Small Scale Industry 08

SMALL SCALE INDUSTRY INTRODUCTION The definition for small-scale industrial undertakings has changed over time. Initially they were classified into two categories- those using power with less than 50 employees and those not using power with the employee strength being more than 50 but less than 100. However the capital resources invested on plant and machinery buildings have been the primary criteria to differentiate the small-scale industries from the large and medium scale industries. An industrial unit can be categorized as a small- scale unit if it fulfils the capital investment limit fixed by the Government of India for the small-scale sector. As per the latest definition which is effective since December 21, 1999, for any industrial unit to be regarded as Small Scale Industrial unit the following condition is to be satisfied: Investment in fixed assets like plants and equipments either held on ownership terms on lease or on hire purchase should not be more than Rs 10 million. However the unit in no way can be owned or controlled or ancillary of any other industrial unit. The traditional small-scale industries clearly differ from their modern counterparts in many respects. The traditional units are highly labor consuming with their age-old machineries and conventional techniques of production resulting in poor productivity rate whereas the modern small-scale units are much more productive with less manpower and more sophisticated equipments. Khadi and handloom, sericulture, handicrafts, village industries, coir, Bell metal are some of the traditional small-scale industries in India. The modern small industries offer a wide range of products starting from simple items like hosiery products, garments, leather products, fishing hook etc to more sophisticated items like television sets, electronics control system, various engineering products especially as ancillaries to large industrial undertakings. Nowadays Indian small-scale industries (SSIs) are mostly modern small-scale industries. Modernization has widened the list of products offered by this industry. The items manufactured in modern Small-scale service & Business enterprises in India now include rubber products, plastic products, chemical products, glass and ceramics, mechanical engineering items, hardware, electrical items, transport equipment, electronic components and equipments, automobile parts, bicycle parts, instruments, sports goods, stationery items and clocks and watches.

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HISTORY OF SMALL SCALE INDUSTRY Ministry of Agro and Land Rural Industries and Ministry of SSI have been merged into a single namely, Ministry of Micro Small & Medium Enterprises. The President under Notification 9th May 2007 has amended the Government of India (Allocation of business) Rules 1961, Pursuant to this amended Ministry of Agro and rural Industries ( Krishi Evam Gramin Udyog Mantralay) and ministry of SSI (Laghu Udoyag Mantralay) have been merged into a single Ministry, namely, Ministry of Micro Small & Medium Enterprises ( Suksham Laghu Aur Medium Udyam Mantralay )

CONCEPT & DEFINATION OF SSI In most parts of the world the nomenclature used is small and Medium Enterprises (SMEs) and the citeria for defininig include the number of employees and /or the turnover. In India the Small Scale Industry eoveks different meanings for different agencies and the financial institution. For example for the purpose of excise and sales Tax Exemption, the turnover alone is the determinig criterion. However in broder terms, currently, an SSI is defined in terms of investment ceiling on the original value of instlled plant and machinery. 7.65 The small scale sector has played a very important role in the socioeconomic development of the country during the past 50 years. It has significantly contributed to the overall growth in terms of the Gross Domestic Product (GDP), employment generation and exports. The performance of the small scale sector, therefore, has a direct impact on the growth of the overall economy. The performance of the small scale sector in terms of parameters like number of units (both registered and unregistered), production, employment and exports is given in Table 7.15. 7.66 During the one year period i.e., 2000-01 Over 1999-2000, the number of SSI units is estimated to have increased by 1,58,000, production at current prices by Rs. 72,609 crore and at constant prices by Rs. 33,714 crore. Employment increased by 7,14,000 persons, while exports were higher by Rs. 5,778 crores. 7.67 According to projections made by the Ministry of Small Scale Industries during 2000-01, the SSI sector recorded growth in production of 8.09 per cent over the previous year. The small scale industries sector has recorded higher growth rate than the industrial sector as a whole (4.9 per cent during 2000-01). It contributed about 40 per cent towards the industrial production as a whole and 35 per cent of direct exports from the country. 7.68 The Government has been taking various measures from time to time in order to enhance The productivity, efficiency and competitiveness of the SSI sector. In pursuance of the comprehensive policy package announced last year, the major developments that have taken place in the SSI sector during 2001-02

