MICRO PROJECT ON

“Prepare Report On Study Of Management Principles Applied

To A Small Scale Industry.”
Course: Management
Course Code: 22509
Academic Year: 2021-2022
Semester: 5I
NAME ROLL No. ENROLLMENT No.
Ayush Kshirsagar 2031 1901410298

Name of Micro Project Guide: Mr. M. S. Bhave.

All India Shri Shivaji Memorial Society’s Polytechnic

Kennedy Road, Near RTO, Pune-411001

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 Institute Code: 0141

CERTIFICATE
Certified that this micro project report titled is the “Prepare Report on Study Of

Management Principles Applied to a Small Scale Industry.” bonafide work of Ms.

Ayush Kshirsagar Roll no. 2031 of Third year diploma in Mechanical engineering for

the course: Management Course code: 22566 during the academic year 2021-22, who

carried out the micro project work under my supervision.

Mr. M. S. Bhave.

Name & Signature

Subject teacher

Acknowledgement

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 I would like to express my special thanks to my teacher Mr. M. S. Bhave &
signature course teacher as well as our principal Mr. S. K. Giram who gave me the
opportunity to do this project on the topic “Prepare Report on Study of Management
Principles Applied to a Small Scale Industry .” helped me in doing a lot of research.
Secondly I would like to thank to my friends who helped me a lot in finalizing the
project within a limited period.

Mr. M. S. Bhave.

Name & Signature

Subject teacher

INDEX

Sr. No. Content Page No.

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 1. Micro Project Proposal 6

2. Rationale 8

3. Aims/Benefits of the Micro Project 6

4. Course Outcome achieved 8

5. Literature Review 8

6. Actual Methodology Followed 8

7. Actual Resources Used 9

8. Output of the Micro Projects 10

9. Skill Developed / Learning outcome of the Micro Project 10

10. Applications of the Micro Project 16

ANNEXURE I

Micro Project Proposal

“Prepare Report On Study Of Management Principles Applied To A Small Scale
Industry.”
1.0 Aims/Benefit of the Micro Project (Minimum 30-50 Words):
Report On Study Of Management Principles Applied To A Small Scale Industry.”

2.0 Course Outcomes Addressed:

C22509.a. Use basic management principle to execute competency.
C22509.b. Understand various provisions of industrial acts.

3.0 Proposed Methodology

(Procedure that will be followed to do the micro project- in about 100-200 words):
1. Finalize the topic
2. Find and Collect information
3. Arrange information
4. Proof read the information
5. Review from the teacher
6. Edit project report as per the suggestions of the teacher
7. Proofread and finalize the report
8. Submission of the report

4.0 Action Plan:

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Sr. Planned Planned Name of Responsible
Detail of Activity
No. Start date Finish Date Team Members
1. Finalize the topic 29.11.2021 30.11.2021 Ayush Kshirsagar
Ayush Kshirsagar
2. Find and Collect information 02.12.2021 04.12.2021

3. Arrange information 05.12.2021 7.12.2021 Ayush Kshirsagar

4. Proofread the information 8.12.2021 008.12.2021 Ayush Kshirsagar

5. Review from the teacher 09.12.2021 10.12.2021 Ayush Kshirsagar

Edit project report as per the
6. 11.12.2021 11.12.2021 Ayush Kshirsagar
suggestions of the teacher
7. Proofread and finalize the report 12.12.2021 12.12.2021 Ayush Kshirsagar

8. Submission of the micro project 13.10.2021 14.12.2021 Ayush Kshirsagar

5.0 Resource Required:

Name of
Sr. No. Specification Qty. Remark
Resource/Material
To collect the information about
1. Internet hydroelectric power plant. 1

2. Computer To make report 1

To take printout of micro project

3. Printing machine report 1

4. Book To Collect information 1

Name of Team Members with Roll No’s:

Sr. No Name of Students Roll No

1 Ayush Kshirsagar 2031

Mr. M. S. Bhave.

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 Name & Signature
Subject teacher

ANNEXURE - II

Micro Project Report

“Prepare Report on Study of Management Principles Applied To a Small Scale
Industry”

1.0 Rationale: Essentially the small scale industries are generally comprised of those industries
which manufacture, produce and render services with the help of small machines and less
manpower. These enterprises must fall under the guidelines, set by the Government of India.
The SSI’s are the lifeline of the economy, especially in developing countries like India. These
industries are generally labor-intensive, and hence they play an important role in the creation
of employment. SSI’s are a crucial sector of the economy both from a financial and social
point of view, as they help with the per capita income and resource utilization in the economy.

