ANNEXURE I

Micro Project On

“Prepare Report on Study of Management Principles

Applied to A Small-Scale Industry’’
1. Rationale

Small scale industries (SSIs) play a vital role in the development of the Indian economy
by providing employment opportunities, encouraging entrepreneurship, and promoting
regional development. Despite their potential, many SSIs struggle due to poor
management practices. This microproject aims to study the application of management
principles in a selected small-scale industry.

2. Literature Review

Management principles by Henri Fayol and modern approaches provide a strong

foundation for understanding business operations. Key functions include:
❖ Planning: Setting objectives and determining strategies.
❖ Organizing: Allocating resources and tasks.
❖ Staffing: Hiring the right people for the job.
❖ Directing: Guiding employees to meet objectives.
❖ Controlling: Monitoring performance and making corrections.

3. Proposed Methodology
(Procedure that will be followed to do the micro project- in about 100-200 words)
1. Finalize the topic
2. Find and Collect information
3. Arrange information.
4. Proof read the information
5. Review from the teacher
6. Edit project report as per the suggestions of the teacher
7. Proofread and finalize the report
8. Submission of the report
 4. Action Plan

SR. Details Of Activity Planned Planned Name of

NO. Started Finished Responsible
Date Date Team
Members
1 Selection Of Micro project

2 Selection of base data

3 Collection Of Data

4 Fixed final information

5 Typing the information

6 Confirm the information of micro-

project by sir
7 Printing the information

8 Submission of micro-project

5. Resources Required

S. No. Name of Resource/material Specifications Qty Remarks

1 Internet www.google.com

2 Laptop HP Pavilion

3 Printing Machine To take printout of

micro project
4 Book To Collect information
 Annexure- II
Microproject Report

“Prepare Report on Study of Management Principles

Applied to A Small-Scale Industry’’
1. Rationale
Essentially the small-scale industries are generally comprised of those industries which
manufacture, produce and render services with the help of small machines and less
manpower. These enterprises must fall under the guidelines, set by the Government of
India. The SSIs are the lifeline of the economy, especially in developing countries like
India. These industries are generally labour-intensive, and hence they play an important
role in the creation of employments are a crucial sector of the economy both from a
financial and social point of view, as they help with the per capita income and resource
utilisation in the economy.

2. Course Outcomes Integrated

a) Understand and analyze the functions of management in practical scenarios

b) Apply management principles to solve real-world business problems
c) Work effectively in a team to solve engineering problems.

3. Literature Review

During the project, we explored various case studies on successful small-scale

industries in India. Reports from the Ministry of MSME and online resources helped us
understand industry challenges such as funding, skill gaps, and supply chain issues.
These sources enhanced our understanding of the adaptability of management concepts
like lean manufacturing, SWOT analysis, and Kaizen in small setups.

4. Actual Procedure Followed

❖ Literature review was carried out

❖ Case studies were researched and compiled.
❖ Team meetings were conducted online to discuss findings.
❖ Report drafting and formatting were completed.
❖ A presentation was prepared using real-life images and analysis graphs.
 5. Actual Resources Required

S. No. Name of Resource/material Specifications Qty Remarks

1 Internet www.google.com

2 Laptop HP Pavilion

3 Printing Machine To take printout of

micro project
4 Book To Collect information

6. Outputs of the Micro-Projects

❖ Introduction to Small Scale Industries (SSI):

The small enterprise is a logical step forward in the development process of businesses
from the level of the enterprising artisan to that of a very large enterprise. The small
enterprises include the areas other than those of manufacturing, such as agriculture,
trade and service industries. Small enterprises play a vital role in the Indian economy.

There is a rapid growth in the services sector of economy due to development of small
enterprises, particularly in the areas of trade, transport, construction and other ancillary
services. One of the main reasons for their rapid growth is that, they have been left
entirely to the private entrepreneurs, which are comparatively free from the government
interference.

Since about one-third of the gross manufacturing output is from the small industry
sector, it is necessary to extend due attention for this sector while formulating growth
promotion strategies. Such strategies may improve global competitiveness.

One of the most important reasons for the success of small enterprises is the interest
and motivation of the entrepreneurs, whereas large industries do not provide enough
room for experimentation and innovation by the creative people because of “Small scale
industry” is an industry, investment of which does not exceed Rs. 300 lakhs (Rs. 300
lakhs in case of ancillary industrial units also) in plants and machinery, irrespective of
the number of persons employed. Generally, these industries employ10 to 50 persons
rage hierarchical organisation structure.
❖ Definitions of Small-Scale Industries (SSI):
“Ancillary industries” are those small-scale industries which are engaged in:

The manufacture of parts, components, sub-assemblies and tooling etc. for supply
against known or anticipated demand of one or more large industries.

“Cottage Industries” according to Fiscal Commission, are the industries which are run
by the numbers of the family either for full time or for part time.

