small business

1. SMALL
SCALE AND
MEDIUM
ENTERPRISE
S

2. What is Micro, Small and Medium Scale
Enterprises?
• As per the provision of Micro, Small and Medium Enterprises Development (MSMED)
Act, 2006 - the Micro, Small and Medium Enterprises (MSME) are classified into two
categories namely.
• 1. Manufacturing Enterprises - The enterprises engaged in manufacture or production
of goods relating to any industry specified in the first schedule to the industries
(Development and Regulation) Act of 1951). or
• Employing plant and machinery in the process of value addition to the final product
having a distinct name or character or use.
• The manufacturing enterprise is defined in terms of investment in plant and
machinery.

3. • 2. Service Enterprises - Enterprises engaged in providing or
rendering of services are defined in terms of investment in
equipment.

4. Classification Of Micro, Small And Medium Scale
Enterprises
• Enterprises can take the form of company or proprietorship or co-
operative or association of persons or Hindu Undivided Family or
Partnership etc.
• The definition is not limited to the number of people employed by
the firm nor the electricity consumed as was the case in the past.
• The micro, small and medium enterprises are categorized based on
the investment in plant and machinery, as mentioned below:

5. • Manufacturing Sector Enterprises Investment in plant and
machinery
• Micro Enterprises - Does not exceed rupees 25 lakh
• Small Enterprises - More than rupees 25 lakh but does not
exceed rupees 5 crore
• Medium Enterprises - More than rupees 5 crores but does not
exceed rupees 10 crore

6. • Service Sector Enterprises Investment in equipment
• Micro Enterprises - Does not exceed rupees 10 lakh
• Small Enterprises - More than rupees 10 lakh but does not
exceed rupees 2 crore
• Medium Enterprises - More than rupees 2 crores but does not
exceed rupees 5 crore

7. Industry Groups :
• There are substantial industry groups in small scale sector in India, ranging
from food products, metal products, rubber and plastic products, hosiery and
garments - wood products, paper products and printing, leather and leather
products, transport equipment and parts, cotton textiles and so on to name a
few.
• The small scale sector in India has emerged as a significant supplier for items
like plastic and rubber goods, leather and leather goods, domestic utensils,
stationery items - soaps and detergents, toothpaste and powder, preserved
foods and vegetables, safety matches and so on.

8. Small Scale Industries
• Small scale industries (SSI) are those industries in
which manufacturing, providing services, productions are done on
a small scale or micro scale.
• For example, Napkins, tissues, chocolates, toothpick, water
bottles, small toys, papers, pens.
• These industries do a one-time investment in machinery, plants,
and industries which could be on an ownership basis,
hire purchase or lease basis. But it does not exceed Rs. 1 Crore.

9. • Small Scale Industry comprise of small enterprises who manufacture goods or
services with the help of relatively smaller machines and a few workers and
employees.
• The enterprise must fall under the guidelines set by the Government of India.
• At the time being such limits are as follows,
• For Manufacturing Units for Goods: Investment in plant and machinery must
be between 25 lakhs and five crores.
• For Service Providers: Investment in machinery must be between 10 lakhs and
two crores.

10. Examples and Ideas of Small Scale Industries
• Bakeries
• School stationeries
• Water bottles
• Leather belt
• Small toys
• Paper Bags
• Photography
• Beauty parlours

11. Characteristics of SSI
• Ownership
• Management
• Labor Intensive
• Flexibility
• Limited Reach
• Resource utilization

12. Role in the Indian economy
• Employment
• Total Production
• Make in India
• Export contribution
• Public Welfare

13. Objectives of SSI
• To create more employment opportunities.
• To help develop the rural and less developed regions of the economy.
• To reduce regional imbalances.
• To ensure optimum utilisation of unexploited resources of the country.
• To improve the standard of living of people.
• To ensure equal distribution of income and wealth.
• To solve the unemployment problem.
• To attain self-reliance.
• To adopt the latest technology aimed at producing better quality products at
lower costs.