MODULE-6

SMALL SCALE INDUSTRIES

Define small scale industry
An industrial undertaking is one in which the investment in fixed assets in plant and
machinery, whether held on ownership or on hire purchase, does not exceeds Rupees One
Crore-(Rs.3 Crores earlier was reduced to Rs.1Crore)
or
It is less than 300 people working in the organization.
The investment limit to start the enterprise was reduced to 1 Crore.

DEFINE TINY INDUSTRIES & ANCILLARY INDUSTRIES

TINY INDUSTRIES
• All Small Scale units wherein investment on plant and machinery(excluding land
and building ) upto Rs. 25 lakhs are classified as tiny industries. 
• unit is treated as Tiny industry where investment in plant and machinery does not
exceed Rs. 25 lakhs.

ANCILLARY INDUSTRIES are those which manufacture parts and components to be

used by larger industries. Eg- Companies like GE (ancillary) produce engines for the
aircraft industry.

WHAT ARE THE CHARACTERISTICS OF SSI

The following are the characteristics of SSI
 A small unit is generally a one-man show
 Localized operation
 Educational level
 Profit motive
 Flexibility
 Labor intensive

CHARACTERISTICS OF SSI
I. A small unit is generally a one-man show. Even if SSI is run on partnership or
company, the activities are carried by one of the partners or directors; the others are as
sleeping partners.
II. In case of SSI, the owner himself or herself is a manager also and hence an SSI is
managed in a personalized fashion. The owner takes effective participation in all
matters of business decision making.
III. The scope of operation of SSI is generally localized, catering to the local and regional
demands.
IV. The gestation period i.e., the period after which return on investment starts is relatively
lower when compared to large units.
V. SSI’s are fairly labor intensive with comparatively smaller capital investment.
 VI. Small units use indigenous resources and therefore, can be located anywhere subject to
the availability of these resources like raw materials, labour etc.
VII. Using local resources Small Units are decentralized and dispersed to rural areas.
VIII. Thus small units promote balanced regional development and prevent the influx of job
seekers from rural areas to cities.
IX. Small scale units are more change susceptible and highly reactive and receptive to
socio-economic conditions. They are more flexible to adopt changes like introduction
of new products, new method of production, new materials, new markets and new
form of organization etc.

WHAT ARE THE SCOPE OF SSI

Scope for the Small Scale Industry in India is very vast. Even by the help of Govt. & its
policies. It has covered most socioeconomic fields of this arena. Some common areas of
scope to be listed are,
a) Manufacturing, Servicing & repairing.
b) Construction.
c) Financial.
d) Retailing.
e) Wholesale business.
f) Transporting.
g) Public Utilities.
h) Communication.

WHAT ARE THE OBJECTIVES OF SSI

1. To generate immediate and large scale employment opportunities with relatively
low investment.
2. To eradicate unemployment problem from the country.
3. To encourage dispersal of industries to all over country covering small towns,
villages and economically lagging regions.
4. To bring backward areas too, in the main stream of national development.
5. To promote balanced regional development in the whole country.
6. To ensure more equitable distribution of national income.
7. To encourage effective mobilization of country’s untapped resources.
8. To improve the standard of living of people in the country.

WHAT IS THE ROLE OF SSI IN ECONOMIC DEVELOPMENT

1. Employment
2. Optimization of Capital
3. Balanced Regional Development
4. Mobilization of Local Resources
5. Export Promotion
6. Consumer Surplus
7. Feeder to Large Scale Industries
 I. Social Advantage
II. Share in Industrial Production
III. Development of Entrepreneurship

WHAT ARE THE ADVANTAGES OF SMALL SCALE INDUSTRIES

1. Requires less investments to start the company
2. Requires less land space as compared with LSI
3. Locally available skilled and semi-skilled people can be appointed at short notice
at a much lower wages compared to the medium and large industries.
4. It is one of the best forms of self-employment as well as giving employment
opportunities to own kin, friends and relatives etc.
5. In case of rural sector the SSI units will be able to have cheaper labor especially in
off seasons.
6. SSI contributes to nation economy
7. SSI plays very important role in producing FMCG products
8. No trade union in SSI

