Growth and Problems in Small Scale Industries/sushant

8/9/2019 Growth and Problems in Small Scale Industries/sushant

1/25

Presented By

Group VI


2/25

Group Members

Nitin Tiwari

Nishant Jain

Neha Jain Om Prakash Dubey

Pankaj Bharti


3/25

Content

Meaning Of SSI

Definitions Of SSI

SWOT Of SSI

Growth Of SSI

Significance Of SSI

Facilities

Problems And Remedials Small Sector Industry Policy

Conclusion


4/25

Meaning

Small Scale Industries have a place of

pride in our economy . They have a high

potentialamong others for generating

employment , dispersal to semi-urban

and ruralareas , promoting

entrepreneurship and earning foreign

exchange. SSI are defined in three ways.


5/25

Conventional Definition Of SSI

Cottage and Handicraft industries.

Traditionallabour

Intensive methods Traditional products

For example :- Handloom Textile

Industry


6/25

Operational Definition Of SSI

The operational definition of SSI Unit

relates to the Investment in fixed assets

. Classified in three categories :-

a) Micro - >= Rs. 10 lac

b) Small- < Rs. 10 lac > 2 Crore

c) Medium - < 2 Crore > 5 Crore

(Manufacturing and Service Sector)


7/25

Theoretical Definition

It relates to nationalincome accounting .

This includes all manufacturing and

Processing activities , including

maintenance and repair services,

undertaken by both household and non-

household small scale manufacturing

units , which are registered under thefactories act , 1948.


8/25

Growth

The number of small-scale units , thevolume and range of productsmanufactured , the employment

provided and the value of exports bythese industries have grownsubstantially during the last decade.During 1997-98 , the production of SSIs

was estimated to be around Rs. 500000Crore at current prices , providingemployment to about 167 lakh persons.


9/25

Year No. of units

(in lakhs)

Output at

current

prices

Employment Export

Earnings

1991-1992 20.82 178699 129.80 13883

1992-1993 22.46 209300 134.06 17785

1993-1994 23.90 241648 139.40 25307

1994-1995 25.71 296886 146.56 29068

1995-1996 26.60 362656 152.61 36470

1996-1997 28.00 411858 160.00 39249

1997-1998 29.40 462641 167.20 43946

1998-1999 30.80 520650 171.50 48979

1999-2000 32.10 572887 178.50 53975

2000-2001 33.10 639024 185.60 59978

2001-2002 34.42 690316 192.23 N.A.

2002-2003 35.72 742021 199.65 N.A.


10/25

Significance

Smallis Beautiful said by E.F.Schumacher

Innovative and Productive

Individual Tastes , Fashions andPersonalized service

Symbols ofNational Identity

Happierin workAlways Winners of the Game

Dispersal Over Wide Areas


11/25

Facilities

Policy Iniciatives

(i) Smallindustry policies and initiatives

(ii) Economic Reforms and SSI policy

(iii) Infrastructural Facilities

(iv) Small Industry Clusters

(v) Industrial Growth Centres

(vi)M

arketing(vii) Pollution Control

(viii) Women Entrepreneurs


12/25

Institutional Support

There are many institutes by state and

central government set ups some ofthem are SIDBI(Small Industries

Development Bank of India),SIDO(Small

Industries development

organization),SISs(Product-cum-process

development

organization),RTCs(Regional testing

centres) etc


13/25

Credit Dispension

a) Apex Level Institutions

Smallindustries development bank ofindia

a) Banks

Commercial Banks

Regional Rural Banks

Co-operative Banks

a) State Level Institutions

State financialcorporations

State industrial development corporations


14/25

Problems

Sickness : Constituting an unhealthyenvironment for those working

Definition ofa sick unit is given by Sick

Industrialcompanies act, 1985. Accordingto the act The sickindustrialcompany is acompany which has at the end ofanyfinancial yearaccumulated losses equal toor excluding its entire net worth and hasalso suffered cash losses in that financialyearand in the financial yearimmediatelypreceding it.


15/25

Reasons of Sickness in SSIs

Production Related Reasons:

i. Faulty Product Mix

ii. Acknoledgement of Productioniii. Poor Quality of end product

iv. Delayed delivery schedule


16/25

Financial Reasons

i. Low Profitability

ii. Low fund generation

iii. Poorliquidity

iv. Step Cost structure

v. Lack of financial resources

vi. Lack ofcredit facility

vii. Faulty credit utilization

viii. Low share value


17/25

Market Reasons:

i. Poor marketing strategy

ii. Imbalance between production &

marketing

iii. Wild market shifts

iv. Lack ofawareness ofconsumerspreferences

v. Lack of specific market segmentation

vi. Poor distribution networkvii. Poor market performance


18/25

Remedials

Majority of sick units is retrievable in

order to tackle the problem of sickness

from the two angles the role of three

agencies assumes significance:

a. The government

b. Financialinstitutions

c. The industry associations


19/25

The Role of Government: If the number ofunits in the country has increased some 10

times since independence and ifwe havediversified industrial structure with widespread entrepreneurship the credit for thislargely belongs to government.

Second areawhere the government canbe helpfulis Vis--vis industriallicensing.The very existence oflicensing andmonopoly regulation legislation implies that

there is a stampede to to get in wheneverlicensing is liberalized foran industryoran economy as awhole


20/25

The Role Of Financial Institutions: The

following are the ways by which

sickness can be prevented by financialinstitutions :

a. Continuous monitoring of unit

b. Careful project appraisalc. Professionalinstitutional response to

units problems

d.Required systems at client units

e. Incentives to units to remain healthy


21/25

The Role Of Indutry Associations : Agood practical review by each industry

association ofinstalled and usablecapacity in the industry , capacityutilization , growth trends , problems etcshould be useful 4 the potential new

entrants 4 deciding whether 2 enter theindustry or not. The industry can havesome sort of 1st aid cell this couldconsist of professionals who could go tothe aid ofa unit that is beginning to fallwith the offer of managerialandtechnical help also.


22/25

Small Sector Industries Policy

Equity participation up to 24 percent byotherindustrial undertaking includingforeign companies.

Legislations to limit financialliability of newand non-active partners/enterpreneur tothe capitalinvested.

Hike in investment limit for tiny sector up

from 2lacs to 5lacs. Support from national equity fund for

projects upto 10 lacs.


23/25

Single windowloans to cover projects

up to 20lacs.

Relaxations ofcertain provisions of

labourlaws.

Easieraccess to institutional finance.

Women enterprises redefined.

Export development centre in SIDO.


24/25

Conclusion

SSI are the pride of ourNation . So

government should take all types of

measures for the development of the

small sectorindustry . The sickness ofSSI should be taken care of by the

government and can be removed as

much as possible.


25/25

Documents

Growth and Problems in Small Scale Industries/sushant