Module III

Need to know about accounting

Accounting ratio is the comparison of two or more financial data which are used for
analyzing the financial statements of companies. It is an effective tool used by the
shareholders, creditors and all kinds of stakeholders to understand the profitability,
strength and financial status of companies.

This is also widely known as financial ratios based on which business performance
can be monitored and important business decisions are made.

Accounting ratios, classified into the following categories:

[1.] Liquidity Ratio: Liquidity ratio helps in measuring the cash sufficiency of an
enterprise to pay off its short-term liabilities. A High liquidity ratio ensures the
company is in a good position to pay its creditors. The liquid ratio of 2 or
more is considered acceptable.
[2.] Profitability Ratio: Profitability ratio is generally used to determine how well the
business is generating profits from its operations. Profit is the balance of income
earned after deducting all related expenses.
[3.] Leverage Ratio: Leverage ratio measures the utilization of borrowed money by
the business. It helps to identify the financial stability of the business by
analyzing the total debt of the company.
[4.] Activity Ratio: Activity ratio indicates the return generated from a particular type
of asset using the sales, cost and asset data. This ratio helps the business to
identify effective utilization of the assets and thereby facilitates efficient
management.

All these types of ratios are used for monitoring the business performance and
comparing the business results with competitors.
Working Capital Management

Working capital management is the process of managing these short-term assets and
liabilities to ensure the company has adequate liquidity to operate smoothly.

Working Capital = Current Assets – Current Liabilities

Working capital efficiency can be measured by certain ratios. Some of the measures
used in estimating the efficiency of working capital management include current ratio,
days of payables outstanding, days of inventory outstanding, days of sales outstanding,
etc.

If the working capital is managed efficiently, the business will be able to free up
cash to pay debts or for reinvestments.

Working Capital can be divided into two main categories:

A. Based on capital
1. Gross Working Capital
2. Net Working Capital
B. Based on time period
1. Fixed Working Capital
2. Variable Working Capital

Gross Working Capital

Gross working capital is the total amount available for financing of current assets.
However, it does not reveal the true financial position of an enterprise.

Gross Working Capital = Total Current Assets

Net Working Capital

The net working capital is an accounting concept which represents the excess of
current assets over current liabilities. Current assets consist of items such as cash, bank
balance, stock, debtors, bills receivables, etc. and current liabilities include items
such as bills payables, creditors, etc. Excess of current assets over current liabilities,
thus, indicates the liquid position of an enterprise.

Net Working Capital = Current Assets-Current Liabilities

The ratio of 2:1 between current assets and current liabilities is considered as optimum or
sound.

Fixed Working Capital

The amount of funds needed for meeting requirements normally varies from time to
time in every business.

However, business always needs a certain amount of assets in the form of working
capital if it is to carry out its functions.

A part of the investment in current assets is as permanent as the investment in

fixed assets. It covers the minimum amount necessary for maintaining the
circulation of the current assets. Working capital invested in the circulation of the
current assets and keeping it moving is permanently locked up.

The permanent or fixed working capital is of two kinds:

a. Regular working capital: It is the minimum amount of liquid capital required to

keep up the circulation of the capital from cash to inventories to receivables and
back again to cash. This would include a sufficient amount of cash to maintain
reasonable quantities of raw materials for processing into finished goods to
ensure quick delivery etc.
b. Reserve margin or cushion working capital: It is extra capital required to meet
unforeseen contingencies that may arise in future. These contingencies may
crop up on account of rise in prices, business depression, strikes, lock-outs,
fires and
 unexpected competition. It is needed over and above the regular
working capital requirements.

Variable working capital:

The variable working capital fluctuates with the volume of business. It may be sub-divided
into:

a. Seasonal Working capital: It refers to liquid capital needed during the particular
season. According to Gestenberg, ―Beyond initial and regular working capital,
most businesses will require at stated intervals a large amount of current
assets to fill the demands of the seasonal busy periods‖
During the season, the business enterprises have to push up purchase of raw
materials (sugarcane by sugar mills, wool by woolen mills) and employ more
people to convert them into finished goods and thus require large amount of
working capital.
b. Special working capital: It is that part of the variable capital which is needed for
financing special operations such as the organization of special campaigns for
increasing sales through advertisement or other sale promotion activities for
conducting research experiments or execution of special orders of Government
that will have to be financed by additional working capital.

