chapter no. 3 -...
TRANSCRIPT
86
A Study of Entrepreneurship Development in Small-scale Industries:
A Case Study of Jalna District.
Chapter No. 3
§ Introduction
§ Contribution to the Economy
§ Performance of Small Scale Industries in India.
§ Employment Profile In The Total SSI Sector.
§ Growth Highlights of SSI Sector in India.
§ Sickness in SSI Sector.
§ Small Scale Sector In India - An Overview.
§ Maharashtra SSI Scenario.
§ References
87
Introduction:
The Small-Scale industry sector has emerged over five decades as a
highly vibrant and dynamic sector of the Indian economy. It has made
significant contribution towards building a strong and stable national economy.1
It is significant segment of the Indian economy. The basic objectives underlying
the development of small and medium scale industries are the increase in the
supply of manufactured goods, the promotion of capital formation, the
development of indigenous entrepreneurial talents and skills and the creation of
employment opportunities. In addition, they include such socio-economic goals
as the decentralization and dispersal of manufacturing activities from the urban
and rural areas, the reduction of regional economic imbalances within the
country and the diffusion of entrepreneurial and managerial abilities and skills
as well as of technology throughout the country.
Small-scale industries constitute a key link in the process of socio-
economic transformation of underdeveloped social structures. It is, no doubt,
true that in the case of predominantly rural countries, processes of
transformation either germinating within the rural segment of bringing the later
within its orbit of influence will play a crucial role and should, therefore,
occupy an important place in their development strategy. It is, however, equally
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true that rural and urban processes are inseparably interwoven in the socio-
economic fabric and strategies of rural development cannot be operationalized
outside the total developmental process straddling the rural urban continuum. It
constitutes a large component of the system of interdependencies wherein
vertical shifts within the workforce from the primary to the industrial
development is quite unique.
The small-scale industry has a place of prominence in the process of
industrial development of Nation and States. This is because the industry has
forward and backward linkages with virtually all sectors and is also a direct
source of supply of wide range of capital goods required by other industries.
The small-scale industries have been experiencing a major turn around in the
post liberalization period with the growth rate hovering around 15 per cent,
much higher than the large industries, in past five years, despite constraints like
infrastructure, finance, market management and technology. With further
improvement in these basic areas, small-scale sector will definitely show much
better results in the 21st century. The evidences indicate that small-scale
industry can be an important vehicle for meeting the growth and equity
objectives of developing countries. Improved policies and carefully crafted
89
projects can play an important role in ensuring that the potential contribution of
small enterprises to the development process is fully realized.
Contribution to the Economy:
Small-scale industries play a significant role in the growth of education,
employment, gross state domestic product and net state domestic product,
which are the indicators of economic development. Employment provides better
living conditions, standard of living, education, health and range of
opportunities and this leads to overall economic development.2 Economic
development is not a phenomenon to be always explained economically, but
there is a development in the economy with changes in the surrounding world.
In Maharashtra skilled, trained and potential entrepreneurs are responsible for
the growth and development of the State.
The SSI sector is the major contributor to the industrial economy of the
country. It accounts for 95 per cent of the country’s factory ownership,
contributes nearly 45 per cent of the total industrial production and export from
this sector account for 45 per cent of total India’s export. The Production of SSI
sector continued to grow generally at a rate higher than that of the industrial
sector. It has registered more than twelve fold increase at constant prices during
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the 30 years period from 1973-74, while employment grew over more than four
times during this period.3 The most significant achievement of the SSI sector is
its performance in terms of exports. The contributions of SSIs to India’s export
are significant. This sector is engaged in providing technical / commercial
training to a large segment of rural and urban population who either cannot
afford to seek higher education or just cannot find a berth in a highly
competitive employment situation. The specialized training institutes are
helping the SSIs in enhancing their technical capabilities.
Small units play an important role in the Indian economy, as these are
labour intensive and create job opportunities. Small industry offers a higher
productivity of capital than capital intensive enterprises, as they have low
investment per worker. They help in dispersal of industries, rural development,
and the decentralization of economic growth. In addition, small companies
support entrepreneurial talent and skills, stimulate personal saving, and help in
developing innovation and appropriate indigenous technology, provide
dynamism and contributing to competition. Therefore, these industries are
supported by the government and have been actively encouraged; no public or
private enterprise with more than 100 employees has been allowed to go out of
business.4 The government to support this sector, not only for employment
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generation but also to enhance their competitive strength has undertaken several
policy initiatives and procedural simplifications. The government has also
provided measures such as greater infrastructural support, more and easier
availability of credit, lower rates of duty, technology up-gradation, assistance to
build entrepreneurial talent, facilities for quality improvement, and export
incentives.
Performance of Small Scale Industries in India:
The small scale sector has been the harbinger of change in the socio-
economic development of Indian economy. It has contributed significantly to
the total production, exports and employment in the economy. At a glance the
small scale sector performance as showing in the following tables. On the
whole, SSI sector has recorded an impressive growth and performance over the
last 10-15 years as shown.5 All India permanent registration of Micro-Small
enterprises up to the year 2000-2001 is shown below.
92
Table No. 3.01:
All India Permanent Registration of Micro-Small Enterprise.
S.
No.
Name of the
State
Cumulative Number of MSE Units granted Permanent
Registration up to the year.
State/Union
Territory
1995-96 1996-97 1997-98 1998-99 1999-00 2000-01
01. Andhra Pradesh 112916 117132 121039 124950 128321 135738
02. Assam 19242 20721 21954 23136 24109 25503
03. Bihar 101221 108148 114296 119107 123933 P 130903
04. Gujarat 129455 141951 153497 164785 174899 185008
05. Haryana 94462 98455 63623 53321 54375 88271
06. Himachal
Pradesh
14015 14593 15232 15941 16602 17562
07. Jammu &
Kashmir
25165 26363 28471 29387 30667 P 32040
08. Karnataka 115353 124504 143073 150675 159944 169189
09. Kerala 133114 148275 166484 184166 202325 214019
10. Madhya Pradesh 233225 243481 256849 268741 277804 P 289042
11. Maharashtra 98144 111129 123856 135016 143457 151749
12. Manipur 4928 5157 5314 5439 5588 5911
13. Meghalaya 2005 2166 2323 2514 2711 2868
14. Nagaland 741 757 782 813 1059 1120
15. Orissa 16623 17173 17931 18732 19513 20641
16. Punjab 145471 147563 149405 151180 152768 161598
17. Rajasthan 71479 74450 77047 80229 83651 88486
18. Tamil Nadu 202210 228936 257079 284943 313861 332002
19. Tripura 5833 5901 5946 6001 6058 6406
20. Uttar Pradesh 302557 323475 341788 361033 382027 P 402606
21. West Bengal 145713 147462 149148 150327 151340 160087
93
22. Sikkim 275 296 305 312 330 P 349
23. Andaman &
Nicobar
1038 1071 1116 1151 1180 1248
24. Arunachal
Pradesh
766 926 945 959 971 1027
25. Chandigarh 2880 2952 2965 3007 3042 3218
26. Dadra & Nagar
Haveli
409 454 618 870 978 1035
27. Delhi 25174 25284 25303 25306 25342 26807
28. Goa 5118 5278 5488 5761 5921 6263
29. Lakshadweep 47 51 58 63 72 76
30. Mizoram 3018 3515 3702 4028 4413 4668
31. Pondicherry 4209 4255 4484 4722 4873 5155
32. Daman & Diu 693 920 1135 1455 1507 1594
All-India Total: 2017499 2152794 2261256 2378070 2503641 2672188
(Source: http://www.smallindustryindia.com/ssiindia/statistics)
The above table shows that the permanent registration of Small-scale
industries in India during the year 1995-96 to 2000-2001. In the year 1995-96
total number of registration of SSI was 20.17 lakh increased up 26.72 lakh in
the year 2000-01. Where as in Maharashtra 98,144 units registered as SSI
increased up to 1.52 lakh in the year 2000-01. All India growth rate shows that
32.45 percent during the year and in Maharashtra the growth of SSI registration
was 54.82 per cent during the year.
