small scale sector final

7/28/2019 Small Scale Sector Final

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A PROJECT REPORT ON PERFORMANCE OF

SMALL SCALE INDUSTRIES IN INDIA

(OPTION B- TERM PAPER)

SUBMITTED BY

NAVPREET GHUMAN

ROLL NO. 530

B.COM (HONS.) FINAL YEAR

UNDER THE SUPERVISION OF

AMITA CHARAN

ASSISTANT PROFESSOR

Department of Commerce

JANKI DEVI MEMORIAL COLLEGE

UNIVERSITY OF DELHI


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CERTIFICATE

As a student of B.COM.(HONS.) final year I have prepared this project on "SMALL SCALE

ENTERPRISE IN INDIA ". I certify that the information contained in this report is an original work

and fully based on my understanding . It has not been submitted in part or full for any other

diploma or degree of any university. I have taken proper care and shown utmost sincerity in

completion of this project. This project is prepared in accordance with the guidelines issued by

University of Delhi.

Amita Charan Navpreet Ghuman

Mentor Student


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ACKNOWLEDGEMENT

I want to give my sincere thanks and deep sense of gratitude to my mentor and respected teacher

AMITA and to all teachers of J.D.M. College for their valuable guidance, interest and constant

encouragement for fulfillment of our project. I am grateful to our college authorities for stocking a

rich collection of books and magazines in the library which has acted as great oasis of knowledge

aimed the vast deserts of our ignorance. It is a great opportunity for me to work on such an

interesting topic which would prove to be great help to me in understanding the relevance of Small

Scale Sector to Indian economy in the era of globalization .

Navpreet Ghuman

{B.com (hons) 3 rd year }


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CONTENTS

S.NO. PARTICULARS PAGE NO.

1. CHAPTER 1

AIM AND OBJECTIVE OF THE STUDY5

2. CHAPTER 2

Definition of Small Scale Industries

Classification of Small Scale Industries

Regulatory bodies and regulations

The Micro, Small and Medium Enterprise

Development Act, 2006

6

6-8

8-10

10-13

3. CHAPTER 3

Research Methodology 14

4. CHAPTER 4 Role Of SSI in Indian Economy

Performance Of SSE

Issues related to SSE

Problems faced by SSE

Measures to promote SSE

Items reserved for exclusive production in

SSE

15-17

18

18-19

19-21

22

22-23

5. CHAPTER 5

Conclusion24


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CHAPTER 1

AIM AND OBJECTIVES OF THE STUDY

AIM OF THE STUDY

The aim of this descriptive study is to understand the performance and status of Small Scale

Industries in India. Small Scale sector in India is considered to have huge potential which is

expected to grow and prosper with its wide range of products. It is estimated that with 40 percent

share in total industrial output and 35 percent share in exports, the small-scale industrial sector in

India is acting as Engine of Growth in the new millennium.

OBJECTIVES OF THE STUDY

The study was an in-depth study of performance of small scale industry in India. The main

purpose of the study was to investigate performance, status and potential of small scale industry in

India. For achieving this main objective several sub-objectives have been framed as discussed

below; To study the performance and status of small scale sector contributing towards

growth of India economy.

To study the employment generation opportunities and exports capacity of this

sector

To figure out the implications and problems faced by small scale sector

To analyse the Government measures taken to promote this sector.


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CHAPTER 2

INTRODUCTION TO THE SMALL SCALE SECTOR

DEFINITIONS:

SMALL SCALE SECTOR

The Small Scale Sector comprises of all those industrial units which have made a smaller

investment in fixed assets and employ a smaller number of workers as compared to large scale

industrial units.

SMALL SCALE INDUSTRY

Small Scale Industries has been defined as an industrial undertaking in which the investment in

fixed assets in plant and machinery whether held on ownership terms on lease or on hire purchase

does not exceed Rs 10 million (subject to the condition that the unit is not owned, controlled or

subsidiary of any other industrial undertaking).

