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Small scale industries are labor intensive but require less capital. Small businesses can be either manufacturing industries or service providers. The Small businesses include goods or provide services with the help of small machines and a few workers and employees. The enterprise must come under the guidelines laid down by the Government of India. Small businesses in India are the lifeline of the Indian economy, and they provide many job opportunities for skilled labor. Finally, from a financial and social point of view, small businesses are essential to the economy.

For a developing country like India, these industries thrive on huge demand and opportunity. Some small businesses are also exporting goods, bringing in foreign currency to India. About half of the products shipped to India are from small scale and mid-scale industries. Some small businesses are created due to the demand of vendors of multinational companies.

The Government of India has some guidelines for small businesses in terms of company-made investments and income-generating income. Small businesses are classified into three parts: manufacturing / manufacturing, ancillary and service industries. Manufacturing Industries: Units that process a finished product for use or used in the processing industries. These types of small businesses are usually privately owned. Examples of manufacturing small scale industries are power looms, engineering industries, food processing etc.

Ancillary Industries: Large companies or MNCs. Makes finished goods, but they usually do not make all the parts themselves. The sellers of these companies are ancillary industries. Ancillary industries can also be identified as companies that make machines for multinational companies or mid-sized enterprises. Service Industries: Repair shops and maintenance industries fall under the category of service industries

Essentials for SSI

Labour intensive:

Small scale industries are quite labor intensive. They provide economic solutions by providing employment opportunities in urban and rural areas at relatively low cost of capital investments.

Flexibility:

Small-scale businesses offer relief in their operations. They quickly adapt to a variety of factors that play a large part in day-to-day operations. Their flexibility makes them best suited to a constantly changing environment.

One-man show:

A small-scale unit is usually a one-man show. It has the organization by individuals. Some small units have the run run by a partnership firm or company. The activities mainly carried out by one of the partners or the director. So, ‘they provide an outlet for the expression of entrepreneurial spirit. As they are their own boss, the decision making process becomes faster and sometimes innovative.

Use of indigenous raw materials:

Small scale industries use indigenous raw materials and promote intermediate and capital goods. They contribute to rapid balanced economic growth in a transition economy. It is possible through decentralization and the disintegration of industries in local sectors.

Local operations:

To meet the local and regional demands of the people, small businesses usually limit their operations to local areas. They cannot expand their business activities due to limited resources.

Importance of small scale industries

Skill Light

Another attraction of small businesses lies in the light of their skills; big business comes with a big deal of management and supervisory skill foremen, engineers, accountants and so on. Like capital, this skill is also in very short supply in our country. And for economists to use it as much as possible.

Small-scale enterprises provide a way to do this and at the same time provide industrial experience and serve as a training ground. It is for a large number of small business managers, some of whom develop the ability to manage large-scale enterprises.

Use of local resources

Small-scale enterprises import light as they use relatively small amounts of imported equipment and materials compared to the total capital used in them. Large-scale industries, on the other hand, require massive imports in the form of equipment and materials, which upset the country’s balance of payments.

Use of local resources

Small-scale enterprises import light as they use relatively small amounts of imported equipment and materials compared to the total capital used in them. Large-scale industries, on the other hand, require massive imports in the form of equipment and materials, which upset the country’s balance of payments.

Fast production

Small-scale enterprises are like the “fast investment type” in that the time between capital investment and the start of the flow of manufactured goods is relatively short.

In a developing economy, with inflationary pressures and the need for rapid growth in living standards, the importance of such rapid investment type industries can hardly be overstated. Anti-inflation needs and growth needs are often in conflict but small businesses can find compromises that have high fruit coefficients and even short fruit lengths.

Latest news

The Covid-19 epidemic has devastated people around the world and caused great loss of life and property. It has changed the entire world order and is comparable to the great events of the past. Events of such scale often give birth to new beliefs in people that can help them overcome their shortcomings; and enter a new era. It has wide expectation that the 2021 budget aims to build trust and determination among the people.

Manufacturing, the backbone of any growth story, is an area that needs special attention. Today’s world is looking for an alternative in the manufacturing space for China. India needs to adopt the right strategy to seize this opportunity.

P.L.I. Expansion of the scheme

The Production Linked Incentive Scheme was one of the major schemes that had launch in March 2020 to boost domestic production; and reduce import bills. P.L.I. The scheme aims to provide incentives to companies on additional sales of products manufactured in domestic units. It encourages both domestic and foreign companies to set up their manufacturing units in India; and to expand existing manufacturing units. P.L.I.

The scheme had initial rotation for the production of mobile and related devices as well as pharmaceutical components and medical devices. We believe that P.L.I. The time is right to extend the plan to other key areas.