CHAPTER 4

SMALL SCALE INDUSTRIES - AN

OVERVIEW
 CHAPTER 4

Small Scale Industries - A n Overview

Industrial development of the underdeveloped countries has become one of

major thrust areas in the recent past. In this the developed countries compete with

each other to meet the rising demands of the developing countries for becoming an

industrialized one. It is an effort in which underdeveloped and developing countries

place a hope of solving their problems of poverty, insecurity, over population and

ending their newly realized backwardness in the modern world. As a result throughout

the world, industrialization has indeed become the magic world of the mid twentieth

century. The industrial revolution was accomplished largely through small scale

industries entity with modest capital, a few score workers at most owned and

managed by a single individual or family. Really large scale organization emerged

slowly and explosive growth did not take place until the first half of the twentieth

century. In India great stress has been laid on rapid industrialization after

independence to achieve a balanced regional development. Public sector enterprises

have been on the major instrument used by the government in this regard. Though,

public sector enterprises have not shown results in terms of profit yet the performance

of public sector enterprises should not be judged on the scale of profitability aspect

alone, ignoring the contribution made by them, in discharging their socio economic

objectives.

Small industries are given place of pride and prominence in the five year

plans. It is now commonly recognized that small scale industries play vital role in the

development of backward economy with the advantages of low investment, high

potential foe employment generation, decentralization of industrial base and dispersal

70
of industries to rural and semi rural areas. In recent years, however there has been

renewed interest in appreciation of the value of small and medium enterprises and

efforts have been made to encourage them and create a climate for their successftil

operations.

4.1 Meaning of Small Scale Industries

The small scale industries cover a wide range of enterprises and may be

explained in a number of ways. India's industrial economy comprise of organized

large and medium industries, modern small scale industries, and unorganized

traditional industries. The last two, known as the village and small industries (VSI),

constitutes an important segment of the economy. The village and small industries

further divided in to eight sub-sectors: (a) khadi, (b) village industries, (c) handlooms,

(d) sericulture, (e) handicrafts, (f) coir, (g) small scale industries and (h) power looms.

Of these eight, small scale industries and power looms represent the modem small

industries and other six sub sectors constitute the traditional industries. Traditional

industries are generally artisan-based industries, located mostly in rural and semi-

urban areas. These industries use local skills and resources, involve lower level of

investment in machinery, and provide largely part time employment. On the other

hand, modern small scale industries include "tiny" units and power looms use power-

driven machines possess some technological sophistication. The market for these

industries is relatively wide and these are generally located close to or in the urban

areas. Their products include hosiery goods, ready made garments, motor parts,

electronics, sports goods, rubber goods and engineering goods.

The definition of small scale industries has changed over the period of time

and in some countries the term used for such a unit is small firm, small enterprise.

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small unit, small business, or small scale industries. As a matter of consequence the

definition derived usually based on single index i.e. either on the basis of investment

in plant and machinery or labour and power used or labour without power. The

industrial commission described small scale industries as organized industries carried

on in a workshop or factories having a simple operation with a provincial character.'

Small scale industries were first defined in 1950 on the basis of twin criteria of gross

investment in fixed assets and workforce. The workforce criteria was changed from a

per day basis to a per shift basis inl958, and finally dropped from the definition of

small scale industries in 1960. Since 1966, the original value of plant and machinery

has been revised periodically since 1966.^ On 3P* December, 1966 the definition was

changed by the small scale industries board as "small scale industries will include all

industrial units with a capital investment of not more than 7.5 lakhs irrespective of the

number of persons employed'".' For ancillary industries, the maximum limit for the

capital investment in plant and machinery has been fixed at Rs. 10 lakh.'' Due to

continuing price hike in capital investment and industrial outputs, the government

decided to enhance the limit of investment in finy, small and ancillary industries in

1980. The revised were as follows:

(1) Tiny units: "Undertaking having investment in fixed assets in plant and

machinery not exceeding Rs. 2 lakh". The ceiling was Rs. one lakh earlier.

(2) Small scale industries: "'Undertaking having investment in Plant and Machinery

whether held on ownership terms or on lease or on hire purchases but does not

exceed Rs. 20 lakhs."

(3) Ancillary industries: "Undertaking having investment in fixed assets in plant

and machinery not exceeding Rs. 25 lakh".^

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 It was thought that this increase in investment limit will boost the small

scale industries, but certain other objectives like modernization of many of the

existing old units, elimination of the tendency to circumvent the present limit by

understanding the value of plant and machinery, falsification of accounts or reports of

benamy units would also be achieved. Consequently, the definitions of small

industries were further revised in 1985, 1991 and 1997. The ceiling of investment in

plant and machinery was fixed 3.5 million in 1985, 6 million in 1991, and 30 million

in 1997.*^ A curious development took place later on, on February 17, 1999; the union

government has very first time reversed the ceiling in plant and machinery by

bringing down the investment limit to ten million. But the investment ceiling for tiny

units remained intact at Rs. 25 lakhs. Small scale industries investment limit (in plant

and machinery) of hosiery, hand tools, stationery and drugs and pharmaceuticals

industries (total 23 items -13 items in stationery sector and 10 items of drugs and

pharmaceuticals) were enhanced from Rs. 1 crore to 5 crores to facilitate suitable

technology up gradation, to enable them to maintain a competitive edge.^

4.2 Organization and Ownership Structure of Small Scale Industries

The organization structure of small scale industries differs from that of other

business organization. Its outstanding feature is the personal character of the

organization and management. The first and foremost question in organizing a small

scale industry is that of ownership which is represented by the right of an individual

to acquire legal title to assets for the purpose of controlling an industrial operation and

to enjoy the gains or profit from such activities.

Small industrial units are by and large started by persons who value

independence is desirous of obtaining the highest rewards for their initiatives.

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innovation, technical skills, business acumen and experience. The main forms of

ownership in an organization are; (1) sole proprietorship, (2) partnership, (3) co-

operative society and (4) joint stock company

Small Scale Industry

. ' .
Private
/at( Public with State Participation

Individual Collective Ownership

^ I ^
Sole Proprietorship •
Partnership Joint stock company Cooperatives
I i
Limited Unlimited

Organization structure of small scale industry

4.3 Ownership Structure

As earlier mentioned above small scale industrial units are generally started by

the persons who value independence and by those who desire to get highest rewards

for their initiatives, innovation etc. It has been proved as seen over a 30 years period

that small scale industries are being increasingly run by proprietary concerns.

