Small Scale Industries and Their Big Roal

8/2/2019 Small Scale Industries and Their Big Roal

1/24

Small Scale Industries And Their Big Role

Page 1

CONTEMPORARY ISSUE ON SEMINAR

A STUDY ON

SMALL BUSINESS BIG ROLE

Presented at

JECRC Business School, Sitapura, Jaipur

In partial fulfillment of the requirement of M-207, for award of the degree of

Master of Business Administration

Submitted by: Submitted to:

Mukesh Jangir The Director

MBA II Sem.

Session 2011-2013


2/24


Page 2

Acknowledgement

The beatitude, bliss & euphoria that accompany successful completion any task would

not be completed without the expression of appreciation of simple virtues to the peoplewho made it possible.

So, I take my immense pleasure in expressing a whole hearted thanks to all the faculty

members who guided me all the way making this project successful.

It is my privilege to express a deep sense of gratitude and thanks to The Director

for providing us various information directly related to project.

I am also thankful to my friends for their guidance & cooperation in this work.

I extend my gratitude and thankfulness to JECRC Business School.

Date: Submitted By:

Place: Jaipur Mukesh Jangir


3/24


Page 3

Preface

The underlying aim of the seminar on contemporary issue as an integral part of MBA

program is to provide the students with practical aspects of the organization working

environment.

Such type of presentation helps a student to visualize and realize about the

congruencies between the theoretical learning in the premises of college and actual

followed by the organization. It gives the knowledge of application aspect of the theories

learnt in the classroom.

The contemporary issue in SMALL BUSINESS BIG ROLE is a complete experience in

itself, which provide me with the understanding. This has become as inspirable of my

knowledge of management being learned in MBA program.


4/24


Page 4

TABLE OF CONTENTS

S.No. Page No.1. Acknowledgement 4

2. Introduction of Small Scale Industry 5

3. Over View 6

3. Opportunities in small scale business 10

4. SSI Industry and Indias Economic

Development

11

5. Growth of SSIs Production In India 11

6. Contribution of SSIs Units in GDP 13

7. Employment and SSIs 14

8. Export of SSIs 15

9. Small Scale Industry In India 17

10. Small Scale Industry In Rajasthan 18

11. Problem In Small Scale Industries 20

12. Conclusion 23

13. References 24


5/24


Page 5

CONCEPT & DEFINITION OF SSI:-

In most parts of the world the nomenclature used is small and Medium

Enterprises (SMEs) and the citeria for defininig include the number of employees and

/or the turnover. In India the Small Scale Industry eoveks different meanings for different

agencies and the financial institution. For example for the purpose of excise and sales

Tax Exemption, the turnover alone is the determinig criterion. However in broder terms,

currently, an SSI is defined in terms of investment ceiling on the original value of

instlled plant and machinery.

7.65 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 the Gross Domestic Product (GDP),

employment generation and exports. The performance of the small scale sector,

therefore, has a direct impact on the growth of the overall economy. The performance of

the small scale sector in terms of parameters like number of units (both registered and

unregistered), production, employment and exports is given in Table 7.15. 7.66 During

the one year period i.e., 2000-01

Over 1999-2000, the number of SSI units is estimated to have increased

by 1,58,000, production at current prices by Rs. 72,609 crore and at constant prices by

Rs. 33,714 crore. Employment increased by 7,14,000 persons, while exports were

higher by Rs. 5,778 crores. 7.67 According to projections made by the Ministry of Small

Scale Industries during 2000-01, the SSI sector recorded growth in production of 8.09

per cent over the previous year. The small scale industries sector has recorded higher

growth rate than the industrial sector as a whole (4.9 per cent during 2000-01). It

contributed about 40 per cent towards the industrial production as a whole and 35 per

cent of direct exports from the country. 7.68 The Government has been taking various


6/24


Page 6

measures from time to time in order to enhance the productivity, efficiency and

competitiveness of the SSI sector. In pursuance of the comprehensive policy package

announced last year, the major developments that have taken place in the SSI sector

during 2001-02

Small scale industries:-

Overview:-

Since the time of independence, the small-scale sector in India has been a major

contributor to countrys Gross Domestic Product (GDP). This traditional sector in India is

considered to have huge growth prospect with its wide range of products. With 40

percent share in total industrial output and 35 percent share in exports, the small-scale

industrial sector in India is acting as Engine of Growth in the new millennium.