Marketing Management

"Marketing management is 'the art and science of choosing target markets and getting,
keeping, and growing customers through creating, delivering, and communicating
superior customer value'

Marketing problems of small-scale industries

Small scale units are exposed to numerous problems. Major problems faced by these
units are concerning raw-material, labor financial and marketing. Problem of
marketing is more complicated in case of small-scale industries. These units are in no
position to face the onslaught of large scale limits w.r.t., quantity quality and cost and
at the same time are not in a position to assess the prevailing market scenario (or)
changes which are taking place w.r.t.
tastes, liking, disliking, competition, technology etc. moreover these units do not possess the
requisite expertise to adjust their operations according to the changed situation.

[1.] Problem of standardization: Small scale units face problems w.r.t. fixing the
standards and sticking. This results in the poor quality of their products and it
adversely effects their image (or) goodwill in the market.
[2.] Competition from large scale units : Small scale units are ill equipped to face
competition from large scale unit ‘s w.r.t. quantity, quality and cost. In the
modern competitive world there is survival of the fittest, even the existence of
small scale units is endangered.
[3.] Poor sale promotion: Small scale units have limited financial resources and hence
cannot afford to spend more on sale promotion. These units are not having
any standard brand name under which they can sell their products. Various
channel members to exploit them because of the lack of goodwill of their
products in the market.
[4.] Poor bargaining power: Small scale units because of their limited resources
and lower scale of operations are in a week position while negotiating with the
suppliers of raw- material, finances (or) marketing agencies. They are always at
the receiving end and as such are not in a position to safeguard their interests.

IMPORTANCE OF MARKETING IN SMALL SCALE INDUSTRIES

Marketing is one of the most important things a business can do. Not only does
marketing build brand awareness but it can also increase sales, grow businesses and
engage customers.

 It informs: marketing is the most effective way to communicate your value

proposition to your customers in a fun and interesting way.
 It sustains: Marketing is important because it allows businesses to maintain
long- lasting and ever-present relationships with their audience. It is not a one-
time fix, it is an ongoing strategy that helps businesses flourish.
 It engages: Customer engagement is the heart of any successful business – this is
especially true for Small Medium Business. Consumers want to be engaged
outside the store. This is where marketing comes in, and whatever the medium,
you can send
 your customers content to keep them engaged beyond store hours. Your audience
wants to form a relationship with your brand, and marketing can be used to do
just that.
 It sells: Marketing is important because it helps you sell your products or
services. The bottom line of any business is to make money and marketing is
an essential channel to reach that end goal. Marketing helps sales and sales
help your business.
 It grows: Marketing is an important strategy to ensure the growth of your
business. While your current customers should always be your main priority,
marketing efforts can help you expand this base.

MARKETING STRATEGIES OF SMALL-SCALE INDUSTRIES

The term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing
Association presidential address. The marketing mix is a business tool used in
marketing products. The marketing mix is often crucial when determining a product
or brand's unique selling point (the unique quality that differentiates a product from its
competitors), and is often synonymous with the 'four Ps': 'price', 'product', 'promotion',
and 'place'. However, in recent times, the 'four Ps' have been expanded to the 'seven
Ps' with the addition of 'process', 'physical evidence' and 'people'. Recently, 'four Cs'
theory is also in the limelight

Small scale industries not using appropriate marketing strategies in the highly
competitive environment. Small scale industries are weak in differentiation strategy. As
small-scale industries are following low cost pricing strategies, so it is also essential to
follow product differentiation for product development. The small manufactures need
to use selective product positioning strategies for different products because same
product positioning strategies for all products are not beneficial.

Further, the SSI ‘s needs to be very careful about price decision because of highly
competitive environment. Product should be offered at highly competitive price after
doing comparative market analysis.

Small scale industries are highly satisfied regarding their product ‘s price and pricing
method. But SSIs should concentrate on pricing strategies because it affects their
overall marketing strategies. Customer also highly satisfied from pricing of the small-
scale industries products.
SSIs should focus on cutting the product cost at the operational and marketing level
with use of latest management approaches.

Small scale industries are not satisfied their distribution channel or place so small
industries need to improve their distribution channel for maximum coverage of the
buyer. For maximum coverage of the market latest technology e- marketing or web
marketing may help the small manufacturer to place the product to large number of
buyer.

Customers also highly dissatisfied from the distribution channel and current method of
convenience of the small scale industries. Small manufacturer should adopt new
methods of the convenience to the customers. It is not possible to carry out all
strategies simultaneously but a set of strategies that can serve as a skeletal
framework for customized approach is necessary to contact more customers towards
the small scale industries products.

