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SMALL BUSINESS

Small businesses in India, categorized into traditional and modern industries, play a crucial role in the economy, accounting for 95% of industrial units and contributing significantly to employment and exports. The Micro, Small and Medium Enterprises Development Act (MSMED), 2006, supports these industries through various initiatives, including credit and technology upgrades. Government assistance, through organizations like the National Small Industries Corporation (NSIC) and District Industries Centers (DIC), promotes the growth and development of small businesses, particularly in rural areas.

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6 views

SMALL BUSINESS

Small businesses in India, categorized into traditional and modern industries, play a crucial role in the economy, accounting for 95% of industrial units and contributing significantly to employment and exports. The Micro, Small and Medium Enterprises Development Act (MSMED), 2006, supports these industries through various initiatives, including credit and technology upgrades. Government assistance, through organizations like the National Small Industries Corporation (NSIC) and District Industries Centers (DIC), promotes the growth and development of small businesses, particularly in rural areas.

Uploaded by

adzoe2008
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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SMALL BUSINESS

INTRODUCTION
• Small industries can be divided into traditional and modern small industries.
• They are handlooms, handicrafts, coir, sericulture, khadi and village industries, small scale industries and
powerlooms.
• Several parameters like the number of persons employed, capital invested, volume and value of output and power
consumed for business activities define a small scale industry
• The definition used by the Government of India to describe small industries is based on the investment in plant and
machinery.
• The Micro, Small and Medium enterprises development act (MSMED), 2006 addresses these issues relating to
definition, credit, marketing and technology upgradation.
• The MSMED Act came into force w.e.f October 2006.

OTHER MSMED ENTERPRISES


• Village industries :- Any industry located in rural areas which produces any goods or renders any services with or
without the use of power and in which the fixed capital per head of artisan or worker is specified by the central
government

• Cottage industries :- these are traditional or rural industries with following criteria:
1. Organised by individuals with private resources
2. Use family labour and locally available talent
3. simple equipment and simple goods
4. Small capital investment
5. Production of goods using indigenous technology

ROLE OF SMALL BUSINESS IN INDIA


• SMALL UNITS ACCOUNT FOR 95% OF INDUSTRIAL UNITS IN COUNTRY. THEY CONTRIBUTE 40% OF GROSS
INDUSTRIAL VALUE ADDED AND 45% OF TOTAL EXPORTS(DIRECT N INDIRECT) FROM INDIA.

• THEY ARE SECOND LARGEST EMPLOYERS OF HUMAN RESOURCES AFTER AGRICULTURE. THEY GENERATE MORE NO
OF EMPLOYMENT OPPORTUNITIES PER UNIT OF CAPITAL INVESTED COMPARED TO LARGE INDUSTRIES. THEY ARE
MORE LABOUR INTENSIVE N LESS CAPITAL INTENSIVE.

• THEY SUPPLY ENORMOUS VARIETY OF PRODUCTS WHICH INCLUDE MASS CONSUMPTION GOODS, READYMADE
GARMENTS, HOSIERY GOODS,STATIONERY ITEMS, SOAPS, DETERGENTS ETC.(FROM BOOK)

• THEY CONTRIBUTE TO BALANCED REGIONAL DEVELOPMENT OF OUR COUNTRY. SMALL INDUSTRIES WHICH
PRODUCE SIMPLE PRODUCTS USING SIMPLE TECHNOLOGY DEPEND ON LOCALLY AVAILABLE MATERIAL N LABOUR N
CAN BE SET UP ANYWHERE IN COUNTRY.

• THEY PROVIDE OPPORTUNITY FOR ENTREPRENEURSHIP THE LATENT TALENT N SKILLS OF PEOPLE CAN BE
CHANNELISED INTO BUSINESS IDEAS WHICH CAN BE CONVERTED INTO REALITY WITH LITTLE CAPITAL INVESTMENT N
NIL FORMALITIES TO START A SMALL BUSINESS.
• THEY ENJOY ADVANTAGE OF LOW COST OF PRODUCTION.LOCALLY AVAILABLE RESOURCES ARE LESS EXPENSIVE.
ESTABLISHMENT AND RUNNING COST IS LOW DUE TO LOW OVERHEAD EXPENSES

• Due to small size of business, quick n timely decision can be taken without consulting people like big organisation.
New business opportunity can be captured at right time.

• They are best for customised production (as per tastes/preferences/needs of customer)

• They have inherent strength of adaptability and personal touch n thus maintain good personal relation with both
customers n employees

GOVT ASSISTANCE TO SMALL INDUSTRIES AND SMALL BUSINESS UNITS


• DUE TO CONTRIBUTION OF SMALL INDUSTRIES IN EMPLOYMENT, REGIONAL DEVELOPMENT, EXPORTS, GOVT
ASSISTS IN PROMOTION N DEVELOPMENT OF SMALL BUSINESS SECTOR LIKE RURAL, COTTAGE,VILLAGE INDUSTRIES
IN BACKWARD AREA.

• GOVT (BOTH CENTRAL AND STATE) ACTIVELY PARTICIPATE IN PROMOTING SELF EMPLOYMENT OPPORTUNITY IN
RURAL AREAS BY PROVIDING INFRASTRUCTURE ,FINANCE, TECHNOLOGY, TRAINING, RAW MATERIAL,MARKETING.

NSIC
• This was set up in1955 with a view to promote, aid and foster the growth of small business units in the country.
This focuses on the commercial aspects of these functions.
• Supply indigenous and imported machines on easy hire-purchase terms.
• Procure, supply and distribute indigenous and imported raw materials.
• Export the products of small business units and develop export-worthiness.
• Mentoring and advisory services.
• Serve as technology business incubators. • Creating awareness on technological upgradation.
• Developing software technology parks and technology transfer centres.

DIC- DISTRICT INDUSTRIES CENTER


• The District Industries Centers Programme was launched on May 1, 1978,

• District Industries Centers is the institution at the district level which provides all the services and support facilities
to the entrepreneurs for setting up small and village industries.

• Identification of suitable schemes, preparation of feasibility reports, arranging for credit, machinery and
equipment, provision of raw materials and other extension services are the main activities undertaken by these
centers.

• Even within the narrow spectrum, an attempt is being made to look at some of the neglected factors such as the
rural artisan, the skilled craftsman and the handloom operator and to tune up these activities with the general
process of rural development being taken up through other national programs.

• The DIC is thus emerging as the focal point for economic and industrial growth at the district level

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