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TRANSCRIPT
IMPACT OF GLOBALISATION ON MSMEs IN KERALA WITH
SPECIAL REFERENCE TO KOZHIKODE DISTRICT
Minor Research Project Report
Submitted to the University Grants Commission, New Delhi
In partial fulfilment of the requirements for the
Completion of Minor Research Project
By
VINEETHAN. T
Assistant Professor of Commerce
POST GRADUATE AND RESEARCH DEPARTMENT OF COMMERCE
GOVERNMENT COLLEGE MADAPPALLY
VATAKARA-2
KOZHIKODE
DECLARATION
I hereby declare that the project report entitled “ Impact of Globalisation
on MSMEs in Kerala with Special Reference to Kozhikode District” is a
bonafide Minor Research Project work done by me and I further declare that this
report has not been submitted anywhere for the award of any degree or other
recognition.
Place: Madappally VINEETHAN. T
Date:
CERTIFICATE
This is to certify that Minor Research Project report titled “Impact of
Globalisation on MSMEs in Kerala with special Reference to Kozhikode
District” is an original work done by Vineethan T, Assistant Professor, Post
Graduate and Research Department of Commerce, Government College Madapplly.
He is permitted to submit the report to the University Grants Commission.
Place: Madappally Principal
Date :
Acknowledgement
I have completed this minor research project with a sense of achievement
and pride. This has been done by vigorous support of many people. Though the
depth of my gratitude cannot be expressed in words, I take this opportunity to
convey my formal thanks to them.
I express my sincere gratitude to the Principal, Govt. College Madappally
and faculty members of Post Graduate and Research Department of Commerce for
their immense co-operation and valuable suggestions.
I greatly indebted to the University Grants Commission for sanctioning this
minor research project and allotting fund for the same.
I am deeply indebted to my parents, wife and son for their unending moral
support and inspiration in my academic pursuits.
Above all I am thankful to God, the Almighty who has given me the strength
and opportunity to complete this project work successfully.
VINEETHAN T
CONTENTS List of Tables
List of Figures
Chapter Descriptions Page No.
1 Introduction 1-8
1.1. Introduction to the study 1.2. Statement of the problem 1.3. Significance of the study 1.4. Objectives of the study 1.5. Scope of the study 1.6. Methodology 1.7. Scheme of Chapterisation 1.8. Limitations of the study
1 3 4 4 5 5 6 7
2 Literature Review 9-23
3 An Overview of SSI/MSME Sector in India and Kerala 24-41
3.1. Small Scale Industrial Sector : A Global Perspective 3.2. Small Scale Industrial Sector in India 3.3. Definition of SSI Unit 3.4. MSMED Act 2006 3.5. Present Scenario of MSME Sector in India 3.6. MSME Sector in Kerala 3.7. State Budget 2015-16 : Announcements for MSMEs 3.8. Kerala Perspective Plan 2030 – Vision and Initiatives 3.9. State Profile of MSME sector 3.10. Problems of MSME Sector 3.11. Impact of Globalisation on SSI/MSME Sector 3.12. Globalisation and SSI/MSME Sector in Kerala
24 25 27 31 34 35 37 37 38 39 40 40
4 Profile of Kozhikode District 42-53
4.1. Kozhikode District: General Profile 4.2 Industrial Profile of Kozhikode District
4.2.1 Existing Industrial Scenario 4.2.2 Working MSME units in Kozhikode District 4.2.3 Gender wise Distribution of MSMEs in Kozhikode. 4.2.4 MSMEs filed EM Part II 4.2.5 Sector wise Distribution of MSMEs in Kozhikode 4.2.6 SWOT Analysis.
42 44 45 46 49 49 50 51
5 Analysis of Performance of SSI/MSME Sector in India, Kerala and Kozhikode District
54-107
5.1 Performance of MSME Sector in India during pre globalisation period from 1982-83 to 1989-90
5.2 Performance of MSME Sector in India during post globalisation period from 1990-91 to 1997-98
55
59
Chapter Descriptions Page No.
5.3 Performance of MSME Sector in India during post globalisation period from 1998-99 to 2005-06
5.4 Performance of MSME Sector in India during post globalisation period from 2006-07 to 2013-14
5.5 Comparison of performance SSI Sector in India in terms of selected parameters
5.6 Performance of SSI Sector in Kerala during pre globalisation period from 1982-83 to 1989-90
5.7 Performance of SSI Sector in Kerala during post globalisation period from 1990-91 to 1997-98
5.8 Performance of SSI Sector in Kerala during post globalisation period from 1998-99 to 2005-06
5.9 Performance of SSI Sector in Kerala during post globalisation period from 2006-07 to 2013 14
5.10 Comparison of performance of SSI sector in Kerala State during pre and post globalisation periods on the basis of selected variables
5.11 Performance of SSI Sector in Kozhikode district during pre globalisation period from 1982-83 to 1989-90
5.12 Performance of SSI Sector in Kozhikode district during post globalisation period from 1990-91 to 1997-98
5.13 Performance of SSI Sector in Kozhikode district during post globalisation period from 1998-99 to 2005-06
5.14 Performance of SSI/MSME Sector in Kozhikode district during post globalisation period from 2006-07 to 2013 14
5.15 Comparison of performance of SSI sector in Kozhikode district during pre and post globalisation periods on the basis of number of registered units
5.16 Comparison of performance of SSI sector in Kozhikode district during pre and post globalisation periods on the basis of employment generation
5.17 Comparison of performance of SSI sector in Kozhikode district during pre and post globalisation periods on the basis of selected parameters
5.18 Comparison of performance of SSI/MSME sector in Kerala State and Kozhikode District during pre and post globalisation periods.
62
65
68
70
73
77
80
84
88
91
95
98
102
103
104
105
6 Findings, Suggestions and Conclusion 108-113
6.1 Findings
6.2 Suggestions
6.3 Conclusion
108
111
113
Bibliography 114-120
LIST OF TABLES
Table No.
Title Page No.
4.1 Existing industrial scenario of Kozhikode District 45
4.2 Medium Scale Industries in Kozhikode District 45
4.3 Working MSMEs in Kozhikode District (Manufacturing) 46
4.4 Working MSMEs in Kozhikode District (Service) 47
4.5 Working MSMEs in Kozhikode District (Manuf. and Service) 48
4.6 Distribution of MSMEs in Kozhikode District on the basis of gender 49
4.7 Number of MSME units filed EM Part II in Kozhikode District 49
4.8 Sector-wise distribution of MSMEs in Kozhikode District 50
5.1 Number of registered SSI Units in India during pre globalisation period 55
5.2 Number of employment generated by SSI sector in India during pre globalisation period from 1982-83 to 1989-90
56
5.3 Production of SSI units in India during pre globalisation period 57
5.4 Number of registered SSI Units in India during 1990-91 to 1997-98 59
5.5 Number of employment generated by SSI sector in India during 1990-91 to 1997-98
60
5.6 Production of SSI units in India during 1990-91 to 1997-98 61
5.7 Number of registered SSI Units in India during 1998-99 to 2005-06. 62
5.8 Number of employment generated by SSI sector in India during 1998-99 to 2005-06.
63
5.9 Production of SSI units in India during 1998-99 to 2005-06. 64
5.10 Number of registered SSI Units in India during 2006-07 to 2013-14. 65
5.11 Number of employment generated by SSI sector in India during 2006-07 to 2013-14.
66
5.12 Production of SSI units in India during 2006-07 to 2013-14. 67
5.13 Comparison of performance of SSI/MSME sector in India during pre and post globalisation periods based on selected parameters.
68
5.14 Number of SSI units in Kerala during pre globalisation period. 70
5.15 Number of employment provided by SSI sector in Kerala during pre globalisation period.
72
5.16 Number of SSI units in Kerala during 1990-91 to 1997-98 74
5.17 Number of employment provided by SSI sector in Kerala during 1990-91 to 1997-98.
75
5.18 Number of SSI units in Kerala during 1998-99 to 2005-06 77
Table No.
Title Page No.
5.19 Number of employment provided by SSI sector in Kerala during 1998-99 to 2005-06
79
5.20 Number of SSI/MSME units in Kerala during 2006-07 to 2013-14 81
5.21 Number of employment provided by SSI/MSME sector in Kerala during 2006-07 to 2013-14
83
5.22 Comparison of pre and post globalisation performance of SSI/MSME sector in Kerala on the basis of number of units
85
5.23 Comparison of pre and post globalisation performance of SSI/ MSME sector in Kerala on the basis of number of employment provided
86
5.24 Comparison of pre and post globalisation performance of SSI/MSME sector in Kerala on the basis of selected parameters
86
5.25 Number of SSI units in Kozhikode district during 1982-83 to 1989-90 88
5.26 Number of employment provided by SSI sector in Kerala during 1982 -83 to 1989-90
90
5.27 Number of SSI units in Kozhikode district during 1990-91 to 1997-98 92
5.28 Number of employment provided by SSI sector in Kerala during 1990-91 to 1997-98
93
5.29 Number of SSI units in Kozhikode district during 1998-99 to 2005-06 95
5.30 Number of employment provided by SSI sector in Kerala during 1998-99 to 2005-06
97
5.31 Number of SSI/MSME units in Kozhikode district during 2006-07 to 2013-14
99
5.32 Number of employment provided by SSI/MSME sector in Kerala during 2006-07 to 2013-14
100
5.33 Comparison of pre and post globalisation performance of SSI/MSME sector in Kozhikode district on the basis of number of Units
102
5.34 Comparison of pre and post globalisation performance of SSI/MSME sector in Kozhikode district on the basis of number of employment provided
103
5.35 Comparison of pre and post globalisation performance of SSI/MSME sector in Kozhikode district on the basis of selected Parameters
104
5.36 Comparison of pre and post globalisation performance of SSI/MSME sector in Kerala State and Kozhikode district on the basis of selected parameters in terms of CAGR
106
5.37 Comparison of pre and post globalisation performance of SSI/MSME sector in Kerala State and Kozhikode district on the basis of selected parameters in terms of Overall Growth Rate.
106
LIST OF FIGURES
Figure No.
Title Page No.
5(i) Annual growth rate in number of units, number of employment and volume of production during the period from 1982-83 to 1998-90
58
5(ii) Compound annual growth rate of selected parameters SSI sector in India during pre and post globalisation periods
69
5(iii) Number of registered units in Kerala during 1982-83 to 1989-90 71
5(iv) Number of employment generated by SSI sector of Kerala during 1982-83 to 1989-90
73
5(v) Number of registered SSI units in Kerala during 1990-91 to 1997-98 75
5(vi) Number of employment provided by SSI sector of Kerala during 1990-91 to 1997-98
76
5(vii) Number of registered SSI units in Kerala during 1998-99 to 2005-06 78
5(viii) Number of employment provided by SSI sector of Kerala during 1998-99 to 2005-06
80
5(ix) Number of registered/working SSI/MSME units in Kerala during 2006-07 to 2013-14
82
5(x) Number of employment generated by SSI/MSME sector of Kerala during 2006-07 to 2013-14
84
5(xi) Comparison of pre and post globalisation performance of SSI/MSME sector in Kerala on the basis of selected parameters in terms of CAGR
87
5(xii) Total number of registered SSI units in Kozhikode district during 1982-83 to 1989-90
89
5(xiii) Number of employment provided by SSI sector of Kozhikode district during 1982-83 to 1989-90
91
5(xiv) Number of registered units in Kozhikode district during 1990-91 to 1997-98
93
5(xv) Number of employment provided by SSI sector of Kozhikode district during 1990-91 to 1997-98
94
5(xvi) Number of registered units in Kozhikode district during 1998-99 to 2005-06
96
5(xvii) Number of employment provided by SSI sector of Kozhikode district during 1998-99 to 2005-06
98
5(xviii) Number of units in Kozhikode district during 2006-07 to 2013-14 100
5(xix) Number of employment provided by SSI/MSME sector of Kozhikode district during 2006-07 to 2013-14
101
5(xx) Comparison of pre and post globalisation performance of SSI/MSME sector of Kozhikode district on the basis of selected parameters in terms of CAGR
105
Chapter I
INTRODUCTION
1.1. Introduction
Micro, Small and Medium Enterprises play a remarkable role in the growth of
any economy. They have been considered as the growth engine of economies across
the world. MSME sector is the backbone of every economy irrespective of its type
(i.e.; developed, developing or under developed). They perform a key role in
accelerating the rates of growth, employment generation, industrial production and
exports.
Well planned and systematic measures taken by the Governments have
brought about a substantial growth in the national income of the country. Even
though the country attained progress in various sectors, it failed to find a solution to
the problem of poverty. Unemployment is the root cause of mass poverty in India.
The only panacea to abolish poverty is to generate quality employment opportunities.
But the quality employment opportunities can be ensured through rapid
industrialisation. So, the focus of the Governments was on the development of basic
and heavy industries. But such a strategy of the Government could not generate
adequate employment opportunities as needed by the economy. In other words,
large scale industries have failed to solve the unemployment problem of the nation.
The intensity of unemployment was too high in rural areas. Therefore, attention has
been paid for the eradication of unemployment problem in rural sector of India.
Since economic development is possible only through industrial growth,
various policies have been framed for the promotion of industries in public and private
sectors. When industrial sector is expanded, natural resources have been exploited
greatly. Consequently, goods and services are produced largely and in turn
employment opportunities are generated enormously. All these bring improvement in
the living standard of the people.
Introduction 2
In India, since the problem of unemployment is largely concentrated in rural
sector, special emphasise have been put on Small Scale Industrial units/MSMEs for
the development of the sector. The development of SSIs/MSMEs has been widely
considered as the most appropriate way for achieving equitable growth.
The importance and contribution of SSIs/MSMEs to economic growth and
prosperity is well established. Their role in terms of employment generation,
encouraging entrepreneurial spirit and innovation has been crucial in fostering
competitiveness in the economy. It can lead the State economy by acquiring exports
through quality production techniques and products. The main advantage of this
sector is its employment potential with low investment. Statistics shows that nearly
45% of the total work force of India is generated by MSMEs. The fact that the
MSMEs contribute 37.5% of India’s GDP, is a strong indication that the sector has a
crucial role in boosting industrial growth and ensuring success of “Make in India”
programme.
In Kerala, MSME sector produces large varieties of products ranging from
traditional to modern. It contributes largely towards domestic needs, export
marketing, employment generation, income generation and foreign exchange
earnings. In addition to increased volume of production; quality of products, product
diversification, energy consumption, environmental effects, etc. are always been
concern of MSME/SSI sector.
As per the MSME survey of 4th census, 5.62% of all India share of MSMEs
is in Kerala. Government of Kerala provides manifold schemes in MSME sector,
targeting various social groups such as Scheduled Castes, Scheduled Tribes,
Women, Youth, Physically Challenged, etc. the sector produces more than 6,000
products ranging from traditional to high tech items. The sector has shown a
constant growth of 11% till 2010-11 whereas, growth rate was 19% in 2011-12 and
14% in 2012-13.
Introduction 3
1.2. Statement of the Problem
Kozhikode, with all its achievements in physical quality of life of people, quality
of infrastructure, availability of qualified manpower, natural and agricultural resources,
and good climate present a paradox in the industrial front. It remains industrially
backward compared to other districts such as Ernakulam, Thiruvananthapuram,
Thrissur, Palakkad, etc. Not only had a good part of its manpower went outside the
state for employment, but its entrepreneurship also went outside Kerala for
investment. In order to promote investment and employment, an aggressive
repositioning strategy has become the need of the hour. The government has taken a
series of measures in this regard. The industrial policy of the government aimed at
making the state an investor friendly one. On one hand, the available capital, skilled
man power, and other resources are not being tapped adequately. On the other, there
is a large educated unemployed youth. This is a paradox. To reduce the size of
unemployment by exploiting the local resources to the maximum extent, the only
way is the growth of MSME sector.
No doubt, the phenomenon of globalization impacted every sector of
economies across the world. The Micro, Small and Medium Enterprises were not an
exception. During the period prior to economic liberalisation (i.e.; the period before
July 1991), the Government provided many facilities such as incentives, subsidies,
concessions, etc. for the development of SSI/MSME sector because of its
remarkable contribution in the growth of the economy. But with the implementation
of economic liberalisation policy in July 1991, the government has started to curtail
such amenities one by one. Since then, the sector is facing hyper competition from
large domestic firms and multi-national companies. It is in this milieu the researcher
wants to make an investigation about the impact of globalisation on MSMEs in
Kerala with special reference to Kozhikode District.
Introduction 4
1.3. Significance of the Study
In India, SSI/MSME sector has continuously acted as the rampart for our
economy by providing capacity to defend against global economic adversities. It
contributes a share of 37.5 percent to the country’s GDP, 45 percent of the
manufacturing output and 40 percent of the exports. There are 346.12 lakh units
spread across the country which provide employment to 805.24 lakh workers.
SSIs/MSMEs contribute the second largest share of employment after agriculture. Our
former Prime Minister Dr. Manmohan Singh once stated ‘the key to our success in
employment lies in the success of manufacturing in the small scale sector’. This
sector, in addition to play a crucial role in providing employment opportunities at
comparatively lesser capital cost, helps in industrialization of rural and backward
areas. This results in reducing regional imbalances and ensures more equitable
distribution of national wealth. Moreover, by performing as ancillaries to large
industries, MSMEs contribute to the socio-economic development of the country to a
large extent. Entrepreneurship is the key element to accelerate the industrial growth of
a nation. MSME sector is an effective means for the progress of entrepreneurship.
This research work has undertaken to determine the extent of influence that
globalisation exerted on the performance of MSMEs in Kozhikode district.
1.4. Objectives of the Study
Following specific objectives are formulated for the purpose of this study:
1. To study the impact of globalisation on SSIs/MSMEs in Kozhikode
District in terms of growth rate of number of units and employment
generation.
2. To examine the growth and development of MSMEs in Kozhikode District.
3. To identify the important threats faced by MSMEs in Kozhikode District.
4. To analyse the opportunities exploited by MSMEs in Kozhikode District
as a result of globalisation.
Introduction 5
1.5. Scope of the Study
The scope of the present study is confined to the Small Scale/MSME Sector
in Kozhikode District. It studies the impact of globalisation on Small Scale / MSME
Sector on the basis of growth in number of registered units and number of
employment provided.
1.6. Methodology
1.6.1. Source of Data
The entire data required for the present study have been collected from
secondary sources only.
1.6.2. Secondary data used for the study
The secondary data needed for the present study were collected from various
publications of Directorate of Industries and Commerce (DIC), Thiruvananthapuram;
Kerala State Planning Board, Thiruvananthapuram; Department of Economics and
Statistics, Thiruvananthapuram; RBI; National Planning Commission; and Small
Industries Service Institute. Books, Reports, Journals, Periodicals, Published and
unpublished research reports and Working papers are also used as the valuable
sources of data. The data collected from these sources are mainly used to analyse
the trend in growth of SSI/MSME sector, using parameters such as number of units,
employment, and investment for a period of 32 years from 1882-83 to 2013-14.
1.6.3. Variables used for the study
Two variables are used for analysing the growth of SSI/MSME sector in
Kozhikode district. They are:
1. Number of Registered SSIs/MSMEs
2. Number of Employment Generated
Introduction 6
1.6.4. Period of Study
The study covers a period of 32 years for knowing the impact of
globalisation in terms of the growth in the number of registered units, employment
and investment in SSI/MSME Sector in Kozhikode District. Out of the thirty two
years period, 8 years from 1982-83 to 1989-90 is selected for studying the pre
globalisation situation and the remaining 24 years period from 1990-91 to 2013-14
is drawn for analysing the post globalisation effects. The post globalisation period is
further divided into three phases.
The entire period of study is divided as follows:
I. Pre-globalisation Period : 1982-83 to 1989-90 (8 years)
II. Post globalisation Period :
a.) First Phase : 1990-91 to 1997-98 (8 years)
b.) Second Phase : 1999-00 to 2005-06 (8 years)
c.) Third Phase : 2006-07 to 2013-14 (8 years)
1.6.5. Tools used for data analysis
The statistical tools used for analysis and interpretation of data include
simple percentages, compound annual growth rate, charts and student’s t-test.
1.7. Scheme of Chapterisation
The report of the present study is arranged in the following sequence:
Chapter 1: Introduction: Statement of the problem, Importance of the study,
Objectives, Scope of the study, Research methodology and Limitations
of the study are included.
Chapter 2: Review of Literature: This chapter includes review of past studies
about SSIs/MSMEs and the impact of globalisation on SSIs/MSMEs in
Kerala.
Introduction 7
Chapter 3: An Overview of SSI/MSME Sector in India and Kerala: This
includes Small scale industrial sector – a global perspective, SSI in
India, Definition of SSI unit, MSMED Act 2006, Present scenario of
MSME sector in India, MSME sector in Kerala, Announcement for
MSMEs in State budget, Kerala perspective plan 2030 – Vision and
Initiatives, State profile of MSME sector, Problems of MSME sector,
Impact of globalisation in SSI/MSME sector, Globalisation and
SSI/MSME sector in Kerala.
Chapter 4: Profile of Kozhikode District: This chapter includes general profile of
Kozhikode district, industrial profile of Kozhikode, existing industrial
scenario, working MSME units in Kozhikode district, gender-wise
distribution of MSMEs in Kozhikode, sector wise details of MSMEs in
Kozhikode district, SWOT analysis.
Chapter 5: Analysis of Performance of SSI/MSME Sector in India, Kerala and
Kozhikode District: This chapter deals with Performance of
SSI/MSME sector in India, Kerala and Kozhikode district during pre
and post globalisation periods in terms of growth rate of number of
registered SSI/MSME units and employment generation.
Chapter 6: Findings, Suggestions and Conclusion: This chapter include findings of
the study, suggestions and conclusion.
1.8. Limitations of the Study
The study is thoroughly based on secondary data obtained from publications
of various government agencies such as Directorate of Industries and Commerce
(DIC), Thiruvananthapuram; Kerala State Planning Board, Thiruvananthapuram;
Department of Economics and Statistics, Thiruvananthapuram; RBI; National
Introduction 8
Planning Commission; Small Industries Service Institute, etc. So, there is no
ambiguity regarding the authenticity of data. For attaining the objectives of the study,
it was mandatory to have district level figures and data during pre-globalisation era.
Certain documents which contain pre-globalisation data were tattered due to passage
of time. However, the researcher has made utmost care to obtain accurate figures and
data to make the outcome of the study fruitful, scientific and logical.