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THE SMALL SCALE INDUSTRIAL UDERTAKING An industrial undertaking in which the investment in plant and machinery, whether held on ownership terms or on lease/hire-purchase basis, does not exceed Rs.10 million (Rs.1 crore) is regarded as a small scale undertaking. These include manufacturing and service units. Status of Small Scale Industries Undertaking a) Ancillary Industries Udertaking :- Engaged in manufacture of parts, component Sub-assemblies, The investment in fixed assets doesn’t exceed 1 crore. b) Tiny Industries :- All small scale units, which investment on plant & machinery (excluding land & building) upto Rs.25 Lakhs. c) Export Oriented Units :- All small scale units, which export more than 50% of Their output.

Tiny Enterprises A unit is treated as a tiny enterprises where investment in plant nad machinery does not exceed Rs.2.5 million (Rs.25 Lakhs) irrespective of the location of the unit. Many shops,

Export Oriented Unit [Eou] A unit with an obligation to export at least 30 percent of its annual production by the end of the third year of commencement of production and having an investment ceiling up to Rs.10 million (Rs.1 crore) in plant and machinery is termed as an export oriented SSI unit. In India no separate definition of medium enterprises exists and as such there is no specific definition of Small and Medium Enterprises [SMEs.] Administratively, in the Indian context ,the industry universe is divided into three major segments. Modern Small Scale Industries These cover SSI units [both in the factory and Non /Factory sectors] and power loom units. Such units mostly use power driven machinery and possess superior production techniques. Units in this sub-sector are generally located in close proximity to large industrial centers or urban areas. These industries are moving away from the traditional products to knowledge-based products. Traditional Small Scale Industries This sector Comprises tiny and cottage industry segments like handlooms, Khadi and Village Industries, handicrafts, sericulture and silk, rubber and coir. These units are labour- intensive, are generally located in rural and semi-urban areas and are artisan based. Usually the capital invested is also nominal.

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How a person can start a small scale industries in Indian Scenario.

1. For starting a Small Scale Industry other than the industries identified as those of highly polluting nature by Pondicherry Pollution Control Committee (PPCC), entrepreneurs have to first apply to the Directorate of Industries and Commerce, Pondicherry ,Branch office at Karaikal ,Sub-office at Mahe and Yanam, depending on the location of the unit for Provisional SSI Registration in the form prescribed. In case of industries identified as those of highly polluting nature by PPCC, entrepreneurs will have to first get clearances from the Pondicherry Pollution Control Committee through the Directorate of Industries and Commerce and then approach for provisional SSI registration after its clearance. 2. All proposals for setting up of H.T. Industries will be referred to the Electricity Department for getting initial advice regarding the availability of power for the unit . In the case of such industries provisional registration / NOC will not be issued unless the initial advice is received from the Electricity Department. 3. All the entrepreneurs irrespective of their size of investment, may approach the `Single Window Committee` (Functioning in the District Industries Centre) for getting the requisite clearances expeditiously. 4. The regional office of the District Industries Centre will make available to the entrepreneurs/ Industrialists, the prescribed application forms for obtaining clearances/ permissions from the following Departments (Photocopies and computerised forms in the format required by the concerned Department will also be accepted): (a) Municipality /Commune Panchayat, in whose jurisdiction the industry is proposed to be set up. (b) Chief Inspector of Factories; (c) Town and Country Planning Department; (d)

Revenue Department;

(e) Agriculture department; and (f) Electricity Department.

