. State level institutions include State Directorates of Industries, State Small Scale Industries Development Corporations, District Industries Centers, State Finance Corporations, and Technical Consultancy Organizations. Central government institutions that support SSI include the Department of Small Scale Industries, Small Scale Industries Board, Small Industries Development Organisation, National Small Industries Corporation, Industrial Credit and Investment Corporation of India, and Industrial Finance Corporation of India. These institutions provide various services like financing, training, marketing assistance, infrastructure development, and policy guidance to small businesses.
The document discusses small scale industries in India. It states that small scale industries are a very important segment of the Indian economy, providing employment and contributing to exports. It defines micro, small and medium enterprises based on their investment in plant and machinery or equipment. Small enterprises have advantages like creating more jobs, being set up easily in rural areas, and fostering local entrepreneurship. They play an important role in socio-economic development.
This document discusses small scale industries in India. It notes that small scale industries are an important part of the Indian economy, providing employment opportunities and contributing to balanced regional development. The objectives of developing small enterprises include generating employment, eradicating unemployment, encouraging development in rural and backward areas, and improving socio-economic conditions. Small scale industries play a key role in the manufacturing, trading, and services sectors. Over the decades, they have significantly increased production, employment, and exports in India.
Small scale industries are an important segment of the Indian economy and play a key role in its growth. They account for about 40% of India's exports and have helped develop other industries by providing ancillary support. While liberalization and reforms since 1991 have created opportunities for small industries, they also face new challenges in areas like quality, productivity, and competition. Small industries need to improve their competitiveness through techniques like technology upgrades in order to sustain growth in the changing industrial environment.
Small scale industries are an important segment of the Indian economy and play a key role in its growth. They account for about 40% of India's exports and have helped develop other industries by providing ancillary support. While liberalization and reforms since 1991 have created opportunities for small industries, they also face new challenges from increased competition. Small industries need to improve productivity, quality and technology to adapt to the changing industrial environment. Their development is crucial for job creation, balanced regional growth, and entrepreneurship in India.
The document discusses small scale industries in India. It notes that small scale industries are a very important segment of the Indian economy, providing employment and contributing to exports. They face challenges from economic reforms and globalization in becoming more productive and competitive. The document defines micro, small, and medium enterprises based on investments and discusses the characteristics and advantages of small enterprises, such as creating more local employment opportunities and encouraging regional development.
The document discusses small scale industries in India. It notes that small scale industries are a very important segment of the Indian economy, providing employment opportunities and contributing to socio-economic development. Small industries account for about 40% of India's total exports. While liberalization has created opportunities for small industries, it has also introduced new challenges around building competitiveness. The document defines micro, small, and medium enterprises based on investment levels and discusses their importance in generating employment, promoting equitable development across regions, and utilizing local resources.
The document discusses small-scale industries (SSI) in India. It provides definitions for micro, small and medium enterprises based on the Micro, Small and Medium Enterprises Act of 2006. SSIs are defined as industries with plant and machinery investments not exceeding Rs. 1 crore. The characteristics of SSIs include being labour intensive, localized operations, flexible to changes, and managed in a personalized way by owners. The document also outlines the objectives, types, scope, steps to start, organization structure, role, problems and policy initiatives for SSIs in India.
Small businesses are defined differently around the world, but most commonly use size criteria like number of employees, assets, investment levels, production volume or sales turnover. Countries define small businesses based on these criteria, with some using a single factor and others a combination. In India, small businesses are currently defined as undertakings with plant and machinery investment up to Rs. 3 crores. Micro, small, and medium enterprises are classified by investment level in both manufacturing and services. Small businesses play an important role in the Indian economy through employment, capital optimization, regional development, and accounting for a major share of industrial output and exports.
This document provides an overview of small scale industries (SSI) in India. It defines SSI as industries with investments up to Rs. 5 crore that are generally labor intensive. SSIs play an important role in employment creation and economic development in India due to their flexibility, use of local resources, and potential for exports. The document discusses the types of SSIs and provides examples. It also outlines the rationale for promoting SSIs, including their employment potential, ability to decentralize industries, and utilize latent resources. SSIs contribute significantly to India's total production and exports.
The document discusses Small and Medium Enterprises (SMEs) in India. It provides definitions of SMEs according to the European Union and United States. It outlines the history of the Ministry of Micro, Small and Medium Enterprises in India. It also describes the classification of SMEs according to investment size and different types of SMEs in India including their roles and challenges.
The document provides information on starting small scale enterprises in India. It discusses rules and regulations small enterprises must follow, including not polluting the environment, exploiting labor, or cheating customers. It also lists important acts related to small enterprises, such as those governing factories, labor disputes, contracts, wages, and more. The document defines small enterprises and categories within small enterprises, such as tiny industries, export-oriented units, and service businesses. It discusses characteristics, advantages, and the role of small enterprises in economic development, including increasing employment, production, and exports over decades. Finally, it outlines the steps to start a small enterprise, including selecting a project and location, feasibility studies, deciding the business structure, and obtaining necessary approvals
The document discusses small-scale enterprises and project planning for small businesses. It defines small-scale enterprises as businesses with few employees and low sales volumes. The document then discusses defining characteristics of small enterprises in different countries. It also outlines the objectives and scope of small enterprises in India and opportunities in industrial, agricultural and service sectors. The document concludes by discussing procedures for registering a small business in India and methods for project planning, including preparing project reports and using the PERT/CPM network techniques.
entrepreneurship and small business management unit iiiPENDYSINGH
This document outlines the contents of four units related to entrepreneurship and small business management. Unit III discusses small-scale enterprises and the formalities for launching an enterprise. It defines small-scale industries and outlines the registration process, which requires obtaining necessary permits from pollution control boards. It also discusses preparing a project report, which is important for understanding project viability, and using project planning techniques like PERT and CPM.
Difficulties Small Business Face Due to Marekt Conditionsijtsrd
Micro, Small and Medium Enterprise (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country. The researcher has tried to find out the possible difficulties that small enterprises face in the market. The reasons behind the failure of maximum small enterprises in Indian market. The market policies which effect such businesses and also the steps taken by the government to relief the small market enterprises. Some of the important policies have been discussed in the paper introduced by the government or which already exists. The researcher has tried to give solutions to solve such problems incurred by the SME'. The researcher has tried to find the existing governmental policies which will ease in doing business and also provide suggestions to solve the problems being faced by such business organisations. Arihant Agrawal"Difficulties Small Business Face Due to Marekt Conditions" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-5 , August 2018, URL: http://www.ijtsrd.com/papers/ijtsrd17022.pdf http://www.ijtsrd.com/management/operations-management/17022/difficulties-small-business-face-due-to-marekt-conditions/arihant-agrawal
Micro, small and medium enterprises (MSMEs) play a crucial role in the Indian economy. They contribute 30% of India's GDP and around 45% of manufacturing output, employing over 11 crore people. However, MSMEs face several challenges including lack of access to adequate and timely credit due to insufficient collateral, outdated technology, infrastructure issues, and marketing difficulties due to limited resources and competition from large firms. The government has implemented various policies to address these problems and strengthen MSMEs, which are vital to employment, production and exports in India.
This document discusses micro, small and medium enterprises (MSMEs) in India. It provides definitions for small scale industries based on investment ceilings. MSMEs are vital for development as they generate employment, promote entrepreneurship and innovation. In India, MSMEs contribute 8% of GDP and provide 60 million jobs. They face problems around financing and policies aim to promote their growth. The government supports MSMEs through various programs and policies. Liberalization created opportunities but also challenges for the sector to become more competitive.
As per PTU Syllabus: Entrepreneurship and Micro, Small and Medium Enterprises Small scale industry, product range, capital investment, ownership patterns -Importance and role played by SSI in the development of the Indian economy - Problems faced by SSI’s and the steps taken to solve the problems - Policies governing SSI’s.
The document provides an introduction to small businesses in India. It defines various types of small businesses according to investment limits, including small scale industries, ancillary industries, tiny enterprises, and women's enterprises. Small businesses are a major part of the Indian economy, accounting for 95% of industrial units and providing significant employment. However, small businesses also face numerous challenges including lack of access to financing, outdated technology, and difficulties with marketing. Overall, small businesses play a vital role in the Indian economy by generating employment, promoting regional development, and acting as an incubator for entrepreneurship.
