Presentation on government policies for small

Made By
Shalu Bijani
Presentation On Government
Policies For Small Scale Industries

What Are Small Scale Industries
 The industries which are organized on a small
scale and produce goods with the help of small
machines, hired labor and power are called as
small scale industries. Scale Industry is defined as
a unit in which investment in original value of
plant and machinery should not exceed Rs. 1.5
crore

Characteristics Of Small Scale Industries
 1.Strart up cost
 2.Profitability
 3. Employees
 4. Localized Operation
 5.Use of indigenous raw material

Government Polices For Small Scale
Industries
 Reservation for Manufacturing:
 Reservation of items for exclusive manufacture
sector statutorily provided for in the Industries
(Development and Regulation) Act, 1951, has been
one of the important policy measures for
promoting this sector. The Reservation Policy has
two objectives:-
 Ensure increased production of consumer goods in
the small scale sector.
 Expand employment opportunities through setting
up of small scale industries.

Industrial Policy Resolutions 1948
• Industrial policy resolution 1948
 The government stressed the role of SSIs for
balanced industrial growth.
 It was stated that SSIs are particularly suited for
the utilization of local resources and creation of
employment opportunities.

Industrial Policy Resolution 1956
• It stated that besides continuing the policy support
to cottage, village and small industries by
differential taxation or direct-subsidies, the aim of
state policy would be that the development of this
sector is integrated with that of large scale
industry.

Industrial policy resolution 1977
It emphasize that whatever can be produced by SSIs
must only be so produced. The main thrust of
policy was effective promotion of cottage, village
and small industries widely dispersed in rural areas
and small towns. This thinking specified the
following things:
 504 items were reserved for exclusive production
in the small-scale industries.
 The concept of District Industries ICs) was
introduced so that in each
 district a single agency could meet all the
requirements of SSIs under one roof.

 Technological up gradation was emphasized in
traditional sector.
 Special marketing arrangements through the
provision of services, such as, product
standardization, quality control, market
survey, were laid down.

 Investment limit was raised for tiny, small, and
ancillary units to Rs. 2 lacs, Rs. 20 lacs, and Rs. 25
lacs respectively.
 Reservation of items and marketing support for
small industries was to continue.
 Availability of credit to growing SS units was
continued.
 Buffer stocks of critical inputs were to continue.
 Agricultural base was to strengthen by providing
preferential treatment to agro- based industries.

 Stress was reiterated to upgrade technology to
improve competitiveness.
 Special emphasis was laid on training of women
and youth under Entrepreneurial Development
Programmed.
 Activities of Kadhi and Village Industries
Commission and Khadi and Village Industries
Board were to expand.

 It raised the investment ceiling in plant and
machinery for SSIs.
 It created central investment subsidy for this sector
in rural and backward areas. Also, assistance was
granted to women entrepreneurs for widening the
entrepreneurial base.
 Reservation of items to be produced by SSIs was
increased to 836.
 Small Industries Development Bank of India was
established to ensure adequate flow of credit to
SSIs.

 SSIs were exempted from licensing for all articles of
manufacture.
 The investment limit for tiny enterprises was raised to Rs. 5
lacs irrespective of location.
 Equity participation by other industrial undertakings was
permitted up to a limit of 24 percent of shareholding in
SSIs.
 Factoring services were to launch to solve the problem of
delayed payments to SSIs.
 Priority was accorded to small and tiny units in allocation
of indigenous and raw materials.
 Market promotion of products was emphasized through co-
operatives, public institutions and other marketing agencies
and corporations.

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