Small Scale Industry power point

Small scale industry contd

SMALL SCALE INDUSTRY Topics:Different policies of SSIGovernment support to SSIs during 5 year plansImpact of liberalization,privatization and globalisation on SSIsGATT/WTOSupporting agencies of government for SSIsAncillary industry and tiny industry

IPR 1948Importance of SSIs in the overall industrial development of the country was accepted in IPR 1948It was well recognized that SSIs are particularly suited for local resources and to create employment for ruralSSIs problems- shortage of raw materials,capital,skilled labour,marketingMain thrust was to provide protection to SSIsIPR 1956Aimed to ensure decentralized sector gained enough self supportAbout 128 items were reserved for exclusive production in small sectorSmall scale industries board(SSIB) constituted a working group in 1959 for purpose the of examining and formulating a development plan for SSIsDuring third year plan period rural industries project and industrial estate projects were started to strengthen SSIsIt aimed at protection and development and initiated modern SSI in indiaIPR 1977Main thrust was on effective promotion of cottage and small scaled industries(i) Cottage and household industries:Provides self employment on a large scale(ii) Tiny sectorInvestment in industrial units in plant and machinery upto rs 1 lakh and situated in towns with population less than 50,000 as per according to 1971 census(iii) Small scale industriesSSIs comprising of industrial units with investment upto rs 10 lakh and in case of ancillary units upto 15 lakhsReservation of items for exclusive production in small scale industries and proposal to set up an agency called district industry centre in each district to promote SSIsIPR 1980It helped the small sector by increasing ceiling from rs 1 lakh to rs 2 lakhs for tiny industries, from 10 lakhs to 20 lakhs in case of small scale industries and from 15 to 25 lakhs for ancillariesDistrict industry centres are replaced with nuclear plants in each industrially backward district to promote small scale industries in backward areasIt also emphasized promotion of village and rural industries to generate economy in villagesIPR 1990Investment ceiling in plant and machinery for tiny units is increased to 5 lakhs from 2 lakhs provided unit is located in area with population of less than 50,000For SSIs investment ceiling is raised to 60 from 35 lakhsTo improve competitiveness of products manufactured in SSIs technology upgradation programs are implemented under technology development centre in SIDOSIDBI to ensure timely flow of credit facilities to SSIsIPR 1991To give priority to small and tiny sector in the allocation of indigenous raw materialIntroduction of services to help the problems of delayed payments to small sectorIntroduction of limited partnership actTo set up technology development cell in SIDOSet up of export development centre in SIDOIntoduction of integrated infrastructural development scheme with technology back up services to SSIs