The definition for small-scale industrial undertakings has changed over time.

Initially they were classified into two categories- those using power with less than 50

employees and those not using power with the employee strength being more than 50

but less than 100. However the capital resources invested on plant and machinery

buildings have been the primary criteria to differentiate the small-scale industries from

the large and medium scale industries. An industrial unit can be categorized as a small-

scale unit if it fulfils the capital investment limit fixed by the Government of India for the

small-scale sector.

As per the latest definition which is effective since December 21, 1999, for anyindustrial unit to be regarded as Small Scale Industrial unit the following condition is to

be satisfied: -

Investment in fixed assets like plants and equipments either held on ownership

terms on lease or on here purchase should not be more than Rs 10 million.


7/24


Page 7

However the unit in no way can be owned or controlled or ancillary of any other

industrial unit.

The traditional small-scale industries clearly differ from their modern counterparts

in many respects. The traditional units are highly labor consuming with their age-old

machineries and conventional techniques of production resulting in poor productivity

rate whereas the modern small-scale units are much more productive with less

manpower and more sophisticated equipments.

Khadi and handloom, sericulture, handicrafts, village industries, coir, Bell metal

are some of the traditional small-scale industries in India. The modern small industries

offer a wide range of products starting from simple items like hosiery products,

garments, leather products, fishing hook etc to more sophisticated items like television

sets, electronics control system, various engineering products especially as ancillaries

to large industrial undertakings.

Nowadays Indian small-scale industries (SSIs) are mostly modern small-scale

industries. Modernization has widened the list of products offered by this industry. The

items manufactured in modern Small-scale service & Business enterprises in India now

include rubber products, plastic products, chemical products, glass and ceramics,mechanical engineering items, hardware, electrical items, transport equipment,

electronic components and equipments, automobile parts, bicycle parts, instruments,

sports goods, stationery items and clocks and watches.

Since independence the Government of India has nurtured this sector with

special care with the following aims: -

To develop this sector as a major source of employment

To encourage decentralized industrial expansion

To ensure equitable distribution of income.

To mobilize capital investment and entrepreneurship skills.


8/24


Page 8

Small scale industries were the dream of Mahatma Gandhi, father of our nation.

He has supported the growth of small sector industries in India, because he had the

vision that it will helped the poor people of India to come up. Small scale industries or

cottage industries are not capital based, but the talent and effort based business. So

even a middle class person can own run this.

History of Small ScaIe Industry:-

Ministry of Agro and Land Rural Industries and Ministry of SSI have been merged

into a single namely, Ministry of Micro Small & Medium Enterprises.The President under

Notification 9th May 2007 has amended the Government of India (Allocation of business)

Rules 1961, Pursuant to this amended Ministry of Agro and rural Industries ( Krishi

Evam Gramin Udyog Mantralay) and ministry of SSI (Laghu Udoyag Mantralay) have

been merged into a single Ministry, namely, Ministry of Micro Small & Medium

Enterprises ( Suksham Laghu Aur Medium Udyam Mantralay )

Small Scale and Ancillary Industries:-

Small scale industrial units are those engaged in the manufacture, processing or

preservation of goods and whose investment in plant and machinery (original cost) does

not exceed Rs.1 crore. These would, inter alia, include units engaged in mining or

quarrying, servicing and repairing of machinery. In the case of ancillary units, the

investment in plant and machinery (original cost) should also not exceed Rs. 1 crore to

be classified under small-scale industry.

The investment limit of Rs. 1 crore for classification as SSI has been enhanced to

Rs.5 crore in respect of certain specified items under hosiery, hand tools, drugs &

pharmaceuticals, stationery items and sports goods by the Government of India.


9/24


Page 9

Small scale businesses operating in India:-

In order to encourage growth, expansion and more investment in the small-scale

sector the Government has adopted a policy of reservation for allowing certain productsto be exclusively manufactured by the small-scale sector.

