Small scale industries are referred to as those businesses wherein the method involved with assembling, creation and adjusting are done on a small scale. It has various features.

The speculation on such businesses is one time and these industries are for the most part done on plant and apparatus, the complete venture on such enterprises don’t surpass 1 crore.

In small scale businesses, the assembling of merchandise and delivering of administrations are finished with the assistance of more modest machines and extremely restricted labor.

Small scale businesses or SSIs are known as the help of an economy, which is vital for a nation like India. Being a work serious industry, it is exceptionally useful in setting out business open doors for the number of inhabitants in the country.

They are likewise a vital piece of an economy from a monetary angle, as they help in settling the per capita pay of the country.

Small scale industries during British rule

Previously, India was considered as a notable industry for materials and handiworks. History is loaded with such data that India was a set up country managing in material, flavors and metals, silk, cotton, and the sky is the limit from there.

After the appearance of British, these ventures were annihilated gradually as the Britishers followed the course of de-industrialisation of Indian businesses to clear a path for British enterprises to thrive.

Following focuses will illuminate the circumstance of ventures during the British principle:

1.The rot of handiwork enterprises: The customary craftsmanship businesses in India were prospering and were known around the world. Notwithstanding, with the British showing up in India, they halted the act of utilizing hand made commodities by setting duties on them.

Additionally, there was firm contest from the machine-made items. With the presentation of railroads, the compass of British items expanded to each side of the country. This load of variables prompted the defeat of material and workmanship businesses in India.

2. Slow development of present day ventures: The presence of a disproportionate foundation brought about the restricted or slow development of undertakings. In addition, there was a shortage of fundamental and substantial ventures that thwarted the development.


Following are the attributes of Small scale industries in India:

  • Small scale industries by and large have a solitary possession, which implies it either has a sole ownership structure or an association.
  • The administration of the small scale industries rests with the proprietors and thusly, the proprietor assumes a functioning part in the everyday elements of the business.
  • Small scale industries are a lot of work serious, henceforth there is restricted utilization of innovation.
  • Small scale enterprises are adaptable and versatile to a changing business climate, in contrast to the huge industries.
  • Small scale industries work in a confined region which makes them ready to meet nearby and territorial necessities.
  • Small scale industries use assets that are nearby and promptly accessible, which assists the economy with using the regular assets and bear least wastage.


The goals of small scale industries are as per the following:

  • To set out work open doors for the populace.
  • To help in the advancement of the country spaces of the economy.
  • To assume a functioning part in lessening the local awkward nature in the country.
  • To help in working on the way of life for individuals in country regions.
  • To guarantee there is equivalent dissemination of abundance and pay

Role of Small Scale Industries in the Indian Economy

Following are the jobs of small scale enterprises in the Indian Economy

  • They are the significant wellsprings of work for individuals living in provincial regions and along these lines, assume a crucial part in producing work in an economy.
  • Small scale businesses represent practically 40% of the complete labor and products in India thus, is a vital supporter of the economy.
  • Small scale enterprises help in advancing the Make in India drive which helps in expanding interest for nearby made items.
  • Larger part of the product materials are given to the Indian organizations from the small scale enterprises. It is assessed that around half of all the material traded are delivered from such businesses.

Concession for Small Scale industries

Small scale Industries assume a fundamental part in the public economy. They assist in creating work with least conceivable speculation and assume an extremely imperative part in advancing products. Thusly, the Government has reported different plans and approaches for the advancement of Small Scale Industries to guarantee that command over creation is broadly disseminated. According to the current definition, an industry having a speculation of up to Rs.1 crore in plant and hardware is characterized as Small Scale Industry.

Finance to SSI

The advances to SSI are considered as Priority Sector Advances by banks. According to RBI rules, 40% of the advances of the nationalized bank ought to be to Priority Sector. In this way SSI Units are given need in bank finance. Further, RBI has declared that guarantee security won’t be demanded for advances by banks upto Rs.5 Lakhs.

Guarantee Free Loans

Accessibility of bank credit without the issues of securities/outsider assurances would be a significant wellspring of help to the original business visionaries to understand their fantasy about setting up their very own unit Micro and Small Enterprise (MSE). Keeping this goal in see, Ministry of Micro, Small and Medium Enterprises (MSME), Government of India dispatched Credit Guarantee Scheme (CGS) in order to fortify credit conveyance framework and work with the progression of credit to the MSE area.

Any security/outsider assurance free acknowledge office (both asset just as non-store based) reached out by qualified establishments, to new just as existing Micro Small and Medium Enterprise, including Service Enterprises, with a most extreme credit cap of Rs.200 lakh (Rupees Hundred lakh) are qualified to be covered. The assurance cover accessible under the plan is to the degree of 75%/85% of the authorized measure of the acknowledge office, with a greatest assurance cap of Rs.62.50 lakh/Rs. 65 lakh. The degree of assurance cover is 85% for miniature ventures for credit up to Rs.5 lakhs.

Value Support

Under National Equity Fund Scheme value support is accessible to business visionaries for setting up new activities in minuscule/small scale area, for undertaking development, modernisation, innovation upgradation and expansion by existing little, SSI and administration endeavors and for the recovery of reasonable wiped out units in the SSI area which satisfy the predefined qualification rules. The extent of this plan was extended in 2000-01 by raising the restriction of credit from Rs.6.25 lakhs to Rs.10 lakhs and undertaking cost limit from Rs.25 lakhs to Rs.50 lakhs.

Help for Technology Development

SIDBI has set up Technology Development and Modernization Fund (TDMF) conspire for direct help of small scale businesses to energize existing modern units in the area, to modernize their creation offices and take on improved and refreshed innovation in order to fortify their commodity capacities. Help under the plan is accessible for meeting the consumption on acquisition of capital gear securing of specialized ability, upgradation of interaction innovation and items with push on quality improvement, improvement in bundling and cost of TQM and obtaining of ISO-9000 series confirmation.