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INTRODUCTION TO SMALL SCALE INDUSTRY
THE SSI (SMALL SCALE INDUSTARY) today is immense for the growth of the country. Small scale industries are the industries which are run with the help of their labours and which also use some simple machine and power.
The investment scale in this industry from 50 lakh to 1 crore for fixed assets. Irrespective number of worker engaged is small scale industry unit.
In India these type of industries are permuted to meet with the problem of excess population and unemployment so the government of India prate entrepreneur to step up small scale industries by aiding him by giving loans, land ,guidance etc .The strategy adopted by the government is:-
1. Public enterprenship should remain confined only to those industries and sector where private enterprise, individual or cooperate, is generally not attracted. Existing public entrepreneurship be improved through better management and by putting relative greatly emphasis on research and development. There is need to streamline the R&D wing of public sector enterprise.
2. All possible efforts be made very seriously (not casualty) for the development of an industrial culture. It should be realize that the central core of entrepreneurship is the motive force since by its very nature, entrepreneurship implies positive action and individual with the right kind of combination of ability can pursue their goal with unlimited courage and enthusiasms.
3. There is need to development management education and industrial training.
4. The development of backward region / area constitutes a new challenge. Program for their development be drawn up and should be effective implemented.
5. Adequate measure is a must for mobilizing & casting the entrepreneurs talent in the country .In this context, it should be realized that entrepreneurs are not the grief of a particular classes.
6. Economic administration by the state should be improved and made more effective so that economic policy may be fully achieve their objective in the overall interest of economy.
7. Financial institute should provide adequate and timely credit and timely create and technical assistance, especially to the small and medium sized enterprise. They may also impart knowledge about the need of economy and they should file their massive data in term of growth of new entrants or entrepreneurs in the field of industry.
HOW TO START A SMALL SCALE INDUSTRY
The steps involved in starting a small-scale industry are:-
1. Conduct Market Survey and Study the products as regards their demand in the market. Check whether it is a seasonal product or it has demand throught the year.
I. Study similar products available in the market that can be probable competitors. Analyze them as regards their utility, quality and cost.
II. Find whether the product can be exported.
III. Explore the possibility whether some product can be manufactured in collaboration with a foreign country. This provides readymade technical know how and save a lot of time and money otherwise wasted in developing a suitable method of manufacture.
IV. Decide the product that you are going to manufacture, on the basis of:-
a) Market Survey
b) Financial implication involved
c) Technical know how available
d) Experience in the line, etc.
1. Select a proper site for locating the unit.
2. Take a building for factory on hire or construct your own factory building.
3. Get yourself conversant with the rules and other information available from small-scale industries, Ministry of Industry, New Delhi.
4. Prepare a scheme in detail to manufacture the selected product such a scheme should include the requirement of and the approximate cost of:-
I. Land and building
II. Machinery, tools and other equipment
III. Direct labour
IV. Indirect labour
V. Direct material cost
VI. Indirect material cost
VII. Selling and distribution overheads
VIII. Working Capital for a unit time
X. Total production cost per unit time
XI. Percentage of profit.
5. The scheme after it has been prepared is sent, for approval to the Directorate of Industries of the particular state.
6. A small scale unit has to get itself registered with the Directorate of industries in order to avail various facilities provided by the government, such as:-
I. Financial assistance
II. Raw materials water and power
III. Import license
IV. Factory accommodation
V. Government order
Since independence government of India has been giving all possible encouragement of SSI. A number of organizations have been set up by the government of India to provide assistance and incentive to small scale industry. These packages of assistance are providing to SSI by a large number of organization operative at national and state level. Development program are being carried out at two level
a) National level
b) State level
AGENCIES WHICH WORK AT NATIONAL LEVEL ARE:-
a) Small scale industrial board (SSIB)
b) Small scale industries development organization
c) National small scale Industrial Corporation.
AGENCIES WHICH WORK AT STATE LEVEL ARE:-
a) State directorate of industries
b) District industrial center (DIC).
c) State small industrial corporation (SSIC).
d) State financial corporation.
e) Commercial bank.
f) Small industries development bank of India (SIDBI).
NATIONAL LEVEL SSIB
It is all advisory body and comprises state government ministry office and representative of several institution & association. Its functioning is to plan, advice and coordinate the activities of center and state government. As such it does not render direct help to entrepreneur. However, it helps to government in involving new polices and program for small scale sector.
Small Industrial Development Organization (SIDO)
Its headquarter at Nirman Bhavan, New Delhi headed by the development commissioner (SSI) has a network of small industries Service Institute (SISIs) one in each state which help In economical, technical, industrial information services, management casualty services, training & marketing.
Its headquarter at New Delhi & regional office at Kolkata, Mumbai, Chennai, Guwahati etc.
Supply of machine and equipment on hire purchase
1.) Distribution of scare raw material imported components.
2.) Marketing assistance
3.) Assistance to SSI in securing order for railway and defense.
4.) Operating a credit guarantee scheme for those units which are registered within.
State financial corporation
Almost every state has its own financial cooperation to provide machine and long term loans small and medium sale industries. Amount of loan varies from Rs. 5000 to Rs. 6. lakhs and these are repayable in equal installments spread over a period of 10-12 years.
Important schemes of financing SFC are
1) A loan scheme for financing of village and cottage industries. Under this scheme they are financed to the extent of Rs. 25,000 and the interest rate is very low.
2) Assistance to tiny units – these grant assistance up to Rs. 2.00 lakhs.
3) Scheme for technical entrepreneur – in order to encourage self employment these corporation provide financial assistance up to Rs.2.00 lakhs at very low interest rate to such technical entrepreneurs who have acquired a diploma or degree in any discipline of engineering .
4) Loans to hotel industry
5) Scheme for SC/ST –Grant financial assistance to SC/ST entrepreneurs at a nominal margin rates are charged at the rate of 10%.
6) Scheme for physically handicapped –these provide financial assistance up to Rs. 3.00 lakhs at a rate of 10%.
SBI and its subsidiary banks and other nationalized banks provide liberal term loans and working capital to small scale entrepreneurs and these loans are advanced for purchase of machine and material and to the technical entrepreneurs to encourage self employment. Specialized institute like, Central Institute of Tool Design, Hyderabad, Central Tool Room, Ludhiana and Kolkata, Central Institute of Hand Tool Jalandhar, Institute for Design of Electrical Measuring Instruments (IDEMI) Mumbai, Integrated Trading centre, Nilokhedi, National institute of small Industry Exton, Hydrabad and National Institute for Entrepreneurship and Small Business Development. They conduct special courses, programmers, Workshops, training programmers for the benefits of small scale industries.
Credit is the prime input for sustained growth of small scale sector and its availability continued to be a matter of concern. To provide credit support to the various SSI units various policies have been formulates by the GOI. Various institutes like SFC, SIDC, NISC, and SIDBI are providing financial supports to various SSI units.
Overviews of the steps taken by the GOI are:-
1. Composite loans limit raised from Rs. 10 lakhs to Rs. 25 lakhs.
2. In the National equity fund scheme (NEF) the project cost limits has been raised from Rs. 25 lakhs to Rs. 50 lakhs.
3. Soft loan limit restrained to 25% of the project cost.
4. Task Force is appointed by the Department of Economic Affairs to suggest revitalization/restructuring of the State financial Corporation.
Concept of Marketing:-
Studies reveal that different organizations have different perception of marketing and these different perceptions have led to the promotion of different concept of marketing. It is found that at least 5 distinct concept of marketing have guided and are still guided business terms. They are:
1. Exchange concept.
2. Production concept.
3. Product concept.
4. Sales concept.
5. Marketing concept.