MBA/BBA project report

RESEARCH REPORTON

SMALL SCALE INDUSTRIES

UNDER THE GUIDANCE OF: SUBMITTED BY:

GRAPHIC ERA UNIVERSITY

ACNOWLEDGEMENT

The research report will be incomplete without acknowledge giving my sincere gratitude to. She has helped me in the preparation of this dissertation.

First of all, I thank ‘GOD ALMIGHTY’ for the blessing showered on me throughout this research project work, which has helped me in the successful completion of the training.

I take the opportunity to extend my sincere gratitude and profound obligation towards my guide for giving me valuable suggestions and his inestimable help rendered to me throughout the research report and all other faculty members for without their encouragement and continuing support, this research project would not have been possible.

Dated:

CERTIFICATE

This is to certify that, a student of Graphic Era University has completed project work on “Small Scale Industries” under my guidance and supervision.

I certify that this is an original work and has not been copied from any source.

Signature of Guide: _________________________________________

Name of Project Guide: ______________________________________

Date _________________

PREFACE

As a part of my BBA VIth program , I was asked to carry out a research on a specific topic , so as to give exposure to practical knowledge .

I got an opportunity to conduct research on the topic “Small Scale Industries”

EXECUTIVE SUMMARY

small-scale industrial undertakings 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 than 100. However, the capital resources invested on plant and machinery buildings have been the primary criteria to differentiate the small-scale industries from the large and 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 the latest definition which is effective since December 21, 1999, for any industrial unit to be regarded as Small Scale Industrial unit the following condition is to be satisfied: - Investment in fixed assets like plants and 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.

DECLARATION

I, ZUNAID RAWAT, student of BACHLEOR OF BUSINESS ADMINISTRATION from

GRAPHIC ERA UNIVERSITY ,DEHRADUN hereby declare that I have completed final

research project in “SMALL SCALE INDUSTRIE”as part of the course requirement .

I further declare that the information presented in this project is true and original to

the best of my knowledge.

Date: Name& Sign: ZUNAID RAWAT

Place:

Program: BBA VIth (FINANCE)

CERTIFICATE

This to certify that ZUNAID RAWAT , a student of Bachelor of business

administration has completed Fianl research project on the topic “SMALL

SCALE INDUSTRIES” under my guidance.

This is carried out in partial fulfillment of Bachelor of Business Administration to

be awarded by GRAPHIC ERA UNIVERSITY. To the best of my knowledge the

piece of work is original and no part of report has been submitted to any university

earlier for reward of any degree/ diploma

Dr. DIVYA NEGI

SIGNATURE.....................................

FACULTY

Department of Management Studies

Graphic Era University

Dehradun

TABLE OF CONTENT S

TOPIC PAGE NO.

TITLE

ACKNOLEDGEMENT

PREFACE

EXECUTIVE SUMMARY

DECLERATION

CERTIFICATE

INTRODUCTION


OBJECTIVES

VARIOUS ASPECTS AND ELEMENTS OF SMALL SCALE INDUSTRIESI

REVIEW OF LITERATURE

RESEARCH METHODOLOGY

LIMITATIONS


INTRODUCTION:

The definition for small-scale industrial undertakings 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 than 100. However, the capital resources invested on plant and machinery buildings have been the primary criteria to differentiate the small-scale industries from the large and 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 the latest definition which is effective since December 21, 1999, for any industrial unit to be regarded as Small Scale Industrial unit the following condition is to be satisfied: - Investment in fixed assets like plants and 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. YEAR INVESTMENT LIMITS 1960 Upto Rs 5 lacs in Plant & Machinery 1966 Upto Rs 7.5 lacs in Plant & Machinery 1975 Upto Rs 10 lacs in Plant & Machinery 1980 Upto Rs 20 lacs in Plant & Machinery

1985 Upto Rs 35 lacs in Plant & Machinery 1991 Upto Rs 60 lacs in Plant & Machinery 1997 Upto Rs 100 lacs in Plant & Machinery 1999 Upto Rs 100 lacs in Plant & Machinery

CLASSIFICATION OF SSIs: A common classification is between traditional small industries and modern small industries. Traditional small industries include khadi and handloom, village industries,handicrafts, sericulture, coir, etc. Modern SSIs produce wide range of goods fromcomparatively simple items t sophisticated products such as television sets,electronics, control system, various engineering products, particularly as ancillaries tothe large industries..The traditional small industries are highly labour-intensive while the modern small-scale units make the use of highly sophisticated machinery and equipment. Forinstance, during 1979-80, traditional small-scale industries accounted for only 135 ofthe total output but their share in total employment was 56%. As against this, theshare of modern industries in the total output of this sector was 74% in 1979-80 buttheir share in employment was only 33%. Obviously, these industrial units would behaving higher labour productivity.

One special characterstic of traditional small-scale industries is that they cannotprovide full time employment to workers, but instead can provide only subsidiary orpart time employment to agricultural laborers and artisans. Among traditional villageindustries, handicrafts possess the highest labour productivity, besides handicraftsmake 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. ROLE OF SMALL SCALE INDUSTRIES IN INDIAN ECONOMY The small-scale industrial sector plays a pivotal role in the Indian economy in termsof employment and growth has recorded a high rate of growth since Independenceinspite of stiff competition from large-scale industries. There are several importantreasons why these industries are contributing a lot to the progress of the Indianeconomy:1. PRODUCTION:The small-scale industries sector plays a vital role in the growth of the country. Itcontributes 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 scalesector produces 4.62 million worth of goods or services with an approximate valueaddition 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 units has increased from an estimated 0.87 million units in the year 1980-81 to over 3 million in the year 2000. When the performance of this sector is viewed against the growth in themanufacturing and the industry sector as a whole, it instills confidence in theresilience of the small-scale sector.Year SSI Sector Growth Rate Total Industrial Sector Growth Rate 1994-95 10.44 9.10 1995-96 11.49 13.00 1996-97 1.29 6.10 1997-98 9.19 6.70 1998-99 7.84 4.10 1999-2000 7.09 6.70 2000-01

8.04 5.00 2001-02 6.06 2.70 2002-03 7.68 5.70 2003-04 8.06 6.09 2004-05 9.96 8.04 Source: SIDO Half Century by DCSSI, Govt. of India 2004 and Annual Report of the Ministry of SSI 2005-06

2. EMPLOYMENT 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.

Office of the Development CommissionerM/O Micro & Small Enterprises Cluster Development Programme(Statistics & Data Bank Division)PERFORMANCE OF MICRO & SMALL ENTERPRISES Year Number of Enterprises (Lakh Nos.) Empl.(LakhPerson)Production

(Rs. Crs.)Growth Share In Registered Unregistered Total at Current prices Rate (%) GDP (%) 2002-2003 15.91 93.58 109.49 263.49 314850 8.68 5.92 2003-2004 16.97 96.98 113.95 275.30 364547 9.64 5.79 2004-2005 17.53 101.06 118.59 287.55 429796 10.88 5.84 2005-2006 18.71 104.71 123.42 299.85 497842 12.32 5.83

