The document defines micro, small, and medium enterprises in India based on investment levels in plant and machinery for manufacturing enterprises and equipment for service enterprises. Small-scale industries are important for increasing employment and economic development in India through urban and rural growth. They play a key role through employment generation, resource mobilization, equitable income distribution, and supporting large industries. However, small industries also face problems like poor capacity utilization, lack of financing, raw materials shortages, and more.

1. Small-Scale Industries

2. Definitions
 In accordance with the provision of Micro,
Small & Medium Enterprises Development
(MSMED) Act, 2006 the Micro, Small and
Medium Enterprises (MSME) are classified in
two Classes:

3.  Manufacturing Enterprises-
Enterprises engaged in the manufacture or production of goods
pertaining to any industry specified in the first schedule to the
industries (Development and regulation) Act, 1951) or employing
plant and machinery in the process of value addition to the final
product having a distinct name or character or use. The
Manufacturing Enterprise are defined in terms of investment in
Plant & Machinery.
 Service Enterprises:-The enterprises engaged in providing or
rendering of services and are defined in terms of investment in
equipment..

4. Limit for investment in
equipment
Manufacturing Sector
Enterprises Investment in plant & machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but
does not exceed five crore rupees
Medium Enterprises More than five crore rupees but does not
exceed ten crore rupees
Service Sector
Enterprises Investment in equipments
Micro Enterprises Does not exceed ten lakh rupees:
Small Enterprises More than ten lakh rupees but does not
exceed two crore rupees
Medium Enterprises More than two crore rupees but does
not exceed five core rupees

5.  SSI are important because it helps in
increasing employment and economic
development of India. It improves the growth
of the country by increasing urban and rural
growth.
 Small scale manufacturing industries and
cottage industries play a very important role
in the economic development of India.

6. Types of Small-Scale
Industries
 Manufacturing industries
 Feeder industries
 Serving industries
 Ancillary to large industries
 Mining or quarrying

7. Characteristics of Small-
Scale Industries
 Ownership
 Management and control
 Area of operation
 Technology
 Gestation period
 Flexibility
 Resources
 Dispersal of units

8. Objectives of Small Scale
Industries
 1.To create more employment opportunities with less investment.
 2. To remove economic backwardness of rural and less developed
regions of the economy.
 3.To reduce regional imbalances.
 4. To mobilise and ensure optimum utilisation of unexploited
resources of the country.
 5.To improve standard of living of people.
 6.To ensure equitable distribution of income and wealth.
 7.To solve unemployment problem.
 8.To attain self-reliance.
 9. To adopt latest technology aimed at producing better quality
products at lower costs.

9. Role and Importance of Small
Scale Industry in India
 Employment generation
 Mobilisation of resources and entrepreneurial
skill
 Equitable distribution of income
 Regional dispersal of industries
 Provides opportunities for development of
technology
 Indigenization
 Promotes exports
 Supports the growth of large industries
 Better industrial relations

10. Relationship Between Small &
Large Units
 Supplementary
 Complementary
 Initiative
 Servicing

11. Rationale of Small-Scale
Industry Development in
India
(1) Employment argument
(2) Equality argument
(3) Decentralization argument
(4) Latent resources

12. Problems of Small-Scale
Industries
1. Poor capacity utilization
2. Incompetent management
3. Inadequate Finance
4. Raw material shortages
5. Lack of marketing support
6. Problem of working capital
7. Problems in Export
8. Lack of technology up-gradation
9. Multiplicity of labor laws

13. 10. Inability to meet environmental standards
11. Delayed payments
12. Poor industrial relations
13. Strain on government finances
14. Concentration of industrial units
15. Inadequate dispersal
16.Widespread sickness
17. Lack of awareness
18. Government interference