IPR 2000The exemption for excise duty limit raised from 50 lakhs to 1 crore to improve competitivenessCredit linked capital subsidy of 12% against loans for technology upgradation was provided in specified industriesThe limit of composite loans was increased from rs 10 to rs 25 lakhsA group was constituted for streamlining of inspection and repeal of redundant laws and regulationsIPR 2001Investment limit in units like hosiery and handloom sectors were increased to 5crore from 1croreCorpus fund set up under the credit guarantee fund scheme was increased from 125 crore to 200 croreCredit guarantee cover was provided against an aggregate credit of rs 23 crore14 items were dereserved related to leather goods,shoes and toys IPR 200373 items were dereserved related to leather products and chemical productsInvestment in plant and machinery was increased to rs 1 crore from rs 5 croreBanks were directed to provide credit to SSI sector within an interest rate band of 2 % above and below their prime lending ratesThe composite loan limit was increased to 50 lakhs from 25 lakhsIPR 200485 items were dereservedInvestment limit increased from 1 crore to 5 crore in plant and machinerySmall and medium enterprise fund of rs 10,000 crore was started by SIDBI with 80% of lending to SSI unitsComposite loans was increased from 50 lakhs to 1 croreIPR 2005180 items were dereservedTax concessions have been provided to SSIs to promote investmentTechnological facilities have been increasedInfrastructural facilities have been improved and measures have been taken to promote marketing of productsEfforts have been made to facilitate adequate flow of creditsGovernment support to SSIs during 5 year plansFirst five year plan 1951-56Rs 48 crore was spent in SSIs covering entire field of small scale and cottage industriesSix boards were formulated..ex: all india handlooms board, all india handicrafts board, all india and village industries board,small scale industries board,coir and central silk boardSecond five year plan 1956-61Focused on dispersal of industries with an outlay of rs 187 croreAs may as 60 industrial estates were established for providing power ,water,transport etcThird five year plan 1961-66Outlayed 264 crores for development of ssi and cottage industriesIt has put a lot of stress on extension of coverage of SSIFourth five year plan 1969-73Development programming established and plan layout was rs 293 crore346 industrial estates were completed providing employment to about 80,000 peopleFifth five year plan 1974-78Main thrust was to develop SSIs to reduce povertyInitiation of development programmesPlan outlay was rs 611 croreSixth five year plan 1980-85Plan outlay was rs 1945 croreReservartion of 409 items for purchase from SSIs and 836 items are reserved for exclusive production in small scale industriesCouncil for advancement of rural technology to provide technical inputs to rural industriesSeventh five year plan 1985-990Plan outlay was 2752 croreMain thrust was upgradation of technology to increase competitivenessIncrease in employment from 96 lakhs to 120 lakhsEighth five year planPlan outlay of rs 6334Establishment of tool rooms and training institutesEstablishment of integrated infrastructure development centresSanction of composite loans and concessional loans for infrastructural developmentImpact of liberalization,privatization and globalization on SSIsLiberalisation has made import of scarce and non available raw materials easyEnterpreneurs have started SSIs which otherwise would have not been possible due to non availability of raw materials..ex computer and electronic industriesPrivatization threw open to many challenging enterpreneurs to produce similar goods like the government organizations at much competitive price and better qualityExamples are telephones and life insurance sectorGlobalization has helped in setting many small scale industriesIndian enterpreneurs in pharma sector , I.T. sector have gone to many countries to start new venturesThe progress of growth is observed in business process outsourcing ,transport,repair servicesGATTGeneral agrrement on tariffs and trade was a treaty signed by 123 nations to reduce tariffs and trade barriers on mutually advantageous basisIn its existence of more than 5 decades gatt had many challengesEcommerce,agriculture commodities,narcotics,nuclear and dangerous materials,counter trade bilateral trade agreementsWTOWorld trade organization was established in jan 1st 1995 as a replacement to GATT, serves as the legal and institutional foundation of the multilateral trading systemFuctions of wtoIt covers all commodities that are internationally traded and have formulated rules and procedures for each category as a guideline to member countriesWto has various expert committees and subcommittiees for different categories to review various subjectsIt acts as an arbitrator to sort out disputes between countries in international tradeIt reviews and advises trade policies of various countries so that they are conducive for international trade Implementing and monitoring multilateral and bilateral trade agreements Advantages of wtoAccess to advanced technology to existing and new industriesIncreased access to export marketsDisadvantages of wtoDeveloped countries are becoming protectionistsSSI will be hit due to competitonSUPPORTING AGENCIES OF GOVERNMENT FOR SSIAll india institutionsState level institutionsFund based institutionsAll india institutionsSmall scale industries board (SSIB)National small industries corporation (NSIC)The khadi and village industries commission (KVIC)Small industry development organization (SIDO)Training institutesSSIBProvides forum to its members for interaction to facilitate cooperation and inter-institutional linkages and to render advice to government on various policy matters for the development of SSIsNSICAssisting ssi units through schemes and activitiesKVICPlanning,promotion,organization and implementation of programs for the development of khadi and other village industriesSIDOApex body for assisting the ministry in formulating,coordinating,implementing and monitoring policies and programs for development of SSIsTraining institutesNISIET

NIESBUD(national institute for enterpreneurship and small business development)IIE (indian institute of enterpreneurship)

State level institutionsState small industrial development corporations(SSIDC)State directorate of industries (SDIs)Ditrict industries centres (DICs)Fund based institutionsSmall industries development bank of india (SIDBI)Commercial banks State financial corporations (SFCs)

SIDBIIt is operating different programs and schemes through 5 regional and 33 branch officesCommercial banks public sector banks have been advised to operationalize specialized ssi branchesSingle window scheme was extended to all districts to meet financial requirements of SSIsLaghu udhyami credit card scheme was launched by public sector banks for providing simplified and borrowed friendly credit facilities to ssiComposite loan was enhanced to 50 lakhs from 25State financial corporations (SFCs)Providing financial assistanceProviding long term financeProviding working capital loansAncillary and tiny industryAncillary industries are those which manufacture parts and components to be used by larger industries. Eg- Companies like GE (ancillary) produce engines for the aircraft industry. ( investment not exceeding 75 lakhs)AdvantagesIndirect development of business activities

Effective solution to marketing problemsEnable reducion in production costEmployment generation

Tiny industryInvestment in plant and machinery not exceeding 5 lakhsAdvantages Utilization of local resources Limited capital to start the industry