2006-2007 20.98 107.46 128.44 312.52 587196 12.65 5.94 2007-2008 (Projected) 24.68 108.99 133.67 322.28 695126 13.00 NA 3. EXPORT: SSI Sector plays a major role in India's present export performance. SSI Sectorcontributes 45%-50% of the Indian Exports. Direct exports from the SSI Sectoraccount for nearly 35% of total exports. Besides direct exports, it is estimated thatsmall-scale industrial units contribute around 15% to exports indirectly. This takesplace through merchant exporters, trading houses and export houses. They may alsobe 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 andjewellery 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 foodand leather products.The SSI sector is reorienting its export strategy towards the new trade regime being ushered in by the WTO

4 . 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 economicgrowth Increasing Export Potential for Indian products Growth inRequirements for ancillary units due to the increase in number of greenfieldunits coming up in the large-scale sector. Small industry sector has performedexceedingly well and enabled our country to achieve a wide measure ofindustrial growth and diversification.1 . Fashion Technology: OPPORTUNITIES

• Glamour & Limelight • C r eativ e • High Value Addition • Coverage (Extensive) • C lo th es • D r es s es • G ar men ts• Tex til e• F o o tw ear• Various Leather Products• J ew eller y• Travel Goods • Fashion Accessories (purses, bags, carryon, watches etc.) • Personal Embellishment (Face, Hair, Hands, Feet, Cosmetics, Perfumes etc.)

2. Information Technology OPPORTUNITIES • Media & Entertainment

• C o n ten ts , • Animation, • Games

. 3 . Design Technology OPPORTUNITIES • Interiors - (Furniture & Furnishing – homes, work places, community, hospitals, schools, shopping places, recreation, sports) • Exteriors - (Architectural) • Industrial products • Textiles • Electrical appliances • White goods • Leather products • Engineering products • Machinery • Dies and tools • Watches • Jewellery

• Hospital equipments • Medical instruments • Electronics and Communication Products and Equipments Information Technology OPPORTUNITIES • Media & Entertainment • C o n ten ts , • Animation, • Games

WELFARE: These industries are also very important for welfare reasons. People of small meanscan organize these industries. This in turn increases their income levels and quality oflife. As such these can help in reducing poverty in the country. Further, theseindustries tend to promote equitable distribution of income. The reasons are obvious.One, a large proportion of income generated in these enterprises is distributed among the workers.Two, income are distributed among a vast number of persons throughoutthe country. All these benefits flow from the fact that these industries are highlylabour-intensive, and that these can be set up anywhere in the country.Distributive aspect of small-scale industries further unravels their two-fold beneficial

character. On the one hand, these industries enable a vast number of people to earnincome, and on the other hand, the very people among whom these are distributed generate this income.

INDIAN SME SECTOR – AT A GLANCE

Overview of SSI Sector

Profile of SSIs

Share in GDP

6.81% Share in

Industrial Production

39.53%

Share of Exports

35%

Number of Items

7500

SSI Sector in India

The size of the total SSI sector is estimated to be over one crore (1,05,21,190).

About 42.26 % of these units are SSIs and

Relevance of Ancillarisation in the context of Globalisation and Emerging

Trade Relations

Produced Estimated number of Units

Registered (In Lakhs)

Unregistered (In Lakhs)

15.5498.41

Number of Reserved items

For Exclusive

Production For

Exclusive Purchase by

Govt

675358

the rest are SSSBEs.

The number of ancillaries among SSIs are 2.98%.

The employment per Rs. one lakh investment in fixed assets is 0.67.

The per unit employment is 4.48.

The Services Sector emerged as the dominant component in the Total SSI Sector.

Contribution of Small Scale Sector in India

The SSI Sector accounts for about 95% of industrial units in the country, 39.52% value added in manufacturing sector, 34.03% of national exports and 6.81% of GDP.

Other significant contribution can be measured as follows:

Employment generation per Rs.

: 4 person

s

100,000 investments Export as percentage of Fixed investment

: 49%

Export as percentage of Fixed production

:27.57

%

Comparative Growth rates of SSI Sector and total Industrial Sector

Year

SSI Sector%

Industrial Sector

%

1999-00

7.09 6.70

2000-01

8.04 5.00

2001-02

6.06 2.70

2002-03

7.68 5.70

2003-04

(April-Dec)

7.57 6.09

Growth of SSI Exports

Year Total Export Percenta

Exports s from SSI

ge Share

1951-52

716 Negligible

-

1961-62

660 Negligible

-

1971-72

1608 155 9.6

1976-77

5142 766 14.9

1981-82

7809 2071 26.5

1986-87

12567 3644 29.0

1991-92

44040 13883 31.5

1992-93

53688 17785 33.1

1993-94

69547 25307 36.4

1994-95

82674 29068 35.1

1995-96

106353 36470 34.2

1996-97

118817 39249 33.4

1997-98

126286.00

44442.18

35.19

1998-99

141603.53

48979.23

34.59

1999-00

159561.00

54200.47

33.97

2000-01

202509.7 69796.5 34.47

2001-02

207745.56

71243.99

34.29

2002-03

252789.97

86012.52

34.03

Copyright © ICSI

Developed and Maintained by SPH Consultants

DISABILITIES

Small enterprises are presently seriously handicapped in comparison with largerunits by an inequitable allocation system for scarce raw materials and importedcomponents, lack of provision of credit and finance; low technical skill andmanagerial ability; and marketing contracts. It is, therefore, essential to develop anoverall approach to remove these disabilities

OUTPUT vs EMPLOYMENT

One argument is that the emphasis on employment is irrelevant, as the basicthing is the output that the economy needs for its growth. From this angle, it iscontended that, since the productivity of these industries is low compared to thatthat of large industries, the small industries simply waste the capital which is veryscarce, and which , if diverted to large industries, can produce more.

mailto:[email protected]

From thisviewpoint, small industries are more capital-intensive. It is also argued that thelabour-productivity in the small industries is also small compared to largeindustries

ADVERSE EFFECT ON CAPITAL FORMATION

It is also contended by some that small industries have unfavorableconsequences on saving and capital formation. They argue that the establishment ofthese industries will, over a period of time, reduce the availability of capital forlarge-scale industries with higher productivity of capital.Fir s t, it will happenbecause capital, used inefficiently in the small industries, will not be available forlarge-scale industries.Second, these industries being labour-intensive, use a majorproportion of the sale proceeds of output to pay workers whose marginal propensityto save is low. As a result, a large part of their incomes will be used forconsumption resulting in a lower rate of saving and capital formation for theeconomy

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 largenumber of sick units which are non-viable; and (ii) rehabilitation of potentiallyviable units. As far as former is concerned, there were 1, 67,980 sick SSI units as onMarch 31,2003. These units are those that had obtained loans from banks. Anamount of Rs. 5,706 crore was blocked in these units. Of these, as many as 1,62,791units with outstanding bank credit of Rs. 4,569 crore were identified by banks asbeing non-viable. As far as the latter issue is concerned, of the 1,67,980 sick SSIunits as on March 31, 2003, only 3,626 units with outstanding bank credit of Rs.625 crore were found to be potentially viable by the banks

SEVERAL DIFFICULTIES:

It is thus obvious that these industries, despite their importance in theeconomy, are not contributing to their full towards the development of the countryalong the desirable lines. It is because these are beset with a number of

problemsconcerning their operations. These may be described as under

Inadequacy of finance: A serious problem of these industries is in

respect of credit both for long-term and short-term purposes. This isevident from the fact that the supply of credit has not beencommensurate with their needs associated with fixed and workingcapital

Difficulties of Marketing: These industries are also up against the

crucial problem of marketing their products. The problem arises fromsuch factors as small scale of production, lack of standardization,inadequate market intelligence, competition from technically moreefficient units, etc. Apart from the inadequacy of marketing facilities,the cost of promoting and selling their products too is high.