Chapter 2
LITERATURE REVIEW
Lots of studies have been conducted from time to time on various aspects of
MSMEs. Studies have also been made about the effects of globalisation on various
sectors of our country. To validate the need of present study, a review of some
important literatures is presented below:
Pillai (1988) attempted to examine the problems faced by small scale
industry in Kerala. For getting a better focus on the problems, the case of
pharmaceutical industry in Kerala was taken into consideration. The study also
examined the sources of finance and performance of the units financed by various
financial institutions. The study concluded that the significant features of the pattern
of financing was the predominance of non- institutional sources in meeting the
financial needs of small scale Industries among the institutional sources,
commercial banks were in the forefront and the role of co-operatives in lending of
small industries sector has been negligible in Kerala.
Abraham (1991) reported that the success or failure of any small enterprises
depends mainly on entrepreneurs, support system and the environment. He
structured that the success or failure is determined mostly by the human element
involved in industrial enterprise.
Xaviour (1992) discussed the socio-educational related factors influencing the
success and failure of the entrepreneurs in his study on ‘Entrepreneurship in SSls in
Trichur town and its environs’. The study identified successful and unsuccessful
entrepreneurs and behavioral factors influencing the success or failure of
entrepreneurs. The study concluded that entrepreneurial development was essential
not only to solve the problem of economic development but also to solve the
problem of unemployment, concentration of economic power and diversion of profit
Literature Review 10
from traditional avenues of investment. Most of the promotional activities were
directed around the financial and physical facilities with the expectation that would
be automatic flow of entrepreneurs.
In 1992 the Development Commissioner of SSls, Govt. of Kerala, conducted
a survey of SSI units registered in the Directorate of industries in the state Union
territories. The main object of the survey was to update the frame of working units
and to assess the present level of contribution made by registered small scale units
in terms of employment, investment and production. The study revealed that the
reason for closure of business with the financial problem (38 %), marketing problem
(15 %), availability of raw materials (6 %) and all contributions (14 %) and the rest
closed as account of other reasons other than those said above.
Venugopal (1993) observed that Government agencies set up for promoting
village and cottage industries are inactive and their performance is below the level
of expectation. He argues that the survival of village and cottage industries depends
on their activity to become competitive. Their efforts should be to reduce cost and to
improve quality through technology upgradation.
Resia (1993) found that shortage of working capital and high rate of interest
charged by banks were two major problems of women entrepreneurs. Shortage of
long term capital, scarcity of raw materials and under utilization of production
capacity were the other problems faced by women entrepreneurs in Kerala. Only a
negligible portion of the products of women enterprises are used for export. The
study suggested for operating these units on modern lines.
Venkiteswaran (1993) attempted to analyze the major problems faced by the
entrepreneur in running their units. Shortage of raw materials was the main problem
in Ernakulam and Kannur districts. The other problems were shortage of working
capital, competition from similar units, labour problems, power shortage and lack of
demand.
Literature Review 11
An integrated study conducted by James Manalel (1994) on various
programmes of assistance available to the SSl units in Kerala, revealed that the growth
rate of SSls in Kerala was higher than in more developed states. But the role played by
the incentive packages generally had not been adequate in meeting their objectives.
Harikumar (1994) examined the sickness in Small Scale Industries in Kerala.
The researcher examined the magnitude and the causes of sickness. The socio
economic profile of the entrepreneurs of the SSI units and its relatives with the success
or failure of the human was also studied. The study reported that industrial sickness
was spreading in the century at an alarming rate both in terms of the number of units
and the amount of bank over dues. Compared with other sectors the incidence of
sickness was significantly higher in SSl sector. The study also revealed that working
Capital was one of the major problems of SSI sector. This problem of the sick units did
not mainly stem from the shortage of supply of assistance for the commercial banks
but from the delay in realizing it and from the manufacturing of the units.
Subramanian and Mohananpillai (1994) examined the growth, structural
changes, current status and problems of small industry. A detailed profile of the Kerala
small scale Industry was also given. The study concluded that the major strategic
question in Kerala was how to induce organizational forms, whereby small firms could
overcome the limitations imposed by industrial structure, tiny size and technological
backwardness. For inducing organizational behaviour, the study suggested that
government would have to play a market friendly role towards SSl units. This would
ensure co-operation between organizations and would lead to the growth of
employment, output and export by the modern small scale industry in Kerala.
Rao (1995) reported that the potential for investment related to technology
requisition and transfer in small scale and medium sector has assumed considerable
significance in their interest to face the challenges of liberation and globalization of
markets.
Literature Review 12
The International Perspective Planning Team (1995) which made an
extensive study on Indian small scale industries was of the opinion that Government
efforts for the promotion of this sector were largely scattered and dealt with only
isolated segment of the problem.
Charu. (1996) describes the growth of SSI with some policy issues. He made
a comparative analysis between large scale and small scale industries taking into the
industrial policy resolutions.
Mohan (1997) analyzed the marketing problems of small enterprises of food
processing industry in Kerala. The researcher examined the working of the units,
problems faced by SSl units, pricing methods, promotional aspects and distribution
aspects. The study concluded that the small enterprises in the food processing
Industries in the state were having a number of grave marketing issues like poor
capacity utilization, small investment in plant and machinery and working capital,
slow growth rate in sales and profit. It clearly indicates that the small enterprises in
the food processing industry are faced with some chronic problems.
Mali, (1998) observed that MSMEs have to face increasing competition in
the scenario of globalization and they have to improve themselves in many fields
especially in the field of management, marketing, product diversification,
infrastructural development, technological up gradation, etc. Moreover, new small
and medium enterprises may have to move from slow growth area to the high
growth area and they have to form strategic alliance with entrepreneurs of
neighbouring countries.
Salim (1998) proved that, in most categories of industries there is more
number of high performing units followed by moderate performing units. High
performing units have more market orientation than low performing Units. There is
a strong positive correlation between market orientation and business performance.
Literature Review 13
Gunasekaran, Forker and Kobu (1998) Small & medium enterprises (SMEs)
play a vital role in modern economics because of their flexibilities & ability to
innovate. In every economy, SMEs play a significant role in providing employment
opportunities & supporting large scale manufacturing firms. The study narrates the
experience of a small company to highlight how productivity can be improved with
limited resources.
Raje (2000) states that credit is an essential input for the working of small
scale industries. Any delay or inadequate supply of credit is detrimental to the
growth of the SSl units. Therefore, timely and adequate availability of credit is of
crucial importance for setting up and for expanding the existing SSl units.
Koshy and Joseph (2000) reported that there was a considerable increase in
the number of women entrepreneurs due to various support measures extended by
Governmental and non- governmental agencies and the changing attitude towards
woman entrepreneurships. However, woman entrepreneurships register low level in
backward districts of Wynad, Kannur and Kasargod, so they suggest that specific
programmes may be implemented in these areas to increase the level of
entrepreneurship.
George (2000) observed that the policy of protection with privileges for SSIs
induced this sector to remain small, and to become more inefficient with poor
product quality. It is not protection but competition that should be the rule of the
day.
Henny (2001) analyzed the approaches towards technology support for small
scale manufacturing enterprises in developing countries since the early 1970s.
According to him, early programmes tended to suffer from a number of weaknesses,
stemming for limited conceptualization of technology and an inadequate
understanding of the role of small scale sector in Industrial development more
broadly. Linking producers to new markets is an important precondition. Facilitating
Literature Review 14
access to information, especially through interactions with other parties, is another
aspect.
Batra (2002) highlighted the emerging issue of entrepreneurship
development and management of small scale industry. The researcher stated that in
a developing economy, small scale industries play a very significant role in
economic development of the country. These industries mostly represent a stage in
economic transition for traditional to modern technology. The study pointed out the
need for the development of entrepreneurship in small scale sector to provide
gainful employment, equitable distribution of national income, mobilization of local
resources and for balanced regional development.
Reji (2004) observed that the growth rate of SSl units in Kerala shows a
declining trend. The average annual growth rate during the study period was 11.86
percent. The district wise analysis indicates that more number of units could be seen
in Ernakulam District. The study conducted that small scale Industry in India and
Kerala are not able to sustain their growth rate in the post liberalization era unless
adequate steps are taken for its development and growth.
Bala Subramanya (2004) concluded that small scale industries in India are
serving in a global competitive environment after liberalisation and the removal of
protective measures. As a result, the growth of the sector in terms of number of
units, employment, output, and export has relatively declined. He further proposed
that the sector is in need of financial, and market support to overcome the taut
competition.
Mathew (2004) probed the reason for consternation in all India census report
on small-scale industries. The study observed that the vitality and vibrancy of the
Small scale sector anticipated under an era of post liberalisation remaining mostly
unrealized. The study stated that a well-built policy exclusively for small and
medium scale industrial sector is inevitable to fulfil its international commitments.
Literature Review 15
Sudan (2005) examined the challenges in the development of Micro and
Small Scale Enterprises by arising various questions. It described the meaning,
advantages, problems and policy options of micro and small enterprises sector. The
study concluded that the policies adopted by Govt. of India were the efforts to form
a dynamic MSE sector providing expanded employment opportunities to absorb all
new labour force.
Gopakumar (2005) observed that SSls in India have been shown a significant
progress in respect of number of units, production employment generation and export.
The Kerala economy also witnessed the same progress. The socio economic factors
such as educational qualification of the entrepreneurs, previous experience of the
entrepreneurs, heritage of the entrepreneurs and financial background of the
entrepreneurs play a vital role in the running of SSI units in a successful manner.
Anand and Murugaiah (2006), examined the performance of SSIs during the
post-liberalisation period. He observed that employment intensity, low factor cost
and equity size are important factors that make SSIs more competitive to meet the
competition.
Madanan (2006) discussed the impact of subsidies towards the growth of
SSIs in Kerala. He found that all stake holders of SSI sector consider SSI as a
critical one as it is one of the biggest employment providers in the state. The study
concluded that the withdrawal of subsidies was intricately related to ensuring
infrastructure, opportunity, amicable climate and other forms of support for SSIS.
He suggests that current administration of subsidies can be improved in through
reducing procedural delays, adopting single window mechanism and simplification
of procedures.
Rathod (2007), described the importance of small scale industrial sector, and
also the contribution of Indian small scale Entrepreneurs in world economy. This
study concluded that both opportunities and challenges were raised as the impact of
Literature Review 16
globalization on Indian Industry as a whole and the small scale sector in particular.
This study found that a major portion of our exports would have to gear up to the
new era of boundary-less economy. The study has suggested that there is need for
simplified legal and regulatory frame work, good governance, stuffiest and
accessible finance, suitable infrastructure.
Valsalachandran (2007) examined the various factors of Entrepreneurship in
SSI sector. The study concluded that there was continuous growth in SSI sector till
2000-2001, after that a decline in the overall growth is felt. The finding of the study
also reveal that the entrepreneurs in Kerala have been facing a number of social,
economic, managerial, technological and marketing problems in their units.
Bodla and Verma (2008) compared the performance of MSME in India on
the basis of cumulative annual growth rate (CAGR) during the pre- and post-
globalisation periods. The study compares performance of MSMEs during the pre-
liberalisation and post-liberalisation periods on the basis of parameters such as
export, output, sick units and percentage of net credit. The outcome revealed that the
overall CAGR performance was better during the post-liberalisation period, but not
so impressive.
Bargal et al. (2009) analysed the causal relationship among the three
variables GDP, SSI output and SSI exports. He also compared the performance
parameters of SSIs in the pre and post liberalization periods. The study found that
the annual average growth rate of different parameters of SSIs have declined in the
period of nineties in comparison with those during the pre-liberalisation era.
Sonia and Kansai (2009) analysed the situation of MSME sector before and after
the era of liberalization. They studied the MSMEs on the basis of growth in the number
of units, total output, employment generation and exports. Their study concluded that
the MSME sector has shown a better growth rate in the pre liberalization era as
compared to post liberalization era in respect of all these parameters.
Literature Review 17
Bhavani (2010) highlighted the subject of quality employment opportunities
generated by the MSME sector. He focussed on the point of quality employment,
and not short term employment. He underlined that MSMEs may contribute a high
percentage towards employment generation but that is more quantitative in nature,
rather than being qualitative. He also stressed on the use of technology for the
MSMEs which in turn would improve remuneration, create quality employment
opportunities and improve skills. Even though the use of technology may reduce the
rate of employment growth in the short run, it would ensure sustainable
employment opportunities for the MSME sector in the long run.
Shastri, et al. (2011) analysed the effects of globalisation on small scale
industrial sector and studied its growth performance in terms of number of units,
employment, output and export.
Venkatesh and Muthiah (2012) found that the role of small and medium
enterprises in the industrial sector is growing rapidly and they have become a
driving force for future growth. They also emphasised that fostering MSME sector
is essential for the economic well-being of the country.
Singh, et al. (2012) analyzed the performance of Small scale industry in
India and focused on policy changes which have opened new opportunities for this
sector. Their study concluded that SSI sector has made good progress in terms of
number of SSI units, production & employment levels. The study recommended the
emergence of technology development and strengthening of financial infrastructure
to boost SSI and to achieve growth target.
Lahiri (2012) has analyzed the definitional aspects of MSMEs and explored
the opportunities enjoyed and the constraints faced by them in the era of
globalization. Annual Average Growth rate (AAGR) has been used as the major
statistical tool to compare the performances of MSMEs during pre and post-
liberalization period with the help of four economic parameters, namely, No. of
units, production, employment and export. The study results show that except
Literature Review 18
marginal increase in growth rate in employment generation, the growth rate in other
parameters is not encouraging during the liberalization period. In the study it has
also been highlighted that MSMEs in India face a tough situation due to extreme
competition from large industries due to withdrawal of subsidy, lack of
infrastructure, anti dumping policy, challenges on product Standardization, total
quality management etc.
Srinivas, (2013) has studied the performance of micro, small and medium
enterprises, and analysed the contribution of MSME sector to economic growth of
India. He concluded that MSMEs play a significant role in inclusive growth of
Indian economy.
Karthika (2013) examined the problems of MSMEs in the era of worldwide
economy. The study also analysed the factors affecting MSMEs and the socio-
economic conditions of MSMEs. The study revealed that the MSMEs can overcome
all the problems and challenges by standardising their business process. They can
also adopt latest technology to improve the productivity. It was said that banks can
hold the industry by providing the credit facilities at low interest rate. The
Government and other related machineries should take effective measures to
improve the export performance of MSMEs in order to develop economy.
Thornton and FICCI, (2013) accentuated that in the face of emerging
challenges and to strengthen global outreach, the MSME sector has to play a crucial
role by demonstrating greater competitiveness and strategic positioning along the
value chain. The study put forth specific models and approaches that MSMEs could
explore to exploit new market opportunities. The report also suggests some innovative
marketing tools, along with the ways in which traditional strategies could be
sharpened so that the sector becomes globally competitive. Today it is not individual
enterprises that compete against each other, but global value chains that are mostly
competing at a global level. To attain the objective of becoming a preferred supplier
in the global value chain, the study suggests that the MSME sector would have to
Literature Review 19
comply with international standards and norms. Again the study says that to improve
competitiveness, the enterprises have to concentrate on core competencies and
outsource non-core activities. This would lead global companies to increasingly
outsource non-core activities to MSMEs across the world.
Chandraiah (2013) focused on economic policy introduced by government
of India in 1991 that gave thrust towards globalization process. Globalization in
India was adopted to integrate Indian economy with global economy. The policy
shift at the behest of International Monetary Fund and World Bank has led to
unequal competition between multinational companies and small Indian enterprises.
As MSME sector is a vital constituent of overall industrial sector of any country
particularly India, the promotion of this sector is a necessity.
Spithoven, et al. (2013) emphasised upon Open Innovation (OI) practices in
small and medium-sized enterprises. The lack of resources is an important barrier
for SMEs to engage in Open Innovation. But at the same time, the shortage of
resources is alluded as a drive for looking beyond organizational boundaries for
technological knowledge. The study analysed how Open Innovation (OI)
dimensions influence the innovative performance of SMEs in comparison to big
enterprises. One of the important findings of the study is that the effects of Open
Innovation (OI) practices in SMEs often differ from those in large organisations.
Vasu and Jayachandra (2014) observed that MSME sector pays a significant
role in term of balanced and inclusive growth. They also highlighted the prospects of
this sector in India.
Final Report of Fourth All India Census of MSMEs, gives a sound, accurate
and comprehensive database of MSMEs for sound policy formation.
The present study is an endeavour to describe the impact of globalisation on
MSMEs in Kozhikode district.
Literature Review 20
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India: Prospects and problems. Indian Journal of Applied Research, 4(5), 40.
Chapter 3
AN OVERVIEW OF SSI/MSME SECTOR
IN INDIA AND KERALA
3.1. Small Scale Industrial Sector - A Global Perspective
Small Scale business organisations have attained popularity in almost all
economies. The basic features of this type of business units and their objectives are
similar to a great extent, across the world. Their role is imperative in most of the
countries.
Rao
emphasised that the small scale sector has witnessed a dramatic
expansion in almost all parts of the world. It is not only in developing countries that
have experienced such a phenomenon, but a similar experience has also been
gathered by a large number of industrially developed countries like Japan, UK,
Germany, USA and Switzerland. Even in the developed countries of Western
Europe, United Kingdom and USA, there is recognition that small and rural
industries play a significant role in complementing the large industry and in
providing opportunities for creative energies of the skilled people.
Steven observed that in USA about 98 per cent of the businesses were
started as small, and a majority of them was concentrated on retail and service
related business. Small industries are labour intensive, and employ 35 percent of the
USA’s private sector workforce even though they posses less than one fourth of
USA’s business assets. Small business generates more jobs for the residents more
than twice that the industries generate and produce more than 38 per cent of USA’s
GNP and account for 42 per cent of business sales. Small industries create more
innovations than medium and large scale industries.
Guide describes the main reasons which make small business units in
Europe less dynamic. They include the smaller base of European industry and
An Overview of SSI/MSME Sector in India &Kerala
25
capitalism as compared to USA, the smaller size of the European market and no
start up at large scale for any innovations, rigid labour market in Europe, and lower
investment climate due to low saving and lower salaries in Europe as compared to
USA.
According to Singer “even in terms of productivity small industries (less
than 100 employees) produce about 90 per cent of the average industrial out per
person in the United States and about 85 per cent in the United Kingdom.
According to the ILO /JASPA African Employment Report, the promotion
of SSEs and especially, of those in the informal sector, is viewed as a viable
approach to sustainable development because it suits the resources in Africa.
An article in “The Times of India” reports that in Taiwan small firms see
MNCs as an opportunity, not a threat. Small firms are much more flexible and
simple than a limbering giant, they are able to produce components more cheaply
and shift constantly to new lines of production. Small industries face problems in
infrastructure and marketing. The Taiwan government helps the small industries to
overcome problems faced in infrastructures and marketing.
Korea and Indonesia have focussed more attention on the growth of the SSI
by reserving items exclusively for manufacturing under Small Scale Sector.
China has biggest SSI sector contributing largely to the national economy.
China is said to continue to rely on Mao’s saying of walking on two legs - “one
small and the other large”.
3.2. Small Scale Industrial Sector in India
India is an economy having scarce resource and idle manpower. So, it
identified that the small scale industrial sector can play a crucial role in bringing
economic development throughout the country. Our former Prime Minister Rajiv
An Overview of SSI/MSME Sector in India &Kerala
26
Gandhi, in his speech at the national convocation on small scale industries of India,
organised by the Federation of Association of Small Industries of India in New
Delhi on 17th September 1986, asserted the need for the development of small scale
sector. He articulated that small scale sector is one of the main legs of our industrial
development.
V.P. Singh, former Prime Minister of India, at the concluding session of
National Development Council meeting on June, 19th
1990 also stated the need for
development of small sector by saying “it is the small scale sector which has given a
large volume of employment and also boosted our exports”.
Mahatma Gandhi once said: “the poor of the world cannot be helped by
mass production, only by the production by the masses. If large number of
producers were to exist for wider markets, the entities that produce necessarily be
small. It is only the earth that is large. All else is small”.
In the words of Nanjappa, Small scale industry is a “golden mean” which
can bring the benefits of modern technology and economic production and can
emerge as an important plank to tackle the problems of unemployment,
underemployment, regional disparities and economic backwardness.
Vyas opined that small scale industries have the capacity to achieve
economic growth faster in view of their small gestation period, high employment
potential and relatively limited financial requirements. In a developing nation like
India, where population is high and income are low, it is inevitable to develop the
small industrial sector, which absorbs more men with low capital.
Vyas observed that balanced regional growth is a socio economic
requirement for all round development of the nation. Large industries have a
tendency to cluster around big cities. It creates economic and social evils like
pollution, slumps and shortage of civic facilities. It can be eliminated by setting up
of SSI Units in under developed areas and by providing employment to local people.
An Overview of SSI/MSME Sector in India &Kerala
27
In the case of small scale units the gestation period is lesser than large scale
industrial units. Harrison observed that SSI units are less dependent on imported
machinery and raw materials. They usually use locally available raw materials.
3.3. Definition of Small Scale Unit
The definition of Small Scale Units varies from one period to another
depending upon the pattern of economic development and policy of the
government. As per Industrial Policy resolution 1948, a logical Small Scale
Industrial Unit had an upper limit of investment of Rs: 5 lakhs. The Fiscal
Commission constituted in 1950 defined a Small Scale Industry as one, which is
operated mainly with hired labour of usually 10 to 50 people. The Small Scale
Industry Board at its first meeting held on 5th and 6th January 1955 adopted the first
working definition of small scale unit. It was as follows:
“A Unit employing less than 50 persons, with using power, and less than 100
persons, without the use of power, and with capital assets not exceeding Rs: 5
lakhs.” Since the working definition did not serve the purpose of maximum
utilisation of equipment and of capital outlay, the Ministry of Commerce and
Industry modified the definition w.e.f. 04-01-1960. Since then all industrial units
with a capital investment of not more than Rs 5 Lakhs, irrespective of the number of
persons employed, are included in SSIs. Again in 1962, the definition of SSI was
enlarged to cover all small scale units with capital assets ranging from Rs: 5 lakhs
to Rs: 10 lakh.
Definition based on Investment in Plant and Machinery
In 1966, the Ministry of Industries defined a Small Scale Unit on the basis of
investment in plant and machinery. It was as given below:
Small Scale Industries will include all industrial units with a capital
investment of not more than Rs: 7.5 lakhs, irrespective of the number persons
employed. The capital investment for this purpose will mean investment in plant
and machinery only. This definition was more specific about the nature of assets in
An Overview of SSI/MSME Sector in India &Kerala
28
which capital investment should be made. The value of plant and machinery is
calculated on the basis of original price paid by the owner.
In 1974, the above definition was revised as follows:
(1) Small Scale Industries: Undertakings having investments in fixed assets in
plant and machinery not exceeding Rs: 10 lakhs.