94
Table 3.02:
State-Wise Distribution Of Units In The Total SSI Sector.
S. No. Name of State/ UT No. of units in the
Total SSI Sector
Percentage to
Total
1. Jammu & Kashmir 73125 0.70
2. Himachal Pradesh 76198 0.72
3. Punjab 376826 3.58
4. Chandigarh 22247 0.21
5. Uttaranchal 106484 1.01
6. Haryana 223294 2.12
7. Delhi 177080 1.68
8. Rajasthan 441572 4.20
9. Uttar Pradesh 1707977 16.23
10. Bihar 519351 4.94
11. Sikkim 368 0.00
12. Arunachal Pradesh 1252 0.01
13. Nagaland 13861 0.13
14. Manipur 47999 0.46
15. Mizoram 11116 0.11
16. Tripura 24352 0.23
17. Meghalaya 22520 0.21
18. Assam 194379 1.85
19. West Bengal 771388 7.33
20. Jharkhand 132446 1.26
95
21. Orissa 388277 3.69
22. Chhattisgarh 263900 2.51
23. Madhya Pradesh 793552 7.54
24. Gujarat 530314 5.04
25 & 26 Daman & Diu & Dadra &
Nagar Haveli 3010 0.03
27. Maharashtra 803568 7.64
28. Andhra Pradesh 875430 8.32
29. Karnataka 658821 6.26
30. Goa 7097 0.07
31. Lakshadweep 532 0.01
32. Kerala 452826 4.30
33. Tamil Nadu 787965 7.49
34. Pondicherry 8860 0.08
35. Andaman & Nicobar Islands 3203 0.03
All India 10521190 100.00
(Source: http://www.smallindustryindia.com/ssiindia/statistics)
96
Table No. 3.03:
Number Of Registered & Unregistered SSI Units In India.
No. of units (In lakhs Nos.) Year
Regd. Un-Regd. Total
1990-91 13.78 5.70 19.48 (6.90)
1991-92 14.98 5.84 20.82 (6.88)
1992-93 16.48 5.98 22.46 (7.98)
1993-94 17.76 6.12 23.88 (6.14)
1994-95 19.44 6.27 25.71 (7.66)
1995-96 20.84 6.40 27.24 (5.95)
1996-97 22.07 6.50 28.57 (4.88)
1997-98 23.52 6.62 30.14 (5.50)
1998-99 24.47 6.74 31.21 (3.55)
1999-00 25.39 6.86 32.25 (3.33)
(Source: http://www.smallindustryindia.com/ssiindia/statistics.)
(Note: Figures in brackets give percentage growth over previous year)
The above table reveals that the total number of SSI units in India has
increased from 19.48 lakh in 1990-91 to 32.25 lakh in 1999-2000 which shows
a 3.33 per cent increase in 1998-99 over the previous years figure or 31.21
lakhs.
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Table No. 3.04:
Economic Indicators Of SSI In India At A Glance.
Estimated No. of Units 3.57 Million
Employment 19.96 Million
Share in Industrial Value Added 39%
Share in Total Exports - Direct:
Overall:
45%
39%
Total Number of Items Produced Over 8000
Number of Reserved Items 675 (Source: http://www.smallindustryindia.com/ssiindia/statistics)
The above table shows the economic indicator of SSI sector in India. It
shows the 3.57 million units registered as SSI units. Employment in these units
was 19.96 million. In overall export the share of SSI was 39 per cent. The total
number of unit produced by the sector is over 8000. The item reserved for SSI
sector is 675.
Year wise growth rate of SSI sector after 1991-92 is given below in
Table No.3.05. The growth rate of SSI sector in the year 1991-92 was 3.10 per
cent was increased up to 12.32 per cent in the year 2005-06. In the same period
the overall all industrial growth rate was increased from 0.60 per cent to 12.10
per cent.
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Table No.3.05:
Growth Rate of Small Industries After 1991. Sr. No. Small Industries Total Industrial Sector
(percent) (percent)
1 1991-92 3.10 0.60
2 1992-93 5.60 2.30
3 1993-94 7.10 6.00
4 1994-95 10.10 9.40
5 1995-96 11.40 12.10
6 1996-97 11.30 7.00
7 1997-98 9.50 4.70
8 1998-99 9.90 4.00
9 1999-00 7.09 6.7
10 2000-01 8.04 5.00
11 2001-02 6.06 2.70
12 2002-03 7.70 5.70
13 2003-04 8.60 6.90
14 2004-05 9.96 8.40
15 2005-06 12.32 8.10
(Source: Dr. Rohini Hattangadi – Entrepreneurship Need of the Hour (2007) –
Himalaya Publishing House, Delhi,p.201.)
The SSI sector has exhibited a phenomenal growth. During the 15 years
ending 2005-06, the small scale sector has witnessed an average growth of 8 to
9 per cent. However, in the past few years the growth rate declined sharply to 3
to 4 percent. The sector turnaround in 1991-92 when it achieved a growth rate
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of around 3.1 per cent compared with only 0.6 per cent growth of the overall
industrial production. The year 1993-94 witnessed a growth rate of over 7.1 per
cent. During the year 1995-96 the small scale sector is achieved 11.40 per cent
growth. Thereafter in the year 2005-06 the growth rat e was at highest level i.e.
12.32 per cent where as the overall industrial growth rate was 8.10 per cent.
Table No. 3.06:
Trends In Growth Of Employment In SSI Sector.
Increase in jobs per annum
Period GDP Growth per annum Organized Sector
including Government SSI sector
1980-1990 5.7% 1.59% 6.7%
1991-1997 5.7% 0.86% 3.5%
(Source: http://www.smallindustryindia.com/ssiindia/statistics)
In Table No. 3.06 GDP growth rate and trends of growth of employment
shows. During the year 1980-1990 and 1991-97 the GDP rate was 5.7 per cent.
The growth rate of job shows by SSI sector was 6.7 per cent during the year
1980-90 was decreased during the year 1991-97 up to 3.5 per cent.
100
Table No. 3.07:
Growth Of SSI Exports.