WHAT ARE THE PROBLEMS OF SMALL SCALE INDUSTRIES

1. insufficient fund or capital to start the ssi
2. lack of proper resources
3. lack of skilled employees in ssi
4. lack of technological upgradation and implementation
5. absence of credit facilities
6. lack of proper machinery and tools
7. presence of many bogus small firms
8. more competition from the large firms
9. absence of marketing facilities and distribution channels
10. unsuitable location
11. Lack of training and development programmes for small firms
12. Lack of proper government initiatives for SSI

EXPLAIN THE ROLE OF SSI IN ECONOMIC DEVELOPMENT

1. Employment generation
2. Optimization of Capital
3. Optimum utilization of local and regional resources
4. Balanced Regional Development
5. Mobilization of Local Resources
6. Economic development and stability of the country
7. Export Promotion
8. Consumer Surplus
9. Feeder to Large Scale Industries
10. Social Advantage
11. Share in Industrial Production
 12. Development of Entrepreneurship

1. Employment
SSI use labour intensive techniques and therefore provide employment on a large
scale,SSI accounts for 75% of the total employment in the industrial sector. SSI provides
self-employment to artisans, technically qualified persons and professionals. These
industries also offer employment to farmers when they are idle.
2. Optimization of Capital
SSI requires less capital per unit of output and provides quick returns on investment due
to shorter gestation period. Small scale units help to mobilize small and scattered savings
and channelise them into industrial activities.
3. Balanced Regional Development
SSI promotes decentralized development of industries. They help to remove regional
disparities by industrializing rural and backward areas. They also help to improve the
standard of living in suburban and rural areas.

4. Mobilization of Local Resources

SSI helps to mobilize and utilize local resources like small saving, entrepreneurial talent
etc. which might otherwise remain idle and unutilized. These industries facilitate the
growth of local entrepreneurs and self-employed professionals in small towns and
villages.

5. Export Promotion
SSI helps in reducing pressure on the country’s balance of payments in two ways. First
they do not require imports of sophisticated machinery or raw materials. Secondly, SSI
can earn valuable foreign exchange through exports. There has been a substantial
increase in exports from the small scale sector.
6. Consumer Surplus
SSI now produces a wide range of mass conception items. Over 5000 products are being
manufactured in small scale sector. About one-half of the output of manufacturing sector
in India comes from small scale industries.
7. Feeder to Large Scale Industries
SSI plays a complementary role to large scale sector. They provide parts, components,
accessories etc. to large scale industries. They serve as ancillary units.
8. Social Advantage
Small scale sector contributes towards the development of a socialistic pattern of society
by reducing concentration of income and wealth. They provide an honorable and
independent living to people with limited resources. They facilitate wide participation of
public in the process of development.

9. Share in Industrial Production

SSI contributes more than one-half of the total industrial production in India. About 5000
products are manufactured in the small scale sector.
10. Development of Entrepreneurship
Small scale units have helped to develop a class of entrepreneur. These units facilitate
self-employment and spirit of self-reliance in the society.