Presentation on small business industryKirti Gupta
Small-scale industries are an important part of the Indian economy, accounting for 40% of manufacturing value added and 80% of employment. They contribute 42% to exports. A small-scale industry is defined as one with plant and machinery investment of less than Rs. 1 crore. Small industries provide several benefits - they are labor intensive, mobilize resources, involve small risks, have short gestation periods, generate employment, help equitable income distribution and regional development. However, they also face problems related to finance, marketing, technology and raw materials. The government promotes small industries through organizations like public sector banks, NABARD, NSIC, SIDBI and schemes for rural/women entrepreneurship development.
Msme overview for finance, subsidy & project related support contact - 9861...Radha Krishna Sahoo
India's GDP in 2008-09 was $1.10 trillion with per capita GDP of $830. The majority of employment was in agriculture and services. MSMEs made up a large portion of the economy, with 26.1 million enterprises employing 59.7 million people. Government policies aimed to support MSMEs through credit schemes, technology development, and reducing regulations over time to boost competitiveness.
Similar to Small scale industry an introduction --india (20)
This document discusses strategies for managing capacity and demand in service businesses. It provides examples of how hotels, movie theaters, and restaurants can work to fill their rooms, seats, or tables on a daily basis. The key challenges are mismatches between fluctuating demand and fixed capacity. The document outlines approaches for shifting demand between peak and lean periods, adjusting capacity temporarily, and using yield management to optimize pricing and segmentation. Waiting line strategies are also presented, such as differentiating customers, making waits entertaining, and providing estimates to reduce anxiety. The overall goal is for businesses to productively use their resources while maintaining quality of service.
This document discusses service innovation and design. It outlines challenges in describing services through words alone, including oversimplification, incompleteness, subjectivity, and biased interpretation. Effective service design focuses on improving internal processes and employee experience to indirectly enhance the customer experience. Service design maps how an organization operates and delivers its services through a service blueprint. Innovation in services can come through new offerings, processes, technologies, customer roles, or service solutions. Strategic orientation is also important, with options including cost leadership, differentiation, or a focus strategy for a niche market.
Service guarantees are marketing tools used by service firms to reduce customer risk, signal quality, differentiate offerings, and institutionalize complaint management. Guarantees pledge that a service will perform as promised and provide reparation if not. For customers, guarantees alleviate purchase risk and facilitate complaining since they expect resolution and compensation. For companies, guarantees help understand what satisfies customers. An effective guarantee should fully cover failures, be easy to invoke and collect from, and satisfy customers.
The document discusses the physical evidence of service quality, specifically focusing on the role played by the physical environment and the relationship between the physical environment and service consumers. It defines physical evidence as the actual physical environment where the service is performed and delivered, where interactions between the firm and customer take place. The physical environment can play roles as a package to communicate service characteristics, a facilitator to enhance performance and satisfaction, a socializer to set the mood, and a differentiator to position a service for a segment. Proper design and maintenance of the physical facilities is important to elicit positive cognitive, emotional and physiological responses from customers and employees.
1) The document discusses the development of customer defined service standards by XYZ Courier Service and other companies. It outlines factors like standardization, formal targets, and customer expectations that inform effective service standards.
2) Hard standards that can be counted like on-time delivery percentages are discussed as well as soft standards collected from customer feedback. Examples include standards set by Ford and a bank.
3) The process of developing customer defined standards involves identifying service sequences, translating customer expectations into behaviors, setting targets, tracking performance, and getting employee feedback to continuously update standards.
This document discusses the critical role of service employees in delivering quality service. It makes three key points:
1. Service employees are the face of the organization and directly interact with customers, so developing a strong service culture where customer service is a priority is important. This involves training employees on service and rewarding good customer service.
2. Service employees play a boundary spanning role between the organization and customers and must be able to handle customer needs, conflicts, and provide quality service.
3. There are various strategies for delivering quality service through employees, such as hiring the right people, training and empowering employees, promoting teamwork, and providing support systems to allow employees to serve customers effectively.
Service recovery refers to actions taken by organizations in response to service failures to improve the customer's situation. There are various strategies for service recovery, including responding quickly, providing appropriate communication, treating customers fairly, and cultivating relationships. It is also important to fix the underlying problem by encouraging complaints, learning from recovery experiences and lost customers, and making services more reliable. Offering unconditional service guarantees can ensure customer satisfaction and enhance a company's brand image, but guarantees need to be designed carefully with customer and employee input to be effective.
The document discusses relationship marketing strategies for customer retention. It covers relationship marketing, customer profitability segments, relationship development strategies, and relationship challenges. Specific topics include establishing, developing and maintaining customer relationships by shifting from a transactional to a relational focus. It also discusses how many customers assume an ongoing relationship rather than switching providers, and how organizations often focus on attracting but not retaining customers, referring to the bucket theory of marketing.
This document discusses building customer relationships through relationship marketing. It introduces the "bucket theory" of marketing, which describes how effective marketing programs pour customers into the bucket, while ineffective programs cause more customers to fall out through holes. It then discusses evolving customer relationships from strangers to partners. The goal of relationship marketing is to build a base of committed, profitable customers. Key strategies discussed include developing relationship drivers like satisfaction, quality, and value to reduce switching barriers. The document also covers customer profitability segments and challenges of relationship marketing.
The document discusses customer satisfaction and service quality. It defines customer satisfaction as a customer's judgment about whether a product or service has met their needs and expectations. Key determinants of customer satisfaction mentioned include product/service features, customer emotions, perceptions of fairness, and opinions of others. Important dimensions of service quality are identified as reliability, responsiveness, assurance, empathy and tangibles. The document also discusses electronic service quality, customer effort, service encounters, sources of pleasure/displeasure in encounters, and using customer research to understand expectations and improve services.
This document discusses customer expectations of services and the factors that influence them. It identifies different types of customer expectations, from the minimum tolerable to ideal expectations. Customer expectations are shaped by both adequate and desired service levels, with a zone of tolerance in between. Personal needs, philosophies, past experiences and word of mouth all contribute to the formation of customer expectations. The document raises issues for companies regarding unrealistic expectations, exceeding customer expectations to delight them, and keeping expectations ahead of competitors.
This document discusses customer expectations and perceptions, and the gaps that can occur between them. It outlines four key gaps that can occur within organizations providing services:
1) The listening gap, which occurs when a company's perception of customer expectations does not match customers' actual expectations, due to inadequate customer research.
2) The service design and standards gap, which occurs when management's perception of customer expectations does not align with customer-driven service design and standards.
3) The service performance gap, which occurs when actual service delivery does not align with customer-driven design and standards, due to issues like inadequate training or resources.
4) The communication gap, which occurs when external communications to customers do not
This document provides an overview of various research designs and data collection methods in marketing research. It discusses exploratory and descriptive research designs, and explains the differences between exploratory and conclusive research. It also distinguishes between primary and secondary data, describing how to evaluate secondary data sources. Finally, it outlines several survey methods like telephone, personal, mail, and electronic surveys, and discusses observation methods.
Digital economics- Project Presentation from Enginerring studentsBinod Sinha
This is one of the best presentation given by B Tech engineering economics students under the Guidance of Dr. Binod Sinha,Associate Professor and Expert Economics Faculty,RIT in March,2017 at Video Conference Hall
Basic Economics helps entrepreneurs in understanding micro and macro economic variables very well.Presentation is useful for start up/budding enterpreneurs.
MDP on Soft Skills for Department of Post,GOI DATED 24th June at RIT Rajaramn...Binod Sinha
The document discusses soft skills that are important for employees of the Department of Post in India. It outlines the changing role of the Department of Post from primarily handling written communication to now offering financial products and services. It describes the difference between hard skills which are technical and can be learned over time, versus soft skills which involve interpersonal abilities. Some key soft skills discussed include communication skills, presentation skills, teamwork, time management, and stress management. The document provides examples of how these soft skills are important for interacting with customers and colleagues in a customer service-oriented role.
6. INTRODUCTION
At present the Small Scale Industry (SSI) constitutes a Very
Important Segment of the Indian Economy & has emerged as a
Dynamic & Vibrant Sector of the Economy.
The Small Scale Industry Sector holds the Key to Economic
Prosperity of the Indian Economy, Characterized by abundant
Labor Supply, Unemployment & Under Employment , Scarcity
of Finance, Growing Modern Large Industries providing scope
for development of Ancillary Industries & so on. The Small
Scale Industry has grown phenomenally during the last Six
Decades & has acquired a very prominent place in the Socio –
Economic Development in the Country.