The number of items in the reserve list has changed over time. As per the

revision done on March 2005, total 506 items are there in the reserve list for SSIs. The

details of the items reserved for SSIs are given below:

Food and allied industries (9)

Wood and wood products (9)

Paper products (19)

Plastic products (53)

Chemicals and chemical products (7)

Natural essential oils (2)

Organic chemicals, drugs and drug intermediates (33)

Other chemicals and chemical products (67)

Glass and ceramics (27)

Mechanical engineering excluding transport equipment (137)

Electrical machines, appliances & apparatus (17)

Electronic equipments and components (1)

Transport equipment boats and truck body building (3)

Auto parts components and ancillaries and garage equipments (36)

Bicycle parts, tricycles and perambulators (41)

Miscellaneous transport equipment (4)

Sports goods (7)

Stationery items (13)

Others (21)

The Government of India under the purview of a special Parliamentary Act

established The Small Industries Development Bank of India (SIDBI) in April 1990. The

primary objective of this bank was to ensure steady flow of funds to SSIs to ease their

financial constraints.


10/24


Page 10

Unfortunately all previous attempts for development, expansion and modernization

of SSIs have not been of much use. However the recent measures like setting up of the

Technology Development Board, the Technology Development and Modernization

Fund, ISO 9000 Certification, stress on improving managerial skills are turning out to be

much more fruitful in modernizing the SSIs in India.

As per the latest definition which is effective since December 21, 1999, for any

industrial unit to be regarded as Small Scale Industrial unit the following condition is to

be satisfied: -

Investment in fixed assets like plants and equipments either held on ownership

terms on lease or on hire purchase should not be more than Rs 10 million.

However the unit in no way can be owned or controlled or ancillary of any other

industrial unit.

Opportunities in Small Scale Business:-

As Small Scale Businesses are less capital intensive and highly labor intensive,

there are huge opportunities for this sector in a labor-abundant capital-scarce economy

like India. The other factors that are cater to the fast growth of this sector are Extensive

Promotion & Support by the govt., available grants & Subsidies, raw material

procurement, rising export demand for Indian products and rising domestic demand

which is the result of overall economic growth. But, the growth rates can increase

further if more development measures are taken to improve the Technology and

Marketing side of Small Scale Business and thus small-scale businesses can construct

the most dynamic and vibrant sector of the economy.

The opportunities in the small-scale sector are enormous due to the following

factors:

Less Capital Intensive

Extensive Promotion & Support by Government

Reservation for Exclusive Manufacture by small scale sector

Project Profiles


11/24


Page 11

Funding - Finance & Subsidies

Machinery Procurement

Raw Material Procurement

Manpower Training

Technical & Managerial skills

Tooling & Testing support

Reservation for Exclusive Purchase by Government

Export Promotion

Growth in demand in the domestic market size due to overall economic

growth

Increasing Export Potential for Indian products

Growth in Requirements for ancillary units due to the increase in number

of Greenfield units coming up in the large scale sector. Small industry

sector has performed exceedingly well and enabled our country to achieve

a wide measure of industrial growth and diversification.

SSI Industry and Indias Economic Development:-

The role of SSI sector is estimates in respect of various performance parameters

relating to the Sector. The time series data in respect of the Sector on various economic

parameters is incorporated in the some following table. The data in the Table No. 1 refer

to micro and small scale industry only. The SSI provides estimates in respect of various

performance parameters relating to the growth of SSI sector. The table showing the

time series data on various economic parameters is given below.

Growth of SSI s Production in India:-

Table No. 1

Sr. No. YearProduction (Rs crore)

Current PricesGrowth Rate


12/24


Page 12

1 1992-93 84413 4.71

2 1993-94 98796 17.04

3 1994-95 122154 23.64

4 1995-96 147712 20.92

5 1996-97 167805 13.60

6 1997-98 187217 11.57

7 1998-99 210454 12.41

8 1999-00 233760 11.07

9 2000-01 261297 11.78

10 2001-02 282270 8.03

11 2002-03 314850 11.54

12 2003-04 364547 15.78

13 2004-05 429796 17.90

14 2005-06 497842 15.83

15 2006-07 709398 42.49

16 2007-08 790759 11.47

17 2008-09 880805 11.39

18 2009-10 982919 11.59

The small-scale industries sector plays a vital role in the growth of the country. It

contributes almost 40 percent of the gross industrial value added in the Indian economy.

The small-scale sector has grown rapidly over the years. The growth rates during the

various plan periods have been very impressive. The number of small-scale units has

increased from an estimated 0.87 million units in the year 1980-81 to over 3 million in

the year 2000. When the performance of this sector is viewed against the growth in the

manufacturing and the industry sector as a whole, it instills confidence in the resilience

of the small-scale sector.