CLASSIFICATION OF SMALL SCALE SECTOR

Under Micro, Small and Medium enterprises Act, 2006 the small scale enterprises in India have

been further classified broadly:

Classification based on nature of enterprise:

(i) Manufacturing: Those engaged in production or manufacturing.

(ii) Services: Those engaged in providing/rendering of services.

Classification based on investment:

Both of the categories of enterprises have been further classified into micro, small and medium

enterprises based on their investment in plant and machinery (for manufacturing enterprises) or on

equipments ( those providing or rendering services).


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The present ceiling on investment to be classified as micro, small or medium enterprises is as

under:

CLASSIFICATION

Investment Ceiling For Plant, Machinery or Equipments *@

Manufacturing Enterprises Service Enterprise

MICRO Up to Rs.25 lakh ($50

thousand)

Up to Rs.10 lakh ($20 thousand)

SMALL Above Rs.25 lakh ($50

thousand) & up to Rs.5

crore ($1 million)

Above Rs.10 lakh ($20 thousand) &

up to Rs.2 crore ($0.40 million)

MEDIUM Above Rs.5 crore ($1

million) & up to Rs.10 crore

($2 million)

Above Rs.2 crore ($0.40 million) &

up to Rs.5 crore ($1 million)

*Fixed costs are higher @ $1 = Rs.50 (April 2009)

(source: http://www.dcmsme.gov.in/ssiindia/MSME_OVERVIEW09.pdf )

CLASSIFICATION OF SMALL SCALE INDUSTRIES

The Small Scale Industrial Sector comprises of

i. Traditional Industries like khadi, village industries, handloom, handicrafts, etc. which use

manual power and are mostly located in rural areas, and

ii. Modern Industries like power loom that use mechanical power and modern machines.

The traditional small industries are highly labour-intensive while the modern small-scale units make

the use of highly sophisticated machinery and equipment. One special characteristic of traditional

small-scale industries is that they cannot provide full time employment to workers, but instead can

provide only subsidiary or part time employment to agricultural laborers and artisans.


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Among traditional village industries, handicrafts possess the highest labour productivity, besides

handicrafts make a significant contribution to earning foreign exchange for the country.

Nowadays Indian Small-scale industries (SSIs) are mostly modern small-scale industries.

Modernization has widened the list of products offered by this industry. The items manufactured in

modern Small-scale service & Business enterprises in India now include rubber products, plastic

products, chemical products, glass and ceramics, mechanical engineering items,

hardware, electrical items, transport equipment, electronic components and equipments, automobile

parts, bicycle parts, instruments, sports goods, stationery items and clocks and watches.

REGULATORY BODIES AND REGULATIONS FOR SSEs

THE MINISTRY

The Ministry of Micro, Small and Medium Enterprises (M/o MSME) is the administrative Ministry in

the Government of India for all matters relating to Micro, Small and Medium Enterprises. It designs

and implements policies and programmes through its field organizations and attached offices for

promotion and growth of MSME sector.

The Office of the Development Commissioner (MSME) is an attached office of the Ministry of MSME, and is the apex body to advise, coordinate and formulate policies and programmes for the

development and promotion of the MSME Sector. The office also maintains liaison with Central

Ministries and other Central/State Government agencies/organizations financial institutions.

MSME provides many services through its network for small scale industries. Specialised services

of Marketing, Export promotion and International co-operation are also available through a series

of schemes and incentives.


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THE INDUSTRIAL DEVELOPMENT BOARD

NABARD

NABARD was established on the recommendations of Shivaraman Committee, by an act of

Parliament on 12 July 1982 to implement the National Bank for Agriculture and Rural Development

Act 1981.

NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for

promotion and development of agriculture, small-scale industries, cottage and village industries,

handicrafts and other rural crafts. It also has the mandate to support all other allied economic

activities in rural areas, promote integrated and sustainable rural development and secure

prosperity of rural areas. In discharging its role as a facilitator for rural prosperity NABARD is

entrusted with

Providing refinance to lending institutions in finance

Bringing about or promoting institutional development

Evaluating, monitoring and inspecting the client banks

CREDITING AND FINANCING OF SSI

Financial assistance in India for MSME units is available from a variety of institutions. The

important ones are:

Commercial/Regional Rural/Co-operative Banks

SIDBI: Small Industries Development Bank of India (refinance and direct lending)

SFCs/SIDCs: State Financial Corporations (e.g. Delhi Financial Corporation)/State

Industrial Development Corporations.

Long and medium term loans are provided by SFCs, SIDBI and SIDCs. Banks also finance term

loans. This type of financing is needed to fund purchase of land, construction of factory

building/shed and for purchase of machinery and equipment.


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The short-term loans are required for working capital requirements, which fund the purchase of

raw materials and consumables, payment of wages and other immediate manufacturing and

administrative expenses. Such loans are generally available from commercial banks. The

commercial banks also sanction composite loan comprising of working capital and term loan up

to a loan limit of Rs.1 crore.

LAWS AND ACTS

THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

MSMED act was primarily established to facilitating the promotion and development and for

enhancing the competitiveness of micro, small, medium enterprises and for matters connected

therewith. The Act is operational from October 2, 2006. The MSMED Act was framed with the

following objectives:

To facilitate the promotion and development of micro, small and medium scale enterprises

(MSM enterprises); To enhance the competitiveness of MSM enterprises;

To concentrate on the related matters of MSM enterprises;

To extend the scope of benefits from SSI undertaking and ancillary industries to MSM

enterprises.


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THE MSMED ACT AND ITS IMPACT

CLAUSE SALIENT FEATURESIMPACT

1. Establishment of National

Small and Medium

Enterprises Board, Max. no. of

members = 47

1.Specific representation of women

2.Mandatory quarterly meeting

Statutory Status, compact board and quarterly

meetings will address problems of SMEs

immediately to take corrective action.

2. Concept of EnterprisesClear-cut demarcation of

manufacturing/production and

rendering services

Facilitates SMEs to enter into service enterprises

aggressively.

3. Definition of EnterpriseSpecific ceiling limit for

manufacturing/production and service

enterprise definition for Medium

enterprise.

Existing small units can graduate into Medium units and

avail facilities under the act.

4. Filing of memoranda

optional for Micro and Small

enterprises in manufacturing

and service sector, Medium

enterprises in Service Sector

Replacement of registration with

memorandum

Facilitates SMEs to avail the benefits of the act

immediately after setting up of the unit.


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but mandatory for Medium

enterprises in manufacturing

sector.

5.Procurement policiesNotification of preference policies by

central or State Governments for

goods and services provided by

Micro

& Small enterprise

Facilitates opportunity for supply of goods/services

without any hassles

6. Delayed Payment Penalty &

dispute resolutionPeriod of payment by the procuring

organizations 45 days Penal

interest 200% of PL

SMEs can plan their cash Flow / financial requirement.

7. Dispute Resolution

Establishment of MSE facilitation

Council;

90 days framework for dispute

resolution.

Easy financial planning and no waste of human

resources for chasing/follow up.

8. Delayed Payment

allowable deduction under IT

Act 1961

Deduction disallowed u/s 23 of

MSMED Act. [Clause 17A of tax

audit]

This will encourage procurement agencies to

ensure timely payment to SMEs.

9. Closure of Business Statutory notification of scheme for

closure.

Facilitates expedition of Liquidation.


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10. Notification of guidelines or

instructions for promotion of

SMEs Funds appropriation

and release

Statutory Mandatory on all facilitating development of SMEs

ensuring fast growth.

11. Facilitating Credit Statutory Mandatory on all providing credit. Guidelines for credit for

20% on year growth


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CHAPTER 3

RESEARCH METHODOLOGY

Type of Research

A descriptive research has been conducted to find out the position of Small Scale

Industries in India through secondary sources. The result is provided in descriptive

form.

