SMALL AND MEDIUM BUSINESS

µ . (not exceeding Rs.DEFINITION OF SMALL INDUSTRIES ` ` ` Year 1950 Size of Gross Investment in fixed assets in plant and machinery. building etc. 5 lakhs and strength of workforce (employment less than 50 workers / day using power or less than 100 workers / day without use of power). ´Eligibility criteria based on investment in Machinery and Equipment only. land.

INTRODUCTION ` ` ` Worldwide. The labor intensity of the MSME sector is much higher than that of the large enterprises. The major advantage of the sector is its employment potential at low capital cost. The MSMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. . the micro small and medium enterprises (MSMEs) have been accepted as the engine of economic growth and for promoting equitable development.

` In India too. MSME sector accounts for about 45% of the manufacturing output and around 40% of the total export of the country. the MSMEs play a pivotal role in the overall industrial economy of the country. this sector employs an estimated 59. ` . As per available statistics (4th Census of MSME Sector).7 million persons spread over 26. In recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector.1 million enterprises. It is estimated that in terms of value.

Its success is written large over the face of the country and is equally visible all around.` Small scale sector is one of the success stories of the modern India. This is a sector that has emerged victorious in the face of rising threats from large sector inside and from multi-nationals abroad. the small-scale industrial (SSI) sector has acquired a prominent place in the socio-economic development of the country during the past 50 years. In India. ` .

Under the MSMED Act 2006. Namely enterprises engaged in the MANUFACTURE/PRODUCTION of goods pertaining to any industry and enterprise engaged in PROVIDING SERVICES. ` . Enterprises have been classified broadly into two categories.Under the MSMED Act 2006. ` Micro enterprises have been defined for the first time in this Act.

5 lakh and up to Rs. 10 crore More than Rs. 25 lakhs Service Enterprises Up to Rs. 10 lakhs More than Rs.` Investment in plant and machinery/equipment (excluding land and building) Manufacturing Enterprises Micro Small Up to Rs. 2 crore and up to Rs. 5 crore Medium . 5 crore and up to Rs. 10 lakh and up to Rs. 2 crore crore More than Rs. 25 More than Rs.

. To promote balanced regional development in the whole country To encourage effective mobilization of country's untapped capital and human resources.Objective of small business ` ` ` ` ` To generate immediate and large scale employment opportunities with relative low investment To improve the level of living of people in the country To encourage dispersal of industries to all over the country small towns. villages and economically lagging regions.

Scope and type of small business Small business covers a wide range of business activies Classified into 5 main groups 1. Serving industries 4. Manufacturing industries 2. Mining industries ` . Ancillary to large industries 5. Feeder industries 3.

Small Scale Industry highlights The SSI sector accounts for :  95 % of industrial units  40 % of output in the manufacturing sector  35 % of total export  Employment of over 60million people .

. mostly fuelled by the performance of garments.EXPORT ` ` 35% of the Indian Exports is contributed by SSI Sector. leather and gems and jewellery units from this sector.

70 2003-04 9.88 8. The comparative growth rates of production for both the sectors during last five years ` Year Growth Rate Overall of SSI industrial sector (%) sector (%) 2002-03 8.32 8.68 5.40 2005-06 12.10 .COMPARISON OF THE SSI SECTOR WITH THE OVERALL INDUSTRIAL SECTOR ` The small-scale sector has maintained a higher rate of growth vis-à-vis the overall industrial sector.64 6.90 2004-05 10.

3. engine oils.. automobile spares etc... ` .Structure features This are classified under three broad categories 1. Some industries are started on a small-scale but they are likely to develop into medium-sized unit within a short time Ex-pens. producing toys etc. Some industries are started as cottage industries but later developed into small scale industries or as feeder units to large-scale industries Ex-coil spring. Some industries are started on a small-scale but they are likely to remain so for a long time in view of specialization nature of demand for the product Ex-bolts nuts agarbatties etc. 2.

Small vs large units Small Local area of operation Labor intensive Small fixed investment Decentralised location Small uneconomic size Limited scope of expansion large Wide area Capital intensive Large Centralised location Large economic size Economices of scale and great for expansion .

Institutional Support There are many institutes by state and Central government set ups some of them are:  SIDBI(Small Industries Development Bank of India).  SISs(Product-cum-process development organization).  SIDC(small industry development corporation).  NSIC(national small industry corporation).  SIDO(Small Industries development organization). ` .  SSIB(small scale industry board).  SISI(Small industry service institute).

Aims of institutions toward SSI ` ` ` ` ` ` ` To facilitate growth of this sector with changing economic scenario To facilitate growth within the framework of social and economic policy of the country To encourage technology modernization To promote entrepreneurship among technically qualified persons To improve product standards To create opportunities for in house R&D To provide greater exports .

and 15.000/.000/respectively Shri Pranab Mukherjee. the then Hon·ble Defence Minister and Shri Mahabir Prasad.20.25.Awards and incentives Besides a Trophy and a Certificate. Second & Third Award carry a Cash Prize of Rs. the First. Rs. Hon·ble Union Minister of SSI & ARI giving away prize to a successful woman entrepreneur .000/-.

National awards for outstanding ssi entrepreneur. National awards for research and development effort in small scale sector.Awards and incentives ` ` ` National awards for quality product in small scale industry. ` NATIONAL AWARD TO SMALL SCALE ENTREPRENEURS .

Thank you .

Sign up to vote on this title
UsefulNot useful