Small Scale Industries And Their Big Role

Arya
Institute of Engg.& Technology Kukas, Jaipur
Submitted by: Renuka Chaudhary MBA II Sem Batch 2011-13 RTU Roll no. Submitted To : Dr. Manish Jain Head of MBA Department

PREFACE

In recent times, the Marketing Department of any company has been seen as a very productive department contributing towards the Organizational goals and objectives. With this, the expectations of management have grown up to a greater extent. Now, the Marketing is not just

Small Scale Industries And Their Big Role seen as a department for recruiting people but its mainly known for making the work enjoyable for every employee. Marketing is also known for keeping employees motivated at all times, in training them, helping in employees personal and professional lives and maintaining a balance in between and alas in retaining them. Therefore, the work of Marketing department has become tougher. Beside various other Marketing systems and processes, the advertising is known as an important tool for any Organization and almost every Organization is spending more on this area for promoting its product. The Indian Economy has become very sound in last five years. The Indian Government has permitted to enter Multinational Corporations (MNCs) in India with which the opportunities for professionals have arisen. Advertising is an important part of any organization, it helps to promote a product in market ,to make consumer aware of product, to increase its sales etc. This project report is developed to discuss use of children in advertising.

Acknowledgement
I express my warmest thanks & deep sense of gratitude to the individuals for their generous help in discussing the project and giving their valuable time in successful completion of this project. Time to time I got constructive suggestions, guidance and encouragement.

Small Scale Industries And Their Big Role I would like to express my deep thanks to Dr. Arvind Agarwal, President, Arya Group of Colleges and Prof. M. L. Gupta, Principal, Arya Institute of Engineering & Technology, Jaipur for extending me the opportunity of presenting the project and providing all the necessary resources for this purpose.With much pride and delight I would like to express my sincere thanks to Dr. Manish Jain (Head of the department) for his excellent guidance and valuable suggestions throughout the project work. I express heartfelt thanks to Mr. Anshul Mathur (Project Guide) for her wonderful support and for giving me an opportunity to present project report on Children Advertising. I also want to give my humble regards to Mr. Anshul Mathur, Mr. Pramod Sharma, Ms. Nisha Goyal, Mrs. Ankita Pareek , Ms. Padma sharma , Ms. Shavika, Ms. Shivali, Ms. Mona and Ms. Usha for their valuable support and believe in my work. Without their sustained interest and encouragement, this work could not have been possible to reach the state of completion with satisfaction. In fact it is their real devotion to the development work, which instilled in me, the need of a passionate commitment to pursue this project. I am also grateful to all my friends for providing critical feedback and support whenever required. Parents made me endure such times with their unfailing humour and warm wishes.I regret for any inadvertent omissions. Renuka Chaudhary MBA IInd SEM. RTU Roll No.

Small Scale Industries And Their Big Role

TABLE OF CONTENTS

S.No. 1. 2. 3. 3. 4. 5. 6. 7.

Acknowledgement Interim Report Introduction of the Industry Objective Literature Review Questionnaire Methodology Reference

Page No. 4 5 6 8 10 12 17 21

Small Scale Industries And Their Big Role

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 smallscale 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 any industrial unit to be regarded as Small Scale Industrial unit the following condition is to be satisfied: -

Small Scale Industries And Their Big Role

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. 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 smallscale 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.

Small Scale Industries And Their Big Role

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. 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 Industries And Their Big Role

CONCEPT & DEFINATION 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

Small Scale Industries And Their Big Role

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 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 200102

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.

Small scale businesses operating in India:In order to encourage growth, expansion and more investment in the smallscale sector the Government has adopted a policy of reservation for allowing certain products to be exclusively manufactured by the small-scale sector.

Small Scale Industries And Their Big Role

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

Small Scale Industries And Their Big Role

1990. The primary objective of this bank was to ensure steady flow of funds to SSIs to ease their financial constraints. 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 capitalscarce 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 Industries And Their Big Role

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 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

Small Scale Industries And Their Big Role

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.

