Small scale sector has been assigned with an important role in the national economy, it is strongly felt that in today’s world it is the small industry that holds the key to growth with equity.
It accounts for 40 percent of the gross value of output in the manufacturing about 80 percent of total employment and over 35 percent of the total export of the country.
The Government of India has introduced several policy methods to develop this vast sector, under the policy of reservation of items for small scale sector, 836 items are reserved for exclusive production in small scale industries and Government also declared 1995-96 as the “SSI Year” and small Industrial Development Bank of India (SIDBI) was established to function as development Bank for SSI with sector. SIDBI’s technology up gradation and modernization programs are aimed at improving the technological capabilities and competitiveness of SSI units in cluster by introducing commercially proven technologies which will result in significant improvement in quality, productivity to bring about cost reduction, saving of energy and raw materials consumption and reduction in the level of pollution.
(Source- Dept of industries commerce)
Meaning of small scale industries:
The best answer is here:
The delimitation for small-scale industries has changed over time. Initially they were classified into two categories. Those using power with less than 50 employees and those not using power with the employee strength being more than 50 but less then 100. However the capital resources invested on plant & machinery buildings have been the primary criteria to differentiate small scale industries from the large & medium scale industries.
An industrial unit can be categorized as a small-scale unit if it fulfils the capital investment limit fixed by the Government of India for the small scale sector.
As per that latest definition for any industrial unit to be regarded as small scale industrial unit the following conditions is to be satisfied.
Investment in fixed assets like plants equipments.
Either held on ownership terms on lease or on hire purchase should not be more
than Rs. 10 million.
However, the unit in no way can be owned or controlled or ancillary of any other
industrial unit.
classification of small-scale industries
Tiny Industry:
Tiny scale industry is one in which the investment in plant and machinery is less than Rs. 25 lakhs irrespective of the location of the unit.
Ancillary Industry:
An Industrial undertaking which is engaged or is proposed to be engaged in the manufacturer or production of parts, components, sub assembles toolings or intermediates, or the rendering of services and undertaking supplied or proposes to supply or render not more than 50% its production or services, as the case may be, to one or more other industrial undertaking and whose investment in fixed assets in plant and machinery whether held on ownership terns or on lease hire purchase does not exceed Rs. 1 crore.
(Source: Management of Small scale Industries by Venkat Desai)
Investment limit of small scale industries:
The definition of small scale industries has under gone changes over the years in terms of investment limits in the following manner.
Table Shows Investment Limit
| Investment Limit | Additional condition |
| 1950 upto Rs.5 Lakhs in Fixed Assets | Less then 50/100 persons with or without power |
| 1960 upto Rs.5 Lakhs in Plant & Machineries | No Conditions |
| 1966 upto Rs.7 Lakhs in Plant & Machineries | No Conditions |
| 1975 upto Rs.10 Lakhs in Plant & Machineries | No Conditions |
| 1980 upto Rs. 20 Lakhs in Plant & Machineries | No Conditions |
| 1985 upto Rs.35 Lakhs in Plant & Machineries | No Conditions |
| 1991 upto Rs.60 Lakhs in Plant & Machineries | No Conditions |
| 1997 upto Rs.100 Lakhs in Plant & Machineries | No Conditions |
Growth of small scale Industry:
The steady growth of small scale industries has been one of the most significant features of planned economic development. The small scale sector has grown phenomenally during the last 3 decodes & the sector has played & has potential to play a vital role in the full filament of our socio-economic objectives. The total number of small scale units in the country in 2000-2001 was 3.37 lakhs compare to 3.21 lakhs in 1999-2000. Value of production of production of small scale units in 2000-01 aggregated to Rs. 6,45,496 crores.
No. of Units production Employment & exports in SSI Sectors:
| Year | No. of SSI Units in Lakhs | Production (Rs. In Crores) | Employment (in Lakhs) | Export |
| 1993-94 | 2.39 | 2,41,648 | 13.94 | 2,41,648 |
| 1994-95 | 2.57 | 399,886 | 14.66 | 2,66,054 |
| 1995-96 | 2.66 | 3,62,656 | 15.26 | 2,96,385 |
| 1996-97 | 2.80 | 4,11,585 | 16.00 | 3,29,935 |
| 1997-98 | 2.94 | 4,62,641 | 16.72 | 3,57,749 |
| 1998-99 | 3.08 | 5,20,650 | 17.16 | 3,85,296 |
| 1999-00 | 3.21 | 5,72,887 | 17.85 | 4,16,736 |
| 2000-01 | 3.37 | 6,45,496 | 18.56 | 4,50,450 |
10 Lakhs = 1 million
The volume of employment in the small scale stood at 18.56 lakhs as of end March 2001, Export from the SSI sector account for about 35 percent of the country’s total exports. In 2000-2001, SSI exports valued at Rs.4,50,450 crores, increased by 12.4% over 1999-2000.