SSI-------SSI--------------SSI------SSI-----------SSI--------------------SSI--------SSI----------SSI----SSI---6
7. This Sector accounts for about 40% of the Country’s Total Exports.
Various Policy Initiatives undertaken by the Central Govt &
Various State Govts whether by way of Incentives or protection, have
helped the sector in acquiring the Status of a Major Contributor in the
Growth Process.
The Process of Liberalization & Economic Reforms, since 1991,
while creating Tremendous Opportunities for the Growth of Small
Scale Industrial Sector, have however thrown up new Challenges for
the Sector. This changed Industrial Scenario, has called for building
Competitive Strengths, Improving Quality & Productivity, Introducing
Technology Up gradation, reducing Wastages & Rejections, Intelligent
Use of Resources, Employing Modern Management Techniques etc in
order to withstand growing competition & for ensuring sustained
growth.
7
8. Also, Small Scale Industries need to reposition
itself in order to meet the Growing Demands for
ancillary items, Subcontracting & Job Work from
other Industrial Units, requiring higher standards
of Quality, Economies of Scale & strict timely
delivery schedules.
The emerging challenges to the Small Scale
Industries Sector are also due to the Impact of
Globalization & Agreement under the WTO (World
Trade Organization) & GATT (General Agreement
on Trade & Tariff) to which India is a Signatory
along with 134 Member Countries.
8
9. CONCEPTS & DEFINITIONS OF
SMALL SCALE INDUSTRY :
It Comprises a Variety of Undertakings.
These definitions generally relate to either the Capital Invested or people
employed or both or any other relevant criteria.
9
10. CLASSIFICATION & DEFINITION OF
INDUSTRIES :
The earlier concept of Industries has been changed to Enterprises. Enterprises
have been classified broadly into Two Categories as Under :
1) Manufacturing Enterprises : Enterprises which are engaged in the
Manufacture / Production of Goods pertaining to any Industry are referred to as
“Manufacturing Enterprises”.
10
11. 2) Service Enterprises : Enterprises which are engaged in providing / rendering of
Services are referred to as “Service Enterprises.”
I) Manufacturing Enterprises : They have been defined in terms of Investment on Plant
& Machinery (Excluding Land & Buildings) & further classified into 3 Categories as
under :
a) Micro Enterprises : An Enterprise where the Investment on Plant & Machinery is upto
Rs. 25 Lakh is referred to as a “Micro Enterprise.”
11
12. b) Small Enterprises : An Enterprise where the
Investment on Plant & Machinery is above Rs. 25
Lakh upto Rs. 5 Crore is referred to as “Small
Enterprise.”
c) Medium Enterprises : An Enterprise where
the Investment on Plant & Machinery is above Rs.
5 Crore & upto Rs. 10 Crore is referred to as
“Medium Enterprise.”
II) Service Enterprises :
They have been defined in terms of their
Investment in Equipment (excluding Land &
Building) & further classified into 3 Categories as
under :
12
13. 1) Micro Enterprises : An Enterprise where the
Investment in Equipment is upto Rs. 10 Lakh is
referred to as “Micro Enterprise.”
2) Small Enterprises : An Enterprise, where
the Investment in equipment is above Rs. 10
Lakh & upto Rs. 2 Crore is referred to as “Small
Enterprise.”
3) Medium Enterprises : An Enterprise, where
the Investment in Equipment is above Rs. 2
Crore & upto Rs. 5 Crore is referred to as
“Medium Enterprise.”
13
14. ANCILLARY INDUSTRIAL
UNDERTAKINGS :
An Industrial Undertaking which is engaged or is
proposed to be engaged in the Manufacture or Production
of Parts, Components, Sub – Assemblies, Tooling or
Intermediaries, or the rendering of services & the
undertaking supplies or it renders or proposes to supply or
render not less than 50 % of its production or services, as
the case may be, to one or more other Industrial
Undertakings & whose Investment in Fixed Assets in Plant
& Machinery whether held on Ownership terms or on lease
or on hire – purchase, does not exceed Rs. 5 Crore in case
of Manufacturing Small Enterprises & Rs. 2 Crore in case
of Service Small Enterprises.
14
15. As can be seen from the above definitions of Micro, Small
& Medium Enterprises, the only criteria for classification is
Investment made on Plant & Machineries in case of
Manufacturing Enterprises & Investment made on Equipment in
case of Service Enterprises. None of the following factors are
considered in classifying the enterprises.
1) Investment made on Land & Buildings.
2) Extent of Land & Built up area of the buildings.
3) Number of people employed.
4) Amount of Electric Power used & whether LT (Low
Tension) or HT(High Tension) power is used.
5) Amount of utilities like Water, Gases, Fuels etc used.
6) Working Capital Employed.
7) Annual Sales / Turn Over.
15
16. CHARACTERISTICS OF
SMALL ENTERPRISES :
“Small Enterprise is Beautiful” because of its following Important
Characteristics :
1) A Small Enterprise is generally a “One Man Show”. Even Small Enterprises
which run by a Partnership Firm or a Private Limited Company, in most cases,
the activities are mainly carried out by one of the Partners or Directors. In
Practice, the others mainly assist in providing Capital / Funds.
16
17. 2) Owner himself / herself is also a Manager
of the Enterprise. Thus, a Small Enterprise is
managed in a personalized manner. The Owner
has First Hand Knowledge of all aspects of the
Enterprise & knows what is actually going on
in the Business. He takes effective participation
in all matters of Business Decision Making.
3) A Small Enterprise has lesser Gestation
Period compared to a Large Enterprise. i.e.,
the period after which the return on
Investment starts.
17
18. 4) Small Enterprises generally carryout their
operations so as to cater to the Local & Regional
Markets.
5) Small Enterprises use indigenous resources &
therefore can be located anywhere subject to the
availability of these resources like Raw Materials,
Labor, Transport Facilities etc.
6) They are fairly Labor Intensive with
comparatively smaller Capital Investment than
the Larger Units. That is, for the same Investment,
a Small Enterprise provides more jobs to the
people compared to a Large Enterprise.
18
19. 7) Using Local Resources, Small Units are decentralized & dispersed to Rural Areas &
Smaller Towns. Thus, the development of Small Enterprises in Rural Areas & Smaller
towns promotes more Balanced Regional Development & thereby prevents influx of job
seekers from rural areas & smaller towns to bigger cities & urbanizing centers.
8) Small Enterprises are more susceptible & highly reactive & receptive to Socio –
Economic conditions compared to larger enterprises. They are more flexible to adapt
changes like Diversification to New Products, adopting to New Production Techniques,
substituting New Raw Materials, Changes in Organization Structure, New Market etc.
19
20. ADVANTAGES OF SMALL
ENTERPRISES :
They are the Back Bone of the Industrial
Activity in the Country & are playing a very
important role in improving the Socio –
Economic Conditions of the people. Advantages
of these Enterprises are as follows : (12 Points)
1) They create greater Employment
Opportunities thro Labor Intensive processes &
thereby help in tackling the Unemployment
Problem.
20
21. 2) They have Low Gestation Period & thereby
Expensive Financial Resources are not idled
unproductively for long periods.
3) They can be set up easily in Rural &
Backward Areas.
4) They need Small / Local / Regional Market.
5) They encourage growth of Local
Entrepreneurship.
6) They create Decentralized pattern of
Ownership.
7) They foster Diversification of Economic
Activities.
21
22. 8) They Innovate & Introduce New
Products particularly to cater to Local Needs.
9) They influence & improve Standard of
Living of Local People.
10) They provide equitable dispersal of
enterprises throughout Rural & Backward
Areas.
11) They earn Vital Foreign Exchange for
the Country through their Exports of Goods /
Services.
12) They Increase Revenue to Central &
State Govts by way of Taxes Paid by them.
22
23. NEED & RATIONALE OF SMALL SCALE
INDUSTRY DEVELOPMENT IN INDIA :
As per the IPR (Industrial Policy Resolution),1956, it
emphasizes the Need & Rationale as given below :
“They provide immediate large scale employment, they
offer a method of ensuring a more equitable distribution of
the National Income & they facilitate an Effective
Mobilization of Resources of Capital & Skill which might
otherwise remain unutilized. Some of the problems that
unplanned urbanization tends to create will be avoided by the
establishment of Small Centers of Industrial Production all
over the Country.”
23
24. The Rationale of Small Scale Industries so established can be broadly classified into
Four Arguments as follows :
1) Employment Argument.
2) Equality Argument.
3) Decentralization Argument.
