“despite remarkable growth, India has to go a long way in diversification of exports in terms of heavy manufactures”.

“despite remarkable growth, India has to go a long way in diversification of exports in terms of heavy manufactures”. Examine the statement with the help of data from 1995-96 to 2005-06 (Refer Economic Survey).

Ans: 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.

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 CONDITIONS
1950 Up to Rs. 5lacs in fixed assets Less than 50/100 persons with or without power
1960 Up to Rs 5 lacs in plant & Machinery No Condition
1966 Up to Rs 7.5 lacs in plant &Machinery No Condition
1975 Up to Rs 10 lacs in plant &Machinery No Condition
1980 Up to Rs 20 lacs in plant &Machinery No Condition
1985 Up to Rs 35 lacs in plant &Machinery No Condition
1991 Up to Rs 60 lacs in plant &Machinery No Condition
1997
( Dec) Up to Rs 100 lacs in plant &Machinery No Condition





Performance of small scale industries
• Employment
• Production
• Exports
• Opportunities

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 investment in fixed assets in the small scale sector generates employment for four persons.





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%).

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

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 between them accounted for 26.2% of employment.

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.



It would surprise many to know that nontraditional products rates in this decade. It has been mostly fuelled by the performance of garment, leather , gems and jewellery units from this sector.



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

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


The opportunities in the Small scale sector are enormous due to the following factors:
• Less capital intensive
• Extensive promotion and support by the government.
• Reservation for exclusive manufacture by small scale sector
• Project profiles
• Funding
• Finance & subsidies
• Machinery Procedure
• Raw material procurement
• Man power training
• Technical managerial skills
• Tools& Tools utilization support
• Export production.