Shortage of raw materials: Then there is the problem of raw

materials which continues to plague these industries. Raw materialsare available neither in sufficient quantity, nor of requisite quality,nor at reasonable price. Being small purchasers, the producers are notable to undertake bulk buying as the large industries can do. Theresult is taking whatever is available, of whatever quality and at high

Low-level technology: The methods of production, which the small

and tiny enterprises use, are old and inefficient. The result is lowproductivity and high costs. There is little of research anddevelopment in this field in the country. There is almost no agency toprovide venture capital to cover risks associated with the introductionof new technologies.

Competition from large-scale industries: Another serious problem,

which these industries face, is that of competition from large-scale industries. Large-scale industries, organized as they are on modern lines, using latest production technology and having access to many facilities, can easily outsell the small producers.

MEASURES

To help the SSIs in meeting the challenges of globalization, the Government hastaken several initiatives and measures in recent years. Primarily among them is theenactment of the ‘Micro, Small and Medium Enterprises Development Act, 2006’,which aims to facilitate the promotion and development and enhance thecompetitiveness of MSMEs. The Act came into force from 2nd October 2006. Themain features of the act are

SALIENT FEATURES OF MSMED ACT – 2006

• Manufacturing enterprises defined in terms of investment in Machinery andEquipment (excluding land and building) classified intoa. Micro enterprises - investment upto Rs 25 lakhs,

b. Small enterprises - investment above Rs 25 lakhs and upto Rs 5 crorec. Medium enterprises - Investment above Rs 5 crores and upto Rs 10 crores

• Service enterprises defined in terms of their investment in equipment

(excluding land and building) classified intoa. Micro enterprises-investment upto Rs 10 lakhsb. Small enterprises-investment above Rs 10 lakhs and upto Rs 2 crorec. Medium enterprises-investment above Rs 2 crores and upto Rs 5crores

Other major initiatives taken by the government are setting up of National

Manufacturing Competitiveness Council (NMCC) and the National Commission ofEnterprises in the Unorganized Sector (NCEUS). Further, in recognition of the factthat delivery of credit continues to be a serious problem for MSEs, a ‘Policy Packagefor Stepping up Credit to Small and Medium Enterprises (SME)’ was announced bythe government with the objective to double the credit flow within the period of five years

The government has also announced a comprehensive package for promotion ofmicro and small enterprises, which comprises the proposals/schemes having directimpact on the promotion and development of the micro and small enterprises ,particularly in view of the fast changing economic environment, wherein

to becompetitive is the key of success.

The Ministry of Micro, Small and Medium Enterprises (MSME) performs its tasks offormulation of policies and implementation of programmes mainly through twoCentral organizations. These are :

Micro, Small and Medium Enterprises Development Organization

The Micro, Small and Medium Enterprises Development Organization (earlierknown as Small Industries Development Organization) set up in 1954,functions as an apex body for sustained and organized growth of micro, smalland medium enterprises. As an apex organ, it provides a comprehensive rangeof facilities and services to the MSMEs through its network of 30 SmallIndustries Service Institutes (SISIs), 28 branch SISIs, 4 Regional TestingCentres (RTCs), 7 Field Testing Centres (FTSs), 6 Process-cum-ProductDevelopment Centres (PPDCs)

National Small Industries Corporation Ltd (NSIC)

NSIC, since its inception in 1955 has being working with its mission ofpromoting, aiding and fostering the growth of micro and small enterprises.The Corporation has been introducing several new schemes from time to time

21

for meeting the change aspirations of micro and small enterprises. The main

objective of all these schemes is to promote the interest of the micro and smallenterprises and to put them in competitive and advantageous position. Theinformation pertaining to the schemes planned to be continued/implementedin the XI plan period by NSIC with Government support is given hereunder:

I. Performance & Credit Rating Scheme

NSIC, in consultation with Rating Agencies and Indian BanksAssociation, has formulated Performance & Credit Rating Scheme forSmall Industries. The scheme is aimed to create awareness among smallenterprises about the strengths and weaknesses of their existingoperations and to provide them an opportunity to enhance theirorganizational strengths and credit worthiness. The rating under thescheme serves as a trusted third party opinion on the capabilities andcredit worthiness of the small enterprises. An independent rating by anaccredited rating agency has a good acceptance from theBanks/Financial Institutions. Under this scheme, rating fee to be paid bythe SSIs is subsidized for the first year only and that is subject tomaximum of 75% of the fee or Rs. 40,000/-, whichever is less.

II. Marketing Assistance Scheme

This is an ongoing old scheme. Marketing, a strategic tool for business development, is critical for the growth and survival of SSIs in today’s intensely competitive market. One of the major challenges before the SSIs is to market their products/services

NSIC acts as a facilitator to promote marketing efforts and enhance thecompetency of the small enterprises for capturing the new marketingopportunities by way of organizing and participating in various domesticand international exhibitions/trade-fairs, buyers-sellers meet intensivecampaigns, seminars and consortia formation at the subsidized rates.

In addition, the Ministry has three National Level EntrepreneurshipDevelopment Institutes namely, Indian Institute for Entrepreneurship(IIE), Guwahati, National Institute for Entrepreneurship and SmallBusiness Development (NIESBUD), Noida and National Institute forMicro, Small and Medium Enterprises (NIMSME), Hyderabad.

Infrastructure Development

For setting up of industrial estates and to develop infrastructural facilities forMSMEs, the Integrated Infrastructure Development Scheme (IID) waslaunched in 1994. The scheme covers districts which are not covered underthe Growth Centres’ scheme. The scheme covers rural as well as urban areaswith a provision of 50% reservation for rural areas and 50% industrial plots

22 are to be reserved for tiny units. For the promotion and development of MSEs in the country, cluster is one of the thrust areas of the Ministry in the 11th plan.

Technology Upgradation in MSE Sector

The opening up of economy has exposed MSE sector to global and domestic competition. With a view to enhancing the competitiveness of this sector, the Government has taken several steps such as:

i. Assistance to industry association for setting up of testing centres and to State Governments and to their autonomous bodies for modernization/expansion of their Quality Marking Centres. ii.

Regional Testing Centres and Field Testing Centres to provide testing services and services for quality upgradation. iii. Implementation of Micro and Small Enterprise Cluster Development

Programme (MSECDP), under which 91 clusters have been taken up,including national programme for the development of toy, stone,machine tools and hand- tool industry in collaboration with UNIDO.

iv.

A scheme of promoting ISO 9000/14001 Certification under which SSIunits are given financial support by way of reimbursing 75% of theirexpenditure to obtain certification subject to maximum of Rs.75,000 perunit

v. Setting up of Biotechnology Cell in SIDO. Further, a scheme on Credit Linked Capital Subsidy was launched in the year 2000 to facilitate technology upgradation of small enterprises.