4) Latent Resources Argument.
24
25. 1) EMPLOYMENT ARGUMENT :
In View of the Scarce Capital Resources of the Country & large Manpower,
the most important argument put forth in favor of the SSI’s is that they have a
potential to create immediate large scale employment opportunities.
The increasing emphasis on SSI’s originates from the widespread concern
over the Unemployment Situation in the Country. It has been found that Small
Scale Units are more Labor Intensive than Larger Units. i.e., Small Units use more
labor per Unit of Output than the Investment.
25
26. It has also been found by various studies that while
Output – Employment Ratio (Ratio of Output to the No. of
people employed) is the lowest in the Small Scale Sector, the
Employment Generation Capacity of Small Sector is
between 8 to 15 times that of the Large Sector for the same
amount of Capital Invested for different types of
Industries.
However, some Scholars have opposed this
employment argument of Small Scale Industries. They
argued that Employment should not be created for the sake
of employment. The more important problem being, how to
make the best use of the Scarce Resources like Capital,
Power, Raw Materials, etc, & not how to absorb Surplus
Resources (Manpower). Then, the Employment Argument
becomes an Output Argument.
26
27. 2) EQUALITY ARGUMENT :
Another Argument put forward in favor of the Small Scale Industry is that
they ensure a more Equitable Distribution of National Income & Wealth. There
are 2 Major Considerations :
1) The Ownership Pattern of SSI’s is more widespread compared to the
Ownership of Large Scale Units in which Major Stake Holders are only a few.
27
28. 2) They are more Labor Intensive & their Decentralization & Dispersal to Rural &
Backward Areas provide more Employment Opportunities to the Unemployed. This
results in more equitable distribution of the produce of the Small Scale Units.
Here, since it is Proprietorship or Partnership, the relations between the Labor &
Management are more harmonious & cordial in Small Enterprises than in Large
Enterprises.
28
29. Some Authors argued that such Small
Enterprises paid less to the Workers, may be only
Half of the Wages paid to Workers of Large
Enterprises. This is because Workers in Small
Enterprises are Unorganized due to absence of
Trade Unions & therefore easily exploited by
Employers.
But, However, the Workers choice is really not
between a High Paid Job & a Low Paid One, but
between a Low Paid Job or No Job at all. Thus we
can say the SSI’s have great importance in an
Economy like Ours where millions are unemployed
& in search of a Livelihood.
29
30. 3) DECENTRALIZATION ARGUMENT :
This stresses the need to disperse the Industrial
Development to different regions so as to promote Balanced
Regional Development in the Country. Large Industries are
concentrated everywhere in Urban Areas. But, Small
Enterprises can be located in Rural & Semi Urban Areas to use
Local Resources & to meet Local Demands.
Decentralization of Industrial Enterprises will help
harnessing Local Resources such as Raw Materials , Idle Capital
, Local Talents , & ultimately improves the Socio – Economic
Conditions & the Standard of Living of the People even in the
erstwhile backward areas.
30
31. 4) LATENT RESOURCES ARGUMENT :
This Argument suggests that Small Enterprises are capable
of picking up Latent & Unutilized Resources like hoarded
Wealth, & Idle Entrepreneurial Ability.
However, the Real Force of Latent Resources Argument lies
in the existence of Entrepreneurial Skill.
The impressive growth in the number of small enterprises
during the last six decades highlights the same fact that
providing the necessary conditions such as Land, Sheds, Power,
Good Transport & Communication Facilities , Credit Facilities
etc, the Latent Resources of Entrepreneurship can be tapped by
the Growth of Small Scale Industries only.
31
32. OBJECTIVES OF DEVELOPING SMALL
ENTERPRISES :
Reasons for Developing Small Enterprises in India can be
enumerated as follows :
1) To generate Large Scale Employment Opportunities for the
Unemployed speedily with relatively Low Investment.
2) To Eradicate Unemployment Problem from the Country.
3) To encourage dispersal of enterprises to all over the country
covering Rural Areas , smaller towns & economically backward
regions.
4) To bring Backward Regions too in the mainstream of
national development.
32
33. 5) To promote balanced regional development in the
Whole Country.
6) To ensure more equitable distribution of National
Wealth & Income.
7) To encourage effective mobilization of Untapped
Resources of the Country.
8) To improve Socio – Economic Conditions & Standard
of Living of the people in the Country.
9) To seize the Vast Opportunities created for Small
Enterprises due to Liberalization & Globalization policies
of the Govt of India.
10) To help earn Vital Foreign Exchange for the Country
thro Exports of Goods / Services of Small Enterprises.
11) To bring more Revenue to the Central & State Govts
by way of Taxes.
33
34. ROLE OF SMALL ENTERPRISES IN ECONOMIC
DEVELOPMENT :
Economic Development of a Country can be defined in terms of
Increase in Real Per Capita Income of Persons resulting in
Improvement in Standard of Living. The Development of Small
Enterprises contributes to the Increase in Per Capita Income & leads
to Overall Economic Development.
It generates Vast Employment Opportunities quickly with
relatively Low Investment , Promotes more equitable distribution of
National Income, makes effective mobilization of Unutilized Capital
& Skilled Manpower & leads to dispersal of Manufacturing
Activities all over the Country , leading to Growth of Villages , Small
Towns & Economically Backward Regions. This leads to Balanced
Regional Development throughout the Country.
34
35. The Role of Small Enterprises in Economic
Development of our Country can be discussed
with reference to the following parameters
during the last Four Decades :
1) Increase in the Number of Small
Enterprises.
2) Increase in the Value of Production in
Rupee Terms.
3) Increase in the Number of People
Employed.
4) Increase in the Export Earnings in Rupee
Terms.
35
36. The Small Enterprises have registered phenomenal growth
in their Number, Production, Employment & Exports over the
Last Four Decades.
In 1950, there were 16,000 Registered Small Scale Industries
& this has increased to 31.21 Lakh Registered SSI’s during 1998
– 1999.
During 1973 – 74, the Total Value of Production reported
by SSI’s was Rs. 7200 Crores & this has grown phenomenally by
about 75 Times to Rs. 5,38,357 Crores during 1998 – 1999.
As regards Employment, about 40 Lakh People were
employed in SSI Sector during 1973 – 1974 & there is a Four
Fold Increase in Employment during 1998 – 1999, that is 175.2
Lakh People were employed in SSI Sector during 1998 – 1999.
36
37. There is a Phenomenal Growth in Exports Revenue during
the last Four Decades. During 1973 -1974, SSI Sector exported
Rs. 393 Crores worth of Goods & Services & this has grown
nearly 150 times to Rs. 57, 488 Crores during 1998 -1999.
As we can see, the SSI Sector has been contributing
tremendously in overall economic development of the Country by
creating Vast Employment Opportunities , increased Value of
Production, & increased Value of Exports & Foreign Exchange
Earnings.
Another way of looking at the SSI Sector for the Economic
Development of the Country is to look at its Relative Position in
terms of Country’s Total Production, Employment & Exports. It
is encouraging to note that Small Scale Enterprises accounts for
35 % of the Gross Value of the Output in the Manufacturing
Sector , about 80 % of the Total Industrial Employment & about
40 % of the Total Exports of the Country.
37
38. STEPS FOR STARTING A SMALL INDUSTRY :
The Various Basic Steps for Starting a Small Enterprise is as Given Below :
38
41. The Steps are discussed below :
1) Project Selection : Entrepreneur is the Most
Important person for the Success of a Project. In
order to set up a Small Enterprise, the
Entrepreneur has to decide or choose a suitable
project.
The Entrepreneur has also to decide on a
suitable location for the project. Based on these
selections, a project feasibility study has to be
conducted & then a brief project profile has to be
prepared for the proposed project.
41
42. The Project Selection & the Preliminary Activities involve the following :
a) Product or Service Selection.
b) Location Selection.
c) Project Feasibility Study.
d) Preparation of Project Profile.
e) Business Plan Preparation.
42
43. a) Product or Service Selection :
This is the first & most important step in setting up a small enterprise. Because, the
further prospects, actions & efforts in setting up the small enterprise & commencing its
commercial activities successfully depend on this decision.
Therefore, the Entrepreneur has to be very careful in the choice or selection of the
Project. The main factors to be considered in deciding a suitable project are as follows :
43
44. 1) Background & Experience of Entrepreneurs.
2) Availability of the Right Technology & Know –
How for the Project.
3) Marketability of the Product / Service.