Human Resource Management (HRM)

It can be defined as a strategic and coherent approach to the management of an

organization‘s most valued assets—the people working there who individually and
collectively contribute to the achievement of its objectives. HRD is that component of
HRM which deals with the development of human resources. For a small enterprise,
the following aspects of human resource development are important.

[1.] Manpower planning

[2.] Recruitment, Selection, and placement [3.]
Performance appraisal and development [4.]
Employee
compensation [5.]
Motivation
[6.] Communication
INDUSTRIAL RELATIONS, LABOR LAWS, AND ENVIRONMENTAL AND POLLUTION CONTROL
LAWS
No business or industry can survive without worker cooperation and industrial peace.
Therefore, effort should be made to ensure that relations between workers and
owners/managers of the firm remain peaceful. However, disputes are frequent due to
expectations on the part of both employers and employees. The government has
legislated certain basic norms to he followed to avoid dispute and maintain peace, to
obtain maximum output from their combined activity in the interest of the nation‘s
economy. The legislation can be categorized as follows.

[1.] Law regulating the conditions of work in factories and establishments

a) General laws, applicable to all factories and establishments:
The Factory Act 1948: The objective of this Act is to provide for the health,
safety, and welfare of workers
b) Specific laws, applicable to specific industries, like Mines Act, 1952, Indian
Merchant Shipping Act, 1923 and Plantation Labour Act, 1998
[2.] Laws relating to wages
a) Minimum wages Act, 1948: This Act has been adopted by State governments
to prevent exploitation of workers, for the fixation and payment of minimum
wages. The Act prescribes for the fixation of wages a) a minimum time rate;
b) a minimum piece rate; c) guaranteed time rate; and d) an overtime rate.
b) Payment of wages Act, 1936: The objective of this Act is to regulate the
payment of wages to a certain class of persons employed in industry and is
of two kinds:
 The date of payment of wages: wages must be paid before the
expire of the seventh day after the last day of wage period (in case
of less than 1000 employee). In other cases, the payment must be
made before the expiry of the tenth day after the last wage period. In
the event of termination of employment of any employee, the wages
earned by him shall be paid before the expiry of the second working
day from the day on which his employment is terminated
 Deduction from wages, whether fine or otherwise: No deduction of
any kind should be made from wages payable except those authorized
by the payment of wages Act. The total amount of deductions which
may be
made in any wage period from the wages of any employed person, shall not
exceed the wage. [3.] Law relating to social security measures
a) Workmen‘s compensation Act, 1923: The Act provides for payment to the
workmen by a
certain category of employer compensation for injury by accident sustained at
work.
b) Employees‘ State Insurance (ESI) Act, 1948: This Act provides certain
benefits to
employees in the event of sickness, maternity, and employment injury.
c) Employees‘ Provident Fund (EPF) Act and Family Pension Fund Act, 1952:
The EPF consists of the contributions made by the employer and the
employee of the factory. The Act also provides for the Employees‘ Family
Pension Scheme that ensures families pension and life insurance benefits to
the employees of the establishment.
[4.] Laws relating to workers’ associations and disputes
a) Trade union Act, 1926: This Act provides the right and liabilities of a
registered trade union.
b) Industrial Disputes Act, 1947: Its main aim is to ensure industrial peace
through voluntary negotiations and compulsory adjudication.
[5.] Laws relating to women and child workers
[6.] Laws relating to environment and pollution control
a) Water (Prevention and control of pollution) Act, 1974
b) Air (Prevention and control of Pollution) Act, 1981
c) Environment (Protection) Act, 1986
ORGANIZATIONAL SUPPORT SERVICES – CENTAL & STATE GOVERNMENT
Entrepreneurship is a multifaceted phenomenon, which has gained popularity around
the world. Becoming an entrepreneur is a challenging task, which requires various
resources and facilities. Small-scale enterprises, given their small resources, find it
difficult to have their own. Finance has been an important resource to start and run an
enterprise. In addition to finance, a minimum level of prior built-up of infrastructural
facilities such as transport and communication are needed to start any enterprise.
Creation of infrastructural facilities involves huge funds, which the small entrepreneurs
do lack. In view of this, various Central and State Government institutions have come
forward to help small entrepreneurs in this regard by providing them various kinds of
support and facilities.
 Central Level Institutions
 State level Institutions
 Other agencies

Central level Institutions

NSIC (National Small Industries Corporation)

NSIC has been working to promote, aid and foster the growth of micro, small and medium
enterprises in the country.
NSIC has set up Training cum Incubation Centre managed by professional manpower.
Some of the main services provided by NSIC are described below
Machinery and Equipment (Hire-Purchase Scheme)
 Supply of indigenous and imported machinery on easy financial terms,
mainly targeted at first-generation entrepreneurs, women entrepreneurs,
weaker sections, physically challenged and ex-servicemen.