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2. 0 Aims/Benefits of the Micro Project:
The project entitled “Study of Management Principles Applied to A Large Scale Industries” is
aimed at providing knowledge of various types of principles applied to a large small scale industries.
3.0 Course Outcomes Achieve:

C22509.a. Use basic management principle to execute competency

C22509.b. Understand various provisions of industrial acts.

2.0 Literature Review:

Industrial Engineering and management – by Dr. O. P. Khanna

https://www.businessmanagementideas.com/project-report/small-scale-industries-
projectreport/project-report-on-small-scale-industries-ssi/5955

www.wikipedia

https://www.researchgate.net/publication/319752102_Some_study_on_need_for_L6s_in_small_scale
_industries

5.0 Actual Methodology Followed

(Write stepwise work done, data collected and its analysis (if any). The contribution of
individual member may also be noted.) :

Sr. No./
Date Time Work Done
Hour

1. 29.12.2021 5.00pm-6.00pm Finalized the topic for micro-project

Started collect information for micro
2. 5.30pm-6.30pm
30.12.2021 project
To find information with the help of
3. 01.12.2021 7.00pm-8.00pm
different resources.
To make changes in the collected
4. 02.12.2021 6.30pm-7.30pm
information.

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 5. 03.12.2021 8.30pm-9.30pm Started making report
Done with arranging information in
6. 04.12.2021 7.15pm-8.15pm
report.
7. 05.12.2021 6.15pm-7.15pm Proof read the report.

8. 06.12.2021 4.30pm-5.30pm Reviewed the report from teacher

Made the changes as per teacher
9. 07.12.2021 12.15pm-12.45pm
suggestion
Proofread and finalize the report after
10. 08.12.2021 5.30pm-6.30pm
making changes in report
11. 11.12.2021 7.15pm-8.15pm Submitted the micro-project

3.0 Actual Resource Required:

Sr. Name of
Specification Qty. Remark
No. Resource/Material
1. Internet To collect information. 1

2. Computer To make report. 1

3. Printing Machine To take printout. 1

4.0 Outputs of the Micro project (Presentation of data, findings, drawing etc.):

Introduction to Small Scale Industries (SSI):

The small enterprise is a logical step forward in the development process of businesses from the level
of the enterprising artisan to that of a very large enterprise. The small enterprises include the areas
other than those of manufacturing, such as agriculture, trade and service industries. Small enterprises
play a vital role in the Indian economy.

There is a rapid growth in the services sector of economy due to development of small enterprises,
particularly in the areas of trade, transport, construction and other ancillary services. One of the main

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reasons for their rapid growth is that, they have been left entirely to the private entrepreneurs, which
are comparatively free from the government interference.

Since about one-third of the gross manufacturing output is from the small industry sector, it is
necessary to extend due attention for this sector while formulating growth promotion strategies. Such
strategies may improve global competitiveness.

One of the most important reasons for the success of small enterprises is the interest and motivation of
the entrepreneurs, whereas large industries do not provide enough room for experimentation and
innovation by the creative people because of “Small scale industry” is an industry, investment of
which does not exceed Rs. 300 lakhs (Rs. 300 lakhs in case of ancillary industrial units also) in plants
and machinery, irrespective of the number of persons employed. Generally, these industries employ
10 to 50 persons rage hierarchical organisation structure.

2. Definitions of Small Scale Industries (SSI):

“Ancillary industries” are those small scale industries which are engaged in:
The manufacture of parts, components, sub-assemblies and tooling etc. for supply against known or
anticipated demand of one or more large industries.

“Cottage Industries” according to Fiscal Commission, are the industries which are run by the numbers
of the family either for full time or for part time.

According to “Mumbai Economic and Industrial Investigation Committee” cottage industries are those
industries, which do not use modern power and engage a maximum of 9 persons.

Tiny Units:
Tiny industry is one in which investment in plant and machinery does not exceed Rs. 25 lakhs and it
should be located in towns with population less than 50,000. (This locational limitation has now been
dispensed with).

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In the definition of small scale industry, the value of plant and machinery includes the investment
made in productive plant and machinery. In calculating the value of plant and machinery, the actual
payment made by the owner, irrespective of whether the plant and machinery is old or new, will be
taken into account.

The cost of consumable stores and the cost of installation of plant and machinery will not be taken
into account. The cost of consumable stores and the cost of installation of plant and machinery will
not be taken into account in calculating the value of plant and machinery.

Similarly, cost of generating sets, extra transformers, bank and service charges etc., are not taken into
account in calculating the cost of plant and machinery.

