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Small industry (SSI) is an industry where manufacturing, servicing, and production take place on a small or micro scale. For example, these are small industry ideas: napkins, handkerchiefs, chocolates, toothpicks, water bottles, small toys, paper, pens. Small industries play an important role in India’s social and economic development. These industries make one-time investments in machinery, equipment, and industries that can be owned, purchased, or leased. But that’s Rs. Does not exceed 1 crore.
Types of small scale industries:
Small industries are divided into three parts: manufacturing , sub-industry, and service industry.
Manufacturing industries:
A unit that produces finished products for the consumption or processing industry. These types of small industries are generally privately owned. Examples of small-scale manufacturing include electric looms, machine manufacturing, and food processing.
Ancillary industries:
Large companies and multinational companies manufacture finished products, but usually not all parts are manufactured in-house. The providers of these companies are the supplier industry. The subcontracting industry can also be identified as a multinational company or a company that manufactures machinery for medium-sized industries.
Service industries:
Repair shops and the maintenance industry fall into the service industry category.
Classification of small scale industries:
As per the MSMED Act 2006, classification of the Manufacturing process:
If the investment in plants and machinery is more than 25%, but not more than 5 million, the industry is a small business.
As per the MSMED Act 2006, classification of service enterprises:
If the investment in equipment exceeds 100,000 rupees and not more than 2 million, the industry is small.
Ancillary small industrial unit:
At least 50% of production must be provided to the mother unit and investment in plants and machinery should not exceed 1 million.
Small scale industries owned and managed by women entrepreneurs:
Female entrepreneurs own at least 51% of their equity capital (individually or jointly).
Administrative bodies for small scale enterprises:
There are government agencies established for the benefit of members of the small industry. The Ministry of SMEs is drafting policies, programs and programs to promote SMEs. The Ministry of Agriculture and Rural Industry coordinates and supports the development of rural and urban villages and caddy industry, micro-industry and micro-industry.
Importance of small scale industries:
Small industries are important because they contribute to increasing employment and economic development in India. It improves national growth by increasing urban and rural growth. The role of SMEs is to help governments expand infrastructure and manufacturing and reduce problems such as pollution, slums, poverty and many development practices. Small-scale manufacturing and domestic industry play a very important role in India’s economic development. Investing capital in small industries helps reduce unemployment and increase self-employment in India. Industry is a sector in which the production of goods is part of the economy.
Problems faced by small scale industries:
The following are the problems faced by small industries:
Poor capacity utilisation:
In many small industries, utilisation is less than 50% of installed capacity. Almost half of the machine parks are idle. Capital is unnecessarily tied up, idle machines also occupy space and require maintenance, which increases costs.
Inadequate finance:
Many small industries face the problem of lack of money. They do not have access to the domestic capital markets to procure resources. In addition, due to its small capital base, it is not possible to enter overseas markets by issuing ADRs (American Depositary Receipts), GDRs (Global Depository Receipts), etc. Banks and financial institutions need to complete various procedures and procedures.
Raw material shortage:
We do not have the required quantity and quality of raw materials. As the demand for goods exceeds the supply, the prices of goods are very high and the cost rises. A shortage of raw materials can lead to reduced capacity, reduced production, inability to meet demand, and loss of customers.
Lack of marketing support:
SMEs lack market knowledge of competitors, consumer preferences, and market trends. The market is very limited due to low production and inability to meet high demand. In the process of liberalisation and globalisation, they are now facing competition from local industries and foreign competitors who sell higher quality products at lower prices.
Conclusion:
Small industries play an important role in the development of the Indian economy in many respects. About 60-70% of all innovations in India come from SSI. Many of today’s large companies all started small and then grew into large companies.
