Development and growth of industries was adopted as one of the pillars of the Economic policy as India.  The historical background and the constitutional mandate the development of the Small Scale Industries (SSI) sector was considered essential as it could fulfill the requirements of providing large e employment opportunities  with low investments in a labour abundant but capital-scarce country.  The SSIs being labour intensive had the positive implications of equity, flexibility, capability to contribute to decentralization, promotion of entrepreneurship, optimum utilization of local resources and talents, etc.

             The six Industrial Policy Resolutions adopted by the successive Governments at the Centre aimed at promoting Industrial growth and determining a pattern of State Intervention and assistance,.  The framework of the First Industrial Policy Resolution, 1948, assigned a prime role to be played by the Small Scale Industries as it was realized that the Small Scale Industries were particularly suitable for better utilization of local resources and achievement of “local self-sufficiency” in respect of certain types of industrial goods.  The policy of supporting the cottage, village and small industries took a definite shape in 1956 when the Government decided to initiate measures to build the competitive strength of small and village industries.  The Second Industrial policy Resolution of 1956 underlined the role that SSI sector could play in providing employment opportunities, mobilizing local skills and capital resources and in the process integrating with large industrial sector. 

            Further impetus to the Sector was provided in the Industrial Policy statement of 1977, which stressed upon wider dispersal of cottage and small industries in the rural areas and small towns.  The concept of District Industries Centres (DICs) was also mooted so as to provide services to small industries under one roof.  While the Industrial policy statement of 1980 paved the way for ancillarisation and creation of nuclear units for the growth of the sector, the Statement of 1990 laid emphasis on the steps needed for enhancing the contribution of the SSI sector in overall exports, employment generation and dispersal of industries in rural areas. 

             The industrial policy measures announced in quick succession in 1991, laid special thrust on promotion and strengthening of small, tiny and village industries.  Besides effecting changes in investment limits, equity participation etc. a new scheme of Integrated Infrastructure Development (IID) for SSIs with the participation of State Governments and Financial Institutions was initiated and a pro-active role for Non-Governmental Organizations (NGOs) was mooted.

             In order to protect the interests of the SSI sector and facilitate its rapid development, the Government, in pursuance of its policies, initiated various support measures from time to time which include policy of reservation, revision of investment ceilings, modernization, technological up gradation, marketing assistance, fiscal incentives etc.  The emerging economic scenario in the changed liberalized and competitive economic environment has necessitated structural and fundamental changes in the policy framework put into place for the development of this vital sector of the economy.  Accordingly, there has been a shift in focus from “Protection” to “Promotion”.  In the post-reform period, a number of steps including partial dereservation, change in investment limits, facilitating foreign participation, establishment of growth centers, export promotion, marketing assistance and incentives for quality improvement etc.  have been taken by the Government for strengthening this sector.

             The SSI sector has proved its mettle even in the changed liberalized economic environment of the country.  The steps required for opening up of the economy have affected the operations of this sector, throwing open new opportunities and challenges at the same time.  The need of the hour undoubtedly is to provide sustenance to the units in the sector through suitable measures to strengthen them for converting the challenges into opportunities and scaling new heights.

             In order to enable the Government to place more focused attention on the problems of the SSI sector, a new Ministry of Small Scale Industries and Agro & Rural Industries was created on the 14^th of October 1999, under the independent charge of a Minister of State.  To give a direction and perspective to the development strategy, the Minister-in-charge of Small Scale Industries and Agro & Rural Industries announced an “Agenda” which laid special emphasis upon facilities, evolution of a new policy framework, improved supply of credit, better infrastructure and impetus to modernization and technology upgradation in Small Scale Industries.  The Agenda took cognizance of the special role to be played by information Technology, sunrise industries, hi-tech industries, export potent industries and at the same time stipulated all possible steps to meet the requirements of the tiny and micro-enterprises which constituted over 95% of total small scale industrial units in the country.

             In September, 2001, a separate Ministry of Small Scale Industries was created in order to give the extended focus and specialized attention upon the challenges faced by the SSI sector due to the onslaughts of domestic and global competition. 

            All the policies and programmes aimed to development and growth of the SSI sector.

THE MICRO, SMALL AND MEDIUM ENTERPRISES

 Classification & Definition:

          Any class or classes of enterprises, whether proprietorship, Hindu Undivided family, association of persons, co-operative society, partnership firm, company or undertaking, by whatever name called,-