Comparative growth of SSI sector and Total Industry sector

Year 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 SSI Sector Growth Rate 10.44 11.49 1.29 9.19 7.84 7.09 8.04 6.06 7.68 8.06 9.96 Total Industrial Sector Growth Rate 9.10 13.00 6.10 6.70 4.10 6.70 5.00 2.70 5.70 6.09 8.04

Source: SIDO Half Century by DCSSI, Govt. of India 2004 and Annual Report of the Ministry of SSI 2005-06

Small Scale Industries And Their Big Role

By its less capital intensive and high labor absorption nature, SSI sector has made significant contributions to employment generation and also to rural industrialization. This sector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices. This is the opportune time to set up projects in the small-scale sector. It may be said that the outlook is positive, indeed promising, given some safeguards. This expectation is based on an essential feature of the Indian industry and the demand structures. The diversity in production systems and demand structures will ensure long term co-existence of many layers of demand for consumer products / technologies / processes. There will be flourishing and well grounded markets for the same product/process, differentiated by quality, value added and sophistication. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. The promotional and protective policies of the Govt. have ensured the presence of this sector in an astonishing range of products, particularly in consumer goods. However, the bugbear of the sector has been the inadequacies in capital, technology and marketing. The process of liberalization coupled with Government support will therefore, attract the infusion of just these things in the sector. Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification.

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 (in plant 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

Small Scale Industries And Their Big Role

traditional and modern small industries; it is constituted by eight specific groups viz. Handloom, Handicrafts, Coir, Sericulture, Khadi, Village Industries, SmallScale Industries and Power looms. The last two items constitute the modern group of industries, the others being traditional.

INDIAN SME SECTOR AT A GLANCE 2005-06

SSI units : 12.3 million Employment generated in SSIs : 29.5 million Production : At current Prices Rs.4762.01 billion Exports : Rs. 1215 billion SSI account: Industrial Production: 40% Exports: 35% (50% of Direct & Indirect)

GDP 7%

Share:

Ownership pattern :

Small Scale Industries And Their Big Role

Proprietorships 78% Partnerships 16% Corporate 6% Industrial 96% Service 3% Ancillary 1% Produces Diverse range consumer items, capital

: : & Units Enterprises Units Others : : : :

of products (more than 8000goods and intermediates)

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 segment of 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

Small Scale Industries And Their Big Role

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.

PERFORMANCE OF MICRO & SMALL ENTERPRISES

Productio Growt n (Rs. Share In Empl. h Crs.) (Lakh Person at Register Unregister Rate ) Total Current GDP (%) ed ed (%) prices Number of (Lakh Nos.) Year Enterprises 15.91 93.58 109. 263.4 314850 8.68 49 9 113. 275.3 364547 9.64 95 0 5.92

20022003 20032004

16.97

96.98

5.79

Small Scale Industries And Their Big Role

20042005 20052006 20062007

17.53

101.06

118. 287.5 429796 10.88 5.84 59 5 123. 299.8 497842 12.32 5.83 42 5 128. 312.5 587196 12.65 5.94 44 2

18.71

104.71

20.98

107.46

20072008 24.68 (Project ed)

108.99

133. 322.2 695126 13.00 NA 67 8

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 of production. 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.

Growth

Problems Faced by SSIs as Barriers to

Market Related 70%

Small Scale Industries And Their Big Role

Finance Related Government Policy Related Power Related/Infrastructure Technology

25% 12.78% 14.0% 14.60%

As far as sourcing technology is concerned, small businesses face the following three essential problems: 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.

Small Scale Industries And Their Big Role

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 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 (UNAPCTT) 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:

Small Scale Industries And Their Big Role

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 preparation of 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/business enterprises 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,

Small Scale Industries And Their Big Role

quality consciousness, strengthening linkages with large medium enterprises and enhancing exports - projects and products from small industries. 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 and higher 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.

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

Small Scale Industries And Their Big Role

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. 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 ProductionRajasthan 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.

