Small Scale Industry: Presented By: Prakhyath Rai
Small Scale Industry: Presented By: Prakhyath Rai
Small Scale Industry: Presented By: Prakhyath Rai
Small scale industries makes use of local raw materials, local skills, local finance and
generally local markets.
Small scale industries contribute to socio-economic development of the country.
Small scale industries and business sectors have emerged as a dynamic and vibrant
sector for the Indian economy.
SSI’s account to 35% of Indian industrial exports.
“An industrial undertaking in which the investment in fixed assets, plant and machinery
does not ross Rs. 10 million is treated as a SSI unit. This is irrespective of whether the
Industrial Units where the investment in plant and machinery is limited to Rs. 25 Lakh,
irrespective of the location of the unit are referred as tiny industrial units.
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• To encourage small entrepreneurs and help them to grow and realize their
dreams 78
‘Scope of SSI’ refers to the range of activities and the type of products that come under
the SSI.
Example:
1) Manufacturing activities 2) Construction activities
3) Public Activities 4) Service/Repairing activities
5) Financial activities 6) Retailing activities
7) Wholesale business
SSI’s use local resources and manpower thus improving local economy
Defensive Stocks
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007
Advantages of SSI Cont..
SSI’s make use of the large semi skilled and unskilled labour
Defensive Stocks
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007
Weaknesses/Drawbacks/Disadvantages of SSI
Raw Materials
The problem with respect
Finance to raw materials are as
follows,
Marketing
Absolute scarcity
Poor quality
Capacity under-utilization
High cost
Outdated Technology
Raw Materials
Finance
The problem with respect to
Marketing finance are due to,
Scarcity of Capital
Capacity under-utilization
Weak creditworthiness of
Raw Materials
Finance
Marketing
SSI units lack professional
Capacity under-utilization
marketing executives as
employed by large sectors,
Outdated Technology
hence marketing can be a
weakness.
Raw Materials
Finance
Capacity in SSI is not fully
Marketing utilized leading to lower
optimization.
Capacity under-utilization
Outdated Technology
Raw Materials
Finance
Marketing
Continued usage of old
Capacity under-utilization technology and no upgradation
brings down their efficiency.
Outdated Technology
Over Protection
Most of the SSI units do not
Inefficient Entrepreneurs have desire to grow to medium
and large scale because of the
Zero R & D
benefits of protection and
Low Wages
Over Protection
Inefficient Entrepreneurs
Entrepreneurs who are young, and
Zero R & D lack industrial experience, and also
whose financial background is
Lack of Successors
weak and those who are stressed
Over Protection
Inefficient Entrepreneurs
Zero R & D
SSI units hardly invest in R & D
Over Protection
Many entrepreneurs who run SSI units may,
Inefficient Entrepreneurs Transfer the responsibility to their children
who might be inefficient or are unwilling
Zero R & D
to continue family business
Low Wages
Over Protection
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Arrangement of finance is required for two reasons:
i. Fixed capital – Finance required for setting up infrastructure like land,
buildings, machinery etc.,. This can be generated by,
Partnership
Bank loans
Venture capitalists
Personal savings
ii. Working Capital – Finance necessary for buying raw materials and
recurring expenditure, can also be raised by various sources.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007
Steps to Start a SSI Cont..
Depending on the SSI been set up and the area where the unit is located, a
number of licences and clearances are required to be procured such as:
i. Municipal authorities (If within city limits)
ii. Chief Inspector of Factories (If employed more than 10 individuals)
iii. Ministry of Agriculture (For food and vegetable processing)
iv. State Drug Controller ( For making drugs and cosmetics)
v. Collector, Central Excise (Excise items like alcohol, cigarette etc.,)
vi. Bureau of Indian Standards (For all measurements)
vii. Company law board (For Reg. to corporate body)
viii. Pollution Control Board (For pollution control clearances) etc.,.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007
Steps to Start a SSI Cont..
Manpower power is key to success of any organization. The right kind of staff –
right from managerial to worker have to be recruited so that all types of work
can be accomplished.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007
Steps to Start a SSI Cont..
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Factors to be taken care with respect to power and water supply are:
Application for connection of power (HT and LT) have to be given in
advance and alternate sources of power and water supply have to be
arranged.
Prakhyath Rai, Asst. Professor, Department of ISE, SCEM, Mangaluru-575007
Steps to Start a SSI Cont..
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After the basic trial runs, commercial production has to begin with proper
quality checks in place
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Marketing the product is the most important step in realizing the business
ambition. Business is not complete without selling the products and eensuring
that the revenue flows into the organization.
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