Achievement in the industrial Sector in Karnataka:
Karnataka has been a pioneer in Industry. For several years now the state has been consistently pursuing progressive Industrial policies to meet the changing needs of the state’s economy industry over the last 100 years, the statue has had the distinction of building a strong and vibrant Industrial base, which combines the intrinsic strengths of large & medium privately owned industries and has outstanding examples of success in the old economy. In recent times, Karnataka has emerged as the knowledge & technology capital of the country making rapid stride in the new economy as well (IT) Information technology and related industries. Bio-technology & strong research & development institutional has given Karnataka a pride of place in the global market.
During the period 2005-06 to 2009-10 the achievement in the industrial sector in Karnataka were as under:
Table Shows achievement in the industrial sector in Karnataka
| Sl. No. | Sector | No. of units established | Investment in Rs. Croere | Employment in numbers |
| 1. | Small Scale industries | 93.845 | 3008.78 | 4,44,259 |
| 2. | Medium Scale industries | 194 | 2499.96 | 45.703 |
| 3. | Large & Mega industries | 21 | 8682.62 | 13,331 |
| | Total | 94,060 | 14191.36 | 103.297 |
Source: New industrial policy 2005-06, Department of industries and commerce, Govt. of Karnataka
The above table revels that, during the period 2005-06to 2009-10 the achievement in the industrial sector in industrial sector in Karnataka. 93.845 small scale industries are established with an investment of 3008.78 crores and employed with 4,44,259 numbers. Where as 194 medium scale industries are established with an investment of 2499.96 and employed with 45.703 in numbers and 21 large and mega industrial units are established with an investment Rs.8682.62 crores and employed with 13.331 numbers.
Taluka-wise small-scale industrial units in Gulbarga District as on 31.03.2010.
Table Shows Taluka-wise small scale Industrial units in Gulbarga District
| Sl. No. | Category Taluka | No. of units | Investment in Rs. Lakhs | Employment in numbers |
| 1. | Afzalpur | 284 | 269.43 | 917 |
| 2. | Aland | 363 | 293.94 | 1350 |
| 3. | Chincholi | 445 | 407.22 | 1772 |
| 4. | Chitapur | 1074 | 1464.53 | 5295 |
| 5. | | 3282 | 6407.72 | 17880 |
| 6. | Jewargi | 305 | 324.91 | 1148 |
| 7. | Sedam | 971 | 797.06 | 4533 |
| 8. | Shahapur | 783 | 508.59 | 3149 |
| 9. | Shorapur | 748 | 443.16 | 3280 |
| 10. | Yadgir | 1082 | 1116.14 | 4578 |
| | Total | 9347 | 12032.70 | 43902 |
The total number of SSI units as on 31.03.2010 were 9347.
Now the number of SSI unties has been increased from 9347 in the year 2009-10 to 11,649 in the year 2008-09,
The total number of SSI in
Institutional finance for small scale industries is provided by commercial banks, the State Bank of
ROLE OF SMALL SCALE INDUSTRIES:
The Small Scale Industries sector, over the years, has grown steadily and occupied an important place in the economy. Contribution of the sector in terms of generation of employment, output and exports is quite significant. The number of registered units in the SSI sector has increased from 0.42 million as at end- March 2009 to 3.37 million at end-March 2010. These numbers are exclusive of the units in the unregistered sector.
The importance of the Small Scale Industries sector is well-recognized from its significant contribution to the socio-economic objectives of growth in generation of employment, output, exports and fostering entrepreneurship. Currently, the sector accounts for around 95 per cent of the industrial units in the country contributing 40 per cent of the manufacturing sector output and approximately one-third of the nation’s exports. At the end of March 2010, there were 3.37 million modern SSI units providing direct employment to around 1.86 million persons.
Despite the important role played by SSI sector in the Indian economy, it is rather difficult to obtain authentic and comprehensive information on various facets of the sector from single source. In order to fill the void in information base, SIDBI, the apex financial institution for SSI sector in India, took initiative in bringing out a series of publication viz. ‘SIDBI Report on Small Scale’.
Industries Sector’ on an annual basis. First two issues of the Report released at the hands of Hon’ble Union Finance Minister has been received well both within the country and at international level. The SIDBI Report on Small Scale Industries Sector 2009 is third issue in the series.
The process of liberalization and globalization has opened up new vistas for various sectors of the economy as also posed certain challenges. While on the one hand, it expands the scope of cross-border transactions, on the other, the new order holds different perception about protection and safeguards that a global trading system should provide to its members. Both these aspects have significant implications for the Indian economy as a whole and the SSI sector in particular.
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