4) Investment Capacity (i.e., Financial Resources.)
5) Availability of Plant & Machinery, Indigenous or
Imported.
6) Availability of Raw Materials.
7) Availability of Proper Infrastructural Facilities
Viz., Land / Shed, Power, Water, Communication,
Transport etc.
8) Availability of right kind of Labor Viz., Skilled,
Semi – Skilled & Unskilled.
44
45. Considering all above aspects & taking the help of Governmental Support
Organizations like TECSOK, KIADB, KSSIDC etc & even private consultants , the
Entrepreneur has to choose & decide the project for implementation.
b) Location Selection : After deciding on the Project, the next important decision an
Entrepreneur has to make is about the Location of the Project. There are a Few factors
associated with the same :
45
46. 1) Nearness or Proximity to Market.
2) Availability of Raw Materials.
3) Availability of Transformation &
Communication Facilities.
4) Availability of Govt Incentives / Concessions.
5) Govt Industrial Policy.
6) Availability of suitable Infrastructural
facilities.
7) Availability of Labor.
8) Convenience for the Entrepreneur’s.
46
47. c) Project Feasibility Study : The important facets of
Project Feasibility Study are as follows :
1) Market Analysis is carried out to find out the
aggregate demand of the proposed Product / Service &
what would be the Market Share of the proposed project.
2) Technical Analysis seeks to determine whether the
prerequisites for the successful commissioning of the
Project have been considered & reasonably good choices
have been made with respect to Location, Size, Process &
so on.
3) Financial Analysis seeks to ascertain whether the
proposed project will be Financially viable in the sense of
being able to meet the burden of Servicing Debt & Satisfy
the return on Investment Expectations of the Promoter’s.
47
48. 4) Economic Analysis : (Social Cost – Benefit
Analysis) is concerned judging a Project from the
larger, social point of view. In such an evaluation, the
focus is on the Social Costs & Benefits of the Project.
5) Project Profile : This gives a Bird’s Eye View of
the Proposed Project. This may be used for obtaining
Provisional Registration Certificate (PRC) from the
District Industries Centre & for making an
Application to KIADB for allotment of Land or to
KSSIDC for allotment of Shed & other
Infrastructures.
A Project Profile generally contains information
about the Project under the Following Heads :
48
49. 1) Introduction.
2) Promoter(s) Background (Education, Experience).
3) Product(s) Service(s) Description (Specification, Uses
etc.)
4) Market & Marketing.
5) Infrastructure needed.
6) Plant & Machinery (Description, Capacity, Cost etc.)
7) Process Details.
8) Raw Materials (Requirements, Specifications, Cost etc.)
9) Power, Water & other utilities required.
10) Manpower needed (type of Personnel reqd & salaries /
wages)
11) Cost of the Project & means of finance.
12) Cost of Production & Profitability.
49
50. e) Business Plan Preparation : This is a Document where the Entrepreneur plans his
Business to have an Organized & effective response to a situation which may arise in
future. A Business Plan is used to make Crucial Start Up Decisions to reassure Lenders,
Investors, to measure Operational Progress ; to Test Planning Assumptions ; to Adjust
Forecasts; & to set the standard for good Operational Management.
A Workable Business Plan has the following features :
50
51. Determines where the Company needs to go.
Forewarns of possible hurdles along the way.
Formulates the responses to contingencies.
Keeps the Business on Track to reach its
Planned Goals.
Start a Business Plan with describing your
Business & Product or Services. Indicate the
Market Segment you are Targeting & the Stage of
Development your Company is in.
51
52. 2) Decide on the Constitution :
To start any Enterprise, the Promoter’s have to decide on the Constitution of the
Unit. There are 3 Major Alternatives :
a) Proprietary b) Partnership c) Company.
In fact, this has to be decided at the initial stages of the Project & necessary
formalities should be completed by the time the application for Provisional Registration
Certificate (PRC) is made to DIC (District Industries Centre).
52
53. a) Proprietary Enterprise : A Single Individual is
the Owner of such an Enterprise. The Proprietor
may proceed to obtain PRC from the DIC.
b) Partnership Enterprise (Firm): This is an
Association of Two or more Persons, subject to a
Maximum of 20 Persons. They are governed by the
Indian Partnership Act , 1932 & rules framed
there under the State Govt. It is advisable to have a
Partnership Deed Agreement on Stamp Paper of
Appropriate Value.
53
54. Registration Formalities of a Partnership Firm :
For Registering a Partnership Firm, an
Application in the prescribed form has to be
submitted to the Registrar of Firms of the District ,
along with the authenticated copy of the
Partnership deed & the prescribed fee & must
obtain “Form A” & “Form C” from the Registrar
of Firms for having registered the Partnership
Firm.
Assistance of a Chartered Accountant may
be availed for completing the above formalities.
54
55. c) Company :
This may be a Private or Public Limited
Company. A Private Limited Company can be
formed with a minimum of 2 Persons & a
Maximum of 50 Persons. A Public Limited
Company can be formed with a Minimum of 7
Persons & Maximum number of Persons is
unlimited. Company is governed by the Companies
Act, 1956.
For Registering the Company, one has to
approach Registrar of Companies of the State.
55
56. 3) Obtaining SSI Registration :
Entrepreneurs desiring to start a Small
Enterprise have to initially obtain a PRC(Provisional
Registration Certificate). Once the Unit goes into
Production, the PRC has to be converted into a
Permanent Registration Certificate (PMT).
a) PRC : This is the Initial Registration reqd for
starting a Micro & Small Enterprise. The
Entrepreneur has to apply & obtain a PRC after
selection of the Project & deciding on the Location of
the Unit. This Application is necessary for
Infrastructural Facilities such as Land, Shed, Power
etc & Finance from the Financial Institutions.
56
57. b) Permanent Registration Certificate (PMT) :
A Micro or a Small Enterprise can get a Permanent Registration
Certificate when it actually commences Commercial Production /
Service. PRC would be converted to PMT when the Unit commences its
Commercial Activities.
PMT Registration will help in several ways like the following :
To apply for scarce raw materials & for imported raw materials.
To get Working Capital Loan from Banks / Financial Institutions.
To get Central Excise Duty Concessions.
For Claiming Incentives, Concessions, including Sales Tax
Exemption wherever applicable.
To apply for registration under Govt Stores purchase programs /
Ancillary Development Programme / Export Promotion Program & to
get Purchase & Price Preference.
57
58. 4) Specific Clearances :
There are a number of Statutory Clearances reqd to
start Micro & Small Enterprises.
Some of them are given below :
a) Agricultural Land Conversion into Non – Agricultural
Land (NA Conversion).
b) Building Plan approved by the Local Authorities.
c) Factories Act & Labor Dept.
d) Trade License from the Local Authorities.
e) Pollution Control Board Clearances.
f) Food Adulteration Act License.
g) BIS Certification wherever applicable etc.
58
59. 5) Land or Shed Selection :
For any Industrial Project, suitable Industrial Site
or a ready Industrial shed is reqd. The Promoters of the
Unit could consider taking an Industrial Site &
constructing a shed as per their requirement, alternatively,
could consider taking a ready Industrial Shed on
Ownership Basis also.
Whom to approach :
a) KIADB for Land.
b) KSSIDC for Shed requirement.
c) Alternatively, the Entrepreneur can also approach
directly the Jt. Director , DIC in the particular District
also for requirement of Land / Shed for the proposed
Enterprise.
59
60. 6) Plant & Machinery :
This requirement for a Particular Project could be purchased from recognized
manufacturer’s / dealers. This could also be taken on Hire Basis operated by National
Small Industries Corporation Limited (NSIC).
This is a Govt of India promoted Corporation.
60
61. 7) Infrastructure Facilities :
For Micro or Small Enterprises the main infrastructure
facilities are Land or Shed for the Project , Power Connection ,
Water Supply & Telephone & Internet Facility.
As said earlier, for Land or Shed , the Entrepreneur can
approach either KIADB or KSSIDC as the case may be. For the
requirement of Power, an application may be made to the local
electricity company in the region. For Telephone connection &
Internet facilities, Entrepreneur has to approach BSNL or other
operators.
District level Single Window Agency (SWA) assists the
Entrepreneur in getting all the above facilities. Hence, the
Entrepreneur can forward an Application on a plain paper to
the Jt. Director , District Industries Centre of the District giving
his requirement of various infrastructural facilities for speedy
approval & sanction.