Machinery and equipment (Lease scheme)

 100 per cent finance to facilitate SSIs in diversification and technology up gradation.
 Tax rebate on full-year rentals.

Financial Assistance Scheme

Provide finance to SSIs for the following activities.

 Marketing
 Bills discounting
 Raw material purchases
 Exports
Assistance for procurement of raw material
 Supply under the off-the-self basis scheme
 Import of raw materials
 Providing scarce materials on priority basis
 Supplies through NIST depots/godowns

National Institute for Entrepreneurship & Small Business Development (NIESBUD)

 It is a premier organization of the Ministry of Skill Development and

Entrepreneurship, engaged in training, consultancy, research, etc. in order to
promote entrepreneurship.

 Its goal is to promote, support and sustain entrepreneurship and small business
through training, Education Research and consultancy.

 The major activities of the Institute are Training of Trainers, Management

Development Programmes, Entrepreneurship-cum-Skill Development
Programmes and Entrepreneurship Development Programmes.

SMALL INDUSTRY DEVELOPMENT ORGANISATION (SIDO)

Central Small Industry Organization (CSIO) is the heart of all agencies dealing with the
development of small industry — renamed as Small Industries Development
Organization (SIDO). The office of the Development Commissioner, SSIs is also known as
the Small Industries Development Organization (SIDO), established in 1954. It is a
policy-making, coordinating and monitoring agency for the development of SSI
entrepreneurs. It is the nodal agency that advises the Ministry of Industry and other
Ministries in formulating policies and programmes for the development of SSIs. It
also overseas the 'package of services' rendered by the SISIs at field level and provides
comprehensive range of consultancy services and technical, managerial and
marketing assistance to SSI units.

The SIDO provides common facilities

 Technology support services

 Marketing assistance and
 Entrepreneurial development support through its network of 30 Small Industries
Service Institutes (SISIs), 28 Branch SISIs, 4 Regional Testing Centers (RTCs),
7 Field Regional Testing Centers (RTCs), 2 Small Entrepreneur Promotion and
Training Institutes (SEPTIs) and 1 Hand Tool Design Development and Training
Centre.
  The SIDO also has a network of Tool Rooms and Process-cum Product
Development Centers (PPDCs) to provide technology and training support

SIDO performs functions such as

 Conducting training courses through SISIs and Extension Centers

 Organizing EDPs and motivational campaigns for rural artisans,
educated unemployed, women entrepreneurs and physically handicapped
persons;
 Securing reservations of certain products for SS's;
 Assisting and encouraging entrepreneurs to set up industrial units in rural
areas and estimating the requirements of raw materials of SSIs.

All SSIs except those falling within the specialized boards and agencies like KVIC, Coir
Boards and Central Silk Board fall under the purview of the SIDO.

NSTEDB
The National Science & Technology Entrepreneurship Development Board (NSTEDB),
established in 1982 by the Government of India to promote knowledge based
technology driven enterprises. The Board aims to convert "job-seekers" into "job-
generators" through Science & Technology (S&T) interventions.

The NSTEDB has verities of programs. The programs starts from creating awareness (i.e.
Entrepreneurship Awareness Camp (EAC)) by sponsoring three day program in the
academic institutions with the aim to germinate entrepreneurs after the gap of 3-5
years
Here what we can say that just through the seeds in the wild without putting water &
fertilizer in the seed & with expecting some of them will germinate as entrepreneur. It is
one of the very low budget program but an effective program of this board. Its
success rate is around 5%.

Then the next programs are the training programs like Entrepreneurship Development
Programme (EDP) of 6-8 weeks durations, aims at training the S&T graduates and the
diploma holders in the essentials of conceiving, planning, initiating and launching an
economic activity or an enterprise successfully.

Faculty Development Programme (FDP) is designed to train and develop professionals in

entrepreneurship development so that they can act as resource persons in guiding and
motivating young S&T persons to take up entrepreneurship as career. The duration of
program is 2-3 weeks;

Technology Based Entrepreneurship Development Programme (TEDP), its primarily

focuses on training and developing need of S&T entrepreneurs in a specific
technology area (e.g. Leather, Plastic, Electronics and communication etc.) The
duration of program is about 6 weeks;

The flagship program that the NSTEDB have is the Technology Business Incubation (TBI)
program.

