Small Scale Industries and the Economy
A Brief introduction to the SSI (small scale industry) Era
The business culture in India is developing with indigenous help from the new concepts like “Make in India” designed by the administration department of the country. India has a wide range of exports when concerned with the diversity of the products making it difficult for the reach of the government to hold policies and firm taxation rules on them.
Generally, small scale industries are the new trend which we denote as startups in the modern era demanding minimal investment and men at work. The maximum annual turnover in the business does not exceed 1 Cr. The Indian SSIs are considered as the spine and play a significant role in modeling the financial culture of the country.
Some of the common examples of the SSI’s include
- Baking industries
- Toy manufacturers
- Different types of leather equipment services
- Digital and analog service providing companies, for example Photography
- Stationery manufacturers for daily purpose
Major characteristics of the Small Scale Industries
- The SSI culture in India is widely covered under a single owner or sole proprietorship. There are also chances of finding an SSI with partnership, but they are rare.
- The SSI management, decision, and other key functions are administered by the owners. Unlike the mega-companies where the decision is framed by a committee of trusted members framed by the owners.
- Large companies need large machines to work while the SSI depends on manpower due to minimal productivity and hence they cannot afford to implement costly machines and deploy technological tools for support.
- The major benefit of the SSI is its nature of accepting flexibility. They set a small frame and goal which they can easily optimize or innovate with the developmental standards. The multi-national or large industries fail here due to an excessive number of changes they have to afford.
The importance of the registration of SSI for the Indian economy
The SSI registration is both necessary and beneficial for carrying out SSI business in India introduced by the MSME (Ministry of Small, Micro, and Medium enterprises). Due to the help enforced by the IT department, one can now even fetch the SSI registration online. Let us get into the deeper process of the registration. One can also get the SSI registration form offline administration departments of the region.
What is SSI registration?
The small scale industries can get various concessions on loan and tax shortage when holding an SSI. The SSI registration is proposed only for two types of businesses that are,
- Manufacturing companies and
- Service providing companies.
The Indian government has some decorated policies and is providing a list of helpful subsidies for small scale businesses.
The eligibility criteria to register under SSI regulations for manufacturing and service enterprises services (exclusive of land and machinery charges)
The micro industries must possess a turnover of 25 lakhs or above to register under the SSI. The small and medium scale industries must possess 5 Cr to 10 Cr or above to register under the SSI respectively.
The micro service enterprises must show a turnover capacity of 10 lakhs while the small and medium have to provide an annual turnover of 2 to 5 Cr each respectively to avail the benefits from the SSI.
Advantages of having an SSI registration and Udyog Aadhar
- One of the major problems for the SSIs is to avail credit and the SSI Udyog Aadhar (MSME registration) can works the best for the companies who require the credit.
- A certain number of government tenders are only SSI limited
- With the help of government-aided concessions, one can minimize the setup process of the industry
- One can easily avail of government licenses and necessary for certification.
The necessity of the development of the MSME for the 5 trillion dollar economy of India
Let us check into some of the notable points mentioned by Arun Kumar Pandey the secretary and an important member of the MSME council. He says that one of the major problems for the MSME is to find skilled workers, and the government is creating free national coaching centers to create skilled employment. The second problem is for credit and free loans and beneficial policies can uplift the MSME business standards. The government is also working hard in encouraging the MSME businessmen to get registered under SSI and avail the deserved subsidies and credits.