Small Scale Industries in India (SSI) – Types, Registration, Advantages, Fees

April 04, 2023

7 min read

Small scale industries are labour intensive yet require little capital. Small scale industries can be either manufacturing industries or service providers. Small scale industries comprise of small enterprises that manufacture goods or provide services with the help of smaller machines and a few workers and employees.

The enterprise must fall under the guidelines set by the Government of India. Small scale industries in India are the lifeline of the Indian economy, and they offer several job opportunities for skilled labours. After all, small scale industries are essential for the economy from a financial and social point of view.

For a developing country like India, these industries bloom because of huge demand and opportunity. Some small-scale industries are also exporting goods, thereby bringing foreign currencies in India. In India, nearly half of the products (45-55%) shipped are from Small scale and mid-scale industries. Some small-scale industries are created because of the demand of vendors for multinational companies.

The Government of India has some guidelines for small scale industries in terms of investment the company is making and the revenue it has generated. Small scale industries are categorized into three parts: manufacturing/production, ancillary, and service industries.

Manufacturing Industries: Units that produce finished goods either for consumption or used in processing industries. These types of small scale industries are generally individually owned. Manufacturing small scale industries examples are power looms, engineering industries, food processing, etc
Ancillary Industries: Big companies or MNC manufactures finished goods, but they don’t generally make all the parts themselves. Vendors of these companies are ancillary industries. Ancillary industries can also be identified as those companies which makes machines for multinational companies or medium scale industries
Service Industries: Repair shops and maintenance industries comes under the category of service industries

Other than these types of industries, there are feeder industries and mining or quarries.

Registration for small scale industries

One can own or invest in small scale industries with minimal documentation and little investment. Small scale industry registration is hassle free, and the government also support with finance for you to invest in small scale industries. Under the Udyog Aadhar scheme, you can even fill the online registration form to get the registry done. SSI registration is free of cost, and you do not have to pay for processing. You will get the certificate on your registered email id after the document verification and processing by the executives. Contact details, Bank/account details, additional details of the business, employees and investment are the mandatory part to fill the registration form. You may also have to submit a scanned copy of the documents in which Aadhar card is compulsory. Micro and small scale industries registration has been made so easy under several schemes provided by the government of India.

Benefits of SSI registration

The banks and financial institution provides loan for the business after SSI registration, and it becomes hassle-free. Once the booking is made, taxes rebate can be availed. To participate in government tenders, it becomes mandatory to have the registration done beforehand. As a lot of concessions and discounts are available, it becomes smooth, and the cost of setting up the industry reduces.

Classification of Small scale industries:

As per the MSMED Act 2006: Classification of the Manufacturing process

An industry is a small enterprise if investment in plant and machinery is more than 25 lakhs but does not exceed five crores.

As per the MSMED Act 2006: Classification of Service enterprises

An industry is a small enterprise if investment in equipment is more than ten lakhs but does not exceed two crores

Ancillary small industrial unit: Minimum 50% of the production is to be supplied to the parent unit and investment in plant and machinery should not exceed one crore.

Small-scale industries owned and managed by women entrepreneurs: Women entrepreneurs have share capital not less than 51 % (individual or jointly)

List of small scale industries

In small scale industries, manufacturing industries grow very fast due to the natural supply of raw materials and huge demand in public. In south India, the summit held where KSSIA (Karnataka Small Scale Industries Association) was also present in January 2019, had a motive to discuss the key issues and find a solution to them at the same time provide the right environment for the growth and development. The major Small scale industries in Tamilnadu and small scale industries in Kerala are spinning and weaving, coconut oil making, cashew nut processing, clay products etc. Small scale ancillary industries in Hyderabad have a vast number of employment due to various multinational companies. Foreign investment is as essential as it creates a huge no. of ancillary small scale industries and thereby creating work.

Some examples of small scale industries are: Agarbatti making, Chalk making, Biodiesel production, Sugar candy manufacturing, Wood making, Rice mill, Potato chips making, Toys making, Microbrewery, Liquid soap making, Honey processing, Slippers making, Detergent powder making, Fruit juice production plant, Spices making, and Chocolate making.

These are some of the ideas from a different industry and a variety of products.

Administrative bodies for Small scale enterprises

There are government bodies set up for the welfare of the member of small-scale industries. Ministry of small scale industries designs policies, schemes and program to promote the small scale industries. Ministry of Agro and rural industries coordinate and help in the development of villages and khadi industries, micro and tiny industries in rural and urban areas.

Tips to keep in mind to avoid problems in handling small scale enterprise

Shortage of funds and raw materials – The most severe problem and money management should be done at all levels
Marketing problems – Proper advertisement to run the show every time
Quality – To fulfil the demand, one should not compromise with the condition.
Technology – Be in par with the latest technology. It helps to reduce the cost of investment and increases the quality
Managerial skills – To handle the labour class and get the work done from them.

Small Scale Industries FAQs:

1. What are small scale industries?

Small Scale Industries are industries that manufacture products in a small scale.

2. What kind of manufacturers are called small scale industries?

Industries like leather manufacturers, bakeries, photo studios, parlours and the like come under small scale industries.

3. What are the characteristics of a small scale industry?

The characteristics of small scale industries are: ownership, labour intensive, flexibility, management, reach, and resource utilisation.

4. What industries can be registered under SSI?

Manufacturing Enterprises and Service Enterprises can registered as SSI.

Small Scale Industries News

Tamil Nadu Small-Scale industry workers and farmers demand rain relief

Due to the intense heavy rainfall this year which lasted longer than usual, many small-scale industry workers and farmers have demanded compensation from the State Government for the loss suffered.

The Centre of Indian Trade Units (CITU) has demanded a yearly interim rain relief of Rs 5000 for workers in sectors directly affected by the rains, especially the appalam makers and Weavers.

The appalam industry has been hit hard by the heavy rainfall as they are dependent on sunlight for drying the flattened dough. With moisture in the air and lack of sunlight, they are not able to proceed with appalam making.

Weavers have lost their livelihood due to rains. The seeping rainwater into their houses has covered the loom pits with water, soaked the wooden looms, and destroyed the raw materials.

Farmers and agricultural workers have demanded a compensation of Rs.10000 and also requested for implementation of a gold loan waiver announced by the Government.

Updated Date: 21-12-2021