This presentation helps students to understand meaning of SSI and importance and difficulties they face for doing their business as well as how government helping SSI.

2. INTRODUCTION
• According to 1949-50 finance-commission
– A small scale industry operated with 10-50 labours
– A cottage Industry operated with help of family
members as whole time or part time occupation
– Small scale Industries highly located in urban area
– Cottage Industries located in rural area
– Small scale industries classify into two category

3. Cont…
• Traditional Small Scale Industries
– Make use of traditional method of production
– Handicrafts with help high-skill workmanship
• Mordent Small Scale Industries
– Make use of modern technology like cycle parts,
razor blades

4. CLASSIFICATION OF SSI
• The industrial policy of 1977 has classified the
SSI as
– Small-Sector Industries
– Ancillary Industries (subsidiary)
– Tiny Unit

5. Cont…
• Those units having the investment not more
than Rs.10 lakhs known as SSI
• Those units having the investment not more
than Rs.15 lakhs known as Ancillary Industries
• Those units having the investment not more
than Rs.1 lakhs known as Tiny unit
• After period of time in 1997 the investment
limit for SSI & Ancillary & tiny unit was raised
to Rs. 3 crores and Rs.25 lakh respectively.

6. IMPORTANCE OF SSI IN INDIA
• Employment
– The cottage and small scale ind. Based on labour
• More output with less Investment
– Labour intensive Ind.
– They can adapt changed as per market demand
• Export Earning
– Exports product like handicrafts, embroidery,
handloom
– 30% export earning based on these industries

7. Cont…
• Labour Intensive
• Low Gestation Period
– Starts in low period of time
– Based on labour intensive Ind.
• Decentralized economy and more even
distribution of Income
– Require less capital and provide large number of
employment
• Balanced regional Growth
– Easily set up in different part of country as the use
local raw material, labour, skill

8. Cont…
• Saving in Social cost
– like infrastructure road, power supply, housing
provision for drinking water, health care,
education facilities
• Use of locally available inputs
– Like use of land, forest, animal waste.
• Subsidiary industries
– Also provide semi finished product to large scale
industries like nut n bolt, carriers for bicycle

9. Problems of SSI
• Problem of finance
• Problem of Availability of Raw Materials
• Problem of Marketing
• Low-Level Technology
• Competition from Large-Scale Industries
• Sickness
• Lack of infrastructural facilities
• Competition from imported Goods and MNCs

10. Promotional Measures for Small
Industries
• Intuitional Arrangement
– The National Small Industries Corporation
– State Financial Corporation
– All India Handlooms and Handicrafts Board
– The Khadi and Village Industries Commission
• Financial Assistants
– Govt. provide credit for starting of the factory
– Machinery, tools, renovation and modernization
of plants

11. Cont…
• Technical support
– Small Industries Development provides technical
support & advice to SSI
– The Govt. set up two institutes for of design to
help SSI (chemical electrical and metallurgical
Industries )
• Marketing Support
– The state Govt. the khadi and village industries
commission & all India handloom board have
started their retail stores for popularized SSI

12. Cont…
• Reservation Policy
• Establishment of Industries Estates
– Under this programme Govt. acquired suitable
pieces of land & developed also provide facilities
water, road, electricity, banking and postal service.
• Provision of Raw-Material & Machinery
– In order to overcome the problem of raw material
SSI use out of date machinery Govt.

13. Cont…
• Store-purchase policy of the Govt.
– Govt. provide 15% discount on purchase of SSI
products
• Fiscal Incentive
– Govt. provide tax holiday for undertaking of SSI
• Financial Support during Five-Year Plans
– First Plan (1951-56) Rs.42 crores
– Second Plan (1956-61) Rs.187 “
– Eighth plan (1992-97) Rs.6334 “

14. Industrial policy 1991 & SSI
• Investment limit in plant & machinery
– Rs.35lakhs to 60lakhs for SSI
– Export oriented units Rs.45lakhs to 70lakhs for
Subsidiary industries
• Financial Support
– Non active partner & new partner extent capital
investment
– Equity participant by non SSI up to 24% share
holding
• Marketing policy

15. Cont..
• The policy ensuring larger production and
better quality of products through
modernization of units
• Special measures for the development of
handloom, handicrafts, khadi and village
industries
• The policy provides for training, managers to
simplify the rules and procedures
• Single Window Scheme

16. • Set up by the government of India in April 1990
• Principal Development Financial Institution for :
- Promotion
- Financing
- Development of Industries in the small scale
sector and
-Co-ordinating the functions of other institutions
engaged in similar activities.

