122

Chapter – III

Development of Small Scale Industries in Tamil Nadu

with special Reference to Pudukkottai – District

Development of Small Scale Industry in Tamil Nadu

The main aim of this chapter is to present an outline of the

development and growth of small-scale industries in the State of Tamil

Nadu with special reference to Pudukkottai District. Besides, efforts are

also made to ascertain the availability of infrastructure facilities for the

setting up of small industrial units in the state of Tamil Nadu in general

and Pudukkottai District in particular.

Pudukkottai District is traditionally considered one among the

backward districts in Tamil Nadu. However, this District is endowed with

abundant natural resources especially on the agricultural, horticultural

and forest side. They have remained untapped for several decades. This

District has not tasted the fruits of the industrial revolution and / or

agricultural revolution. However, that has given good opportunities for

development of organic farming in this District as land; water and air are

not much polluted. Besides, the available infrastructure such as road

transportation, communication, water and power in Pudukkottai District

are reasonably adequate.

123

The following Table 3.1 shows that the growth rate of small scale

industry in Tamil Nadu from 1991-92 within eleven years performance

has been increased for overall the performance but not only the

employments.

Table-3.1

Growth of Small Scale Industrial Units in Tamil Nadu

(Rs. in Crore)

Year

Factories

Covered (No.)

Employees (‘000,Nos)

Value in

Input (Rs.in Crore)

Value in

output (Rs. in Crore)

1991-92 15,506 1,229 25,290.00 32,496.00

1992-93 16,651 1,075 29,381.00 38,377.00

1993-94 18,099 1,152 35,002.00 45,200.00

1994-95 19,177 1,375 44,364.00 57,752.00

1995-96 19,301 1,211 52,200.00 67,478.00

1996-97 19,202 1,266 57,560.00 74,212.00

1997-98 19,406 1,348 75,920.00 89,654.00

1998-99 20,478 1,169 57,376.00 73,996.00

1999-00 20,217 1,108 76,335.00 94,549.00

2000-01 20,601 1,136 83,268.00 1,03,539.00

2001-02 18,912 1,096 76,153.00 94,360.00

Main source: Statistical Handbook, Department of Economics and Statistics, Chennai - 6

124

Steps have also been taken for the development of irrigation

facilities and for the proper conservation of rain / surface water in this

District. These are the pre-requisites for the consolidation and further

increase in production of various food and non-food crops in the District

and to ensure regular availability of such agro-food products as raw

materials for manufacturing and processing units.

The Government of Tamil Nadu has introduced new schemes like

New Anna Marumalarchi Thittam, Comprehensive Waste Land

Development Programme and training of agriculturists in new farm

practices with a view to promoting small and tiny industries in the rural

areas.

For the successful implementation of the above schemes,

entrepreneurs should be informed about the resources and facilities

available in the District. For this, an industrial seminar on 2003 agro-

allied / food processing industries organized and a bulletin detailing the

district is potential and profile was Table 3.1 and 3.2 released.

125

The following Table 3.2 shows that the small scale industries

registered units in Tamil Nadu.

Table- 3.2

Performance of Small Scale Industries in Tamil Nadu 2003 – 2004

S.

No Details of

Industry

No. of

Units

Value in lakh Employment

Investment Production

1.

Food Products 40,966 81,932.00 10,79,212.00 1,93,845

2.

Beverages and

Tobacco

products

2,916 4,898.00 1,49,715.00 77,150

3.

Cotton Textiles 24,933 63,007.00 7,93,368.00 1,89,604

4.

Wool silk

synthetic

2,866 13,699.00 2,14,894.00 45,216

5.

Jute, Hemp,

Rest Products

1,566 61,514.00 1,40,301.00 56,167

6.

Hosiery and

Readymade

Garments

1,26,792 2,49,496.00 26,00,400.00 11,19,061

7.

Wood and wood

products

20,603 41,183.00 2,65,781.00 99,600

8.

Paper and paper

products

27,108 80,812.00 4,31,017.00 1,18,335

9.

Leather

Industries

12,240 49,326.00 4,10,040.00 1,50,802

10.

Rubber &

plastics

15,978 46,335.00 31,157.00 88,799

11.

Chemical &

products

18,676 39,651.00 3,36,168.00 2,62,317

12.

Non – Metallic

mineral

products

13,024 31,288.00 1,79,731.00 1,47,251

13.

Basic metal

products

6,211 29,687.00 1,69,497.00 63,737

14.

Metal products 22,780 62,644.00 4,14,596.00 1,69,460

15.

Machinery parts

except electrical

30,474 69,066.00 4,54,063.00 1,24,123

16.

Electrical parts 12,946 68,484.00 3,22,355.00 1,05,941

17.

Transport

equipments

12,492 46,440.00 2,06,118.00 1,07,734

18.

Miscellaneous

Industries

82,128 2,89,688.00 1,29,5567.00 3,46,160

Source: Industries Commissioner and Director of Industries and Commerce, Chennai – 5.

126

Profile of Pudukkottai District

Pudukkottai District was under the rule of Muslims in the Pre-

independence era Pudukkottai Samasthanam. It was under the

suzerainty of the Thondaiman kings since then, until 1948, when the

kingdom was annexed to the then Madras Presidency.

The name Pudukkottai is derived from the New Fort, which was

constructed by the kings who ruled Pudukkottai at that time. New castle

in England and Novgorod in Russia also derived their names due to the

construction of new forts in those towns.

Pudukkottai District was formed on 14 January 1974 by merging

the Pudukkottai Revenue division of Trichy district and the Aranthangi

and Avudayarkovil Taluks of Thanjavur District.

The District is spread over an area of 4651 square kilometers with

a 39 km coastline. It is bounded by Trichy district in the North and

West, by Sivagangai district in the South and the Bay of Bengal in the

East. It has the following structure:

Municipalities - 2,

Revenue villages - 765,

Revenue Firkas - 42,

Village Panchayaths - 498, and

Town Panchayaths - 8.

127

Demographic Details

The total population of the District as per the 2001 Census was

15,95,500 of which males and females were almost equally divided. The

respective figures were 7,96,200 and 7, 99,300. The population density is

342 persons per square kilometer. The rural population accounts for the

major share of 86 % (13, 72,130) while the semi – urban population is

2,23,370.

