Originally small scale industries usually consist of industries that manufacture, produce and present services with the help of small machines and low manpower. These enterprises should fall under the guidelines set by the Government of India.
SSI is the lifeline of the economy, especially in developing countries like India. These industries are generally labor-intensive, and therefore they play an important role in the creation of employment. SSIs are an important sector of the economy from both a financial and social point of view, as they help with per capita income and resource utilization in the economy.
Examples and Ideas of Small Scale Industries
Characteristics of SSI:
Ownership: SSIs are generally sole proprietorships. So it can be either a sole proprietorship or sometimes a partnership.
Management: Generally the management and control is owned by both the owner/owners. Therefore the owner is actively involved in the day-to-day activities of the business.
Labor intensive: SSI's reliance on technology is very limited. Therefore they use labor and manpower for their production activities.
Flexibility: SSIs are more suited to their changing business environment. They are therefore flexible enough to adapt and carry, unlike large industries, in case of modifications or unexpected developments.
Limited Access: Small scale industries have a limited area of operation. Therefore, they can meet their local and regional demand.
Resource utilization: They use local and readily available resources which helps the economy to fully utilize natural resources with minimal wastage.
Role in Indian Economy
Employment: SSI is a major source of employment for developing countries like India. Due to limited technology and resource availability, they use labor and manpower for their production activities.
Total Production: These enterprises account for about 40% of the total production of goods and services in India. They are one of the major reasons for the growth and strengthening of the economy.
Make in India: SSIs are the best example for the Make in India initiative. They focus on the mission of manufacturing in India and selling products worldwide. It also helps to create more demand from all over the world.
Export Contribution: India's export industry relies prominently on these small industries for their growth and development. About half of the goods exported from India are manufactured or produced by these industries.
Public welfare: These industries have the opportunity to earn money and create employment. SSIs are also important for the social growth and development of our country.
Eligibility Criteria for SSI Registration
For SSI registration can be obtained:
Manufacturing enterprise; And
For a manufacturing enterprise, if the investment in plant and machinery (excluding land and buildings) is within any of the following levels:
Micro Enterprises: Up to Rs 25 lakh investment in plant and machinery
Small Enterprises: In Plant and Machinery Rs. Investment up to 5 crores
Medium Enterprises: Up to Rs 10 Crore Investment in Plant and Machinery
For service enterprise, if the investment in plant and machinery (excluding land and buildings) is within any of the following levels:
Micro Enterprises: Up to Rs 10 Lakhs Investment in Equipment
Small Enterprise: Up to 2 Crore Investment in Equipment
Medium Enterprise: Equipment includes Rs. Investment up to 5 crores
SSI registration has to be obtained if the investment is made within the above mentioned limits.
Benefits of getting SSI registration
SSI is granted various tax rebates
A Credit for Minimum Alternative Tax (MAT) is allowed to be carried forward for 15 years instead of 10 years.
There are several government tenders which are open only to SSI.
They are easy to borrow.
Once the cost of obtaining a patent is recorded, or the cost of establishing the industry is reduced because there are many discounts and concessions available.
Business registered as SSI is given high priority for government license and certification.
What is SSI registration process?
MSME / SSI registration is a full flow online process. You have to fill an application form for the registration process. In this, you can take help of self-appointed advisors and get approval from higher authorities. The online SSI registration or MSME registration process is given as follows:
File an application in relation to the government department.
Provide the necessary details of the industry in the application along with the following documents:
Applicant's Aadhar Card Number.
Applicant Name, Gender, PAN no. Mobile Number and Email ID.
Details of the industry like organization type, address, date of establishment, number of employees etc.
Bank account details including bank account number and IFCS code.
The main business activity of the organization.
Investment in plant and machinery.
NIC 2 digit code
The objectives of small scale industries are:
To create more employment opportunities.
Helping to develop rural and less developed areas of the economy.
To reduce regional imbalances.
Ensuring optimum utilization of the country's unplugged resources.
To improve the standard of living of the people.
Ensuring equal distribution of income and wealth.
So that the problem of unemployment can be resolved.
Production of superior quality products at low cost