(2) Ancillary Industries : Undertakings having investments in fixed assets in
plant and machinery not exceeding Rs: 15 lakhs and in:
(a) the manufacture of parts, components, sub-assemblies, tooling or
intermediates; or
(b) the rendering of services and supplying or rendering or proposing to
supply or render 50% of their products or the total services as the case
may be, to other units for the production of other articles
Provided that no such undertaking shall be a subsidiary of, or owned or
controlled by any other undertaking.
In the year 1977 the Industrial Policy Resolution created a new sector called
Tiny Sector. It was defined as “All industries with a capital investment of Rs: 1 lakh
in plant and machinery located in rural areas and small towns are included in the
Tiny Sector.”
In the year 1980, the government redefined the limits of tiny units, ancillary
units and small scale units as given below:
(1) Tiny Units: The limit of investment increased from Rs: 1 lakh to Rs: 2 lakh.
(2) Ancillary Units: The limit of investment increased from Rs: 15 lakh to Rs:
25 lakh.
(3) Small Scale Units: The limit of investment increased from Rs: 10 lakh to
Rs: 12 lakh.
An Overview of SSI/MSME Sector in India &Kerala
29
In the year 1985-86 the Government again changed the investment ceiling of
small scale units and ancillary units. Accordingly, an undertaking having an
investment in fixed asset in plant and machinery not exceeding Rs: 35 lakhs will be
a small scale unit, and an undertaking having an investment in fixed asset in plant
and machinery not exceeding Rs: 45 lakhs will be ancillary unit.
The Government modified the definition of tiny unit in the year 1988 and
thus “all industries with a capital investment of Rs: 2.5 lakh in plant and machinery
and located in rural areas and small towns will be tiny units.”
A major change was made in the definition of Small Scale Industries,
Ancillary Industries and Tiny Enterprise in the year 1991:
(1) Small Scale Industry:
(A) An industrial undertaking in which investment in fixed asset in plant and
machinery, whether held on ownership terms or on lease or by hire
purchase, does not exceed Rs: 60 lakhs.
(B) In case of undertaking referred to in (A) above, the limit of investment in
fixed asset in plant and machinery shall be Rs: 75 lakhs, provided the unit
undertakes to export 30% of the annual production by the end of the third
year from the date f commencement of production.
(2) Ancillary Industry:
An undertaking which is engaged in or proposed to be engaged in the
manufacture of or production of parts, components, sub-assemblies, tooling or
intermediates, or the rendering of services, and the undertaking supplies or render or
proposes to supply or render not more than 50% of its production or service, as the
case may be, to one or more other industrial undertakings and whose investment in
fixed asset in plant and machinery, whether held on ownership terms or on lease or
on hire purchase, does not exceed Rs: 75 lakhs.
An Overview of SSI/MSME Sector in India &Kerala
30
(2) Tiny Enterprise: The limit of investment in plant and machinery is increased to
Rs: 5 lakh, irrespective of location of the unit.
In the year 1997, based on the recommendations of Expert Committee, under
the chairmanship of Dr. Abid Hussain, the Government of India raised the ceiling
for all Small Scale Industries including Ancillary Units and export oriented units to
Rs 3 crore and that of Tiny Units was increased to Rs:25 lakhs. However, in
December 2000 the Government has reduced the investment limit in Plant and
Machinery from Rs 3 crore to Rs: 1 crore as per the recommendations of Study
Group under the chairmanship of Dr. S. P. Gupta. But the limit for investment in
Tiny Units has been retained as Rs:25 lakhs.
Till October 2006, when Micro, Small, Medium Enterprises Act, 2006 was
implemented, the investment ceiling of Small Scale Industries were as follows:
i) Small Scale Industrial Units: Units having investment in plant and
machinery up to Rs.1 crore.
ii) Ancillary Industrial Units: Units having investment in plant and machinery
up to Rs.1 crore. Such an undertaking must sell not less than 50 percent of
its output to other industrial undertakings.
iii) Export-oriented Units: Units having investment in plant and machinery up to
1 crore. The unit must export at least 30 percent of its output by the end of
three years from the date of commencement of production.
iv) Tiny Units: Units having investment in plant and machinery up to Rs.25
lakhs irrespective of location.
Definition of SSIs in India – A Bird’s Eye View
Following table shows chronological revision of investment ceiling in case
of Small Scale Industrial Unit (SSIs) in India from 1950 to 2006:
An Overview of SSI/MSME Sector in India &Kerala
31
Year Investment Limits Additional Conditions
1950 Up to Rs 5 lakhs in fixed assets
Employment of less than 50 with using power OR, less than 100 persons without using power
1960 Up to Rs 5 lakhs in Plant & Machinery
Employment condition was dropped
1966 Up to Rs 7.5 lakhs in Plant &Machinery
No condition
1975 Up to Rs 10 lakhs in Plant & Machinery
No condition
1980 Up to Rs 20 lakhs in Plant & Machinery
No condition
1985 Up to Rs 35 lakhs in Plant & Machinery
No condition
1991 Up to Rs 60 lakhs in Plant & Machinery
No condition
1997 (Dec) Up to Rs.3 crores in Plant &Machinery
No condition
1999(Dec) to 2006
Up to Rs 1 crore in Plant & Machinery
No Condition
3.4. MSMED Act, 2006
A comprehensive act for the development and regulation of small enterprises
had been a long outstanding demand of the Sector so as to free it from a plethora of
laws and regulations. The need has been emphasized from time to time by stake
holders at different corners. In addition, recommendations to provide for a proper
legal framework for small sector to relieve it of the requirements to comply with
multiple rules and regulations were made by the Committees such as the Abid
Hussain Committee (1997) and Study Group under Dr. S.P. Gupta (2000). While the
small scale industries continued to be important for the economy, in the recent years
An Overview of SSI/MSME Sector in India &Kerala
32
the small scale services have also emerged as a significant sector contributing
substantially to the economy and employing millions of workers. Therefore, it
became necessary, across the world, to address the concerns of both the small scale
industries and services together and recognize them as small enterprises. In a fast
growing economy like ours, the natural mobility of small enterprises to medium
ones has to be facilitated through appropriate policy interventions and legal
framework. With these objectives in view, the Government came with an exclusive
legislation for micro, small and medium enterprises known as the Micro, Small and
Medium Enterprises Development Act, 2006.
With the enactment of the MSMED Act, 2006, which came into force on 2nd
October 2006, the system of SSI registration has been done away with and the new
system of filing Entrepreneurs Memorandum (EM) has been introduced. Also the
earlier concept of “Industries” has been changed to “Enterprises.”
Classification of Enterprises under MSMED Act includes:
The Micro, Small and Medium Enterprises Development Act, 2006 defines
the Micro, Small and Medium Enterprises based:
(i) on the investment in plant and machinery for those engaged in
manufacturing or production, processing or preservation of goods
(Manufacturing Sector); and
(ii) on the investment in equipment for enterprises engaged in providing or
rendering of Services (Service Sector)
The guidelines with regard to investment in plant and machinery or
equipment as defined in the MSMED Act, 2006 are:
An Overview of SSI/MSME Sector in India &Kerala
33
Nature of Enterprise Manufacturing Enterprises Service Enterprises
Micro Not exceeding Rs.25.00 Lakhs Not exceeding Rs.10.00 Lakhs
S(Manufacturing Sector)mall
More than Rs.25.00 lakhs but does not exceed Rs.500.00 lakhs
More than Rs.10.00 lakhs but does not exceed Rs.200.00 lakhs
Medium More than Rs.500.00 lakhs but does not exceed Rs.1000.00 lakhs
More than Rs.200.00 lakhs but does not exceed Rs.500.00 lakhs
Features of Small Scale Industries
The following are the features that are particular to small scale industries.
1. In Small Scale Units, generally, a single individual occupies all the key
business positions. Many often SSIs are one-man show. Even though they
are formed as partnerships or companies, the activities are mainly carried
out by one of the partner’s or directors.
2. The management of Small Scale Industrial Units is always vested in the
hands of owner himself. He has the direct contact with the business
activities.
3. In Small Scale Industrial Units, the gestation period is always less than
that of large scale industrial units.
4. The scale of operation of Small Scale Units is mostly localised. They
cater the needs of local people.
5. Since the Small Scale Industries use the indigenous resources (both
human and non-human) and technologies, they can be set up any place
subject to the availability of material and human resources.
6. Small Scale industrial units are more flexible and reactive to the socio-
economic conditions prevailing in the society.
An Overview of SSI/MSME Sector in India &Kerala
34
There are many economic activities, which are not suited to large scale
enterprises. Small scale industries can specialise in such activities. An efficient
small scale industrial sector can substantially enhance the efficiency of large
enterprises by relieving them of the necessity of making certain operations, which
for some reasons or the other the small units can produce at a lower cost.
Technical ground is also favourable to scale small industries. Harrison stated
that the cheapest and quickest way of spreading appropriate technology widely is to
encourage small scale enterprises.
According to the Economic Survey 2001-02, the small scale sector has
played a very important role in the socio economic development of the country
during the past 50 years. It has significantly contributed to the overall growth in
terms of GDP, employment generation and exports. The performance of small scale
sector therefore has a direct impact on the growth of the overall economy.
3.5. Present Scenario of MSME Sector in India
The MSME sector in India is diverse in terms of its size, level of
technology used and range of products and services produced. The range of
products of MSME sector varies from tradition industries to electronic devices,
microprocessors, medical instruments, etc. the sector shows a constant growth of
11% till 2010-01, whereas growth rate was 19% in 2011-12 1nd 14% IN 2012-13
(Economic Review of Kerala, 2015).
As per the Fourth All India Census of micro, small and medium
enterprises were 3.61 crore, of which 0.16 crore were registered enterprises. They
play a crucial role in enhancing industrial growth by contributing 37.5% of
India’s GDP. A number of schemes are being implemented by the Ministry of
MSMEs, Govt of India, for the establishment of new units and development of
the existing units. These include:
An Overview of SSI/MSME Sector in India &Kerala
35
1) Prime Minister’s employment generation programme
2) Micro and Small Enterprises- Cluster Development Programme
3) Credit Guarantee Fund Scheme for micro and small enterprises
4) Performance and Credit Rating Scheme
5) Assistance to Training Institutions
6) Scheme of Fund for Regeneration of Traditional Industries.
During 12th Five Year Plan, an outlay of Rs: 24,124 crore has been
allocated for Ministry of MSME which represents an increase of 133.53% over
the 11th Five year Pan allocation of Rs: 10,330 crore. The Ministry has been
allocating outlays of Rs: 2,251 crores, Rs: 2,610 crores and Rs: 2,612.51 crores
for the years 2013-14, 2014-15 and 2015-16 respectively under Plan for
promotion of MSMEs in the country. India is one amongst very few countries
which has a legal frame work for the MSME sector in the form of MSMED Act,
2006.
Udyog Aadhar Memorandum (UAM)
In September 2015, the Ministry of MSMEs has notified that every micro,
small, medium enterprise shall file Udyog Aadhar Memorandum (UAM). This is
a path breaking step to promote ease of doing business for MSMEs in India as the
UAM replaces the filing of Entrepreneurs Memorandum (EM part-I and II) with
the respective States or Union territories. The entrepreneurs in the MSME sector
can file UAM on http://udyogaadhaar.gov. in online, if they have an Aadhaar
Number and will instantly get a unique Udyog Aadhaar Number (UAN). The
UAM can be filed in offline mode with the General Manager of the concerned
District Industries Centre (DIC).
3.6. MSME Sector in Kerala
In Kerala, MSME sector contributes to the process of economic growth,
employment generation and balanced regional development. It has the potential to
An Overview of SSI/MSME Sector in India &Kerala
36
emerge as a strong, vibrant and globally competitive sector in the State’s
economy. Kerala, with its excellent connectivity, communication net work and
availability of manpower, is the best suited for the growth of MSME sector.
The potential of IT industry in the MSME sector is big as the State offers
best connectivity with broadband reach in almost all parts of the State. I is
estimated that the share of Tier- III cities in the IT industry in India is expected to
grow up rom 10% now to 80%. Cosulting firm KPMG has suggested that the
State can become an economic growth driver of the country by tapping its SME
sector and IT sector.
The MSME sector targets mainly the various social groups in rural areas
like SC, ST, Women, Youth, Physically Challenged, etc. This helps to reduce the
social and regional imbalances and thereby ensures more equitable distribution of
income and wealth.
The MSME sector contributes very much for the socio economic
development of the State. As per the MSME Survey and Quick Results of the
Fourth Census, of the total number of MSMEs in India, 5.62% is in Kerala. Ming
under this sector include handicrafts, handloom, khadi, food processing
industries, garment making and textile industries, industries related to
coir/wood/bamboo/ plastic/rubber/leather/clay/electronic/ electronic components,
etc.
The Directorate of Industries and Commerce of Government of Kerala
acts as a facilitator for industrial promotion and sustainability of MSME sector
and traditional industrial sector in the State with the help of Directorate of
Handloom and Textile, Directorate of Coir and Khadi & Village Industries Board.
A total amount of Rs:2,373.74 crore have been provided for the development of
industry and minerals during the first four years of 12th Five Year Plan.
An Overview of SSI/MSME Sector in India &Kerala
37
3.7. State Budget 2015-16: Announcements for MSMEs
The highlights of 2015-16 State budget announcements in industry sector
are:
1) Encouraging entrepreneurship in the State is one of the seven themes
focussed on State budget 2015-16.
2) The State budget 2015-16 given priority on new initiatives for the
development of a culture of entrepreneurship and establishment of
business incubation centres to co-ordinate entrepreneur promotion
activities for creating more employment opportunities in the industry
sector.
3) It is proposed to establish Trade Facilitation Centres in selected District
Industries Centres to promote trade in products like handloom,
handicraft, coir, etc. to enhance traditional industries.
3.8. Kerala Perspective Plan 2030- Vision and Initiatives
The Mission obtained in Kerala Perspective Plan 2030 under Micro, Small,
Medium sector is “Kerala’s evolution into knowledge driven competitive economy
with spirit of entrepreneurship, innovation, social inclusion, tolerance and
diversity.” The measures and schemes initiated in integration with perspective plan
are:
A.) Improving infra structure in existing DA/DPs, construction of multi storied
industrial estates and Assistance for promoting industrial areas/plots in private
sector:
Infra structure investment on PPP mode
Promoting mutual trust between government and entrepreneurs through
partnerships
An Overview of SSI/MSME Sector in India &Kerala
38
Involve real world entrepreneurs
Promote private investments
Develop eco-friendly parks
B.) Entrepreneur Support Scheme and Start Up subsidy for creation of new
employment opportunities:
Encourage technology up gradation
Promotion of micro finance
C.) Business Incubation Centre in Hand loom, Power loom and DIC:
Involve real world entrepreneurs
Promote entrepreneurial earning in an informal learning environment.
Increase visibility and emphasise the role of entrepreneurship in creating
new jobs.
3.9. State Profile of MSME Sector
The number of new MSMEs filed Memorandum under MSMED Part II in
Kerala during the year 2014-15 was 15455, 3.05% more than that of previous year
which was 14997. Out of 15455; 600 (4%) MSMEs were registered by SCs, 85
(0.5%) by STs and 3735 (24%) by women.
Investment on the sector was increased by7.57% to Rs:2,38,794.75 lakhs
from Rs; 2,22,412.30 lakhs in the previous year while employment generated
decreased by 5% from 87,789 to 83,500 numbers. The value of goods and services
produced in 2014-15 increased by 5.4% to Rs: 7,11,975.39 lakhs from 6,75,597.11
lakhs in the previous year.
In Kerala, during 2014-15, 6915 new entrepreneurs have filed memorandum
with an investment of Rs: 1,57,799.62 lakhs to provide employment to 38,280
persons. As on 31st March 2015, the total number of working SSI/MSMEs
registered in Kerala is 2,49,696. Of these, 4% have promoted by Scheduled Castes,
An Overview of SSI/MSME Sector in India &Kerala
39
0.7% by Scheduled Tribes and 25% by women entrepreneurs. The total investment
was Rs: 16,73,851.70 lakhs while the total value of goods and services produced
was Rs: 64,44,288.56 lakhs which indicates an increase of 26% over Rs: 50,848.27
lakhs of previous year. The total number of employment generated was 12,74,385 as
on 31.03.2015.
3.10. Problems of MSME Sector
It is a global fact that the development of an economy mainly depends on the
growth of its MSME sector. In India, MSME sector is the backbone of our
economy. However, the sector is facing a lot of internal and external problems.
Even though the problems differ from industry to industry, they are generally
occurred due to faulty management practices, marketing strategy, technological,
financial, government policy level, globalisation and competition from other units.
The important problems faced by MSME sector can be listed as follows:
1. Lack of raw material
2. Under utilisation of capacity
3. Inadequate labour
4. High cost of production
5. Lack on marketing strategies
6. Lack of proficiency in management
7. Lack of finance
8. Out dated technology
9. Lack of proper assessment of market situations
10. Problems related with the change of economic policies.
As MSME sector is imperative for the economic development of the
country, utmost care must be taken for proper handling the sector in Kerala in the
era of globalisation.
An Overview of SSI/MSME Sector in India &Kerala
40
3.11. Impact of Globalisation on SSI/MSME Sector
Globalization is the process of integration national economies with
economies across the world. In the Indian context it is connecting the economy of
India with the world economy. Globalisation has played a crucial role in making
SSI/MSME sector to be competitive to face the challenges placed by large business
organisations within and outside the country.
As a result of globalisation, better quality products of foreign markets get
opportunities to enter into our economy. At the same time, as the marketing
operations of SSI/MSME sector in our country is already weak, the entry to foreign
markets become a great threat to them. So policy frame work and assistance are
being done by the government authorities for the promotion of MSME sector in
India.
3.12. Globalisation and SSIs/MSMEs in Kerala
Any potential impact of globalisation depends upon in what way the
government and the entrepreneurial community would respond or reorient
themselves, to an externally determined environment. Competition between the
MSME sector and large scale sector is severe. It is quiet natural that MNCs produce
a large volume of goods to meet the global requirements. So they enjoy the benefits
of economies of scale. On the other hand, as an important employment generating
sector in the State, the MSME should also be protected in accordance with their role
in the economy.
An Overview of SSI/MSME Sector in India &Kerala
41
References:
1) Rao, S. (2001). Entrepreneurship and small business management.
Bombay: Discovery Publishing House.
2) Solomon Steven (1986) “Small Business” – USA, (Crown Publishers).
3) Guide, V.J.C. (1999) “to small scale industries policies, procedure and
practice”, Bharat publishing house, New Delhi.
4) Singer, H. (1964). International Development: Growth and Change. New
York: McGraw Hill.
5) ILO, JASPA. (1988). African Employment Report. Geneva, Switzerland:
ILO.
6) Times of India. (1997). Create small scale Multinationals. March 23rd.
7) Nanjappa, K.R. (2000). Industries in the rural economy- A review of
progress and prospects. Yojana, 15, 15.
8) Vyas, J. (1973). Small scale industry handbook. Ahammadabad:
N.K.Vyas Publications.
9) Vyas, J. (1986). Small scale industry hand book. Ahammadabad:
N.K.Vyas Publications.
10) Harrison, P. (1979). Small is appropriate. New Scientists, 82, 1149.
Chapter 4
PROFILE OF KOZHIKODE DISTRICT
4.1. Kozhikode District : General Profile
Kozhikode district is situated in the southwest coastal region of Kerala
state. The headquarters of the district is located in the Kozhikode city which was
earlier called as Calicut. The district got its name from the two terms namely
‘koyil’ meaning palace and ‘kota’ meaning fort. Both the terms together means
"A place of fortified palace". During the ancient period of time the Kozhikode
city had trade relations with Europeans. Vasco De Gama, a Portuguese
navigator, found the Kozhikode district in 1498 through the sea route to India.
On 1st January, 1957 the Kozhikode district was emerged as a separate district in
the map of Kerala state.
Geographically, the district lies at 11°26'N latitude, 75°78'E longitude and 1 m
Altitude. The district covers an area of 2,345 sq km and it is bounded by Kannur
district on the north, Wayanad district on the east, Malappuram district on the south
and the Arabian Sea on the west. The climate of the district is characterised as the hot
and humid. The actual rainfall in the district was 2869.2 mm in the year of 2015-16.
For administrative purpose, the district is divided into 3 sub-districts, 51
towns and 51 villages. There are 3 Parliamentary constituencies and 11 Assembly
constituencies in the district.
According to 2011 census the district has a population of 30,86,293 (Person)
out of which 14,70,942 are males and 16,15,351 are females. The district has a sex
ratio of 1098 females for every 1000 males. In the year 2001-2011 the population
growth rate in the district was 7.2% (Person) including 5.12% are males and 9.16%
are females.
Profile of Kozhikode District 43
The economy of the district is mainly dependent on agriculture. More than
half of its population are engaged in agriculture in order to earn their livelihood. The
chief agricultural products in the district are Banana, coconut, paddy, nuts, pepper,
ginger, turmeric, cashew, rubber, tapioca, areca nut, etc. The adoption of the new
agricultural technologies amongst the famers of the district helps to increase the
production of various agricultural items. Every year a huge amount of revenue
comes from these agricultural products, and thus the economy of the district is being
helped by the agricultural sector to a great extent. The district is industrially
backward when comparing with other districts of the State. In the year 2014-2015
the GDP of the district was Rs: 37,30,678 lakhs at current price.
The district is well known as a home of several reputed educational
institutions. The Calicut University situated about 24 km in the southern part of
Kozhikode in the Malappuram district was established in 1968 and most of the
colleges in the Kozhikode district are affiliated to this university. Some of its
recognised colleges are Government Engineering College, Malabar Christian
College, Zamorin's Guruvayurappan College, St. Joseph's College, Farook College,
Government Arts and Science College, Providence Women's College, Government
Homeopathic Medical College, Government Law College, Government College of
Teacher Education, Kerala School of Mathematics, etc. As per 2011 census the
literacy rate in the district is 95.08% (Persons) including 97.42% are males and
92.99% are females.
C.H. Mohammed Koya, an eminent Indian politician and the tenth Chief
Minister of Kerala from 12th October, 1979 to 1 st December, 1979 was born on 15th
July, 1927 at Atholi in the Kozhikode district.
The district has several centres which attracts numerous travellers from
different parts of the country as well as world. Sweat Meat Street, popularly known
as SM Street, is the one of the busiest shopping spots of Kozhikode. The street got
this name because of the presence of numerous sweet meat stalls. Beypore town,
Profile of Kozhikode District 44
situated near to the Beypore River at a distance of 9.65 km from the Kozhikode.