The following Table 3.3 shown that the administrative set-up for

the sample District.

Table – 3.3

The Administrative Setup of the Pudukkottai District

Development wing Revenue wing

Pudukkottai

Division

(Blocks)

Aranthangi

Division

(Blocks)

Pudukkottai

Division

(Taluks)

Aranthangi

Division

(Taluks)

Annavasal Aranthangi Pudukkottai Aranthangi

Arimalam Avudayarkovil Alangudi Avudayarkovil

Kunnandarkoil Karambakkudi Thirumayam Manamelkudi

Ponnamaravathi Manamelkudi Keeranoor

Pudukkottai Thiruvarankulam Gandarvakottai

Thirumayam Illuppur

Viralimalai

Gandarvakottai

Source: Annual Credit Plan, Indian Overseas Bank, 2004-2005, P.No: 05.

128

Infrastructural Facilities Available

The infrastructure and the service sectors were assessed with

respect to ascertaining mainly the adequacy of the various facilities like

- Road and Rail Transport

- Communication Facilities

- Educational Institutions

- Land

- Energy and Power, and

- Water

Pudukkottai District is fairly developed in all the infrastructure

requirements for industrial growth.

Highways and Rural-works

Pudukkottai Revenue District is spread over an area of 4651

sq.km. The Highways Department is maintaining 2108.40 kms of

government roads. The roads are re-laid periodically to ensure a smooth

riding surface and free flow of traffic by utilizing state funds and loan

assistance from the NABARD and HUDCO.

Surface Transport

The mode of transport, weight of the materials to be carried, speed

and quality of service, distance to be covered, opportunity for bulk

handling etc., affect the transport cost of either raw materials or finished

products. There is an efficient bus transport system in the District.

129

Railways

The District has 84 kms of broad gauge railway lines with 12

railways stations connecting Pudukkottai with major centers in the state

like Chennai, Trichy, Karaikudi, Rameshwaram and Tirunelveli as well as

Quilon in Kerala. Aranthangi is connected with Thiruvarur and

Nagapattinam. Pudukkottai District is well served by the Trichy railway

junction, which is well connected with major centers by long distance

express trains.

Port and Airport

The nearest seaport for the District is Tuticorin, which is 350 kms,

away from the District. The nearest Airport is Trichy, which is about 40

kms, from Pudukkottai. Regular Air services are available between Trichy

and Madurai, Chennai, Cochin, Columbo and Sharjah.

Telephones

Pudukkottai District is well connected by means of telephone lines

and internet. Even timing hamlets are connected with post offices and

telephones. Moreover, new connections are provided almost on demand.

Health

In a developing district like Pudukkottai, the Government of Tamil

Nadu has already introduced various schemes to take care of the health

of the downtrodden people. There are 12 Taluks and non-Taluks

hospitals one dispensary, 51 primary health centers, 141-health sub –

centers and 2 Employees State Insurance hospitals in this District.

130

Tourism

Sufficient hospitality facilities are available in the District. Many

old historical temples are there in the district most of the temples are

cave temples built by the Thondaiman, Chola and Pandiya Kings.

Education

Education is the foundation for the growth of any society.

Pudukkottai has a long history of educational development, thanks to

the Thondaiman rulers who started The Rajah’s College in the pre

independence period. The Literacy rate in Pudukkottai District is more

than 90 % after the Literacy Campaign conducted successfully by the

Arivoli Iyakkam in the years 1991 – 1992.

Over the years, the importance of education is realized widely by

all sections of the society from villages to town. Many new educational

institutions, private and government have been open in the District.

More over the central government scheme “Sarva Shiksha

Abhiyan”, a District Elementary Education Plan provides education for

all to make the literacy rate of the district 100 % by aiming to make the

enrolment of children at the primary and elementary school level 100 %.

Water

In an era with its thrust on sustainable development, the emerging

challenge is water management. Water is precipitation, surface water or

ground water. Water is needed for drinking and for irrigation. Rainwater

harvesting structures have been put up in all buildings in the District.

131

Electricity

Pudukkottai District is fed from the SIPCOT 330/110 KV

substation situated at 9.00 km from Pudukkottai town. This 230 KV sub-

station is tied to the southern grid and the incoming supply to this sub

station is fed from the 230 KV Alandur SS and 230kv Karaikudi SS. The

autotransformer capacity of this sub station is 100 MVA.

The proposal for enhancement of power transformer capacity of

230/110 KV SIPCOT SS into 2 x 100 MVA from the existing 2 x 50 MVA

has been included in the 10th master plan. Further 9 Nos. of HT sub

stations are being proposed in the 10th master plan. The existing 21 sub

– stations are having adequate capacity of power transformers and hence

any industrial load can be catered to within a reasonable time.

Commercial Banks

A pre-requisite for industrial development is the availability of

adequate finance. Several financial institutions provide financial

assistance in response to the need of the entrepreneurs. Details of

commercial banks are functioning in the area are given below in Table-

3.4. The total number of bank branches in this District is 117.

The number of commercial bank branches in the rural areas is 69,

in semi urban areas it is 16, the total number of commercial banks in

the district is 85.

132

Table -3.4

Commercial Bank Branches in Pudukkottai District

S.No. Banks No. of Bank

Branches

1. Nationalized Banks 62

2. Private sector Banks 25

3. Pudukkottai Central Co – operative

Bank 20

4. State land Development Bank 9

5. Tamil Nadu Industrial investment

corporation Ltd. 1

Total 117

Sources: Green Industries Pudukkottai – 2003, P.No. 19.

133

Socio-Economic Status

The demographic characteristics of small-scale entrepreneurs are

given fellow Table-3.5.