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5. Duly filled in application forms in prescribed format along with required copies of the site, building & machinery layout plans and other relevant documents shall be submitted to the District Industries Centre or its regional office for obtaining Clearances / Permissions from the various Departments. The District Industries Centre or its regional office on receipt of the applications will forward the same to the concerned Department within three days of the receipt of the applications.

6. After installing machinery. entrepreneurs have to get licences from the concerned Municipality/ Commune Panchayat, Licence from Inspectorate of Factories and consent orders from the PPCC for operation of the unit.

7. After commencement of regular production, the entrepreneurs have to apply for Permanent SSI Registration to the Directorate of Industries and Commerce..

II Procedure for obtaining change in location, inclusion of additional activities in case of Small Scale Industries. Before commencement of production:- In case of Small Scale Industries the industrial unit has to submit a requisition letter to this effect along with the original certificate to the Directorate of Industries and Commerce/ branch office at Karaikal/ Sub- office at Mahe and Yanam, depending on the location of the unit. Then the changes have to be effected in the Permissions/NOC issued by Municipality / Commune Panchayat, Inspector of Factories and PPCC. 2. After commencement of production:- Initially the unit has to obtain NOC from the Directorate of Industries and Commerce to this effect and amendment in the Permanent Registration Certificate.these the changes have to be effected in the licences issued by Municipality / Commune Panchayat, Inspector of Factories and PPCC. After obtaining those changes, Industries Department will make

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INSTITUTE OF SKILL DEVELOPMENT & TRAINING OF SSI

National Enterprenureship Development Institute National Institute For Entrepreneurship and Small Business Development (NIESBD) Noida. National Institute of Micro Small and Medium Entrepreneur (NIMSME) Hydrabad. Formaly National Institute of Small Industry Extention Training (NISIEI) Indian Institute of Entreprerneurship (IIE) Guwahati. Others MSME Development Institute Tools Rooms Central Footwear Training Center- Agra & Chnnai. Fragrance and Flower Development Center- Kannauj. Procer-Cum Product Development center- Agra. Electronics service & Training Center- Ram Nagar. Institute for Design Electrical Measumg Instrument- Mumbai.

NEED OF FINANCE IN SSI For running business finance is necessary. Owners of SSI need finance for fixed assets installation to start business & working capital for keep the running condition. Financial requirements of small scale industries can be classified into two heads: Equity Capital :- This is the investment by the owner of the small unit for setting up a unit. At the time of establishing business it is very much required that the owner contribute his own capital & then he collect funds from loan.it is preferable to purchase all fixed assets from owner funds as the chances of success as high in that case. On the other hand depending upon interest beariy to outsiders loan acurring fixed assets result to maximum payment to outsiders in from of interest and very less amount left for entrepreneur as profit . Laon Capital :- In real condition entrepreneur doesn’t have adequate funds for Sting in the units, so the owner requires long term and short loan. Long term loans For purchase of fixed assets and short term loan for making day to day expenses. A Financial structure will be that wfere more investments are from own (equity) capital. But as the loan from outsider also important so the amount of outsider fund should be less than or equal to owners fund.

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FINANCING OF SSI `Government has recognized the important role of entrepreneurs in the industrial development of the economy, especially through the small-scale industries (SSIs). SSI are essential for Indian economy in terms of employment generation, foreign exchange earnings, its share in industrial output, and contribution to national income. The government of India and state governments provides a number of special facilities and incentives. The incentives not only motivate entrepreneurs to set up industries in the smallscale sector, but also strengthen the entrepreneurs base in the economy. Of all the elements that go into a business, credit is the perhaps the most crucial.the best plans can come to naught if adequate finance is not available at right time. SSIs need credit support not only for running the enterprise & operational requirements but also for diversification, modernization / up gradation of facilities, capacity expansion etc. In respect of SSIs, the problem of credit becomes all the more critical whenever any episodic event occurs such as a large order, rejection of consignment, inordinate delay in payment etc. In general, SSIs operate on tight budgets, often financed through owner’s own contribution, loans from friends and relatives and some bank credit. Government of India recognized the need for a focused credit policy for SSI in the early days of promotion of SSIs and RBI has been instrumental in devising a multi-stage approach / financial system for credit dispensation to different sectors of the economy, for example, agriculture, industry, exports, SSIs etc. This section focuses on the role of SIDBI, SFCs and commercial banks in granting credit to small scale and tiny sector.