Measures for Export Promotion

Export promotion from the MSE sector has been accorded a high priority. Following schemes have been formulated to help MSEs in exporting their products:

i. Products of MSE exporters are displayed in international exhibitions and the government reimburses the expenditure incurred. ii. To acquaint MSE exporters with latest packaging standards,

techniques, etc., training programme on packaging for exporters areorganized in various parts of the country in association with the IndianInstitute of Packaging.

iii. Under the MSE Marketing Development assistance (MDA) scheme, assistance is provided to individuals for participation in overseas 23

INDIAN ECONOMYby RUDDAR DATT AND K.P.M. SUNDHARAM

fairs/exhibition, overseas tours, or tours of individuals as member of a trade delegation going abroad. Entrepreneurship and Skill Development

The Ministry conducts Entrepreneurship Development Progamme (EDPs) tocultivate the skill in unemployed youths for setting up micro and small enterprises.Further, under the management Development Programmes(MDPs), existing MSEentrepreneurs are provided training on various areas to develop skills inmanagement, to improve their decision-making capabilities resulting in higherproductivity and profitability. To encourage more entrepreneurs from SC/ST,women and physically challenged groups, the Ministry of MSME provides them astipend of Rs.500 per capita per month for the duration of the training.

From the above description of the government approach and measures, it is clear that these are by and large on the right lines. If, however, the SSIs still suffer from various handicaps, it is obviously, because these measures are not implemented effectively. It is that the efforts are more in direction of “protection” of this sector, and there is very little by way of raising its efficiency and competitive strength. Unless this becomes the centre-theme of the policy, the SSIs will not become a dynamic sector.

Small Scale Industrial Undertakings

The following requirements are to be complied with by an industrial undertaking to be graded as Small Scale Industrial undertaking w.e.f. 21.12.1999

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)

(Subject to the condition that the unit is not owned, controlled or subsidiary of any other industrial undertaking)

Explanation: For the purpose of this note:-

a. "owned" shall have the meaning as derived from the definition of the expression "owner" specified in clause (1) of section 3 of the said Act;

b. "subsidiary" shall have the same meaning as in clause (47) of section 2, read with section 4, of the Companies Act, 1956 (1 of 1956);

c. the expression "controlled by any other industrial undertaking" means as under:-

i. where two or more industrial undertakings are set up by the same person as a proprietor, each of such industrial undertakings shall be considered to be controlled by the other industrial undetaking or undertakings,

ii. where two or more industrial undertakings are set up as partnership firms under the Indian Partnership Act, 1932 (1 of 1932) and one or more partners are common partner or partners in such firms, each such undertaking shall be considered to be controlled by other undertaking or undertakings,

iii. where industrial undertakings are set up by companies under the Companies Act, 1956 (1 of 1956), an industrial undertaking shall be considered to be controlled by other industrial undertaking if:-

a. the equity holding by other industrial undertaking in it exceeds twenty four percent of its total equity; or

b. the management control of an undertaking is passed on to the other industrial undertaking by way of the Managing Director of the first mentioned undertaking being also the Managing Director or Director in the other industrial undertaking or the majority of Directors on the Board of the first mentioned undertaking being the equity holders in the other industrial undertaking in terms of the provisions of the following items (a) and (b) of sub-clause (iv);

(iv) the extent of equity participation by other industrial undertaking or undertakings in the undertaking as per sub-clause (iii) above shall be worked out as follows:-

a. the equity participation by other industrial undertaking shall include both foreign and domestic equity;

b. equity participation by other industrial undertaking shall mean total equity held in an industrial undertaking by other industrial undertaking or undertakings, whether small scale or otherwise, put together as well as the equity held by persons who are Directors in any other industrial undertaking or undertakings even if the person concerned is a Director in other Industrial Undertaking or Undertakings;

c. equity held by a person, having special technical qualification and experience, appointed as a Director in a small scale industrial undertaking, to the extent of qualification shares, if so provided in the Articles of Association, shall not be counted in computing the equity held by other industrial undertaking or undertakings even if the person concerned is a Director in other industrial undertakings or undertakings;

(v) where an industrial undertaking is a subsidiary of, or is owned or controlled by, any other industrial undertaking or undertakings in terms of sub-clauses (i); (ii); or (iii) and if the total investment in fixed assets in plant and machinery of the first mentioned industrial undertaking and the other industrial undertaking or undertakings clubbed together exceeds the limit of investment specified in paragraphs (1) or (2) of this notification as the case may be, none of these industrial undertakings shall be considered to be a small scale or ancillary industrial undertaking.

Note 2-

(a) In calculating the value of plant and machinery for the purposes of paragraphs (1) and (2) of this notification, the original price thereof, irrespective of whether the plant and machinery are new or second hand, shall be taken into account.

(b) In calculating the value of plant and machinery, the following shall be excluded, namely:-

i. the cost of equipments such as tools, jigs, dies, moulds and spare parts for maintenance and the cost of consumable stores;

ii. the cost of installation of plant and machinery; iii. the cost of research and development equipment and pollution control equipment; iv. the cost of generation sets and extra transformer installed by the undertaking as per the

regulations of the State Electricity Board; v. the bank charges and service charges paid to the National Small Industries Corporation or

the State Small Industries Corporation; vi. the cost involved in procurement or installation of cables, wiring, bus bars, electrical

control panels (not those mounted on individual machines), oil circuit breakers or miniature circuit breakers which are necessarily to be used for providing electrical power to the plant and machinery or for safety measures;

vii. the cost of gas producer plants; viii. transportation charges (excluding of sales tax and excise) for indigenous machinery from

the place of manufacturing to the site of the factory; ix. charges paid for technical know how for erection of plant and machinery;

x. cost of such storage tanks which store raw materials, finished products only and are not linked with the manufacturing process; and

xi. cost of fire fighting equipments.

(c) In the case of imported machinery, the following shall be included in calculating the value, namely:-

i. import duty (excluding miscellaneous expenses as transportation from the port to the site of the factory, demurrage paid at the port);

ii. the shipping charges; iii. customs clearance charges; and iv. sales tax.

Every industrial undertaking which has been issued a certificate of registration under section 10 of the said Act or a license under sections 11, 11A and 13 of the said Act by the Central Government and are covered by the provisions of paragraphs (1) and (2) above relating to the ancillary or small scale industrial undertaking, may be registered, at the discretion of the owner, as such, within a period of one hundred and eighty days from the date of publication of this notification in the Official Gazette.

Ancillary Industrial Undertakings

The following requirements are to be complied with by an industrial undertaking for being regarded as ancillary industrial undertaking: -

An industrial undertaking which is engaged or is proposed to be engaged in the manufacture or production of parts, components, sub-assemblies, tooling or intermediates, or the rendering of services and the undertaking supplies or renders or proposes to supply or render not less than 50 per cent of its production or services, as the case may be, to one or more other industrial undertakings and whose investment in fixed assets in plant and machinery whether held on ownership terms or on lease or on hire-purchase, does not exceed Rs 10 million.

Tiny Enterprises

Investment limit in plant and machinery in respect of tiny enterprises is Rs 2.5 million irrespective of location of the unit.