Table – 3.5

Socio – Economic indicators of Pudukkottai District

S.No. Socio – Economic Indicate Total Male Female

1. Area in sq kms 4,663.2 - -

2. No of occupied residential

house 2,71,825 - -

3. Total Population 15,95,500 7,96,200 7,99,300

4. Population (SC) 2,23,228 1,11,826 1,11,402

5. Population below 7 years 1,82,596 92,393 90,203

6. Literates 6,61,604 4,10,153 2,51,471

7. Total workers 5,16,835 3,63,037 1,53,798

8. Cultivators 1,33,588 64,225 69,363

9. Agri. Laborers 4,775 4,338 437

10. Workers : Livestock forestry

etc. 2,131 1,563 568

11. Workers : MAF & Pro other 29,756 26,143 3,613

12. Construction workers 6,032 5,498 534

13. Trade & commerce workers 35,003 33,191 1,812

14. Transport storage & common

workers 7,727 7,043 184

15. Workers in other services 39,796 28,872 10,924

16. Marginal workers 70,419 4,657 65,768

17. Non – workers 7,38,894 2,94,094 4,45,800

Source: Pudukkottai IOB, Annual credit plan 2004 – 2005, P. No. 30

134

The aim of this section is to analyze the socio-economic status of

the small-scale industrial entrepreneurs in Pudukkottai District. For the

purpose of the present study, this was based on micro data.

Prospective industries to be start in Pudukkottai

In the coastal areas of this District, there appears to be good scope

for fisheries-based industries like, fish-processing, manufacturing of

fishmeal, fabrication, servicing and repairing of machine boats, ice

plants, and cold storage and making articles from conch. As there are,

about 250 acres of saltpans people may come forward to start salt- based

industries.

The industrial profile of the sample district explains in Table 3.6.

Table: 3.6

Industrial Profile of the District

S.No Type of Industry

Registered

No. of

Units

Investment

(In lakh)

Employment

generated

1. Small scale industries 9,730 15,867.24 23,290

2. Cottage industries

5,925 414.91 8,883

3. Handicraft industries 5,044 254.77 7,549

4.

Large & Medium scale

industries 16 130.13 1,776

Total

20,715 16,667.05 41,498

Sources: DIC, Pudukkottai, District profile scenario, data, Page No: 05

135

Table - 3.6 shows that out of the 20,715 industrial units registered

in the District. Small-scale industries accounted for 9,730 units. The

total investment value is Rs.15,867.24 (in lakh) total employment

generated is 23,290. In cottage industries there are 5,925 units, the

investment value is Rs.414.91 (in lakh) and the total employment

generated 8,883.

Mineral based industries like those making mechanized bricks,

Mangalore tiles, ceramic and Mosaic tiles, Attangudi tiles, granite

(cutting and polishing), blue metal jelly, quicklime, white cement, etc.

can also started in this District.

In Pudukkottai District, forest based industries like manufacturing

of paper, gum, sawmills, agro-based industries, polymer and chemical-

based industries, textiles industries, automobile, cashew based units,

bone meal, solar equipment, poultry and poultry feed, cattle feed and

leather products may be successful ventures for new entrepreneurs.

The possibilities of starting a modern freezing plant for processing

of fish, crabs, etc., in the coastal areas of this District may be considered.

A big boat-building yard may also be planned for fabrication of motorized

boats.

With good Forest resources in the District like eucalyptus trees, a

modern paper plant may be started. The good number of cattle warrants

meat processing projects and leather units.

136

There has been an ‘information revolution’ is a computer

revolution. With this, the economy can grow fast. Job opportunities will

be created and we can compete in global markets. The Govt. of Tamil

Nadu have already planned to set up 1,000 Information Technology

centers throughout the state with the support of NGO’s to make the

entire state computer-literate.

Minor Irrigation

All irrigation projects both surface and groundwater mean, that

cover an area of 2,000 hectares are classified as minor irrigation

schemes, as per the norms laid down by the Planning Commission.

The skilled and semi–skilled workers required for the construction

of wells are available in the District. The Agricultural Engineering

department is executing construction of bore wells and tube wells in the

District. Sufficient work strength is available with the departments.

Bank credit for minor irrigation is not found to be picking up as

expected during the past few years in spite of the district being agrarian

in nature and being in the rain shadow region. The development of minor

irrigation plays a vital role in boosting up agricultural productivity.

As an incentive for credit flow to Minor Irrigation, the NABARD has

reduced the rates of interest on refinance for all the agencies. The

commercial banks are now charged a uniform rate of 8.5 % on the

refinance irrespective of the size of the loan whereas the co-operative

banks are charged interest at the rate of 7 % for loans up to Rs. 25,000

and 8.5 % for loans over 25,000.

137

Small Scale Industries

Table – 3.7

Category Wise Registered Small Scale Industries as on

30.6.2006

S.No. Product No. of units

1. Food products 305

2. Coir & coir products 70

3. Hosiery & Garments 6077

4. Wood products 528

5. Paper Products 150

6. Leather products 65

7. Rubber & Plastics 92

8. Chemical & Chemical products 105

9. Non – metallic mineral products 29

10. Basic metal products 39

11. Metal products 45

12. Machinery & parts (Except elect) 145

13. Electrical machinery / apparatus 21

14. Transport Equipments & parts 11

15. Miscellaneous Industries 41

16. Personal service 111

17. Repairing & services 1892

18. Jute , Hemp and Heats Textiles 4

Total 9730

Sources: DIC, Pudukkottai. Page No-14

138

A category wise analysis of registered small-scale industries is

shown in Table-3.7. There are 9,730 registered small-scale industries in

this District. Out of this only 20 % has been chose as the sample.

Table-3.8 shows union wise details of registered small-scale

industries in Pudukkottai District up to July 2006. Small-scale

industries accounted for 9,730 units. The total investment value is

Rs.15,867.24 (in lakh) total employment generated is 23,290.

Table- 3.8

Union Wise SSI registered in Pudukkottai District

up to 2006, July

S.No.

