110
Small Scale Industries in India: An Outlook
Pooja
Resource Person in Commerce Department, Sir Chhotu Ram Govt. College for Women, Sampla, Rohtak
ABSTRACT
India, a developing country, places much emphasis on the development of Micro, Small & Medium enterprises in order to walk on the road of growth and progress. Undoubtedly, SSIs in India have been increased in the number of units in the last few decades and contribute a significant proportion in the net exports of the homeland. Not only this, a number of people has been provided with employment opportunities and marks a noticeable increase in the capital formation. In this research paper, an effort has been made to examine the present position and performance of SSI sector in India and its role in the economy. It also covers weakness of the SSI sector and to suggest measures to remove the weakness. A lot of newspapers, magazines, articles, research papers, dissertations and websites are gone through to gather knowledge regarding this field.
Keywords: MSMEs, SSIs, Manufacturing Sector, Service Sector etc. INTRODUCTION
In a developing country like India manpower is abundant but capital is relatively scarce. Small scale industries tend to be labor intensive. Therefore, these industries are better suited to the country’s resource potential. Industrial units are generally classified between small-scale, medium scale and large scale units; considering their size, capital resources and the number of laborers engaged upon. According to the Fiscal Commission, 1950 “A small scale industry is one which is operated mainly with hired labor usually 10 to 50 hands.” Accordingly, the Industries (Development and Regulation) Act,1951 exempted small scale units employing less than 50 workers with power and less than 100 workers without power, from the system of registration. These exempted industries were termed as small scale industries. Small scale industries can be classified into two categories :-
1. Traditional Industries :- It consists of Khadi village industries, handloom industries etc.
2. Modern Industries :- It consists of export oriented ancillaries, small scale service sectors, various business enterprises etc.
In accordance with the provision of Micro, Small and Medium Enterprise Development (MSMED) Act, 2006. the micro, small and medium enterprises are classified into two classes-
Manufacturing Enterprises-The manufacturing enterprises are defined in terms of investment in plant and machinery.
Investment Limit in Manufacturing Sector
Enterprises Investment in Plant & Machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but does not exceed five crore rupees
Medium Enterprises More than five crore rupees but does not exceed ten crore rupees
Source: Micro, Small & Medium Enterprises Development (MSMED) Act, 2006
111 Investment Limit in Service Sector
Enterprises Investment in Equipments
Micro Enterprises Does not exceed ten lakh rupees:
Small Enterprises More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises More than two crore rupees but does not exceed five core rupees
Source: Micro, Small & Medium Enterprises Development (MSMED) Act, 2006
Objectives:
1. To study MSMEs Status and Employment Status of Small Scale Industries . 2. To study Contribution of Small Scale Industries in Production and Exports. 3. To identify the problems faced by the SSIs in the Indian economy.
Research Methodology:
1) Period of study: For the purpose to achieve the objectives Data for the period 2001- 2014 have been taken.
2) Source of Information : Secondary data from different sources like:-Journals, magazines, periodicals and publications, newspapers, through Internet has been taken to collect the required data for this study.
Performance of Small Scale Industries:
Table- 1: (MSMEs Status and Employment Status)
Year Total working MSMEs(Lakh
Numbers)
Employment(Lakh Persons)
2001-02 105.21 249.33
2002-03 109.49 260.21
2003-04 113.95 271.42
2004-05 118.59 282.57
2005-06 123.42 294.91
2006-07 261.12 595.66
2007-08 272.79 626.34
2008-09 285.16 659.35
2009-10 298.08 695.38
2010-11 311.52 732.17
2011-12 447.66 1,011.80
2012-13 467.56 1,061.52
2013-14 488.46 1114.29
112 Table- 2: (Production and Exports)
Year Production(In crores) Exports
2001-02 282270 71244
2002-03 314850 86013
2003-04 364547 97644
2004-05 429796 124417
2005-06 497842 150242
2006-07 709398 182538
2007-08 790759 202017
2008-09 880805 N.A.
2009-10 982919 N.A.
2010-11 1095758 N.A.
2011-12 N.A. N.A.
2012-13 N.A. N.A.
2013-14 N.A. N.A.
A reasonable hike has been observed in the statistics of production and exports of SSIs and MSMEs in this given table. Thus, no doubt small and medium enterprises have performed better in comparison to the previous year but if given more emphasis and if their problems be resolved then, these industries can perform even much better than that.
PROBLEMS FACED BY SMALL SCALES INDUSTRIES
Problems of Small Scale Industries can be classified in three areas i.e. Marketing area , Raw material area and Labour area.