61
62. 8) Project Report :
For any New Project or Enterprise to be set
up, Proper Planning is necessary.
A detailed Project Report provides such a plan
for the Project. The Report is useful to the
Entrepreneur for Planning & Implementing the
Project. This is essential for Obtaining Finance &
other clearances for the Project.
In fact, the Project Report gives a detailed
insight of the Techno – Economic Viability of the
Project. This is generally prepared to cover the
following :
62
63. 1) Introduction.
2) Entrepreneurs (Promoters) Background
(Education, Experience, Special Achievements etc.)
3) Details of Product(s) to be manufactured &
specs / details of Service(s) to be rendered with
Technical Details.
4) Market Potential for the Product(s) /
Service(s) & Marketing Plan.
5) Plant Capacity, Production Plan &
Manufacturing Process.
6) Infrastructure needed for the Project.
7) Raw Materials & Consumables needed for
the Project.
63
64. 8) Plant & Machinery for the Project (Description , Capacity , Cost etc.)
9) Manpower requirements.
10) Total Project Cost.
11) Means of Finance.
12) Income , Costs & Profitability Projections.
13) Financial Analysis.
14) Schedule of Implementation.
15) Conclusions & Recommendations.
64
65. 9) Finance :
Finance for such Projects are under 2 main categories :
a) Term Loan.
b) Working Capital Loan.
a) Term Loan : For starting a Small Enterprise, Term Loan
Finance for the Fixed Assets like Land, Building, Plant &
Machinery etc ., can be availed. This Loan can be availed from
Karnataka State Financial Corporation (KSFC) & or from the
Commercial Banks.
Financial Institutions sanction up to 75 % of the Total
investment on Fixed Assets & the Balance of 25 % has to be
pooled in by the Promoters as Margin Money. At present the
Lending Interest Rates are between 13 to 14 % & also subject to
change. Promoters can also approach National Small Industries
Corporation (NSIC) for Financial Assistance.
65
66. b) Working Capital Loan :
It is always preferable to approach Commercial banks for Working Capital Loan. All
Commercial Banks finance up to 75 % of the Working Capital Loan & the remaining 25
% has to be pooled in by the Promoters.
It is important to note that Banks will release Working Capital Loan only after the
Promoters have contributed their share of 25 % , at present the Lending Rates are
varying between 13 to 14 %.
66
67. c) Single Window Scheme (SWS) of KSFC for both
Term Loan & Working Capital Loan :
This Loan Scheme is for providing
assistance to new Micro & Small Enterprises
whose project cost (Excluding Working Capital
Margin of the Promoters) does not exceed Rs. 50
Lakh & the Total Working Capital Requirements
at the Normal Level of Operation is up to Rs. 20
Lakh. Term Loan for Fixed Assets & Term Loan
for Working Capital is fixed based on the Debt
Equity Ratio of 2:1 for Loans above Rs. 10 Lakh &
3:1 for Loans up to Rs. 10 Lakh.
67
68. 10) Implementation of the Project :
The Entrepreneurs will have to take necessary steps to
physically implement the Project after obtaining the various
Licenses, Clearances, Infrastructural Facilities etc. Following are
the Major Activities that the Entrepreneurs have to undertake
for implementing the Project.
a) Construct Shed : If the Entrepreneurs have taken a ready
shed from the KSSIDC or have made arrangements for Rental
Sheds / Premises then they need to go thro this Step. If they have
obtained Industrial Land from KIADB or they have made
arrangements for Vacant Land privately, then they have to take
steps to construct the shed for their industry. The Plan for the
Industrial Shed should be approved by the concerned authorities
like KIADB & or Local Authorities like Municipal Corporations
or Municipalities or Village Panchayats etc., as the case may be.
68
69. b) Order for Machinery :
The Entrepreneurs have to take necessary steps to order
the necessary Machinery, Equipments etc. thro NSIC or any
other suitable Organizations. The Terms & Conditions for
ordering Machinery, Equipments etc. will vary from dealer to
dealer, hence the Entrepreneurs have to make necessary
arrangements as per the terms & conditions of the dealers.
The delivery dates may vary upon the type of Machinery,
Equipments etc. & the dealer thro whom the Machinery is
ordered.
Keeping these Factors in mind, the Entrepreneurs should
plan to order the necessary Machinery, Equipments etc. at the
appropriate time so that they are able to obtain them in Time, to
implement the Project.
69
70. c) Recruit Personnel :
Depending upon the Size of the Industry & type of the
Products, the Entrepreneurs will have to hire different types of
personnel for the Industry.
Certain Managerial & Technical Personnel may be reqd in
the initial stages for the Project Planning. These Personnel may
be needed for the preliminary works, for supervision & other
related works during Planning & Implementation of the Project.
Accordingly, the Entrepreneurs should take steps to hire the
Key Managerial & Technical Personnel well in advance. Most of
the other Personnel & Office Staff will be needed as soon as the
unit is ready for Commissioning.
70
71. d) Arrange for Raw Materials :
Entrepreneurs should plan for reqd Raw
Materials as soon as they proceed to implement the
Project. They should try to get the necessary
samples for the Basic Raw Materials &
Components that they need to buy from outside for
the Project.
During the implementation of the Project,
they should finalize the Sources of Raw Materials,
the Quality & Quantity Requirements for the
Project. Accordingly, they should Plan & Order
the necessary Raw Materials & Components so
that they start receiving the supplies from the date
of expected Commissioning of the Project.
71
72. e) Marketing :
The Entrepreneurs would have already
considered about the Market for their Project &
the Marketing Plan that they desire to take up for
the Products.
They should build up necessary Contacts for
marketing during the implementation stage. They
have to undertake necessary ground work of
contacting the prospective customers & preparing
necessary plans for Marketing. The Planning
should cover the product(s) design, Pricing,
Promotional Activities & the Distribution Systems.
72
73. f) Erection & Commissioning :
Once the Building is ready & the necessary Plant & Machinery have arrived, the
Entrepreneurs have to take steps to erect the Machineries. The various items of Plant &
Machinery should be erected as per the Plan prepared. Some of the sophisticated
Machineries are supplied along with the service of erection. In such cases, the erection &
commissioning will be undertaken by the Vendors of the equipment.
73
74. After the Plant Machinery is erected, the Entrepreneurs should proceed to commission
the Plant. Initially, during the trial run period, the Entrepreneurs will have to make
necessary adjustments & changes in Production & Process so as to obtain the desired
quality products. Once, the Production / Process of the Unit is standardized, they can
proceed with Commercial Production.
74
75. g) Obtain Final Clearances :
The Entrepreneurs are reqd to take several Final Clearances when is ready for
Commissioning or as it goes into Production. Accordingly, the Entrepreneurs are advised
to refer to the various preliminary clearances they have obtained from different Depts /
Organizations & take necessary steps to obtain Final Clearances or approvals as reqd.
75
76. Government Policy towards SSI :
Small Scale Enterprises have been given an
important place in the frame work of Indian Planning for
both ideological & Economic Reasons. Development of
Small Scale Enterprises have been taken up with various
important objectives to be realized. These are :
(1) The generation of Immediate Employment
Opportunities with relatively Low Investment.
(2) The promotion of more equitable distribution of
National Income.
(3) Effective mobilization of untapped Capital &
Human Skills.
(4) Dispersal of Manufacturing activities all over the
Country, leading to growth of Villages , Small Towns &
economically Backward Regions.
76
77. Therefore, the Govt of India as well as various State
Govts in the Country have started various programs &
evolved policies for the Development of Micro & Small
Enterprises in the Country.
Various measures taken by the Central & State
Govts for the development of Micro & Small Enterprises
have included Product Reservations, subsidies on fixed
capital investment, Sales Tax & Income Tax Concessions,
Preferential allocation of credit & interest subsidy,
extension of business & Govt purchases, Marketing
Assistance including Export Promotion by institutions such
as National Small Industries Corporation, Small Industries
Development Organization & several other agencies.
77
78. For the purpose of administration of India’s Micro & Small Enterprises have been
divided into Seven Groups as under into Traditional Sector & Modern Sector.
Traditional Sector :
1) Handicrafts.
2) Handlooms.
3) Khadi, Village & Cottage Industries.
4) Coir.
5) Sericulture.
78
79. Modern Sector :
6) Power Looms.
7) Residual Micro & Small Enterprises.