Small Scale Industries And Their Big Role

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. 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.
Performance

Production The small-scale industries sector plays a vital role in the growth of the country. It contributes almost 40% of the gross industrial value added in the Indian economy. It has been estimated that a million Rs. of investment in fixed assets in the small scale sector produces 4.62 million worth of goods or services with an approximate value addition of ten percentage points. 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 smallscale sector.

Small Scale Industries And Their Big Role

Year 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00

Target Achievement 3.0 5.0 7.0 9.1 9.1 9.1 * * * 3.1 5.6 7.1 10.1 11.4 11.3 8.43 7.7 8.16 8.90

2000-01 (P) *

P-Projected (April-December) * Target not fixed at constant prices

Employment SSI Sector in India creates largest employment opportunities for the Indian populace, 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. Generation of Employment - Industry Group-wise Food products industry has ranked first in generating employment, providing employment to 0.48 million persons (13.1%). The next two industry groups were Nonmetallic mineral products with employment of 0.45 million persons (12.2%) and Metal products with 0.37 million persons (10.2%). In Chemicals & chemical products, Machinery parts except Electrical parts, Wood products, Basic Metal Industries, Paper products & printing, Hosiery & garments,

Small Scale Industries And Their Big Role

Repair services and Rubber & plastic products, the contribution ranged from 9% to 5%, the total contribution by these eight industry groups being 49%. In all other industries the contribution was less than 5%. Per unit employment Per unit employment was the highest (20) in units engaged in beverages, tobacco & tobacco products mainly due to the high employment potential of this industry particularly in Maharashtra, Andhra Pradesh, Rajasthan, Assam and Tamil Nadu. Next came Cotton textile products (17), Non-metallic mineral products (14.1), Basic metal industries (13.6) and Electrical machinery and parts (11.2.) The lowest figure of 2.4 was in Repair services line. Per unit employment was the highest (10) in metropolitan areas and lowest (5) in rural areas. However, in Chemicals & chemical products, Non-metallic mineral products and Basic metal industries per unit employment was higher in rural areas as compared to metropolitan areas/urban areas. In urban areas highest employment per unit was in Beverages, tobacco products (31 persons) followed by Cotton textile products (18), Basic metal industries (13) and Nonmetallic mineral products (12). Location-wise Employment Distribution - Rural Non-metallic products contributed 22.7% to employment generated in rural areas. Food Products accounted for 21.1%, Wood Products and Chemicals and chemical products shared between them 17.5%. Urban

Small Scale Industries And Their Big Role

As for urban areas, Food Products and Metal Products almost equally shared 22.8% of employment. Machinery parts except electrical, Non-metallic mineral products, and Chemicals & chemical products between them accounted for 26.2% of employment. In metropolitan areas the leading industries were Metal products, Machinery and parts except electrical and Paper products & printing (total share being 33.6%). State-wise Employment Distribution Tamil Nadu (14.5%) made the maximum contribution to employment. This was followed by Maharashtra (9.7%), Uttar Pradesh (9.5%) and West Bengal (8.5%) the total share being 27.7%. Gujarat (7.6%), Andhra Pradesh (7.5%), Karnataka (6.7%) and Punjab (5.6%) together accounted for another 27.4%. Per unit employment was high - 17, 16 and 14 respectively - in Nagaland, Sikkim and Dadra & Nagar Haveli. It was 12 in Maharashtra, Tripura and Delhi. Madhya Pradesh had the lowest figure of 2. In all other cases it was around the average of 6. Year Target Achievement Growth rate 134.06 139.38 146.56 152.61 160.00 167.20 171.58 3.28 3.28 5.15 4.13 4.88 4.50 2.61

(lakh nos.) (lakh nos.) 1992-93 128.0 1993-94 133.0 1994-95 138.6 1995-96 144.4 1996-97 150.5 1997-98 165 1998-99 170.1