Year Total exports
(Rs. Crores)
Exports from SSI sector
(Rs. Crores)
Percentage share
1951-52 716 Negligible - 1961-62 660 Negligible - 1971-72 1608 155 9.6 1976-77 5142 766 14.9 1981-82 7809 2071 26.5 1986-87 12567 3644 29.0 1991-92 44040 13883 31.5 1992-93 53688 17785 33.1 1993-94 69547 25307 36.4 1994-95 82674 29068 35.1 1995-96 106353 36470 34.2 1996-97 118817 39249 33.4 1997-98 126286.00 44442.18 35.19 1998-99 141603.53 48979.23 34.59 1999-00 159561.00 54200.47 33.97 2000-01 202509.7 69796.5 34.47 2001-02 207745.56 71243.99 34.29 2002-03 252789.97 86012.52 34.03 2003-04 291582 97644 33.49 2004-05 375339.52 124416.56 33.15 2005-06 456417.88 150242.03 32.92
(Source: http://www.smallindustryindia.com/ssiindia/statistics.)
SSI sector is the major exporter in India. The export from SSI sector from
1951-52 to 2005-2006 displayed in the table. The table shows that the total
export of SSI sector was Rs. 155 crore in 1971-72 was increased up to Rs.
101
150242.03 crore in the year 2005-06. The growth in percentage was shows 9.6
per cent to 32.92 per cent during the period.
The data related to SSI sector during the year 1973-74 to 2002-03 for No.
of units, fixed investment, production, employment and export is given in the
table no. 3.08. The table shows that 0.416 million units registered in the year
1973-74 increased up to 3.572 million in the year 2002-03. Fixed investment
was in the year Rs. 22.96 increased up to 90.450 billion, production made by
SSI sector was Rs. 72.00 billion increased up to Rs. 7420.21 billion,
employment in this sector was 19.965 million increased from 3.97 million and
export increased from 3.93 billion to Rs. 860.12 billion during the same period.
Table No. 3.08:
Time Series data for SSIs in India.
Fixed
investment
Production Employment Export
Year No. of units
(millions) (at current
prices)
(Rs. billion)
(at current
prices)
(Rs. Bn.)
Nos. in
million
(Rs.
billion)
1973-74 0.416 22.96 72.00 3.97 3.93
1974-75 0.498 26.97 92.00 4.04 5.41
1975-76 0.546 32.04 110.00 4.59 5.32
102
1976-77 0.592 35.53 124.00 4.98 7.66
1977-78 0.670 39.59 143.00 5.40 8.45
1978-79 0.734 44.31 157.00 6.38 10.69
1979-80 0.805 55.40 216.35 6.70 12.26
1980-81 0.874 58.50 280.60 7.10 16.43
1981-82 0.962 62.80 326.00 7.50 20.71
1982-83 1.059 68.00 350.00 7.90 20.45
1983-84 1.155 73.60 416.20 8.42 21.64
1984-85 1.240 83.80 505.20 9.00 25.41
1985-86 1.353 95.85 612.28 9.60 27.69
1986-87 1.462 108.81 722.50 10.14 36.43
1987-88 1.583 126.10 873.00 10.70 43.72
1988-89 1.712 152.79 1064.00 11.00 54.89
1989-90 1.823 N.A. 1323.20 11.96 76.25
1990-91 1.948 N.A. 1553.40 12.53 96.64
1991-92 2.082 N.A. 1786.99 12.98 138.83
1992-93 2.246 N.A 2093.00 13.416 177.84
1993-94 2.388 35.38 2416.48 13.94 253.07
1994-95 2.571 40.80 2988.86 14.66 290.68
1995-96 2.658 49.62 3626.56 15.26 364.70
1996-97 2.803 54.70 4118.58 16.00 392.48
103
1997-98 2.944 60.55 4626.41 16.72 444.42
1998-99 3.080 86.11 5206.50 17.16 489.79
1999-00 3.212 72.63 5728.87 17.85 542.00
2000-01 3.312 79.70 6390.24 18.56 697.97
2001-02 3.442 84.30 6903.16 19.22 712.44
2002-03 3.572 90.45 7420.21 19.96 860.12
Source: Development Commissioner, Ministry of SSI, Govt .of India
Third census of SSI conducted in the year 2001-02 by the Central
Government. The result of this census given in the Table No. 3.09. Overall data
related to total number of SSI units – registered and unregistered, out of these
rural units registered and unregistered, ancillary unit, tiny units, no of women
enterprises, nature of activity, types of organization, number of units managed
by the respected communities including women, source of power, outstanding
loans, sick units, reasons for sickness, total employment, per unit employment,
value of plant and machinery and many more are covered in the table.
104
Table No. 3.09:
Summary Results Of Third Census in the year 2001-02.
Characteristics Registered
SSI Sector
Unregd.
Sector
Total SSI
Sector
1. Size of the sector 13,74,974 91,46,216 1,05,21,190
2. No. of rural units 6,09,537
(44.33 %)
51,98,822
(56.8 %)
58,08,359
(55 %)
3. No. of SSIs 9,01,291
(65.55 %)
35,44,577
(38.75 %)
44,45,868
(42.26 %)
4. No. of SSSBEs 4,73,683
(34.45 %)
56,01,639
(61.25 %)
60,75,322
(57.74 %)
5. No. of ancillary units
(% age of no. of SSIs)
45,797
(5.08 %)
86,516
(2.44 %)
1,32,313
(2.98 %)
6. No. of tiny units among SSIs 8,82,496
(97.9 %)
35,43,091
(99.9 %)
44,25,587
(99.5 %)
7. No. of women enterprises 1,37,534
(10 %)
9,26,187
(10.13 %)
10,63,721
(10.11 %)
8. Nature of activity :
Manufacturing/ Assembling/ Processing
Repairing & Maintenance
Services
8,72,449
(63.45 %)
28,843
(2.10 %)
4,73,682
(34.45 %)
33,03,366
(36.12 %)
16,92,663
(18.50 %)
41,50,187
(45.38 %)
41,75,815
(39.69 %)
17,21,506
(16.36 %)
46,23,869
(43.95 %)
105
9. Type of organization :
Proprietary
Partnership
Pvt. Company
Cooperatives
Others
12,21,702
(88.85 %)
99,190
(7.21 %)
33,284
(2.42 %)
4,715
(0.34 %)
16,083
(1.17 %)
88,62,548
(96.9 %)
1,03,662
(1.13 %)
38,153
(0.42 %)
9,854
(0.11 %)
1,31,999
(1.44 %)
1,00,84,250
(95.8 %)
2,02,852
(1.9 %)
71,437
(0.68 %)
14,569
(0.14 %)
1,48,082
(1.41 %)
10. No. of units managed by :
SC
ST
OBC
Others
1,07,934
(7.85 %)
48,560
(3.53 %)
5,29,406
(38.50 %)
6,89,074
(50.12 %)
9,43,969
(10.32 %)
4,74,271
(5.19 %)
38,11,372
(41.67 %)
39,16,604
(42.82 %)
10,51,903
(10 %)
5,22,831
(4.97 %)
43,40,778
(41.26 %)
46,05,678
(43.8 %)