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Table 4.1 Ownership Structure of Small Scale Industries
(Numbers are in percent)

Ownership First all Second all Third all DC(SSI) Manufacturing

India India India sample, enterprise
census census census survey survey 1994-95
1972-73 1987-88 2001-02 1992-93
Proprietorship 61.00 80.48 88.85 78.03 97.65
Partnership 35.00 16.84 7.22 16.03 1.86
Co-operative 0.70 0.29 0.34 0.38 0.00
Ltd. Company 3.00 2.11 2.42 3.78 0.00
Others 0.30 0.28 1.17 1.78 0.00
Not Reported 0.00 0.00 0.00 0.00 0.49

Total 100 100 100 100 100

Source: SIDBI Report 2001 and Third all India Census

The govt, policy, to sponsor programs such as Self Employment for

Educated Unemployed Youth (SEEUY) and Prime Minister Rojgar Yojna (PMRY),

have also contributed in the higher number of proprietary concerns in India ( SIDBI

Report 2001). The proportional importance of partnership firms has declined

massively, from 35 percent in 1972-73 to 1.86 percent in 1994-95. The importance of

other types of holdings has also declined in the last conducted survey.

4.4 Importance of Small Scale Industries .

The small scale industries have been assigned a place of pride in the country's

industrial development program as it has the capacity to achieve economic growth in

small gestation period, high employment potential and relatively limited financial

requirements in a developing nation like India where population is high and incomes

are low, it is inevitable to develop the small industrial sector, which absorbs more

men and low capital. The small scale industry occupies not only a prominent place in

backward or developing economies but also in the economy of industrially developed

countries. In U.S.A. the small sector provides 34 percent of the total employment.* In

75
Japan, small scale manufacturing units provide 72 percent of employment, 52 percent

of output, 13.5 percent of export and 99 percent of establishment,^ where as, in

Singapore small and medium enterprise contributes 32 percent of output, 16 percent

of export, about 33 percent of value addition and 97 percent of establishments.'° In

India, small scale industries constitute 95 percent of industrial units, contribute 40

percent of industrial output and 35 percent of national export."

Appreciating the importance of this sector Abid Hussian Committee (Expert

Committee on small enterprises 1997) in its report stated that "there are several

reasons why one wishes small scale enterprises (SSEs) to develop. First they are

relatively labor intensive and this has implication for equity. Second, they are flexible.

Third, they contribute potentially to decentralization. Fourth, they promote

entrepreneurship. But desiring the SSEs to develop is one thing, introducing sector

specific programmes to help them flourish is another. Sector specific programmes

needs to be introduced only if market imperfection prevents SSEs from developing".

Earlier, appraising the importance of small scale sector the Botton Committee

observed, "one of the most important contribution's of the small business to the

community is in providing a wide range of choice and high standard of personal

service to the consumer. It is recognized that in many cases the spread of

standardization and mass production methods bring advantages but they inevitably

reduce the consumer's choice".'^

Small scale industries are considered as the backbone of economic structure

of developing economy. These industries serve the consumer and meet the needs of

other businesses large or small. Inspite of the limitation of their small size, their

importance in the present scenario cannot be ruled out. They have the capacity to

76
compete with the large sector in regards to price, service and in specialized segment

of particular market and increase the range of available alternatives.

One of the main importances of small industries is that it helps in keeping

regional balance in terms of employment and income. This ultimately protects the

major cities from population, congestion and crime. Large scale industries are mainly

concentrated in the state of Maharashtra, West Bengal, Gujarat, and Tamil Nadu. But

even, in these industrial states the large scale units are concentrated in few large cities

like Mumbai, Kolkata, and Chennai. This helped in creating new slums, various social

and personal problems.'^ In our country, almost in every Five Year Plans, stress has

been given on employment generation, removing regional disparities, and creation of

more income, decentralization, and good working condition, upliftment of deprived

and poor section of societies, better health and education. The small scale industries

can prove panacea for fulfilling the above mentioned objectives.

In brief, we can say that small scale industries create more employment, equal

distribution of income, better utilization of entrepreneurial talent, skills abilities in a

very earnest way and help the cause of regional dispersal of industries through

decentralization. Hence, they play a crucial role in socio-economic transformation of

economy characterized scarcity of capital, chronic unemployment, gross income

inequalities, and huge quantity of unused and untraced wealth as well as glaring

imbalances in the regional industrial development.

4.5 Growth of Small Industries in India

The small scale sector has acquired a prominent place in the socio- economic

development of the country during the last five decades, contributing to the overall

growth of the domestic product, towards employment generation and export. Having

77
emerged as the engine of growth for Indian industry, performance of small scale

industry has had a direct impact on growth of national economy. As the table 4.2

reveals that the performance of small scale industries is marvelous.

Table 4.2 Performance of Small Scale Industries

Production
No. of units Employment Exports
Year at current price
(in Lakhs) (No. in lakhs) (Rs. In Crores)
(Rs. in crores)
20.82 178699 129.8 13883
1991-92
22.46 209300 134.06 17784
1992-93
(7.99) (17.12) (3.28) (28.1)
23.88 241648 139.38 25307
1993-94
(6.32) (15.46) (3.97) (42.3)
25.71 298886 146.56 29068
1994-95
(7.66) (23.69) (5.15) (14.86)
26.58 362656 152.61 36470
1995-96
(3.38) (21.34) (4.13) (25.46)
28.03 411858 160 39248
1996-97
(5.46) (13.57) (4.84) (7.61)
29.44 462641 167.2 44442
1997-98
(5.03) (12.33) (4.5) (13.23)
30,8 520650 171.58 48979
1998-99
(4.62) (12.54) (2.62) (10.21)
32.12 572887 178.5 54200
1999-00
(4.29) (10.03) (4.03) (10.66)
33.12 639024 185.64 69797
2000-01
(3.11) (11.54) (4.0) (28.78)
34.42 690316 192.23 71244
2001-02
(3.91) (8.03) (3.55) (2.1)
35.15 763013 199.65 86013
2002-03
(2.12) (10.53) (3.86) (20.7)
AAGR 4.5 13.01 3.7 17
CGR 4.83 14.2 4.1 20.6
Source: - Compiled from Industrial Policy and Statistics and Economic Surveys, Govt, of India.

The total number of industrial units in the year 1991-92 was 20.82 lakh units.

This went up by 68.8 percent in the year 2002-03. Initially the growth rate was little

high as compared to average annual growth rate. But in later stage it declined little bit.

But if we see the trend it has been showing steady increase. The growth in production

has also been showing similar trends. In the initial years the annual growth rate

(hereafter AGR) of production was high as compared to average annual growth rate.