79
80. GOVERNMENTAL SUPPORT TO SMALL SCALE
ENTERPRISES :
Immediately after independence, Govt of India initiated various steps for
promotion & development of Small Scale & Cottage Industries. Govt of India has
attached great importance to the development of Small Enterprises Sector in all
the Five Year Plans since the beginning in 1951.
80
81. Details of the same are seen below :
The Plan Expenditure on Small Enterprises Sector has been continuously increasing.
In the First Five Year Plan (1951 – 56), Rs 48 Crores constituting 47.8 % of the Total
Plan Expenditure was spent in Small Scale Sector alone.
By the end of First Five Year Plan, there were Six Statutory Boards created to help the
Small Scale Sector.
81
82. These are :
a) All India Handloom Board.
b) All India Handicrafts Board.
c) All India Khadi & Village Industries Board.
d) Small Scale Industries Board.
e) Coir Board.
f) Central Silk Board.
82
83. The above Boards covered the entire field of Small Scale &
Cottage Industries.
Second Five Year Plan (1956 – 61) focused on dispersal of
Industries to all the regions in the Country. Accordingly, 60
Industrial Estates were established in different regions providing
various infrastructural facilities like Power, Water, Transport
etc., at one place. The total expenditure was 187 Crores.
The Third Five Year Plan (1961 – 66) stressed on extension of
Coverage of Small Scale Industries. The total expenditure on
Small Scale Sector was Rs. 248 Crores.
The Fourth Five Year Plan (1969 – 73) Small Scale Sector
witnessed significant Diversification & Expansion. By the end of
1973, as many as 346 Industrial Estates had been established &
Small Scale Sector provides employment to about 82,700
Persons.
83
84. The Fifth Five Year Plan (1974 – 78) outlay was Rs 611 Crores, whereas the actual
expenditure on Small Scale Sector amounted to Rs. 592 Crores.
During Sixth Five Year Plan (1980 – 1985), massive development programs were
initiated by the development of most promising Small – Scale Industrial Sector.
Expenditure occurred in this Plan was Rs. 1945 Crores exceeding the Outlay of Rs. 1780
Crores.
84
85. Some of the important programs implemented during Sixth Five Year Plan are as
under :
1) List of items reserved for exclusive production in Small Scale Industrial Sector increased
to 836.
2) 409 items were reserved for exclusive purchase from Small Scale Industries.
3) Provision of Consultancy Services in Technical , Managerial etc. thro SIDO (Small
Industries Development Organization).
85
86. 4) For providing necessary Technical Input to Rural Industries, Council for
Advancement of Rural Technology (CART) was established in October 1982.
By the end of 6th
Five Year Plan the Annual Production of SSI’s was Rs. 65,370
Crores, Exports touched Rs. 4557 Crores, employment reached to 31.5 Lakh Persons,
accounting for 80 % of the Total Industrial Employment next only to employment in
Agricultural Sector.
86
87. 7th
Five Year Plan (1985 – 90) gave a lot of
importance for Technology Up gradation to
increase Competitiveness of Small Scale
Industrial Sector. The actual expenditure
during Seventh Plan was Rs. 3249 Crores &
exceeded the plan outlay of Rs. 2753 Crores.
Due to this, various development programs, the
Small Scale Industrial Sector witnessed
significant development in all fronts. Employed
increased substantially from 96 Lakh persons
to 119.6 Lakh persons during the Seventh Plan
period.
87
88. The 8th
Five Year Plan (1992 – 1997) gave a lot of stress on Employment generation as
the motive force for economic growth. As a result the number of Small Scale Units
increased from 13.56 lakh to 18.27 Lakh. The value of Annual Production increased to
Rs. 91,681 Crores. The total expenditure in Eight Plan on Small Scale Sector was Rs. 6334
Crores.
88
89. Impact of Liberalization, Privatization & Globalization of Small
Enterprises :
The process of Liberalization & Economic Reforms , since
1991, have thrown up new challenges to the small enterprises
sector , simultaneously creating tremendous opportunities for
the growth of this sector.
In this changed scenario, building Competitive Strengths,
introducing Technology Up gradation & Quality Improvement
are important issues which need to be addressed in order to
build the capacity to withstand emerging pressures & ensure
sustained growth. Also small enterprises sector needs to reposition
itself if it has to meet the growing demands for ancillary items ,
subcontracting etc from other Medium & Large Enterprises ,
requiring higher standards of Quality, Economies of Scale & strict
delivery schedules.
89
90. Even before introduction of the Economic Reforms
in 1991, following the inevitable Globalization, the Small
Enterprises sector was somewhat overprotected. With
Liberalization & Globalization, they are now more
exposed to severe competition from Large Domestic
Private Enterprises & from Foreign & other MNC’s.
The problems of Small Enterprises in the Liberalized
Environment are many – Delay in Implementation of
Projects, Lack of Timely assistance of Finance & Credit
from the Financial Institutions, Marketing Problems, Lack
of Proper Infrastructural Facilities, Delay in receiving
payment against the goods sold, outdated technology, poor
quality of raw materials & consumables & lack of
managerial skills etc.
90
91. Now, World over the Business Environment is changing
fast. Globalization in terms of multilateral trade liberalization &
increasing Internationalization of Production, Distribution etc
has resulted in the opening up of markets, leading to keen
competition.
For instance, the WTO regulates multilateral trade
requiring its member countries to remove restrictions on Import
Quotas & reduce the Import Tariff. Accordingly, India was
asked to remove Quantitative restrictions on Imports by 2001, &
all export subsidies by 2003. As a result, all enterprises both Big
& Small Enterprises are facing severe competition in both
domestic & export markets. Further, 643 of the 812 items
reserved for MSME Sector , have been brought under OGL
(Open General License) list of Imports as on 1st
April 2001. This
has opened up stiff direct competition in the Domestic market
with the imports of high quality goods from member countries.
91
92. Competition in the domestic market has further intensified
with the arrival of MNC’s as the restrictions on Foreign Direct
Investment (FDI) have been removed. During, 1990 – 2000
period, many MNC’s in areas such as Automobiles, Electronics,
Information Technology & Telecommunication have entered the
Indian Market.
Many sectors which were over protected earlier & where
Large Government promoted Public Undertakings were only
involved, have been thrown open to the Private Sector by the
Government of India. As a result, many Indian & MNC’s have
such areas as Telecommunications, Infrastructural Development
Activities , establishment of International & National Airports ,
formation of Special Economic Zones (SEZs ) in specified areas
etc. Privatization has resulted in additional market potential for
Products / Services, of Small Enterprises Sector.
92
93. Thus, we can say that the with the New & Emerging
Industrial Scenario, MSME’s will have to be Competitive.
Govt is aware of these challenges & has been trying to
improve the Competitiveness thro various measures like :
a) Strengthen Existing Technological Facilities. It is
formulating a Scheme of assistance for Technology Up
gradation.
b) To improve access to Latest Technology, automation
of the ministry of MSME, has been taken up.
c) In order to facilitate adequate flow of Credit, a scheme
of Credit Guarantee has been launched. Measures have
been taken to improve Infrastructure Facilities & Promote
Marketing of Products etc.
93
94. EFFECT OF WTO / GATT ON
SMALL ENTERPRISES :
The Emerging Challenges to Micro & Small Enterprises
Sector are due to impact of the agreements under the WTO to
which India is a Signatory.
The setting up of WTO in 1995 has altered the Basic
structure of International Trade towards supportive, Market
Oriented Policies. This is in keeping with the Policy shift from
State Regulations / Interventions in economic Activity. This has
lead to an expansion in the Volume of International Trade &
Changes in the Pattern of Commodity Flows. The main outcome
of WTO stipulated requirements has been brought about thro a
gradual reduction in Export Subsidies, greater market access,
removal of Non Tariff Barriers, & reduction in Tariffs.
94
95. More stringent Patent Laws have been brought into
force thro regulation of Intellectual Property Rights (IPR)
under the Trade related aspects of the Intellectual Property
Rights (TRIPS) Agreement which stipulates the Products &
Processes which can be patented for what duration of time
(20 Years) & on what terms.
Because of WTO Agreement , there will be Large
Inflows of Imports in the Domestic Market , from around 3
% of Domestic Production to 5 %. The removal of
Quantitative Restrictions (QR’s) on Imports has been
speeded up & Imports of these items will soon be freed
from all restrictions in our EXIM Policy. (Export - Import
Policy.)
95
96. Increased Market Access under the WTO
requirements will also mean that our Small Enterprises
have a bigger World Market & can compete for Export
Markets in both Developed & Developing Countries. This
requires restructuring of our Small Enterprises to meet the
demands of Quality & Global Competitiveness for their
survival & growth.