11. No. of units managed by women 1,14,361 8,80,780 9,95,141
106
(8.32 %) (8.37 %) (9.46 %)
12. Main source of power :
No power needed
Coal
Oil
LPG
Electricity
Non-conventional energy
Traditional energy/ Firewood
3,60,611
(26.23 %)
28,841
(2.10 %)
40,401
(2.94 %)
7,222
(0.53 %)
8,99,657
(65.43 %)
7,142
(0.52 %)
31,100
(2.26 %)
38,55,035
(42.15 %)
2,95,165
(3.23 %)
5,55,416
(6.07 %)
55,237
(0.60 %)
40,25,262
(44.01 %)
60,539
(0.66 %)
2,99,562
(3.28 %)
42,15,646
(40 %)
3,24,006
(3.1 %)
5,95,817
(5.66 %)
62,459
(0.59 %)
49,24,919
(46.8 %)
67,681
(0.64 %)
3,30,662
(3.14 %)
13. No. of units having outstanding
loan as on 31-3-2002
2,76,333
(20.1 %)
5,01,306
(5.48 %)
7,77,639
(7.39 %)
14. No. of units having outstanding
loan with institutional sources as on 31-
3-2002
1,96,137
(14.26 %)
2,82,267
(3.09 %)
4,78,404
(4.55 %)
15. No. of sick units (with erosion of 46,431 58,338 1,04,769
107
net-worth by more than 50 % or delay
in repayment of institutional loan by
more than 12 months)
(3.38 %) (0.64 %) (1 %)
16. No. of incipient sick units (decline
in gross output over three consecutive
years)
1,58,023
(11.5 %)
5,92,899
(6.48 %)
7,50,922
(7.14 %)
17. No. of sick units as per RBI
criteria, i.e., those that are sick among
units having outstanding loan with
institutional sources
38,403
(19.6 %)
46,887
(16.61 %)
85,290
(17.8 %)
18. No. of sick/ incipient sick units
(with erosion of net-worth by more
than 50 % or delay in repayment of
institutional loan by more than 12
months or decline in gross output over
three consecutive years)
1,92,328
(13.98 %)
6,30,568
(6.89 %)
8,22,896
(7.82 %)
19. Reasons for sickness/ incipient
sickness :
Lack of demand
Shortage of working capital
Non-availability of raw material
Power Shortage
1,11,508
(58 %)
1,09,844
(57 %)
23,493
(12 %)
33,099
4,35,121
(69 %)
2,69,648
(43 %)
76,029
(12 %)
77,345
5,46,629
(66 %)
3,79,492
(46 %)
99,522
(12 %)
1,10,444
108
Labour Problems
Marketing problems
Equipment problems
Management problems
(17 %)
12,182
(6 %)
70,202
(37 %)
16,995
(9 %)
9,124
(5 %)
(12 %)
26,282
(4 %)
2,24,002
(36 %)
76,038
(12 %)
21,088
(3 %)
(13 %)
38,464
(5 %)
2,94,204
(36 %)
93,033
(11 %)
30,212
(4 %)
20. Per unit employment 4.48 2.05 2.37
21. Total employment 61,63,479 1,87,69,284 2,49,32,763
22. Per unit original value of Plant &
Machinery (in Rs.lakhs)
2.21 0.27 0.52
23. Total original value of Plant &
Machinery (in Rs.lakhs)
30,32,868 24,56,492 54,89,360
24. Per unit fixed investment (in Rs.
Lakhs)
6.68 0.68 1.47
25. Total fixed investment (in Rs.
Lakhs)
91,79,207 62,55,660 1,54,34,867
26. Per unit Gross Output (in Rs.lakhs) 14.78 0.86 2.68
27. Total Gross Output (in Rs. Lakhs) 2,03,25,462 79,01,536 2,82,26,998
28. No. of exporting units 7,344 43,262 50,606
29. Value of exports (in Rs. lakhs) 12,30,826 1,89,130 14,19,956
109
30. Employment per Rs. one lakh
investment
0.67 3.00 1.62
31. Units maintaining accounts 4,04,672
(29.43 %)
5,98,333
(6.54 %)
10,03,005
(9.53 %)
32. No. of economic activities as per
National Industrial Classification-1998,
pursued in SSI sector
672 619 672
33. No. of products/ services as per
ASICC produced/ rendered in SSI
sector
5,983 2,680 6,003
34. No. of reserved products (as per the
reserve list effective on 31-3-2001)
produced in SSI sector
877 382 878
(Source: http://www.smallindustryindia.com/ssiindia/statistics)
SSI sector comprises small-scale industrial undertakings and small scale
service and business (industry related) enterprises. Registration of these units
with the respective District Industries Centers is on voluntary basis. Hence, it is
possible, at any given point of time that the sector will have registered as well
as unregistered units. Therefore, it has become necessary to investigate into this
in greater detail so as to have benchmark information on the structure of the
Total SSI Sector, which comprises the registered SSI sector and the
unregistered SSI sector.
110
It is estimated that the Total SSI sector comprises 1,05,21,190 units,
spreading over the length and breadth of the country. About 55 per cent of these
units were located in rural India. Over 44 lakhs (42.26 per cent) in the total SSI
sector were SSIs and the remaining 61 lakhs (57.74 per cent) were SSSBEs.
The no. of ancillary units among SSIs was 2.98 per cent. The dominating
presence of tiny units with original investment in plant & machinery up to
Rs.25 lakhs has been a continuous feature in the SSI sector. In the Third
Census, it was found that 99.5 per cent of the SSIs were tiny units. In terms of
State-wise spread, it is seen that Uttar Pradesh (16.23 per cent), Andhra Pradesh
(8.32 per cent ), Maharashtra (7.64 per cent ), Madhya Pradesh (7.54 per cent )
and Tamil Nadu (7.49 per cent ) were the top five States having a total share of
47.22 per cent in terms of number of units.
About 44 per cent of the units were in the Services Sector; followed by
40 per cent units engaged in manufacturing and allied activities and 16 per cent
units in repairing and maintenance activities. Hence, Services sector emerged as
the dominant component in the Total SSI Sector in the Third Census. The State-
wise and sector-wise percentage distribution of units in the Total SSI Sector by
nature of activity is given in the following table.
111
Table No. 3.10:
State-Wise and Sector wise Percentage Distribution of Units In The Total
SSI Sector.
S.