According to “Mumbai Economic and Industrial Investigation Committee” cottage

industries are those industries, which do not use modern power and engage a maximum
of 9 persons.

❖ Tiny Units:

Tiny industry is one in which investment in plant and machinery does not exceed Rs.
25 lakhs and it should be located in towns with population less than 50,000. (This
locational limitation has now been dispensed with).

In the definition of small-scale industry, the value of plant and machinery includes
the investment made in productive plant and machinery. In calculating the value of
plant and machinery, the actual payment made by the owner, irrespective of whether
the plant and machinery is old or new, will be taken into account.

The cost of consumable stores and the cost of installation of plant and machinery will
not be taken into account. The cost of consumable stores and the cost of installation of
plant and machinery will not be taken into account in calculating the value of plant and
machinery.

Similarly, cost of generating sets, extra transformers, bank and service charges etc., are
not taken into account in calculating the cost of plant and machinery.

❖ Role of Small-Scale Industries:

The contribution of this sector is considerable to the Indian economy. About 2.4 million
units are providing employment to over 14 million people, and contributing over a third
of the overall gross output of the manufacturing sector. Output from small enterprises
now stands at Rs. 236,500 crores and is growing at a rate of about 8% per annum. This
sector is also contributing about a third of
country’s exports.

Today Central and State governments are providing all types of help of the interested
persons to solve their problems including money problems. These play a dynamic role
in accelerating the rate of industrial growth and attaining economic prosperity of a
developing nation. Therefore, in a developing country like India, small industries are
of much importance for building up of national economy.
❖ The Planning Commission observed that these industries can play the following
important roles in accelerating the rate of industrial growth and economic
prosperity:

a) These create immediate and permanent employment on a large scale at relatively

small capital cost
b) These can immediately meet a substantial part of the increased demand for
consumer goods and simple producer’s goods.
c) These offer a good method of ensuring more equitable distribution of national
income.
d) These help for growing into an efficient and progressive decentralised sector of
economy.
e) These provide more opportunities of work and income.

In this regard once Dr. Shyma Prasad Mukerjee the then Minister of Industries said,
“If we really want to tackle the grave problem of unemployment that faces the
country today, we can do so not only by having large scale industries in different
parts of the country but also by regional planning of small scale and medium sized
industries in different areas”

❖ Industrial Policy Regarding SSI

Development of small-scale industry is primarily the responsibility of the State

Governments. However, the Central Government is very active in helping the state
activities in the fields in which they are less developed.

The Industrial Policy Resolution 1956 shows more importance to the role of small-scale
industries in the industrial development of the country. This new policy was declared
on 30th April, 1956 to take place of the industrial policy of 1948.

❖ The aim of this new industrial policy was

a) To speed up the economic growth

b) Rapid Industrialisation.
c) To frame progressive co-operative sector.
d) To reduce social and economic imbalances
e) To reduce the concentration of economic power

❖ Salient Features of the Industrial Policy of 1956 (Revised in Aug. 1991):

It stressed for the following objects:

a) To establish a socialistic society.

b) To increase the rate of economic development by rapid industrialisation.
c) To develop large industries and machine manufacturing industries.
d) To develop public sector industries.
e) To form large co-operative sector.
f) To check monopoly and the concentration of the economic power.
g) To reduce the imbalance of income and property
❖ Importance

It stressed on the importance of the cottage and small scale industries because
these industries provide immediate opportunities for employment, distribute national
income in a better way.

❖ These industries should be encouraged in the following ways

a) By introducing taxes on the production of big industries.

b) By helping small scale industries.
c) Small scale industries should be self-supported.
d) By improving the method of manufacture and by providing technical assistance.
e) By supplying electricity at cheaper rate.

❖ Facilities:

It also stressed for providing the transport and power facilities in the industrial
backward areas to reduce the regional disparity.

❖ For industrial peace, it stressed for improving the conditions of labourers so that their
working capacity may increase by providing incentives to them. It also stressed for
allowing labourers and experts to take part in the management.

❖ Organisations for Assistance to SSI

To fulfil the various objectives of Small-Scale Industries programmes, various

organisations have been setup both at the Central and State level. Although the
development of the small-scale industries is the responsibility of the State
Governments, various issues regarding programme of development of small-scale
industries having all India character are tackled at the central level. Thus, the
Government of India takes the responsibility of planning and coordinating the basic
programme of development of small-scale industries.

❖ Organisations at the Central Level:

Following are some of the important organisations at central level

a) All India Small Scale Industries Board

This board was set-up in 1945 and is responsible of overall planning, coordinating and
development of small scale industries in the country. The board comprises the State and
Central Government officers, representatives of various institutions, financing bodies
and a number of non-officials representing trade. It deals with the questions relating to
the supply of raw materials, credit facilities and reviews, the programmes of
implementation and formulates new directives for further growth of small scale sector.
❖ Preparation of Model Schemes for SS

For all the items which are reserved for small scale industries and all other items which
can be profitably sold, if produced by small units “Model Schemes” are prepared,
several model schemes have already been prepared and are available with the State
Director of Small Industries Service Institute and Publications Division, Government
of India, Delhi-110006. These are also published andmade available by the Directorate
of Industries and Civil Supplies of different States.