The production of SSI unit in India was Rs 84,413 crore in 1992-93, which

increased and reached up to Rs. 9,82919 crore in 2009-10. The production of SSI units


13/24


Page 13

shows continually raising trend during the study period. During 1992-93 SSI units shows

4.71 growth rate in production which gone up to 11.59 percent in 2009-10. The

production of Small Scale Industries increased with an annual average growth rate of

15.15 percent during 1992-93 to 2009-10. The production of SSI shows highest growthrate of 42.49 per cent growth in 2006-07.

Contribution of SSIs units in GDP:-

The contribution of the small scale industries in GDP has been almost same

since 19992000 to 200304. The total SSI production has also been very similar from

19992000 onwards till 20032004.

TABLE No. 2

Year Total industrial productionGross Domestic

Product (GDP)

1999-2000 39.74 5.86

2000-2001 39.71 6.04

2001-2002 39.12 5.77

2002-2003 38.89 5.91

2003-2004 38.74 5.79

2004-2005 38.62 5.84

2005-2006 38.56 5.83

2006-2007 45.62 7.20

2007-2008 45.24 8.002008-2009 44.86 8.72

2009-2010 45.72 8.03


14/24


Page 14

Employment and SSIs:-

SSI Sector in India creates largest employment opportunities for the Indianpopulace, next only to Agriculture. It has been estimated that 100,000 rupees of

investment in fixed assets in the small-scale sector generates employment for four

persons. The total employment from SSI sector in the country as per the third All India

Census of SSIs conducted with the reference year of 2001-02 was 249.33 lakh

numbers. Units operated with fixed premises are treated as SSIs. As per the estimates

compiled for the year 2005-06 the employment was 294.91 lakh persons in SSI sector.

The share of SSIs in the total employment among units engaged in manufacturing and

services is around 34.93 percent.

Table No. 3

Sr. No. YearEmployment (lakh

person)Growth Rate

1 1992-93 174.84 5.33

2 1993-94 182.64 4.46

3 1994-95 191.40 4.79

4 1995-96 197.93 3.42

5 1996-97 205.86 4.00

6 1997-98 213.16 3.55

7 1998-99 220.55 3.46

8 1999-00 229.10 3.88

9 2000-01 238.73 4.21

10 2001-02 249.33 4.44

11 2002-03 260.21 4.36

12 2003-04 271.42 4.31


15/24


Page 15

13 2004-05 282.57 4.11

14 2005-06 294.91 4.37

15 2006-07 594.61 101.62

16 2007-08 626.34 5.34

17 2008-09 659.35 5.35

18 2009-10 695.38 5.47

The total employment from the SSI sector in the country as per the Fourth

Census of MSEs with Reference Year 2006-07 was 594.61 lakh numbers. As per the

estimates compiled for the year 2009-10, the employment was 695.38 lakh persons in

the sector. The growth of small scale industries sector is shown in table 3. The

employment has increased marginally over the period of 19992000 to 200506. During

200506, 123.4 lakh units provided employment to 294.9 lakh persons.Percentage

growth of employment in SSI sectors was 5.33 percent in 1992-93, which was 5.47

percent in 2009-10. On an average simple annual growth rate was 9.80 percent during

1992-93 to 2009-10.

Export of SSI:-

SSI Sector plays a major role in India's present export performance. 45 to 50

percent of the Indian Exports is contributed by SSI Sector. Direct exports from the SSI

Sector account for nearly 35 percent of total exports. Besides direct exports, it is

estimated that

Table No. 4

Year Total exports Exports from

SSI sector

Percentage

share

(Rs. Crores) (Rs. Crores)

1991-92 44040 13883 31.5


16/24


Page 16

1992-93 53688 17785 33.1

1993-94 69547 25307 36.4

1994-95 82674 29068 35.1

1995-96 106353 36470 34.21996-97 118817 39249 33.4

1997-98 126286 44442.18 35.19

1998-99 141603.53 48979.23 34.59

1999-00 159561 54200.47 33.97

2000-01 202509.7 69796.5 34.47

2001-02 207745.56 71243.99 34.29

2002-03 252789.97 86012.52 34.032002-03 252137 86013 34.03

2003-04 291582 97644 33.49

2004-05 375339.52 124416.56 33.15

2005-06 456417.88 150242.03 32.92

2006-07 571779 182,538 31.92

2007-08 655864 202017 30.80

2008-09 840755 NA NA

2009-10 845534 NA NA

small-scale industrial units contribute around 15 percent to exports indirectly. This takes