Union No. of

Units Investment Employment

1. Annavasal 435 366.32 1307

2. Aranthangi 1863 641.42 3978

3. Avudayarkoil 586 297.04 1230

4. Arimalam 397 270.92 1038

5. Gandarvakottai 295 700.92 852

6. Karambakkudi 319 506.31 751

7. Kunnandarkoil 290 570.94 807

8. Manamelkudi 335 360.13 967

9. Pudukkottai 3326 8798.77 7701

10. Ponnamaravathi 392 230.91 1063

11. Viralimalai 445 1567.58 1187

12. Thiruvarankulam 515 620.53 1145

13. Thirumayam 532 935.45 1264

Total 9730 15,867.24 23,290

Sources: DIC, Pudukkottai

139

Block wise Potential Profile

The block wise details of units and their operations are given below:

Annavasal- Oil mill, agricultural implements, Wood saw mill, Readymade

Garments, Steel furniture, Bakery, Gem cutting, Pottery and terracotta,

Quarries.

Aranthangi- Oil mill, Flour mill, Coir products, Paddy hulling, Saw mill,

Readymade garments, PVC accessories, Detergent cakes, Mosaic tiles,

Aerated waters, Xerox, Printing and binding, Bakery, Colour film

processing, Steel furniture, Domestic utensils, Gates and grills, Radio

repair and servicing, Auto mobile repairs and servicing, Bullock cart

making.

Arimalam- Oil mill, Flour mill, Wood saw mill, Papers and boards,

readymade garments, Metal engraving, Coir products, Pottery terracotta,

Palm leaf products, Beads and garlands.

Avudayarkoil- Flour mill, Oil mill, Coir products, Agricultural

implements aluminum utensils, Oil engine repairs Aerated waters,

Pottery terracotta, Bullock cart making, Fishnet making, Palm leaf

products.

Gandarvakottai- Oil mill, Flourmill, Agricultural implements,

Mechanized bricks, Tiles. Cashew processing, Ground nut cake making,

Art glass works.

Kunnandarkoil- Saw mill, Flour mill, Oil mill, Agricultural implements,

Aerated waters, Suit cases, Coir product, Sculpture, Quarries, Rice mill,.

Tyre retarding pottery terracotta, Coeval mat weaving.

140

Manamelkudi- Flourmill, Oil mill and Charcoal powder and Bakery.

Aerated water and Pottery terracotta, and Fish net, Flour mill, Saw mill,

Dyeing and Bleaching, Stainless steel, Utensil, Brass sheets, Automobile

service, Coir rewinding, Bakery, Aerated water, coir products.

Thiruvarankulam- Flourmill, Oil mill, Groundnut, Decorticating, Saw

mill, Polythene bags manufacturing, Detergent cake, Domestic utensil,

Cycle repairs, Printing, Bakery. Aerated waters, Pottery terracotta, Coir,

Bullock cart making, Bangles.

Pudukkottai- Flour mill, Oil mill, Soap nut powder, Betel nut,

Sugarcane crushing, Agricultural implements, Saw mill, Readymade

garments, Woven sacks plastic Bags, Tube vulcanizing, Rexene seat

cover, Bio – chemical testing, Tyre retarding, PVC electric accessories,

Steel furniture, Domestic utensil, Colour photography, Envelop making,

Xerox, Pottery, Terracotta, Toys made of paper mach, Tape making,

Snack, Sculpture, Cashew nut processing.

Thirumayam- Saw mill, Flour mill, Oil mill, readymade garments,

Domestic utensils, and Electric motor rewinding, automobile services,

Mosaic tiles, Wooden articles.

Viralimalai- Flour mill, Saw mill, Oil mill, Readymade garments,

Detergent cake, Gate grill making, Wedding steel, Fabrication, Limekiln,

Card board, Bakery, Bone, Meal, puffery, Terracotta, Coir, Gum cutting.

141

Role of Development Programmes in the District

Swarnjayanti Gram Swarozgar Yojana (SGSY) Programme

The Ministry of Rural Development, Government of India has

launched a new Programme known as the Swarnjayanti Gram Swarozgar

Yojana (SGSY) by restructuring the existing schemes. The SGSY is major

and most important poverty alleviation Programme for the rural poor

Swarnjayanthi Gram Swarozgar Yojana is a holistic self employment

scheme covering various aspects such as organizing the poor into Self

Help Groups (SHG’s) identifying the activity with appropriate

technological tie-up, forming clusters, imparting Entrepreneurs

Development Programmes and skill training providing credit linkage,

infrastructure & marketing support. This scheme has been formulated

by merging all other poverty alleviation schemes.

The main object of the scheme is to bring the assisted poor families

above the poverty line within 3 years enabling them to earn a monthly

income of at least Rs. 2,000.00. Assistance will be provided for the

creation of income generating assets through bank credit with

government subsidy.

Salient Features of the Swarnjayanthi Gram Swarozgar Yojana

Swarnjayanthi Gram Swarozgar Yojana aims at establishing a large

number of micro enterprises in the rural areas building upon the

potential of the rural poor. The rural poor in India have competencies

and given the right support, they can be successful producers of valuable

goods / services.

142

The emphasis under the SGSY is on the cluster approach. The

local resources, the occupational skills of the people and the available

market can be tapped through them. The major share of the SGSY

assistance will be for activity clusters.

The effort under the SGSY is to cover 30% of the poor in

each block in the first five years through an efficient

programme.

SGSY is a credit cum subsidy programme, subsidy being

only minor an enabling element.

SGSY lays emphasis on skill development through well-

designed training courses.

SGSY will provide for promotion of marketing of the

goods produced by the SGSY Swarozgar.

Subsidy under SGSY will be uniform - i.e., 30% of the

project cost subject to a maximum of Rs. 7,500.00.

SGSY will particularly focus on the vulnerable groups

among the rural poor.

Quarry Clusters

In Pudukkottai District, special effort is taken by the district

administration to form quarry clusters. Quarry workers mostly women

were working almost as bonded labour. They have not been organized in

Self-Help Group and Quarry leases are being awarded to them. Now 49

quarry workers’ Self-Half Groups are functioning in the District.

143

Waste Land Development through Self Help Groups

Pudukkottai District is having wastelands and land is readily

available on lease. Seeing this as an opportunity most of the self half

groups are now taking up vegetable/flower cultivation as their activity

under the SGSY after taking wastelands on lease from private people.

District Supply and Marketing Society

The District Supply and Marketing Society popularly known, as

‘DSMS’ is the marketing wing of the District Rural Development Agency

(DRDA) exclusively created to facilitate rural employment / development.