Small Enterprises contribute about 54 % of the Non
Traditional & 10 % of Traditional Exports ( Together 35
% of the Total Exports ) of our Country. However, they
have to face Threats & also avail opportunities owing to the
WTO & its agreements.
96
97. The main Opportunities of WTO are classified as
under :
a) Firstly, most favored nation (MFN) treatment for
exportable items across the member countries all over the
World, with better Market Access thro the Internet .
b) Secondly, enlightened Entrepreneurs have greater
Opportunities to benefit from their Comparative
advantages due to lowering of Tariffs & removal of other
restrictions.
c) Finally, Enterprises that are in constant touch with
the Govt which in turn negotiates in their best interests in
the On Going dialogue with the WTO are going to benefit.
97
98. SUMMARY :
India has a Good Potential to become a
Superpower in the Service Sector, particularly
Information Technology (IT) enabled services.
India has already captured 25 % of World
Exports. However, they face challenges due to
competition by way of Cheap Imports from other
Countries due to Removal of Quantitative
Restrictions (QR’s) on Imports & Lowering of
Tariffs. Due to this, there is Stiff Competition for
both Small & Big Enterprises in both Domestic &
Export Markets.
98
99. In addition, the Open General License (OGL)
opens up the possibility of Direct Competition in
the Domestic Market with the Import of High
Quality Goods from developed Nations & Cheap
Products from Less Developed Countries. Also, the
entry of MNC’s has intensified Competition in the
Domestic Market. Also, these Enterprises are
finding it extremely difficult to compete due to
certain inherent problems like Poor Quality of
Goods, Costly Credit, not so well developed
Infrastructure, Traditional Technology, Strict
Labor Laws, Lack of Information & International
Exposure & ineffective Small Enterprises
association.
99
100. However, the WTO Agreements suggests ways by which some of the adverse
consequences could be neutralized. Some of them are inbuilt safety mechanisms like Anti
Dumping & such other measures. Also WTO prevents subsidies which directly affects the
Competition of the Product , it helps activities of Common Interest which act indirectly
act as Subsidy to the Small Enterprises.
100
101. SUPPORTING INSTITUTIONS /
AGENCIES OF GOVT FOR SMALL
ENTERPRISES :
Need for Institutional Support :
Small Enterprises are playing a Very Vital Role in Economic
Development of the Country by contributing to increased Production,
increased employment generation, contributing to nearly 40 % of our
Country’s Exports thereby help earning Important Foreign Exchange
for the Country & finally giving substantial revenue to both Central &
State Govts by way of Direct & Indirect Taxes.
Therefore, Small Scale Enterprises Sector needs a lot of
support & encouragement for its rapid growth from both Central &
State Govts. Setting up of Small Enterprise requires Infrastructural
Facilities & Financial Support as Entrepreneur on his own cannot
arrange all these requirements. Entrepreneur also requires support for
marketing his Product (s) / Service (s) , he requires Technological
Inputs & also ED Training, therefore, a strong Governmental
Institutional Network is reqd. 101
102. The Governmental Institutional Support Network can be broadly be classified into
Two Categories as under :
a) Central Level Institutions / Agencies.
b) State Level Institutions / Agencies.
List of these support organizations & salient features of these support organizations is
given below :
102
103. A) CENTRAL LEVEL SUPPORT
INSTITUTIONS / AGENCIES :
Important Central Level Support Agencies
for Promotion & Development of Small Scale
Enterprises are as under :
1) Development Commissioner, Micro, Small &
Medium Enterprises (DC – MSME) under the
Central Ministry of Micro, Small & Medium
Enterprises in which Ministry of Agro & Rural
Industries has also been merged.
2) National Board for Micro, Small & Medium
Enterprises (NBMSME).
103
104. 3) Small Industries Development Organization (SIDO).
4) National Small Industries Corporation (NSIC).
5) Small Industries Development Bank of India (SIDBI).
6) Khadi & Village Industries Commission (KVIC).
7) National Science & Technology Entrepreneurship Development
Board (NSTEDB).
8) National Productivity Council (NPC).
9) National Institute for Small Industry Extension & Training
(NISIET).
10) National Institute for Entrepreneurship & Small Business
Development (NIESBUD).
11) Indian Institute of Entrepreneurship (IIE).
12) Entrepreneurship Development Institute of India (EDII).
13) National Bank for Agricultural & Rural Development (NABARD).
14) Council of Scientific & Industrial Research (CSIR).
104
105. KHADI & VILLAGE INDUSTRIES
COMMISSION (KVIC) :
This is a Statutory Body created by an act of the Parliament in 1956. It is
concerned with Planning, Promotion, Organization, & Implementation of the
Programme for the Development of Khadi & other Village Industries in the
Rural Areas in Coordination with other agencies engaged in Rural Development
whenever necessary. The Various Functions are :
105
106. Build up a Reserve of Raw Materials & implements for
supply to rural industries.
Create common service facilities for converting Raw
Materials into Semi Finished goods to be used as inputs by the
Rural Industries.
To market the Products of KVIC.
To Organize Training of Artisans engaged in Rural
Industries & to encourage Co-operative efforts amongst them.
To Provide Financial Assistance to Institutions or Persons
engaged in the Development & Operation of Khadi & Village
Industries.
To Provide necessary Technical Information & Guidance
thro supply of Designs & Prototypes etc. to Khadi & Village
Industries.
106
107. NATIONAL PRODUCTIVITY COUNCIL
(NPC) :
This is an Autonomous Institution functioning under the Overall Supervision
of the Ministry of Industry, Govt of India. Its Head Office is at New Delhi. It has
got Regional Directorates at almost all the State Capitals. Its Primary Objective
is to Act as a Catalyst in enhancing the Productivity of all the Sectors of the
Economy , including Industry & Agriculture.
107
108. The Main Activities of NPC is to provide
Consultancy & Training in Various areas related to
Industrial Engineering , Plant Engineering, Energy
Management, Human Resources Development,
Informal Sector etc. about 200 Professionals
specialized in various fields work under NPC.
In order to provide expertise of NPC to Small
Scale & Informal Sector. SIDBI has entered into a tie
up with NPC. The Collaboration aims at promoting
the concept of productivity in Small Industry Clusters
& improving the Technology Level of Small
Enterprises.
108
109. INDIAN INSTITUTE OF
ENTREPRENEURSHIP (IIE) :
IIE was established in the year 1993 as an Autonomous
National Institute at Guwahati by the Ministry of Industry,
(Now , Ministry of MSME), Govt of India. The Institute started
its Operations from April 1994 with NEC (North East Council) ,
India. The Main Objectives are :
1) To Organize & Conduct Training for Entrepreneurship
Development.
2) To Conduct Training Program for the Functionaries of the
Govt & Non Governmental Organizations engaged in promoting
Entrepreneurship.
3) To identify, Design & Conduct Training Programmes for
the existing Entrepreneurships.
109
110. 4) To Act as a Catalyst for the Development of Self Employment / Entrepreneurship ,
Enterprise / Business.
5) To Organize Workshops, Seminars etc. for the Promotion of Entrepreneurship.
110
111. B) STATE LEVEL SUPPORT
INSTITUTIONS / AGENCIES :
This is done for the Promotion & Development of
Small Scale Enterprises are as under :
1) Directorate of Industries & Commerce (DI & C).
2) District Industries Centers (DICs).
3) State Financial Corporation , in Karnataka it is
called as KSFC.
4) KSSIDC.
5) KIADB.
6) TECSOK (Technical Consultancy Services
Organization of Karnataka).
7) Centre for Entrepreneurship Development of
Karnataka (CEDOK).
111
112. 8) Karnataka State Industrial Investment & Development
Corporation (KSIIDC).
9) Council for Technological Up gradation. In Karnataka
State it is named as Karnataka Council for Technological Up
gradation (KCTU).
Directorate of Industries & Commerce (DI & C) :
At the State Level, the Commissioner / Director of
Industries & Commerce implements Policies for the
Promotion & Development of MSME & Large Scale
Enterprises. The Central Policies for the MSME Sector serve
as guidelines but each State evolves its own Policy &
Package of Incentives. The Commissioner / Director of
Industries & Commerce in all the States & UTs , oversee the
Activities of Field Offices, that is, the District Industries
Centers (DICs) at the District Level.
Reference is taken from google.com
and other online resources.
112