place through merchant exporters, trading houses and export houses. They may also

be in the form of export orders from large units or the production of parts and

components for use for finished exportable goods. It would surprise many to know thatnon-traditional products account for more than 95 percent of the SSI exports. The

exports from SSI sector have been clocking excellent growth rates in this decade. It has

been mostly fuelled by the performance of garments, leather and gems and jewellery

units from this sector. The product groups where the SSI sector dominates in exports

are sports goods, readymade garments, woolen garments and knitwear, plastic


17/24


Page 17

products, processed food and leather products. The SSI sector is reorienting its export

strategy towards the new trade regime being ushered in by the WTO.

Small Scale Industry In INDIA:-

In India, the latest definition of a small-scale industry (SSI) is any unit with an

upper limit on investment (inplant and machinery) of from Rs. 0.20 million to Rs. 0.35

million in the case of SSI and Rs. 0.45 million in the case of ancillary units. What is

called the village and small industries (VSI) sector comprises both traditional and

modern small industries; it is constituted by eight specific groups viz . Handloom,

Handicrafts, Coir, Sericulture, Khadi, Village Industries, Small-Scale Industries and

Power looms. The last two items constitute the modern group of industries, the others

being traditional.

In the economic development of India, a strategic position has been given to the

development of village and small industries (VSI) which constitute an important segmentof the overall economy. Next to agriculture, the VSI sector provides the greatest

employment opportunities, a considerable portion of which is in rural and semi-rural

areas. It contributes about fifty percent of the value added in manufacturing.

India's overall policy on all industrial development is contained in the Industrial

Policy Resolution of 1956, as amended from time to time. New priorities have been

developed as and when required including some designed to reduce the basic

handicaps of small-scale industries. The latest of these is the Industrial Policy of July

1980 which alms to harmonize growth in the small-scale sector with that in the large and

medium sectors and to remove the dichotomies between the two sectors.

During the sixth plan period (1979-80 to 1984-85) production in this sector

increased from Rs. 335380 million to Rs. 657300 million at current prices and


18/24


Page 18

employment from 23.37 million to 31.50 million persons. The latter figure represents

nearly 80 percent of the entire industrial employment. Of this total, modern small-scale

industries employ 9 million people; next in importance is the handloom subsector which

employs about 7.5 million people. During the seventh plan period (1985-90) the total

value of production of the VSI sector is expected to increase by about 52.4 percent and

employment by 27 percent to 40.0 million. The seventh plan also lays emphasis on the

necessity of providing a new thrust for tiny units having fixed investment of less than Rs.

0.2 million. They form nearly 90 percent of the total number of small-scale industrial

enterprises. A modified strategy will provide adequate facilities in rural and semi-urban

areas which will increase dispersion of these industries.

Small scale industry in Rajasthan:-

Rajasthan started experiencing industrial development between 1950 and 1960.

Large and small scale industries started springing up in the Kota, Jaipur, Udaipur,

Bhilwara and other Industrial Estates of Rajasthan. The main industries of Rajasthan

include textile, rugs, woolen goods, vegetable oil and dyes. Heavy industries consist of

copper and zinc smelting and the manufacture of railway rolling stock. The other

industries related to Private Sector include steel, cement, ceramics and glass wares,

electronic, leather and footwear, stone and other chemical industries. Altogether the

industrial sector accounts for about 32.5 per cent of the total share of the states

economy. During 1995- 96 and 2001-02, the industrial sector of Rajasthan experienced

growth at the rate of 6.9% per annum

Textile Industry:-

Textile is the chief industry and the Rajasthan is considered as Indias second

largest producer of Polyester Fiber. It is grown in the Bhilwara district of Rajasthan.

Besides these, Rajasthan is also involved in the large scale production of cotton and

wool in the country. In total the production of Textiles accounts 21.96 % in the state.


19/24


Page 19

Rajasthan also produces huge quantities of spun yarn and hence is the fourth largest

producer in India.

Cement Industry:-

The state of Rajasthan is also the major producer of cement and accounts for 15

per cent of the cement output of the country.

Salt Production:-

Rajasthan is the third largest producer of salt (sodium chloride) in the country

and accounts for the countrys one-tenth of salt production.

