Chapter-9

Small business

Small business

• A small scale industry is a business created on a small budget. it produces its goods using small machiness,less power and less labor. it is located within a single place.

Small business

• SSI-Small scale industries.

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• MSMED-the micro , small and medium enterprises development
• Small industries is based on the investment in plant and machinery

• It classified into two.

1.Manufacturing

It engaged in manufacturing and production of goods

• Micro enterprise( investment in plant and machinery does not exceed 25 lakh.
• Small enterprise-is more than 25 lakh and but not exceed 5 crore rupees.
• Medium enterprise-more than 5 crore and but not exceed 10 crore rupees.

2.Services

It engaged in providing services

• Micro enterprise( investment in equipment does not exceed 10 lakh
• Small enterprise-is more than 10 lakh and but not exceed 2crore rupees.
• Medium enterprise-more than 2crore and but not exceed 5 crore rupees.

Village industries

• Defined as any industries located in rural area which produces any goods, renders any service with or without the use of power.

Cottage /rural/traditional industries

these industries are certain features like:

• Simple equipment is used
• Family labour
• Small capital investment
• Produce simple product
• Production of goods using indigenous technology

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95 % of the industrial units in India come under SSIs

SSIs contributing 45% to total exports

Roll of Small business in India /in rural India�

1. Employment opportunities
2. Balanced regional development
3. Higher standard of living
4. Mobilization of local resources
5. Simple technology
6. Promotion of self employment
7. Promotion of exports
8. Protection of environment
9. Less dependence on foreign capital
10. Economical use of capital
11. Low cost of production

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problems of Small business in India /in rural India�

1. Lack of managerial experience
2. Inadequate finance
3. Lack of proper machinery
4. Lack of technological know-how
5. Run on traditional lines
6. Irregular supply of raw material
7. Problem of marketing
8. Global competition
9. Personnel problems-lack of training
10. Quality of products

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Government assistance to small industries

A. Institutional support:

1.NABARD-(national bank for agriculture and rural development)

• It was setup-1982
• To promote integrated rural development
• It provide credit and non-credit facilities.

2.RSBDC(the rural small business development centre)

• Its aim is provide management and technical support to micro and small entrepreneurs.

3.NSIC(National small industries corporation)

• It was setup in 1995.
• To promote, aid and foster the growth of small business in India.

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4.SIDBI(small industries development bank of India)

• it provide financial assistance to small scale business.

5.DICs(district industries centers)

• It was setup 1978.

B.incentives

it offered in the form of

• land
• Power
• Water
• sales tax
• Raw materials
• Finance
• offer tax holidays(exemption from paying taxes for 5 or 10 years)

Other Support

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• Provide administrative framework at district level.
• Provision of training facilities.
• Supply machinery on hire purchase basis.
• Assistance for export marketing.
• Technical and financial support etc.

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