(period 1991-92 to 2002-03). But later years it was below average annual growth rate

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(hereafter AAGR). The production in 1991-92 was of Rs. 178699 crores which rose up

by 425.8 percent in the year 2002-03. Employment in the year 1991-92 was 129.8

lakh. This went up by 153.8 percent in the year 2002-03. If we compare the AGR with

the AAGR we find that AGR moving just around the AAGR albeit, the trend has been

steadily increasing. The progress in export has been commendable. In the year 1991-

92 export by small scale sector was of Rs. 13883 crores. It went up and reached at Rs.

69797 crores in the year 2000-01 which was 502.8 percent more than the base year.

The AGR in export was quite high as compared to AGR in number of units,

production and employment. The AAGR in export was about 20.1 percent for the

period 1991-2003.

In conclusion it can be said that the performance of SSIs has been

outstanding. The total numbers of units, production, employment and exports have

been showing increasing trend. The growth in exports is quite high and satisfactory. It

proves that Indian SSIs have been competing in international arena. But it is little

worrying that the 93% of total export by SSI consists of non-traditional items.'''

Therefore emphasis must be given to the exports of traditional items too. Further, it

has been necessary to develop and expand small scale industries in rural and

backward areas. This strategy must be supported and fostered by all round efforts. As

a result of it, a new class of talented entrepreneurs will come to the scene. It will, no

doubt, accelerate the growth rate of the economy and generate more employment

opportunities in rural and backward areas in the country and would also make

contribution in achieving the objectives of balanced regional development and more

«
even distribution of income in the society.

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4.6 The Problem of Small Scale Industries

After observing a highly impressive data on the performances of SSIs, it

cannot be said that small scale sector has not got any problem. They have been facing

lots of problems. The main problems of the small scale sectors are:

4.6.1 Financial Problems '^

The paucity of finance and credit is the main drawback in the development of

SSIs. 34.7 percent of the total closed units had to shut down due to this problem.'^

The entrepreneurs from the rural areas have been depending on Mahajam or local

lenders for their financial needs. They charge high rate of interest. Though,

Government and Reserve Bank of India (RBI) have been trying to overcome this

problem. But even their efforts have been failing to curtail the cost of procuring loans.

For this Morris argues that much of higher cost actually come from the banks own

unimaginative and avoidable bureaucratic and cumbersome paper work and

procedure.'^

4.6.2 Marketing '*

One of the main problems faced by small scale units is, in the field of

marketing. These units do not possess any marketing organization and consequently

their products compare unfavorable with the quality of the products of large scale

industries. Moreover their products are not advertised through various media.

Therefore, they face a competitive disadvantage vis-a-vis large scale units. To save

small units from competition the government has reserved certain items for the small

scale sector. The Trade Development Authority and the State Trading Corporations

help the small scale industries in organizing their sales. But due to World Trade

Organization agreements the policies like reservation and subsidies will have to be

80
removed which will enhance their problems further. The report of second all India

census of small scale industries depicts that 14.4 percent of closed units were led to

shut down due to marketing problem."

4.6.3 Raw Material ^°

Small scale industries generally depend on local sources of raw material. They

purchase raw material in small quantity and often on credit. But due to opening up of

economy in intemationa] arena and the share of SSls in export, now this sector has

been focusing on those items which have international market. According to Sebastain

Morris, despite import liberalization during 1990s, the tariff on materials like steel

copper, metals, plastics, chemicals, papers etc. remain high in comparison to tariffs on

manufacturing goods. This has created problem of a significant 'inversion' in tariff

structure, which specifically hurts small firms since they are more labour using and

have high material to output ratio.^' Further, non-availability of raw material caused

the closure of 5.6 percent of total units closed.^^

4.6.4 Poor Data Base ^^

Another problem is the availability of inadequate data related to small scale

sector. SIDO and CSO are the major source of information. There is wide gap in

period of data assimilation. So, proper study for formulation of policies and

implementation thereof is not possible. SIDBI in its report pointed out that "there is

an urgent need for evolving a regular system for the up gradation and the collection of

data on small scale industrial sector in view of the rapid growth and substantial

contribution of this sector. New units come up every year for different line of

production while existing units either diversify or expand or in certain cases close

down. Upkeep of the latest information is critical for policy decisions. ^'*

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4.6.5 Technology^^

In the competitive world where substantial growth is only possible when the

industry is technically sound. Large scale units due to their financial strength giving

more emphasis on research and development programme. They are becoming more

competitive. But the small scale sector has been hampered by the low level of

technology and shortage of trained and experienced supervisor personnel. In the

present era of globalization and liberalization, small scale sector need to be

technologically strong and more competitive. Therefore, emphasis on technological

advancement is the need of the hour.

4.6.6 Adverse Effect of Economic Reforms and Globalization ^^

With the opening up of economy and World Trade Organization (WTO)

commitments the wounds of small scale sector have been more widened. The small

scale sector already has been facing numerous problems or competition within

national territory. But now they have to compete with the Multi National Companies

(MNCs) which are financially strong and technically sound.

4.6.7 Industrial Sickness ^^

Sickness in small scale sector is a matter of great concern and debate.

Industrial sickness is the major hindrance to economic growth as it results locking up

of resources, wastages of capital assets, loss of production and increase in

unemployment. In addition, it leads to reduction of loanable funds of the financial

institutes by reducing the velocity of circulation. Further, it involves re-scheduling of

past over dues with concessions on interest amount due, additional credit for

modernization and technological up gradation and provision for fresh working capital.

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The number of sick units and outstanding amount in SSI sector has been growing up.

In the year 1991 the total numbers of sick units were 221472 units. The number of

units went up to 306221 units in the year 1999. The amount outstanding in 1991 was

27.92 billion and in the year 2000 it reached at 46.08 billion. Table 4.3 also reveals

that small scale units account for around 98 percent of total industrial sickness and the

figure reached its height in 1995 with the value of 99.11 percent. The growing number

of sickness and outstanding amount forcing the banks to follow the cumbersome

procedures whilefinancingthe project.

Table 4.3 Overall Inustrial Sickness and Outstanding Amount (Rs. In Billion)
SSI units as
Total Number Outstanding Outstanding
Year SSI Sick Units percentage of
of sick units total amount with the SSI
total units
1991 223809 221472 98.95 107.68 27.92
1992 247924 245575 99.05 115.33 31.01
1993 240700 238176 98.95 131.34 34.43
1994 258952 256452 99.03 136.96 36.8
1995 271206 268815 99.11 137.39 35.47
1996 264750 262376 99.10 137.48 37.22
1997 237400 235032 99.0 137.87 36.09
1998 224012 221536 98.89 156.82 38.57
1999 309013 306221 99.09 194.63 43.13
2000 307399' 304235 98.77 236.55 46.08
Source:- RBi Report on Trend and Progress of Banking in India

Besides the above mentioned problems others like erratic power supply,

labour problems, infrastructure constraints, poor management, inadequate attention on

research and development and diversion of resources are also fiieling the existing

problems.