The large mineral and metal deposits like zinc, copper, lignite, gypsum and mica in the

state have also fostered the growth of a large number of industries that are involved in

producing by-products by utilizing these natural resources.

Wooden handicraft:-

Wooden handicrafts are specialized skills passed on from one generation to the

next. The term 'wooden handicrafts' refers to a wide range of wooden items carrying

utilitarian and artistic value that are made by hand, or with the use of simple tools.Indian wooden handicrafts reflect unmatched workmanship, fine designs, and subtle

elegance. This makes India one of the chief exporters of wooden handicrafts in the

world market.

The wooden handicrafts industry plays an important role in the Indian economy. This

industry requires low capital investment and other resources. The wooden handicraft

sector provides a high ratio of value addition, and has emerged as one of the major

sources of foreign exchange earnings for India.

Indian wooden handicrafts are much sought after the world over, and form an

important export commodity of India. Although India's handicraft exports show a

consistent increase of sixteen per cent every year, its share in the international market

is not more than two per cent.


20/24


Page 20

The Indian wooden handicraft sector is the second largest employment provider

(after agriculture). It employs about six million artisans. Women constitute a large

section of the handicrafts industry, including people belonging to the weaker sections of

society.

Problems in small scale industries:-

Majority of the small scale units use old techniques of production and out dated

machinery and equipment. Up gradation of the technology and achieving economies of

scale is one of the major problems facing the sector? They cannot afford new machines

and equipments and are therefore not in a position to use the latest techniques ofproduction. They do not find it possible to conduct research and development on a

continuing basis. Therefore, productivity and quality in small scale firms tends to be low

while unit cost of production is generally high.

But with liberalization of the economy, the MSMEs are facing stiff competition from

imports and need technological up gradation in order to produce better quality products

at cheap rates.

PPrroobblleemmss FFaacceedd bbyy SSSSIIss aass BBaarrrriieerrss ttoo GGrroowwtthh

MMaarrkkeett RReellaatteedd 7700%%

FFiinnaannccee RReellaatteedd 2255%%

GGoovveerrnnmmeenntt PPoolliiccyy RReellaatteedd 1122..7788%%

PPoowweerr RReellaatteedd//IInnffrraassttrruuccttuurree 1144..00%%

TTeecchhnnoollooggyy 1144..6600%%

As far as sourcing technology is concerned, small businesses face the following three

essential problems:-


21/24


Page 21

Obtaining information about technology is the first important issue. For most of

them, information about available technology options is through word of mouth or

from a visit to an advanced unit. Few have access to technical literature,

professional journals or information about new product launches. But with the

advent of internet, new vistas are opening up through electronic journals,

catalogue downloads and advanced search facilities.

Actual procurement of the technology is the next important issue because even if

information is obtained, there are barriers to import of technology and other

problems relating to technology transfer, vendor capability, after sales support,

import procedures, etc which impede procurement.

Acquiring finance for technology up gradation is also a problem. Small

enterprises generally look to external sources of funding for upgrading

technology as withdrawing money from business entails its own costs.

With a view to foster the growth of MSME sector in the country, government has taken

up several initiatives:

ISO 9000/14001 Certification Fee Reimbursement Scheme was introduced in

order to incentivize technological up gradation, quality improvement and better

environment management by the MSEs. The scheme provides incentive to those

small scale/ ancillary undertaking who have acquired ISO 9000/ISO

14001/HACCP certifications.

In order to reduce the cost of funds, a scheme called Credit Linked Capital

Subsidy Scheme (CLCSS) for Technology Up gradation in Small Scale Industries

has been put into place. It aims at facilitating technology up gradation by

providing upfront capital subsidy to small scale industry units, including tiny,

Khadi, village and coir industrial units, on institutional finance (credit) availed of

by them for modernization of their production equipment (plant and machinery)

and techniques.

National Manufacturing Competitiveness Programme (NMCP) has been

launched by the government in order to help MSMEs improve their

competitiveness. The schemes under this Programme are aimed at addressing


22/24


Page 22

the technology/quality up gradation needs of the sector, mainly in the public-

private partnership mode.

Small Industries Development Bank of India (SIDBI) in collaboration with United

Nations-Asian Pacific Centre for Transfer of Technology (UN-APCTT) had

established Technology Bureau for Small Enterprises (TBSE) to bring synergy

between Technology and Finance for Small and Medium Enterprise (SME)

sector. The objectives of the company are to:

Provide professional services for technology transfer in order to

enhance market competitiveness of small and medium enterprises

and promote sustainable development.