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FINANCIAL INSTITUTION WHICH SUPPORTS DEVELOPING OF SSI 1 National Small Industries Corporation (NSIC) Set up in 1955 to promote S.S.I. Corporate Term Loan Scheme to acquire land & building & working capital. Hire-Purchase Scheme to supply of indigenous & imported machinery & equipment. Equipment Leasing to expand this capacities or diversify or upgrade their technology. Working Capital Finance. Bill Financing Bills drawn by small scale units for the supplies made to the reputed and well established enterprises and duly accepted by them will be financed / discounted by NSIC for a maximum period of 90 days. Working Capital Finance Finance for augmenting working capital of viable and well managed units, on selective basis in case of emergent requirements, to enable them to payoff their purchases of consumable stores and spares and production related overheads particularly electricity bills, statutory dues, etc. Export Development Finance Finance for export development to export oriented units for meeting their emergent requirements. Pre and post shipment finance shall also be provided to such units at usual terms & conditions. Equipment Leasing Scheme The object of the Leasing Scheme is to assist SSI Units to procure industrial equipment for modernisation, expansion and diversification of their industries. Hire Purchase Scheme Supply of indigenous and imported machinery and equipment on easy financial terms with special focus on women entrepreneurs, weaker sections, handicapped and exservicemen and SC/ST entrepreneurs BENEFITS 100% financing at very liberal terms with easy repayment schedule. Simple formalities and speedy sanction. Single window system for imported equipment. The Corporation undertakes to complete formalities like procuring import licence, opening of Letter of Credit etc. Tax rebate on full 5 year lease rental. 8

2 Small Industries Service Institute (SISI) The scheme was launched on the auspicious day of 2nd October, 1993. the birth Anniversary of Mahatma Gandhi all over the country the main objective of the PMRY scheme was to provide easy subsidized financial assistance to educated unemployed youth for starting their own enterprises in manufacturing, business and service and trade sectors initially the scheme was aimed at providing self-employment to one millon educated unemployed youth in the country by setting up 7 lakh micro enterses through inducting service and buiness ventures over a period of 21/2 yers. The scheme was a stupendous success and caught the imagination of the youth. Overwhelmed with the response and ever-increasing need, the government has decided to mark it a permanent scheme and framed modalities and guidelines for its successful implementation and fulfil the purpose for which it designed. Salient Features of PMRY Scheme • •

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This is centrall sponsored scheme The development commissioner (Small-Scale lndustries) under ministry of Small Scale and Rural Agro, Industries Government of India is the apex body for this scheme . The respective commissioner/director of industries implements the scheme at the state level except the four metropolitan cities, with an overall monitoring by the concerned Secretaries of industries. The implementation agencies at the grass root level are District Industries Centre (DIC) who would be instrumental for the grounding of the units. Small Industries Service Institute (SISI) located in the four Metropolitan cities of Delhi, Kolkata, Mumbai and Chennai are the implementing agencies of this scheme. The DCSSI has setup a special PMRY division in the headquarters under the able guidance of an IAS officer. DCSSI formulates the rules, regulations and guideline instruction and provides clarifications on all the matters pertaining to PMRY scheme. It has also devised a complete feedback information by the means of getting monthly, quaterly and annual progress reports from all the states to closely monitor the implementation and progr ess of the scheme. Similarly at the state level, State level PMRY committee meetings monitors the progress of the scheme every quarter. The yearly targets for number of beneficiaries for each state is fixed by DCSSI.

