2 Origin and History of Small Scale Industries

2 Origin and history of small s mall scale industries in India Before Before the Second Wor World ld War, War, it was established established as the office of

superinten superintendent dent of 

Cottage Industries. In 1947, it was expended into as the office of irectorate of Industries and in 19!" it too# responsibilit$ for the de%elop&ent of pri%ate industries. In 197"' it was transferred to the (inistr$ of Industries, bearing with the na&e of Cottage Industries Corporation. )n "1*"*1974, it was shifted again to the (inistr$ of Co*operati%e. +he na&e was also changed into Cottage Industries epart&ent on -**197. )n "1*"*1974, it was shifted again to the (inistr$ of Co*operati%e. +he na&e was also changed into Cottage Industries epart&ent on -**197. In 19/", 14 wea%ing schools were referred fro& the epart&ent of Industr$, 0griculture  2ocation cational al +rain +raining ing under under the (inist (inistr$ r$ of 3ducati 3ducation on to the Cottag Cottagee Indust Industrie riess epart&ent. In 1997, the structure of the depart&ent was pro&oted fro& rade  to rade 1. +he na&e of the depart&ent was changed again as the S&all*Scale Industries epart&ent on 1*4*"-11.

2.3 Meaning of small scale industry 0 s&all scale industr$ 5SSI6 is an industrial under ta#ing in which the in%est&ent in fixed assets in plant and &achiner$, whether held on ownership ter& or on lease or hire purchase, does not exceed s. 1 crore. In other words, 0 s&all scale industr$ is that industr$ in which &ost of the wor#  is done b$ hand or %er$ s&all and si&ple &achines and the wor#ers ha%e lac# of technical #nowhow &eans the$ ha%e no degree for their wor#. S&all scale units are not defined in the central excise 0ct 1944 or rules &ade there under. +he s&all scale units are defined in Industries 0ct, 19!1 for the purpose of exe&pting then fro& registrati registration on under the 0ct. +he definition definition basicall$ basicall$ ta#en the in%est&ent in%est&ent &ade on the plant and &achiner$ b$ an$ industries as the basis for deter&ining the s&all scale industries.

2.4 Definition of small scale industries efining s&all*scale industr$ is a difficult tas# because the definition of s&all*scale industr$ %aries fro& countr$ to countr$ and fro& one ti&e to the in the sa&e countr$ depending upon the pattern and stage of de%elop&ent, go%ern&ent polic$ and ad&inistrati%e set up of the  particular countr$. +he 8iscal Co&&ission, o%ern&ent of India, ew elhi, 19!-, for the first ti&e defined a s&all*scale industr$ as, one which is operated &ainl$ with hired labor usuall$ 1- to !hands. 8ixed capital in%est&ent in a unit has also been adopted as the other criteria to &a#e a distinction between s&all*scale and large*scale industries. +his li&it is being continuousl$ raised up wards b$ go%ern&ent. +he S&all Scale Industries Board in 19!! defined, :S&all*scale industr$ as a unit e&plo$ing less than !- e&plo$ees if using power and less than 1-- e&plo$ees if not using  power and with a capital asset not exceeding s. ! la#hs:. +he definition for s&all*scale industrial underta#ings has changed o%er ti&e. Initiall$ the$ were classified into two categories* those using power with less than !- e&plo$ees and those not using power with the e&plo$ee strength being &ore than !- but less than 1--. ;owe%er the capital resources in%ested on plant and &achiner$ buildings ha%e been the pri&ar$ criteria to differentiate the s&all*scale industries fro& the large and &ediu& scale industries. 0n industrial unit can be categori