4.7 Policy Issues

The need for the development and promotion of small scale industries in India

was recognized since independence. Indian five year plans and industrial policies

83
have given a special place to the SSIs, partly due to social realities that created

political compulsions. Ideological commitment to a 'social pattern of society' and the

consequential stress on equity required (a) creation of broad based employment

opportunities; and (b) wide dispersal of industrial production. Small scale industries

were taken to be legitimate instrument for generating employment opportunities and

enabling the wide dispersal of industrial production.^* The foremost task of the

government was to achieve rapid industrialization of the country with the overall

framework of a welfare state.

Though the government had started taking active interest in the development

of small scale industries during the world war two, its importance was not fully

recognized before the conference on Industrial development held in New Delhi in

December, 1947. The conference stressed the need for organized development in the

field of SSIs and in pursuance of its recommendation; the Cottage Industries Board

was set up as an advisory body. The policy of the government towards this sector was

categorically defined in the industrial policy resolution of April, 1948 as "cottage and

small scale industries have a very important role in the national economy, offering as

they do scope for individual, village or co-operative enterprises and means for

rehabilitation of displaced persons.^'

To regulate the industrial development according to plan priorities, targeting

and promoting small scale sector, the Government of India enacted the Industries

Development and Regulation Act in 1951. Under this act no new industrial

undertaking could be established without prior permission of government. Thus

Industrial licensing had acted as a big barrier to entry and given assured market to the

few existing industrial units.^" In 1956 the industrial policy resolution of 1948 was

replaced by a new industrial policy resolution, with the objective of establishing

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socialistic pattern of society. This resolution aimed at "a method of ensuring a more

equitable distribution of national income and facilitate the effective modernization of

resources of capital and skill which might otherwise remain unutilized and some of

the problems that unplanned urbanization tends to be create will be avoided."^' This

policy resolution adopted supporting and protective attitudes towards village and

small scale industries.

A more positive approach for the development of SSIs was incorporated in

the industrial policy 1977. In this policy emphasis was laid on reservation of items. It

was the policy of government that "whatever can be produced by the small and

cottage industries must only be so produced." To support this policy, the number of

items to be exclusively reserved for the manufacturing in small scale sector to 500

from 180. The number of reserved items further increased to 805 in April 1979.''^

Albeit, the reservation police was introduced in 1967, but there was no legal backing

until 1984, government plugged this legal inadequacy and put this policy on a

statutory footing in the IDR Act 1951.''^ Industrial policy 1977 aimed at the

decentralized approach for development and promotions of industries in rural and

backward areas by setting up District Industries Centers at every district headquarter.

In industrial policy 1980, the government took steps to develop those

industries which were based on local resources. The 1980 policy statement specified

certain measures for the support and the development of the small scale sector and

enunciated the concept of economic federalism in which there would be close organic

linkages between the large and the small sector and which would generate large

number of ancillary and small scale units. "

The new industrial policy for small, tiny and village industries was

announced in august 1991, with the objectives of imparting more vitality and growth

85
impetus to the small scale sector. In order to encourage the modernization and

technological upgradation in the small scale sector, equity participation not exceeding

24 percent by other industrial undertaking including that by foreign collaboration was

permitted. Further, this policy emphasized on setting up of a monitoring agency to

ensure that genuine credit needs of small scale industrial sector were fully met,

review of all statues, regulations and their modification to ensure that their operation

did not militate against the interest of small and village enterprise; encouraging

industrial associations to establish quality counselling and common testing facilities;

sub-contracting exchanges and expansion of entrepreneurship development

programme; further liberalization of schemes of National Equity Fund and Single

Window Loans etc.'''

After the liberalization of economy in 1991, need was arisen to make small

scale sector more financially self dependent and more competitive. It was felt that the

policy of protectionism could not survive after opening up of economy in

international arena. Therefore they needed to be more competitive and technological

sound. So government needed to frame certain types of policy measures which would

enable small scale sector to fight in global arena. In this effort various committees

were formed to look after the problems of this sector and to recommend various

suggestion in this regard.

In the year 1991, Reserve Bank of India had set up Nayak Committee on SSI

credit and related issues. The committee in its report stated that the working capital

needs of small scale industries at 20 percent of the output should be pre-empted by

commercial banks through an annual budgetary exercise and if necessary, a part of

resources to the medium and large industries sector, should be diverted to fully meet

the demands of small scale industries. Further, the committee also stressed upon a

86
system of granting annual budgetary for the working capital requirement of small

scale sector borrowers, adequate discretionary power to branch managers and

revitalizing the state level forum for overseeing and monitoring of credit to small

scale industries.''^

In order to see adequacy and timeliness of credit to SSIs, the government

appointed an expert committee on small enterprises headed by Sh. Abid Hussain

in 1995. The committee emphasized on reforming the existing policies and designs the

new policies which would facilitate the growth of viable and efficient small scale

industries to make them globally competitive. The expert committee in its report laid

emphasis on the removal of protection, abolishing reservation, enhancement of SSIs

investment limit and restructuring supportive, specialized and financial instituUons.

The committee also stressed on cluster approach for future strategy of development.''''

After above committee RBI in December 1997 appointed a one man

committee under the chairmanship of Mr. S.L. Kapur, to suggest measures for

improving the delivery system and simplification of procedures for credit to small

scale industrial sector. The committee has given 126 recommendations covering wide

range of areas relating to financing of small sector. In its recommendation major

were; removal of procedural bottlenecks, setting up of small scale industries

development fund for developing industrial areas in and around metropolitan and

urban areas, enhancement in quantum of composite loans etc.^** However, few of these

recommendations were accepted by the government.

In 1999, the planning commission had set up a study group on small

enterprise development under the chairmanship of Dr. S.P. Gupta to review present

policies, look in to problems of the sector and to suggest policy modification and new

policy initiative. The study group suggested for revising the investment ceiling

87
upward every three years to account for inflation by using the whole price index,

enhancement of investment limit in those industries that have export and employment

generation potential and simplification of rules and regulations for small scale

industries. It also stressed on allowing concessions on those units who have acquired

ISO-9000 certification.^^

In order to strengthen the SSIs sector through better coordination on various

policy issues pertaining to more than one ministry, an inter-ministerial. Group of

Ministers was constituted by the prime minister on June 28, 2000 under the

chairmanship of Sh. L K Advani. The group formulated a comprehensive policy

package for small scale industries. In this package Prime Minister at the national

conference of the small scale industries on August 30, 2000 announced include, (1)

increase in the central excise duty full exemption limit from Rs. 5 million to 10

million; (2) increase in the limit of composite loan from Rs. 1 million to Rs. 2.5

Million, (3) industry related services and business enterprises with a maximum

investment of Rs. One million to qualify for priority lending; (4) to launch a credit

guarantee fund scheme; (5) to provide capital subsidy of 12 percent investment in

technology in selected sector; (6) to set up an inter ministerial committee of experts to

define the scope of technology up gradation and sectoral priorities; (7) to set up

incubation centre in sunrise industry and (8) to strengthen the Technology Bureau for

Small Enterprises (TBSEs) set up by SIDBI, so that it functions effectively as a

Technology Bank.''°

Lots of policies are being made for the development of small scale industries.