Beypore is one of the significant fishing ports of the Kerala. Thusharagiri, also
known as the 'Green Splendor' is situated 55 km away from the Kozhikode city. The
mesmerising scenery creates by the four waterfalls in the heart of the forest and
streams in the hilly region attract the tourists from far off places. Some other notable
places of interest in the district are Kallai, Kappad, Kirtads, Mananchira Square,
Science Centre & Planetarium, Kadalundi, Kozhikode Beach, Vadakara, Kuttichira
Mosque, Krishna Menon Museum, etc.
S K Pottekkatt, a distinguished Malayalam writer and author of nearly sixty
books was born on 14 March, 1913 at the Kozhikode city. He was honoured by
many prestigious awards including Kerala Sahithya Academy award in 1961, the
Jnanpith Award in 1980 and many more.
4.2. Industrial Profile of Kozhikode District
Kozhikode District has a total land area of 2,344 sq.km. and a coastal line of
about 71 km. Kozhikode, with all its achievements in physical quality of life of
people, quality of infrastructure, availability of qualified manpower, natural and
agricultural resources, good climate presents a paradox in the industrial front. It
remains industrially backward, compared to Ernakulam, Thiruvananthapuram,
Thrissur, Palakkad, etc. in spite of vast unemployed educated manpower and high
saving rates. Not only had a good part of its manpower went outside the state for
employment but its entrepreneurship also went outside Kerala for investment. In
order to promote investment and employment, an aggressive repositioning strategy
has become the need of the hour. The government has taken a series of measures in
this regard. The Malabar Spinning Mill, Kerala Soap Factory, Steel Complex, etc.
are revitalised by the appropriate action of government in the right time. The
industrial policy aimed at, to make the state an investor friendly one. On the other
hand, the available capital, skilled manpower and resources are not being tapped
Profile of Kozhikode District 45
adequately, to reduce the size of unemployment, to utilise the existing resources to
the maximum extent possible, to increase the production, income and employment;
the only way is the growth of MSME sector.
4.2.1. Existing Industrial Scenario
The following table gives a summary about the existing industrial scenario
of Kozhikode district:
Table No. 4.1: Existing Industrial Scenario of Kozhikode District
Sl. No. Particulars Size
1 Registered working SSI/MSME units as on 31/03/2014 (Nos.) 15,982
2 Employment generated by the above SSIs 78,471
3 Investments in plant and machinery (Rs: in lakh) 95,173.4
4 Employment in large and medium industries 560
5 Number of industrial land (DA/DP) 2
6 Number of mini industrial estates 12
Source: Industrial potential survey 2014, Kozhikode District, Department of Industries and Commerce, Kerala
Following are the seven medium scale industries in the district:
Table No. 4.2: Medium Scale Industries in Kozhikode District
Sl. No. Name of Unit Product Manufacturing
1 M/s. Peekay Rerolling Mills, Cheruvannur Steel
2 M/s. Peekay Steel Casting, Nallalam Steel
3 M/s. Uniroyal Marine Exports Ltd., Vengalm Marine products
4 M/s. Steel Complex, Cheruvannur Steel
5 M/s. Parisons Agro Tech, West Hill Maida, Dalda
6 M/s. VKC Group, Cheruvannur Foot wear
7 M/s. P K Floor Mill Flour Mill
8 Thiruvannur Cotton Mill Clothes
Source: Industrial potential survey 2014, Kozhikode District, Department of Industries and Commerce, Kerala
Profile of Kozhikode District 46
4.2.2. Working MSME Units in Kozhikode as on 31st December 2014
The following table shows the details of working MSMEs in Kozhikode
district which are coming under manufacturing sector:
Table No. 4.3: Working MSMEs in Kozhikode (Manufacturing Enterprises)
Area Type No. of Units
Investment (Rs in lakh)
No. of Employment
Kozhikode Taluk
Micro 4,115 25,374.08 25,230
Small 194 13,667.54 4,314
Medium 2 1,350.00 103
Total 4,311 40,391.62 29,647
Koyilandy Taluk
Micro 1,074 4,392.48 4,871
Small 23 2,066.56 803
Medium 0 0 0
Total 1,097 6,459.04 5,674
Vatakara Taluk
Micro 957 4,690.59 4,314
Small 26 2,041.87 284
Medium 0 0 0
Total 983 6,732.46 4,598
Kozhikode District
Micro 6,146 34,457.15 34,415
Small 243 17,775.97 5401
Medium 2 1,350.00 103
Total 6,391 53,583.12 39,919
Source: Industrial Potential Survey of Kozhikode 2014, Department of Industries and Commerce, Kerala
The following table shows the details of working MSMEs in Kozhikode
district which are coming under service sector:
Profile of Kozhikode District 47
Table No. 4.4: Working MSMEs in Kozhikode (Service Enterprises)
Area Type No. of Units Investment (Rs in lakh)
No. of Employment
Kozhikode Taluk
Micro 471 996.12 2779
Small 58 2,410.88 265
Medium 1 300.00 3
Total 530 3707.00 3,047
Koyilandy Taluk
Micro 115 259.77 760
Small 10 254.00 86
Medium 0 0 0
Total 125 513.77 846
Vatakara Taluk
Micro 121 226.22 1,939
Small 10 221.00 31
Medium 0 0 0
Total 131 447.22 1970
Kozhikode District
Micro 707 1524.51 5,478
Small 78 2,885.87 382
Medium 1 300.00 3
Total 786 4,710.38 5,863
Source: Industrial Potential Survey 2014, Kozhikode District, Department of Industries and Commerce, Kerala
The following table shows the details of all working MSMEs in Kozhikode
district which are coming under manufacturing and service sector:
Profile of Kozhikode District 48
Table No. 4.5: Working MSMEs in Kozhikode (Manufacturing and Service Enterprises)
Area Type No. of Units Investment (Rs in lakh)
No. of Employment
Kozhikode Taluk
Micro 4,586 26,370.20 28,009
Small 252 16,078.42 4,579
Medium 3 1650.00 106
Total 4,841 44,098.60 32,694
Koyilandy Taluk
Micro 1,189 4,652.25 5,631
Small 33 2,320.56 889
Medium 0 0 0
Total 1,222 6,972.81 6,520
Vatakara Taluk
Micro 1,078 4,916.81 6,253
Small 36 2,262.87 315
Medium 0 0 0
Total 1,114 7,179.68 6,568
Kozhikode District
Micro 6,853 35,939.26 39,893
Small 321 20,661.85 5,783
Medium 3 1,650.00 106
Total 7,177 58,251.11 45,7822
Source: Industrial potential survey 2014, Kozhikode District, Department of Industries and Commerce, Kerala
The above tables reveal that out of the total 7,177 working MSME/SSI units
in Kozhikode district, 4841 (67.45%) are situated in Kozhikode taluk. Of the
remaining MSMEs 1222 (17.03%) are in Koyilandy taluk and 1114 (15.52%) are in
Vatakara taluk. When we consider the total employment opportunities provided by
MSMEs in Kozhikode district, 71.41% is generated by Kozhikode taluk; and 14.24 %
and 14.35% are generated by Koyilandy and Vatakara taluks respectively. The total
investments in the MSME sector of Kozhikode district is spread over Kozhikode,
Koyilandy and Vatakara taluks as 75.75%, 11.97% and 12.33% respectively.
Of the total MSMEs in Kozhikode district, 95.49% (6853) are micro
enterprises, 4.47% (321) are small enterprises and 0,04% (3) are medium enterprises.
Profile of Kozhikode District 49
Out of the total, 6391 MSMEs (89.05%) are coming under manufacturing
sector and the remaining 786 MSMEs (10.95%) are service enterprises.
4.2.3. Gender wise Distribution of MSMEs in Kozhikode District
The following table shows the gender wise distribution of MSMEs in
Kozhikode District as on 31st December 2014:
Table No. 4.6: Distribution of MSMEs in Kozhikode District on the Basis of Gender
Gender Micro Small Medium Total Total Investment (Rs: in lakh)
Male 5,755 289 3 6,047 53,152.78
Female 1,098 32 0 1,130 5,140.72
Total 6,853 321 3 7,177 58,293.50
Source: Industrial potential survey 2014, Kozhikode District, Department of Industries and Commerce, Kerala
The table shows that out of the 7177 MSME units, 6047 (84.26%) are owned
by male and the remaining 1130 units (15.74%) are owned by female entrepreneurs.
4.2.4. MSME Units Filed Part II From 2007-2014
Following table shows the number of MSME units filed part II from 2007-08
to 2013-14:
Table No. 4.7: Number of MSME Units Filed Part II in Kozhikode District
Year Number of
Units Investment
(Rs: in lakhs) Number of
Employment
2007-08 380 2,895.34 2,701
2008-09 406 1,650.11 2,240
2009-10 602 3,281.05 2,395
2010-11 875 4,642.00 6,551
2011-12 817 11,372.93 5,082
2012-13 1,067 15,731.62 6,790
2013-14 948 14,364.98 6,092
2014-15 (Up to Jan 2015) 886 15,440.40 4,985
Total 5,981 69,378.43 36,836
Source: Industrial potential survey 2014, Kozhikode District, Department of Industries and Commerce, Kerala
Profile of Kozhikode District 50
4.2.5. Sector wise Details of MSME Units in Kozhikode District
Following table shows the distribution of MSMEs in Kozhikode district on
28th December 2015, on the basis of sector in which they falling:
Table No. 4.8: Sector-wise Distribution of MSMEs in Kozhikode District as on
28-12-2015
Sl. No.
Sector No. of Units
Investment (Rs: in lakhs)
No. of Employment
1 Agro & Food based 1,374
(18.98%) 9,350.27 6,328
2 Textile, Readymade Garments 562
(7.76%) 2,555.28 4,699
3 IT Industries 224
(3.09%) 1357.71 1,674
4 Wood/Wooden based Furniture
1,136 (15.70%)
5,771.16 6,239
5 Paper & Paper Products 143
(1.98%) 3,498.49 998
6 Rein/leather based 222
(3.07%) 4,063.52 3,989
7 Chemical based 402
(5.56%) 3,181.38 2,457
8 Rubber & Plastic Products 359
(4.96%) 4,535.11 2,383
9 Glass & Ceramics 488
(6.74%) 2,841.04 3,048
10 Mining & Quarrying 56
(0.77%) 2,375.70 426
11 General Engineering 680
(9.39%) 2,875.53 3,924
12 Service Activities 572
(7.90%) 5,135.46 4,056
13 Printing & Publishing 329
(4.55%) 5,476.24 1,714
14 Machinery & Equipment 343
(4.74%) 2,783.24 1,717
15 Miscellaneous 348
(4.81%) 2,640.50 2,430
Total 7,238
(100%) 58,440.63 46,082
Source: Industrial potential survey 2014, Kozhikode District, Department of Industries and Commerce, Kerala
Profile of Kozhikode District 51
The above table tells us, out of the total MSMEs in Kozhikode District, the
agro and food industries sector holds the maximum number of MSMEs (18.98%).
Wood based furniture industries and general engineering industries occupy
respectively second and third places.
4.2.6. SWOT Analysis
The attraction of Kozhikode has been growing, especially among the
residential and commercial developers seeking opportunities in the greater
Kozhikode area. The developments such as ULCC Cyber Park and Kozhikode
Cyber Park; and the investments in residential and commercial developments are
solid indicators of aggressive growth of the district.
Kozhikode is one of the main commercial centres of Kerala. The economy is
mainly business oriented. A large portion of the male population is employed in the
Middle Eastern countries, and their remittances to home are an important part of the
local economy. Kozhikode has witnessed a building boom in recent years. This is
particularly evident in the number of malls recently built in the District.
Real estate sector has witnessed heightened activity due to perceptible
demand in many sectors such as hospitality, residential, retail and office space.
Traditionally, the demand from leisure travellers to tourist destinations to Wayanad
and northern region of Kerala has been fuelling the growth and development of
hospitality industry.
The availability of low cost highly skilled manpower, high literacy, female
IT professionals, low cost of living, etc. are expected to attract many IT companies
and other knowledge based industries to Kozhikode in the next 5 years.
The industrial scenario reveals the following are the strengths, weaknesses,
opportunities and threats of the district:
Profile of Kozhikode District 52
a) Strengths:
1. Availability of good infrastructure
2. Availability of agricultural and natural resources
3. Very good tradition in industry, trade and commerce
4. Presence of unemployed educated youth
5. Presence of technical and high end institutions (IIM, NIT, etc)
6. People having entrepreneurial culture
7. Good climate
8. Availability of banking facilities
9. Potential of NRIs
10. Availability of industrial estates, industrial parks, mini industrial estates, etc.
11. Good market prospects for all consumer goods
12. Availability of skilled labour at comparatively low cost
13. LSGDs are showing keen interest for the promotion of MSMEs
b) Weaknesses
1. Absence of large scale industries
2. Non availability of land at reasonable rates
3. Scattered input resources
4. Inadequate work culture
5. Seasonal availability of input resources
6. Most of the industrial units are micro units having poor economic viability
7. Non availability of highly skilled labour
8. Irregular power supply
9. High density of population
10. Inadequate availability of technical consultants
c) Opportunities
1. Investment climate
2. Growth in tourism sector
Profile of Kozhikode District 53
3. Global market due to liberalisation, privatisation and globalisation
4. Reduction in Gulf opportunities
d) Threats
1. Lack of standardisation of products
2. Competition from outside state and outside the country
3. Lack of technology training facilities
4. Lack of co-ordination between line departments and financial institutions
5. Lack of confidence among entrepreneurs
6. Lack of professional managers and project consultants
7. High cost of land
8. Lack of awareness about industrial opportunities and technology
9. Inability to achieve technical standards and scale
10. Lack of entrepreneurship training facilities
By identifying the strength and weaknesses; and to face threats and exploit
the opportunities, following programmes are planned by the authorities;
1. Sensitisation programmes are to be conducted to impart the importance of
standardisation of the products
2. It is proposed to conduct various awareness programmes and entrepreneurship
development programmes including skill development programmes to
motivate and improve the confidence level of entrepreneurs
3. It is proposed to motivate the entrepreneurs to produce competitive products
through various technology development programmes.
4. Continual improvement in the Single Window Clearance System.
Chapter 5
ANALYSIS OF PERFORMANCE OF SSI/MSME
SECTOR IN INDIA, KERALA AND
KOZHIKODE DISTRICT
This chapter deals with analysis of performance of SSI/MSME sector in
India, Kerala and Kozhikode District on the basis of selected parameters such as
number of registered units, number of employment generated and volume of
production during pre-globalisation period and three phases of post globalisation
period. For this purpose, the data in respect of these variables for pre-globalisation
period of eight years from 1982-83 to 1989-90 and post globalisation period of 24
years (three phases of 8 years duration each) from 1990-91 to 2013-14 are analysed,
using certain statistical tools. A comparison of the performance between pre
globalisation period and various phases of post globalisation period is also made in
this chapter.
I. ANALYSIS OF PERFORMANCE OF SSI/MSME SECTOR IN INDIA
The performance of SSI sector in India is analysed by dividing entire period
of study of 32 years from 1982-83 to 2013-14 into two parts, namely; (A) pre-
globalisation era (from 1982-83 to 1989-90) and (B) post globalisation era (from
1990-91 to 2013-14). Post globalisation era is further divided into three phases of 8
years duration each as detailed below:
i) First phase of post globalisation period (from 1990-91 to 1997-98)
ii) Second phase of post globalisation period (from 1998-99 to 2005-06)
iii) Third phase of post globalisation period (from 2006-07 to 2013-14)
Analysis of Performance of SSI/MSMESector in India... 55
5.1. Performance of SSI Sector in India during pre-globalisation
period from 1982-83 to 1989-90
The performance of SSI/MSME sector in India is analysed on the basis of
three variables namely, number of registered units, number of employment provided
and the amount of output produced.
(a) Number of Registered SSI Units:
In India, Small Scale Industrial Sector plays a central role in the economic
development of the country. It recorded a high growth rate since independence in
spite of stiff competition from the large scale sector. There were only 16,000
registered small scale units in India in the year 1950-51. It jumped to 36,000 units in
1961-62 and 10.6 lakh units in 1982-83. By the year 1989-90, the total number of
registered SSI units became 18.2 lakh.
The number of units is an important parameter for measuring the performance
of SSIs in India. The number of Small Scale Units registered in India during pre-
globalisation period from 1982-83 to 1989-90 is shown in the following table:
Table No. 5.1: Number of Registered SSI Units in India during 1982-83 to
1989-90
Year No. of Units (in lakhs) % change over previous year
1982-83 10.6 --
1983-84 11.6 + 9.43
1984-85 12.4 + 6.90
1985-86 13.5 + 8.87
1986-87 14.6 + 8.15
1987-88 15.8 + 8.22
1988-89 17.1 + 8.23
1989-90 18.2 + 6.43
Overall Growth Rate + 71.70 %
Compound Annual Growth Rate (CAGR) + 8.03 %
Source: Reports of Ministry of Micro, Small and Medium industries, Govt. of India.
Analysis of Performance of SSI/MSMESector in India... 56
The table shows that there is a continuous increase in the number of SSIs
units registered in India during the pre-globalisation period from 1982-83 to 1989-
90. In the year 1982-83 the number of registered SSI units in India was 10.6 lakhs
which increased to 18.2 lakhs in 1989-90 with an overall growth of 71.70% and
compound annual growth rate of 8.03%. The annual growth rate was highest
(9.43%) in the year 1983-84 and was lowest in the year 1989-90 (6.43%).
(b) Employment Generated:
The Small Scale Industrial Sector plays an imperative role in
generating employment opportunities across our economy. The growth in
employment potential of Small Scale Units in India during pre-globalisation period
from 1982-83 to 1989-90 is shown in the following table:
Table No. 5.2: Number of Employment Generated by SSI Sector in India During
1982-83 to 1989-90
Year No. of Employment provided
(in lakhs) % change over previous year
1982-83 79.00 -
1983-84 84.20 + 6.58
1984-85 90.00 + 6.89
1985-86 96.00 + 6.67
1986-87 101.40 + 5.63
1987-88 107.00 + 5.52
1988-89 113.00 + 5.61
1989-90 119.60 + 5.84
Overall Growth Rate + 50.63 %
Compound Annual Growth Rate (CAGR) + 6.11 %
Source: Reports of Ministry of Micro, Small and Medium industries, Govt. of India.
It is seen from the table that there is continuous increase in the number of
employment generated by SSI units in India during the pre-globalisation period
Analysis of Performance of SSI/MSMESector in India... 57
from 1982-83 to 1989-90. In the year 1982-83 the number of employment generated
by SSI sector was 79 lakhs which increased to 119.6 lakhs in 1989-90 with an
overall growth of 51.39% and compound annual growth rate of 6.11%. The annual
growth rate was highest (6.89%) in the year 1984-85 and was lowest in the year
1987-88 (5.52%). The overall figures during the whole period show that the SSI
sector has a crucial role in providing employment across our economy.
(c) Volume of Production
In India, SSI sector is engaged in the production of different types of
products. Today, more than 6,000 products, ranging from traditional to high tech
items, are manufactured by SSI sector. The sector contributes nearly 45% to the
manufacturing output of the country. The following table shows the volume of
production made by small scale sector during pre globalisation period from 1982-83
to 1989-90:
Table No. 5.3: Volume of production made by SSI sector in India during 1982-
83 to 1989-90
Year Production – Current Prices
(Rs: in crores) % change over previous
year
1982-83 35,000 -
1983-84 41,600 + 18.86
1984-85 50,500 + 21.39
1985-86 61,200 + 21.19
1986-87 72,300 + 18.14
1987-88 87,300 + 20.75
1988-89 1,06,400 + 21.88
1989-90 1,32,300 + 24.34
Overall Growth Rate + 278.00 %
Compound Annual Growth Rate (CAGR) + 20.92 %
Source: Reports of Ministry of Micro, Small and Medium industries, Govt. of India.
It is obvious from the table that the production of SSI sector in India is
increased year after year during the pre
In the year 1982-83, the amount output produced by India’s SSI sector was Rs: 35,000
crores which increased to Rs:1,32,300 crores in 1989
278% and compound annual growth rate of 20.92 %. The annual growth rate was
highest (24.34%) in the year 1989
The following figure sho
units, number of employment provided and volume of production during the pre
globalisation period from 1982
Figure 5(i): Annual growth rate in number of units, number of employment and
volume of production during the period from 1982
The figure (i) shows a comparison in annual growth rate of number of units,
number of employment created and the amount of production made by SSI sector of
India during pre-globalisation period fr
the amount of production is too high when comparing with that of other two. When
comparing the annual growth rate in number of units and number of employment
0
5
10
15
20
25
Analysis of Performance of SSI/MSMESector in India
It is obvious from the table that the production of SSI sector in India is
increased year after year during the pre-globalisation period from 1982
83, the amount output produced by India’s SSI sector was Rs: 35,000
ich increased to Rs:1,32,300 crores in 1989-90 with an overall growth of
278% and compound annual growth rate of 20.92 %. The annual growth rate was
highest (24.34%) in the year 1989-90 and was lowest in the year 1986
The following figure shows the annual growth rate in number of registered
units, number of employment provided and volume of production during the pre
globalisation period from 1982-83 to 1989-90:
Annual growth rate in number of units, number of employment and
e of production during the period from 1982-83 to 1998
The figure (i) shows a comparison in annual growth rate of number of units,
number of employment created and the amount of production made by SSI sector of
globalisation period from 1982-83 to 1989-90. The growth rate in
the amount of production is too high when comparing with that of other two. When
comparing the annual growth rate in number of units and number of employment
growth rate in number of units
growth rate in number of employment generated
growth rate in volume of production
Sector in India... 58
It is obvious from the table that the production of SSI sector in India is
globalisation period from 1982-83 to 1989-90.
83, the amount output produced by India’s SSI sector was Rs: 35,000
90 with an overall growth of
278% and compound annual growth rate of 20.92 %. The annual growth rate was
90 and was lowest in the year 1986-87 (18.14%).
ws the annual growth rate in number of registered
units, number of employment provided and volume of production during the pre-
Annual growth rate in number of units, number of employment and
83 to 1998-90
The figure (i) shows a comparison in annual growth rate of number of units,
number of employment created and the amount of production made by SSI sector of
90. The growth rate in
the amount of production is too high when comparing with that of other two. When
comparing the annual growth rate in number of units and number of employment
growth rate in number of
growth rate in number of employment generated
growth rate in volume of production
Analysis of Performance of SSI/MSMESector in India... 59
provided, the performance in terms of employment potential is more than that in
terms of number of registered units.