No. Name of State/UT Manufacturing
Repair &
Maintenance Services Total
Rural Urban Rural Urban Rural Urban
1. Jammu & Kashmir 35.00 16.95 3.74 4.67 28.09 11.54 100.00
2. Himachal Pradesh 50.73 3.78 10.64 3.02 25.08 6.76 100.00
3. Punjab 10.60 24.07 12.95 13.10 17.71 21.57 100.00
4. Chandigarh 0.96 28.09 0.25 18.39 1.94 50.38 100.00
5. Uttaranchal 19.73 10.49 7.50 15.60 16.98 29.69 100.00
6. Haryana 12.46 17.11 10.16 14.88 17.97 27.42 100.00
7. Delhi 1.26 31.16 0.78 16.60 1.45 48.74 100.00
8. Rajasthan 23.89 14.47 8.23 9.13 24.30 19.97 100.00
9. Uttar Pradesh 30.73 11.47 10.90 8.16 22.11 16.63 100.00
10. Bihar 44.54 10.78 13.73 5.92 15.62 9.42 100.00
11. Sikkim 32.07 31.79 0.00 2.99 1.09 32.07 100.00
12. Arunachal Pradesh 12.38 22.20 2.24 29.47 3.67 30.03 100.00
13. Nagaland 62.77 11.75 9.88 1.22 9.44 4.95 100.00
14. Manipur 52.44 13.30 6.90 7.24 12.48 7.64 100.00
15. Mizoram 17.04 32.53 0.03 2.69 31.64 16.08 100.00
16. Tripura 10.06 15.14 5.83 12.00 22.56 34.40 100.00
17. Meghalaya 47.32 12.61 0.79 16.59 2.55 20.14 100.00
18. Assam 32.70 8.99 18.89 8.14 22.30 8.98 100.00
19. West Bengal 35.69 21.44 8.65 7.36 11.29 15.56 100.00
20. Jharkhand 45.51 14.00 17.70 10.63 6.02 6.14 100.00
21. Orissa 55.86 5.54 5.76 3.34 20.28 9.22 100.00
112
22. Chhattisgarh 22.83 5.50 23.49 11.65 26.37 10.16 100.00
23. Madhya Pradesh 26.50 9.92 9.51 6.76 26.00 21.32 100.00
24. Gujarat 13.53 18.67 10.93 11.16 18.56 27.15 100.00
25 &
26
Daman & Diu & Dadra &
Nagar Haveli 56.05 7.14 0.96 2.13 11.10 22.62 100.00
27. Maharashtra 16.69 17.96 3.63 6.58 24.54 30.60 100.00
28. Andhra Pradesh 16.41 14.20 4.30 7.25 25.30 32.52 100.00
29. Karnataka 21.70 15.48 3.51 7.49 23.81 28.01 100.00
30. Goa 30.62 21.88 6.40 8.10 10.60 22.40 100.00
31. Lakshadweep 8.83 64.29 0.56 6.95 0.75 18.61 100.00
32. Kerala 34.68 10.37 3.88 1.93 35.11 14.02 100.00
33. Tamil Nadu 6.83 15.82 4.52 7.79 23.53 41.52 100.00
34. Pondicherry 9.16 22.98 1.66 14.07 18.28 33.84 100.00
35. Andaman & Nicobar
Islands 60.85 10.74 2.59 4.75 7.37 13.71 100.00
All India 25.31 14.38 8.37 7.99 21.53 22.42 100.00
Source: http://www.smallindustryindia.com/ssiindia/statistics.
It was estimated that the total SSI sector comprises 44,45,868 SSIs (42.26
per cent) and 60,75,322 SSSBEs (57.74 per cent). The number of ancillary units
among SSIs was estimated to be 1,32,313 (2.98 per cent). The level of
concentration of the three types of units over different States/ UTs is given in
the following table.
113
Table No. 3.11:
Distribution Of SSI, Ancillaries And SSSBES In The Total SSI Sector.
S. No. State/UT Estimated percentage of No. of Units
SSIs Ancillaries SSSBEs
1. Jammu & Kashmir 0.90 0.53 0.55
2. Himachal Pradesh 0.95 0.32 0.56
3. Punjab 3.22 4.74 3.84
4. Chandigarh 0.15 0.04 0.26
5. Uttaranchal 0.76 0.16 1.20
6. Haryana 1.62 1.52 2.49
7. Delhi 1.39 1.33 1.90
8. Rajasthan 4.12 2.65 4.26
9. Uttar Pradesh 17.03 8.27 15.65
10. Bihar 6.77 3.50 3.59
11. Sikkim 0.01 0.00 0.00
12. Arunachal Pradesh 0.01 0.00 0.01
13. Nagaland 0.29 6.69 0.02
14. Manipur 0.72 0.59 0.26
15. Mizoram 0.13 0.59 0.09
16. Tripura 0.15 0.03 0.29
17. Meghalaya 0.30 0.01 0.15
18. Assam 2.00 0.31 1.74
19. West Bengal 10.17 5.33 5.26
20. Jharkhand 1.89 1.72 0.80
114
21. Orissa 5.51 2.54 2.36
22. Chhattisgarh 1.87 0.41 2.98
23. Madhya Pradesh 7.02 2.03 7.93
24. Gujarat 4.17 14.79 5.68
25 & 26 Daman & Diu & Dadra &
Nagar Haveli 0.05 0.04 0.02
27. Maharashtra 6.87 13.50 8.20
28. Andhra Pradesh 6.54 5.86 9.62
29. Karnataka 6.05 7.13 6.42
30. Goa 0.09 0.15 0.05
31. Lakshadweep 0.01 0.00 0.00
32. Kerala 4.62 8.04 4.07
33. Tamil Nadu 4.50 6.94 9.68
34. Pondicherry 0.07 0.24 0.10
35. Andaman & Nicobar
Islands 0.05 0.00 0.01
All India 100.00 100.00 100.00
Source: http://www.smallindustryindia.com/ssiindia/statistics.
Although registration is voluntary, the registered SSI sector was found to
be the cream of the total SSI sector. In terms of size, it was only 13 per cent, but
in terms of investment, its share was 59 per cent and it contributed to 72 per
cent of the total production of the SSI sector. The composition of the total SSI
sector as Registered and Unregistered.
115
Table No. 3.12:
Percentage Of Units In The Total SSI Sector, By Duration Of Operation.
Duration of operation (Months) No. of units (%)
Less than 1 month 0.29
1 to 2 0.39
2 to 3 0.84
3 to 4 1.00
4 to 5 1.09
5 to 6 2.35
6 to 7 2.07
7 to 8 3.68
8 to 9 4.48
9 to 10 13.22
10 to 11 17.83
11 to 12 52.29
Not recorded 0.47
Total 100.00
Source: http://www.smallindustryindia.com/ssiindia/statistics.
About 95.8 per cent of the units in the Total SSI Sector were found to be
of proprietary type of ownership. Entrepreneurs belonging to socially backward
classes managed about 56 per cent of the units. The number of women
enterprises was 10,63,721 (10.11 per cent). The number of enterprises actually
managed by women was 9,95,141 (9.46 per cent).
116
Employment Profile In The Total SSI Sector:
It was found that the SSI sector employed 2,49,32,763 persons during the
period. The five States, viz., Uttar Pradesh (16.05 per cent), West Bengal (8.7
per cent), Andhra Pradesh (8.58 per cent), Maharashtra (8.23 per cent), Tamil
Nadu (8.09 per cent) put together had a share of 49.65 per cent in the total
employment. The State-wise position of employment generation is given in the
following table.
Table No. 3.13:
State-Wise Distribution Of Units In The SSI Sector Registered Under
Factories Act.