Various committees and study groups are being formed for assessing the financial,

technological, marketing and developmental issues and recommending suggestions

thereof But actual need is to implement the policies efficiently. Efforts must be made

88
actually to help the small scale sector in a very earnest way. In addition to these

policies, various types of financial incentives, fiscal incentives, credit and other

incentives must be provided by the government and its agencies.

Before going in to details of the various incentives and facilities it is

imperative to know about the important organizations and institutions set up by the

central and state governments for the development and promotion of small industrial

enterprises in India. At the central level, the office of the Development

Commissioner, Small Scale Industries, also known as the Small Industries

Development Organization (SIDO), which is a part of the Ministry of Small Scale

Agro and Rural Industries (SSARIs), Government of India, is the apex body which

formulates the policies for SSI sector. Under this office, there are 30 Small Industries

Service Institutes (SISIs). and 28 branches of SISIs.'" These SISls provide services

like market information, dissemination of trade and market information, undertaking

market surveys, workshop facilities, techno-economic and managerial consultancies.

In addition to this, for providing technical and training facilities 4 testing centers, 10

tool-rooms design institutes, 6 product-cum-process development centers and central

footwear training centers are also working for this sector."*^ National Institute for

Small Industry Extension and Training (NISIET), Hyderabad; National Institute for

Entrepreneurship and Small Business Development (NIESBUD) New Delhi, and

Indian Institute of Entrepreneurship, Guwahati, cater to the training requirements of

SSI sector. The National Small Industries Corporation (NSIC) along with SIDO

provide machinery under hire purchase and equipment leasing scheme, marketing

support under consortia marketing, procurement of bulk orders, brand franchising,

technology assistance and training assistance. At the state level. Directorate of

Industries is the nodal agencies. At the district level. District Industries Centre

89
implements the policies, which are framed by state and centre government.

Registrations of SSIs are done at the District Industries Centres.

4.8 Incentives and Facilities for the Growth of SSI in India

The general policy guidelines have been supported by appropriate policy

decisions taken at regular intervals for the augmentation of small sector in the

country. As a result, a number of incentives and facilities have been given for the

growth of this sector. Generally these incentives and facilities are in the form of fiscal

incentives, credit incentives, special incentives for backward area and general

incentives and facilities. Besides these, several other incentives are also provided by

the state governments.

4.8.1 Fiscal Incentives

Fiscal incentives for the small scale industries were started in 1986. Under

fiscal incentives wide range of concessions and exemptions form payment of excise

duty are available to small scale manufacturers to enable them to stand in competition

with large scale manufacturers at national and international level. These fiscal

concessions are in the form of: -

4.8.1.1 Excise Concession

Small scale units as defined by the investment limits and subject to specified

turnover limits are either totally exempted from paying excise duties on their products

or permitted to pay tax at lower excise duties on the same item than the large

industries. Till 1997-98 any SSI unit whether registered or unregistered was entitled

tofrillexemption from duty up to turnover of Rs. 30 lakh and concessional duty up to

turnover of Rs. 100 lakh. But after this period duty structure has been changed. Duty

90
at the rate of three percent up to turnover of Rs. 50 lakh and 5 percent between Rs. 50

lakh to 1 crore was prescribed. However this benefit was available only to total

turnover of Rs. three crores. In budget 1998-99, clearance up to Rs. 50 lakh were

made fully exempted from excise duty.''^ But after announcement of comprehensive

package this limit has been enhanced to Rs.l crores.'*''

4.8.1.2 Amortization of Certain Preliminary Expenses:

Certain preliminary expenses like expenditure incurred on preparation of

feasibility report, project report, market survey, legal charges for drafting

Memorandum of Association (MoA), Article of Association (AoA), expenses related

to the public subscription of shares, debentures, underwriting commission, brokerages

and preparation charges of prospectus etc. are allowed for amortization, subject to

condition that the aggregate amount does not exceed 5 percent of the cost of project.

The amortization is allowed against the profits in the equal installments over a period

of 5 successive previous years."*^

4.8.1.3 Tax Concession in Respect of Newly Set-up Small Scale

Industrial Undertaking in Rural Areas

If any industrial undertaking in rural area established between October 1, 1994

to march 2V\ 2004 shall be entitled to tax exemption at the rate of 100 percent of

profits for the initial 5 years and there after 30 percent for companies and 25 percent

for other assesses for next five assessment years.''^

4.8.1.4 Tax Holiday for SSI

A deduction equal to 30 percent for company and 25 percent for others from

profit derived from a SSI undertaking which started its operation between April V\

91
1995 to 31" March, 2002 is allowed for the purpose of determining the taxable

income for the 10 assessment years/^

4.8.1.5 Exemption of Tax on the Income of Newly Established 100

percent Export Oriented Undertaking and Undertaldng in
Free Trade Zone (FTZ)
To encourage the export, government provides 100 percent of profit derived

from the exports as exemption. The deduction shall be available for 10 previous years

in which undertaking begin to manufacture or produce article or things or computer

software. The deduction however will not be allowed after assessment year 2010-11.

If any undertaking produces articles or things after march 31^', 2002 in any special

economic zone (SEZ), the deduction shall be 100 percent of profit so derived fi-om

export for five initial assessment year, 50 percent for further two assessment year and

for the next 3 consecutive assessment year 50 percent of such profit and gains or the

amount debited to profit and loss account and credited to the SEZ RE-Investment

Allowance Reserve Account whichever is less shall be allowed as deduction.''*

4.8.1.6 Integrated Infrastructure Development Scheme:

This scheme was launched in March, 1994 to strengthen the infrastructural

facilities in rural and backward areas.''^ The creation and development of

infrastructural facilities like developed sites, power distribution network, water,

telecommunication, drainage, banking, raw material, storage and marketing outlets

common service facilities and technological back up service form a integral part of

scheme.