5.2. Performance of SSI Sector in India during Post Globalisation
Period from 1990-91 to 1997-98 (First Phase)
The performance of SSI sector in India during first phase of post
globalisation period is analysed in the same way that was done in respect of pre-
globalisation period. The variables used for this purpose are number of registered
units, number of employment provided and the amount output produced.
(a) Number of Registered SSI Units:
The number of registered units is an important criterion for analysing the
growth of SSI sector in India during post globalisation period also. The total number
of registered SSI units in India during first phase of post globalisation period from
1990-91 to 1997-98 are given in the following table:
Table No. 5.4: Number of Registered SSI Units in India During the Period
from 1990-91 to 1997-98
Year No. of Units (in lakhs) % change over previous year
1990-91 67.9 -
1991-92 70.6 + 3.98
1992-93 73.5 + 4.11
1993-94 76.5 + 4.08
1994-95 79.6 + 4.05
1995-96 82.8 + 4.02
1996-97 86.2 + 4.11
1997-98 89.7 + 4.06
Overall Growth Rate + 32.11 %
Compound Annual Growth Rate (CAGR) + 4.06 %
Source: Reports of Ministry of Micro, Small and Medium industries, Govt. of India.
Analysis of Performance of SSI/MSMESector in India... 60
The table shows that there is a continuous increase in the number of SSIs
units registered in India during the first phase of post globalisation period from
1990-91 to 1997-98. In the year 1990-91 the number of registered SSI units in India
was 67.9 lakhs which increased to 89.7 lakhs in 1997-98 with an overall growth of
32.11% and compound annual growth rate of 4.06%. The annual growth rate was
highest (4.11%) in the years 1992-93 and 1996-97 and it was lowest in the year
1991-92 (3.98%).
(b) Employment Generation:
Since the employment potential is a crucial factor in the economic
development of the nation, the same is taken as a parameter for analysing the
performance of the SSI sector. The number of employment provided by Small Scale
Units in India during the first phase of post globalisation period from 1990-91 to
1997-98 is shown in the following table:
Table No. 5.5: Number of employment provided by SSI sector in India during
1990-91 to 1997-98
Year No. of Employment (in lakhs) % change over previous year
1990-91 158.30 -
1991-92 165.99 + 4.86
1992-93 174.84 + 5.33
1993-94 182.64 + 4.46
1994-95 191.40 + 4.80
1995-96 197.93 + 3.41
1996-97 205.86 + 4.01
1997-98 213.16 + 3.55
Annual Growth Rate + 34.66 %
Compound Annual Growth Rate (CAGR) + 4.34 %
Source: Reports of Ministry of Micro, Small and Medium Industries, Govt. of India.
Analysis of Performance of SSI/MSMESector in India... 61
The table shows that there is a continuous increase in the number of
employment generated by SSI units in India during the first phase of post
globalisation period from 1990-91 to 1997-98. In the year 1990-91 the number of
employment provided by SSI sector was 165.99 lakhs which increased to 213.16
lakhs in 1997-98 with an overall growth of 34.66% and a compound annual growth
rate of 4.34%. The annual growth rate was highest (5.33%) in the year 1992-93 and
was lowest in the year 1995-96 (3.41%).
(c) Volume of Production
The following table shows the production performance of small scale sector
in India during first phase of post globalisation period from 1990-91 to 1997-98:
Table No. 5.6: Volume of Production of SSI sector in India during 1990-91 to
1997-98
Year Production-Current prices
(Rs: in crores) % Change Over Previous Year
1990-91 78,802 -
1991-92 80,615 + 2.30
1992-93 84,413 + 4.71
1993-94 98,796 + 17.04
1994-95 1,22,154 + 23.64
1995-96 1,47,712 + 20.92
1996-97 1,67,805 + 13.60
1997-98 1,87,217 + 11.57
Overall Growth Rate + 137.58 %
Compound Annual Growth Rate (CAGR) + 13.16 %
Source: Reports of Ministry of Micro, Small and Medium industries, Govt. of India.
It is clear from the table that the production of SSI sector in India is
increased year after year during the first phase of post globalisation period from
1990-91 to 1997-98. In the year 1990-91, the amount of output made by India’s SSI
Analysis of Performance of SSI/MSMESector in India... 62
sector was Rs: 78,802 crores which increased to Rs: 1,87,217 crores in 1997-98 with
an overall growth of 137.58% and a compound annual growth rate of 13.16 %. The
annual growth rate was highest (23.64%) in the year 1994-95 and was lowest in the
year 1991-92 (2.3%).
5.3. Performance of SSI sector in India during post globalisation
period from 1998-99 to 2005-06 (Second Phase)
The performance of SSI sector in India during second phase of post
globalisation period is analysed in the same manner it has been done in respect of
pre-globalisation period and first phase of post globalisation period. So the same
variables are used for analysis.
(a) Number of Registered SSI Units:
The total number of registered SSI units in India during second phase of post
globalisation period from 1998-99 to 2005-06 are given in the following table:
Table No. 5.7: No. of Registered SSI Units in India during 1998-99 to 2005-06
Year No. of Units (in lakhs) % change over previous year
1998-99 93.4 -
1999-00 97.2 + 4.07
2000-01 101.1 + 4.01
2001-02 105.2 + 4.06
2002-03 109.5 + 4.09
2003-04 114.0 + 4.11
2004-05 118.6 + 4.04
2005-06 123.4 + 4.05
Overall Growth Rate + 32.12 %
Compound Annual Growth Rate (CAGR) + 4.06 %
Source: Reports of Ministry of Micro, Small and Medium industries, Govt. of India.
Analysis of Performance of SSI/MSMESector in India... 63
The table shows that the annual growth rate in the number of registered SSIs
units in India during the second phase of post globalisation period from 1998-99 to
2005-06 is almost constant throughout the period. In the year 1998-99 the number of
registered SSI units in India was 93.4 lakhs which increased to 123.4 lakhs in 2005-
06 with an overall growth of 32.12% and a compound annual growth rate of 4.06%.
The annual growth rate was highest (4.11%) in the years 2003-04 and it was lowest
in the year 2000-01 (4.01%).
(b) Employment Generated
The number of employment provided by Small Scale Units in India during
the second phase of post globalisation period from 1998-99 to 2005-06 is shown in
the following table:
Table No. 5.8: Number of Employment Generated by SSI Sector in India
during 1998-99 to 2005-06
Year No. of Employment (in lakhs) % change over previous year
1998-99 220.55 -
1999-00 229.10 + 3.88
2000-01 239.09 + 4.36
2001-02 249.09 + 4.18
2002-03 260.13 + 4.43
2003-04 271.42 + 4.34
2004-05 282.57 + 4.11
2005-06 294.91 + 4.37
Overall Growth Rate + 33.72 %
Compound Annual Growth Rate (CAGR) + 4.24 %
Source: Reports of Ministry of Micro, Small and Medium Industries, Govt. of India.
The table shows that there is almost constant rate of growth in the number of
employment generated by SSI units in India during the second phase of post
globalisation period from 1998-99 to 2005-06. In the year 1998-99 the number of
Analysis of Performance of SSI/MSMESector in India... 64
employment provided by SSI sector was 220.55 lakhs which increased to 294.91
lakhs in 2005-06 with an overall growth of 33.72% and a compound annual growth
rate of 4.24%. The annual growth rate was highest (4.43%) in the year 2002-03 and
was lowest in the year 1999-00 (3.88%).
(c) Volume of Production
The performance of SSI sector in India in volume of production during
second phase of post globalisation period from 1998-99to 2005-06 is detailed
below:
Table No. 5.9: Volume of production of SSIs in India during 1998-99 to 2005-06
Year Production–Current prices
(Rs: in crores) % change over previous year
1998-99 2,10,454 -
1999-00 2,33,760 + 11.07
2000-01 2,61,297 + 11.78
2001-02 2,82,270 + 8.03
2002-03 3,14,850 + 11.54
2003-04 3,64,547 + 15.78
2004-05 4,29,796 + 17.90
2005-06 4,97,842 + 15.83
Overall Growth Rate + 136.56 %
Compound Annual Growth Rate (CAGR) + 13.09 %
Source: Reports of Ministry of Micro, Small and Medium industries, Govt. of India.
It is clear from the table that the production of SSI sector in India is
increased year after year during the second phase of post globalisation period from
1998-99 to 2005-06. In the year 1998-99, the amount output of India’s SSI sector
was Rs: 2,10,454 crores which increased to Rs: 4,97,842 crores in 2005-06 with an
overall growth of 136.56% and a compound annual growth rate of 13.09 %. The
annual growth rate was highest (17.9%) in the year 2004-05 and was lowest in the
year 2001-02 (8.03%).
Analysis of Performance of SSI/MSMESector in India... 65
5.4. Performance of SSI/MSME Sector in India during post
Globalisation Period from 2006-07 to 2013-14 (Third Phase)
The performance of SSI/MSME sector in India during third phase of post
globalisation is analysed in the same manner as it has been done in respect of pre-
globalisation period; and first and second phases of post globalisation periods. So,
for the purpose of analysis, the same variables are used here also.
(a) Number of Registered SSI Units:
The total number of registered SSI/MSME units in India during the third
phase of post globalisation period from 2005-06 to 2013-14 is given in the
following table:
Table No. 5.10: No. of registered SSI/MSME units during the period 2006-07 to
2013-14
Year No. of Units (in lakhs) % change over previous year
2006-07 261.1 -
2007-08 272.8 + 4.48
2008-09 286.2 + 4.91
2009-10 298.1 + 4.16
2010-11 311.5 + 4.50
2011-12 447.6 + 43.69
2012-13 467.5 + 4.45
2013-14 488.5 + 4.49
Overall Growth Rate + 87.09 %
Compound Annual Growth Rate (CAGR) + 9.36 %
Source: Reports of Ministry of Micro, Small and Medium industries, Govt. of India.
The table shows that the annual growth rate in the number of registered
SSI/MSME units in India during the third phase of post globalisation period from
2006-07 to 2013-14 is almost same throughout the period, except for the year 2011-
Analysis of Performance of SSI/MSMESector in India... 66
12. In the year 2006-07 the number of registered SSI units in India was 261.1 lakhs
which increased to 488.5 lakhs in 2013-14 with an overall growth of 87.09% and a
compound annual growth rate of 9.36%. During the period, the annual growth rate is
highest (43.69%) in 2011-12 and it is lowest (4.16%) in 2009-10.
(b) Employment potential
The number of employment provided by SSI/MSME sector in India during
third phase of globalisation period is given in the following table:
Table No. 5.11: Number of Employment Provided by SSI/MSME Sector in
India during 2006-07 to 2013-14
Year No. of Employment (in lakhs) % change over previous year
2006-07 595.66 -
2007-08 626.34 + 5.15
2008-09 659.35 + 5.27
2009-10 695.38 + 5.46
2010-11 732.17 + 5.29
2011-12 1,011.69 + 38.18
2012-13 1,061.40 + 4.91
2013-14 1,114.29 + 4.98
Overall Growth Rate + 87.07 %
Compound Annual Growth Rate (CAGR) + 9.36 %
Source: Reports of Ministry of Micro, Small and Medium industries, Govt. of India.
The table shows that there is a continuous growth in the number of
employment generated by SSI/MSME units in India during the third phase of post
globalisation period from 2006-07 to 2013-14. In the year 2006-07 the number of
employment provided by SSI/MSME sector was 595.66 lakhs which increased to
1,114.29 lakhs in 2013-14 with an overall growth of 87.07% and a compound
annual growth rate of 9.36%. The annual growth rate was highest (38.18%) in the
year 2011-12 and was lowest in the year 2012-13 (4.91%).
Analysis of Performance of SSI/MSMESector in India... 67
(c) Volume of Production
The production performance of SSI/MSME sector in India during third
phase of post globalisation period from 2006-07 to 2013-14 is given below:
Table No. 5.12: Volume of Production of SSI/MSME sector in India during
2006-07 to 2013-14
Year Production-Current prices
(Rs: in crores) % change over previous
year
2006-07 5,85,112 -
2007-08 14,35,179 + 145.28
2008-09 15,24,235 + 6.21
2009-10 16,19,356 + 6.24
2010-11 17,21,553 + 6.31
2011-12 18,34,332 + 6.55
2012-13 NA -
2013-14 NA -
Compound Annual Growth Rate (CAGR) + 25.67 %
Source: Reports of Ministry of Micro, Small and Medium industries, Govt. of India.
It is clear from the table that the production of SSI sector in India is
increased year after year during the third phase of post globalisation period from
2006-07 to 2011-12. In the year 2006-07, the amount output of India’s SSI sector
was Rs: 5,85,112 crores which increased to Rs:18,34,332 crores in 2011-12 with a
compound annual growth rate of 25.67 %. As the researcher has failed to collect the
figures in respect of production of SSI/MSME sector for the years 2012-13 and
2013-14, the same has not been added in the table. During the year 2007-08, the
sector has attained a very high growth rate of 145.28% in respect of SSI/MSME
production.
Analysis of Performance of SSI/MSMESector in India... 68
5.5. Comparison of performance of SSI sector in India in terms of
Number of Units, Employment generation and Volume of
production during pre globalisation period
The following table shows a comparison of the performance of SSI/MSME
sector in India during pre and post globalisation periods in respect all the selected
parameters (using Compound Annual Growth Rates):
Table No. 5.13: Comparison of Performance of SSI/MSME Sector in India
during Pre and Post Globalisation Periods Based on Selected
Parameters
Parameter
Compound Annual Growth Rate (CAGR)
Pre-globalisation period
Post globalisation periods
Phase I Phase II Phase III
1982-83
to
1989-90
1990-91
to
1997-98
1998-99
to
2005-06
2006-07
to
2013-14
Number of Units 8.03 % 4.06 % 4.06 % 9.36 %
Employment provided 6.10 % 4.34 % 4.24 % 9.36 %
Production 20.92 % 13.16 % 13.09 % 25.67 %
The table shows the Compound Annual Growth Rates (CAGR) in respect of
number of units, number of employment provided and amount of production during
pre and post globalisation periods. The CAGR in respect of number of units in India
during pre-globalisation period is 8.03%. During the first and second phases of post
globalisation period, it has reduced to 4.06%. But during the third phase, it shows an
extensive increase of 9.36%.
The CAGR of number of employment generated in India is 6.1% during the
pre-globalisation period. It shows a decrease during the first and second phases of
post globalisation. The CAGR for the period are 4.34% and 4.24% respectively.
During the third phase of post globalisation, the rate increased to 9.36%.
The CAGR in respect of amount of SSI production in India during the pre
globalisation period is 20.92%. It shows a decrease during the first and second
phases of post globalisation periods. The CAGR for these periods are 13.16% and
13.09% respectively. During the third phase of post globalisation, the rate shows an
extensive increase of 25.67%.
The comparison of CAGR of number of registered units, number of
employment provided and volume of production for pre globalisation period and
three phases of post globalisation periods is depicted in the following figure:
Figure 5(ii): Compound
Sector in India during
From the figure, it is seen that the performance of SSI/MSME sector in India
in respect of the selected parameters is declined significantly during
of post globalisation period. During the second phase, the sector maintains the same
performance as it was during the first phase. But the performance has improved
extensively during the third phase of post globalisation period.
0
5
10
15
20
25
30
Pre-glob Post glob
Analysis of Performance of SSI/MSMESector in India
The CAGR in respect of amount of SSI production in India during the pre
ion period is 20.92%. It shows a decrease during the first and second
phases of post globalisation periods. The CAGR for these periods are 13.16% and
13.09% respectively. During the third phase of post globalisation, the rate shows an
25.67%.
The comparison of CAGR of number of registered units, number of
employment provided and volume of production for pre globalisation period and
three phases of post globalisation periods is depicted in the following figure:
ompound Annual Growth Rate of Selected Par
in India during Pre and Post Globalisation Periods
From the figure, it is seen that the performance of SSI/MSME sector in India
in respect of the selected parameters is declined significantly during
of post globalisation period. During the second phase, the sector maintains the same
performance as it was during the first phase. But the performance has improved
extensively during the third phase of post globalisation period.
Post glob-I Post glob-II
Post glob-III
CAGR - number of units
CAGR - number of emmployment
CAGR - Volume of production
Sector in India... 69
The CAGR in respect of amount of SSI production in India during the pre-
ion period is 20.92%. It shows a decrease during the first and second
phases of post globalisation periods. The CAGR for these periods are 13.16% and
13.09% respectively. During the third phase of post globalisation, the rate shows an
The comparison of CAGR of number of registered units, number of
employment provided and volume of production for pre globalisation period and
three phases of post globalisation periods is depicted in the following figure:
Selected Parameters SSI
Post Globalisation Periods
From the figure, it is seen that the performance of SSI/MSME sector in India
in respect of the selected parameters is declined significantly during the first phase
of post globalisation period. During the second phase, the sector maintains the same
performance as it was during the first phase. But the performance has improved
number of units
number of emmployment
Volume of production
Analysis of Performance of SSI/MSMESector in India... 70
II. ANALYSIS OF PERFORMANCE OF SSI/MSME SECTOR IN KERALA
Even though Kerala has less scope for large scale industries because of
various factors, its environment is so good for starting small scale industries. This
section deals with analysis of performance of SSI/MSME sector in Kerala during
pre and post globalisation periods on the basis of two important parameters, namely;
(1) number of registered units and (2) number of employment generated.
5.6. Performance of SSI sector in Kerala during pre-globalisation
period from 1982-83 to 1989-90
The performance of SSI sector in Kerala during pre-globalisation period
from 1982-83 to 1989-90 is examined on the basis of two important parameters,
namely; (1) number of registered units, and (2) number of employment generated.
(a) Number of Registered Units
The total number of registered SSI/MSME units in Kerala during pre-
globalisation period from 1982-83 to 1989-90 is given in the following table:
Table No. 5.14: No. of Registered SSI Units in Kerala during 1982-83 to 1989-90
Year No. of Units % change over previous year
1982-83 24,884 -
1983-84 28,117 + 12.99
1984-85 31,499 + 12.03
1985-86 35,365 + 12.27
1986-87 40,342 + 14.07
1987-88 47,191 + 16.98
1988-89 55,427 + 17.45
1989-90 63,698 + 14.92
Overall Growth Rate + 155.98 %
Compound Annual Growth Rate (CAGR) + 14.37 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala
The table shows that there is a continuous increase in the number of SSIs
units registered in Kerala during the pre
90. In the year 1982-83 the total number of registered SSI units in Kerala was
24,884 which increased to 63,698 in 1989
and compound annual growth rate of 14.37%. During the pre
the annual growth rate was highest (17.45%) in the year 1988
the year 1984-85 (12.09%).
The total number of registered SSIs/MSMEs during pre
from 1982-83 to 1989-90 is depicted graphically in the following figure:
Figure 5(iii): Number of registered units in Kerala during 1982
The figure shows a continuous increa
during the pre-globalisation period of 1982
(b) Employment Generation
The following table shows the
in Kerala during pre-globalisation period from 1982
0
10000
20000
30000
40000
50000
60000
70000
1982-83 1983
Analysis of Performance of SSI/MSMESector in India
The table shows that there is a continuous increase in the number of SSIs
units registered in Kerala during the pre-globalisation period from 1982
83 the total number of registered SSI units in Kerala was
sed to 63,698 in 1989-90 with an overall growth of 155.98%
and compound annual growth rate of 14.37%. During the pre-globalisation period,
the annual growth rate was highest (17.45%) in the year 1988-89 and was lowest in
85 (12.09%).
al number of registered SSIs/MSMEs during pre-globalisation period
90 is depicted graphically in the following figure:
Figure 5(iii): Number of registered units in Kerala during 1982
The figure shows a continuous increase in the total number of SSI units in Kerala
globalisation period of 1982-83 to 1989-90.
Employment Generation
The following table shows the number employment provided by
globalisation period from 1982-83 to 1989-90:
1983-84 1984-85 1985-86 1986-87 1987-88 1988-
Sector in India... 71
The table shows that there is a continuous increase in the number of SSIs
globalisation period from 1982-83 to 1989-
83 the total number of registered SSI units in Kerala was
90 with an overall growth of 155.98%
globalisation period,
89 and was lowest in
globalisation period
90 is depicted graphically in the following figure:
Figure 5(iii): Number of registered units in Kerala during 1982-83 to 1989-90
se in the total number of SSI units in Kerala
provided by SSI sector
-89 1989-90
Analysis of Performance of SSI/MSMESector in India... 72
Table No. 5.15: Number of Employment Provided by SSI sector in Kerala
During 1982-83 to 1989-90
Year No. of Employment % Change Over Previous Year
1982-83 87,906 -
1983-84 1,16,674 + 32.73
1984-85 1,40,274 + 20.23
1985-86 1,67,848 + 19.66
1986-87 1,97,710 + 17.79
1987-88 2,35,955 + 19.34
1988-89 3,66,373 + 55.27
1989-90 3,82,000 + 4.27
Overall Growth Rate + 334.56 %
Compound Annual Growth Rate (CAGR) + 23.35 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala.
The table tells us the fact that there is a continuous improvement in the employment
potential of SSI sector in Kerala during the pre-globalisation period from 1982-83 to
1989-90. In the year 1982-83 the number of employment generated by SSI sector
was 87,906 which increased to 3,82,000 in 1989-90 with an overall growth of
334.56% and compound annual growth rate of 23.35%. During pre-globalisation
period from 1982-83 to 1989-90, the annual growth rate was too high (55.27%) in
the year 1988-89 and was too low in the year 1989-90 (4.27%).
The total number of employment provided by SSIs/MSMEs during pre-
globalisation period from 1982-83 to 1989-90 is depicted graphically in the
following figure:
Figure 5(iv): Number of employment generated by SSI sector in Kerala during
1982-83 to 1989
The figure shows a forward movement in the employment potential of SSI
sector in Kerala during pre
increase in number of employment generation was steep during the year 1988
5.7. Performance of
period from 1990
The performance of SSI sector in Kerala during first phase of post
globalisation is analysed in the same way which has been followed for analysing the
pre-globalisation performance. The variables used for this purpose are number of
registered SSI units and
(a) Number of Registered Units
The total number of registered SSI/MSME units in India during 1990
1997-98 is given in the following table:
0
50000
100000
150000
200000
250000
300000
350000
400000
1982-83 1983
Analysis of Performance of SSI/MSMESector in India
Number of employment generated by SSI sector in Kerala during
83 to 1989-90
The figure shows a forward movement in the employment potential of SSI
sector in Kerala during pre-globalisation period from 1982-83 to 1989
increase in number of employment generation was steep during the year 1988
Performance of SSI sector in Kerala during post globalisation
period from 1990-91 to 1997-98 (First Phase)
The performance of SSI sector in Kerala during first phase of post
globalisation is analysed in the same way which has been followed for analysing the
globalisation performance. The variables used for this purpose are number of
registered SSI units and the number of employment created by SSI sector of Kerala.