Women Entrepreneurs

A Small Scale Industrial Unit/ Industry related service or business enterprise, managed by one or more women entrepreneurs in proprietary concerns, or in which she/ they individually or jointly have a share capital of not less than 51% as Partners/ Shareholders/ Directors of Private Limits Company/ Members of Cooperative Society.Investment Limits

The definition of small scale industries has undergone changes over the years in terms of investment limits in the following manner:-

YEAR INVESTMENT LIMITS ADDITIONAL CONDITIONS1950 Upto Rs 5 lacs in fixed assets Less than 50/100

persons with or without power

1960 Upto Rs 5 lacs in Plant & Machinery No condition1966 Upto Rs 7.5 lacs in Plant & Machinery No condition1975 Upto Rs 10 lacs in Plant & Machinery No condition1980 Upto Rs 20 lacs in Plant & Machinery No condition1985 Upto Rs 35 lacs in Plant & Machinery No condition1991 Upto Rs 60 lacs in Plant & Machinery No condition1997(Dec)

Upto Rs 100 lacs in Plant & Machinery No condition

Computation of Plant and Machinery(For calculating investment limit)

In calculating the value of plant and machinery, the original price thereof irrespective of whether the plant and machinery are new or second hand, shall be taken into account. However, to determine the price of second hand imported machinery, the original vale of the said plant and machinery will be taken in foreign currency terms. The value of foreign currency will be converted into rupee using the "current" exchange rate, i.e. exchange rate prevalent at the time of import. The import duty will be added on the basis of "current" rate of import duty, i.e. the rate of import duty prevalent at the time of import.

In calculating the value of plant and machinery, the following shall be excluded, namely:- i. Cost of equipments such as tools, jigs, dies, moulds and spare parts for maintenance and

the cost of consumable stores. ii. Cost of installation of plant and machinery.

iii. Cost of Research and Development (R&D) equipment and pollution control equipment. iv. Cost of generation sets, extra transformers, etc., installed by the undertaking as per the

regulations of the State Electricity Board. v. Bank charges and service charges paid to the National Small Industries Corporation or

the State Small Industries Corporation. vi. Cost involved in procurement or installation of cables, wiring, bus bars, electrical control

panels (not those mounted on individual machines), oil circuit breaker/miniature circuit breakers, etc. which are necessarily to be used for providing electrical power to the plant and machinery safety measures.

vii. Cost of gas producer plants. viii. Transportation charges (excluding taxes e.g., Sales tax, excise, etc.) for indigenous

machinery from the place of manufacturing to the site of the factory.ix. Charges paid for technical know-how or erection of plant and machinery.x. Cost of such storage tanks which store raw materials, finished products only and are not

linked with the manufacturing process.xi. Cost of fire-fighting equipments.

xii. Cost of those items of plant and machinery installed purely for power generation using non-conventional energy sources such as wind, solar energy, ocean waves, bio-gas etc.

In case of imported machinery, the following shall be included in calculating the value namely:- i. Import duty, excluding miscellaneous expenses such as transportation from the port to the

site of the factory, demurrage paid at the port.ii. Shipping charges

iii. Customs clearance charges andiv. Sales tax v. Employment Generation

SSI Sector in India creates largest employment opportunities for the Indian populace, next only to Agriculture. It has been estimated that a lakh rupees of investment in fixed assets in the small scale sector generates employment for four persons.

vi.vii.

According to the SSI Sector survey conducted by the Ministry and National Informatics Centre with the base year of 1987-88, the following interesting observations were made related to employment in the small scale sector.

Generation of Employment - Industry Group-wise

Food products industry has ranked first in generating employment, providing employment to 4.82 lakh persons (13.1%).

The next two industry groups were Non-metallic mineral products with employment of 4.46 lakh persons (12.2%) and Metal products with 3.73 lakh persons (10.2%).

In Chemicals & chemical products, Machinery parts and except Electrical parts, Wood products, Basic Metal Industries, Paper products & printing, Hosiery & garments, Repair services and Rubber & plastic products, the contribution ranged from 9% to 5%, the total

contribution by these eight industry groups being 49%.

In all other industries the contribution was less than 5%.

Per unit employment

Per unit employment was the highest (20) in units engaged in Beverages, tobacco & tobacco products mainly due to the high employment potential of this industry particularly in Maharashtra, Andhra Pradesh, Rajasthan, Assam and Tamil Nadu.

Next came Cotton textile products (17), Non-metallic mineral products (14.1), Basic metal industries (13.6) and Electrical machinery and parts (11.2.) The lowest figure of 2.4 was in Repair services line.

Per unit employment was the highest (10) in metropolitan areas and lowest (5) in rural areas.

However, in Chemicals & chemical products, Non-metallic mineral products and Basic metal industries per unit employment was higher in rural areas as compared to metropolitan areas/urban areas.

In urban areas highest employment per unit was in Beverages, tobacco products (31 persons) followed by Cotton textile products (18), Basic metal industries (13) and Non-metallic mineral products (12).

Rural

Non-metallic products contributed 22.7% to employment generated in rural areas. Food Products accounted for 21.1%, Wood Products and Chemicals and chemical products shared between them 17.5%.

Urban

As for urban areas, Food Products and Metal Products almost equally shared 22.8% of employment. Machinery and parts except electrical, Non-metallic mineral products, and Chemicals & chemical products between them accounted for 26.2% of employment.

In metropolitan areas the leading industries were Metal products, Machinery and parts except electrical and Paper products & printing (total share being 33.6%).

State-wise Employment Distribution

Tamil Nadu (14.5%) made the maximum contribution to employment.

This was followed by Maharashtra (9.7%), Uttar Pradesh (9.5%) and West Bengal (8.5%) the total share being 27.7%.

Gujarat (7.6%), Andhra Pradesh (7.5%), Karnataka (6.7%), and Punjab (5.6%) together accounted for another 27.4%.

Per unit employment was high - 17, 16 and 14 respectively - in Nagaland, Sikkim and Dadra & Nagar Haveli.

It was 12 in Maharashtra, Tripura and Delhi.

Madhya Pradesh had the figure of 2. In all other cases it was around the average of 6.

Production

The small scale industries sector plays a vital role for the growth of the country. It contributes 40% of the gross manufacture to the Indian economy.

It has been estimated that a lakh rupees of investment in fixed assets in the small scale sector produces 4.62 lakhs 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.

viii.ix.

The number of small scale units has increased from an estimated 8.74 lakhs units in the year 1980-81 to an estimated 31.21 lakhs in the year 1999.

From the year 1990-91 this sector has exhibited a comparitively lower growth trend (though positive) which continued during the next two years. However, this has to be

viewed in the background of the general recession in the economy. The transition period of the process of economic reforms was also affected for some period by adverse factors such as foreign exchange constraints, credit squeeze, demand recession, high interest rates, shortage of raw material etc.

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 of the small scale sector.

The estimates of growth for the year 1995-96 have shown an upswing.The growth of SSI sector has surpassed overall industrial growth from 1991 onwards.The positive trend is likely to strengthen in the coming years.This trend augurs a bright future for the small scale industry.

x.Export contribution

SSI Sector plays a major role in India's present export performance. 45%-50% of the Indian Exports is being contributed by SSI Sector. Direct exports from the SSI Sector account for nearly 35% of total exports. The number of small scale units that undertake direct exports would be more than 5000.

