Introduction: Small Scale Industries (SSI)

Small Scale Industries (SSI) are those industries that undertake manufacturing, production, and rendering of services on a small scale or micro scale. These types of industries make a one-time investment in plant, machinery, and equipment on a small basis. Small-scale industries are the backbone of the economy and the lifeline for employment opportunities in India. They contribute billions of dollars to the economy and also give employment to tens of millions of Indians.

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They help in promoting domestic manufacturing infrastructure and saving of precious foreign exchange of the country. They also play a crucial role in innovations in the country. About 60 – 70 percent of innovations come from Small Scale Industries. Many of the big businesses that we see today were once small-scale industries. 

Examples of small-scale industries are:-

• Bakeries.
• School stationaries.
• Small toys.
• Leather products.
• Readymade garments.
• Plastic bags.

Characteristics of Small scale industries:-

• Ownership

Generally, small-scale industries are under single owner. Hence it is mostly Sole Proprietorship and sometimes can be Partnership Firm.

• Management

Generally, both the management and the control of the company lies in the hand of the owner.   Hence the owner is actively participating in day to day activities of the company.

• Labor Intensive

SSI is mostly dependent on labor-intensive techniques of production due to limited capital. Hence it is the largest employment generator in the economy.

• Limited Reach

The area of operation for the SSIs is limited due to limited resources. Hence they can only operate in local and regional areas.

• Flexibility

Due to their small size, they can easily adapt to the changing rules and regulations set by the Government rather than big corporations because of their big size.

Roles of Small-Scale Industries in the Economy:

Small Scale Industries (SSI) play a crucial role in the economy of the nation. From employment generation to saving of precious forex reserve and many more, these SSIs are the backbone of the economy. The following is the contribution by SSIs to the economy:-

• Employment Generator

The SSI uses a labor-intensive technique of production due to limited resources and the availability of technology. Hence it generates a lot of employment opportunities in the country.

• Domestic Production

The SSIs account for more than 40% of the domestic production of goods and services in India. Hence they are one of the main reasons for the growth and development of the economy. They do production in India and sell worldwide and creating demand for Indian-made goods across the globe.

• Export Contribution

India’s export industry majorly depends on the shoulders of these small-scale industries. Nearly half of India’s exports are manufactured or produced by SSIs. These SSIs also help India earn billions of foreign exchange.

• Regional Development

Most of the small-scale industries are set up in backward areas and rural areas. Hence it plays an important role in the generation of employment opportunities and regional development of these areas.

• Public Welfare

These SSIs provide an opportunity to earn wealth and create employment opportunities to society. Hence helps in the social development of the country.

Eligibility criteria for Small Scale Industries:

Small-scale industries in India are regulated under the MSME Act of 2006. The MSME Act, of 2006 bifurcated the Small scale industries under 3 categories i.e. Micro, Small, and Medium Enterprises. Following are the criteria for Micro, Small, and Medium enterprises based on investment and turnover.

The registration process of SSI / MSME:

SSI registration is provided by the Ministry of Micro, Small, and Medium Enterprises through the Directorate of Industries of the State Government. The main logic behind SSI registration is to keep a record of a large number of SSIs in India and help the business to become eligible for a number of subsidies given by the Government. One can also apply for SSI/MSME registration online through Udyam Registration.

Here is the process for online registration of SSI/MSME:-

• Visit Udyam registration “https://udyamregistration.gov.in/UdyamRegistration.aspx”.
• Fill in the “Aadhar number “and “Name of the entrepreneur “and click validate option.
• Enter OTP sent to the linked mobile number with the Aadhar card and enter the PAN card number.
• The application form will open and fill in the details regarding the address of the enterprise, bank details of the enterprise, number of employees, investment on plant and machinery, etc.
• After filing the application form, enter the CAPTCHA and mobile number linked with the Aadhar card. Submit the application form and a UDYAM Registration number will generate. 
• It takes 2 days for verification of the information provided in the MSME application form, after that one can download the MSME certificate by entering the mobile number, and enter the OTP sent to the mobile number given in the application form.

There is no need to upload any documents and no government fees is need to pay for MSME certificate.

Benefits of MSME registration:

There are multiple benefits of an SSI/MSME registration certificate:-

• The government provides various tax rebates to SSIs.
• There are a lot of government tenders that are reserved for SSIs. They can easily apply for a government tender.
• The most important benefit which SSIs get is the easy availability of credit. 
• Businesses registered as MSMEs are given higher preference for other government licenses and certification/registration.
• All the MSME get access to the Government e-marketplace (GeM) portal.