Number of Registered Units
The total number of registered SSI/MSME units in India during 1990
98 is given in the following table:
1983-84 1984-85 1985-86 1986-87 1987-88 1988-89
Sector in India... 73
Number of employment generated by SSI sector in Kerala during
The figure shows a forward movement in the employment potential of SSI
to 1989-90. The
increase in number of employment generation was steep during the year 1988-89.
SSI sector in Kerala during post globalisation
The performance of SSI sector in Kerala during first phase of post
globalisation is analysed in the same way which has been followed for analysing the
globalisation performance. The variables used for this purpose are number of
the number of employment created by SSI sector of Kerala.
The total number of registered SSI/MSME units in India during 1990-91 to
89 1989-90
Analysis of Performance of SSI/MSMESector in India... 74
Table No. 5.16: No. of Registered SSI Units in Kerala During 1990-91 to
1997-98
Year No. of Units % change over previous year
1990-91 73,552 -
1991-92 84,440 + 14.80
1992-93 95,851 + 13.51
1993-94 1,10,384 + 15.16
1994-95 1,26,220 + 14.35
1995-96 1,43,123 + 13.39
1996-97 1,60,544 + 12.17
1997-98 1,80,091 + 12.18
Overall Growth Rate + 144.85 %
Compound Annual Growth Rate (CAGR) + 13.65 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala.
The table shows that there is a continuous increase in the number of SSIs
units registered in Kerala during first phase of post globalisation period from 1990-
91 to 1997-98. In the year 1990-91 the number of registered SSI units in Kerala was
73,552 which increased to 1,80,091 in 1997-98 with an overall growth of 144.85%
and compound annual growth rate of 13.65%. During the first phase of post
globalisation period, the annual growth rate is highest (15.16%) in the year 1993-94
and is lowest in the year 1996-97 (12.17%).
The total number of registered SSIs/MSMEs during first phase of post
globalisation period from 1990-91 to 1997-98 is depicted graphically in the
following figure:
Figure 5(v): Number of registered SSI units in Kerala during 1990
The figure shows a continuous increase in the total number of registered SSI units in
Kerala during the first phase of post globalisation period from 1990
(b) Employment Generation
The total number of employment generated by SSI sector of Kerala during
1990-91 to 1997-98 is detailed
Table No. 5.17: Number of
During
Year No. of Employment
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
Overall Growth Rate
Compound Annual Growth Rate
Source: Compiled from Various Issues
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
200000
1990-91 1991
Analysis of Performance of SSI/MSMESector in India
Figure 5(v): Number of registered SSI units in Kerala during 1990
The figure shows a continuous increase in the total number of registered SSI units in
Kerala during the first phase of post globalisation period from 1990-
Employment Generation
The total number of employment generated by SSI sector of Kerala during
detailed in the following table:
Number of Employment Provided by SSI Sector
During 1990-91 to 1997-98
No. of Employment % change over previous year
4,24,881 -
5,17,992 + 21.91
5,68,598 + 9.77
6,29,543 + 10.72
7,03,161 + 11.69
7,74,936 + 10.21
8,39,596 + 8.34
9,09,859 + 8.37
+ 114.14 %
Compound Annual Growth Rate (CAGR) + 11.49 %
Various Issues of Economic Review, State Planning Board, Kerala.
1991-92 1992-93 1993-94 1994-95 1995-96 1996-97
Sector in India... 75
Figure 5(v): Number of registered SSI units in Kerala during 1990-91 to 1997-98
The figure shows a continuous increase in the total number of registered SSI units in
-91 to 1997-97.
The total number of employment generated by SSI sector of Kerala during
Sector in Kerala
over previous year
-
+ 21.91
+ 9.77
+ 10.72
+ 11.69
+ 10.21
+ 8.34
+ 8.37
+ 114.14 %
+ 11.49 %
of Economic Review, State Planning Board, Kerala.
97 1997-98
The table reveals that there is a continuous enhancement in the total number
of employment provided by the SSI sector of Ke
globalisation period from 1990
employment generated by SSI sector was 4,24,881 which increased to 9,09,859 in
1997-98 with an overall growth rate of 114.14% and compound a
of 11.49%. During the first phase of post globalisation period from 1990
1997-98, the annual growth rate is highest (21.91%) in the year 1991
lowest in the year 1996
The total number of employment provided by
globalisation period from 1990
following figure:
Figure 5.(vi): Number of employment provided by SSI sector in Kerala during
1990-91 to 1997
The figure shows a continuous
generated by SSI sector of Kerala during first phase of post globalisation period
from 1990-91 to 1997-98.
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1000000
1990-91 1991
Analysis of Performance of SSI/MSMESector in India
The table reveals that there is a continuous enhancement in the total number
of employment provided by the SSI sector of Kerala during the first phase of post
globalisation period from 1990-91 to 1997-98. In the year 1990-91 the number of
employment generated by SSI sector was 4,24,881 which increased to 9,09,859 in
98 with an overall growth rate of 114.14% and compound annual growth rate
of 11.49%. During the first phase of post globalisation period from 1990
98, the annual growth rate is highest (21.91%) in the year 1991
lowest in the year 1996-97 (8.34%).
The total number of employment provided by SSIs during first phase of post
globalisation period from 1990-91 to 1997-98 is depicted graphically in the
5.(vi): Number of employment provided by SSI sector in Kerala during
91 to 1997-98
The figure shows a continuous increase in the total number of employment
generated by SSI sector of Kerala during first phase of post globalisation period
98.
1991-92 1992-93 1993-94 1994-95 1995-96 1996-97
Sector in India... 76
The table reveals that there is a continuous enhancement in the total number
rala during the first phase of post
91 the number of
employment generated by SSI sector was 4,24,881 which increased to 9,09,859 in
nnual growth rate
of 11.49%. During the first phase of post globalisation period from 1990-91 to
98, the annual growth rate is highest (21.91%) in the year 1991-92 and is
SSIs during first phase of post
98 is depicted graphically in the
5.(vi): Number of employment provided by SSI sector in Kerala during
increase in the total number of employment
generated by SSI sector of Kerala during first phase of post globalisation period
97 1997-98
Analysis of Performance of SSI/MSMESector in India... 77
5.8. Performance of SSI sector in Kerala during post globalisation
period from 1998-99 to 2005-06 (Second Phase)
The performance of SSI sector in Kerala during second phase of post
globalisation is analysed in the same way which has been used in pre-globalisation
period and first phase of post globalisation period. The variables used are number of
registered SSI units and the number of employment generated by the SSI sector.
(a) Number of Registered Units
The following table describes the total number of registered SSI units in
Kerala in each year of the second phase of post globalisation period from 1998-99 to
2005-06
Table No. 5.18: Number of registered SSI Units in Kerala during 1998-99 to
2005-06
Year No. of Units % change over previous year
1998-99 1,99,827 -
1999-00 2,19,833 + 10.01
2000-01 2,39,896 + 9.13
2001-02 2,58,010 + 7.55
2002-03 2,70,344 + 4.78
2003-04 2,75,649 + 1.96
2004-05 2,80,584 + 1.79
2005-06 2,86,210 + 2.01
Overall Growth Rate +43.23 %
Compound Annual Growth Rate (CAGR) + 5.27 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala.
The table describes that there is a continuous increase in the total number of
SSIs units registered in Kerala during the second phase of post globalisation period
from 1998-99 to 2005-06. In the year 1998-99 the total number of registered SSI
units was 1,99,827 which increased to 2,86,210 in 2005
rate of 43.23% and compound annual growth rate of 5.27%. During the second
phase of post globalisation period, the annual growth rate is highest (10.01%) in the
year 1999-00 and is lowest
The total number of registered SSI units during pre
from 1982-83 to 1989-90 is depicted graphically in the following figure:
Figure 5(vii): Number of registered units in Kerala during 1998
The figure shows that the total number of registered SSI units in Kerala is increasing
year after year during the period. But the growth rates in second half is less than that
of first half.
(b) Employment Generation
The total number of employment generated
second phase of post globalisation period is detailed in the following table:
0
50000
100000
150000
200000
250000
300000
1998-99 1999
Analysis of Performance of SSI/MSMESector in India
99,827 which increased to 2,86,210 in 2005-06 with an overall growth
rate of 43.23% and compound annual growth rate of 5.27%. During the second
phase of post globalisation period, the annual growth rate is highest (10.01%) in the
00 and is lowest (1.79%) in the year 2004-05.
The total number of registered SSI units during pre-globalisation period
90 is depicted graphically in the following figure:
Figure 5(vii): Number of registered units in Kerala during 1998
The figure shows that the total number of registered SSI units in Kerala is increasing
year after year during the period. But the growth rates in second half is less than that
Employment Generation
The total number of employment generated by SSI sector of Kerala during
second phase of post globalisation period is detailed in the following table:
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Sector in India... 78
06 with an overall growth
rate of 43.23% and compound annual growth rate of 5.27%. During the second
phase of post globalisation period, the annual growth rate is highest (10.01%) in the
globalisation period
90 is depicted graphically in the following figure:
Figure 5(vii): Number of registered units in Kerala during 1998-99 to 2005-06
The figure shows that the total number of registered SSI units in Kerala is increasing
year after year during the period. But the growth rates in second half is less than that
by SSI sector of Kerala during
second phase of post globalisation period is detailed in the following table:
05 2005-06
Analysis of Performance of SSI/MSMESector in India... 79
Table No. 5.19: Number of employment provided by SSI sector in Kerala
during 1998-99 to 2005-06
Year No. of Employment % change over previous year
1998-99 9,81,491 -
1999-00 10,53,533 + 7.34
2000-01 11,14,495 + 5.79
2001-02 11,73,474 + 5.29
2002-03 12,15,532 + 3.58
2003-04 12,37,422 + 1.80
2004-05 12,60,007 + 1.83
2005-06 12,88,135 + 2.23
Overall Growth Rate + 31.24 %
Compound Annual Growth Rate (CAGR) + 3.96 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala.
The table shows that there is a continuous enhancement in the total number
of employment provided by the SSI sector of Kerala during the second phase of post
globalisation period from 1998-99 to 2005-06. In the year 1998-99 the total number
of employment generated by SSI sector was 9,81,491 which increased to 12,88,135
in 2005-06 with an overall growth rate of 31.24% and compound annual growth rate
of 3.96%. During the second phase of post globalisation period from 1999-00 to
2005-06, the annual growth rate is highest (7.34%) in the year 1999-00 and is lowest
in the year 2003-04 (1.80%).
The total number of employment provided by SSIs during the second phase
of post globalisation period from 1998-99 to 2005-06 is depicted graphically in the
following figure:
Figure 5(viii): No. of employment provided by SSI sector of Kerala during
1998-99 to 2005
The figure shows that th
of Kerala during the second half is comparatively less than that during the second
half of the period.
5.9. Performance of
globalisation period
The performance of SSI sector in Kerala during third phase of post
globalisation is analysed in the same way that has been done in pre
period and first and second phases of post globalisation period. The two parameters
used here for analysis are number of registered SSI units and the number of
employment generated by the SSI/MSME sector in Kerala.
(a) Number of Registered Units
The total number of registered SSI/MSME units in Kerala during the third
phase of post globalisati
following table:
0
200000
400000
600000
800000
1000000
1200000
1400000
1998-99 1999
Analysis of Performance of SSI/MSMESector in India
No. of employment provided by SSI sector of Kerala during
99 to 2005-06
The figure shows that the growth rate of employment potential of SSI sector
of Kerala during the second half is comparatively less than that during the second
Performance of SSI/MSME Sector in Kerala
globalisation period from 2006-07 to 2013-14 (Third Phase)
The performance of SSI sector in Kerala during third phase of post
globalisation is analysed in the same way that has been done in pre
period and first and second phases of post globalisation period. The two parameters
sed here for analysis are number of registered SSI units and the number of
employment generated by the SSI/MSME sector in Kerala.
Number of Registered Units
The total number of registered SSI/MSME units in Kerala during the third
phase of post globalisation period from 2006-07 to 2013-14 is given in the
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Sector in India... 80
No. of employment provided by SSI sector of Kerala during
e growth rate of employment potential of SSI sector
of Kerala during the second half is comparatively less than that during the second
during post
14 (Third Phase)
The performance of SSI sector in Kerala during third phase of post
globalisation is analysed in the same way that has been done in pre-globalisation
period and first and second phases of post globalisation period. The two parameters
sed here for analysis are number of registered SSI units and the number of
The total number of registered SSI/MSME units in Kerala during the third
14 is given in the
05 2005-06
Analysis of Performance of SSI/MSMESector in India... 81
Table No. 5.20: Number of registered SSIs/MSMEs in Kerala during 2006-07
to 2013-14
Year No. of Units % change over previous year
2006-07 1,95,960 -
2007-08 2,88,869 + 47.41
2008-09 2,04,381* --29.25
2009-10 2,13,740 + 4.58
2010-11 1,94,908* -- 8.81
2011-12 2,05,987 + 5.68
2012-13 2,19,444 + 6.53
2013-14 2,34,441 + 6.83
Overall Growth Rate + 19.64 %
Compound Annual Growth Rate (CAGR) + 2.59 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala.
*Total number of working SSIs/MSMEs in Kerala (not the total number of registered units)
The table shows that there is an increase in the total number of SSIs/MSMEs
in Kerala in each year (except 2008-09 and 2010-11) during the third phase of post
globalisation period from 2006-07 to 2013-14. In the year 2006-07 the number of
registered SSI units in Kerala was 1,95,960 which increased to 2,34,441 in 2013-14
with an overall growth of 19.64% and compound annual growth rate of 2.59%.
During the third phase of post globalisation period, the annual growth rate is highest
(47.41%) in the year 2007-08. The minus figure in growth rate (2008-09 and 2010-
11) is occurred as the effect of taking number of working SSI units instead of total
number of registered SSI units.
The total number of registered/working SSIs/MSMEs during the third phase
of post globalisation period from 2006-07 to 2013-14 is depicted graphically in the
following figure:
Figure 5(ix): Number of registered/working SSI/MSME units in Kerala during
2006-07 to 2013
The figure shows that there is a very high growth in the total number
SSI units in Kerala in the first year of the phase. But there is a steep decline in the
very next year. This is not due to decline in the total registered units, but only an
effect of taking working number of units instead of total number of registered
units.
(b) Employment Generated
The number of employment provided by SSI/MSME sector of Kerala
during the third phase of post globalisation period is mentioned in the following
table:
0
50000
100000
150000
200000
250000
300000
2006-07 2007
Analysis of Performance of SSI/MSMESector in India
5(ix): Number of registered/working SSI/MSME units in Kerala during
07 to 2013-14
The figure shows that there is a very high growth in the total number
SSI units in Kerala in the first year of the phase. But there is a steep decline in the
very next year. This is not due to decline in the total registered units, but only an
effect of taking working number of units instead of total number of registered
Employment Generated
The number of employment provided by SSI/MSME sector of Kerala
during the third phase of post globalisation period is mentioned in the following
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Sector in India... 82
5(ix): Number of registered/working SSI/MSME units in Kerala during
The figure shows that there is a very high growth in the total number of
SSI units in Kerala in the first year of the phase. But there is a steep decline in the
very next year. This is not due to decline in the total registered units, but only an
effect of taking working number of units instead of total number of registered
The number of employment provided by SSI/MSME sector of Kerala
during the third phase of post globalisation period is mentioned in the following
13 2013-14
Analysis of Performance of SSI/MSMESector in India... 83
Table No. 5.21: Number of employment generated by SSI/MSME sector in
Kerala during 2006-07 to 2013-14
Year No. of Employment % change over previous year
2006-07 12,91,209 -
2007-08 13,00,487 + 0.72
2008-09 13,48,598 + 3.70
2009-10 14,09,474 + 4.51
2010-11 14,94,352 + 6.02
2011-12 15,73,533 + 5.30
2012-13 16,55,497 + 5.21
2013-14 17,43,286 + 5.30
Overall Growth Rate +35.01
Compound Annual Growth Rate (CAGR) + 4.38 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala.
The table shows that there is a continuous enhancement in the total number
of employment provided by the SSI sector of Kerala during the second phase of post
globalisation period from 2006-07 to 2013-14. In the year 2006-07, the number of
employment generated by SSI sector was 12,91,209 which increased to 17,43,286 in
2013-14 with an overall growth rate of 31.24% and compound annual growth rate of
3.96%. During the second phase of post globalisation period from 1999-00 to 2005-
06, the annual growth rate is highest (7.34%) in the year 1999-00 and is lowest in
the year 2003-04 (1.80%).
The total number of employment provided by SSIs/MSMEs during the
second phase of post globalisation period from 1998-99 to 2005-06 is depicted
graphically in the following figure:
Figure 5(x): Number of employment generated by SSI/MSME Sector in Kerala
during 2006
The figure shows that the number of employment generated by SSI/MSME sector of
Kerala is increased throughout the period from 2006
5.10. Comparison of
State during Pre
of Selected Variables
After analysing the performance of SSI/MSME sector in Kerala during pre
and post globalisation periods separatel
presented in following table
(a) On the basis of number of units:
The following table shows the performance of SSI/MSME sector in Kerala
on the basis of number of registered
globalisation period:
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
2006-07 2007
Analysis of Performance of SSI/MSMESector in India
Figure 5(x): Number of employment generated by SSI/MSME Sector in Kerala
during 2006-07 to 2013-14
The figure shows that the number of employment generated by SSI/MSME sector of
Kerala is increased throughout the period from 2006-07 to 2013-14.
.10. Comparison of Performance of SSI/MSME Sector in Kerala
during Pre and Post Globalisation Periods
Selected Variables
After analysing the performance of SSI/MSME sector in Kerala during pre
and post globalisation periods separately, on the basis of selected variables,
presented in following tables so as to facilitate comparison:
On the basis of number of units:
The following table shows the performance of SSI/MSME sector in Kerala
on the basis of number of registered SSI/MSME units during pre and post
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Sector in India... 84
Figure 5(x): Number of employment generated by SSI/MSME Sector in Kerala
The figure shows that the number of employment generated by SSI/MSME sector of
14.
of SSI/MSME Sector in Kerala
Periods on the Basis
After analysing the performance of SSI/MSME sector in Kerala during pre
selected variables, they are
The following table shows the performance of SSI/MSME sector in Kerala
SSI/MSME units during pre and post
13 2013-14
Analysis of Performance of SSI/MSMESector in India... 85
Table No. 5.22: Comparison of Pre and Post Globalisation Performance of
SSI/MSMS Sector in Kerala on the Basis of Number of Units
Pre Globalisation Period
Post Globalisation Periods
1982-83
to
1989-90
Phase I Phase II Phase III
1990-91
to
1997-98
1998-99
to
2005-06
2006-07
to
2013-14
Year A G R Year A G R Year A G R Year A G R
82-83 - 90-91 - 98-99 - 06-07 -
83-84 +12.99 91-92 +14.80 99-00 +10.01 07-08 +47.41
84-85 +12.03 92-93 + 13.51 00-01 +9.13 08-09 --29.25
85-86 +12.27 93-94 +15.16 01-02 +7.55 09-10 +4.58
86-87 +14.07 94-95 +14.35 02-03 +4.78 10-11 --8.81
87-88 +16.98 95-96 +13.39 03-04 +1.96 11-12 +5.68
88-89 +17.45 96-97 +12.17 04-05 +1.79 12-13 +6.53
89-90 +14.92 97-98 +12.18 05-06 +2.01 13-14 +6.83
OGR + 155.98 OGR + 144.85 OGR + 43.23 OGR + 19.64
CAGR + 14.37 CAGR + 13.65 CAGR + 5.27 CAGR + 2.59
a) On the basis of number of employment generated
The following table shows the performance of SSI/MSME sector in Kerala
on the basis of number of employment provided during pre and post globalisation
period:
Analysis of Performance of SSI/MSMESector in India... 86
Table No. 5.23: Comparison of Pre and Post Globalisation Performance of SSI/
MSMS Sector in Kerala on the basis of Employment Generation
Pre Globalisation Period Post Globalisation Periods
1982-83
to
1989-90
Phase I Phase II Phase III
1990-91 to
1997-98
1998-99 to
2005-06
2006-07 to
2013-14
Year A G R Year A G R Year A G R Year A G R
82-83 - 90-91 - 98-99 - 06-07 -
83-84 +32.73 91-92 +21.91 99-00 +7.34 07-08 +0.72
84-85 +20.23 92-93 +9.77 00-01 +5.79 08-09 +3.70
85-86 +19.66 93-94 +10.72 01-02 +5.29 09-10 +4.51
86-87 +17.79 94-95 +11.69 02-03 +3.58 10-11 +6.02
87-88 +19.34 95-96 +10.21 03-04 +1.80 11-12 +5.30
88-89 +55.27 96-97 +8.34 04-05 +1.83 12-13 +5.21
89-90 +4.27 97-98 +8.37 05-06 +2.23 13-14 +5.30
OGR + 334.56 OGR + 114.14 OGR + 31.24 OGR + 35.01
CAGR + 23.35 CAGR + 11.49 CAGR + 3.96 CAGR + 4.38
The following table shows the performance of SSI/MSME sector in Kerala
based on selected parameters (number of registered units and number of
employment generated) during pre and post globalisation period in terms of CAGR:
Table No. 5.24: Comparison of performance of SSI/MSME sector in Kerala during
pre and post globalisation periods on the basis of selected parameters
Parameter
Compound Annual Growth Rate (CAGR)
Pre-globalisation period
Post globalisation periods
Phase I Phase II Phase III
1982-83 to
1989-90
1990-91 to
1997-98
1998-99 to
2005-06
2006-07 to
2013-14
No. of Units + 14.37 % + 13.65 % + 5.27 % + 2.59 %
Employment provided + 23.35 % 11.49 % 3.96 % 4.38 %
The table shows that the CAGR in respect of number of units
during pre-globalisation period is 14.37%. During the first, second and third phases
of post globalisation, it declined to 13.65%, 5.27% and 2.59% respectively.
The CAGR in respect of number of employment provided was 23.35%
during the pre-globalisation period. But it has reduced to 11.49% and 3.96 %
respectively during the first and second phases of post globalisation era. However, it
shows a slight increase during the third phase of post globalisation.
The comparison of CAGR in respect of number
employment provided for the pre
globalisation period is depicted graphically in the following figure:
Figure 5(xi): Comparison of pre and post globalisation performance of SSI/
MSME
terms of CAGR.
The figure shows that the compound annual growth rate of both the selected
parameters during all the three phases of post globalisation period are less than that
during pre-globalisation period.