3. Role of Small Scale Industries:

The contribution of this sector is considerable to the Indian economy. About 2.4 million units are
providing employment to over 14 million people, and contributing over a third of the overall gross
output of the manufacturing sector. Output from small enterprises now stands at Rs. 236,500 crores
and is growing at a rate of about 8% per annum. This sector is also contributing about a third of
country’s exports.

Today Central and State governments are providing all types of help of the interested persons to solve
their problems including money problems. These play a dynamic role in accelerating the rate of
industrial growth and attaining economic prosperity of a developing nation. Therefore, in a
developing country like India, small industries are of much importance for building up of national
economy.

Characteristics of SSI

Ownership

SSI’s generally are under single ownership. So it can either be a sole proprietorship or sometimes a
partnership.

Management

Generally, both the management and the control is with the owner/owners. Hence the owner is
actively involved in the day-to-day activities of the business.

Labor Intensive

SSI’s dependence on technology is pretty limited. Hence they tend to use labour and manpower for
their production activities.

Flexibility

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SSI’s are more adaptable to their changing business environment. So in case of amendments or
unexpected developments, they are flexible enough to adapt and carry on, unlike large industries.

Limited Reach

Small scale industries have a restricted zone of operations. Hence, they can meet their local and
regional demand.

Resources utilisation

They use local and readily available resources which helps the economy fully utilise natural resources
with minimum wastage.

Role in the Indian Economy

Employment

SSI’s are a major source of employment for developing countries like India. Because of the limited
technology and resource availability, they tend to use labour and manpower for their production
activities.

Total Production

These enterprises account for almost 40% of the total production of goods and services in India. They
are one of the main reasons for the growth and strengthening of the economy.

Make in India

SSI’s are the best examples for the Make in India initiative. They focus on the mission to
manufacture in India and sell the products worldwide. This also helps create more demands from all
over the world.

Export contribution

India’s export industry majorly relies on these small industries for their growth and development.
Nearly half of the goods that are exported from India are manufactured or produced by these
industries.

Public Welfare

These industries have an opportunity to earn wealth and create employment. SSI’s are also important
for the social growth and development of our country.

Objectives of SSI

The objectives of the small scale industries are:

 To create more employment opportunities.

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  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.

Registration of SSI

SSI registration is a registration provided by the Ministry of MSME. A business should obtain SSI
registration in order to be eligible for a number of schemes, subsidies and other incentives provided
by the Government to such SSI’s. SSI registration can be obtained online too.

Overview of SSI Registration

SSI registration is provided by the Ministry of Micro, Small and Medium Enterprises (MSME)
through the Directorate of Industries of the State Government. The main logic behind the SSI
registration is to set up new SSI businesses in India. SSI registration helps the business to be eligible
for a number of subsidies given by the Government. We can also get SSI/MSME registration online
through Udyam Registration. Let’s look at the process of SSI/MSME registration online:

 Visit the Udaym Registration portal and click on the “For New Entrepreneurs who are not
Registered yet as MSME or those with EM-II”.

 Fill in your “Aadhaar Number” and “Name of the Entrepreneur” and click on the “Validate
and Generate OTP” button.

 You will receive OTP to your mobile number. Enter OPT on the PAN verification page will
open. Enter PAN details and click on the “Validate PAN” button.

 The Udyam Registration page will open. Fill in all the personal details and industry details
such as industry name, address, bank account details and some common information and click
on the “Submit and Get Final OTP” button.

 With this the MSME registration is complete and a message of successful registration with a
reference number will appear. After verification of registration, the MSME Registration
Certificate is issued.

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If a person wants to get registration for more than one industry then also he/she can opt for an
individual SSI registration. The documents required for the SSI registration are the Aadhar number
and PAN number. No registration fees are required for the registration.

Eligibility Criteria for SSI Registration

SSI registration can be obtained for enterprises that are considered as micro and small enterprises
under the MSME Act, 2006.

A micro enterprise is an enterprise whose investment in plant, machinery and equipment does not
exceed Rs.1 crore, and turnover does not exceed Rs.5 crore.

A small enterprise is an enterprise whose investment in plant, machinery and equipment does not
exceed Rs.10 crore, and turnover does not exceed Rs.50 crore.

Benefits of obtaining SSI Registration

 There are various tax rebates offered to SSI’s.

 A credit for Minimum Alternate Tax (MAT) is allowed to be carried forward for up to 15
years instead of 10 years.

 There are many government tenders that are only open to the SSI.
They get easy access to credit.