Small Scale Industries And Their Big Role

1999-00 175.4 P-Provisional

177.3

3.33

Export SSI Sector plays a major role in India's present export performance. 45%-50% of the Indian Exports is contributed by SSI Sector. Direct exports from the SSI Sector account for nearly 35% of total exports. Besides direct exports, it is estimated that small-scale industrial units contribute around 15% 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 that non-traditional products account for more than 95% 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, woollen garments and knitwear, plastic 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 Industries And Their Big Role

Year

Exports (Rs. Crores) (at current prices)

1994-95 1995-96 1996-97 1997-98 1998-99

29,068 (14.86) 36,470 (25.50) 39,249 (7.61) 43946 (11.97) 48979 (10.2)

1999-00 (P) 53975 (10.2) P-Provisional

Major

Export

Markets

An evaluation study has been done by M/s A.C. Nielsen on behalf of Ministry of SSI. As per the findings and recommendations of the said study the major export markets identified having potential to enhance SSIs exports are US, EU and Japan. The potential items of SSIs have been categorised into three broad categories. More.. Export groups. More.. Destinations

The Export Destinations of SSI products have been identified for 16 product

Opportunity

Small Scale Industries And Their Big Role

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 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.

By its less capital intensive and high labour absorption nature, SSI sector has made significant contributions to employment generation and also to rural industrialisation. This sector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices. This

Small Scale Industries And Their Big Role

is the opportune time to set up projects in the small-scale sector. It may be said that the outlook is positive, indeed promising, given some safeguards. This expectation is based on an essential feature of the Indian industry and the demand structures. The diversity in production systems and demand structures will ensure long term coexistence of many layers of demand for consumer products / technologies / processes. There will be flourishing and well grounded markets for the same product/process, differentiated by quality, value added and sophistication. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. The promotional and protective policies of the Govt. have ensured the presence of this sector in an astonishing range of products, particularly in consumer goods. However, the bugbear of the sector has been the inadequacies in capital, technology and marketing. The process of liberalisation coupled with Government support will therefore, attract the infusion of just these things in the sector.

Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification.

By its less capital intensive and high labour absorbtion nature, SSI sector has made significant contributions to employment generation and also to rural industrialisation. This sector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices. So this is the opportune time to set up projects in the small scale sector. It may be said that the outlook is positive, indeed promising, given some safeguards. This expectation is based on an essential feature of the Indian industry and the demand structures. The diversity in production systems and demand structures will ensure long term coexistence of many layers of demand for consumer products / technologies / processes. There will be flourishing and well grounded markets for the same product/process, differentiated by quality, value added and sophistication. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. The promotional and protective policies of the Govt. have ensured the presence of this sector in an astonishing range of products, particularly in consumer goods. However,

Small Scale Industries And Their Big Role

the bug bear of the sector has been the inadequacies in capital, technology and marketing. The process of liberalisation will therefore, attract the infusion of just these things in the sector.

SSIs IN INDIA

Estimated No. of Units Employment Share in Industrial Value Added

3.57 Million 19.96 Million 39% 45% 34% Over 8000 675 (Figures for 2002-2003)

Share in Total Exports Direct Overall

Total Number of Items Produced Number of Reserved Items

TRENDS IN GROWTH SSI & INDUSTRIAL SECTOR (in %) Year 1991-92 SSI Sector 3.1 Industrial Sector 0.6

Small Scale Industries And Their Big Role

1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000

5.6 7.1 10.1 11.4 11.3 8.43 7.7 8.16

2.3 6.0 9.4 12.1 7.1 5.8 4.0 6.5

TRENDS

IN

GROWTH

OF

EMPLOYMENT

IN

SSI & INDUSTRIAL SECTOR (in %) Increase in jobs per annum Period GDP annum Growth per Organised Sector including Government 19801990 19911997 5.7% 1.59% SSI sector

6.7%

5.7%

0.86%

3.5%

1980 - 1997 Organised Sector SSI Sector 53.66 lakh new jobs 80.00 lakh new jobs