State level Institutions

DIC (District Industries Centers)

 The 'District Industries Centre' (DICs) programme was started by the central
government in 1978
 The objective of providing a focal point for promoting small, tiny, cottage and
village industries in a particular area and to make available to them all necessary
services and facilities at one place.
 The District Industries Centre is the institution at the District level, which provides
all the services and support facilities to the entrepreneur for setting up Micro,
Small and Medium Enterprises. This included identification of
o suitable schemes
 o preparation of feasibility reports
o arrangements for credit facilities
o machinery and equipment‘s
o Provision of raw materials and development of industrial clusters etc.

State Financial Corporations (SFCs)

 This is State level financial institutions which play a vital role in the growth of
small & medium enterprises in the concerned States.
 They offer financial assistance in the form of direct subscription to
debentures/equity, term loans, guarantees, discounting of bills of exchange &
seed/ special capital, etc.
 SFCs have been set up with the purpose of catalyzing higher investment,
engendering greater employment & extending the ownership base of industries.
 They have also started offering assistance to newer types of business activities
like tissue culture, floriculture, poultry farming, services related to engineering,
marketing and commercial complexes. In India, there are 18 State Financial
Corporations (SFCs).

STATE INDUSTRIAL DEVELOPMENT CORPORATIONS (SIDCs)

The State Industrial Development Corporations (SIDCs) were incorporated under the
Companies Act, 1956, as wholly owned State Government Undertakings for promoting
industrial development.

The main functions of SIDCs are to provide assistance in the form of term-loans,
underwriting direct subscription to shares / debentures and guarantees. They also
undertake a variety of promotional activities like preparation of feasibility reports,
conducting industrial potential surveys, entrepreneurship development programmes
and developing industrial estates. Some SIDCs also offer a package of developmental
services such as technical guidance, assistance in plant locations and coordination‘s
with other agencies. In line with the changing environment, many SIDCs are making
efforts to diversify and mutual funds. There are 28 SIDCs in the country.
Other agencies

NABARD (National Bank for Agriculture and Rural Development):

 It formed based on the Committee to Review the Arrangements for Institutional
Credit for Agriculture and Rural Development (CRAFICARD) which outlined the
need for a new organizational device for providing undivided attention, forceful
direction and pointed focus to credit related issues linked with rural
development.
 Formation of National Bank for Agriculture and Rural Development (NABARD) was
approved by the Parliament through Act 61 of 1981.
 NABARD came into existence on 12 July 1982.
 It was dedicated to the service of the nation by the late Prime Minister Smt.
Indira Gandhi on 05 November 1982.
 Set up with an initial capital of Rs.100 crore, its‘ paid up capital stood at Rs.10,
580 crore as
on 31 March 2018.
 It aimed at building an empowered and financially inclusive rural India through
specific goal oriented departments which can be categorized broadly into three
heads: Financial, Developmental and Supervision.

Industrial Finance Corporation of India (IFCI)

 IFCI Ltd. was set up in 1948 as Industrial Finance Corporation of India
 It provide medium and long term finance to industry.
 The Government of India, as per the Budget for FY 2014-15 has mandated IFCI
for setting up of a Venture Capital Fund under Social Sector initiatives with an
aim to promote entrepreneurship among the Scheduled Castes (SC) and to
provide concessional finance to them.

Small Industries Development Bank of India (SIDBI)

 Set up on 2nd April 1990 under an Act of Indian Parliament, acts as the Principal
Financial Institution for Promotion, Financing and Development of the Micro, Small
and Medium Enterprise (MSME) sector as well as for co-ordination of functions of
institutions engaged in similar activities.
 Over the years, SIDBI has been working towards the sustainable development
of MSME sector
GOVERNMENT SUBSIDY FOR SMALL BUSINESS IN INDIA

Government subsidy for small business is very much effective in any small-scale
industry. Many incentives are provided with both by the Central and State Governments
to pro-mote the growth of small-scale industries specially MSME.