WHAT ARE THE IMPACT OF GLOBALIZATION AND LIBERALIZATION ON

SSI
Positive Impact
1. Industrial licensing
2. Increase the foreign investment.
3. Increase the foreign exchange reserve.
4. Increase in consumption and Control over price.
5. To promote and protect the SSI, the central government took several measures
6. Industrial extension services
7. Institutional support in respect of credit facilities
8. Free flow of capital and increase in the total capital employed.
9. Free flow of technology.
10. Increase in industrialization.
11. Spread of production facilities throughout the globe.
12. Balanced development of world economies.
13. Increase in production and consumption.
14. Commodities at lower price with high quality.
15. Increase in jobs and income.
16. Higher Standard of living.
17. Balanced human development
18. Provision of developed sites for construction of sheds
19. Provision of training facilities
20. Supply of machinery on hire purchase terms
21. Opening and planning to expand business throughout the world.
22. Erasing the difference between domestic and foreign market
23. Buying and selling goods and services from / to any countries in the world.
24. Assistance for domestic marketing as well as exports
25. Special intensive for setting up enterprises in backward areas
26. Technical consultancy and financial assistance for technological up gradation.
27. Reduction of trade barriers to permit free flow of goods and services among
nation.
28. Creation of environment in which free flow of capital can take place among
nation.
29. Creation of environment, permitting free flow of technology; and.
30. Last, but not the least, from the point of view of developing countries, creation
of environment in which free movement of labor can take place in different
countries of the world.
 Negative Impact
1. The new policies of the government towards liberalization and globalization without
ensuring the interest or priority of small-scale sector resulted in poor growth rate
of SSI sector.
2. Globalization resulted in opening up of markets, leading to intense competition.
3. The problems of SSI in liberalized environment have become multidimensional
delay in implementation of project,
4. It resulted inadequate availability of finance and credit, marketing problems,
cheap and low quality products, technological obsolescence, lack of
infrastructural facilities, deficient managerial and technical skills
5. Lead to commercial and political colonism
6. Widening gap between rich and poor
7. Loss of domestic industries
8. Exploit human resources
9. Decline in income
10. Transfer of natural resources
11. Widening gap between rich and poor
12. Dominance of foreign institute
EXPLAIN THE STEPS TO START AN SSI
Step-1: Decision to be self-employed
Step-2: Analyzing strengths, weaknesses, opportunities and threats (SWOT analysis)
Step-3: Scanning of Business Environment
Step-4: Training
Step-5: Product selection
Step-6: Market survey
Step-7: Form of Organization
Step-8: Location
Step-9: Technology
Step-10: Machinery & Equipment
Step-11: Project report preparation and Appraisal
Step-12: Finance
Step-13: Provisional registration
Step-14: Recruitment of manpower, procurement of raw materials, production, marketing,
quality assurance

Decision to be self-employed:
This is the most crucial decision a youth has to take, shunning wage employment and
opting for self-employment or entrepreneurship.

2. Analyzing strengths, weaknesses, opportunities and threats (SWOT analysis):

The potential entrepreneur has to analyze his strengths, weaknesses, opportunities and
threats, while deciding to go for entrepreneur career. This analysis enables him to know
what type and size of business would be the most suitable. This will vary from person to
person.

3. Scanning of business environment:

It is always essential on the part of the entrepreneur to study and understand the
prevailing business environment.
In order to ensure success of his enterprise, entrepreneur should scan the business
opportunities and threats in the environment. He should study the administrative
framework, procedures, policies, rules and regulations and other formalities implemented
by the government.

4. Training:
Before going to start the enterprise, the potential entrepreneur must assess his own
deficiencies which he can compensate through training. He can avail the facilities of
various training institutes like EDI, NIESBUD, IEDs existing in our country. These
institutes are providing tailor-made Entrepreneurship Development Programmes (EDPs)
and skill up gradation training programmes for the benefit of the new entrepreneurs,
existing entrepreneurs and for the employees of the small scale industries.

5. Product selection:
The most important step is to decide what business to venture into, the product or range
of products that shall be selected for manufacture and in what quantity. The level of
activity will help in determining the size of business and thus form of ownership. One
could generate as many project ideas as one can through environment scanning and short
list a few of them as discussed in the last chapter. Closely examine with the help of
opportunity analysis each one of them and zero on the final product or products.

6. Market survey:
It is always convenient to manufacture an item but difficult to sell. So it is rational on the
part of the entrepreneur to survey the market thoroughly before embarking upon
production. Market survey implies systematic collection of data by the entrepreneur about
the product for manufacture, demand-supply lag, extent of competition, frequency of
demand, pattern and design of demand, its potential share in the market pricing,
distribution policy, etc. The principle is to produce what actually people demand. The
entrepreneur can contact the concerned authorities for this, and will be discussed later.