To conclude, the overall performance of SSI/MSME sector in K
post globalisation period is less than that during the pre
0
5
10
15
20
25
Pre-glob. Post
Analysis of Performance of SSI/MSMESector in India
The table shows that the CAGR in respect of number of units
globalisation period is 14.37%. During the first, second and third phases
of post globalisation, it declined to 13.65%, 5.27% and 2.59% respectively.
The CAGR in respect of number of employment provided was 23.35%
isation period. But it has reduced to 11.49% and 3.96 %
respectively during the first and second phases of post globalisation era. However, it
shows a slight increase during the third phase of post globalisation.
The comparison of CAGR in respect of number of units and number of
employment provided for the pre-globalisation period and three phases of post
globalisation period is depicted graphically in the following figure:
Comparison of pre and post globalisation performance of SSI/
MSME sector in Kerala on the basis of selected parameters in
terms of CAGR.
The figure shows that the compound annual growth rate of both the selected
parameters during all the three phases of post globalisation period are less than that
globalisation period.
To conclude, the overall performance of SSI/MSME sector in K
post globalisation period is less than that during the pre-globalisation period.
Post-glob.I Post-glob.II Post-glob.III
Number of units
number of employment
Sector in India... 87
The table shows that the CAGR in respect of number of units in Kerala
globalisation period is 14.37%. During the first, second and third phases
of post globalisation, it declined to 13.65%, 5.27% and 2.59% respectively.
The CAGR in respect of number of employment provided was 23.35%
isation period. But it has reduced to 11.49% and 3.96 %
respectively during the first and second phases of post globalisation era. However, it
of units and number of
globalisation period and three phases of post
Comparison of pre and post globalisation performance of SSI/
sector in Kerala on the basis of selected parameters in
The figure shows that the compound annual growth rate of both the selected
parameters during all the three phases of post globalisation period are less than that
To conclude, the overall performance of SSI/MSME sector in Kerala during
globalisation period.
Number of units
number of employment
Analysis of Performance of SSI/MSMESector in India... 88
III. ANALYSIS OF PERFORMANCE OF SSI/MSME SECTOR IN
KOZHIKODE DISTRICT
Even though there are quality infrastructure, qualified manpower, materials,
good climate, etc., the district of Kozhikode remains industrially backward as
compared to Ernakulam, Thiruvananthapuram, Thrissur, Palakkad, etc. However,
nearly 6,000 MSMEs have filed Entrepreneurship Memorandum part II as per
MSME Act. This section deals with analysis of performance of SSI/MSME sector in
Kozhikode district during pre and post globalisation periods on the basis of two
important parameters, namely; (1) number of registered units and (2) number of
employment generated.
5.11. Performance of SSI Sector in Kozhikode District during Pre-
Globalisation Period from 1982-83 to 1989-90
(a) Number of Registered Units
The total number of registered SSI/MSME units in Kozhikode district during
pre globalisation period from 1982-83 to 1989-90 is detailed in the following table:
Table No. 5.25: Number of Registered SSI Units in Kozhikode District During
1982-83 to 1989-90
Year No. of units registered
during the year % change over previous year
Total No. units as on 31st March
% change over previous year
1982-83 254 -- 2,241 --
1983-84 266 + 4.72 2,507 + 11.87
1984-85 249 -- 6.39 2,756 + 9.93
1985-86 375 + 66.27 3,131 + 13.61
1986-87 392 +4.53 3,523 + 12.52
1987-88 455 +16.07 3,978 + 12.92
1988-89 674 +48.13 4,652 + 16.94
1989-90 970 +43.92 5,622 + 20.85
Overall Growth Rate for the period from 1982-83 to 1989-90 + 150.87 %
CAGR for the period from 1982-83 to 1989-90 (CAGR) + 14.04 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala.
The table shows that
registered SSI/MSME units in Kozhikode district during pre globalisation period
from 1982-83 to 1989-90. In the year 1982
Kozhikode district was 2,241 which inc
growth of 150.87% and a compound annual growth rate of 14.04%. During the
period, the annual growth rate is highest (20.85%) in the years 1989
lowest (9.93%) in the year 1984
The total number of
from 1982-83 to 1989-90 is depicted graphically in the following figure:
Figure 5(xii): Total Number of Registered Units in Kozhikode during 1982
to 1989-
The figure shows an upward movement in the
units in Kozhikode district during
(b) Employment Generated
The number of employment generated in each year and the total number of
employment provided
period is given in the following table:
0
1000
2000
3000
4000
5000
6000
1982-83 1983
Analysis of Performance of SSI/MSMESector in India
The table shows that there is a continuous increase in the total number of
registered SSI/MSME units in Kozhikode district during pre globalisation period
90. In the year 1982-83 the number of registered SSI units in
Kozhikode district was 2,241 which increased to 5,622 in 1989-90 with an overall
growth of 150.87% and a compound annual growth rate of 14.04%. During the
period, the annual growth rate is highest (20.85%) in the years 1989
lowest (9.93%) in the year 1984-85.
The total number of registered SSIs/MSMEs during pre-globalisation period
90 is depicted graphically in the following figure:
5(xii): Total Number of Registered Units in Kozhikode during 1982
-90
The figure shows an upward movement in the total number of registered SSI
units in Kozhikode district during pre globalisation period from 1982
Generated
The number of employment generated in each year and the total number of
employment provided by SSI sector in Kozhikode district during pre
period is given in the following table:
1983-84 1984-85 1985-86 1986-87 1987-88 1988-89
Sector in India... 89
there is a continuous increase in the total number of
registered SSI/MSME units in Kozhikode district during pre globalisation period
83 the number of registered SSI units in
90 with an overall
growth of 150.87% and a compound annual growth rate of 14.04%. During the
period, the annual growth rate is highest (20.85%) in the years 1989-90 and it was
globalisation period
90 is depicted graphically in the following figure:
5(xii): Total Number of Registered Units in Kozhikode during 1982-83
number of registered SSI
from 1982-83 to 1989-90.
The number of employment generated in each year and the total number of
in Kozhikode district during pre-globalisation
1989-90
Analysis of Performance of SSI/MSMESector in India... 90
Table No. 5.26: Number of Employment Provided by SSI Sector in Kozhikode
District during 1982-83 to 1989-90
Year No. of Employment
% change over previous year
Total No. units as on 31st March
% change over previous year
1982-83 1,187 -- 9,076 --
1983-84 1,474 +24.18 10,550 +16.24
1984-85 2,409 +63.43 12,959 +22.83
1985-86 2,304 --4.36 15,263 +17.78
1986-87 2,352 +2.08 17,615 +15.41
1987-88 2,275 --3.27 19,890 +12.92
1988-89 3,370 +48.13 30,750 +54.60
1989-90 3,641 +8.04 34,391 +11.84
Overall Growth Rate for the period from 1982-83 to 1989-90 + 278.92 %
CAGR for the period from 1982-83 to 1989-90 (CAGR) + 20.96 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala
The table shows that the total number of employment in Kozhikode district
is increased year after year during the pre-globalisation period of 1982-83 to 1989-
90. In the year 1982-83, 1,187 new employment opportunities are created and the
total number of employment became 9,076. By the end of the pre-globalisation
period, the total number of employment became 34,391 with an overall growth rate
of 278.92% and a Compound Annual Growth Rate of 20.96%. The annual growth
rate in total number of employment is highest (54.6%) in the year 1988-89 and it is
lowest (11.84%) in the year 1989-90.
The total number of employment generated by SSI sector in Kozhikode
district during pre-globalisation period from 1982-83 to 1989-90 is depicted
graphically in the following figure:
Figure 5(xiii): Number
during 1982
The figure describes, though the total number of employment is increased
throughout the pre-globalisation period from 1982
too high in the year 1988
5.12. Performance of
Globalisation Period
(a) Number of Registered Units
The total number of registered SSI units in Kozhikode district during
phase of post globalisation period from 19
following table:
0
5000
10000
15000
20000
25000
30000
35000
1982-83 1983
Analysis of Performance of SSI/MSMESector in India
Number of Employment Provided by SSI Sector in Kozhikode
during 1982-83 to 1989-90
The figure describes, though the total number of employment is increased
globalisation period from 1982-83 to 1989-90, the growth rate is
in the year 1988-89.
Performance of SSI sector in Kozhikode District
Globalisation Period from 1990-91 to 1997-98 (First Phase)
Number of Registered Units
The total number of registered SSI units in Kozhikode district during
globalisation period from 1990-91 to 1997-98 is detailed in the
1983-84 1984-85 1985-86 1986-87 1987-88 1988-89
Sector in India... 91
of Employment Provided by SSI Sector in Kozhikode
The figure describes, though the total number of employment is increased
90, the growth rate is
during Post-
(First Phase)
The total number of registered SSI units in Kozhikode district during first
is detailed in the
89 1989-90
Analysis of Performance of SSI/MSMESector in India... 92
Table No. 5.27: No. of Registered SSI Units in Kozhikode District during
1990-91 to 1997-98
Year No. of units
registered during the year
% change over previous year
Total No. units as on 31st March
% change over previous year
1990-91 604 --62.27 6,226 +10.74
1991-92 620 + 2.65 6,846 +9.96
1992-93 651 + 5.00 7,497 +9.51
1993-94 733 + 12.60 8,230 +9.78
1994-95 1,221 + 66.58 9,451 +14.84
1995-96 1,136 --6.96 10,587 +12.02
1996-97 1,275 + 12.24 11,862 +12.04
1997-98 1,550 + 21.57 13,412 +13.07
Overall Growth Rate for the period from 1990-91 to 1997-98 + 115.42 %
CAGR for the period from 1990-91 to 1997-98 (CAGR) + 11.59 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala
The table shows that there is a continuous increase in the total number of
registered SSI/MSME units in Kozhikode district during first phase of post
globalisation period from 1990-91 to 1997-98. In the year 1990-91 the number of
registered SSI units in Kozhikode district was 6,226 which increased to 13,412 in
1990-91 with an overall growth of 115.42% and a compound annual growth rate of
11.59%. The annual growth rate is highest (14.84%) in the years 1994-95 and it is
lowest (9.51%) in the year 1992-93.
The total number of registered SSIs/MSMEs during first phase of post
globalisation period from 1990-91 to 1997-98 is depicted graphically in the
following figure:
Figure 5(xiv): Number of Registered Units in
to 1997
The graph shows a continuous increase in the total number of employment during
the first phase of post globalisation period from 1990
(b) Employment Generated
The number of employment generated in each year and the total number of
employment provided by SSI sector
globalisation period is given in the following table:
Table No. 5.28: Number of
District
Year No. of units Registered
During the Year
1990-91 2,398
1991-92 2,312
1992-93 2,277
1993-94 3,199
1994-95 7,429
1995-96 5,136
1996-97 4,204
1997-98 3,855
Overall Growth Rate for the
CAGR for the period from 1990
Source: Compiled from Various Issues of Economic Review,
0
2000
4000
6000
8000
10000
12000
14000
1990-91 1991
Analysis of Performance of SSI/MSMESector in India
5(xiv): Number of Registered Units in Kozhikode District During 1990
to 1997-98
shows a continuous increase in the total number of employment during
the first phase of post globalisation period from 1990-91 to 1997-98.
Generated
The number of employment generated in each year and the total number of
by SSI sector in Kozhikode district during first phase of post
globalisation period is given in the following table:
Number of Employment Provided by SSI Sector
District during 1990-91 to 1997-98
Registered Year
% Change Over Previous Year
Total No. Units as on 31st March
--34.14 36,789
--3.59 39,101
--1.51 41,378
+40.49 44,577
+132.23 52,006
--30.87 57,142
--18.15 61,346
--8.30 65,201
Overall Growth Rate for the period from 1990-91 to 1997-98
CAGR for the period from 1990-91 to 1997-98 (CAGR)
Compiled from Various Issues of Economic Review, State Planning Board, Kerala
1991-92 1992-93 1993-94 1994-95 1995-96 1996-97
Sector in India... 93
Kozhikode District During 1990-9
shows a continuous increase in the total number of employment during
98.
The number of employment generated in each year and the total number of
first phase of post
Sector in Kozhikode
% Change Over Previous Year
--6.97
+6.28
+5.82
+7.73
+16.67
+9.88
+7.36
+6.28
+ 77.23 %
+ 8.52 %
State Planning Board, Kerala
97 1997-98
The table shows that
is increased year after year during the first phase of post globalisation period from
1990-91 to 1997-98. In the year 1990
were created and the total number of em
first phase of post globalisation period, the total number of employment became
65,201 with an overall growth rate of 77.23% and a Compound Annual Growth
Rate of 8.52%. The annual growth rate in total number of emp
(16.67%) in the year 1994
The total number of employment generated by SSI sector in Kozhikode
district during first phase of post globalisation period from 1990
depicted graphically in the following figure:
Figure 5(xv): Number of Employment Provided by SSI Sector in Kozhikode
District during 1990
The figure shows an upward movement
by SSI sector in Kozhikode distr
from 1990-91 to 1997-98.
0
10000
20000
30000
40000
50000
60000
70000
1990-91 1991
Analysis of Performance of SSI/MSMESector in India
The table shows that the total number of employment in Kozhikode district
is increased year after year during the first phase of post globalisation period from
98. In the year 1990-91, 2,398 new employment opportunities
were created and the total number of employment became 36,789. By the end of the
first phase of post globalisation period, the total number of employment became
65,201 with an overall growth rate of 77.23% and a Compound Annual Growth
Rate of 8.52%. The annual growth rate in total number of employment is highest
(16.67%) in the year 1994-95 and it is lowest (5.82%) in the year 1993
The total number of employment generated by SSI sector in Kozhikode
district during first phase of post globalisation period from 1990-91 to 1997
graphically in the following figure:
Figure 5(xv): Number of Employment Provided by SSI Sector in Kozhikode
District during 1990-91 to 1997-98
The figure shows an upward movement in the total number of employment provided
by SSI sector in Kozhikode district during first phase of post globalisation period
98.
1991-92 1992-93 1993-94 1994-95 1995-96 1996-97
Sector in India... 94
the total number of employment in Kozhikode district
is increased year after year during the first phase of post globalisation period from
91, 2,398 new employment opportunities
ployment became 36,789. By the end of the
first phase of post globalisation period, the total number of employment became
65,201 with an overall growth rate of 77.23% and a Compound Annual Growth
loyment is highest
95 and it is lowest (5.82%) in the year 1993-94.
The total number of employment generated by SSI sector in Kozhikode
91 to 1997-98 is
Figure 5(xv): Number of Employment Provided by SSI Sector in Kozhikode
in the total number of employment provided
during first phase of post globalisation period
97 1997-98
Analysis of Performance of SSI/MSMESector in India... 95
5.13. Performance of SSI Sector in Kozhikode District during Post-
Globalisation Period from 1998-99 to 2005-06 (Second Phase)
(a) Number of Registered Units
The total number of registered SSI/MSME units in Kozhikode district during
second phase of post globalisation period from 1998-99 to 2005-06 is detailed in the
following table:
Table No. 5.29: No. of Registered SSI Units in Kozhikode District during
1998-99 to 2005-06
Year No. of units registered
during the year
% change over previous year
Total No. units as on 31st
March
% change over previous
year
1998-99 1,510 --2.58 14,922 +11.26
1999-00 1,516 +0.40 16,438 +10.16
2000-01 1,390 --8.31 17,828 +8.46
2001-02 1,159 --16.62 18,987 +6.50
2002-03 908 --21.66 19,895 +4.78
2003-04 477 --47.47 20,372 +2.40
2004-05 448 --6.08 20,820 +2.20
2005-06 272 --39.29 21,092 +1.31
Overall Growth Rate for the period from 1998-99 to 2005-06 + 41.35
CAGR for the period from 1998-99 to 2005-06 (CAGR) + 5.07 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala
The table shows that there is a continuous increase in the total number of
registered SSI/MSME units in Kozhikode district during second phase of post
globalisation period from 1998-99 to 2005-06. In the year 1998-99 the number of
registered SSI units in Kozhikode district was 14,922 which increased to 21,092 in
2005-06 with an overall growth of 41.35% and a compound annual growth rate of
5.07%. The annual growth rate is highest (11.26%) in the year 1998
lowest (1.31%) in the year 2005
The total number of reg
phase of post globalisation period from 1998
in the following figure:
Figure 5(xvi): Number of Registered Units in Kozhikode District During 1998
99 to 2005
The figure shows that the increase in total number of employment is too small
during the ending years of the
1998-99 to 2005-06.
(b) Employment Potential
The number of employment generated in each year and the total number of
employment provided
post globalisation period is given in the following table:
0
5000
10000
15000
20000
25000
1998-99 1999
Analysis of Performance of SSI/MSMESector in India
5.07%. The annual growth rate is highest (11.26%) in the year 1998
lowest (1.31%) in the year 2005-06.
The total number of registered SSI units in Kozhikode district during second
phase of post globalisation period from 1998-99 to 2005-06 is depicted graphically
in the following figure:
5(xvi): Number of Registered Units in Kozhikode District During 1998
99 to 2005-06
that the increase in total number of employment is too small
during the ending years of the second phase of the post globalisation period from
Employment Potential
The number of employment generated in each year and the total number of
employment provided by SSI sector in Kozhikode district during
globalisation period is given in the following table:
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Sector in India... 96
5.07%. The annual growth rate is highest (11.26%) in the year 1998-99 and it is
istered SSI units in Kozhikode district during second
06 is depicted graphically
5(xvi): Number of Registered Units in Kozhikode District During 1998-
that the increase in total number of employment is too small
second phase of the post globalisation period from
The number of employment generated in each year and the total number of
in Kozhikode district during second phase of
05 2005-06
Analysis of Performance of SSI/MSMESector in India... 97
Table No. 5.30: Number of Employment Provided by SSI Units in Kozhikode
District during 1998-99 to 2005-06
Year No. of employment provided during the
year
% change over previous
year
Total No. of employment provided
as on 31st March
% change over previous
year
1998-99 3,389 --12.09 68,590 +5.20
1999-00 4,243 +25.20 72,833 +6.19
2000-01 5,350 +26.09 78,183 +7.35
2001-02 2,840 --46.92 81,023 +3.63
2002-03 2,671 --5.95 83,694 +3.30
2003-04 1,799 --32.65 85,493 +2.15
2004-05 1,673 --7.00 87,166 +1.96
2005-06 986 --41.06 88,152 +1.13
Overall Growth Rate for the period from 1998-99 to 2005-06 + 28.52 %
CAGR for the period from 1998-99 to 2005-06 (CAGR) + 3.65 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala
The table shows that the growth rate in the total number of units during
second phase of globalisation period is too low during the ending years. In the year
1998-99, 3,389 number of new employment opportunities were created and the
total number of employment became 68,590. By the end of the second phase of post
globalisation period, the total number of employment became 88,152 with an
overall growth rate of 28.52% and a Compound Annual Growth Rate of 3.65%. The
annual growth rate in total number of employment is highest (7.35%) in the year
2000-01 and it is lowest (1.13%) in the year 2005-06.
The total number of employment generated by SSI sector in Kozhikode
district during second phase of post globalisation period from 1998-99 to 2005-06 is
depicted graphically in the following figure:
Figure 5(xvii): Number of Employment Provided by SSI sector in Kozhikode
District during 1998
The figure describes that the total number of employment is increased every year,
but the annual growth in the employment potential
5.14. Performance of
during Post-
(Third Phase)
(a) Number of Registered Units
The total number of registered SSI/MSME units in Kozhikode district during
third phase of post globalisation period from
following table:
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
1998-99 1999
Analysis of Performance of SSI/MSMESector in India
Figure 5(xvii): Number of Employment Provided by SSI sector in Kozhikode
District during 1998-99 to 2005-06
The figure describes that the total number of employment is increased every year,
but the annual growth in the employment potential is only nominal.
Performance of SSI/MSME Sector in Kozhikode District
-globalisation Period from 2006-07
(Third Phase)
Number of Registered Units
The total number of registered SSI/MSME units in Kozhikode district during
globalisation period from 2006-07 to 2013-14
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Sector in India... 98
Figure 5(xvii): Number of Employment Provided by SSI sector in Kozhikode
The figure describes that the total number of employment is increased every year,
Kozhikode District
07 to 2013-14
The total number of registered SSI/MSME units in Kozhikode district during
14 is given in the
05 2005-06
Analysis of Performance of SSI/MSMESector in India... 99
Table No. 5.31: Number of registered SSI Units in Kozhikode District during
2006-07 to 2013-14
Year No. of units
registered during the year
% change over previous
year
Total No. working units as on 31st
March
% change over previous
year
2006-07 230 --15.44 15,620 --25.94
2007-08 380 +65.22 16,000 +2.43
2008-09 406 +6.84 16,406 +2.54
2009-10 602 +48.28 17,008 +3.67
2010-11 941 +56.31 17,949 +5.53
2011-12 818 --13.07 18,767 +4.56
2012-13 1041 +27.26 19,808 +5.55
2013-14 925 --11.14 20,733 +4.67
Overall Growth Rate for the period from 2006-07 to 2013-14 + 32.73 %
CAGR for the period from 2006-07 to 2013-14 (CAGR) + 4.13 %
Source: Compiled from Various Issues of Economic Review, State Planning Board, Kerala
The table describes that there is a continuous increase in the total number of
registered SSI/MSME units in Kozhikode district during third phase of post
globalisation period from 2006-07 to 2013-14. In the year 2006-07, the number of
working SSI units in Kozhikode district was 15,620 which increased to 20,733 in
2013-14 with an overall growth of 32.73% and a compound annual growth rate of
4.13%. The annual growth rate is highest (5.55%) in the year 2012-03 and it is
lowest (2.43%) in the year 2007-08.
The total number of SSIs/MSMEs in Kozhikode district during third phase
of post globalisation period from 2006-07 to 2013-14 is depicted graphically in the
following figure:
Figure 5(xviii): Number of units in Kozhikode District during 2006
The figure shows an upward movement in the number of SSIs/MSMEs in
Kozhikode district during the third phase of the post globalisation period from 2006
07 to 2013-14.