[1.] The Credit Guarantee Fund Scheme for Micro and Small Enterprises
The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE)
was launched by the Government of India to provide collateral-free credit to
Indian MSMEs. Both the existing and the new enterprises are eligible for the
scheme.
The scheme provides credit facilities in the form of term loans and working
capital facility of up to Rs. 100 lakh per borrowing unit. The amount is
contributed by the Government and SIDBI in the ratio of 4:1, respectively. The
scheme also offers rehabilitation assistance to sick units covered under the
guarantee scheme.
[2.] SAMPADA Scheme for Agro-Marine Produce Processing
SAMPADA stands for Scheme for Agro-Marine Produce Processing and
Development of Agro-Processing Clusters. With a budget of Rs. 6000 Crores,
the SAMPADA scheme is aimed to integrate current and new schemes in the food
processing sector. The main objective is reducing food wastage and doubling
farmers‘ income.
[3.] Government Subsidy for Small Business from NSIC
NSIC provides two basic subsidies. Such as raw material assistance and
marketing assistance. Raw Material Assistance Scheme aims at helping Small
Scale Industries/Enterprises by way of financing the purchase of Raw Material
(both indigenous & imported).
This gives an opportunity for SSI to focus better on manufacturing quality
products. Under the Scheme, marketing support is provided to Micro, Small &
Medium Enterprises through National Small Industries Corporation (NSIC) to
enhance competitiveness and marketability of their products.
[4.] Credit Linked Capital Subsidy Scheme for Technology Up gradation (CLCSS) Up gradation
of the process as well as the corresponding plant and machinery is important to
help SMEs reduce the cost of production and remain price competitive in the
global market. To help SMEs flourish in international trade markets, the Ministry
 of Small-Scale Industries (SSI) runs a scheme for technology up gradation of
Small-Scale Industries.
Known as the Credit Linked Capital Subsidy Scheme (CLCSS), it aims at
facilitating technology up gradation by providing the upfront capital subsidy of
15% (limited to maximum Rs.15 lakhs) to SSI units for credit availed by them for
the modernization of their plant and machinery. All sole proprietorship,
partnership firms, cooperative, private and public limited companies are eligible
for this scheme.
[5.] Capital Subsidy for Solar Lighting and Small Capacity PV Systems
The Government of India has launched the Jawaharlal Nehru National Solar
Mission (JNNSM) to promote sustainable energy generation and support the
growing need for energy in India while addressing India‘s energy security
challenge. The JNNSM provides a host of subsidies and soft loans for the
promotion and penetration of solar energy generation in the nation.
Through the capital subsidy for solar lighting and small capacity PV systems, the
JNNSM provides capital subsidy of up to 40% of the approved unit cost
(benchmark cost) for solar lighting systems and small capacity Photovoltaic
systems. Capital subsidy of 90% of the benchmark cost, would be available for
special category states, viz. NE, Sikkim, J&K, Himachal Pradesh and
Uttarakhand.

INCENTIVES TO SMALL SCALE INDUSTRIES IN INDIA

An incentive is a motivational factor which induces a person to work hard or to do his

work more efficiently.

[1.] Reservation:
To protect the small-scale industries from the competition posed by large-scale
industries, the Government has reserved the production of certain items
exclusively for the small-scale sector. The number of items exclusively re-served
for the small- scale sector has been considerably increased during the Five Year
Plan Periods and now stands at 822.
However, prior to the 1997 – 98 Budget the number of items reserved for the
small- scale sector stood at 836. The Finance Minister de-reserved 14 items in
the 1997 – 98 Budget.
[2.] Preference in Government purchases:
The Govern-ment as well as Government organizations shows preference in
procuring their requirements from the small-scale sector. For instance, the
Director General of Supplies and Disposals purchases 400 items exclusively from
the small-scale sector. The National Small-Scale Industries Corporation assists the
SSI units in obtaining a greater share of Government and defense purchases.
[3.] Marketing assistance:
The National Small Industries Corporation (NSIC), the Small Industries
Development Organization (SIDO) and the various Export Promotion Councils help
SSI units in marketing their products in the domestic as well as foreign markets.
The SIDO conducts training programmers on export marketing and organizes
meetings and seminars on export promotion.
[4.] Excise duty:
In respect of SSI units excise duty concessions are granted to both registered
and unregistered units on a graded scale depending upon their production
value. Full exemption is granted up to a production value of Rs.30 lakhs in a
year and 75 % of normal duty is levied for production value exceeding Rs.30
lakhs but not exceeding Rs.75 lakhs. If the production value exceeds Rs.75 lakhs,
normal rate of duty will be levied.
[5.] Supply of raw materials:
In order to ensure regular supply of raw materials, imported components and
equipment‘s, the Government gives priority allocation to the small-scale sector as
compared to the large- scale sector. Further, the Government has liberalized the
import policy and streamlined the distribution of scarce raw materials.