Data Collection

The data has been collected from various secondary sources such as internet,

books, business magazine and web sources such as www.dcmsme.gov.in .

Some of the important referrals and books are also studied for the purpose of data

collection and relevant information on the subject matter such as

1. Indian Economy by B.K.Bhargava and Vandana Sethi.

2. Indian Economy by Uma Kapila
http://www.dcmsme.gov.in/http://www.dcmsme.gov.in/


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CHAPTER 4

STATUS AND PERFORMANCE OF SMALL

SCALE INDUSTRIES IN INDIA

ROLE OF SMALL SCALE INDUSTRIES IN INDIAN ECONOMY

Micro and Small Enterprises are known as Village and Small Scale industries and

playing vital role in solving many of Indias economic problems. They hold out the

promise of improving farmers by providing them supplementary source of income.

Moreover they assure larger avenues of employments to the unemployed persons andensure more economic use of scarce capital resources. Small scale industry helps in

promoting and achieving equitable distribution of income and a balanced regional

growth. Development of this sector is advocated on the basis of many factors some of

them are described below:

PRODUCTION AND CONTRIBUTION TO ECONOMY

The small-scale industrial sector plays a crucial role in the financial viability and

economic growth of the developing economies. It contributes almost 40% of the

gross industrial value added in the Indian economy. It has been estimated that a

million Rs. of investment in fixed assets in the small scale sector produces 4.62

million worth of goods or services with an approximate value addition of ten

percentage points.

The small-scale sector has grown rapidly over the years. The growth rates during the

various plan periods have been very impressive. The number of small-scale unitshas increased from 0.87 million units in the year 1980-81 to over 3 million in the year

2000 to 3.57 million in 2003. When the performance of this sector is viewed against

the growth in the manufacturing and the industry sector as a whole, it instills

confidence in the resilience and self-reliance of the small-scale sector.

EMPLOYMENT GENERATION

SSI Sector in India creates largest employment opportunities for the Indian populace,next only to Agriculture. It has been estimated that 100,000 rupees of investment in

fixed assets in the small-scale sector generates employment for four persons. The

small-scale industries provide large scope for employment on a massive scale.


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In 2001 the employment generated in this sector was 19.2 million rising to 19.96

million in 2003 and 59.46 million people were employed in this sector including agro,

rural, cottage and small scale industries as per 4th All India Census of micro, small

and medium enterprises (MSMEs).

This significantly important for a country like India which is a labour-surplus

economy, and where labour-force is increasing at a very rapid rate. Moreover, the

small-scale industries being labour-intensive industry and employ more labour per

unit of capital for a given output compared to the large-scale industries. This is

evident from the fact that the small-scale sector accounts for as much as 80% of the

total employment in the industrial sector.

The small-scale industries are also specially suited for overcoming various types of unemployment in the rural and semi-urban areas. With little capital and other

resources, mostly available locally, these industries can be set-up everywhere in the

country, even at the very door-step of the workers. For this reason the small farmer

and agricultural worker can combine their work in agriculture with that in these

industries. Further, these industries provide part-time as well as full time work to rural

artisans, women and needy people.

EXPORT

SSI Sector plays a major role in Indias present export performance. 45%-50% of the

Indian Exports is contributed by SSI Sector. Direct exports from the SSI Sector

account for nearly 35% of total exports. Besides direct exports, it is estimated that

small-scale industrial units contribute around 15% to exports indirectly. This takes

place through merchant exporters, trading houses and export houses. They may

also be in the form of export orders from large units or the production of parts andcomponents for use for finished exportable goods. It would surprise many to know

that non-traditional products account for more than 95% of the SSI exports. The

exports from SSI sector have been clocking excellent growth rates in this decade. It

has been mostly fuelled by the performance of garments, leather and gems and

jewellery units from this sector.