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Locations / Networks of SISI o SISI Agartala (Tripura) o SISI Ahmedabad (Gujarat) o SISI Agra (UP) o SISI Allahabad (UP) o SISI Bangalore (Karnataka) o SISI Mumbai (Maharashtra) o SISI Calcutta (West Bengal) o SISI Cuttack (Orissa) o SISI Guwahati (Assam) o SISI Hubli (Karnataka) o SISI Hyderabad (A.P.) o SISI Indore (M.P.) o SISI Imphal (Manipur) o SISI Jaipur (Rajasthan) o SISI Kanpur (U.P.) o SISI Karnal (Haryana) o SISI Ludhiana (Punjab) o SISI Chennai (Tamil Nadu) o SISI Margao (Goa) o SISI Muzaffarpur (Bihar) o SISI Nagpur (Maharashtra) o SISI New Delhi (New Delhi)

3 NSIC NSIC assist and promotes SSI sector through various schemes. A composite term lone scheme assists existing and prospective entrepreneurs to acquire land and building , machinery ,equipment and working capital at one place. Machinery and equipment are provided through hire purchase and leasing on easy financial terms and full financing . Working capital finance and off the shelf availability of scarce materials are also provided. SSI units can get registered with NSCI to avail benefits of local /global tender and also for Government Store Purchase Programme . NSIC also does bill discounting up to a specified limit. The 5 NSIC Technical Service Centers and a number of extension centers provide technically trained manpower testing facilities and prototype modification. The Technology Transfer Centre provides on-line data on latest technology. The NSIC-STP complex provides packaged infrastructure facilities for software export units to be set up in the complex NSIC also provides various marketing facilities (e.g. exhibitions, BSM, etc.). It also operates an Indo-Italian Line of Credit for select sectors. NSIC is also working out a programme for development of SSI sector in the North-Eastern Region. Once approved in principle, NSIC will implement a scheme a

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Mentoring / Advisory services for SSI sector in select clusters. Technocrats and successful firm owners will provide the service to SSI units on a payment basis, which will be supported by the scheme NSIC has offices all over. FINANCIAL INSTITUTIONS WHICH GIVES FINANACIAL SUPPORT TO SSI 1. Small Industries Development Bank Of India (SIDBI) The SIDBI was established in 1990 as the apex refinance bank. The SIDBI is operating different programmes and schemes through 5 Regional Office and 33 Branch Offices. The financial assistance of SIDBI to small scale sector is channelised through the two routes- direct and indirect.

a). Indirect Assistance a) SIDBI’s financial assistance to small sector is primarily chnnelised through the existing credit delivery system, which consists of state level institution, rural and commercial banks. b) SIDBI provides refinance to and discounts bills of Primarily Lending Institution (PLI) c) The Assistance is Available for i. Marketing of SSI product. ii. Setting up of new venture. iii. Availability of working capital. iv. Expansion . v Modernization. vi. Human Resource Development . vii. Diversification Of existing units for all activities.

b). Direct Assistance a) The loans are available for new ventures, diversification technology upgradation, modernization and expansion of well run small scale enterprises. Assistance is also available for private sector. b) Small scale sector is eligible for maximum debt-equity ratio of 3:1. c) Foreign currency loan for import of equipment are also available to export oriented small scale enterprises. d) SIDBI also provide venture capital assistance to the entrepreneurs for their innovative ventures if they have a sound management team, long term competitive advantages and a potential for above average leading to attractive return on investment. New Initiatives of SIDBI a) Two Subsidiaries viz.SIDBI Venture Capital Limited and SIDBI Trustee ompany Limited formed to oversee Venture Capital.

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b) Technology Bureau for Small Enterprise formed to oversee Technology Transfer, March making Servise, Finance Syndication and facilitating Joint Ventures. c) SIDBI Foundation for Micro Credit has been launched to provide financial assistance to the poor to meet emerging needs of the micro finance sector especially in the rural areas.