92
4.8.1.7 Quality Certification Scheme:

In order to improve the quality standard of the SSI products this scheme was

launched. Under this scheme the financial support is given to those SSIs units which

acquire ISO-9000 certification. SSI units are given financial support by way of

reimbursing 75 percent of their expenditure to obtain ISO-9000 certification subject to

maximum of Rs. 75000. However this scheme is valid up to 10 five year plan.^°

4.8.1.8 ISational Equity Fund Scheme;

This scheme was started in 1987 to support SSI units for expansion,

modernization and technology up gradation. The project cost limit under the National

Equity Fund Scheme (NEFS) was enhanced from Rs. 25 lakh to Rs. 50 lakh in 2002-

03 Union Budget.^' Assistance under the NEFS is provided at a service charge of 5

percent per annum.

4.8.1.9 Technology Development and Modernization Fund Scheme:

For modernization and adoption of improved and updated technology in April,

1995, this scheme was launched with a corpus of Rs. 200 crores." Assistance under

this scheme is available for meeting the expenditure on purchases of capital

equipment, acquisition of technical know how, up gradation of process technology

and product with thrust on quality improvement in packaging and cost of Total quality

Management (TQM) and acquisition of ISO-9000 service certification. Initially this

scheme was extended by three years in 2000 budget, but later on it is further extended

by two years in 2003."

93
4.8.1.10 Technology Development Fund Scheme:

This scheme was started for creation of technology development fund in the

states. For this active participation of states and various industry associations are

being tatcen. So that creation and utilization of funds shall be correctly done.

4.8.2 Credit and Financial Policies

The following credit and financial policies have been initiated by the

government for the upliftment of the small scale sector.

4.8.2.1 Priority Sector Lending

Prior to liberalization, bank credit in India channeled through the nationalized

commercial banking system was governed by a credit allocation system in a credit

rationing framework. Reserve Bank of India, with the prior instruction of Govt, of

India, used to fix interest rates and allocate the amount for different purpose. In this

system, SSI, were given preferential treatment through the provision of lower interest

rate as well as requirement for a minimum credit allocation from each commercial

bank. In this system 40 percent of all bank credit was to be allocated to SSI units. But

after liberalization and initiation of financial sector reforms, interest rates de-

regulated. This resulted the reduction in subsidized interest rates.'''

4.8.2.2 Refmancing Facilities:

Refinancing facility is given by SIDBI to small scale industries through

Banks, State Financial Corporations, and Small Industries Development Corporations.

With the change in liquidity position and the credit policy announced by RBI, SIDBI

takes policy initiatives to enhance the credit flow to the small scale industrial units.

94
The bank acting in this direction has introduced financial support to banks for

providing refinancing facilities.

4.8.2.3 Concessional Fixed Rate of Interest:

Small scale sector has been getting the loans at concessional rate of interest.

For loans up to Rs. 5 lakh, the collateral security requirement has been dispensed

with. This exemption limit further increased to 15 lakh on April 29, 2002. RBI in its

mid term review of monetary and credit policy 2003-04 enhanced the limit from 15

lakh to 25 lakh. Further, Union Budget 2003-04 announced that banks will provide

credit to SSI sector with in an interest rate band of 2 percent above and below their

primary lending rate.^^

4.8.2.4 Single Window Scheme:

With a view to strengthen the financial assistance to SSI sector Single

Window Scheme (SWS) was launched in 1988. SWS provide working capital loans

along with term loans for fixed capital to new tiny and small scale industrial units.

Under this scheme SIDBI provides loans for project outlays up to Rs. 50 lakh as a

whole, removing sub limits for working capital and term loan components.^

4.8.2.5 Prime Minister Rojgar Yojna (PMRY)

The PMRY was launched on October 2, 1993 with the objective of assisting

educated unemployed youth in setting up self employment venture in industry, service

and business sector. This scheme is beneficial or provided to those 8"^ pass youths,

preferably trained in any trade, in government institutions or government approved

institution for duration of six months or income of family does not exceed Rs. 40,000

per annum and who are in the age of 18-35 years, for setting up self employment

95
ventures. Although, age limit for north east residents, 18-40 and for schedule cast /

schedule tribe, physically handicapped and women 18-45 have been fixed." However

beneficiaries under other subsidy linked schemes shall not be eligible for availing this

scheme.

4.8.2.6 Composite Loan Scheme

This scheme was introduced in the year 1978 with an objective to meet the

entire financial requirements of artisans; village and cottage industries in the tiny

sector where the total credit required for equipment finance and working capital do

not exceed to Rs. 25000. However, this limit has increased time to time. In the year

2004-05 this limit enhanced to Rs. 1 crores from Rs. 50 lakh.'*

4.8.2.7 Credit Guarantee Fund Scheme (CGFS):

To fulfill the credit requirement and problems of collateral faced by SSI units,

the CGFS was launched to provide guarantee for loan up to Rs. 25 lakh extended by

commercial banks, selected well performing regional rural banks and other financial

institutes without any collateral including third party guarantee has been initiated.

However, the lower limit of Rs. 5 lakh on loan covered under the CGFS has been

removed. Further, corpus fund set up under this scheme has been raised up to Rs. 200

crores from Rs. 125 crores in the year 2001-02.'

4.8.2.8 Credit Linked Capital Subsidy Scheme:

This scheme was approved by the government on September 20'*^, 2000 for the

upgradation of technology.^" In this scheme capital subsidy of 12 percent against

loans for technology up gradation in specified small scale industries is provided.

96
 4.8.3 Other incentives

Besides providing various financial, fiscal and credit schemes there are also

other schemes for the development of small scale industries. These are:-

4.8.3.1 Reservation of Products:

Reservation of product was initiated in 1967 as promotional and protective

measures for the small scale sector. Under this policy, products were identified for

exclusive production in SSI sector. The rational for reservation was based on the

advantages of the small scale sector, like labor intensity and adaptability to semi-

urban and rural environment. This policy is applicable only to manufacturing sector.