1. Classification of Small Scale Industries according to Problems of Marketing :- Type of Small scale industries Limited Local Market Lack of Transport & Communi-cation Lack of Broker Lack of Stages Other (specify) Total
1 2 3 4 5 6 7
(I) Food
Manufacturing (Sugar & Others)
18 (4.96) 10 (2.75)
10 (2.75)
12 (3.31)
7 (1.93) 57 (15.70)
(II) Textile (Jute, Cotton & Others)
21 (5.79) 9 (2.48)
11 (3.03)
14 (3.86)
4 (1.10) 59 (16.25) (III) Paper & Paper
Products
6 (1.65) 7 (1.93)
5 (1.38)
3 (0.83) 1 (0.28) 22 (6.06) (IV) Manufacture of
Rubber Products
8 (2.20) 9 (2.48)
6 (1.65)
2 (0.55) 3 (0.83) 28 (7.71) (V) Basic Industrial
chemicals (other than Fertilizers)
1 (0.28) 1 (0.28)
1 (0.28)
1 (0.28) 1 (0.28) 5 (1.38)
(VI) Cement 5 (1.38) 5
(1.38) 4 (1.10)
2 (0.55) 2 (0.55) 18 (4.96) (VII) Sports & Sports
Goods
42 (11.57) 34 (9.37)
35 (9.64)
24 (6.61)
15 (4.13) 150 (41.32)
(VIII) Others 4 (1.10) 4
(1.10) 5 (1.38)
7 (1.93) 4 (1.10) 24 (6.61) Total 104 (28.65) 79 (21.76) 77 (21.21) 65
(17.91) 37 (10.19)
113 This table revealed that 28.65 percent of sampled small scale industries felt that there has been a limited local market, where they are unable to supplying their final products. 21.76 percent of sampled industries have been facing problems relating to sufficient transport and communication facilities. 21.21 percent of sampled industries expressed that there has been a lack of brokers in the market. 17.91 percent of sampled industries expressed that there has been a lack of stages in the market and 10.19 percent of sampled industries phases except than these problems.
2. Classification of Small Scale Industries according to Problems of Labour Type of Small
scale industries
Lack of Qualified High Wage Rates
Lack of Hours Absentees Other (specify)
Total
(I) Food
Manufacturing (Sugar & Others)
25 (6.89) 10 (2.75)
7 (1.93) 15 (4.13) --- 57 (15.70)
(II) Textile (Jute, Cotton & Others)
26 (7.16) 11 (3.03)
8 (2.20) 14 (3.86) --- 59 (16.25) (III) Paper & Paper
Products
9 (2.48) 8 (2.20) 4 (1.10) 2 (0.55) --- 23 (6.34)
(IV) Manufacture of Rubber Products
10 (2.75) 10 (2.75)
5 (1.38) 4 (1.10) --- 29 (7.99)
(V) Cements 2 (0.55) 6 (1.65) 8 (2.20) 1 (0.28) --- 17 (4.68) (VI) Supports & Sports
goods
32 (8.82) 35 (9.64)
30 (8.26)
35 (9.64) 20 (5.51) 152 (41.87) (VII) Others (8) (2.20) 7 (1.93) 5 (1.38) 4 (1.10) 2 (0.55) 26 (7.16)
(VIII) Total 112
(30.85) 87 (23.97)
67 (18.46)
75 (20.66) 22 (6.06) 363 (100.00)
Source :- www.msme.org.in
It reveals various types of labour problems existing in sampled small-scale enterprises. Labour problems have been classified into the following categories: (i)Lack of qualified labour, (ii) High wage rate, (iii) Lack of hours, (iv) Absentees, (v) others etc. The table revealed that 30.85% sampled small-scale enterprises are unable to find qualified labour. Mostly labourers were engaged as unskilled labour. 23.9% industries felt that labourers demanded high wage rates for their work. 18.46% enterprises had been facing problems relating to working hours. Labourers in these enterprises had not been working according to prescribed hours. 20.66% enterprises had found serious problem about absentees. Thus this table concluded that most of these enterprises have to face lack of qualified workers and many other labour problems with the result that their manufacturing activities are inversely affected.
The main reason of failure of SSI's are as follows:- reason for sickness in SSIs include: 1. Insufficient working capital
2. Poor technology
3. Lack of financial resources 4. Inadequate raw material 5. Increasing labor turnover rate 6. Power cut problem
7. Lack of infrastructure facilities etc.
114 CONCLUSION
SSIs in India have been increased in the number of units in the last few decades and contribute a significant proportion in the net exports of the homeland. No. of units of SSI in 2001-02 were only 105.21 lakhs which constantly kept on increasing and the number rose to 488.46 in 2013-14. A reasonable hike has been observed in the statistics of production and exports of SSIs and MSMEs. Small Scale Industries felt that they are unable to supplying their final products, facing problems relating to sufficient transport and communication facilities etc. It reveals various types of labour problems existing in sampled small-scale enterprises. The performance of SSIs on various parameters, that is, number of units, value of production, number of persons employed and exports has been impressive in spite of tough competition from large-scale sectors.
REFERENCES
[1]. Bhatia B.S. & Batra G.S.(2008), Encyclopaedia of Business Management, Deep & Deep Publications Pvt. Ltd., New Delhi. [2]. Gupta C.B. & Srinivasan N.P.(2008), Entrepreneurship development in India, Sultan Chand & Sons, New Delhi.
[3]. University Press, New Delhi (2000).
[4]. Purohit H.C.(2006),Rural Marketing Challenges and Opportunities, Shree Publishers & Distributors, New Delhi. [5]. Verma S.B.(2010), Rural Management, Deep & Deep Publications Pvt. Ltd., New Delhi.
WEBSITES
1. www.haryana.nic.in 2. www.goidirectory.nic.in 3. www.rbi.org