The District Supply and Marketing Society is a registered society under

the Societies Registration Act, the District Supply and Marketing Society

Pudukkottai was originally form in the year 1994 to assist the IRDP

beneficiaries especially to promote gem-cutting clusters in the District.

Objectives of the District Supply and Marketing Society

The main objective of the society is to support Swarozgar is

augmenting their income and to create employment opportunities in

order to redeem them from poverty. The objectives are aim to be

achieving through.

Arranging marketing opportunities for their products

Arranging other support services such as packaging

brand/ logo etc.,

Arranging the raw materials required for products

manufacturing.

144

Arranging for financial assistance to self half groups,

especially activity- oriented self half groups.

Arranging employment opportunities to skilled

workers.

Imparting the training required for bringing out

qualitative products.

Arranging liaison with various development

departments and to arrange for convergence of various

development schemes for the betterment of the rural

poor.

Activities of the District Supply and Marketing Society

District Rural Development Agencies (DRDA) arrange to provide

credit cum subsidy through banks to Self-Help Groups for various

economic activities, under the SGSY. By using this money, Self-Help

Groups are now producing various rural products. The District Supply

and Marketing Society arrange to market these products. The Society

also distributes packaging materials to Self-Help Groups for direct

marketing by the Self-Help Groups themselves.

Now the society is marketing various rural products like pickles,

Appalam, Masala Powders, Vadagam, Agarbathi, Computer sampirani,

Organic manures, Palm leaf products, Eanjibaskets, Wirebaskets,

Groundnut chikki, Terracotta products, Pith handicrafts, Tanjure

paintings, Cut glass works etc. During 2004-2005 more than Rs.1.50

lakh worth of products were market through the District Supply and

Marketing Society.

145

Creation of Employment Opportunities

District Supply and Marketing Society Pudukkottai has helped to

create indirect employment opportunities through many ancillary

activities. It has helped to empower women and alleviate poverty.

Khadhi & Village Industries Commission (KVIC) Rural Employment Generation Programme (REGP)

The scheme was form known as KVIC margin money cum subsidy

scheme. 25 % of the project cost up to Rs. 25 lakh will be provide as

margin money. The scheme is applicable to viable village industries

projects. Individual entrepreneurs are eligible for projects costing up to

Rs. 10 lakh and institutions / co-operative’s societies / trusts are eligible

for projects costing up to Rs. 25 lakh.

Banks will ensure that each project fulfills the criteria of village

industries regarding fixed capital own contribution and rural area. Any

industry located in rural areas, which produce any goods, or renders any

services with or without the use of power and in which the fixed capital

investment per head of an artisan or a worker does not exceed Rs.

50,000. Any area, which comprises any village or includes an area

outside the Municipal limit the population of which does not exceed

20,000, is termed as rural area.

Banks must ensure investment of own contribution by the

entrepreneurs / institutions / co-operative society at the rate of 10 % of

the total cost of the project for general category and 5 % in the case of

weaker sections of beneficiaries / institutions. The list of village

industries under the purview of the KVIC and the list of industries not

coming under the purview of the KVIC given below.

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List of units under KVIC purview

Khadhi Industries

Cotton, Silk, Woolen, Dan carpet.

Exclusively for Sikkim and northeastern states.

Village Industries

Mineral based industries.

Forest based industries

Agro based and food industries

Polymer and chemical based industries

Engineering and non-conventional energy

Textile industry (Excluding Khadhi)

Service industry

Any industry / business connected with meat slaughtering,

processing / canning and / or items made of it as food production /

manufacturing or sale of industrial items like beedi, pan, cigarette, etc,

any hotel engaged as sales outlet, serving liquor, preparation of tobacco

product etc.

Activities related to coir / horticulture, floriculture, fish culture,

piggery and cloth. Manufacture of polythene carry bags below 20-micron

thickness. Any other item that cause environmental problems.

SMALL INDUSTRIES DEVELOPMENT CORPORATION LIMITED

(SIDCO)

The Government of Tamil Nadu established the Tamil Nadu Small

Industries Development Corporation Limited in the year 1970. The main

objective of the Corporation is to aid the small-scale industrial units in

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Tamil Nadu and to accelerate their growth. To achieve the objectives,

SIDCO is actively rendering services in the formation of industrial

estates, distribution of raw materials and rendering marketing

assistance.

Formation of Industrial Estates

Wherever the demand for industrial sheds and industrial plots is

identified, the Pudukkottai Industrial Estate of SIDCO purchases land

and develop the area by providing infrastructure facilities such as roads,

water supply, storm drainage system etc. Electricity connection is

providing in time with the cooperation of the TNEB. The entrepreneurs

will have no problem in getting clearance from statutory agencies like the

Tamil Nadu Pollution Control Board, the Health Department, Fire Service

Department, Local Bodies, etc.

Established Industrial Estates

Pudukkottai

Mathur

Vellanur ( SIPCOT Complex)

The SIDCO has announced the following concessions to entrepreneurs who are willing to commence industrial units in

the SIDCO estates.

Installment based sale is extended in all the SIDCO

industrial estates

Interest rate is reduced to 15 %

Entrepreneurs who pay their dues promptly are eligible

for a concession of 1 % on the interest payable

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Entrepreneurs who commence production in their

allotted plot / shed within the prescribed time are

eligible for another 1 % concession on interest.

The administrative charges are reducing from 15 % to

10 % in the SIDCO industrial estates and its

surroundings.

In most backward areas plots / sheds are allotted on

lease basis at the rate of Rs. 2.00 per sq it

Sick industrial units were permitted to sell or lease their

premises.

The following Table-3.9 shows that the details of available shed

and plots location of the Estate.

Table-3.9

Pudukkottai SIDCO Estate available sheds and plots

S.No. Location of the Industrial Estate Extent in acres

1. Machuvadi, Pudukkottai 23.18

2. Mathur, Kulathur T.K. 23.75

3. Vellanur, SIPCOT Complex 51.45

4. Thirumayam 0.217

5. Gandarvakottai 0.2587

Source: Green Industries, Pudukkottai 2003, P.No. 13

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STATE INDUSTRIES PROMOTION CORPORATION OF TAMILNADU

(SIPCOT)

The SIPCOT industrial complex is located on the Trichy–

Rameshwaram National Highway–NH 210. This industrial complex was

well, connected by road, rail and air. It was established in 1980. The

allotment of land commenced in 1982 to accommodate engineering and

general industries. The total extent of the complex is 421.10 acres.

