Describe the salient features of the protective policy adopted by the Government of India for small scale industry.

The features of the protective policy adopted by the Government for small scale industry are (SSI) are as follow:

Reservation of Products: The small-scale units are protected by the reservation of items for exclusive production in the small scale sector.

Reservation and Preference in Government Procurement: In the mater of purchases of different products SSIs have been given protection from competition. A large number of items have been reserved from the VSI (Village and Small Industries) sector for exclusive purchase. Whereas in the large scale sector, a number of items have been provided a price preference upto 15 percent over units.

Machinery on Hire Purchase: The supply of machines on hire purchase is arranged by (NSIC) The National Small Industries Corporation to small scale units.

Infrastructural and Institutional Support: Industrial Estates, District Industries Centers (DICs), small Industries Service Institute, Khadi and Village Industries Commission (KVIC) and other specialized institutions provided the infrastructural and institutional supports by providing technical assistance, testing facilities, etc.

Marketing Assistance: The institutions like NSIC, the Small Industries Development Organization (SIDO), Handicrafts and Hand-looms Export Promotion Corporation, KVIC etc. provided the marketing assistance including export promotion assistance.

Training: (EDIT) Entrepreneurship Development Institute of India, Technical Consultancy Organizations (TCOs), financial institutions and commercial banks management institute, NSIC etc. offered the training for existing and capable entrepreneurs and others associated with the working of small units.

Supply of Raw Materials: The supply of raw material and especially of scarce items have been arranged to the small scale units.
Financial Assistance: Commercial banks, State level financial institutions etc. provided a financial assistance at concessional terms.

Promotion of Ancillarisation: The industrial policy also gives importance to ancillarisation. One of the factors considered while evaluating application from the private sector for industrial license was the scope for ancillarisation by the proposed project.

Exemptions: Licensing, many labor legislation’s and excise and sales tax are exempted for SSI. These SSI policies together motivated the small units to grow. The SSI policies have considerably reduced the pressure for small firms to improve technology, update production techniques, introduce modern product designs and reduce costs.

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