 Once registered the cost of acquiring a patent, or the cost of setting up the industry reduces as
many rebates and concessions are available.

 Business registered as SSI are given higher preference for government license and
certification.

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The Planning Commission observed that these industries can play the following important roles
in accelerating the rate of industrial growth and economic prosperity:
(a) These create immediate and permanent employment on a large scale at relatively small capital
cost.

(b) These can immediately meet a substantial part of the increased demand for consumer goods and
simple producer’s goods.

(c) These offer a good method of ensuring more equitable distribution of national income.

(d) These help for growing into an efficient and progressive decentralised sector of economy.

(e) These provide more opportunities of work and income.

In this regard once Dr. Shyma Prasad Mukerjee the then Minister of Industries said, “If we really
want to tackle the grave problem of unemployment that faces the country today, we can do so
not only by having large scale industries in different parts of the country but also by regional
planning of small scale and medium sized industries in different areas”.

4. Industrial Policy Regarding SSI:

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Development of small scale industry is primarily the responsibility of the State Governments.
However, the Central Government is very active in helping the state activities in the fields in which
they are less developed.

The Industrial Policy Resolution 1956 shows more importance to the role of small scale industries in
the industrial development of the country. This new policy was declared on 30th April, 1956 to take
place of the industrial policy of 1948.

The aim of this new industrial policy was: (i)

To speed up the economic growth.

(ii) Rapid Industrialisation.

(iii) To frame progressive co-operative sector.

(iv) To reduce social and economical imbalances.

(v) To reduce the concentration of economic power.

Salient Features of the Industrial Policy of 1956 (Revised in Aug. 1991):

It stressed for the following objects: (i)
To establish a socialistic society.

(ii) To increase the rate of economic development by rapid industrialisation.

(iii) To develop large industries and machine manufacturing industries.

(iv) To develop public sector industries.

(v) To form large co-operative sector.

(vi) To check monopoly and the concentration of the economic power.

(vii) To reduce the imbalance of income and property.

(b) Importance:
It stressed on the importance of the cottage and small scale industries because these industries provide
immediate opportunities for employment, distribute national income in a better way.

These industries should be encouraged in the following ways:

(i) By introducing taxes on the production of big industries.

(ii) By helping small scale industries.

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(iii) Small scale industries should be self-supported.

(iv) By improving the method of manufacture and by providing technical assistance (v) By supplying

electricity at cheaper rate.

(c) Facilities:
It also stressed for providing the transport and power facilities in the industrial backward areas to
reduce the regional disparity.

(d) For industrial peace, it stressed for improving the conditions of labourers so that their working
capacity may increase by providing incentives to them. It also stressed for allowing labourers
and experts to take part in the management. 5. Organisations for Assistance to SSI:
To fulfill the various objectives of Small Scale Industries programmes, various organisations have
been setup both at the Central and State level. Although the development of the small scale industries
is the responsibility of the State Governments, various issues regarding programme of development
of small scale industries having all India character are tackled at the central level. Thus the
Government of India takes the responsibility of planning and coordinating the basic programme of
development of small scale industries.

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A. Organisations at the Central Level:
Following are some of the important organisations at central level:
1. All India Small Scale Industries Board:
This board was set-up in 1945 and is responsible of overall planning, coordinating and
development of small scale industries in the country. The board comprises the State and Central
Government officers, representatives of various institutions, financing bodies and a number of non-
officials representing trade.

It deals with the questions relating to the supply of raw materials, credit facilities and reviews, the
programmes of implementation and formulates new directives for further growth of small scale
sector.

Preparation of Model Schemes for SSI:

For all the items which are reserved for small scale industries and all other items which can be
profitably sold, if produced by small units “Model Schemes” are prepared, several model schemes
have already been prepared and are available with the State Director of Small Industries Service

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Institute and Publications Division, Government of India, Delhi-110006. These are also published and
made available by the Directorate of Industries and Civil Supplies of different States.

Model schemes are prepared with the object of installing an economic unit with minimum
investment. Whosoever is coming forward to establish small industries, may find it difficult to have
ready idea of anticipated investment on machinery and equipment, raw-materials and other
expenditures in certain industries.

Therefore, model schemes are made available to serve this purpose. These may provide pattern for
adaptation in the light of available resources and circumstances and serve as “Guiding Lines”. Model
schemes are revised from time to time in the light of further experience and suggestions from experts
in the field.
Generally, a model scheme provides the following information:
1. Introduction: Scope of product.

2. Non-recurring expenditure.

(a) Land and Building.

(b) Machinery and equipment.