S. No. Name of State/UT Total Employment Percentage Employment
1. Jammu & Kashmir 152699 0.61
2. Himachal Pradesh 130120 0.52
3. Punjab 908576 3.64
4. Chandigarh 48252 0.19
5. Uttaranchal 195333 0.78
6. Haryana 553399 2.22
7. Delhi 626909 2.51
8. Rajasthan 867608 3.48
9. Uttar Pradesh 4002374 16.05
10. Bihar 1082685 4.34
11. Sikkim 1322 0.01
12. Arunachal Pradesh 3687 0.01
117
13. Nagaland 56795 0.23
14. Manipur 136811 0.55
15. Mizoram 24850 0.10
16. Tripura 56962 0.23
17. Meghalaya 65586 0.26
18. Assam 429003 1.72
19. West Bengal 2169105 8.70
20. Jharkhand 276070 1.11
21. Orissa 923176 3.70
22. Chhattisgarh 531766 2.13
23. Madhya Pradesh 1344584 5.39
24. Gujarat 1266676 5.08
25 & 26 Daman & Diu & Dadra &
Nagar Haveli
42012 0.17
27. Maharashtra 2051494 8.23
28. Andhra Pradesh 2139763 8.58
29. Karnataka 1638703 6.57
30. Goa 29311 0.12
31. Lakshadweep 1638 0.01
32. Kerala 1114661 4.47
33. Tamil Nadu 2018137 8.09
34. Pondicherry 35217 0.14
35. Andaman & Nicobar Islands 7479 0.03
All India 24932763 100.00
http://www.smallindustryindia.com/publications/books/books.html
118
Growth Highlights of SSI Sector in India:
o Women employees were of the order of 13.31 per cent, whereas the socially
backward classes had a share of 57.45 per cent in total employment in the
SSI Sector. In the States of Mizoram, Orissa, Karnataka, Goa, Lakshadweep,
Kerala, Tamil Nadu and Pondicherry, the share of women employment was
significantly higher (more than 20 per cent). The number of children
employed in the SSI sector was negligible (0.44 per cent).
o All the SSI units permanently registered up to 31-3-2001 numbering
22,62,401 were surveyed on complete enumeration basis, of which
13,74,974 units (61 per cent) were found to be working and 8,87,427 units
(39 per cent) were found to be closed.
o Of the 13,74,974 working units, 9,01,291 were SSIs and 4,73,683 were
SSSBEs. Thus, the proportion of SSIs was 65.55 per cent. About 5.08 per
cent of the SSI units were ancillary units. The proportion of the units
operating in rural areas was 44.33 per cent.
o In terms of no. of working units, six States, viz., Tamil Nadu (13.09 per
cent), Uttar Pradesh (11.85 per cent ), Kerala (10.69 per cent ), Gujarat
(10.08 per cent), Karnataka (8.04 per cent) and Madhya Pradesh (7.41 per
cent) had a share of 61.16 per cent.
119
o With regard to closed units, six States, viz., Tamil Nadu (14.33 per cent),
Uttar Pradesh (13.78 per cent), Punjab (9.32 per cent), Kerala (8.43 per
cent), Madhya Pradesh (7.4 per cent) and Maharashtra (6.11 per cent) had a
share of 59.37 per cent.
o The per unit employment was 4.48. The employment per Rs. one lakh
investment in fixed assets was 0.67.
o Rice milling industry topped the list in terms of gross output. In terms of
exports, textile garments and clothing accessories industry was on top.
♦ Unregistered SSI sector:
o Out of the 9,94,357 villages and urban blocks, 19,579 villages and urban
blocks were surveyed to identify the units of unregistered SSI sector. Out of
these, information was completely received in respect of 19,278 villages and
urban blocks. In these villages and urban blocks, the enumerators selected
1,68,665 unregistered SSI units for survey, but they could actually survey
1,67,665 units.
o The size of the unregistered SSI sector is estimated to be 91,46,216. Of
these, only 38.75 per cent were SSIs and the rest were SSSBEs.
120
o The reasons for non-registration were elicited in the Third Census.
Interestingly, 53.13 per cent of the units informed that they were not aware
of the provision for registration, while 39.86 per cent of the units indicated
that they were not interested.
o About 45.38 per cent of the units were engaged in Services while 36.12 per
cent were engaged in manufacturing and the rest of the 18.5 per cent in
repair/ maintenance.
o Maximum number of unregistered SSI units (16.89 per cent) was located in
Uttar Pradesh. The other States having very high concentration of
unregistered SSI units were Andhra Pradesh, West Bengal, Maharashtra,
Madhya Pradesh, Tamil Nadu, Karnataka, Bihar, Rajasthan and Gujarat.
o 96.9 per cent of the units were proprietary units and about 1.13 per cent of
the units were partnership units.
o The average employment was 2.05 and the employment generated per one
lakh fixed investment was 3 persons.
o About 10.13 per cent of the units were women enterprises and 57 per cent of
the units were managed by socially backward classes.
121
♦ Total SSI sector
o The size of the total SSI sector is estimated to be over one crore
(1,05,21,190). About 42.26 per cent of these units were SSIs and the rest
were SSSBEs. The number of ancillaries among SSIs was 2.98 per cent.
o About 47.22 per cent of the units were located in Uttar Pradesh, Andhra
Pradesh, Maharashtra, Madhya Pradesh and Tamil Nadu.
o The Services Sector emerged as the dominant component in the Total SSI
Sector with a share of 44 per cent of the units.
o Although registration is voluntary in the SSI sector, the registered SSI sector
was found to be the cream of the Total SSI sector. In terms of size, it was
only 13 per cent, but in terms of investment its share was 59 per cent and it
contributed to 59 per cent of the total production.
o About 95.8 per cent of the units were of proprietary type of ownership.
Entrepreneurs belonging to socially backward classes managed about 56 per
cent of the units.
o The number of women employees was of the order of 13.31 per cent. The
employees belonging to socially backward classes numbered 57.45 per cent.6
122
Sickness in SSI Sector:
Small-scale industry occupies an important position in the economy. But
the growing sickness in small scale units has created an alarming situation to
financing bankers.7 The growing sickness in small scale units has created a
disquieting situation not only for entrepreneurs but also in the banker financial
portfolio. Many units come up, utilize bank finances both of project promoters
and outsiders, struggle through out for completing of project and its operation,
meet with financial failure and disintegrate finally. It results in loss of finances
to project promoters, loss to financial institutions especially banks,
unproductive use of the community’s scare savings and finally adds to the
already serious unemployment situation. Hence, it is essential to analyze the
magnitude and the causes of this sickness so as to ensure a proper management
of bank finances.
