•Definition:
SSI’s are the industrial undertakings
having fixed investment in plant and machinery, whether held on ownership basis
or lease basis or hire purchase basis not exceeding Rs. 1 crore.
Characteristics
of Small-Scale Industries
•(i)
Ownership:
Ownership of
small scale unit is with one individual in sole-proprietorship or it can be
with a few individuals in partnership.
•(ii)
Management and control:
A small-scale
unit is normally a one man show and even in case of partnership the activities
are mainly carried out by the active partner and the rest are generally
sleeping partners. These units are managed in a personalized fashion. The owner
is activity involved in all the decisions concerning business.
•(iii)
Area of operation:
The area
of operation of small units is generally localized catering
to the local or regional demand. The overall resources at the disposal of small
scale units are limited and as a result of this, it is forced to confine its
activities to the local level.
•(iv)
Technology:
Small industries
are fairly labor intensive with comparatively smaller capital investment than
the larger units. Therefore, these units are more suited for economics where
capital is scarce and there is abundant supply of labour.
•(v)
Gestation period:
Gestation
period is that period after which teething problems are over and return on
investment starts. Gestation period of small scale unit is less as compared to
large scale unit.
•(vi)
Flexibility:
Small
scale units as compared to large scale units are more change susceptible and
highly reactive and responsive to socio-economic conditions. They
are more flexible to adopt changes like new method of production, introduction
of new products etc.
•(vii)
Resources:
Small
scale units use local or indigenous resources and as such can be located
anywhere subject to the availability of these resources like labor and raw
materials.
•(viii)
Dispersal of units:
Small
scale units use local resources and can be dispersed over a wide territory. The
development of small scale units in rural and backward areas promotes more
balanced regional development and can prevent the influx of job seekers from
rural areas to cities.
Objectives
of Small Scale Industries:
1.
To create more employment opportunities with less investment.
2.
To remove economic backwardness of rural and less developed regions of the
economy.
3.
To reduce regional imbalances.
4.
To mobilize and ensure optimum utilization of unexploited resources of the
country.
5. To improve standard of living of people.
6. To ensure equitable distribution of income and wealth.
7. To solve unemployment problem.
8. To attain self-reliance.
9. To adopt latest technology aimed at producing better quality
products at lower costs.
Filing of Entrepreneurs’ Memorandum
•
Filling of memorandum by a Micro, Small or Medium Enterprise
Section 8 of the Micro, Small and Medium Enterprises Development
(MSMED) Act, 2006 is necessary.
•
The memorandum may be filed by all three categories of enterprises
with the District Industries Centre in the jurisdiction of which
the enterprise is (or, is proposed to be) located.
• The File Format for
Entrepreneurs Memorandum and the detail procedure for filing it are
available at http://dcmsme.gov.in/howtosetup/getstart
Obtaining SSI
Registration :
Entrepreneurs desiring to start a Small Enterprise have to initially obtain a PRC(Provisional
Registration Certificate). Once the Unit goes into Production, the PRC has to
be converted into a Permanent Registration Certificate (PMT).
a) PRC : This is the
Initial Registration reqd for starting a Micro & Small Enterprise. The
Entrepreneur has to apply & obtain a PRC after selection of the Project
& deciding on the Location of the Unit. This Application is necessary for
Infrastructural Facilities such as Land, Shed, Power etc & Finance from the
Financial Institutions.
b) Permanent Registration
Certificate (PMT) :
A
Micro or a Small Enterprise can get a Permanent Registration Certificate when
it actually commences Commercial Production / Service. PRC would be converted
to PMT when the Unit commences its Commercial Activities.
PMT Registration will help in several ways like the following :
ü To apply for scarce raw
materials & for imported raw materials.
ü To get Working Capital
Loan from Banks / Financial Institutions.
ü To get Central Excise
Duty Concessions.
ü For Claiming Incentives,
Concessions, including Sales Tax Exemption wherever applicable.
ü
To apply for registration under Govt Stores purchase programs / Ancillary
Development Programme / Export Promotion Program & to get Purchase &
Price Preference.
Benefits of SSI registration
•Collateral Free Loans From Banks:
•Reservation Policies To Manufacturing /
Production Sector:
•Very Easy To Get Licenses, Approvals And
Registrations:
•Special Consideration On International Trade Fairs:
•Waiver Of Stamp Duty And Registration Fees:
•Exemption Under Direct Tax Laws:
•Bar Code Registration Subsidy:
•Eligible For IPS(Industrial Promotion Subsidy) Subsidy
•Protection Against Delay In Payment
•Reduction In Rate Of Interest From Banks
•Waiver In Security Deposit In Government
•Concession In Electricity Bills:
•Reimbursement Of ISO Certification
•Excise Exemption Scheme
•Preference In Procuring Government
•15% Weightage In Price Preference:
•1% Exemption On Interest Rate On OD
•50% Subsidy For Patent Registration
Drawbacks and problems of SSI
•Finance and credit
•Raw material availability
•Machines and other equipments
•Problems of marketing
•Inspector RAJ (for all clearances)
•Adverse effect of economic reform and Globalization
INDUSTRIAL SICKNESS
•Def : “ A company where the accumulated losses at the end of any financial
year results in erosion of 50% or more of its peak net worth during the immediately
preceding five financial years ”
Causes of Industrial Sickness
•From External
–Govt. Policy
–Erratic Supply of Inputs
–Locational Problems
–Technological Problems
–Power Cuts
•From Internal
–Inexperienced managerial skills
–Paucity of funds
–Entrepreneurial incompetency
–Weak management
–Outdated / faulty equipments