Table – 3.10

SIPCOT Industrial Estate Salable allotted and balance land

S.No. Particulars No. of acres / Units

1. Salable area available 322.47 acres

2. Extent allotted 222.93 acres (68 plots)

3. Balance available 98.63 acres (17 plots)

4. No. of units allotted 68 Units

5. No. of units commenced

production

38 Units

6. No. of units under

construction

5 units

7. No. of units yet to commence

production

10 units

8. Sick and closed units 15 units

Source: Green Industries Pudukkottai 2003, P.No. 14

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The above Table-3.10, shows that out of the 322.47 acres available

the saleable area, 222.93 acres extend over 68 plots, 38 units have

commenced production, 5 units are under construction, 10 units are yet

to commence production and 15 units are sick and closed. The

remaining 98.63 acres (17 plots) are the balance land available in the

industrial estate area in Pudukkottai District.

SIPCOT Amenities

Total length of the roads 9.2 kms

The TWAD Board arranged water supply system and it

has been supplying water with effect from 08.08.2002.

A power station has been established with a total

capacity of 110/22 Kva, have 230 Kva sub – station

provides uninterrupted power supply and is

functioning from July 2000.

A separate post office and electronic telephone

exchange is functioning, the capacity being 336 lines

with 236 achieve lines.

A fire station is exclusively functioning from 1995

within the complex. 158 streetlights have been provided

in the complex.

A first aid center and canteen building and staff

quarters have also been constructed.

Land has been earmarked for the location of the police

station, bank, and school.

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Straw-Based Industries

In Pudukkottai District, paddy is cultivated in 90,000 to 1,00,000

Hectares annually. The dry straw production of this district is five lakh

mts. About three lakh mts. of straw are being utilized as cattle feed,

besides green fodder, groundnut hams and pulses hams. Hence, two

lakh mts. dry straw is available as surplus in this District. This straw is

being transported to markets in Kerala. However, this straw can be used

in this District itself for production of straw board. Hence straw boards

industries can be developed in this District by using paddy straw as raw

material.

Role of District Industries Centre (DIC)

The basic objective of the industrial policy pursued by the Tamil

Nadu Government is to achieve a massive increase in employment by

promoting small industries and rural industries. The cottage and village

industries or small industries including tiny and household sectors

promote and develop the rural industries.

The District Industries Centre is the institution at the district level,

which provides all services and support facilities to entrepreneurs, for

setting up small, and village industries. The services include

identification of suitable schemes, preparation of feasibility reports,

arrangement of credit facilities, machinery and equipment, provision of

raw materials and extension services.

The District Industries Centre has been pursuing these basic

objectives by assisting optimum utilization of resources in existing

industries, faster promotion of new small scale and village industries

with a rural bias and by increasing the employment opportunities in

industries sector.

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The small entrepreneur requires various types of assistance right

from the selection of an item for manufacture, and the gathering of

inputs like credit, raw materials, power, land and building, etc., from the

District Industries Centers, entrepreneurs can get all such assistance

through one agency.

Main functions of DIC – NODAL agency for Small Scale

Industries

Conducting motivation campaigns at the block level.

Counseling and guiding the entrepreneurs

Issuing provisional registration certificates for SSIs.

Identifying browsing centers for issue of on – line SSI

provisional registration certificate.

Conducting single window committee meeting

periodically to get fast clearances from different agencies

like the TNEB, local bodies, etc.

Preparing technical feasibility reports wherever the

financial institutions ask for them.

Issuing permanent SSI registration for the industries,

which have commenced production.

Issuing registration certificates for cottage industries.

Issuing registration certificates for handicrafts

industries.

Implementing exclusive schemes for agro-based and

food-processing industries through New Anna

Marumalarchi Thittam,

Granting subsidies on low tension power tariff.

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Granting export compensatory subsidy for leather and

electronics industries.

Conducting task force committee meetings to select the

beneficiaries under the Rural Employment Generation

Programme and Prime Ministers Rozgar Yojana (PMRY)

Schemes.

Conducting Entrepreneur Development Programmes at

selected institutes for probable entrepreneurs.

Conducting exclusive Entrepreneur Development

Programmes for women.

Conducting seminars, work shops etc. on industrial

development and related subjects.

Formation of industrial co-operative societies in the

District.

Recommending the industries for awards from state and

the central governments.

Identifying the sick units and assisting them through

the District Sick Unit Declaration Committee.

Assisting SSI units to get their long pending dues from

their borrowers through regional Industry Facilitation

Councils.

Recommending SSI units to get actual users certificate

to obtain concessions in the rate of customs duty while

importing capital goods.

Assisting entrepreneurs to get scarce raw materials.

Assisting entrepreneurs to get industrial license, if

needed.

Conducting regular meetings with the local SSI

association to solve particular problems.

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Assisting the banks in recovering the dues from the

PMRY beneficiaries by conducting regular recovery

campaigns.

Associating with various Departments / Government

agencies like TAHDCO, TABCEDCO etc. for the uplift of

the entrepreneurs belonging to the socially weaker

sections.

Identifying and developing cluster of industries under

the Cluster Development Programme.

Providing guidance to industrial exporters through the

Export Guidance Cell.

Motivation campaigns by DIC

District Industries Centers identify the entrepreneurs and render

all type of assistance through co-ordinates efforts with the line

departments to commission the small-scale industrial units chosen by

them. The Centre conducts motivation campaigns in all the blocks with

the assistance of the Panchayath presidents. Final year students of

Colleges of Engineering and Arts. Polytechnics and Industrial Training

Institutions are motivated through seminars so that they are motivated

to choose self-employment opportunities instead of waiting for wage-

employment.

