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Nitin Tiwari Nishant Jain Neha Jain Om Prakash Dubey Pankaj Bharti
Meaning Of SSI Definitions Of SSI SWOT Of SSI Growth Of SSI Significance Of SSI Facilities Problems And Remedials Small Sector Industry Policy Conclusion
Small Scale Industries have a place of pride in our economy . They have a high potential among others for generating employment , dispersal to semi-urban and rural areas , promoting entrepreneurship and earning foreign exchange. SSI are defined in three ways.
Conventional Definition Of SSI
Cottage and Handicraft industries. Traditional labour Intensive methods Traditional products For example :- Handloom Textile Industry
Operational Definition Of SSI
The operational definition of SSI Unit relates to the Investment in fixed assets . Classified in three categories :a) Micro - >= Rs. 10 lac b) Small - < Rs. 10 lac > 2 Crore c) Medium - < 2 Crore > 5 Crore (Manufacturing and Service Sector)
It relates to national income accounting . This includes all manufacturing and Processing activities , including maintenance and repair services, undertaken by both household and nonhousehold small scale manufacturing units , which are registered under the factories act , 1948.
The number of small-scale units , the volume and range of products manufactured , the employment provided and the value of exports by these industries have grown substantially during the last decade. During 1997-98 , the production of SSIs was estimated to be around Rs. 500000 Crore at current prices , providing employment to about 167 lakh persons.
No. of units (in lakhs)
Output at current prices 178699 209300 241648 296886 362656 411858 462641 520650 572887 639024 690316 742021
1991-1992 1992-1993 1993-1994 1994-1995 1995-1996 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003
20.82 22.46 23.90 25.71 26.60 28.00 29.40 30.80 32.10 33.10 34.42 35.72
129.80 134.06 139.40 146.56 152.61 160.00 167.20 171.50 178.50 185.60 192.23 199.65
13883 17785 25307 29068 36470 39249 43946 48979 53975 59978 N.A. N.A.
Small is Beautiful said by E.F. Schumacher Innovative and Productive Individual Tastes , Fashions and Personalized service Symbols of National Identity Happier in work Always Winners of the Game Dispersal Over Wide Areas
Policy Iniciatives (i) Small industry policies and initiatives (ii) Economic Reforms and SSI policy (iii) Infrastructural Facilities (iv) Small Industry Clusters (v) Industrial Growth Centres (vi) Marketing (vii) Pollution Control (viii) Women Entrepreneurs
Institutional Support There are many institutes by state and central government set ups some of them are SIDBI(Small Industries Development Bank of India),SIDO(Small Industries development organization),SISs(Product-cum-process development organization),RTCs(Regional testing centres) etc
Credit Dispension a) Apex Level Institutions Small industries development bank of india a) Banks Commercial Banks Regional Rural Banks Co-operative Banks a) State Level Institutions State financial corporations State industrial development corporations
Sickness : Constituting an unhealthy environment for those working Definition of a sick unit is given by Sick Industrial companies act, 1985. According to the act ³ The sick industrial company is a company which has at the end of any financial year accumulated losses equal to or excluding its entire net worth and has also suffered cash losses in that financial year and in the financial year immediately preceding it.´
Reasons of Sickness in SSIs
Production Related Reasons: i. Faulty Product Mix ii. Acknoledgement of Production iii. Poor Quality of end product iv. Delayed delivery schedule
Financial Reasons i. Low Profitability ii. Low fund generation iii. Poor liquidity iv. Step Cost structure v. Lack of financial resources vi. Lack of credit facility vii. Faulty credit utilization viii. Low share value
Market Reasons: i. Poor marketing strategy ii. Imbalance between production & marketing iii. Wild market shifts iv. Lack of awareness of consumer¶s preferences v. Lack of specific market segmentation vi. Poor distribution network vii. Poor market performance
Majority of sick units is retrievable in order to tackle the problem of sickness from the two angles the role of three agencies assumes significance: a. The government b. Financial institutions c. The industry associations
The Role of Government: If the number of units in the country has increased some 10 times since independence and if we have diversified industrial structure with wide spread entrepreneurship the credit for this largely belongs to government. Second area where the government can be helpful is Vis-à-vis industrial licensing. The very existence of licensing and monopoly regulation legislation implies that there is a stampede to ³to get in´ when ever licensing is liberalized for an industry or an economy as a whole
a. b. c. d. e.
The Role Of Financial Institutions: The following are the ways by which sickness can be prevented by financial institutions : Continuous monitoring of unit Careful project appraisal Professional institutional response to unit¶s problems Required systems at client units Incentives to units to remain healthy
The Role Of Indutry Associations : A good practical review by each industry association of installed and usable capacity in the industry , capacity utilization , growth trends , problems etc should be useful 4 the potential new entrants 4 deciding whether 2 enter the industry or not. The industry can have some sort of 1st aid cell this could consist of professionals who could go to the aid of a unit that is beginning to fall with the offer of managerial and technical help also.
Small Sector Industries Policy
Equity participation up to 24 percent by other industrial undertaking including foreign companies. Legislations to limit financial liability of new and non-active partners/enterpreneur to the capital invested. Hike in investment limit for tiny sector up from 2lacs to 5lacs. Support from national equity fund for projects upto 10 lacs.
Single window loans to cover projects up to 20lacs. Relaxations of certain provisions of labour laws. Easier access to institutional finance. Women enterprises redefined. Export development centre in SIDO.
SSI are the pride of our Nation . So government should take all types of measures for the development of the small sector industry . The sickness of SSI should be taken care of by the government and can be removed as much as possible.