The RBI, for the purpose of Banks has defined a sick unit as one which
has incurred financial or cash loss in the last year and is likely to incur cash loss
in the current year as well as in the following year. Sickness is characterized
further by a worsening debt / equity ratio and imbalances in the financial
structure such as the current ratio being less than one. A small scale unit is sick
when the unit accounts with the banks are irregular continuously for six to nine
123
months, the rate at which the unit is eating away its capital is more than 10 per
cent per annum, there is continuing default in the payment to the creditor and
the unit has remained closed for the previous six months. Irrespective of size, a
sick unit is one which works well below its break even level or which fails to
generate internal surplus on a continuous basis to meet its obligation and
depends on external funds for its survival.8
Sickness of industrial units may be inherited, achieved or thrust upon
them. The born sick units have inherited inability of financial operation with the
bankers. The units which achieve sickness are unhealthy units due to bad effect
of internal causes after few years of operation of the units are affected by
external problems, the sickness is said to be thrust upon them. The inherited
reasons of sickness are lack of experience and faulty financial planning or
project, lack of capital, distorted capital structure cost escalation due to delay in
project commissioning, lack of marketing wrong location with inadequate
infrastructural service, deficient financial planning, excessive capital used in
fixed assets, obsolete technology, absence of market and inadequate market
analysis. Such inadequacies which should be considered by the banks while
financing will not extend reasonable survival prospect right from its existence.
124
The internal causes for which sickness is achieved by the units are bad
fund management due to inexperienced and inefficient management personnel,
unplanned expansion, sock mismanagement due to bigger inventories, more
credit purchases, more expenditure due to unproductive fixed assets and
function, inadequate collection of receivables, defective buying of poor quality
assets and raw materials, more replacement due to poor maintenance, lack of
scheme of modernizing technology and absence of industrial relations etc.9
These causes make the unit gradually sick and turn the concern economically
non-viable. The external causes are not within the control of the sick units. Such
causes are shortage of power and energy, disrupted supply of raw materials,
artificial constraints, unrealistic and erratic pricing policy and unsuitable and
inadequate delay by financial and governmental agencies in extending help and
deficiency of demand in the market.
Table No. 3.14:
Sickness in SSI Sector:
Year Total sick units Potentially Viable
At the end No. Amount O/S No. Amount O/S
Of March (Rs. Crores) (Rs. Crores)
1993 2,23,176 3,443 21,649 799
1994 2,56,452 3,680 16,580 686
125
1995 2,68,815 3,547 15,539 597
1996 2,62,376 3,722 16,424 636
1997 2,35,032 3,609 16,220 479
1998 2,21,536 3,857 18,686 456
1999 3,06,221 4,313 18,692 377
2000 3,04,235 4,608 14,373 369
2001 2,49,630 4,506 13,076 399
2002 1,77,336 4819 4,493 416
2003 1,67,980 5706 3,626 625
Source: http://www.smallindustryindia.com/ssiindia/statistics.
Sickness in the SSI is a matter of concern. Industrial sickness is the major
hindrance to economic growth as it results in locking up of resources, wastage
of capital assets, loss of production and increase in unemployment. In addition,
the incidence of sickness leads to reduction of loanable funds of the financial
institutions. The incidence of sickness in SSI sector has declined from the year
1993 to 2003 as per the data compiled by the RBI from Scheduled Commercial
Banks. The number of sick units in the country has come down from 3,06,221
as at the end of March 1999 to 1,67,980 as at the end of March 2003.
126
o Sickness in the Total SSI sector was of the order of 1 per cent, whereas in
the registered and unregistered SSI sectors it was 3.38 per cent and 0.64 per
cent respectively.
o The maximum number of sick units was located in West Bengal, Kerala,
Maharashtra, Karnataka and Andhra Pradesh. About 59.53 per cent of the
sick units were located in these five States.
o Out of the units having loan outstanding with institutional sources like banks
and financial institutions, sickness was about 19.6 per cent in the registered
SSI sector and 16.61 per cent in the case of unregistered SSI sector. In the
Total SSI sector, this percentage was 17.8.
o Incipient sickness identified in terms of continuous decline in gross output
was 11.5 per cent in the registered SSI sector and 6.48 per cent in the
unregistered SSI sector. In the Total SSI sector, this percentage was 7.4.
o Combining the three yardsticks used to measure sickness, viz., (a) delay in
repayment of loan over one year, (b) decline in net worth by 50 per cent, and
(c) decline in output in last three years, about 13.98 per cent of the units in
the registered SSI sector were identified to be either sick or incipient sick,
while this percentage was only 6.89 in the case of unregistered units. In the
Total SSI sector, this percentage was 7.82.
127
o The States of Kerala, Tamil Nadu, Andhra Pradesh, Karnataka, and
Maharashtra had maximum number of sick SSI units. These five States
together accounted for 54.28 per cent of the sick SSI units in the country.
o 'Lack of demand' and 'Shortage of working capital' were the main reasons
for sickness in both the registered and unregistered SSI sectors.
Small Scale Sector In India - An Overview:
Small enterprises are the engine of growth in many economies around the
world. Their ability to create jobs, foster entrepreneurship, utilize local skills
and resources and provide depth to the industrial base in the economy making
them attractive propositions for policy makers. In India, the performance of the
small scale sector has been recognized and acknowledged for over five decades.
The Indian SSI Sector has contributed to the overall growth of the gross
domestic product and has contributed significantly towards employment
generation and export. The sector has been consistently outperforming large
industry on crucial parameters such as growth in production and growth in
employment. The performance of small scale sector in terms of critical
parameters such as number of units, production, employment and export is
indicated below:-
128
The promotion of SSIs has been a conscious policy of Government, at
both the Central & State level. Support to SSIs in India has been fine-tuned over
a period of time. Though often it has been in response to changes in the
business environment, at other times, it has been proactive - anticipating
challenges and threats. In the five decades since Independence, it has moved
from protection to promotion and lately to facilitation and advocacy. Broadly,
SSI related policy interventions can be categorized into three distinct periods:-
1948 – 1991, 1991 – 1999 and 1999 onwards
1948 – 1991:
Beginning with the Industrial Policy Resolution of 1948, recognition was
given to the small and cottage sector. A slew of measures followed in the 1950s
such as the establishment of the Small Industries Development Organization
(SIDO), the National Small Industries Corporation (NSIC) etc. Policy measures
were put into place which provided:-
• Access to bank credit on priority basis through the Priority Sector Lending
Programme of commercial banks.
• Reservation of products lines for exclusive manufacture in the small scale
sector. Thus a large unit could not manufacture such items without an export
stipulation.
129
• Relief on excise for small scale units.
• Reservation of certain items for exclusive purchase from small scale sector
by State agencies.
• Price preference of upto 15 per cent was allowed to small business products
in respect of Government purchase.
• Industrial estates were set-up by Government provide better infrastructure.
• Training institutes for entrepreneurs were established to promote budding
entrepreneurs and train existing entrepreneurs.
• A marketing corporation (NSIC) was established to assist small units in
marketing their products.
• State Financial Corporations (SFCs) set-up to provide term loans to SSIs
• District Industries Centers (DIC) set-up at district level for single window
assistance to SSIs
• Setting-up of the Small Industries Development Bank of India (SIDBI).
1991 – 1999:
The policy for Small, Tiny & Village Enterprises announced on 6th
August 1991 laid down the framework for government intervention in the
context of liberalization. Liberalization itself implied opening up of the
economy and encouraging internal competition. Prior licensing requirements
130
were reduced to the minimum. The initiatives for the Small Scale Sector during
this period included:
• Strengthening of entrepreneurship development institutes.
