Introduction: Small Scale Industries (SSI)
Small Scale Industries (SSI) are those industries that undertake manufacturing, production and rendering of services on a small scale or micro scale. These types of industries make a one-time investment on plant, machinery and equipment on a small basis. Small scale industries are the backbone of economy and lifeline for employment opportunities in India. They contribute billions of dollars to the economy and also give employment to tens of millions of Indians.
Table of Contents
- Introduction: Small Scale Industries (SSI)
- Characteristics of Small scale industries:-
- Roles of Small Scale Industries in the economy:
- Eligibility criteria for Small Scale Industries:
- Registration process of SSI / MSME:
- Benefits of MSME registration:
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They help in promoting domestic manufacturing infrastructure and saving of precious foreign exchange of the country. They also play a crucial role in innovations in the country. About 60 – 70 percent of innovations come from Small Scale Industries. Many of the big businesses that we see today were once a small-scale industries.
Examples of small scale industries are:-
- School stationaries.
- Small toys.
- Leather products.
- Readymade garments.
- Plastic bags.
Characteristics of Small scale industries:-
Generally, small-scale industries are under single owner. Hence it is mostly Sole Proprietorship and sometimes can be Partnership Firm.
Generally, both the management and the control on company lies in the hand of the owner. Hence the owner is actively participating in day to day activities of the company.
- Labor Intensive
SSI mostly dependent on the labor-intensive techniques of production due to limited capital. Hence it is the largest employment generator in the economy.
- Limited Reach
The area of operation for the SSIs are limited due to limited resources. Hence they can only operate in local and regional areas.
Due to their small size, they can easily adapt to the changing rules and regulations set by the Government rather than big corporations because of their big size.
Roles of Small Scale Industries in the economy:
Small Scale Industries (SSI) plays a crucial role in the economy of the nation. From employment generation to saving of precious forex reserve and many more, these SSIs are the backbone of the economy. The following are the contribution by SSIs to the economy:-
- Employment Generator
The SSI use a labor-intensive technique of production due to limited resources and availability of technology. Hence it generates a lot of employment opportunities in the country.
- Domestic Production
The SSIs accounts for more than 40% of the domestic production of goods and services in India. Hence they are one of the main reasons for the growth and development of the economy. They do production in India and sell worldwide and create demands for Indian-made goods across the globe.
- Export Contribution
India’s export industry majorly depends on the shoulders of these small-scale industries. Nearly half of India’s exports are manufactured or produced by SSIs. These SSIs also help India earn billions of foreign exchange.
- Regional Development
Most of the small-scale industries are set up in backward areas and rural areas. Hence it plays an important role in the generation of the employment opportunities and regional development of these areas.
- Public Welfare
These SSIs provide an opportunity to earn wealth and create employment opportunities to the society. Hence helps in social development of the country.
Eligibility criteria for Small Scale Industries:
Small scale industries in India are regulated under the MSME Act of 2006. The MSME Act, 2006 bifurcated the Small scale industries under 3 categories i.e. Micro, Small and Medium Enterprises. Following are the criteria for Micro, Small and Medium enterprises based on investment and turnover.
|Micro||1 crore||5 crores|
|Small||10 crores||50 crores|
|Medium||50 crores||250 crores|
Registration process of SSI / MSME:
SSI registration is provided by the Ministry of Micro, Small and Medium Enterprises through the directorate of Industries of the State Government. The main logic behind SSI registration is to keep a record of the large number of SSIs in India and help the business to become eligible for a number of subsidies given by the Government. One can also apply for SSI/MSME registration online through Udyam Registration.
Here is the process for online registration of SSI/MSME:-
- Visit Udyam registration “https://udyamregistration.gov.in/UdyamRegistration.aspx”.
- Fill the “Aadhar number “and “Name of entrepreneur “and click validate option.
- Enter OTP sent to linked mobile number with Aadhar card and enter the PAN card number.
- The application form will open and fill the details regarding address of enterprise, bank details of enterprise, number of employees, investment on plant and machinery, etc.
- After filing the application form, enter the CAPTCHA and mobile number linked with aadhar card. Submit the application form and an UDYAM Registration number will generate.
- It takes 2 days for verification of the information provided in MSME application form, after that one can download the MSME certificate by entering the mobile number and enter the OTP sent to the mobile number given in the application form.
There is no need to upload any documents and no government fees is need to pay for MSME certificate.
Benefits of MSME registration:
There are multiple benefits of SSI/MSME registration certificate:-
- Government provides various tax rebates to SSIs.
- There a lot of government tenders that are reserved for SSIs. They can easily apply for the government tender.
- The most important benefit which SSIs get is the easy availability of credit.
- Businesses registered as MSME are given higher preference for other government licenses and certification/registration.
- All the MSME get access to the Government e-marketplace (GeM) portal.
This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.
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