Presentation on Small Business Industry

Presented By:Kirti Gupta

Introduction And MeaningINTRODUCTION: Small business is important sector of Indian economy. Small scale industries accounted for 40% of value added by the whole manufacturing sector and 80% of employment. Small industries have contributed to the extent of 42% with regard to exports.

MEANING: A Small scale industry is an industrial undertaking in which the investment in fixed assets in plant & machinery, whether held on ownership term or on lease or hire purchase, does not exceed Rs.1crore. However this investment limit is varied by the government from time to time.

DEFINITIONSAccording to Fiscal Commission-1950,”A unit operating mainly with hired labour usually 10 to 50 hands”According to Small Scale Industries Board-1995,”A unit employing less than 50 persons if using power and less than 100 persons without the use of power and with a capital investment not exceeding Rs.5Lakhs.”According to the government of India-2000,”An undertaking having an investment in plant and machinery of not more than Rs.1crore”

Why We Need SSI?

1)Employment generation2)Balanced regional development3)Savings in foreign exchange4)Mobilization of capital5)Equitable distribution of income6)Self employment

Small Enterprise As A Seedbed Of EntrepreneurshipSeedbed refers to preparation of soil for the sowing of seeds for a good crop. As small-scale industries provide conductive and favourable conditions for the emergence and growth of entrepreneurship hence it is treated as seedbed for entrepreneurship.

Steps In Setting Up Of SSI

Prepare A

Business Plan

Selection Of

Product

Location of an

enterprise

Arrangement Of

Finance

Installation Of

Plant & Machiner

y

Provisional

Registration

Permanent Registration

Profit Generatio

n

Features Of Small Enterprise1)Labour Intensive: Small scale industries are generally labour-intensive. They do not require costly tools and techniques. The energy of people may be used for productive processes.2)Mobilization Of Resources: Small industrial units helps to mobilize the resources of capital and skills which often would remain inadequately utilized.3)Small Amount Of Risk: Small amount of risk is involved in small scale industry because it require small amount of investment.4)Shorter Gestation Period: Small scale industries

can be established in a short period and ensuring equitable distribution of income.5)Employment opportunities: Small business creates job in the rural areas. This will help in reducing the problem of unemployment and poverty.

Role Of Small

Enterprise in INDIA

Number of units

Employment

Generation

Investment

Output

Helpful In

Exports

Equitable Distributio

n Of Income

Regional Dispersa

l Of Industri

es

Better Industri

al Relation

1. Number Of Units: Total no. registered small scale units has been increasing rapidly from 16000 in 1950 to 36000 in 1961 and 14.96 lakh in 1991-92. There are also unregistered small scale units in India. The small scale units are producing various types of commodities starting from simple consumer goods to manufacture of sophisticated electronic goods.

2. Employment Generation: Small-scale industries are labour intensive. Total employment generated by These small-scale industries has increased to 185.6lakh in 2000-01. These units provide large employment than large scale industries.

3. Investment: Investment in small scale sector has been increasing at a faster rate. Total amount investment in small scale sector in India has increased significantly from Rs. 2333crore in 1972-73 to Rs.9588crore in 1985-86.4. Output: Total production of small scale industries has increased from Rs. 7200crores in 1973-74 to Rs. 9588crore in 1985-86.

5. Helpful in Exports: The contribution of SSI sector towards export increasing at a faster rate. The share of exports has increased from 9.6 percent in 1971-72 to 35 percent in 1999-2000.Thus they help in increasing the country's foreign exchange reserves .

6. Equitable Distribution Of Income: Small-scale and

Cottage industries have been resulting more equitable distribution of national income and wealth. This is mainly due to the fact that the ownership of small-scale industries is quite widespread as compared to large scale industries and SSI having high employment potential than that of large scale sector.7. Regional dispersal of industries: People migrate from rural and semi urban areas to these highly developed centres in search of employment which leads to overcrowding , pollution, creation of slums etc. This problem is solved by SSI which utilise local resources and brings about dispersion of industries in the various parts of the country thus promotes balanced regional development.

8. Better industrial relation: Better industrial relations between the employer and employees helps in increasing the efficiency of employees and reducing the frequency of industrial disputes. The loss of production is less in small-scale industries. Due to good employee-employer relationship, there is increase in production, employment and exports in SSI

Problem Of Small Enterprise

Role Of Government In Promoting SSIThe government of India provides various opportunities through its ministries, bodies and programes. Few of these are listed below:

 

1. Public Sector Banks: Banks are the most accessible source for financial support for SMEs. They offer a range of services and schemes including loans and credit facilities for various business needs

2. National Bank for Agriculture and Rural Development (NABARD): NABARD works towards integrated rural development and helps promote rural businesses and small industries, agriculture and cottage industries. They offer various training and development and consultancy services as well as credit facilities to support these businesses.

3. National Small Industries Corporation Limited (NSIC): Set up with the objective to boost small scale industries in India, NSIC helps import machines on easy hire purchase terms.

4. Small Industries Development Bank of India (SIDBI): As the name suggests, SIDBI was primarily set up to provide financial assistance to small scale industries in India. It is one of the leading government bodies that provides various financial schemes across a range of industries and services.5. National Commission for Enterprises in the Unorganized Sector (NCEUS): This Commission was constituted for the welfare of enterprises in the unorganized and informal sector. Their primary role is to generate business and employment opportunities in the unorganized sector. 6. Rural and Women Entrepreneurship Development (RWED): This programe is focused on encouraging entrepreneurship among women and the rural population. It supports various business and entrepreneurial initiatives by providing timely advice and counselling, initiating training and development programes and helping secure credit opportunities.

Contribution Of Banks In Promoting SSI

State Bank Of India

Punjab National Bank

Union Bank Of India

Bank Of India

Conclusion So in the end, we can say that Small Scale industries is developing industries in our economy. We should encourage the entrepreneur to set the small scale industries in rural areas , so that we can develop the rural areas by giving opportunities to unemployed persons. Government should also help the small scale industries by giving marketing assistance and also help in technology upgradation . Loans should also be given by various banks at concessional rate of interest . This all is done for the balanced regional development.

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