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 and components 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 has been clocking excellent growth rates in this decade. It has been mostly fuelled by the performance of garment, leather and gems and jewellery units from this sector.

xi.xii.

The lucrative product groups where the SSI sector dominates in exports, are sports goods, readymade garments, woollen garments and knitwear, plastic products, processed food

and leather products.

Opportunities

Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification.

xiii.xiv.

By its less capital intensive and high labour absorbtion nature, SSI sector has made significant contributions to employment generation and also to rural industrialisation. 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.

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

- Less Capital Intensive

- Extensive Promotion & Support by the Government

- Reservation for Exclusive Manufacture by small scale sector

- Project Profiles

- Funding

- Finance & Subsidies

- Machinery Procurement

- Raw Material Procurement

- Manpower Training

- Technical & Managerial skills

- Tools & Tools utilisation 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 greenfield units coming up in the large scale sector.

So this is the opportune time to set up projects in the small scale sector. It may be said that 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 / 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.

The promotional and protective policies of the Govt. have ensured the presence of this sector in an astonishing range of products, particularly in consumer goods. However, the bug bear of the sector has been the inadequacies in capital, technology and marketing. The process of liberalisation will therefore, attract the infusion of just these things in the sector.

Economic Indicators

The Small Scale Industry today constitutes a very important segment of the Indian economy. The development of this sector came about primarily due to the vision of our late Prime Minister Jawaharlal Nehru who sought to develop core industry and have a supporting sector in the form of small scale enterprises.

Small Scale Sector has emerged as a dynamic and vibrant sector of the economy.

- Today, it accounts for nearly 35% of the gross value of output in the manufacturing sector and over 40% of the total exports from the country.

- In terms of value added this sector accounts for about 40% of the value added in the manufacturing sector.

- The sector's contribution to employment is next only to agriculture in India. It is therefore an excellent sector of economy for investment.

List of Items Reserved for Exclusive Manufacture

Food and Allied Industries

SL NO. SL. (As per gazette notification)

PRODUCT CODE

NAME OF PRODUCT

1 2 3 4

1. 3 202501 Pickles & Chutneys

2. 7 205101 Bread

3. 8A 20530102 Pastry

4.9 20920101 Confectionery (Excluding Choclates,Toffees and

chewing gum)

5. 10 21100101 Rapeseed Oil (except solvent extracted)

6. 11 21100102 Mustard Oil (except solvent extracted)

7. 12 21100103 Sesame Oil (except solvent extracted)

8. 13 21100104 Ground nut Oil (except solvent extracted)

9. 14 214302 Sweetened Cashewnut products

10.16 219502 Ground and processed spices other than spice oil and

Oleo resin spices

11. 16A 21920101 Tapioca sago

12. 16B 219504 Tapioca flour Textile Products Including Hosiery


PRODUCT CODE NAME OF PRODUCT

1 2 3 4

20 17 260101 Cotton Cloth knitted

21 18 260102 Cotton vests knitted

22 19 260103 Cotton socks knitted

23 20 260104 Cotton undergarments knitted

24 21 260106 Cotton Shawls knitted

25 22 260199 Other cotton knitted wears

26 23 260201 Woollen cloth knitted

27 24 260202 Woollen vests knitted

28 25 260203 Woollen socks knitted

29 26 260204 Woollen scarves knitted

30 27 260205 Woollen undergarments knitted

31 28 260206 Woollen caps knitted

32 29 260207 Woollen shawls knitted

33 30 260208 Woollen gloves

34 31 260207 Woollen mufflers knitted

35 32 260299 Other woollen knitted wearsArt Silk / Man-Made Fibre Hosiery


PRODUCT CODE

NAME OF PRODUCT

1 2 3 4

36. 32A Art Silk / Man-Made Fibre Hosiery

260310 1.Synthetic knitted socks and stocking

260302 2.Synthetic knitted underwears such as vest, briefs and

drawer

260304 3.Synthetic knitted outerwears such as jersey slipover,

pullover, cardigans and jacket.

260308 4.Synthetic knitted children wear such as baby suits,

knicker, frock, underwear andouterwear

26030901 5.Synthetic knitted fabrics except high pile fabric made

by sliver knitting and synthetic knitted blankets.

260311 6.Synthetic knitted swim wear such as trunk and costume

260312 7.Synthetic knitted swim wear such as scarf, muffler

shawl, cap, ties, blouse and jean

260313 8.Synthetic knitted shirt, T-Shirt, Collar,Shirt and Sports-

Skirts

260314 9.Synthetic knitted hose

260315 10.Synthetic knitted gas mantle fabric

260316 11.Other synthetic knitwear

37. 33 261102 Stove wicks

38. 34 264104 Readymade garments

39. 35 266901 Cotton belting

40. 36 266902 Belt lacing

41. 37 266903 Measuring Tapes Cotton Wood and Wood Products

SL. NO. SL. (As per gazette notification

PRODUCT CODE

NAME OF PRODUCT

1 2 3 4

42. 37A 271001 Sawn timber

43. 38 27210301 Wooden crates

44. 39 272201 Tea chest plywood

45. 40 273002 Seasoned wood

46. 41 279914 Wooden sewing machine covers

47. 42 273012 Cable drums for AA ACSR conductors

48. 43 273013 Tent poles

49. 44 274202 Wooden plugs

50. 45 274301 Handles-Wooden Bamboo

51. 46 27440101 Teak fabricated round block

52. 47 276001 Wooden furniture and fixtures

53. 48 276002 Wooden storage cupboards

54. 49 276003 Wooden storage shelves & racks

55. 50 279908 Wood wool slabsPaper Products

SL NO.

SL. (As per gazette notification)

PRODUCT CODE

NAME OF PRODUCT

1 2 3 4

56. 51 280402 Waxed paper

57. 52 280403 Bitumenised water-proof paper

58. 53 280905 Decorative papers

60. 55 281101 Paper Bags

61. 56 281102 Composite containers (unlimited)

62. 57 28120101 Paper board cartons (unlimited)

63. 58 281301 Paper cups/plates

64. 59 281902 Paper envelopes

65. 60 281904 Corrugated fibre board containers

66. 61 283102 Paper twines, strings and ropes

67. 62 283201 Paper cones

68. 63 28320201 Paper Tubes (Except heavy duty resin impregnated conical spinning tubes for textile industry)

69. 64 283901 Drinking straws

70. 65 283902 Paper napkins including facial tissue napkins

71. 66 283903 Gummed tape

72. 67 283906 Teleprinter rolls

73. 68 283907 Stencil paper

74. 69 283908 Tele-Tape rolls

75. 70 283909 Slitting ordinary paper into rolls & sheets

76. 71 283910 Toilet paper rolls and sheets

77. 72 283911 Paper straps

78. 73 283912 Stickers, labels of gummed paper etc.

