JATIYA KABI KAZI NAZRUL ISLAM UNIVERSITY

DEPARTMENT OF MARKETING

ASSIGNMENT

Topic: Small Scale Industry and Business.

Course name: Introduction to Business.
Course code: MKT-111

Submitted to: Submitted by:

Kumar Biswazit Saha Junayed Hasan Khan Pranto
Lecturer Roll no.- 23134302
Department of Marketing Session: 2022-23
Jatiya Kabi Kazi Nazrul Islam
University

Date of submission: 29 January 2024

 SMALL SCALE INDUSTRY AND BUSINESS

DEFINITION:
Small scale industries are referred to those industries in which the process of manufacturing,
production and servicing are done on a small scale. Essentially small scale industries comprise of
small enterprises who manufacture goods or services with the help of relatively smaller machines and
a few workers and employees. There are two sectors in business, (1) Manufacturing sector and
(2) Service sector.

The small scale industries are defined as per the MSMED Act, 2006. According to the Act, the
classification of the industries or organizations into micro, small or medium units depends on their
capital investment in plant and machinery or equipment. These investments are specified for both
manufacturing-oriented units as well as service-oriented units. The level of investment required is
mentioned below.

Category Manufacturing sector Service sector

Micro Enterprises Up to Rs. 25,00,000 Up to Rs. 10,00,000

Small Enterprises More than Rs. 25,00,000 up to More than Rs. 10,00,000 up to
Rs. 5,00,00,000 Rs. 2,00,00,000

Medium Enterprises More than Rs. 5,00,00,000 up More than Rs. 2,00,00,000 up
to Rs. 10,00,00,000 to Rs. 5,00,00,000

In developing countries like India, these small scale industries are the lifeline of the economy. These
are generally labor-intensive industries, so they create much employment. They also help with per
capita income and resource utilization in the economy. They are a very important sector of the
economy from a financial and social point of view.
Some small scale industries:

• Tissue manufacturers
• Xerox and printing
• Candle making units
• Bakeries and cafes
• Small garment manufacturing units or textile units
• Packaging units
• Small toy manufacturing units
• Vehicle Servicing units
• Beauty parlors
• Local food processing units

IMPORTANCE OF SMALL SCALE INDUSTRIES:

1. Employment Opportunities: Small businesses are one of the best sources of employment in
India. Employment is one of the most important factors that determine the development of a
country. Therefore, the development of small businesses should be encouraged in order to create
more employment for the country.

2. Less capital: Small business has less capital than large business. Since capital is scarce in
developing countries like India, small businesses are the best way to maintain balance.

3. Utilization of resources and development of entrepreneurial skills: Small businesses can

develop entrepreneurial skills among rural residents who do not have large businesses. These
businesses contribute to the development of rural areas by contributing to the efficient use of
resources in rural areas.

4. Equality in income distribution: Small businesses create employment opportunities and

provide equal income to young people in underdeveloped regions. This leads to the country's
growth in terms of employment and human development.

5. Increasing regional balance: The fact that large enterprises are generally located in large cities
or regions causes workers to migrate to these cities. The result of this migration is urban
overcrowding and environmental degradation. Natural resources need to be used more to support
the growing population.

6. Short production time: The production time of small businesses is shorter than that of large
businesses that ensures the movement of money within the business.
7. Promoting Large Businesses: Small businesses help large businesses grow by producing
products for large businesses or by producing small products that can be used in large businesses
to assemble the final product.

8. Growth in exports: Small businesses account for nearly 40% of India's total exports and
account for a significant portion of export revenues. Small businesses try to increase the
country's foreign exchange, reducing the burden on the country's balance of payments.

9. Reduced dependence on agriculture: A large portion of the rural population will depend on
agriculture, which will have an impact on agriculture. Small businesses provide many
opportunities for growth by providing employment opportunities to the rural population and also
paving the way for a greater division of labor.

REFFERENCES:

https://byjus.com/commerce/role-and-importance-of-small-scale-industries/

https://www.toppr.com/guides/business-environment/scales-of-business/small-scale-
industries/#:~:text=Small%20scale%20industries%20(SSI)%20are,small%20toys%2C%20paper
s%2C%20pens.

https://www.creditmantri.com/small-scale-industries/