Registration of Small Scale Industries through DIC

Registration with DIC is one of the main documents for recognition

to obtain incentives and concessions from governmental and non-

governmental agencies. This registration helps the entrepreneur to get

priority in getting power connections from the TNEB. The certificate

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issued by the DIC has validity for 5 years from the date of issue. This

registration helps the entrepreneurs in getting all the incentives /

subsidies eligible to them. An industrial unit is defined as small-scale

industry, as long as the investment on plant and machinery does not

exceed Rs. 1 crore.

Advantages of Registration as SSI

Priority in getting electricity and telephone connection.

While competing in tenders, SSIs are eligible for free

tender forms and exemption from EMD / SD.

Power tariff will be charged under III – A & III – B only

Single window facility is available to get various

clearances from government departments.

Government orders have been issued for exclusive

procurement of reserved items from small-scale

industrial units only by government department.

Awards to Small Scale Industries

To encourage the small industries to maintain / improve their

quality, production and exports, the Government of Tamil Nadu is giving

the following awards.

District level awards

State level awards

State level Quality Production awards

State level Export awards

State level Women Entrepreneurs awards.

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The award is given every year and the same will be notified in the

newspapers. The best industries are selected based on the performance

viz. investment, employment production, quality/export achievement,

diversification and introduction of new products, modernization, of plant

and machinery, safety measures, etc.

Regional Industry Facilitation Council (RIFC)

The Small Industries Department of the Government of Tamil Nadu

takes care of the development of small scale industries by giving

incentives, subsidies etc., to small scale industries. It also endeavors to

take care of the settlement of pending payments due to small-scale

industries from major Government Public / Corporations of Government

of Tamil Nadu for the supply of goods / services rendered by the former.

The Government of Tamil Nadu has established Industry Facilitation

Councils at Chennai, Trichy, Madurai and Coimbatore Regions.

The following is the Constitution of the Facilitation Council.

1. Industries commissioner & Director – Chennai, Ex –

Officio member.

2. The District Collector of the District – Ex – Officio

member consulted when disputes arise.

3. One representative nominated, from time to time, by the

Tamil Nadu, Small and Tiny Industries Association,

Chennai.

4. One representative nominated, from time to time, by the

Commissioner of Commercial Taxes, and.

5. One representative nominated, from time to time by the

Confederation of Indian Industry.

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District Sick Unit Declaration Committee

There are so many reasons for a small industry to become sick.

The most common of them is mismanagement of the financial portfolio. If

the unit cannot be revived from its sickness, it can be declared sick by

the District Sick Unit Declaration Committee.

Subsidies and Incentives

The agro-based and food-processing industries coming under the

New Anna Marumalarchi Thittam are eligible for a subsidy on their low-

tension power tariff bills at the rate of 30 %, 20 % and 10 % for the first

three years respectively. The units that have commenced production

under this scheme will be issued an eligibility certificate to avail this

subsidy and they have to claim the subsidy once in six months as

prescribed in the eligibility certificate.

Export Guidance Cell

The Export Guidance Cell is formed at the District Industries

Centre. The aim of the Export Guidance Cell is to promote industrial

exports at the district level by identifying the industries with the

potential for exports, identifying suitable markets for exports, inviting

entrepreneurs to exploit the potential and giving them proper guidance

for exporting their products. Entrepreneurs willing to have a share of the

export market can approach the Export Guidance Cell for help.

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New Anna Marumalarchi Thittam

The Government of Tamil Nadu announced in June’ 2002, this

scheme to give a thrust to agro-based and food processing industries.

Under this scheme, food processing and agro based industries with a

minimum capital investment of Rs. 25 lakh and not exceeding four units

per block creating employment in rural areas would be encouraged.

Units under this scheme are eligible for a capital investment subsidy @

15 % on the cost of plant & machinery and low-tension power tariff

subsidy @ 30 %, 20 % and 10 % for the first, second and 3 years

respectively. This scheme implement in various areas of the District.

Tamil Nadu Industrial Investment Corporation (TIIC)

TIIC extends loans up to Rs. 3 crore for single industrial projects

for acquiring fixed assets like land, building, plant & machinery and

equipments, for setting up new projects and for the expansion,

modernization, etc. of existing units. The branches are empowered to

sanction loans up to Rs. 30 lakh. The Head Office sanctions loans above

Rs. 30 lakh. However, documentation, disbursement and monitoring are

done through the branches for all loans.

National Equity Fund Scheme

This is intended to provide equity support to deserving

small entrepreneurs to establish new projects or to

expand existing units.

New projects or existing tiny and small-scale industries

are eligible for National Equity Fund (NEF) assistance.

The project cost including the margin money for working

capital should not exceed Rs. 50 lakh

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The scheme was introduced to assist technological

development and modernization of small-scale

industrial units.

Small-scale industrial units either exporting or intending to

export would be eligible for assistance.

Tamil Nadu Backward Classes & Economic Development Corporation (TABCEDCO) and Tamil Nadu Minorities Development Corporation

(TAMDCO)

Financial assistance can be had from TABCEDCO and TAMCO for

setting up SSI units, petty shops, or service industries, purchase of

vehicles, for agriculture and allied industries, handicrafts and

conventional industries.

The applicant should belong to backward class / most backward

class / Denitrified Tribe / minorities. Annual income of the applicant

should not exceed Rs. 42,412 /- and Rs. 31,982 /- in the case of urban

and rural areas respectively. An individual can get Rs.1 lakh as loan and

Rs. 3 lakh, as transport vehicle loan. A loan of Rs. 5 lakh is sanctioned

on the approval of the Head Office at Delhi. Interest is charged at the rate

of 7 % up to loan for Rs. 2 lakh and 10 % on loans up to Rs. 5 lakh, and

the balance is charged at 13.5%.

National Small Industries Corporation (NSIC)

The NSIC offers financial assistance for production and marketing

activities under one roof through prompt clearance of proposals with

minimum processing time, in addition to on-the-spot assistance in

preparing proposals and completing the formalities.

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The NSIC arranges raw materials on credit as per the specific

needs of the SSI units for a maximum period of 90 days.

Bills drawn by SSI units for the supplies made to reputed and well-

established enterprises will be discounted for a maximum of 90 days.

