Small scale industries are the ones that primarily deal with the
manufacture, processing and preservation of goods. Usually, the
investment of the small scale industries in machinery and plant does
not, in any case, exceed Rs.1 crore. This will also include units
engaged in mining, repairing or servicing of the machinery. For the
ancillary units, the amount invested in machinery and plant must also
not, in any case, exceed Rs. 1 crore in order to be classified as
small-scale industry.
Just recently, the investment limit of Rs. 1 crore has been increased to Rs 5 crores for an industry in order to be classified as a 'Small Scale Industry'. Government of India has done this in respect to some particular items including hosiery, drugs & pharmaceuticals, hand tools, sports goods, and stationery items.
Those small scale units earn the status of 'Tiny Enterprises' that have invested 25 lacs in plant and machinery, irrespective of their unit's location. Even the industry related business enterprises and services will earn the benefits of small scale sector if they have an investment of nearly Rs. 10 lacs in fixed assets. This investment is inclusive of building and land. In order to calculate the value of the fixed assets, the original price that was paid by the first owner is considered. The price that the subsequent owners pay is not taken into account.
Small Scale industries might seem to be really small, but the unique feature of the intensiveness of labor often characterizes the small scale industries. It has been calculated that the total number of people employed in the small scale industries in nearly equivalent to 1 crore and 90 lakhs in India.
Immense potential for generating employment increases the significance of the small scale industries to a considerable extent. The countries that face an extreme problem of unemployment particularly put a lot of emphasis on the growth and development of the these Industries. The primary advantage of these industries is that they specialize to produce the consumer commodities. They follow the labor intensive approach for the producing the commodities. Due to a lack of the capital, these industries primarily depend on the labor for producing the commodities. Another advantage of this process is that it involves the absorption of any unused labor in the economy. This utilization of unemployed labor helps in scaling down the poverty and unemployment. Also the these industries are more efficient in equally distributing the national income among all the contributors. They also offer help to promote a balanced development of the industries in a country.
Thus, the government extends great support to the development and growth of the small scale industries, by protecting them from the direct competition given by the large scale industries.
Just recently, the investment limit of Rs. 1 crore has been increased to Rs 5 crores for an industry in order to be classified as a 'Small Scale Industry'. Government of India has done this in respect to some particular items including hosiery, drugs & pharmaceuticals, hand tools, sports goods, and stationery items.
Those small scale units earn the status of 'Tiny Enterprises' that have invested 25 lacs in plant and machinery, irrespective of their unit's location. Even the industry related business enterprises and services will earn the benefits of small scale sector if they have an investment of nearly Rs. 10 lacs in fixed assets. This investment is inclusive of building and land. In order to calculate the value of the fixed assets, the original price that was paid by the first owner is considered. The price that the subsequent owners pay is not taken into account.
Small Scale industries might seem to be really small, but the unique feature of the intensiveness of labor often characterizes the small scale industries. It has been calculated that the total number of people employed in the small scale industries in nearly equivalent to 1 crore and 90 lakhs in India.
Immense potential for generating employment increases the significance of the small scale industries to a considerable extent. The countries that face an extreme problem of unemployment particularly put a lot of emphasis on the growth and development of the these Industries. The primary advantage of these industries is that they specialize to produce the consumer commodities. They follow the labor intensive approach for the producing the commodities. Due to a lack of the capital, these industries primarily depend on the labor for producing the commodities. Another advantage of this process is that it involves the absorption of any unused labor in the economy. This utilization of unemployed labor helps in scaling down the poverty and unemployment. Also the these industries are more efficient in equally distributing the national income among all the contributors. They also offer help to promote a balanced development of the industries in a country.
Thus, the government extends great support to the development and growth of the small scale industries, by protecting them from the direct competition given by the large scale industries.
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