The
definition of small scale industry varies from one country to another country.
In most of the country the criteria for defining a small scale industry relates
to the size of employment of capital or both.
In
India the ministry of commerce and industries defined a small scale industry as
a unit with a capital investment of not more then Rs 5 lacks irrespective of
the number of person employed.
Ho
ever in 1974 the small scale industry board recommended the following
definition.
Undertaking
having investment in plant and machinery not exceeding Rs 7.5 lacks.
Function
1)
Small scale industrial unit have to achieve
a wide dispersal of industries.
2)
Small scale industry have to bring forth
indigenous entrepreneurship and saving lying dormant particularly in Sami urban
and rural areas.
3)
Small scale industry have the function of
providing employment promoting entrepreneurship and earning foreign exchange to
the country.
Importance
1)
SSIs has consumes less capital and demand
average level technology.
2)
They create immediate and permanent employment.
3)
Gestation period is less in establishing
the unit.
4)
Exodus to urban areas in prevented rural
entrepreneurship are encouraged.
5)
Geographical diffusion of skills and
technology.
6) Provide greater opportunity for the growth
of large scale industries by supplying quality components.
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