Model schemes are prepared with the object of installing an economic unit with
minimum investment. Whosoever is coming forward to establish small industries, may
find it difficult to have ready idea of anticipated investment on machinery and
equipment, raw-materials and other expenditures in certain industries.

Therefore, model schemes are made available to serve this purpose. These may provide
pattern for adaptation in the light of available resources and circumstances and serve as
“Guiding Lines”. Model schemes are revised from time to time in the light of further
experience and suggestions from experts in the field.

❖ Generally, a model scheme provides the following information

1. Introduction: Scope of product.
2. Non-recurring expenditure.
a) Land and Building.
b) Machinery and equipment.
3. Recurring expenditure.
a) Staff and labour.
b) Raw materials for one month
4. Other expenditure per month, such as packing, advertising, stamping, electricity,
water, labour, welfare, recreation etc.
5. Working capital, Total production cost/month. Percentage profit approximately.
6. List of machinery manufacturers and suppliers’ of raw materials, office equipment
etc.

❖ Modernisation Programme for SSI:

Modernisation programme is necessary for achieving overall production efficiency and

keep the small-scale industries abreast with the latest information on production,
processes, product designs, technological developments, training facilities. For
motivating the SSIs to modernise their units, seminars, workshops are organised under
this programme.
❖ The main objectives of the modernisation programme are:

1. Improvement in production technology.

2. Product development and design.
3. Testing design and quality control.
4. Installation of modern machinery and equipment
5. Application of modern management techniques.

These measures help in increasing the profits by installing new equipment so

that production increases per employee and per unit of investment. IDBI is providing
concessional finance to units following the modernisation scheme. Industrial Finance
Corporation of India also operates a scheme of subsidy for encouraging modernisation
of tiny, small scale and ancillary units.

❖ Advantages of Small-Scale Industries:

1. It provides better and quick employment.

2. It is labour intensive and capital saving.
3. With small investment production can be easily and quickly started.
4. Highly sophisticated machines and modern technology is not needed.
5. It attracts small savings and diverts them into productive channels.
6. It provides economic development by rapid industrialisation.
7. It provides check on monopoly.
8. It reduces imbalance of income and property.

❖ Market Survey for SSI

The aim of market survey is to find out all the relevant economic and social facts
about the markets in which manufacturer’s goods will be sold. In market survey,
investigation about the product demand, design and cost of production is made. An
owner always wants that his money should be utilized to the best possible extent.
For this reason, planners must survey the market conditions, where the customers
are in need of that product, whether the demand is continuous or intermittent. The
next important factor a planner should consider is to see that whether similar
products are being produced by- some other manufacturers or not and whether he
will be able to complete them as regards quality and cost is concerned. As size of
industry is related with the consumption of product therefore, this fact must be
considered while deciding the capacity of plants and machinery.

❖ The following points are of utmost importance while making market survey:

1) Demand for products in the market.

2) Selling method to be adopted.
3) Possible new markets for the products.
4) Comments of consumers about the product.
5) To see that existing size, quality and design suit the customers or not.
❖ Principal Of SSI
The principles of management provide the managers with useful insights into real world
situations. Adherence to these principles will add to their knowledge, ability and
understanding of managerial situations and circumstances. It will also enable
managers to learn from past mistakes and conserve time by solving recurring problems
quickly. As managerial discretion is bounded by the principle of contribution to
organisational objectives. (ii) Scientific decisions: Decisions must be based on facts,
thoughtful and justifiable in terms of the intended purposes. They must be timely,
realistic and subject to measurement and evaluation. Management principles help in
thoughtful decision-making. They emphasise logic rather than blind faith. Management
decisions taken on the basis of principles are free from bias and prejudice. They are
based on the objective assessment of the situation.

Honour the language and spirit of law of every nation and undertake open and fair
corporate activities to be a good corporate citizen around the world.
Respect the culture and customs of every nation and contribute to economic and social
development through corporate activities in local communities.
To provide clean and safe products and to enhance the quality of life everywhere.
Create and develop advanced technologies and provide outstanding products and
services that fulfil the needs of customers worldwide.

7. Skills Developed / Learning

a) To complete work in time.

b) To learn new things.
c) To prepare report.
d) How to collect and edit information to make report
e) Priorities of work.

8. Applications of this Micro-Project

a) We Use basic management principles to execute daily activities.

b) We Use principles of planning and organizing for accomplishment of tasks.

Small scale industries are important because it helps in increasing employment and
economic development of India. It improves the growth of the country by increasing
urban and rural growth. The industry is a sector in which the production of goods is a
segment of the economy.