79. 74 283913 Treated tracing paper

80. 75 283914 Gummed paper for stamps

81. 75 283915 Gummed paper other than for stamps

82. 77 283916 Sanitary towels

83. 78 283917 Transfer labels

84. 79 285002 Exercise books and registers

85. 80 285005 Letter pads

86. 81 285006 File covers and file boardLeather and Leather Products including Footwear

SL NO.


PRODUCT CODE

NAME OF PRODUCT

1 2 3 4

90 85 290303 Leather pickers and other leather Accessories for textile industry

91 86 290401 Vegetable tanned hides and skins Semifinished

92 87 290501 Chrome tanned hides & skins semifinished

93 90 290905 Harness leather

94 91 291101 Leather shoes

95 92 291102 Leather shoes upper closed

96 93 291301 Leather sandals and chappals

97 94 292001 Leather garments

98 95 293101 Leather suit cases and travel goods

99 96 293201 Leather purses & hand bags

100 97 293202 Fancy leather goods & other novelty items

101 98 293901 Watch straps leather

102 99 293903 Leather cases and covers of all types

103 100 299004 Industrial leather gloves

104. 101 299005 Leather washers and laces Rubber Products

SL NO.


PRODUCT CODE

NAME OF PRODUCT

1 2 3 4

105 102 26720101 Rubberised cloth by doctor's blade technique

106 103 269304 Canvas hoses

107 104 300301 Tyres Cycle & Cycle rickshaw

108 105 3003020 Tubes-Cycle & cycle rickshaw

109 107 30040201 Camel-Back Tyre retreading materials (Except cold curing tyre materials precured)

110 107 A 301102009 Moulded rubber soles and heels for Footwear (except for captive consumption)

111 109 302102 Hot water bags Rubber

112 110 302103 Ice Bags rubber

113 111 302301 Rubber balloons

114 112 30240201 Rubber hose pipes excepting braided hoses

115 113 30240202 Rubberized canvas hose pipes excepting wire braided high press the hydraulic hoses

116 114 302403 Rubber tubes

117 115 302502 Rubber washers

118 117 30250901 Rubber thread (Except bare rubber thread of over 80 gauges and heat resisting rubber thread)

119 118 302510 Rubber eraser

120 119 302511 Hard rubber battery containers

121 121 302514 'O' ring rubber

122 122 30260101 Latex foam & latex products (Except synthetic rubber coats and aprons and lubricating pads)

123 123 302702 Microcellular sheets

124 124 302904 Other dipped latex products except contraceptives

125 124 A 31060102 Ortho amino phenol

126 125 31865101 Rubber blowing agents DNPT Plastic


PRODUCT CODE

NAME OF PRODUCT

1 2 3 4

127 126 301201 Full PVC footwear chappals, sandals & shoes

128 127 30310101 Blow moulded plastic- Hd PE-PVC containers upto 5 litre capacity excluding stretch blow moulded plastic containers

129 128 303201 Acrylic sheets

130 129 303303 Fibre Glass reinforced plastic produts other than the following:(a) SMC & DMC and its mouldings(b) Continuous Filament Winding (Pipes above 600 mm diameter)(c) Pultruded products(d) FRP sheets by continuous process

131 130 30330402 Hessian, paper and cloth to polythylene laminations-Straight and sandwiched by extrusion coating process except paper to polythelene laminations for integrated packing

132 131 303402 H.D. Polythylene Mono Filament (Except for captive use for rope manufacturers)

133 132 303403 Polypropylene Mono Filament (Except for captive use for repoe manufactures)

134 133 30350101 Polythylene Films with thickness less than 0.10 mm except co-extruded film cross linked

135 134 30350102 Products of polythylene films as coloured printed films & bags

136 135 303601 Spectacle frames by fabrication or by injection moulding

137 136 303702 Polypropylene tubular films (except biaxially oriented)

138 137 30370301 Industrial items from engg. Plasticsmaterial by fabrication process only

139 138 303704 Plastic collapsible tubes (Except lamianted)

140 139 303705 Polyptopylene box strapping

141 140 30370601 Polythylene and PVC flexible hoses (except wire braided hoses)

Injection Moulding Thermo Plastic Products (1)

SL NO. SL. (As per gazette

PRODUCT CODE

NAME OF PRODUCT

notification)

1 2 3 4

142 140 A 303707 1. Handles

143 140 B 303802 2. Soap cses

144 140 C 303804 3. Buckets

145 140 D 303808 4. Cups

146 140 E 303810 5. Lunch boxes

147 140 F 303812 6. Water jugs

148 140 G 303816 7. Saucers

149 140 H 303818 8. Tumblers

150 140 HH 30382200 8A. Plastic Cane

151 140 I 303831 9. Bins for various sizes

152 140 303832 10. Washing bowls

153 140 K 303833 11. Salad baskets

154 140 L 303834 12. Dust pans and bins

155 140 M 303835 13. Hair brushes

156 140 N 303836 14. Umbrella frames

157 140 O 303837 15. Hinged hair pins

158 140 P 303838 16. Babies bath tubs

159 140 Q 303839 17. Mugs

160 140 R 303840 18. Plates and dishes

161 140 S 303841 19. Salt containers

162 140 T 303842009 20. Toys (excluding electronic toys)

163 140 U 303843 21. Pencil boxes

164 140 V 303844 22. Coffee pots

165 140 W 303845 23. Coffee pot covers

166 140 X 303846 24. Table calendar stands

167 140 Y 303847 25. Office table tray

168 140 Z 303848 26. Waste paper baskets

169 141 30390101 Flexible polyurethane foam

170 142 30390102 Flexible polyurethane foam products

30390201 Polyurehane shoe soles

171 143 303902 Polystyrene foam products (except slabs for expandable polystyrene beads manufacturers)

172 144 303903 Plastic buttons

173 145 Fabricated plastic products as follows :-

30390401 1. Advertising novelties

30390402 2. Desk calendar

30390403 3. Pen stand

303904047 4. Plastic toys (excluding electronic toys)

30390405 5. Decorative and Industrial fixtures

30390406 6. Street lights

30390407 7. Corridor lights

30390408 8. Passage lights

30390409 9. Building models (Prototype)

30390410 10. Machine model (Prototype)

174 145 A 303907 HDPE Woven sacks (Except sacks manufactured on circular looms)

175 146 303909 Plastic combs

176 147 30391201 PVC Pipes including conduits - Upto 110 mm dia

30393501 Fittings for PVC pipes including conduits upto 110 mm dia.

177 148 303913 Zip fasteners - Non metallic (Except in the case of integrated plants manufacturing all components.

178 149 30390501 Compression moulded plastic products excluding decorative and industrial laminates

179 150 303916 Plastic rain coats

180 151 303925 Plastic bottle caps

181 152 303926 Flash light torch cases-plastic

182 153 303927 Polyester sheets

183 154 303928 Other thermo welded plastic product such as:

30392801 1. Shopping bags

30392802 2. Diaries

30392803 3. File cover

30392804 4. Badges/Folders

30392805 5. Advertising materials

30392806 6. Wallets

30392807 7. Passport covers

30392808 8. Tool kit covers

30392809 9. Medical disposables

30392810 10. Industrial packings for calculations, Microphones etc.

30392811 11.Inside assembly of brief cases

30392812 12. Key chains

30392813 13. Identity cards and visiting cards

30392814 14. Albums

30392815 15. Textile welding for garments

184 155 30392901 Contact lenses except those manufactured in integrated plant from monomer.

