Small Scale Industires in India


Worldwide, SMEs are being recognised for their contribution to employment, innovation and economic dynamism. In the Indian context, SSI units are helping generate new jobs, supplying a wide range of products, contributing to exports, helping in more equitable distribution of national income and emerging as outsourcing destinations. The Government has been encouraging and supporting SSIs through policies for infrastructural support, technology upgradation, preferential access to credit, reservation of products for exclusive manufacture in the SSI sector, preferential purchase policy etc.
By the end of March 2002, there were over 3.4 million small scale industrial units in the country accounting for more than 40 per cent of the gross value of output in the manufacturing sector and about 35 per cent of the total exports of the country. They provided employment to over19.2 million persons, which is second only to agriculture. During the Ninth Plan period, SSIs created over 3.2 million jobs. Presently, there is no in-built component keeping record of functional registered SSI units. SSI units often shut down due to unforeseen circumstances. The figures provided by District Industries Centres (DICs) may not include closed SSI units. Hence there is an urgent need to introduce a system of de-listing closed registered SSI units.
A Study Group on the Development of Small Enterprises was set up under the chairmanship of Dr. S.P. Gupta, Member, Planning Commission, to look into the problems of the SSI sector. The Study Group submitted an Interim Report in July 2000. After inter-ministerial consultations on the Interim Report, the Prime Minister announced a number of new policy initiatives on 30 August 2000. These announcements were followed by other announcements by the Ministry of Small-Scale Industry and Agro and Rural Industries (SSI&ARI). The final report of the Study Group was submitted in March 2001 and the...