Want to start a Small Scale Industry(SSI)? Government can help you to go through

Every business is trying to make their mark worldwide.So why not Small Scale Industries(SSI)?India is the best place for small scale business to emerge as a powerful industry.This article will clear your doubt about-
1.What is a Small Scale Industry(SSI)?
2.What is the role of Small Scale Industries in India's development?
3.What are the problems faced by Small Scale Industries?
By Palmiped (Taken at Ruddington Framework Knitters Museum) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons4.How government institution can help you to start a small scale business?

What is a Small Scale Industry?
According to Micro,Small and Medium Enterprises Development(MSMED) Act 2006,the industries can be categorised in two,namely manufacturing and service industries.

Manufacturing Industry
(a)Micro Scale Industry-Industries in which the investment in plant and machinery does not exceeds 25 lakh rupees comes under this category.
(b)Small Scale Industry-Industries in which the investment in plant and machinery is between 25 lakh and 5 crore rupees comes under this category.
(c)Medium Scale Industry-Industries in which the investment in plant and machinery is between 5 crore and 10 crore rupees comes under this category.

Service Industry     
(a)Micro Scale Industry-Industries in which the investment in asset does not exceeds 10 lakh rupees comes under this category.
(b)Small Scale Industry-Industries in which the investment in plant and machinery is between 10 lakh and 2 crore rupees comes under this category.
(c)Medium Scale Industry-Industries in which the investment in plant and machinery is between 2 crore and 5 crore rupees comes under this category.

What is the role of Small Scale Industries?
Small Scale Industries plays the following roles-
1.Employment
As most of the small scale industries are labour intensive,they gave huge amount of employment opportunities to the people living in both urban and rural areas.
2.Balanced regional development
Most of small scale industries are located in rural areas,taking the responsibility of industrialisation and modernisation of the village economy.
3.Optimum utilisation of resource
Rural areas are rich in some or the other resources.But if some large industry functions there,it will not use the resources to it's fullest as they have lot of money to spare on resources.But if small industry functions there,it will take a good care of the resources and will use the resources to its maximum advantage.
4.Exchange earning
Small Scale Industries can reduce a heavy burden of Balance of Payment(BOP) by the following ways-
(a)It does not require the import of raw materials from foreign countries.
(b)The goods produced by Small Scale Industries are good in quality and can be used to export to other country and earn foreign exchange.
5.Feeder to large industries
Large industries cannot produce everything by their own.Hence they have to depend upon small scale industries for the production of things like spare parts etc.

What are the problems faced by Small Scale Industries?
1.Finance
Availability of sufficient finance is the biggest hurdle face by small scale industries.The are not in a position to go for the institutional sources of finance i.e banks because they does not have enough collateral as such.Hence moneylender emerges as a source of finance for them.But the interest rate it which the money is provide is very high and most of the time small business have to struggle as their output is small.
2.Raw material 
Raw material is also scarce for the business as in the non availability of raw material they will have to compromise with the quality and some times have to pay higher price to get the commodity.There bargaining poor is small as their purchase is small.They cannot take risk to buy large amount of raw material as they does not have reliable storage facilities.
3.Management
Small scale industries are most of the time owned by individual who is not professionals to manage the business.As such they cannot afford to hire professional for the management of business.
4.Labour
Labour is some times scarce as small business can not afford to pay them as they wish.Hence mobility of labour in and out is common aspect of small scale business.Hiring labour is also risky job as the labour force first have to be trained.
5.Quality
Small scale industries does not take any extra effort to improve the quality of the product.Hence most of the time suffers to sell their products.

How government institution can help you to start a small scale business?
Government can help small scale business at each stage in following ways-
1.Rural Small Business Development Centre(RSBDC)
This centre provides technical and marginal assistance to small and micro businesses in rural areas.They also organise training programmes for rural unemployed and educated youth.

2.National Small Industries Corporation(NSIC)
The corporation came into action in 1955 with the following objective-
(a)To procure and supply import raw material to small scale industries.
(b)To export the product produced by small scale industries.
(c)To improve export worthiness 
(d)To provide technical assistance to small scale industries.
(e)To provide advisory services to small scale industries.
(f)To procure government orders for small scale industries.
National Small Industries Corporation(NSIC)
  

3.National Bank for agricultural and rural development(NABARD)
(a)The bank was initiated in 1982 for integrated rural development.
(b)It supports agriculturalist,village and cottage industries and rural artisans.
(c)It provides concentric services and training programmes for small scale industries.
National Bank for agricultural and rural development(NABARD)



4.Small Industries Development Bank of India(SIDBI)
(a)It was initiated as an apex institution for giving direct and indirect finances to small scale industries.
(b)It coordinates the activities of institutions giving financial assistance to small scale industries.
(c)It has also organised small scale industries fund for giving credit to small scale industries.

5.District Industries centre(DICs) 
Small scale industries are scattered in the various parts of the country.Hence they cannot reach the capital city each time to get approval and assistance.Government of India has initiated District Industries centre in each district to get approvals from the concerned authorities.The functions performed by DICs are as follows-
District Industries centre(DICs) maharashtra(a)To identify the project and entrepreneur of the small scale industries.
(b)To get permanent registrations of small scale industries.
(c)To provide loans and raw materials to small scale industries.
(d)To obtain licenses for power and water.
(e)To enrol small scale industries for government schemes and policies.

6.Khadi and Village Industries Commission(KVIC)                    
This commission procures loans from commercial banks and other institution and grants directly to gram udyog or through the sate level khadi and village industries board.The loans are provided for buying raw material,buying machinery or buying the salary of the workers.
Khadi and Village Industries Commission(KVIC)




7.National Commission for Enterprises in Unorganised Sector(NCEUS)
This commission was initiated in September 2004 for promoting and building enterprises in unorganised sector.It's functions are as follows-
(a)To suggest measures to increase the productivity of enterprises.
(b)To increase employment opportunities.
(C)To increase the competitiveness of the industry to compete in the global market.

8.Schemes of Funds for Regeneration of Traditional Industry(SFRTI)
To increase the productivity of traditional industries and make them more competitive,this scheme was launched by Government of India in 2005 by investing 100 crores in the scheme.It's functions are as follows-
(a)To set up traditional industries in each part of the country.
(b)To increase employment opportunities.

9.Special Schemes for industries in Rural,Backward and hilly areas
(a)To provide at concessional rate to the industries in backward areas.
(b)To set up public sector industry in rural areas for balanced regional development.
(c)To provide credit facilities from commercial banks on easy term and reasonable rate of interest.
Rural and Women Entrepreneurship Development(d)To To provide tax concession to industries in rural,backward and hilly areas.
(e)To develop good infrastructure for industries functioning in rural,backward and hilly areas.
(f)to provide subsidies like transport subsidy for transportation of raw material and capital subsidy for purchase of machinery.

10.Rural and Women Entrepreneurship Development(RWED)
It was set up as building block for promoting institutional and human capabilities among the rural and women entrepreneurs.It create a sound environment for proper functioning of business owned by women.It also holds training programmes for women entrepreneurs.
Want to start a Small Scale Industry(SSI)? Government can help you to go through Want to start a Small Scale Industry(SSI)? Government can help you to go through Reviewed by Saurabh Jadhav on December 10, 2017 Rating: 5
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