Significance of SSIs

Significance of SSIs

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SSI Units play a significant role in job creation. Because these units require a lot of labour, they have the ability to create a lot of jobs. As per the 4th census of the SSI Units performed in 2006-07, the nation has around 260 lakh MSMEs (medium, small, and micro firms) that contribute approximately 8.0% of GDP and 45.0% of manufactured output.

SSI Units play a significant role in job creation. Because these units require a lot of labour, they have the ability to create a lot of jobs. As per the 4th census of the SSI Units performed in 2006-07, the nation has around 260 lakh MSMEs (medium, small, and micro firms) that contribute approximately 8.0% of GDP and 45.0% of manufactured output.

1. National Income Contribution - SSI Units and cottage Industry both help generate national income. This is made possible by the two factors listed below. For starters, SSI ownership is more prevalent than large-scale industry ownership. Second, they have a significantly higher employment potential than large-scale industries. As a result, the SSI Units promote a more fair allocation of the nation's income and wealth.

2. Rural development - Because SSI Units are typically located in rural regions which offer employment and other advantages, they aid in rural development. It also contributes to the provision of modern infrastructure in rural areas, such as roads, power, water, hospitals, educational institutions, and so on.

3. Contribution to Capital Formation - SSI Units contribute to capital formation throughout the country by employing a significant number of people. As a result, SSI Units encourage people to save. Savings can be successfully used for beneficial purposes. With an increase in the savings rate, the investment rate rises, resulting in an increase in the capital creation rates and economic growth. The SSI Units additionally assist in capital development by putting back profits back into the firm.

4. Reduces Regional Disparities - One of the important objective of the Industrial Policy in India is to achieve regional development and SSI Units help to reduce regional disparities. The large scale Industries prefer to concentrate in urban areas however the SSI Units are located not only in urban areas but also in rural areas. Due to support of state government SSI Units are located in all states but large scale Industries prefer to locate in the Industrially developed states like Maharashtra, Gujrat ,West Bengal ,Tamil Nadu.

5. Less Industrial Disputes - Unlike the large scale Industries SSI Units are free from strikes lock outs and other Industrial disputes. Therefore there is no loss of output .In Cottage Industries dispute don’t arises as they are managed by family members.

6. Supports Large Scale Industries - The SSI Units support medium and large scale Industries as they manufacture and supply intermediate goods to them. The SSI Units provide spare parts ,nuts, bolts, steel plates, and other inputs to the large scale Industries. Thus SSI Units complements large Units.

7. Supports to the Agriculture Sector - In the form of supply of inputs, processing facilities and consumer goods for the consumption in the rural area the SSI Units provides support to agriculture sector. Rural based cottage Industry provide employment to surplus Labour from agriculture. This helps in overcoming the problem of seasonal unemployment to some extent.

8. Service Sector Development - SSI Units are responsible for the service sector development .Due to expansion of SSI Units the banking sector, transport , electricity ,roads ,telecommunication sector and other service sectors get a boost.

9. Contribution to Export - In the post-Independence period the contribution of the SSI Units in export earnings has increased. It comprises non-classical things such as engineering items, chemicals, woolen clothes, leather & sports goods and classical garments.