17. Function of SIBDI
• For setting up new micro and small enterprises and
for expansion, modernization, diversification
• To discount and rediscount bill arising from the sale
of machinery by SSI
• To provide beginning capital and soft loan assistance
• To provide direct assistance as well as refinance for
SSI
• To provide technical, leasing and other services to
the SSI
• To provide financial support to SSI for providing
limited raw materials and marketing

18. Performance & Progress of the Bank
• SIDBI retained its position in the top 30
Development Banks of the World in the latest
ranking of The Banker, London.
• As per the May 2001 issue of The Banker,
London, SIDBI ranked 25th both in terms of
Capital and Assets.
• To initiative steps for technological up-
gradation and modernization of existing units

19. Cont…
• To extend channels for marketing the products
of SSI
• To promote employment in sub-urban areas
• A single window scheme for enlarged to cover
more units
• Refinance facility
• The bank has also set up a venture capital to
provide assistance to small entrepreneurs

20. State Financial Corporation (SFC’s)
• The industrial Development Bank of India &
the Industrial Reconstruction Bank of India
were established & provide financial support
to Industries

21. Financial Resources of the SFC’s
• Their own share capital
• Income from investment and repayment of
loan
• Sale of bonds
• Loans from the IDBI
• Borrowing from the Reserve Bank of India
• Deposits from public
• Sometimes loans from the State Government

22. Industries Eligible for Financial
Assistance from the SFC’s
• Manufacture, processing of goods
• Mining activities
• Generation & distribution of electricity
• Hotel Industries
• Transport of passenger
• Packing industries
• Fishing
• Maintenance, repair, testing and servicing
machinery

23. Financial Assistance by the SFC’s
• Loans & subscription to debentures of
industrial concern repayable within a period
not exceeding 20years
• Providing guarantee for loans raised by
Industrial units from commercial bank
• Providing guarantee for deferred payments in
cases where industrial units have purchased
capital goods on a differ payment

24. Cont…
• To underwrite the issue of shares, bonds and
debentures of industrial concerns
• To subscribe to shares, bonds & debentures of
industrial units
• Main function of SFC’s to grant loans to
Industrial units

25. Industrial assistance by the SFC’s
Year Rs (in crores)
1980-81 284
1985-86 608
1990-91 1,260.01
1997-98 15,560

26. National Small Industries Corporation
(NSIC)
• NSIC was established in 1955. own and
managed by the central Govt. o India
• Head office at Delhi and Regional offices at
Bombay, Madras and Calcutta
• NSIC provide assistance to SSI through the
provision of finance, making available raw-
material and machinery

27. Nature or Assistance by the NSIC
• Supply of machinery on hire-purchase basis
• Securing purchase contracts from Central Govt.
stores purchase agencies
• Providing training workers and supervisors at
prototype development centers at okhla, Rajkot
• Management of Industrial Estate
• Distribution of limited raw materials needed by
SSI
• Helping promotion of exports SSI goods

28. State Industrial Development
Corporations (SIDCS)
• Many states Govt. and Union Territories have
established sin 1960 SIDCS
• Main aim of SIDCS is to promote industrial
development of respective States and Union
Territories

29. Services of SIDCS
• Provide financial assistance like direct
investment, loans, guarantees, loan for
deferred payments
• State like Karnataka and Bihar the SIDC are
empowered to take special activities like
managing estates, generation of electricity
• As at the end of June 1980 total financial
assistance by the SIDCs was 260 crores