Maintain and provide data base on technology options available

from different countries.

Provide micro small & medium enterprises information on sources

of technology and means of accessing them.

Provide background information on technology seeking enterprises

to technology suppliers and collaborators.

Identify business partners willing to collaborate and extend support

to tie up financial assistance and other requirements such as

drafting agreements, obtaining various approvals and preparationof business plans required for transfer of technology.

Provides financial syndication through banks and financial

institutions.

Besides, National Small Industries Corporation Ltd. (NSIC) has taken up an

initiative to enhance technology options for small scale industries. An ISO 9001 certified

company, it has been working to fulfill its mission of promoting, aiding and fostering the

growth of small scale industries and industry related small scale services/businessenterprises in the country. Over a period of five decades of transition, growth and

development, NSIC has proved its strength within the country and abroad by promoting

modernization, up gradation of technology, quality consciousness, strengthening

linkages with large medium enterprises and enhancing exports - projects and products

from small industries.


23/24


Page 23

Also, Small Industries Development Organization (SIDO) has set up 10 Tool

Rooms and Training Centers in the country in order to assist small scale units in their

technical up gradation by providing good quality toolings.

Further, in order to facilitate investments for technological up gradation andhigher productivity in the micro and small enterprises, the phased deletion of products

from the list of items reserved for the exclusive manufacture by such enterprises is

being undertaken.

Conclusions:-

The small scale industries sector contributes significantly to the manufacturing

output, employment and exports of the country. It is estimated that in terms of value, the

sector accounts for about 45 per cent of the manufacturing output and 40 per cent of the

total exports of the country. The sector is estimated to employ about 59 million persons

in over 26 million units throughout the country. The production of SSI unit in India was

Rs 84,413 crore in 1992-93, which increased and reached up to Rs. 9,82919 crore in

2009-10. The production of SSI units shows continually raising trend during the study

period. During 1992-93 SSI units shows 4.71 growth rate in production which gone up to

11.59 percent in 2009-10. The production of Small Scale Industries increased with an

annual average growth rate of 15.15 percent during 1992-93 to 2009-10. The production

of SSI shows highest growth rate of 42.49 per cent growth in 2006-07. The total

employment from SSI sector in the country as per the third All India Census of SSIs

conducted with the reference year of 2001-02 was 249.33 lakh numbers. Units operated

with fixed premises are treated as SSIs. As per the estimates compiled for the year

2005-06 the employment was 294.91 lakh persons in SSI sector.SSI Sector plays a

major role in India's present export performance. 45 to 50 percent of the Indian Exports

is contributed by SSI Sector. Direct exports from the SSI Sector account for nearly 35

percent of total exports. Besides direct exports, it is estimated that small-scale industrial

units contribute around 15 percent to exports indirectly.


24/24


Page 24

References:-

1. Vidya Suresh and P shashidhar, Competitiveness of Small-Scale Industries of

India, Conference on Global Competition & Competitiveness of Indian Corporate.

2. Nyati, K. (1988). Problems of pollution and its control in small-scale industries.

3. Gupta, M. & Sharma, K. (1996, third quarter). Environmental operations

management: An opportunity for improvement. Production and Inventory

Management Journal, 40-46.

4. Manimala J. Mathew, (2006), Entrepreneurship Education and Training in

India: Global Education, University of Essex, Scotland.

5. Ahluwalia, I.J., (1985) Industrial Growth in India: Stagnation Since the Mid-

Sixties(London, Oxford University Press).

6. Lal, K Anil and Clement W. Roland, (2005), Economic Development in India;

The role of Individual Enterprises, Asia-pacific Development Journal, Vol 12. No

2.7. Acs J. Zoltan,(2007), How is Entrepreneurship good for Economic Growth?,

Progress Foundation, Zurich: Switzerland.

8. (MSME) Annual Report 2010-11.

Web bidlography:-

1. www.isrj.net

2. www.msme.gov.in
http://www.isrj.net/http://www.isrj.net/http://www.msme.gov.in/http://www.msme.gov.in/http://www.msme.gov.in/http://www.isrj.net/

Small Scale Industries and Their Big Roal

Documents

Transcript of Small Scale Industries and Their Big Roal