There are various types of business organizations. Some are sole proprietorships, while others have over 1000 employees. Depending on the size of your business, you can categorize it as a small scale industry, a large scale industry, a public enterprise and a multinational corporation.
Large Scale Industries
A large-scale industry is one that has a large infrastructure, raw materials, high labor and capital requirements. Organizations with a fixed asset over ₹10 crore are considered as large-scale industries. The economic growth of the country is heavily dependent on the growth of these industries. These industries work to import foreign reserves, create jobs and set the pace for economic growth.
Large Scale Industries in India
The following sorts of industries comprise India’s large-scale industries:
- Iron and Steel Industry
- Automobile Industry
- Textile Industry
- Telecommunication Industry
- Information Technology Industry
- Petroleum and Natural Gas Industry
- Silk Industry
- Fertiliser Industry
- Jute Industry
- Paper Industry
- Cement Industry
Small Scale Industries
SSI stands for small scale industries, which are businesses that produce, provide services, and produce goods on a small-scale or micro-scale. For instance, small-scale industries like Napkins, Tissues, Chocolates, Toothpicks, Water Bottles, Toys, Paper, Pen, etc. are really important for India’s social and economic growth. Small-scale industries make one-time investments in machinery, factories, and industries, which can be on an owner-purchase, hire purchase, or lease basis.
Small-scale industries are characterized by the production of goods or services by small enterprises utilizing relatively small-scale machinery and a limited number of personnel. In order to be considered a small-scale enterprise, the entity must adhere to the regulations established by the government of India. Currently, the following limitations apply to small-scale enterprises:
- Goods Production Units: Investment in plant and machinery should be between ₹ 25 crore and ₹ 50 crore.
- For service providers: machine investment must be ₹ 10 – ₹ 20 Crore.
These small-scale industries are the backbone of the economy in developing countries like India. These industries are usually labor-intensive, which is why they generate a lot of employment. They also contribute to per capita income and the utilisation of resources in the economy. These industries are a very important part of the economy from financial and social perspectives.
Examples and Ideas of Small-Scale Industries
- Bakeries
- Candles
- School stationeries
- Water bottles
- Leather belt
- Small toys
- Paper Bags
- Xerox and printing
- T-shirt Printing
- Photography
- Beauty parlors
Characteristics of Small-Scale Industries
Ownership: These units are usually owned by one person. Therefore, it is a single-person company or sometimes a joint venture.
Management: Management and control are usually in the hands of the owner/owners, meaning that the owner is directly involved in the day-to-day operations of the company.
Limited Reach: Since small-scale industries operate within a limited geographical area, they satisfy local and regional demand.
Labor Intensive: These small-scale industries mainly rely on labour and human resources for their manufacturing processes, so their reliance on technology is relatively low.
Flexibility: These units are also more flexible in their business environment. This means that in the event of a sudden change or an unexpected development, they are more able to adjust and continue to operate. Large industries are an exception to this.
Resources: They utilize locally sourced and easily accessible resources. This also contributes to the economy by making better use of natural resources and reducing waste.
Economic Contribution of Small-Scale Industries in India
Total Production: Nearly 40% of the goods and services manufactured in the Indian economy are produced by these enterprises. They contribute to the growth and development of the economy.
Employment: These small-scale industries are one of the country’s main sources of employment. Since the entire workforce can’t find employment in the formal economy, these labour-intensive sectors provide a living for a large part of the workforce.
Contribution to Export: Almost half (45-55%) of the goods exported from India are produced by these small companies. About 35% of direct exports and 15% of indirect exports come from small-scale industries. Thus, the Indian export industry depends on these small-scale industries for its growth and development.
Welfare of the Public: Apart from economic reasons, these branches of economy are also important from the point of view of the social growth and development of our country. These industries are usually started by lower or middle class audience. They have the opportunity to earn a fortune and employ other people. It helps distribute income and promotes social development.