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Small Scale Industries ( SSI ) – Characteristics, Objectives, Registration of SSI

Updated on:  

08 min read

Small Scale Industries (SSI) are those industries in which the manufacturing, production and rendering of services are done on a small or micro scale. These industries make a one-time investment in machinery, plant, and equipment, but it does not exceed Rs.10 crore and annual turnover does not exceed Rs.50 crore.

Introduction of SSI

Essentially the small scale industries are generally comprised of those industries which manufacture, produce and render services with the help of small machines and less manpower. These enterprises must fall under the guidelines, set by the Government of India.

The SSI’s are the lifeline of the economy, especially in developing countries like India. These industries are generally labour-intensive, and hence they play an important role in the creation of employment. SSI’s are a crucial sector of the economy both from a financial and social point of view, as they help with the per capita income and resource utilisation in the economy.

Examples and Ideas of Small Scale Industries:

  • Bakeries
  • School stationeries
  • Water bottles
  • Leather belt
  • Small toys
  • Paper Bags
  • Photography
  • Beauty parlours

Characteristics of SSI

Ownership

SSI’s generally are under single ownership. So it can either be a sole proprietorship or sometimes a partnership.

Management

Generally, both the management and the control is with the owner/owners. Hence the owner is actively involved in the day-to-day activities of the business.

Labor Intensive

SSI’s dependence on technology is pretty limited. Hence they tend to use labour and manpower for their production activities.

Flexibility

SSI’s are more adaptable to their changing business environment. So in case of amendments or unexpected developments, they are flexible enough to adapt and carry on, unlike large industries.

Limited Reach

Small scale industries have a restricted zone of operations. Hence, they can meet their local and regional demand.

Resources utilisation

They use local and readily available resources which helps the economy fully utilise natural resources with minimum wastage.

Role in the Indian Economy

Employment

SSI’s are a major source of employment for developing countries like India. Because of the limited technology and resource availability, they tend to use labour and manpower for their production activities.

Total Production

These enterprises account for almost 40% of the total production of goods and services in India. They are one of the main reasons for the growth and strengthening of the economy.

Make in India

SSI’s are the best examples for the Make in India initiative. They focus on the mission to manufacture in India and sell the products worldwide. This also helps create more demands from all over the world.

Export contribution

India’s export industry majorly relies on these small industries for their growth and development. Nearly half of the goods that are exported from India are manufactured or produced by these industries.

Public Welfare

These industries have an opportunity to earn wealth and create employment. SSI’s are also important for the social growth and development of our country.

Objectives of SSI

The objectives of the small scale industries are:

  • To create more employment opportunities.
  • To help develop the rural and less developed regions of the economy.
  • To reduce regional imbalances.
  • To ensure optimum utilisation of unexploited resources of the country.
  • To improve the standard of living of people.
  • To ensure equal distribution of income and wealth.
  • To solve the unemployment problem.
  • To attain self-reliance.
  • To adopt the latest technology aimed at producing better quality products at lower costs.

Registration of SSI

SSI registration is a registration provided by the Ministry of MSME. A business should obtain SSI registration in order to be eligible for a number of schemes, subsidies and other incentives provided by the Government to such SSI’s. SSI registration can be obtained online too.

Overview of SSI Registration

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 the SSI registration is to set up new SSI businesses in India. SSI registration helps the business to be eligible for a number of subsidies given by the Government. We can also get SSI/MSME registration online through Udyam Registration. Let’s look at the process of SSI/MSME registration online:

  • Visit the Udaym Registration portal and click on the “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II”.
  • Fill in your “Aadhaar Number” and “Name of the Entreprenuer” and click on the “Validate and Generate OTP” button. 
  • You will receive OTP to your mobile number. Enter OPT on the PAN verification page will open. Enter PAN details and click on the “Validate PAN” button.
  • The Udyam Registration page will open. Fill in all the personal details and industry details such as industry name, address, bank account details and some common information and click on the “Submit and Get Final OTP” button.
  • With this the MSME registration is complete and a message of successful registration with a reference number will appear. After verification of registration, the MSME Registration Certificate is issued.

If a person wants to get registration for more than one industry then also he/she can opt for an individual SSI registration. The documents required for the SSI registration are Aadhar number and PAN number. No registration fees are required for the registration.

Eligibility Criteria for SSI Registration

SSI registration can be obtained for enterprises that are considered as micro and small enterprise under the MSME Act, 2006.

A micro enterprise is an enterprise whose investment in plant, machinery and equipment does not exceed Rs.1 crore, and turnover does not exceed Rs.5 crore.

A small enterprise is an enterprise whose investment in plant, machinery and equipment does not exceed Rs.10 crore, and turnover does not exceed Rs.50 crore.

Benefits of obtaining SSI Registration

  • There are various tax rebates offered to SSI’s.
  • A credit for Minimum Alternate Tax (MAT) is allowed to be carried forward for up to 15 years instead of 10 years.
  • There are many government tenders that are only open to the SSI.
    They get easy access to credit.
  • Once registered the cost of acquiring a patent, or the cost of setting up the industry reduces as many rebates and concessions are available.
  • Business registered as SSI are given higher preference for government license and certification.
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