7. Form of organization:
A firm can be constituted as proprietorship, partnership, limited company
(public/private), cooperative society, etc. This will depend upon the type, purpose and
size of entrepreneur’s business. One may also decide on the form of ownership on the
basis of resources at hand or from the point of view of investment.

8. Location:
The next step will be to decide the location where the unit is to be established. Will it be
hired or owned? The size of plot, covered and open area and the exact site will have to be
decided.

9. Technology: To manufacture any item, technology is used. Information on all

available technologies should be collected by the entrepreneur and the most suitable one
to be identified. This will also be useful to determine the type of machinery and
equipment to be installed.
10. Machinery and equipment:
Having chosen the technology, the machinery and equipment required for manufacturing
the chosen products have to be decided, suppliers have to be identified and their costs
have to be estimated. One may have to plan well in advance for machinery and
equipment especially if it has to be procured from outside the town, state or country.

11. Project report preparation: After deciding the form of the ownership, location,
technology, machinery and equipment, the entrepreneur should be ready to prepare his
project report or the feasibility study. The economic viability and the technical feasibility
of the product selected have to be established through a project report. A project report
that may now be prepared will be helpful in formulating the production, marketing,
financial and management plans. It will also be useful in obtaining finance, shed, power
connection, water connection, raw material quotas, etc. The entrepreneur has to consider
the guidelines given by the Planning Commission in preparing the
report

12. Project appraisal: Ordinarily, project appraisal implies the assessment of a project.
It is a technique for ex-ante analysis of a scheme or project. While preparing to set up an
enterprise, the entrepreneur has to carefully appraise the project from the standpoint of
economic, financial, technical, market, managerial and social aspects to arrive at the most
socially-feasible enterprise.
To avail the finance from the financial institutions and banks, a comprehensive appraisal
of projects carrying techno-economic feasibility aspects should be undertaken by the
entrepreneur. Thus, a project which is selected should be technically feasible and
economically viable, and then only it will be bankable.
For this, the following appraisals can be performed at the preliminary level:
(a) Economical appraisal
(b) Financial appraisal
(c) Technical appraisal
(d) Management appraisal
(e) Organizational appraisal
(f) Operational appraisal
(g) Market appraisal

13. Finance: Finance is the lifeblood of the enterprise. Entrepreneur has to take certain
steps and follow specified norms of the financial institutions and banks to obtain it. A
number of financial agencies provide capital assistance and venture capital for starting an
enterprise. There are some agencies which
Small Scale Industry provide financial assistance on concession rates. Under PMRY and
REGP schemes financial assistance and subsidies are being provided to the persons who
want to set up their own enterprise.
14. Provisional registration: It is always worthwhile to get the unit registered with the
government. The entrepreneur has to obtain the prescribed application form for
provisional registration from DIC or Directorate of Industries.
After having duly filled in the application form, he has to submit the application with all
relevant documents in the local DIC or Directorate of Industries. This will enable the
entrepreneur to avail various government facilities, incentives and assistances schemes
including financial assistance from NSIC/SFCs/KVIC.

15. Technical know-how: In some cases, technical know-how may be arranged for
setting up enterprise. This can be arranged through TCOs, NSIC, SSIDC, DIC, private
consultants, SISI, ED-institutes, foreign collaborators, India Investment Centre, and
Industry, etc. Facilities are also available to SSI for making technical know-how
arrangements including turn-key jobs.

16. Power and water connection: The sites, where the enterprise will be located, should
either have adequate power connections or this should be arranged. Entrepreneur can
calculate the total power requirement and determine the nearest pole from which power
will be given to the enterprise as it can
materially affect the installation cost. Similarly, the water connection will have to be
obtained or provision should be made for adequate water supply to the firm.

17. Installation of machinery: Having completed the above formalities, the next step is
to procure the machinery for installation. Machinery should preferably be installed as per
the plan layout.

