Type Of Small Scale Industry – The definition of small scale industry varies from country to country and within a country at a time depending on the mode and stage of development of another country, government policy and the administrative structure of a particular country. At least 50 different definitions of SSI are found and used in 75 countries. In some countries of the world, the criterion for defining small enterprises is related to the size of employment. For example in USA there is a small scale industry that employs 500 people. The UK has less than 20 skilled workers, Germany less than 300 and Italy less than 50. However, in most countries the definition of SSI is related to the size of investment or employment or both.
(1) A small camera is usually a one-man show. Although an SSI is run by a partnership or company, the activities are conducted by one of the partners or directors; Others are sleep partners. (2) In case of SSI, the owner himself or herself is also the manager and therefore the SSI is managed in an individualized manner. The owner effectively participates in all aspects of business decision making. (3) The scope of work of SSI is generally localized, meeting local and regional demands. (4) Gestation period i.e. the period after which the return on investment starts is relatively short compared to larger units.
Type Of Small Scale Industry
5 Contd… (5) SSIs are fairly labor-intensive with relatively low capital investment. (6) Small units use indigenous resources and therefore can be anywhere under the availability of the resources like raw materials, labor, etc. (7) Smaller units are decentralized and dispersed over rural areas using local resources. Small units thus promote Balanced regional development and prevent migration of job seekers from rural areas to cities. (8) Units of small scale are more susceptible to change and highly reactive and reactive to socio-economic conditions. They are more flexible to adapt to changes such as introduction of new Products, new production methods, new materials, new markets and new forms of organization etc.
Pdf] Occupational Health And Ergonomic Intervention In Indian Small Scale Industries: A Review
7 Employment argument Given the abundant labor and scarce capital resources, the most important argument in favor of SSI is its potential to generate large-scale employment opportunities immediately. There are many research findings available that would establish that small scale units are more labor intensive than large scale units. Smaller units use more labor per unit than investment. Studies have shown that the output-employment ratio is lowest in the small sector, with the employment generation potential of the small sector being eight to ten times that of the large sector.
8 Equality Argument An important argument in favor of small-scale enterprises is that they ensure a more equal distribution of national income and wealth. This is based on two key considerations: compared to ownership of large-scale units, ownership of small-scale units is extensive. (ii) Their more labor-intensive nature and decentralization and spread to rural and backward areas provide more employment opportunities to the unemployed. Most of the small-scale units are related to ownership or partnership, the relationship between worker and employer is more harmonious in small-scale units than in large-scale units.
Large industries are generally concentrated in urban areas, but small industries may be located in rural or semi-urban areas to use local resources and meet local demands. It promotes balanced regional development in the country. Although it is not possible to start small scale industries in every village, it is possible to start small scale industries in groups of villages. Decentralization will help harness local resources, passive savings and local talent and improve living standards even in previously backward areas. A good example of this phenomenon is the economy of Punjab, which has smaller units than the industrially developed state of Maharashtra.
According to this argument, small enterprises are capable of mapping latent and untapped resources such as stockpiled wealth and ideal entrepreneurial potential. Dhar and Liddell feel that the real source of the latent resource debate lies in the existence of entrepreneurial skills. According to him, there is no evidence that there is an overall lack of small entrepreneurs in India. They therefore doubt the power of the latent middle argument. His argument is not very right because if small entrepreneurs are abundant, what hinders the growth of small entrepreneurs?
Small Scale Industries For Increasing Economical Growth »
11 Objectives 1. To create immediate and massive employment opportunities with relatively low investment. 2. To remove the problem of unemployment from the country. 3. To encourage distribution of industries throughout the country covering small towns, villages and economically backward regions. 4. Bring the backward areas into the mainstream of national development. 5. To promote balanced regional development throughout the country. 6. To ensure more equal distribution of national income. 7. To promote effective mobilization of untapped resources of the country. 8. To improve the standard of living of the people of the country.
12 Scope The scope of small scale industries is very wide which includes various types of activities. The characteristics of these activities are labor intensive, require less capital and require less sophisticated technology. Activities that seem particularly useful can be successfully run on a small scale. Important among them are: manufacturing activities service/repair activities retail activities financial activities wholesale-selling business construction activities infrastructure activities such as transport, communication etc.
Capital Balanced Regional Development Employment Optimization Mobilization of Local Resources Export Promotion Consumer Surplus Feeder to Large Enterprises Social Benefit Share in Industrial Production Development of Entrepreneurship
● Small enterprises can be started according to the convenience of the owner in terms of space, finance, production and manpower. ● A short gestation period of only 2 to 6 months is required to set up and start production of the unit and the layout can be made as per convenience. ● Locally available skilled and semi-skilled people can be hired with less notice and at much lower wages than in medium and large enterprises. ● Where high technology is involved, senior company officials will help. Alternatively, consultants can be hired to solve technology-related problems. ● It is a great form of self employment as well as providing employment opportunities to the relatives, friends and relatives etc.
Chapter 3: Small Scale Industry And Business
15 Contd… SSI units are needed to help large enterprises and new projects in developing countries. So they not only contribute to the country’s economy, but also create employment opportunities for people around the project sites. ● In case of SSI units started by experienced and talented executives, there is ample scope for MNCs to develop high technology components and organize exports. ● Population growth has led to an increase in the production of consumer goods and fast moving consumer goods (FMCG). In view of this, small enterprises play a major role in providing the components and manufacturing the product itself. ● Small units with annual turnover up to 75 lakh are exempted from excise duty. In case of industries in backward districts, various statutory taxes are waived or concession. It avoids a lot of paper work and formalities. ● Since employees are recruited on the basis of contacts or relationships, there will be loyalty to the employer and therefore no trade union activities.
Analyzing Strengths, Weaknesses, Opportunities and Threats (SWOT Analysis): Scanning the Business Environment: Training: Product Selection: Market Survey: Organization Form: Location: Technology: Machinery and Equipment: Project Report Preparation: Project Appraisal:
Electricity and Water Connection: Installation of Machinery: Recruitment of Manpower: Procurement of Raw Material: Production: Marketing: Quality Assurance: Permanent Registration: Market Research:
First Plan: In the first five year plan Rs. 48 crores (47.8% of the total plan expenditure on industry) was spent on small-scale industries alone. During this scheme six boards were established namely All India Handloom Board, All India Handicrafts Board, All India Khadi and Village Industries Board, Small Industries Board, Coir Board and Central Silk Board. Boards are formed to cover the entire area of small scale and cottage industries. Second Plan: Following the recommendations of the Carve Committee, the Second Five Year Plan emphasized the dispersal of industries. In this plan, 60 industrial estates have been established to provide various facilities like water, electricity, transport etc. at one place. The total expenditure for SSI during this scheme is Rs. 187 crores. Apart from this, some items are reserved for Special production in small scale industries. Third Plan: The Third Plan focuses on expanding the scope of small enterprises. During this scheme Rs. 248 crore was spent. Fourth Plan: The programs adopted in the Third Plan were also extended in the Fourth Plan. As a result, the small-scale sector saw considerable diversification and expansion during the Fourth Plan period, during which 346 industrial estates were completed and small
Pdf) Understanding The Dynamics Of Small Scale Industry: A Case Study Of Indian Context
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