The product groups where the SSI sector dominates in exports are sports goods,

readymade garments, woolen garments and knitwear, plastic products, processed

food and leather products. The SSI sector is reorienting its export strategy towards

the new trade regime being ushered in by the WTO.


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OPPORTUNITY

The opportunities in the small-scale sector are enormous due to the following

factors:

Less Capital Intensive

Extensive Promotion & Support by Government

Reservation for Exclusive Manufacture by small scale sector

Project Profiles

Funding - Finance & Subsidies Machinery Procurement

Raw Material Procurement

Manpower Training

Technical & Managerial skills

Tooling & Testing support

Reservation for Exclusive Purchase by Government

Export Promotion

Growth in demand in the domestic market size due to overall economic

growth

Increasing Export Potential for Indian products

Growth in Requirements for ancillary units due to the increase in

number of green field units coming up in the large scale sector.

This sector is ideally suited to build on the strengths of our traditional skills and

knowledge, by infusion of technologies, capital and innovative marketing practices.

This is the opportune time to set up projects in the small-scale sector. It may be saidthat the outlook is positive, indeed promising, given some safeguards. This

expectation is based on an essential feature of the Indian industry and the demand

structures. The diversity in production systems and demand structures will ensure

long term co-existence of many layers of demand for consumer products /


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technologies / processes. There will be flourishing and well grounded markets for the

same product/process, differentiated by quality, value added and sophistication. This

characteristic of the Indian economy will allow complementary existence for various

diverse types of units.

PERFORMANCE OF MICRO AND SMALL ENTERPRISES

YEARNO. OF UNITS

(LAKHS)

PRODUCTION

(RS. in CRORES)

(At 2001-02 Prices)

EMPLOYMENT

(LAKHS)

EXPORTS

(RS. In

CRORES)

2002-03 109.49 3,06,771 263.68 86,013

2003-04 113.95 3,36,344 275.30 97,644

2004-05 118.59 3,72,938 287.55 1,24,417

2005-06 123.42 4,18,884 299.85 1,50,242

2006-07 128.44 4,71,663 312.52 NA

ISSUES RELATED TO SMALL SCALE ENTERPRISE

Small enterprises are presently seriously handicapped in comparison with

larger units by an inequitable allocation system for scarce raw materials

and imported components, lack of provision of credit and finance; low technical skill

and managerial ability; and marketing contracts. It is, therefore, essential to

develop an overall approach to remove these disabilities.

OUTPUT Vs. EMPLOYMENT

One argument is that the emphasis on employment is irrelevant, as the basic thing is

the output that the economy needs for its growth. From this angle, it is contendedthat, since the productivity of these industries is low compared to that of large

industries, the small industries simply waste the capital which is very scarce, and

which , if diverted to large industries, can produce more. From this viewpoint, small


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industries are more capital-intensive. It is also argued that the labour-productivity in

the small industries is also small compared to large industries.

ADVERSE EFFECT ON CAPITAL FORMATION

It is also contended by some that small industries have unfavorable consequences

on saving and capital formation. They argue that the establishment of these

industries will, over a period of time, reduce the availability of capital for large-scale

industries with higher productivity of capital. First, it will happen because capital,

used inefficiently in the small industries, will not be available for large-scale

industries.

Second, these industries being labour-intensive, use a major proportion of the saleproceeds of output to pay workers whose marginal propensity to save is low. As a

result, a large part of their incomes will be used for consumption resulting in a lower

rate of saving and capital formation for the economy.

INEFFICIENT PRODUCTION

Another charge against these industries is that the cost of production is higher than

in the large industries, because these industries suffer from several inefficienciesNo doubt, the fact of large scale entails, what is described as economies of scale,

lowering the costs.

LARGE SICKNESS

There are two main issues in respect of sick SSIs: (i) existence of a large number of

sick units which are non-viable; and (ii) rehabilitation of potentially viable units. As far

as former is concerned, there were 1, 67,980 sick SSI units as on March 31, 2003.

