Criteria for SSIs

Criteria for SSIs

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In order to create regulations for this sector, the government must identify and solve the concerns of the SSIs, or Small Scale Industries. For this aim, the government designated small scale enterprises based on the following criteria.

1. Employment Criteria - The Industrial (Development and Regulation) Act of 1951 exempted from registration entities employing fewer than 50 workers with power and less than 100 workers without power. These exempted sectors became known as the small-scale segment.

2. Fixed Capital Investment Criteria - In 1966, small scale enterprises were classified as units with fixed asset investments of less than Rs.7.5 lakh and ancillary units with investments of less than Rs.10 lakh. The ceiling was boosted to Rs 10 lakh for small-scale enterprises and Rs.15 lakh for auxiliary units in 1975. The investment limit was raised to Rs 60 lakh and Rs 75 lakh in April 1991, respectively. Furthermore, a small sector was identified and designated as entities with an investment ceiling of less than Rs 5 lakh. The investment limit for small scale and auxiliary businesses was boosted to Rs 3 crore in 1997, while the investment limit for tiny units was lifted to Rs 25 lakh. The investment limitation for small industries was reduced to Rs 1 crore in 1999, although the investment limit for small units was set at Rs 25 lakh. Enterprises are roughly classified into two groups under the Micro, Small, and Medium Enterprises Act of 2006.

(A)Manufacturing Enterprises - A Micro Enterprise, where the amount invested in machinery and equipment is not greater than Rs.25 lakhs;

           i) A Small Enterprise – here the investments on the machinery and plant do not go over Rs.25 lakh and is below Rs.5 crores

           ii) A Medium Enterprise – here the investments on the facilities and the plant exceed Rs 5 crores and is below Rs 10 crores.

(B)Service Enterprises:

           i) A Micro Enterprise, with an investment of up to Rs.10 lakhs in equipment;

           ii) A Small Enterprise, when the capital spending on equipment exceeds Rs. 10 lakh but does not go over Rs. 2 crores;

           iii) A Medium Enterprise, when the amount spent in equipment is greater than Rs 2 crores but less than Rs 5 crores.