(b) Number of Employment
The number of employment generated in each year and the total number of
employment provided by SSI sector
globalisation period is given in the following table:
Table No. 5.32: Number of
District
Year No. of units registered
during the year
2006-07 1,106
2007-08 2,701
2008-09 2,243
2009-10 2,395
2010-11 6,551
2011-12 5,082
2012-13 6,790
2013-14 6,092
Overall Growth Rate for
CAGR for the period from 2006
Source: Compiled from Various Issues of Economic Review,
0
5000
10000
15000
20000
25000
2006-07 2007
Analysis of Performance of SSI/MSMESector in India
Figure 5(xviii): Number of units in Kozhikode District during 2006
The figure shows an upward movement in the number of SSIs/MSMEs in
Kozhikode district during the third phase of the post globalisation period from 2006
Number of Employment
The number of employment generated in each year and the total number of
by SSI sector in Kozhikode district during third phase of post
globalisation period is given in the following table:
Number of Employment Provided by SSI Units in Kozhikode
District during 2006-07 to 2013-14
No. of units registered during the year
% change over previous year
Total No. units as on 31st March
+12.17 89,258
+144.21 91,959
--16.96 94,202
+6.78 96,597
+173.53 1,03,148
+77.58 1,08,230
33.61 1,15,020
--10.28 1,21,112
Overall Growth Rate for the period from 2006-07 to 2013-14
CAGR for the period from 2006-07 to 2013-14 (CAGR)
Compiled from Various Issues of Economic Review, State Planning Board, Kerala
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Sector in India... 100
Figure 5(xviii): Number of units in Kozhikode District during 2006-07 to 2013-14
The figure shows an upward movement in the number of SSIs/MSMEs in
Kozhikode district during the third phase of the post globalisation period from 2006-
The number of employment generated in each year and the total number of
third phase of post
Units in Kozhikode
% change over previous year
+1.25
+3.03
+2.44
+2.54
+6.78
+4.93
+6.27
+5.30
+ 35.69 %
+ 4.46 %
State Planning Board, Kerala
13 2013-14
The table shows that
SSIs/MEMEs is increased every year during the third phase of post globalisation
from 2006-07 to 2013
opportunities were created and the total number of employment bec
the end of the third phase of post globalisation period, the total number of
employment became 1,21,112 with an overall growth rate of 35.69% and a
Compound Annual Growth Rate of 4.46%. The annual growth rate in total number
of employment was highest (6.78%) in the year 2010
in the year 2006-07.
The total number of employment generated by SSI sector in Kozhikode
district during third phase of post globalisation period from 2006
depicted graphically in the following figure:
Figure 5(xix): Number of employment provided by SSI/MSME sector in
Kozhikode district during 2006
The figure shows an upward
by SSI/MSME sector in Kozhikode district during the third phase of post
globalisation period from 2006
0
20000
40000
60000
80000
100000
120000
140000
2006-07 2007
Analysis of Performance of SSI/MSMESector in India
The table shows that the total number of employment provided by
SSIs/MEMEs is increased every year during the third phase of post globalisation
07 to 2013-14. In the year 2006-07, 1,106 new employment
opportunities were created and the total number of employment bec
the end of the third phase of post globalisation period, the total number of
employment became 1,21,112 with an overall growth rate of 35.69% and a
Compound Annual Growth Rate of 4.46%. The annual growth rate in total number
s highest (6.78%) in the year 2010-11 and it was lowest (1.25%)
The total number of employment generated by SSI sector in Kozhikode
district during third phase of post globalisation period from 2006-07 to 2013
ly in the following figure:
Figure 5(xix): Number of employment provided by SSI/MSME sector in
Kozhikode district during 2006-07 to 2013-14
upward movement in the total number of employment provided
by SSI/MSME sector in Kozhikode district during the third phase of post
globalisation period from 2006-07 to 2013-14.
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Sector in India... 101
the total number of employment provided by
SSIs/MEMEs is increased every year during the third phase of post globalisation
07, 1,106 new employment
opportunities were created and the total number of employment became 89,258. By
the end of the third phase of post globalisation period, the total number of
employment became 1,21,112 with an overall growth rate of 35.69% and a
Compound Annual Growth Rate of 4.46%. The annual growth rate in total number
11 and it was lowest (1.25%)
The total number of employment generated by SSI sector in Kozhikode
07 to 2013-14 is
Figure 5(xix): Number of employment provided by SSI/MSME sector in
movement in the total number of employment provided
by SSI/MSME sector in Kozhikode district during the third phase of post
13 2013-14
Analysis of Performance of SSI/MSMESector in India... 102
5.15. Comparison of Performance of SSI/MSME Sector in
Kozhikode District during Pre and Post Globalisation Periods
on the Basis of Number of Units
A Comparison of performance of SSI/MSME Sector in Kozhikode District
during pre and post liberalisation periods on the basis of number of units is given in
the following table:
Table No. 5.33: Comparison of performance of SSI/MSME Sector in
Kozhikode District during pre and post globalisation periods
on the basis of number of units
Pre Globalisation Period
Post Globalisation Periods
1982-83
to
1989-90
Phase I Phase II Phase III
1990-91 to
1997-98
1998-99 to
2005-06
2006-07 to
2013-14
Year A G R Year A G R Year A G R Year A G R
1982-83 -- 1990-91 +10.74 1998-99 +11.26 2006-07 --25.94
1983-84 +11.87 1991-92 +9.96 1999-00 +10.16 2007-08 +2.43
1984-85 +9.93 1992-93 +9.51 2000-01 +8.46 2008-09 +2.54
1985-86 +13.61 1993-94 +9.78 2001-02 +6.50 2009-10 +3.67
1986-87 +12.52 1994-95 +14.84 2002-03 +4.78 2010-11 +5.53
1987-88 +12.92 1995-96 +12.02 2003-04 +2.40 2011-12 +4.56
1988-89 +16.94 1996-97 +12.04 2004-05 +2.20 2012-13 +5.55
1989-90 +20.85 1997-98 +13.07 2005-06 +1.31 2013-14 +4.67
OGR +150.87 OGR +115.42 OGR +41.35 OGR +32.73
CAGR 14.04 CAGR 11.59 CAGR +5.07 CAGR +4.13
OGR = Overall Growth Rate, CAGR = Compound Annual Growth Rate
The table shows that the overall growth rate in number of registered units in
Kozhikode District during pre globalisation was 150.87%, which reduced to
115.42% during the first phase of post globalisation period. Overall growth rate in
respect of number of registered units again decreased to 41.35 % during the second
Analysis of Performance of SSI/MSMESector in India... 103
phase and became 32.73% during the third phase of post globalisation period. The
table further reveals that the CAGR in respect of number of units are declining
throughout the post globalisation period. So, we may conclude that globalisation has
a great negative impact on the SSI/MSME sector in Kozhikode district.
5.16. Comparison of performance of SSI/MSME Sector in
Kozhikode District State during pre and post globalisation
periods on the basis of number of employment generation
A Comparison of performance of SSI/MSME Sector in Kozhikode District
during pre and post liberalisation periods on the basis of number of employment
potential is given in the following table:
Table No. 5.34: Comparison of performance of SSI/MSME Sector in Kozhikode
District during pre and post globalisation periods on the basis
of number of employment generated
Pre Globalisation Period Post Globalisation Periods
1982-83
to
1989-90
Phase I Phase II Phase III
1990-91
to
1997-98
1998-99
to
2005-06
2006-07
to
2013-14
Year A G R Year A G R Year A G R Year A G R
1982-83 -- 1990-91 +6.97 1998-99 +5.20 2006-07 +1.25
1983-84 +16.24 1991-92 +6.28 1999-00 +6.19 2007-08 +3.03
1984-85 +22.83 1992-93 +5.82 2000-01 +7.35 2008-09 +2.44
1985-86 +17.78 1993-94 +7.73 2001-02 +3.63 2009-10 +2.54
1986-87 +15.41 1994-95 +16.67 2002-03 +3.30 2010-11 +6.78
1987-88 +12.92 1995-96 +9.88 2003-04 +2.15 2011-12 +4.93
1988-89 +54.60 1996-97 +7.36 2004-05 +1.96 2012-13 +6.27
1989-90 +11.84 1997-98 +6.28 2005-06 +1.13 2013-14 +5.30
OGR +278.92 OGR +77.23 OGR +28.52 OGR +35.69
CAGR +20.96 CAGR +8.52 CAGR +3.65 CAGR +4.46
Analysis of Performance of SSI/MSMESector in India... 104
The table shows that the overall growth rate in the employment potential of
SSI/MSME sector in Kozhikode District during pre globalisation was 278.92%,
which decreased to 77.23% during the first phase of post globalisation period.
Overall growth rate in respect of employment potential further decreased to 28.52%
during the second phase of post globalisation. It showed a slight increase during the
third phase and thus it became 32.73% at the end of the period. It is also seen from
the table that the CAGR in respect of employment potential are also declining
throughout the post globalisation period, except during the third phase. During the
third phase of post globalisation, both the CAGR and overall growth rate showed a
slight increase. They are increased to 35.69% &and 4.46% respectively.
5.17. Comparison of performance of SSI/MSME sector in
Kozhikode District during pre and post globalisation periods
based on selected parameters
A comparison of compound annual growth rates in number of registered
units and number of employment of SSI/MSME sector in Kozhikode district during
pre and post globalisation periods is given in the following table:
Table No. 5.35: Comparison of Growth Rates in Respect of Selected Parameters
of SSI/MSME Sector during Pre and Post Globalisation Periods
Parameter
Compound Annual Growth Rate (CAGR)
Pre-globalisation period
Post globalisation periods
Phase I Phase II Phase III
1982-83 to
1989-90
1990-91 to
1997-98
1998-99 to
2005-06
2006-07 to
2013-14
No. of Units + 14.04 % + 11.59 % + 5.07 % + 4.13 %
Employment provided + 20.96 % + 8.52 % + 3.65 % + 4.46 %
The comparison of performance of SSI/MSME sector in Kozhikode district on the
basis of CAGR in respect of number of units and number of employment provided
during pre globalisation p
depicted graphically in the following figure:
Figure 5(xx): Comparison of
SSI/MSME sector in Kozhikode District
parameters in terms of
The figure shows that the compound annual growth rates in respect of both the
parameters are decreasing during all the three phases of post globalisation period
except the number of employment during the third phase of post globalisation which
shows a slight increase. The performance of SSI/MSME sector in Kozhikode
District is almost same as that of Kerala state.
5.18. Comparison of the performance of SSI/MSME sector in Kerala
and Kozhikode District during pre and post globalisation
periods
Following table shows a comparison of performance of SSI/MSME sector in
Kerala state and Kozhikode district
pre and post globalisation periods
0
5
10
15
20
25
1982-83 to 1989-90
19901997
Analysis of Performance of SSI/MSMESector in India
during pre globalisation period and three phases of post globalisation period
depicted graphically in the following figure:
Comparison of pre and post globalisation performance
SSI/MSME sector in Kozhikode District on the basis of selected
parameters in terms of CAGR
The figure shows that the compound annual growth rates in respect of both the
parameters are decreasing during all the three phases of post globalisation period
except the number of employment during the third phase of post globalisation which
shows a slight increase. The performance of SSI/MSME sector in Kozhikode
District is almost same as that of Kerala state.
Comparison of the performance of SSI/MSME sector in Kerala
and Kozhikode District during pre and post globalisation
Following table shows a comparison of performance of SSI/MSME sector in
Kerala state and Kozhikode district on the basis of the selected parameters during
pre and post globalisation periods in terms of CAGR:
1990-91 to 1997-98
1998-99 to 2005-06
2006-07 to 2013-14
Number of registered units
Number of employment provided
Sector in India... 105
riod and three phases of post globalisation period is
pre and post globalisation performance of
on the basis of selected
The figure shows that the compound annual growth rates in respect of both the
parameters are decreasing during all the three phases of post globalisation period
except the number of employment during the third phase of post globalisation which
shows a slight increase. The performance of SSI/MSME sector in Kozhikode
Comparison of the performance of SSI/MSME sector in Kerala
and Kozhikode District during pre and post globalisation
Following table shows a comparison of performance of SSI/MSME sector in
of the selected parameters during
Number of registered units
Number of employment provided
Analysis of Performance of SSI/MSMESector in India... 106
Table No. 5.36: Comparison of performance of SSI/MSME sector in Kerala
and Kozhikode District during pre and post globalisation
periods in terms of CAGR
Parameter Area Covered
(Kozhikode/ Kerala)
Compound Annual Growth Rate (CAGR)
Pre-globalisation period
Post globalisation periods
Phase I Phase II Phase III
1982-83 to
1989-90
1990-91 to
1997-98
1998-99 to
2005-06
2006-07 to
2013-14
Number of Units
Kozhikode 14.04 % 11.59 % 5.07% 4.13 %
Kerala 14.37 % 13.65 % 5.27 % 2.59 %
Number of employment
Kozhikode 20.96 % 8.52 % 3.65 % 4.46 %
Kerala 23.35 % 11.49 % 3.96 % 4.38 %
The table shows that there is significant difference in the performance of
SSI/MSME sector in Kerala and Kozhikode district during pre and post
globalisation periods. The compound annual growth rate in respect of number of
units and number of employment opportunities during all the three phases of post
globalisation period are too less than those during the pre globalisation period.
Following table shows a comparison of performance of SSI/MSME sector in
Kerala state and Kozhikode district on the basis of the selected parameters during
pre and post globalisation periods in terms of OGR:
Table No. 5.37: Comparison of Performance of SSI/MSME Sector in Kerala
and Kozhikode District During Pre and Post Globalisation
Periods in Terms of OGR
Parameter
Area Covered
(Kozhikode/ Kerala)
Overall Growth Rate (OGR)
Pre-globalisation period
Post globalisation periods
Phase I Phase II Phase III
1982-83 to
1989-90
1990-91 to
1997-98
1998-99 to
2005-06
2006-07 to
2013-14
Number of Units Kozhikode 150.87 % 115.42 % 41.35 % 32.73 %
Kerala 155.98 % 144.85 % 43.23 % 19.64 %
Number of employment
Kozhikode 278.92 % 77.23 % 28.52 % 35.69 %
Kerala 334.56 % 114.14 % 31.24 % 35.01 %
Analysis of Performance of SSI/MSMESector in India... 107
The table shows that there is significant difference in the performance of
SSI/MSME sector in Kerala and Kozhikode district during pre and post
globalisation periods. The overall growth rate in respect of number of units and
number of employment opportunities during all the three phases of post
globalisation period are too less than those during the pre globalisation period. It is
seen that, during third phase there is a slight increase in overall growth rate of
employment over that during second phase of post globalisation period.
Chapter 6
FINDINGS, SUGGESTIONS AND CONCLUSION
6.1. Findings
The study has been undertaken to examine the impact of globalisation on
MSMEs/SSIs in Kerala. The comparative analysis of compound annual growth rates
in respect of number of SSIs/MSMEs and employment generation during pre and
post globalisation periods show that the globalisation had a negative impact on the
MSME/SSI sector in Kerala. The fall in growth rate of number of units and
employment generation in all the three phases of post globalisation period is a
matter of serious discussions for policy-makers, administrators and planners.
The major findings of the study are:
The Compound Annual Growth Rate of number of MSME/SSI units in
Kozhikode District during pre-globalisation period from 1982-83 to 1989-90
was 14.04%. The rate has been declined during all the three phases of post
globalisation period. During the first phase it became 11.59 %. This has been
further declined to 5.07% and 4.13 % during second and third phases
respectively. The CAGR in respect of MSME/SSI units in Kerala State was
14.37% during pre-globalisation period. This declined to 13.65%, 5.07% and
4.13 % during first, second and third phases of post globalisation respectively.
The Overall Growth Rate (OGR) of number of MSME/SSI units in
Kozhikode District shows continuous decline during all the three phases of
post globalisation period. During pre –globalisation period from 1982-83 to
1989-90, it was 150.87%. It has been declined to 115.42%, 41.35% and
32.73% respectively during the first, second and third phase of post
globalisation period. For the whole Kerala, the OGR was 155.98% during
Analysis of Performance of SSI/MSMESector in India... 109
pre-globalisation period; and it was declined to 144.855, 43.235 and 19.64%
respectively during the three phases of post globalisation period.
The performance of MSME/SSI sector in respect of employment generation
also shows the negative impact of globalisation. The CAGR of employment
generation in Kozhikode district was 20.96% during pre-globalisation
period. During the first phase of post globalisation, it became 8.52%. This
was again declined to 3.65% and 4.46% respectively during the second and
third phases of post globalisation. For the Kerala State, the CAGR of
employment generation was 23.35% during pre-globalisation period; and
then declined to 11.49%, 3.96% and 4.38% respectively during the three
phases of the post globalisation period.
The OGR in respect of employment generation in Kozhikode district has
also declined continuously during the three phases of post globalisation
period. During pre-globalisation period, the OGR of employment creation
was 278.92%. Then, it has been declined as 77.23%, 28.52% and 35.69%
during the three phases of post globalisation respectively. The OGR for
Kerala state was 334.56% during the pre globalisation period. Then it
declined to 114.14%, 31.24% and 35.01% respectively during the three
phases of post globalisation period.
The overall performance of MSME/SSI sector in Kerala, in terms of number
of units and employment generation, during all the three phases of post
globalisation period are too poor than those during the pre-globalisation era.
Of the total 7,177 number of working MSMEs/SSIs in Kozhikode district,
4841 units (67.45%) are situated in Kozhikode taluk. The number of units in
Koyilandy and Vatakara taluks are 1222 (17.03%) and 1114 (15.52%)
respectively.
Of the total number of employment generated by MSME sector in Kozhikode
district, 71.41% is generated by MSMEs in Kozhikode taluk. The contribution
of Koyilandy and Vatakara taluks are only 14.24% and 14.35% respectively.
Analysis of Performance of SSI/MSMESector in India... 110
Of the total investment in MSME sector of Kozhikode district, 75.7% are in
Kozhikode taluk, 11.97% are in Koyilandy taluk and 12.33% are in Vatakara
taluk.
Of the total MSME units in Kozhikode district, 95.49% (6853 Nos.) are
micro units, 4.47% (321 Nos.) are small units and only 0.04% (3 Nos.) is
medium enterprises.
In Kozhikode district, 89.05% of the total MSMEs are manufacturing
enterprises (6391 Nos.) and remaining 10.95% are service enterprises (786
Nos.).
Of the total number of MSMEs in Kozhikode district, 6047 units (84.26%)
are run by male and 1130 units (15.74%) are owned by female.
Out of the total investment in MSMEs in Kozhikode district, Rs: 53152.78
lakhs (91.18%) are invested in the units run by male and Rs: 5140.72 lakhs
(8.82%) are invested in units run by females.
Majority of MSMEs in Kozhikode District are falling under agro and food
industries sector (18.98%). Wood based furniture industries (15.7%) and
General engineering industries (9.39%) hold the second and third places
respectively.
The strength of MSME sector in Kozhikode district includes availability of
good infrastructure; availability of agricultural and natural resources; very
good tradition in industry, trade and commerce; presence of unemployed
educated youth; presence of technical and high end institutions; people
having entrepreneurial culture; good climate; availability of banking
facilities; potential of NRIs; availability of industrial estates, industrial
parks, mini industrial estates, etc.; good market prospects for all consumer
goods; availability of skilled labour at comparatively low cost; and keen
interest of LSGDs for the promotion of MSMEs.
The important weaknesses of MSME sector in Kozhikode district are absence
of large scale industries; non availability of land at reasonable rates; scattered
Analysis of Performance of SSI/MSMESector in India... 111
input resources; inadequate work culture; seasonal availability of input
resources; non availability of highly skilled labour; irregular power supply;
high density of population, inadequate availability of technical consultants.
The important opportunities available to MSME sector in Kozhikode district
are investment climate; growth in tourism sector; global market due to
liberalisation, privatisation and globalisation; and reduction in Gulf
opportunities.
The major threats of MSME sector in Kozhikode district are lack of
standardisation of products; competition from outside state and outside the
country; lack of technology training facilities; lack of co-ordination between
line departments and financial institutions; lack of confidence among
entrepreneurs; lack of professional managers and project consultants; high
cost of land; lack of awareness about industrial opportunities and
technology; inability to achieve technical standards and scale; and lack of
entrepreneurship training facilities.
To conclude, both the parameters show the negative impact of globalisation
on Kerala’s MSME/SSI sector. The growth rates during all the three phases of post
globalisation are very low when comparing with the growth rates during pre-
globalisation period.
6.2. Suggestions
For removal of the negative impact of globalisation and for overall
promotion of MSME sector in Kerala, following measures are suggested:
Consumer awareness camps may be organised in rural and semi urban areas
of Kerala for familiarising the products of MSME sector.
More number of MSME units may be promoted among weaker sections like
women, Scheduled Caste, Scheduled Tribe, minorities, backward castes, etc.
in order to streamline the society.
Analysis of Performance of SSI/MSMESector in India... 112
Entrepreneurship Development Clubs may be established in Schools,
Colleges and other educational institutions to spread the message on
entrepreneurship among young blood.
Measures may be taken to reopen sick/closed units by adding partners or by
changing management or by diversification of activities, or through
modernisation, or through bank support.
District level exhibition cum trade fair may be conducted at regular intervals.
Financial support to entrepreneurs may be granted through Entrepreneurs’
Support Scheme (ESS) and Prime Minister’s Employment Generation
Programme (PMEGP).
To improve the performance of their distribute system the MSME units may
be entered into tie-ups with the organised retail stores.
The information dissemination system may be strengthened so as to
propagate the benefits of various schemes and incentives of DIC and other
departments playing in the field of MSME sector, self employment sector
and in entrepreneurship sector to the entrepreneurs and public and thereby
attract them towards MSME sector.
Measures may be taken to make access to all entrepreneurs to avail the
eligible grants, subsidies and other services of the DIC, other state and
central departments and agencies and institutions playing in the field of
MSME sector.
Measures may be taken to join the hands of all MSMEs in Kerala with
national and international MSMEs.
Proper human management techniques may be implemented By MSMEs to
acquire, train, motivate and retain the employees.
The MSME units in Kerala should acquire knowledge about taxation and
regulatory measures by way of training. They should use budgetary control
system for financial planning.
Analysis of Performance of SSI/MSMESector in India... 113
6.3. Conclusion
Micro, Small Medium sector in India finds itself in an extremely competitive
environment since 1991, due to globalization and economic liberalization policies of
the government. Therefore, the growth of the sector in terms of number of units and
employment generation has come down. Consequently, its contribution to national
income has become less remarkable. But at the same time, national and international
policy changes have thrown new opportunities to Indian MSME sector. Concerted
efforts of government departments and MSME sector itself are needed to exploit all
these opportunities. The crucial role of technological up-gradation, in-house
technological innovations and inter-firm linkages should be emphasised consciously
in the light of dimensions of global competition and its negative fallouts as well as
positive opportunities. Measures should be taken for making the entrepreneurs
aware in this respect through seminars and workshops at local level. No doubt, the
joint efforts of all the various agencies in the field of MSME sector can make the
sector as one bringing sustainable contribution to national income, employment and
exports.
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