SSI units can procure industrial equipment for modernization,

expansion and diversification under the Equipment Leasing Scheme.

Composite term loans to the tune of Rs. 25 lakh are offered to new

/ existing units with a margin money assistance of 15 %. The repayment

period is 5 years with a gestation period of 6 months.

To ensure a fair margin to producers and to ensure quality control,

marketing facilities are given by the NSIC. Further, the NSIC has

introduced a common brand name and given publicity to the SSI

products.

Credit Guarantee Fund Trust for Small Industries

Availability of bank credit without the hassles of collateral / third

party guarantees would be a major source of support to the first

generation entrepreneurs to realize their dream of setting up a unit of

their own in the small-scale industrial sector.

The guarantee scheme seeks to assure the lender that, in the event

of an SSI unit, which has availed collateral-free credit facilities, failing to

discharge its liabilities to the lender, the Guarantee Trust would make

good the loss incurred by them up to 75 % of the credit extended.

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Any collateral-free credit facility (both term loan as well as working

capital) extended by eligible institutions to new as well as existing

manufacturing SSI units, including information technology and software

industry. Subject to a maximum credit capital of Rs. 25 lakh per

borrowing unit will be extended guarantee cover of 75 % of the loan

sanctioned, with a maximum guarantee capital of Rs. 18.75 lakh. The

guarantee will commence from the date of payment of guarantee loans

and will continue for a period of 5 years.

Tamil Nadu Adi-Dravidar Housing and Development Corporation Limited (TAHDCO)

The TAHDCO was setup in 1974, to take up the construction of

houses for SC’s / ST’s. It is now implementing a number of schemes for

the economic development of the depressed classes.

All units costing up to Rs. 50,000 /- are considered under the

project, with 5 % promoters contribution. 30 % of the project cost is

given as subsidy. Automobile workshops, bakery and carpentry, units

Beauty parlors and TV / AC / Refrigerator service centers are eligible for

assistance under this scheme.

Setting up New Industries

Guidelines have been evolved for locating new industries

prescribing its distance from sensitive areas and restricting certain

industries within 1 km from specified water sources.

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Action Plan for Industrial Development in Districts

The available infrastructure such as roads, transportation,

communication, water and power in Pudukkottai District are reasonably

adequate. However, some more efforts are needed for development of

irrigation facilities and for proper conservation of rain / surface water.

These are a pre – requisite for consolidation / increase in the production

of various food and non – food crops in the District to ensure regular

availability of such agro produce as raw material for manufacturing units

in the District. Additional social infrastructure facilities like institutions

for technical education / training to the over already available would also

help considerably in speeding up the process of industrial development

in this District.

Entrepreneurship Development Programme (EDP)

In Pudukkottai district, 3,510 women were giving EDP training

under the Women Entrepreneurship Development Programme (WEDP)

scheme. Only 1,000 women were technically qualified. The remaining

trainees were from self-help groups and under the PMRY scheme. The

trainees from self-help groups do not have sufficient technical knowledge

or skill and are unable to start their own ventures. To make the WEDP

scheme a success the SHG members who have undergone EDP training

should be given skills training which will make them computer ate

enough to start their own ventures.

ISO Certifications

In the era of Liberalization, Privatization and Globalization (LPG), it

is pertinent for an industry to compete at the global level with the quality

certifications like ISO. In order to enhance the competitive strength of the

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small-scale sector the Government of India is assisting Small and

Medium Entrepreneurs going in for ISO certification in the form of an

incentive towards the cost of acquiring the certification subject to a

ceiling of Rs. 75,000 per units. The scheme in operation since from 1994,

was enlarged to include reimbursement of expenses for acquiring ISO

14001 certification and will be in vogue until 31.3.2007.

Capital Subsidy

During the last Budget Speech, the Hon’ble Minister for Finance

had announced that the scheme of granting capital subsidy to industries

established in industrially backward areas would be revived. A high-level

committee has been constituted to recommend guidelines for

identification of industrially backward blocks. The Committee’s report is

expected shortly. After examination of the report, orders will be issued.

Under the scheme of setting up of agro based industries in all

blocks sanctioned in G.O.Ms.No.32, Small industries Department, dated

28.06.2002, as on 31.3.2007, 455 projects in 257 blocks with a total

project cost of Rs.288.56 crore have commenced production providing

employment opportunities to an estimated 15,272 persons including

10,483 women. With a total project cost of Rs.98.90 crore 185 projects

are under various stages of implementation; and 215 projects with a total

project cost of Rs.147.40 crore have applied for sanction of loan to

various financial institutions. As on 31.3.2007, Rs.799.88 lakh has been

disbursed towards special capital subsidy and Rs.397.00 lakh low-

tension power tariff subsidy under the scheme. This scheme will be

integrated with the capital subsidy scheme for indicating backward

areas, which will be operated from the current year.

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Back ended interest subsidy is being provided for the Small Scale

Industrial units since December 2003 for;

1. Term loan obtained for Technology Up gradation /

Modernization

2. Term loan obtained under the National Equity Fund

(NEF) Scheme

3. Term loan obtained for ISO Certification/ Research and

development resulting in registration of Patents &

Intellectual Property Rights.

4. Term loan obtained under Credit Guarantee Fund Trust

(CGFT) scheme.

The Government is examining a proposal to modify the scheme to

enable large coverage of beneficiaries under this scheme.

The strength of an economy lies in its conventional and resource

based industries. However, some of the industries like rice mills, textiles

etc. are denied the incentives given by the government stating that they

are conventional and resource based industries. These units are the

ones, which are providing employment to the masses. Hence due

consideration is to be given to these industries while providing

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incentives. In addition to the earlier subsidy schemes to SSIs the

government have introduced a new scheme meant only for agro based

and food processing units.

The services that need to be developed to modernize and transform

the primary sector and provide necessary base for industries, include

those in the areas of education, Labor training, health care, transport,

electricity generation, farm management, professional counseling and

other urban services. The induction of such a transformation has already

been taken up by the agencies concerned in Pudukkottai District.

To sum up, it could be concluded that in Pudukkottai District all

infrastructure facilities and services are already sufficiently developed to

help build up a conductive environment for industrialization.