18. Recruitment of manpower: Once machines are installed, the need for manpower
arises to run them. So the quantum and type of manpower is to be decided. This
presupposes the skilled, unskilled and semiskilled labour, administrative staff etc.
Further, sources of getting desired labour and staff members be indented and recruited.
Possibly, the labour force has to be trained either at the entrepreneur’s premises or in a
training establishment.
19. Procurement of raw materials: Raw materials are the important ingredients for
running an enterprise. The labour will require raw materials to work upon the installed
machinery. These materials may be procured indigenously or may have to be imported by
the entrepreneur. Entrepreneur has to identify the
cheap an assured sources of supply of raw materials for running his own enterprise.
Government agencies.

20. Production: The unit established should have an organizational set-up. To operate
optimally, the organization should employ its manpower, machinery and methods
effectively. There should not be any wastage of manpower, machinery and materials. If
items are exported, then the product and its packaging must be attractive. Production of
the proposed item should be taken up in two stages:
(i) Trial production
(ii) Commercial production
Trial production will help tackling problems confronted in production and test marketing
of the product. This will reduce the chances of loss is the eventuality of mistakes in
project conception. Commercial production should be commenced after the test-
marketing of the product.

21. Marketing: Marketing is the most important activity as far as the entrepreneurial
development is concerned. Various aspects like how to reach the customer, distribution
channels, commission structure, pricing, advertising, publicity, etc. have to be decided by
the entrepreneur. Like production, marketing should also be attempted cautiously, that is,
in two stages namely:
(i) Test stage
(ii) Commercial marketing stage
Test marketing is necessary to save the enterprise from going into disrepute in case the
product launched is not well accepted by the customers. It will also assist the
entrepreneur in carrying out modifications or additions in designs and features of the
product. Having successfully test marketed the product, commercial marketing can be
undertaken. The entrepreneur can contact the Small industries marketing
corporation.

22. Quality assurance: Before marketing, the product quality certification from BIS
(Bureau of Indian Standards)/AGMARK/HALLMARK, etc., should be obtained
depending upon the product. If there is no quality standards specified for the products, the
entrepreneur should evolve his own quality control parameters. Quality, after all, ensures
long term success.
23. Permanent registration: After the small scale unit goes into production and
marketing, it becomes eligible to get permanent registration based on its provisional
registration from DIC or Directorate of Industries.

24. Market research: Once the product or service is introduced in the market, there is
strong need for continuous market research to assess needs and areas for modification,
upgradation and growth. Market becomes waterloos for most SSI entrepreneurs as they
ignore the vital day-to-day operation. Initial success should not lure the entrepreneur into
a sense of complacency.

Different government policies towards SSI

1. INDUSTRIAL POLICY RESOLUTION, 1948
Industrial Policy Resolution 1948 ascribed an important role to the SSI sector. It also
highlights the need to develop small scale and village industries to meet the following
objectives:
1. To create large-scale employment at relatively small capital costs.
2. To mobilize unused resources of capital and skills.
3. To ensure a more equitable distribution of national income including regional
dispersal of industries.
4. To counter the tendencies towards concentration of economic power by widening
opportunities for new entrants and medium and small sized units.

Thus, this Industrial Policy Resolution 1948 gave a special role to SSI sector for creating
additional employment with low capital investment by laying the basic administrative
foundation for the years to come.

2. INDUSTRIAL POLICY RESOLUTION, 1956

1. Reservation of certain items only for village and small scale industries;
2. Restriction of capacity expansion of large industry;
3. Management of supply of raw materials; and
4. A scheme of concessions and benefits to small producers.
5. To achieve these 128 items were exclusively reserved for production in SSIs,

3. Industrial Policy Resolution of 1977

1. Technological upgradation was emphasized in traditional sector.
2. Special marketing arrangements through the provision of services, such as,
product standardization, quality control, market survey, were laid down.
3. Classification of small sector in three categories:
(i) Small Scale Industries
(ii) Tiny Units
(iii) Cottage and household industries which provide self-employment in large
numbers.
4. Reservation of production of 504 items in the small scale sector.
 5. Establishment of District Industries Centres (DICs) in all districts of the country to
serve as a focal point of development for small and cottage industries.
6. Special marketing services to be provided like product standardization, quality
control etc.