PERFORMANCE OF SIDBI SIDBI's efforts have resulted in increased flow of credit to SSI sector since inception as indicated below: Year

Sanction

Disbursement

1990-91

2410

1839

1991-92

2847

2028

1992-93

2909

2146

1993-94

3357

2672

1994-95

4706

3390

1995-96

6066

4801

1996-97

6485

4585

1997-98

7484

5241

2 Industrial Finance Corporation of India (IFCI) IFCI was set up for the purpose of assisting the medium and long term projects for capital expenditure on projects, expansion, modernization and technological up gradation etc. it plays promotional and developmental role, particularly in relation to the small and medium scale entrepreneurs. Main function are providing: Underwriting and guaranteeing facilities to the industrial concerns. Term loan and foreign currency loans are through foreign credit lines from foreign banks and cooperative societies engaged in a. Manufacturing, preservation and processing of goods b. Shipping c. Mining d. Hotel Industry e. Electricity generation and distribution etc.

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It concentrates mostly on medium and large scale projects .by an agreement with other Financial Institution and IDBI, the IFC specializes in financing of certain industries like jute, cement, sugar etc.

3 Industrial Development Bank of India (IDBI) IDBI Bank Limited. General Code of Conduct and Ethics (COCE) for IDBI Bank Ltd, Directors, Officers and Employees IDBI is the leader in the Indian Capital Market. It has both regulatory and development functions. The role of IDBI in the market is to promote and develop industries as per the planned projection of the Governmen that, to provide technical and assistance for the expansion and modernization of the industry and for rediscount and refinance facilities to financial institution. IDBI as the leader in the market coordinates guides and Monitors the credit facilities by all India and State level financial institution and development corporations. It undertook the responsibility the promoting and financing the small and cottage industries and also the import-export trade of the country until separate bodies namely Exim Bank and Small Industries Development Bank of India (IDBI) were set up. i. ii. iii. iv. v.

Textile Modernisation Fund Scheme for the purpose of promoting modernization of jute and cotton textile industries. Venture capital Fund Scheme for developing new ventures and promoting risky ventures by new technicians and new entrepreneurs. Technology up gradation Scheme for the purpose of upgrading technology in selected capital goods industries. Energy conservation Scheme for the purpose of financing energy saving proposals of industries and. Seed Capital Scheme for the purpose of providing initial seed capital in the form of promoters contribution to new ventures. The IDBI operates direct assistance schemes whereby project appraisal and financing for medium and large scale projects is undertaken. It provides refinancing under the Industrial Loans Scheme for the loans extended by commercial and operators and units in the backward areas etc.

IDBI also borrows abroad and secures funds under arrangements with foreign financial institution, foreign banks and foreign governments and operates foreign lines of credit, secured by the Government. FUNCTIONS    

NATIONAL INTREST FINANCIAL REPORTING AND RECORDS CARPORATE DISCLOSURE PARTIES COMPETETION

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   

EQUAL RIGHTS PROHIBITED BUSINESS CORPORATE OPPORTUNITY ETHICAL STANDARDS

4 State Development of Corporation (SIDc) Sources Of Funds Issue of bonds and debentures in the market, fixed deposits from the public, borrowings from RBI, IDBI, state government etc. These bodies assist small scale industries, units in backward areas, new entrepreneurs etc. Industrial Development Corporation, Industrial Investment corporation were set by some states for promotion, infrastructural development, and financial, managerial and entrepreneurial guidance to the industrialists, provision of industrial sheds/ plots for setting units up of small units etc.

