Small scale industry is widely recognized as a powerful instrument for socioeconomic growth and balanced sectoral development. One of the distinctive characteristics of small scale sector is that the development of these industries would create broader employment opportunities assisting entrepreneurship and skills development and ensure better use of scarce financial resources and appropriate technology. Furthermore, they can play a main role in achievement of national economy and sociopolitical objectives, the gestation period is very short and they need small amount of capital to start. I also help in the dissemination of production capacity unlike the large scale industries which tend to concentrate in a few hands. This apart, establishment of such industries in rural areas and small towns helps to check the influx of population into bigger towns. A rewarding feature of economic development in India has been the impressive growth of modern small scale industries. The small enterprises have by now established their competence to manufacture a wide variety of sophisticated goods in different product lines requiring a high degree of skill and precision.
[...] The diversified, rapid growth of small scale industries is a significant feature of India's economic development in recent years. Definitions:- As per the industrial policy statement of 31st May 1999, a tiny unit small scale industry, ancillary undertaking and service establishment are defined as follows Tiny Unit An industrial unit located in rural or backward areas with a population not exceeding 100000 as per 1991 census and having an investment upto RS 25 Lakhs in plant & machinery is called a tiny industrial unit. [...]
[...] RBI on the advise of the government has set up State Level Inter- institutional Committees in all state under the chairmanship of secretary, Industries Department of the concerned state government and the local officer in- charge of the RBIs Rural Planning and Credit Department as conveyor to provide a useful forum for exchange of information and discussions on problems faced by small scale industrial units. The committee consists of representatives of SISI, SIDC, SFC, SIDBI and banks. The committee meets periodically and brings different parties connected by rehabilitation of viable sick units together so that detailed parameters for rehabilitation based on consensus can emerge. [...]
[...] The small scale industry is so far dependent on internal market alone barring a few industrial units who export their products. It is therefore, imperative that not only for great utilization of capacity but for providing stability to the production units concerned efforts are made to boost internal demand as also export market. However, it must be emphasized that strengthening of the home base should have precedence over creation of capacity exclusively for export market. Over dependence on export market exposed the industry, especially to the one which is composed of small and cottage sector units to the vicissitudes of external environment. [...]
[...] Ancillary Development and Sub-contracting Exchanges: Under the ancillary development program, individual items are identified for ancillary and small scale industries are assisted for securing sub contract jobs with a view to providing them effective marketing support. As a part of this program Sub-contracting exchanges have been set up in SSIs to promote ancilliarisation. These exchanges acts as an information house for matching the requirements of medium /large undertakings looking for sub-contractors with small scale units desirous of securing orders from medium/large undertaking. [...]
[...] Under the second category some units started on a small scale and are likely to remain so for a long time in view of the specialized nature of demand for their products. Though specialized type of machines are required by this sector, they do not require any large scale investment in block assets. Generally, these are organized as non-corporate concerns, partnership, proprietary or joint family concern. These concerns have little block assets to offer as security though they maintain sufficient stocks. [...]
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