185 156 303930 Watch straps PVC

REVIEW OF LITERATURE

The small-scale industries sector plays a vital role in the growth of the country. 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 units has increased from an estimated 0.87 million units in the year 1980-81 to over 3 million in the year 2000.

From 1947 to 1994, General Agreement on Trade and Tariff (GATT) was the forum for negotiating lower customs duty rates and other trade barriers. The World Trade Organization (WTO) was established on 1st January 1995. When the GATT came into WTO's umbrella, it has annexes dealing with specific sectors such as agriculture and textiles, and with specific issues such as State Trading, Product Standards, Subsidies and Actions taken against dumping. The WTO has 148 members, accounting for over 97% of world trade. Around 30 others are negotiating membership.

WTO aims to develop the country's economy by encouraging its export among the member countries. Further, it facilitates for availing new technologies from various countries at a lower cost. In this connection, this paper focuses on the positive role played by the WTO in the globalization scenario.

GROWTH OF SSI SECTOR IN INDIA

Small Scale Industries (SSIs) are the pillars of India's industrial economy. The SSIs' chief aims are:

To Remove the regional disparities To facilitate for the Equitable distribution of national income and wealth To earn the Return on Investment in shorter period To produce some consumption goods and essential commodities.

As the SSIs consume local resources, the growth of SSIs was quite appreciable at the dawn of new century. It is evidential from the fact that there were over 32 lakhs Small Scale Units in the organized sector as on 31st March 2000 (Naik: 2002) & (Economic Survey: 2001).

SSIs require comparatively a smaller investment and avails the financial support of various financial institutions. There have a number of schemes of direct and self -employment. The employment through SSIs has been tremendously increased from 119.6 lakh during the year 1989 - 90 to 178. 5 crore during the year 1999 – 2000. In succeeding years also in the well grown in all areas.

Problems facing the SSI sector

The SSI sector confronts several problems despite its strategic importance in any industrialisation strategy and its immense potential for employment generation.

The problem which continues to be a big hurdle for the development of the sector is lack of access to timely and adequate credit. The Abid Hussain Committee on SSIs (1997) examined the problems of the SSI sector and recommended a package of policies to restructure the industry in the context of current global economic changes. The Expert Committee was of the view that the existing institutional structure for delivering credit to SSEs needs a thorough overhaul. It endorsed the recommendations of the Nayak Committee and urged the RBI to implement the same. The Committee recommended restructuring of financial support through SFCs and SIDCs, tapping of other sources of funding for SSEs, extending credit rating servcies to small units, and addressing the credit needs of tiny units to ensure that they are not bypased by the commercial banking system. The overall credit availability for SSIs during 1991-1996 amounts to only 13% of the value of production.

The Nayak Committee had recommended a desirable norm of 20% of the value of production to be made available by way of working capital through term-lending institutions and commercial

banks A norm of 75% was set for fixed capital assets whereas actual availability is only 55%. Lack of finance has been one of the major causes of sickness in the SSI sector, blocking access to technological modernisation and other growth possibilities. There is an urgent need to enlarge flow of credit to the SSI sector from institutional sources. The creation of a facilitating environment for SSIs will centre on access to credit. The Ninth Five Year Plan (1997-2002) estimates additional working capital funds at Rs. 1420 to 1460 billion for the small sector. Lowering interest-rates, specifying a time-frame to clear loan applications and adherence to norms set down by the Nayak Committee are some of the minimum measures that need to be taken.

Legislative measures have a role to play with regard to funding and financing of small scale units. There are measures which can basically ensure that impediments to credit availability are removed. These measures include:

Right to reasonable credit from commercial banks as per RBI guidelines framed after consultation with representative Board

Protection against non-normative demands for security Appeal and enforcement by Ombudsman/Board Access to public funds by way of debentures, deposits, securities Government guarantee for loans from banks

The measures to support Marketing and Competitiveness are as follows:

State to exempt from contract security Prompt return of contract securities in case of others Prompt payment measures Protection against undue bundling of contracts by the state Protection against restrictive and monopolistic trade practices Ombudsman/arbitral services for enforcement

RESEARCH METHODOLOGY:

Taking into consideration of the project, a draft of how to go was decided.

Firstly, it was decided to divide the report into two parts:

1. A general introduction of CRM

2. CRM in Banking sector ( ICICI)

After dividing the project into two parts, the source of data was decided.

The source of data was primary as well as secondary.

PRIMARY: Survey of the CRM through personal interview from Customer of ICICI.

SECONDARY: Several data from sites of ICICI Bank . And several other sites.

A structured questionnaire was designed to collect the necessary information. The questionnaire consisted of close-ended & open-ended questions.

PLACE: For filling up the Questionnaire from Employees & Customers, visit was made to ICICI Bank .

SAMPLE SIZE: No.1 Private Bank as ICICI Bank

METHOD OF DATA COLLECTION : Survey method.

TOOL OF DATA COLLECTION: Personal interview

PROJECT LIMITATION:

Though Overall response was satisfactory but I went to ICICI Bank in the month of April all the Employees were very busy and it was very difficult for them to give time for filling up the questionnaire. As far as Customers are concerned they are sometimes not willing to fill up.

Conclusion

WTO plays positive role in strengthening the SSIs. On the other hand, it is feared that many rules of WTO are biased and in the favour of developed countries; they are formulated to force the developing countries to open their economy which would benefit the developed countries and many indigenous industries of developing countries might fail as they will not be able to compete with the international enterprises. This may cause adverse effect on the employment opportunities in the country.

High investment; High return! Though it is the reason for the handicaps of our SSIs, It can be confronted by the innovativeness, novelty in products and the development of lean technologies in the manufacturing sector. Number of Innovative entrepreneurs having strong need for achievement can surely ensure success and tackle the challenges of open competitions at global level.

REFERENCES:

Several Books and Sites were referred, these are as follow:

1. WWW. BRITTANICA.COM2. INDIA TODAY, INDIA NO. 1 BUSINESS WEEKLY

3. TASLIMA CUSTOMER INTERACTION MANAGAMENT

4. WWW.WIKIPEDIA.COM

APPENDICES:

QUESTIONNAIREName………………………..Age……………….Occupation , If any………………………

1. What do you prefer as an investor if you have an option to invest 20 – 25 lakh in S.S.I ? - Wholesale / Retail - Mining plant

- Others , Please specify ………

2. What is the source of capital you would employ?- Loans from banks - Using own resources

3. What type of technology is used or like to use?- Labour intensive - Capital intensive- Both

4. What will be your selling criteria?- Credit - Cash

5. According to you what is the main hurdle in setting up S.S.I plants?- Govt policy - Initial investment - Others , Please specify ……………

6. What will be the source of raw material?- Extraction - Direct purchase

7. Do you think that this area will develop more in future?- Yes - No

8. Is this sector safe for investment?-Yes - No

9.What type of competition is present in this market?- Perfect - Imperfect

10. What is your expected rate of return?- Good

- Average- Low

11. Do you think you will be able to get any support from banks?- Yes - No

MBA/BBA project report

Documents

Transcript of MBA/BBA project report