• Enactment of a Delayed Payment Act for ensuring prompt payment to SSI
units of their dues from large industry.
• Setting up of Sub-Contracting Exchanges to facilitate buyer-seller
interaction.
• Subsidy for SSI entrepreneurs for participation in international fairs.
• Training programmes on export packaging.
• Reimbursement scheme in respect of ISO 9000 Quality Certification for
individual SSI units.
• Technology up-gradation in industry specific clusters.
• IT based initiatives for information sourcing.
• Simplification of Labour Laws governing SSIs.
• Services given enhanced importance in small sector.
• Focus on the tiny sector.
• Prime Minister's Rozgar Yojana for educated unemployed youth.
• Integrated Infrastructure Development (IID) Scheme for setting up industrial
estates exclusively for SSI units.
• Specialized SSI Bank branches.
131
1999 Onwards:
The establishment of an independent Ministry of SSI&ARI in October
1999 ushered in a new phase of SSI development. Advocacy for the sector
found a new and effective platform. In its early days itself, it became clear that
liberalization in world trade and globalization were emerging as huge
challenges for the sector. Extensive consultations and discussions spread across
the length and breadth of the country culminated in a comprehensive policy
package for the sector. This was announced in August 2000, within 10 months
of the formation of the Ministry. The package aimed at enhancing
competitiveness of Indian SSIs in the context of global competition. The focus
of the effort was on:-
• Excise exemption up to Rs. 100 lakhs.
• Technological up-gradation & 12 per cent Capital Subsidy Scheme.
• Credit Guarantee Scheme for loans upto Rs. 25 lakhs.
• Raising of limit of composite loans to Rs. 25 lakhs.
• Raising of project cost limits under National Equity Fund to Rs. 50 lakhs.
• Infrastructural Development (IID) Scheme extended to all areas.
• New scheme for up-gradation of industrial estates.
• Testing Centers with involvement of Industry Associations.
• Marketing Development Assistance Scheme for SSIs.
132
Maharashtra SSI Scenario:
Industrial Sector plays a crucial role in the rapid and balanced economic
development of the state. The high level of industrialization of the state is
evident from its consistent contribution of more than 20 per cent in the value of
out put in the organized industrial sector in the country. The Annual Survey of
Industries (2000-01), revealed that Maharashtra continued to maintain its
leading position in the country with its contribution of 21.5 per cent in the net
value added in the organized industrial sector. It has observed that the Industry
groups chemicals and chemical products, refined petroleum products,
machinery and equipments, Textiles, basic metals, motor vehicles, trailers etc.
and other transport equipments contribute together was more than 80 per cent in
the total net value added in the manufacturing sector in the state and at All India
level it was 68 per cent in the year 2000-01.
The MSME Sector is a vital segment of the economy, contributing
substantially in the form of production, employment and export. This sector
creates large employment opportunities in low capital cost. For speedy growth
of SSI Sector in the State, The Government has already brought about
simplifications in procedures. The investment limit for SSI units has been
reduced from Rs. 3 crore to Rs. 1 crore. For tiny sector, this limit has been
increased from Rs. 5 lakh to Rs. 25 lakhs. Fore Small Scale Service and
133
Business enterprises sector, the investment liit has been increased up to Rs. 10
lakhs. The composite term loan limit for SSI units has been increased from Rs.
2 lakh to Rs. 5 lakhs. The investment limit for SSI units in the category of hand
tools and hosiery has been enhanced upto Rs. 5 crore. The total number of SSI
permanent registered units in the State as on 31.3.2003 was 173101. Total
employment in these units were 12,87,269 numbers and the investment in plant
and machinery was Rs. 31,66,972 lakhs. The production capacity of these units
was Rs. 1,89,49,580 lakhs.10
Table No. 3.15:
Total No. of Permanent Registered SSI in Maharashtra up to 30/09/2006. Sr. Region No. of SSI Unit Investments Employment
1 Mumbai 12962 710682 140103
2 Konkan 13016 271012 144336
3 Nashik 18533 280843 114897
4 Pune 67557 176734 345534
5 Aurangabad 9219 90855 74643
6 Amravati 5978 48498 37015
7 Nagpur 12840 77973 88628
Total: 140105 1656597 945156 Source: Maharashtra at a glance -Sept.-2007, Directorate of Industries.
134
Table No. 3.16:
Small Scale Industries in Marathwada Region. Sr. No. Year No. of Units Investments Employments
(Rs. Crore)
1 1978-79 822 13.46 2250
2 1979-80 985 16.66 2850
3 1980-81 1302 24.28 4300
4 1981-82 1137 25.07 5750
5 1982-83 1106 28.06 8555
6 1983-84 1085 38.40 9705
7 1984-85 1940 60.81 10135
8 1985-86 1706 65.10 8805
9 1986-87 1360 141.50 9765
10 1987-88 2049 98.47 14355
11 1988-89 2003 108.88 13005
12 1989-90 2517 119.16 16060
13 1990-91 3635 99.17 18150
14 1991-92 4690 109.14 22220
15 1992-93 5878 143.24 29599
16 1993-94 6260 168.84 34320
17 1994-95 6991 244.10 37575
18 1995-96 7999 358.38 32510
19 1996-97 8448 435.18 53219
20 1997-98 9321 807.07 58883
21 1998-99 10267 868.38 68952
22 1999-00 11116 1188.47 79269
135
23 2000-01 9240 1263.75 80287
24 2001-02 12408 1884.60 89671
25 2002-03 6906 2509.38 61562
26 2003-04 9129 2646.68 109485
(Source: Joint Director of Industries, Aurangabad.
To know the development of SSI sector in Marathwada region, since the
establishment of eight DIC in Marathwada, The Table No. 3.14 shows the
progress in numbers, Investment and employment from 1978-79 to 2003-04.
There are many fluctuations in total number of units because of closing and
sickness but it gives the trend of development in SSI.
References:
1. Dr. Vasant Desai – Management of Small-scale Industry (2007)-
Himalaya Publishing House, New Delhi. P.v.
2. Jagannath Panda – Entrepreneurship and Economic Development (2005)
– Wide Vision, Jaipur, p.45.
3. Jumle Anand – Issues in Development and Management of SSI units in
India - National Seminar on Development of SSI in the Era of
Globalization.
4. Gajendra Singh – Marketing Strategies of Small and Medium Scale
Industry – Deep & Deep Publications, New Delhi, p.4.
136
5. Dubey G.S. – Sector Reform Approach in Rural Development(2006) –
Mahavir & Sons New Delhi, P. 211.
6. http://www.smallindustryindia.com.
7. Jagdish Pandi – Incidence of Sickness in Small-scale Units – Discovery
Publishing House, p 17.
8. Jain Khusphat – Key Issues: Industrial Sickness in SSI Sector- National
Seminar on Development of SSI in the Era of Globalization,p.2.
9. Sukhdev S.S. – Development of Small-Scale Industries in Maharashtra
(1984), p.ix.)
10. http://www.msmedimumbai.gov.in.
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