Abstract

The concept of small scale industries in India showed a confusion and lack of clarity before independence. This sector was exclusively meant for village based and / tiny or cottage industry in urban areas, manufacturing handicrafts. “In the Industrial Policy Resolution 1948 and the document of the First Five year Plan, the only criterion to define small scale was their non-registration under the Factory Act. Thus, SSI meant all units which used power and employed less than 10 workers / without power and employed up to 20 workers. Later on, during the First Five Year Plan the distinction between SSI and village industry was made. From then on, capital, employment and use of power criteria were adopted. Employment, power and machinery were the determinants of size of the industry up to 2005”2

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