These units are those that had obtained loans from banks. An amount of Rs. 5,706

crore was blocked in these units. Of these, as many as 1,62,791 units with

outstanding bank credit of Rs. 4,569 crore were identified by banks as being non-

viable. As far as the latter issue is concerned, of the 1,67,980 sick SSI units as on

March 31, 2003, only 3,626 units with outstanding bank credit of Rs.625 crore were

found to be potentially viable by banks.

PROBLEMS FACED BY SMALL SCALE ENTERPRISES

HIGH PRODUCTION COST


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The Small industries, are generally as cost efficient as the large-scale industries. The

small size of plant combined with low and erratic market demand does not give rise

to such economies: these units may rather be operating at uneconomical levels

resulting in high production cost. Being cost inefficient, the small scale units often fail

to meet the competition, low cost products from the large industries and may even

be driven out of the market.

PROBLEMS OF MARKETING

The small scale industries also face the problem of marketing their products. The

small producers, running these industries, have no means of reaching the distant

urban markets due to difficulties of transport and other expenses involved in

movement of goods. They cannot adopt aggressive marketing strategies like big

industries. Thus, they cannot find market, despite good quality of their products. Lack

of proper marketing organization thus prevents the small producers to earn

remunerative prices for their products.

LOW MARKET DEMAND

The demand for goods of small scale industries is not high enough to ensure steady

income to the producers in this sector because of low quality. Thus, the products do

not find ready acceptability in the market. Market for products of small-scale is not

wide enough to assure adequate returns to producers and induce them for further

development.

PROBLEMS OF FINANCE

Like the big industrial units, the MSEs too need finance to run their operations such

as purchase of raw material, equipments, transportation of products, etc. But while

the large scale units have access to capital market and get their required credit,

small industries do not have such facilities. They very often have to borrow from

unorganized sources such as indigenous bakers, moneylenders, etc who charge

high rate of interest. The problem is more acute in case of cottage industries,

craftsmen and artisans, who have to fall back only on moneylenders and traders for

their financial needs. Thus, lack of adequate and cheap finance becomes a major

handicap for the development of this sector.


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OBSOLETE PRODUCTION TECHNIQUES

The methods of production, which the small and tiny enterprises use, are old and

inefficient. The result is low productivity and high costs. There is little of research and

development in this field in the country. There is almost no agency to provide venture

capital to cover risks associated with the introduction of new technologies.

DIFFICULTY IN PROCURING RAW MATERIALS

There is another problem of raw materials which continues to plague these

industries. Raw materials are available neither in sufficient quantity, nor of requisite

quality, nor at reasonable price. Being small purchasers, producers are not able to

undertake bulk buying as the large industries can do. The result is taking whatever is

available, of whatever quality and at high price.

MEASURES TO PROMOTE SMALL SCALE ENTERPRISE

PROVIDING CREDIT FACILITIES

Institutions providing credit facility have also been set up. State Financial

Corporations provide financial assistance to small scale industries. Public sector banks have also been providing credit facility to artisans and craftsmen. National

Bank for Agriculture and Rural development (NABARD) has been extending credit,

consultancy and other facilities to village industries and agro-processing units

through various agencies.

SETTING UP ORGANISATIONS FOR PROMOTION OF MSEs

Govt. has established organizations like Khadi and Village Industries Commission

and commodity specific organizations such as Handloom Board, Cottage Industries

board, coir board etc. to help these units in purchasing raw material and machinery,

marketing of goods, technology improvements, training and learning facilities..District

Industrial centers have been set-up to provide necessary assistance for healthy


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growth of the small scale industries. Small Industries Development Organizations

(SIDO) provides marketing and consultancy services.

HELPING IN MARKETING OF MSEs PRODUCTS

A large number of items used by the government in its various departments and

offices are reserved for exclusive purchase from small scale sector. Besides, govt.agencies also organize trade fairs and exhibitions of goods provided by cottage and

small industries at various places within the country as well as in foreign countries to

create demand for these products.