5 Commercial Bank In India, the banks are major sources of finance, are encouraged in several ways to extend export fianance, to achive the objectives of foreign trade policy. Credit requirement of SSIs is basically of two types- Long Term Loans and working Capital. Commercial banks with their extensive network of branches operating nation wide are primary channels for working capital requirement. Banks are required to compulsory ensure that defined percentage (currently 40%) of their overall lending is made to priority sectors as classified by RBI. These sector their include agriculture, small industries, export etc. The inclusion of small industries in this lists makes them eligible for this earmarked credit. With the liberalization of the Indian economy, greater emphasis was placed on meeting the credit needs of SSIs. This was manifest through the following initiatives taken by RBI. a) Credit for tiny sector has been earmarked within overall lending to small industries. In order to ensure that credit is available to all segments of SSI sectors RBI has issued instruction that out of the funds normally available to SSI sector, 40% be given to units with investment inplant & machinery up to Rs. 5 lakhs, 20% for units with investment between 5 lakhs to Rs. 25 lakhs and remaining 40% for other units. b) Public sector banks have been advised to operationalise more specialized SSI branches at centers where there is a potential for financing many SSI borrowers. As on March 2002, 391 specialised SSI branches are working in the country. c) ‘Single Window Scheme’ was extend to all districts to meet the financial requirements (both term loan & working capital) of SSIs.

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d) Laghu Udyami Credit Card (LUCC) Scheme was launched by the public sector banks for providing simplified & borrowed friendly Credit facilities to SSi, tiny enterprises retail traders & artisans. e) Composite loan limit was enhanced to Rs.50 lakhs from Rs.25 lacks.

6 Indigenous Bankers Or Money Lender As the funds from bank required lot of paper work, security & has combusome procedure the small entrepreneur have to borrow late of interest charged by money landers are high. The money lender don’t have specify interest rate, security condition and term of loan. It keeps on verify as per the goodwill of borrower.

7 Public Deposits Public deposit means collecting funds by general public by issuing public deposit certificate. The small scale unit need not to keep any security against funds collected by public deposit, but rate of interest is higher than the interest rate provide by commercial bank. IDBI also borrows abroad and secures funds under arrangements with foreign financial institution, foreign banks and foreign governments and operates foreign lines of credit, secured by the Government.

SSI’s AS CREATOR OF THE JOBS Small Scale Industries (SSIs) have always been regarded for their high employment intensity. SSIs today employ over 192 lakh persons and this is targeted to grow at 4% per annum during the 10th Plan period of 2002-2007. Though often described as ideal vehicles for promotion creation of jobs in the economy, at the same time, it is also true that the nature of employment in the sector is undergoing change. Employment generation figure declined from 6.3 persons per SSI in 1987-88 (2nd Census) to 3.6 persons per SSI in 1999-2000 (Sample Survey). Expert committees which have looked at this issue have also come up with different sets of recommendations. The Task Force on Employment Opportunities under Shri Montek Singh Ahluwalia had identified SSIs as an important source of employment and as an important incubator for entrepreneurship. The Task Force however called for a shift in policy from protection to promotion. The Task Force felt that almost 70% of the total employment opportunities generated over the next 10 years were likely to be in the services sector. On the other hand, a Special Group on

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Employment for creation of 10 million employment opportunities per year over the 10th Plan under Dr. S.P. Gupta has recommended that since more than 92% of employment generation in the economy is coming from small and medium enterprises, including agriculture - commonly defined as the unorganized sector, there is need to give special focused attention for meeting the requirements of small and medium enterprises to enable them to create more jobs in the future. During the 1990s, jobs in the organized sector grew at less than 1% per annum while jobs in the SSI sector increased by 3.5% every year. In the changing scenario, on account of globalization and liberalization, what shall be the impact on the creation of new jobs by SSIs? Does increase in capital intensity of SSIs, as they go in for technological upgradation, imply that lesser jobs will be available? You may perhaps like to pose such questions to the Hon'ble Minister of State (SSI), Smt. Vasundhara Raje, who shall be joining us for an online chat session. Avail of this opportunity to address your queries to the Minister and seek clarifications on various issues. Topic for discussion: SSI's as creator of jobs Time: 4 pm IST on 16th July 2002

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