1.INTRODUCTION 2.

IMPORTANCE OF SMALL SCALE ENTERPRISE

3.PROBLEMS OF SMALL SCALE ENTREPRENURES

INTRODUCTION EVOLUTION OF THE CONCEPT OF SMALL SCALE INDUSTRIES.

The definition of small scale industry varies from one country to another.

In most of the countries the criteria for defining a small scale industry relates to the size of employment or capital or both. In India the definition of small scale industry has undergone a periodic change .An entreprenuer,who is the owner of a small scale industry is known as a small scale entreprenur. The first definition adopted by small scale industry board in 1955 is A unit employing less than 50 persons if using power &less than 100 persons without the use of power &with capital asset not exceeding Rs 500000.

 After a lot of changes over a period of 50

years the Government of India in its new policy initiatives for small industries in 1999-2000 has announced the investment for small scale industry to Rs 1 crore.
The employment criteria was dropped in the

year 1960 & a small scale industrial unit was defined in terms of investment only.

 A common classification in between traditional small scale industry &modern small scale industry.
Traditional small scale industries include

khadi&handloon,handicraft,coir etc.Modern small scale industry produce goods ranging from simple items to sophisticated products such as television sets,electronic control system,particularly as ancillaries to the large industries.

IMPORTANCE OF SMALL SCALE INDUSTYRY

1.Employment generation. 2.Use of local raw material. 3.Balanced regional development. 4.Decentralisation of industries 5.Mobalisation of capital.

6.Developing entreprenurship. 7.Equitable distributin of wealth. 8.Training ground for local entreprenurs. 9.Efficient use of productive factors. 10.Promotion of export.

PROBLEMS OF SMALL SCALE INDUSTRIES

Finance

Inadequate finance is the major problem for small scale units. Their internal resources are small .Institutional agencies are reluctant to advance money to small industries as they are unable to offer security.
Raw material

The availability of raw materials is a great problem for small scale unit. The shortage of right type of raw materials at standard prices affects the production programme. Marketing Small scale units have to face competition from other small scale units and large industries . They do not have resources and expertise to market their products .

 Technology

They use outdated technology and old machineries . Due to limited capital ,they find it difficult to use modern machinery . As a result , the cost of production tends to be higher and quality of products lower than small scale industries.

 Underutilization of capacity

The small industries have a problem of underutilization of capacity due two reasons: 1.frequent power cuts 2. inability to go for alternatives like generators. Recovery One of their basic problem is recoveries from sale . The buyers do not pay their dues in time.

 Institutional Constraints

The small entrepreneurs have to approach several agencies to get their requirements. As a result they are not able to get the assistance in time . Other Problems They also face problems such as imperfect knowledge of market condition , lack of infrastructure facilities , deficient managerial skills , etc .

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