However those large industries that were already producing the reserved items prior to

1967, they are not debarred from producing reserved items. In the year 1984, this

policy was put on statutory footing in IDR act. In its inception in April 1967, there

were only 47 items in the reserved category. In the year 1984 this number increased to

873. But after de-reservation in 1989 it came down to 836.^' In recent years, the

government has however followed the policy of de-reservation. Expert committee on

small enterprises headed by Dr. Abid Hussain advocated the abolition of reservation

of products for the exclusive production in small scale sector.^^ Further Rakesh

Mohan, in its study "Small Scale Industry Policy in India: A Critical Evaluation" has

argued that the reservation policy has militated against labour intensive growth in

manufacturing, particularly of exports.^'' However, liberalization and globalization has

itself reduced the scope of reservation of items. Consequently the number of reserved

items has been brought down to 605 in October 2004.^''

97
4.8.3.2 Reservation of Items for Exclusive Purchase from Small Scale
Sector:

In order to assist the small scale industrial units to participate effectively in the

store purchases program, a number of items reserved for exclusive or partial purchase

from small scale units. But after July 28, 1989 the purchase policy of government

modified and the categorization of the purchase items was reduced to two major

groups. In 1997, the list of 409 items reserved for exclusive purchase from SSI sector

was reduced to 358 items. The remaining items not falling under reserved list

continue to get a price preference of 15 percent over quotation from units in the large

scale sector.^^

4.8.3.3 Price Preference on Government Purchase:

In addition to items for exclusive or partial purchases from the small scale

sector, the small scale units are given a price preference up to 15 percent by the

central purchase organization (Director General of Supplies and Disposal/^ where

they compete with the large scale units for purchases made by government subject to

the condition that the products are of good quality.

4.8.3.4 Infrastructure Facilities:

To encourage the growth of small scale industrial units the central and state

governments have devised various schemes for the infrastructure development. The

main scheme of Government of India covers the industrial estates and growth centers.

The creation of industrial areas and development of plots and industrial sheds for

allotment to SSI entrepreneurs was initiated in 1955, as a centrally sponsored to be

implemented through state/ UT government.^' The objective was to attract

entrepreneurs to set up small industries or to shift existing units to industrial areas

98
provided with infrastructural facilities. After getting the experience from the above

said scheme it was felt that there must be some supporting facilities, social overheads

and suitable environment to achieve dispersed industrial growth centre. The

identification of growth centre was made on the basis of techno-economic

consideration and new industrial areas.

4.8.3.5 Entrepreneurship Development Programme:

Encourage the youth, to set up small scale industry, proper guidance is

provided through Entrepreneurship Development Programmes (EDPs). The SIDO

through the network of SIS Is has been the pioneer in conducting such EDPs for

various target groups. These courses generally are of four to six weeks. To boost up

the EDPs, Ministry of SSI has undertaken the strengthening the national level training

institutes. To meet the demand entrepreneurship development institutions have been

set up with government assistance in different states.

4.8.3.6 Assistance for Setting up Testing Centers:

Testing facilities to SSls are provided by the regional testing centers. These

centers provide performance testing; type testing, acceptance testing, calibration

services and development of processes for various products. A scheme to provide

assistance to industry association/voluntary agencies to set up testing centers has also

been operated since 1994-95. For operation of this scheme help of NGOs have also

been taken up.

4.8.3.7 Vendor Development Programme:

This programme was generally launched by the government to support the

SSls for selling their products directly to consumers. The different trade promotion

99
organizations conduct such type of programs, where seller and buyer meet together.

Government sponsored exhibition more often in different parts of the country. This

helps in solving the marketing problems of small scale industries.

4.8.3.8 Export Promotion Measures:

Small scale units accounts for about 35 percent of national export. In this

scenario, it is obvious that SSI sector need more encouragement to compete in

international market. Realizing this fact, SSI sector has been accorded a high priority

in India's export promotion strategy. The EXIM policy allows various export / Import

entitlement top exporting units. These policies generally relate to advance licensing,

imports under Export Promotion Capital Goods (EPCGs) scheme of 100 percent

Export Oriented Units (EOUs). setting up units in Free Import Zones and Export

Promotion Zones. The EXIM policy provides double weightage on export from SSI

units for recognition as export/ trading houses. SIDO, through the office of DC (SSI)

conducts training programme on packaging to SSI for maintaining latest packaging

standards. Ministry of SSI sponsors trade delegation and sales-cum-study teams under

the Market Development Assistance Scheme.

4.8.3.9 Cluster Development Programme:

This programme was launched by SIDO for providing infrastructural facilities

and support services including technological up gradation for strengthening

competitive position. SIDO has established technical support service through Product-

cum-Process Development Centers (PPDCs) to assist clusters of SSI units for

different specialized product lines. These centers provide services like Research and

Development (R&D) in the areas of dense industry clusters, product design.

100
innovation, product and process improvement, improved packaging techniques, and

manpower development training.

4.8.3.10 Environment Dimensions:

After becoming a party to Montreal Protocol in June, 1992 to phase out Ozone

Depleting Substance (ODS) by the year 2010, office of the DC (SSI) has been

charged with the responsibility of effecting phase out of ODS in the small scale

sector. To co-ordinate this work on the behalf of the Ministry of Environment and

Forests, "Ozone Cell" has been constituted in SIDO. This cell provide information,

awareness and training mechanism for small enterprises to facilitate phasing out of

ODS in this sector. The SSI sector is now engaged in the energy audit of polluting

industries.

4.8.3.11 World Trade Organization Cell

To co-ordinate the latest developments in regard to WTO, a separate WTO

cell in the office of DC (SSI) was set up on November 15, 1999.^^ The objectives of

the cell inter-alia include, (a) to keep abreast with the recent developments in the

WTO, (b) to disseminate information to SSI Associations and SSI units, (c) to

coordinate with other ministries and departments of Govt, of India, (d) to prepare

policy for small scale industries in line with the WTO agreements, (e) to organize

WTO workshops/seminars for SSI units for creating awareness.

Conclusion

Small scale industrial sector has great significance in the development of our

economy. Small scale industry constitutes 95 percent of industrial units, contributes

40 percent of industrial output and 35 percent of national export. The analysis of the

101
concept of the small scale industry reveals that the definition of small scale industry

has undergone a sea-change. Different countries have their own way of defining the

small scale industry. In our country, lots of emphasis has been given on generation of

employment and balanced regional development. This small scale sector has high

employment potential, small gestation period, relatively limited financial

requirements and also capacity to balanced regional development. However this

sector has been facing the problems like financial, marketing, raw material, poor data

base, technology and industrial sickness. To meet the problems of this sector,

government has been giving special emphasis on the all over development and

promotion of this sector, in our industrial policies and five year plans special

emphasis laid on development of this sector. Government has been providing various

incentives like fiscal, financial and credit, and other incentives to this sector.

Although, such types of facilities have been provided since independence, yet these

problems are still there, various committees and study groups have been set up to

analyze the problems and to recommend suggestion there of. Various suggestions

regarding change in definition, credit and financial incentives, fiscal, technological,

marketing and infrastructural improvement have been given. But the problems are still

intact. However, policies are good enough to cater the needs of this sector. But actual

requirement is whole hearted approach to extend these policies at entrepreneurial

level, proper dissemination, and making the government machinery at national, state

and district level more active and effective to strengthen this sector in the tough

competitive global arena.