3. Recurring expenditure.

(a) Staff and labour.

(b) Raw materials for one month

4. Other expenditure per month, such as packing, advertising, stamping, electricity, water, labour,
welfare, recreation etc.

5. Working capital, Total production cost/month. Percentage profit approximately.

6. List of machinery manufacturers’ and suppliers’ of raw materials, office equipment etc.

Modernisation Programme for SSI:

Modernisation programme is necessary for achieving overall production efficiency and keep the small
scale industries abreast with the latest information on production, processes, product designs,
technological developments, training facilities. For motivating the SSIs to modernise their units,
seminars, workshops are organised under this programme.

The main objectives of the modernisation programme are:

1. Improvement in production technology.

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2. Product development and design.

3. Testing design and quality control.

4. Installation of modern machinery and equipment.

5. Application of modern management techniques.

These measures help in increasing the profits by installing new equipment so that production
increases per employee and per unit of investment. IDBI is providing concessional finance to units
following the modernisation scheme. Industrial Finance Corporation of India also operates a scheme
of subsidy for encouraging modernisation of tiny, small scale and ancillary units.

8. Advantages of Small Scale Industries:

1. It provides better and quick employment.

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2. It is labour intensive and capital saving.

3. With small investment production can be easily and quickly started.

4. Highly sophisticated machines and modern technology is not needed.

5. It attracts small savings and diverts them into productive channels.

6. It provides economic development by rapid industrialisation.

7. It provides check on monopoly.

8. It reduces imbalance of income and property.

9. Market Survey for SSI:

The aim of market survey is to find out all the relevant economic and social facts about the markets in
which manufacturer’s goods will be sold. In market survey, investigation about the product demand,
design and cost of production is made. An owner always wants that his money should be utilized to
the best possible extent.

For this reason planners must survey the market conditions, where the customers are in need of that
product, whether the demand is continuous or intermittent. The next important factor a planner should
consider is to see that whether similar products are being produced by- some other manufacturers or
not and whether he will be able to complete them as regards quality and cost is concerned.

As size of industry is related with the consumption of product therefore, this fact must be considered
while deciding the capacity of plants and machinery.

The following points are of utmost importance while making market survey:
1. Demand for products in the market.

2. Selling method to be adopted.

3. Possible new markets for the products.

4. Comments of consumers about the product.

5. To see that existing size, quality and design suit the customers or not.

Principal Of SSI:

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The principles of management provide the managers with useful insights into real world situations.
Adherence to these principles will add to their knowledge, ability and understanding of managerial
situations and circumstances. It will also enable managers to learn from past mistakes and conserve
time by solving recurring problems quickly. As managerial discretion is bounded by the principle of
contribution to organizational objectives. (ii) Scientific decisions: Decisions must be based on facts,
thoughtful and justifiable in terms of the intended purposes. They must be timely, realistic and
subject to measurement and evaluation. Management principles help in thoughtful decision-making.
They emphasize logic rather than blind faith. Management decisions taken on the basis of principles
are free from bias and prejudice. They are based on the objective assessment of the situation

1. Honor the language and spirit of law of every nation and undertake open and fair corporate
activities to be a good corporate citizen around the world.

2. Respect the culture and customs of every nation and contribute to economic and social
development through corporate activities in local communities.

3. To provide clean and safe products and to enhance the quality of life everywhere.

4. Create and develop advanced technologies and provide outstanding products and services that
fulfill the needs of customers worldwide.

7.0 Skill developed / Learning outcome of the Micro-Project:

a)To complete work in time.

b) To learn new things.
c) To prepare report.
d) How to collect and edit information to make report

e) Priorities of work.

4.0 Applications of the Micro-Project:

We Use basic management principles to execute daily activities.

We Use principles of planning and organizing for accomplishment of tasks.

Essentially the small scale industries are generally comprised of those industries which manufacture,
produce and render services with the help of small machines and less manpower. These enterprises
must fall under the guidelines, set by the Government of India.

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The SSI’s are the lifeline of the economy, especially in developing countries like India. These
industries are generally labour-intensive, and hence they play an important role in the creation of
employment. SSI’s are a crucial sector of the economy both from a financial and social point of view,
as they help with the per capita income and resource utilisation in the economy.

Examples and Ideas of Small Scale Industries:

 Bakeries

 School stationeries

 Water bottles

 Leather belt

 Small toys

 Paper Bags

 Photography

 Beauty parlours

Small scale industries 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. ... The industry is a sector in which the production of goods is a segment of the economy.

Mr. M. S. Bhave
(Name and Signature of faculty)

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