UNIT-VI Small Scale Industry (SSI)

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  UNIT-VI   Small Scale Industry (SSI) Contents: 1.Definition of SSI. 2.Classification of SSI. 3.Characteristics of SSI. 4.Need and Rational of SSI. 5.Objectives of SSI. 6.Scope of SSI. 7.Role of SSI in Economic Development. 8.Advantages and Dis-advantages of SSI. 9.Steps to start a Small Scale Industry. 10.Government policy towards SSI or Different Policies for SSI. 11.Government support to SSI during 5year plans. 12.Impact of Liberalization, Privatization and Globalization on SSI. 13. Effect of WTO on SSI’s , Functions of WTO & Advantages of WTO.  14.Supporting Agencies of Government for SSI. 15.Ancillary Industry and Tiny Industry. Advantages of Ancillary Industry and Tiny Industry.    1) Definition of SSI.   “An Industrial undertaking in which the investment in fixed assets, plant and machinery does not cross Rs 10 million is treated as SSI unit” This is irrespective of whether the assets are held on ownership terms or on lease. Ex: Ice Creams, Bread, Biscuits, Rice Mills, Garments, Auto Repair and service etc  New Definition of SSI: Union ministry of commerce and Industries (1960) “SSI will include all Industrial limits with a capital investment not more than Rs 5lakhs, irrespective of the number of persons employed”   2) Classification of SSI. SSI are broadly classified as: I)Traditional Industries: 1. Khadi and village Industry. 2. Handloom. 3. Handicrafts. 4. Coir ( Fiber from the outer husk of the coconut, used in making Ropes.) 5. Sericulture ( Manufacturing of Silk.)  II) Modern Industries: 1. Small Scale Industrial Undertaking. 2. EUO [ Export Oriented] SSI uits. 3. Ancillary Industrial Unit. 4. Tiny Industrial Unit. 5. Small- Scale Business and Business Enterprise . 3) Characteristics of SSI.   Some important Characteristics of SSI are: 1. Generally owned by a single or at the most 2 persons and engaged in  production of small goods. 2. Capital investment is low. 3. Most SSI’s employ less than 10 workers.  4. Most of them are family owned industries. 5. Small Scale units generally use local resources although the market for its  product can be far and wide. 6. SSI’s are generally labour intensive.   7. Organization structure of an SSI’s would be very simple.   8. Innovation and risk bearing are high in SSI’s.   9. Technology may become obsolete, resulting in closure of SSI’s.  10. Generally found in urban or semi urban areas.  4) Need and Rational of SSI.  The following are some of the important points that stress the need and Rationale of SSI’s 1.Innovative : Small units are generally have highly innovative. In SSI’s, there will not be enough facilities, machines or resources. To get the jobs done with the limited available facilities, innovation arises. 2. Self Satisfaction:  It gives lot of self-satisfaction to workers for having done a good job with limited facilities. 3. Caters to individual taste and Styles:  Provide food and drink at a social event. SSI’s can change the process of production according to the changes in the taste and fashions of the customers. 4. Small in Operation:   SSI’s utilize local labour, small in operation and leads to satisfaction of the entrepreneur. 5. Strength of nation: SSI are generally locally owned and well controlled. This leads to strengthening of a family and other social system.
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