102
References:
1. Report of Indian Industrial Commission, 1918, Government of India, DC
(SSI), New Delhi, pp. 99-100.

2. SIDBI Report on Small Scale Industries Sector, 2001, SIDBI, p. 23.

3. Government of India, DC (SSI), Small Scale Sector in India, DC (SSI), New

Delhi, 1968, p. 58.

4. Ibid.

5. Press Note on 2nd August, 1980, Economic Times, 3 August, 1980.

6. Uma Kapila, "Understanding the Problems of Indian Economy", Academic

Foundation, New Delhi. 2004-05, p. 373.

7. "General Studies, Indian Economy", Pratiyogita Darpan, 2005-06, p. 83.

8. C.S. Prasad, "Small and Medium Enterprises in Global Perspective", New

Century Publications, New Delhi, 2004, p. 9.

9. Ibid.

10. Ibid.

ll.Ibid, p. 8
12. Shashi Bala, "Management of Small Scale Industries", Deep & Deep, 1984,
New Delhi, p. 26.

13. S.K. Misra, and V.K. Puri, "Indian Economy", Himalaya Publishing House,
Delhi, 2004, p. 442.

14. Ibid.

15. "Industrial Policy and Statistics 2002", Office of the Economic Adviser, to
the Govt, of India, Ministry of Commerce and Industry, Govt, of India, New
Delhi, p.160.

16. Ibid.

17. S. Morris, "Finance and Small Firms", in S. Morris, R. Basnt, K. Das, K.

Ramchandran and A. Koshy, The Growth and Transformation of Small Firms
in India, New Delhi, 2001, pp. 229-230.

18. "Industrial Policy and Statistics 2002" op. cit.

103
19. The Report of the Second All India Census of Small Scale Industrial Units,
1992, p. 156.

20. "Industrial Policy and Statistics 2002," op. cit.

21. Morris, "Small Firms and Exports", op. cit., pp. 201-202.

22. Industrial Policy and Statistics 2002, op. cit.

23. SlDBl Report on Small Scale Industries Sector, 1999, Lucknow, pp. 28-29.

24. Ibid., p. 29

25. R. Datt, and K.P.M. Sundaram, "Indian Economy", S. Chand & Company
Limited, 2005, New Delhi, Mumbai, Nagpur, p. 451.

26. Misra, and Puri, op. cit., p. 451.

27. Ibid., p. 450.

28. Industrial Policy Resolution 1956.

29. R.B.I., "Financing of Small Scale Industries", Symposium, 1959, R.B.I.,

Bombay, p. 2.

30. J.N. Bhagwati, and P. Desai, "Planning for Industrialization", Oxford

University Press, 1970, Delhi, p. 269.

31. S.K. Tulsi, "Incentives for Small Scale Industries, An Evaluation", Kunj
Publishing House, Delhi, 1980, p. 6.

32. Ibid., p. 8.

33. R. Mohan, "Small Scale Industry Policy in India: A Critical Evaluation",

Krueger, A.O., (ed.) "Economic Policy Reforms and the Indian Economy"
Oxford University Press, New Delhi, 2002, pp. 219-221.

34. N. Raghunathan, "Role and Performances of Small Scale Industries in the

National Economy", Laghu Udyog Samachar, Vol. 13, No. 5, Dec, 1988, p.
3.

35. Planning Commission, Government of India, "Eight Five Year Plan 1992-97",
New Delhi, Vol. 2, p. 132.

36. Reserve Bank of India, Committee to Examine the Adequacy of Institutional

Credit to SSI Sector and Related Aspects, R.B.I. Bulletin, Sep. 1993, p. 129.

104
37. Government of India, Expert Committee on Small Enterprises to see
Adequacy and Timeliness of Credit to SSI, R.B.I. Annual Report, 1996-97, p.
48.

38. Reserve Bank of India, Committee to Suggest Measures for Improving the
Delivery System and Simplification of Procedures for Credit to Small Scale
Industrial Sector, SIDBl Annual Report 1997-98, SIDBI, p. 9.

39. India, Planning Commission, A Study Group on Development of Small

Enterprises to Review Present Policies, Look in to the Problems of the Sector,
Policy Modification and New Policy Initiatives, SIDBl Report on SSI Sector
2001, pp. 46-50.

40. Government of India, Economic Survey, 2000-01, Delhi, 2001, p.145.

41. C.S. Prasad, op.cit., pp. 29-30.

42. Ibid.

43. Ibid., p. 39.

44. J.M. Pawar, and S.P Wagh, "55/ in India- Present Status and Future
Strategies", Laghu Udyog Samachar, A Journal of Small Scale Industries,
DC(SSI), Ministry of SSI, Govt, of India, Vol. 27 to 28, No. 9 to 2, April-
September, 2003, p. 43.

45. S.P Goyal, "Direct Tax Planning and Management", Sahitya Bhawan
Publication, Agro, 2005, pp. 20-25.

46. Ibid, p. 40.

47. K. Singhania, K. Singhania, M. Singhania, "Direct Tax Planning and

Management", Taxmann's, New Delhi, 2005, p. 60.

48. Ibid.

49. Government of India, Economic Survey, 1995-96, Delhi, 1996, p. 126.

50. Government of India, Economic Survey, 2000-01, Delhi, 2001, p. 145.

51. Pawar and Wagh, op. cit.

52. SIDBI Report on Small Scale Industries, 2001, SIDBI, 2002, p. 118.

53. 13'\ Annual Report 2002-03, SIDBI, 2003, pp. 17-18.

54. R. Mohan, 2000, op. cit., p. 217.

55. Government of India, Economic Survey, 2003-04, Delhi, 2004, p. 154.

105
56. Government of India, Economic Survey, 1995-96, op. cit.

57. SIDBI Report on Small Scale Industries, 2002, op. cit, p. 58.

58. Pratiyogita Darpan, General Studies, Indian Economy, Upkar Prakashan,

Agra, 2005, p. 87.

59. Uma Kapila, "Understanding the Problems of Indian Economy", Academic

Foundation, New Delhi, 2004, pp. 384-385.

60. Ibid.

61. Government of India, DC (SSI), Small Scale Industries in India - A Handbook

of Statistics, 1985, DCSSI, New Delhi, p. 56.

62. Government of India, Expert Committee on Small Enterprises to See

Adequacy and Timeliness of Credit to SSI, op. cit.

63. R. Mohan, 2000, op. cit., p. 222.

64. Government of India, Economic Survey, 2004-05, Delhi, 2005, p. 166.

65. SIDBI Report on Small Scale Industries, 2001, op. cit., pp. 57-58.

66. Ibid.

67. Ibid, pp. 61-62.

68. Industrial Policy and Statistics, 2002, op. cit., p. 158.

106