4. Industrial Policy Resolution of 1980

1. Definition of small scale, tiny units and ancillaries units was redefined;
2. The District Industries Centres (DICs) were replaced by nucleus plants in each
industrially backward district to promote cottage and small industries. The nucleus
plants were to concentrate on assembling the products of ancillary units and to
produce inputs needed by large number of small units;
3. Reservations of items continued;
4. Financial support to small units was strengthened;
5. Village industries including handloom, handicrafts, khadi etc. received greater
attention.
6. The policy also measured to build up buffer stocks of critical inputs.

5.Industrial Policy Resolution of 1990

1. It created central investment subsidy for this sector in rural and backward areas.
2. Assistance was also granted to women entrepreneurs for widening the
entrepreneurial base.
3. Reservation of items to be produced by SSIs was increased to 836.
4. Small Industries Development Bank of India was established to ensure adequate
flow of credit to SSIs.
5. Stress was reiterated to upgrade technology to improve competitiveness.
6. Special emphasis was laid on training of women and youth under Entrepreneurial
Development Programme.
7. Activities of Kadhi and Village Industries Commission and Khadi and Village
Industries Board were to expand.

What are the objectives of GATT/WTO

1. By reducing tariff barriers in international trade, the GATT aims at:
2. Expansion of international trade
3. to ensure that trade flows as smoothly, predictably and freely as possible.
4. Increase of world production by ensuring full employment in the participating
nations
5. Development and full utilisation of world resources
6. Raising standard of living of the world community as a whole.
7. To implement the new world trade system as visualised in the Agreement
8. To promote World Trade in a manner that benefits every country
9.  To expand and utilize world resources to the best
 10.  To increase the level of production and productivity with a view to ensuring level
of employment in the world

WHAT IS THE IMPACT OF WTO/GATT ON SSI

1. This is likely to lead to an expansion in the volume of international trade and
changes in the pattern of commodity flows
2. The main outcome of WTO stipulated requirements will be brought about through
reduction in
 export subsidies,
 greater market access,
 removal of non-tariff barriers and
 Reduction in tariffs.

3. There will also be tighter patent laws through regulation of intellectual property
rights under Trade-Related Intellectual Property Rights (TRIPS) Agreements
4. Increased market access to imports will mean opening up the domestic market to
large flows of imports.
5. Increased market access will also mean that our industries can compete for export
markets in both developed and developing countries.
6. enlightened entrepreneurs have greater opportunities to benefit from their
comparative advantages due to lowering of tariffs and dismantling of other
restrictions.
7. national treatment of exportable items across the countries all over the world, with
better market access through the internet.
8. But the expected surge in our exports can come about only if SSI sector is
restructured to meet the demands of global competitiveness, which is the key to
the future of small industries in present contest.

EXPLAIN NATURE & TYPES OF SUPPORTS

Policy Support
(1) The investment limit for the tiny sector will continue to be Rs. 25 lakh.
(2) The investment limit for the SSI sector will continue to be at Rs. 1 crore.
(3) The ministry of SSI and ARI will bring out a specific list of hi-tech and export
oriented industries which would require the investment limit to be raised upto Rs. 5 crore
to admit suitable technology upgradation and to enable them to maintain their
competitive edge.
(4) The Limited Partnership Act will be drafted quickly and enacted. Attempt will be
made to bring the bill before the next session of parliament.

Fiscal Support
To improve the competitiveness of small-scale sector the exemption for excise duty Limit
rose from Rs. 50 lakhs to Rs. 1 crore.
(1) The composite loans limit rose from Rs. 10 lakh to Rs. 25. lakh.
(2) The Small-Scale Service and Business (Industry Related) Enterprises (SSSBES) with
a maximum investment of Rs. 10 lakhs will qualify for priority lending.
(3) In the National Equity Fund Scheme, the project cost limit will be raised from Small
Scale Industry
Rs 25 lakh to Rs 50 lakh. The soft loan limit will be retained it 25 percent of the project
cost subject to a maximum of Rs. 10 lakh per project. Assistance under the NEF will be
provided at a service charge of 5 percent per annum.
(4) The eligibility limit for coverage under the recently launched (August, 2000) Credit
Guarantee Scheme has been revised to Rs. 25 lakh from the present limit of Rs. 10 lakh.
(5) The Department of Economic Affairs will appoint a Task Force to suggest
revitalization/restructuring of the State Finance Corporations.
(6) The Nayak Committee’s recommendations regarding provision of 20 percent of the
projected turnover as working capital is being recommended to the financial institutions
and banks.