RESERVATION

To protect the products of small-scale industrial sector from unequal competition

from products produced by the large scale-industrial units, the govt. of India has

reserved a large no. of products which can be produced exclusively in the small

industries sector. The bigger industrial units can be permitted to produce suchproducts only if they undertake to export a minimum of 75% of total production.

ITEMS RESERVED FOR EXCLUSIVE MANUFACTURE BY MICRO AND SMALL

ENTERPRISE SECTOR (As on 30 July, 2010)

S.No. S.No.(As Per Gazette

Notification)

ProductCode

Name Of The Product

20-21 Food And Allied Industries

1 3 202501 Pickles $ Chutneys

2 7 205101 Bread3 11 21100102 Mustard Oil (Except Solvent Extracted )

4 13 21100104 Ground Nut Oil (Except Solvent Extracted)27 Wood And Wood Products

5 47 276001 Wooden Furniture And Fixtures28 Paper Products

6 79 285002 Exercise Books And Registers


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Other Chemical And Chemical Products

7 253 305301 Wax Candles

8 308 314201 Laundry Soap

9 313 317001 Safety Matches10 314 318401 Fire Works

11 319 319902 Agarbattis

Glass And Ceramics

12 335 321701 Glass Bangles

33-35 Mechanical Engg. Excluding Transport Equipments13 364 340101 Steel Almirah

14 394 341004 Rolling Shutters15 402 34200602 Steel Chairs-All Types16 404 34200702 Steel Tables-All Other Types

17 409 342099 Steel Furniture -All Other Types18 428 343302 Padlocks19 447a 345207 Stainless Steel Utensils20 474 345202 Domestic Utensils- Aluminum


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CHAPTER- 5CONCLUSION

SSI sector is significantly contributing to Indian economy with its less capital

intensive and high labour absorption nature. SSI sector is playing crucial role for

employment generation and rural industrialization. The promotional and protective

policies of the Indian Government have ensured the importance of this sector with its

astonishing range of products, particularly in consumer goods. However, thebugbear of the sector has been the inadequacies in capital, technology and

marketing. The process of liberalization coupled with Government support will

therefore, attract the infusion of just these things in the sector. SSI have many

inherent advantages such as exclusivity, ability to produce small order quantities

which can be used to tap new markets. What is needed is a rational policy which

offers adequate support and protection to this sector.

According to Bala Subrahmanya:

The central issue of concern for the growth of small-scale industry is how to

strengthen its competitiveness. First of all, if small industry has to thrive steadily,

infrastructural bottlenecks must be overcome to enable must be overcome to enable

it to compete on its own based on inherent potentials. And it is responsibility of

government to remove any structural bottlenecks in small industry performance

through removal of protective elements. It is essential to provide the much neededlevel playing field to small sector through infrastructural development. But

overcoming infrastructural bottlenecks for small enterprises is easier said than done.

To improve competitiveness, there is need to encourage and promote greater

research and development, in-depth market research, which largely depends on


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quantum of finance available to the small scale sector. For this, credit delivery

system to SSI needs to strengthen, outputs and inputs designs need to be improved

to achieve greater acceptability and quality of SSI products. Technological

upgradation is also needed to produce better quality products at cheap rates to face

stiff competition from imports.

BIBLIOGRAPHY

Books referred-

.(2011) .Indian Economy . Publication- Sultan Chand & Sons . Bhargava and Sethi

.(2011) .Economic Development and Policy in India . Publication- Sultan Chand &

Sons . Uma Kapila

Websites-

www.dcmsme.gov.in

www.exim.indiamart.com

www.indiabudget.nic.in

www.indianblogger.com
http://www.dcmsme.gov.in/http://www.exim.indiamart.com/http://www.indiabudget.nic.in/http://www.indianblogger.com/http://www.dcmsme.gov.in/http://www.exim.indiamart.com/http://www.indiabudget.nic.in/http://www.indianblogger.com/

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