Infrastructure Support
(1) The Integrated Infrastructure Development (IID) Scheme will progressively cover all
areas in the country with 50 percent reservation for rural areas.
(2) Regarding upgrading Industrial Estates which are languishing, the Ministry of SSI
and ARI will draw up a detailed scheme for the consideration of the planning
commission.
(3) A plan scheme for cluster Development will be drawn up.
(4) The Funds available under the non-lapsable pool for the North-East will be used for
Industrial Infrastructure Development, setting up of incubation centers, for cluster
Development and for setting up of IIDs in the North-East including Sikkim.

Technological Support and Quality Improvement

(1) Capital subsidy of 12 percent for investment in technology in selected sectors. An
Inter-ministerial committee of Experts will be set up to define the scope of technology
upgradation and sectorial priorities.
(2) To encourage Total Quality Management, the scheme of granting Rs. 75,000/- to each
unit for opting ISO-9000 Certification will continue for the next six years i.e., till the end
of the 10th plan.
(3) Setting up of incubation centers in Sunrise Industries will be supported.
(4) The TBSE set up by SIDBI will be strengthened so that it functions effectively as a
Technology Bank. It will be properly networked with NSIC, SIDO (SENET programme)
and APCTT.
(5) SIDO, SIDBI and NSIC will jointly prepare a compendium of available technologies
for the R & D institutions in India and Abroad and circulate it among industry
associations for the dissemination of the latest technology related information.
(6) Commercial banks are being requested to develop schemes to encourage investment
in technology upgradation and harmonize the same with SIDBI.
(7) One-time capital grant of 50 percent will be given to Small-Scale Associations which
wish to develop and operate Testing Laboratories, provided they are of international
standard.

Marketing Support
(1) SIDO will have a Market Development Assistance (MDA) programme, similar to
one obtaining in the Ministry of Commerce and Industry. It will be a plan scheme.
(2) The vendor Development Programme, Buyer-Seller meets and Exhibitions will
take place more often and at dispersed locations.

Informational Support
(1) General information.
(2) Technical/Marketing expertise in specific areas.
(3) Technical and financial expertise.
(4) Implementation assistance for turn-key projects.

Incentives and Subsidies

(1) Export-import subsidies.
(2) Interest free loans.
(3) Subsidy for R & D work.
(4) Capital investment subsidy.
(5) Transport subsidy.
(6) Interest subsidy.
(7) Subsidy for power generation.
(8) Exemption from property tax.
(9) Incentives for NRI.
(10) Exemption from income tax.
(11) Sales tax exemptions.
(12) Price preference to SSIs.
(13) Subsidy/assistance for technical consultancy.
(14) Exemptions from stamp duty.
(15) Provisional for seed capital.
(16) Allotment of controlled or subsidized raw materials.
(17) Subsidy for cost of market study/feasibility study or reports.

Other Types of Support

(1) Streamlining Rules and Regulations.
(2) Entrepreneurship development training.
(3) Rehabilitation of sick units.
WHAT IS THE ROLE OF GOVERNMENT FOR PROMOTING SSI

List of Organizations Promoting SSIs

• Small Industry Development Organization (SIDO)
• National Small Industries Corporation Ltd (NSIC
• Small Industries Development Bank of India (SIDBI
• Indian Institute of Entrepreneurship (IIE)
• National Institute of Small Industry Extension Training (NISIET)
• State small industrial development corporations(SSIDC)
• State directorate of industries(SDI’s)
• District industries centers(DIC’s)

PROBLEMS/OBSTACLES FOR SSI

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