Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
INTRODUCTION
Britain and the United States of America is significant. Many Nations, both
useful vehicle for growth, in the later for the creation of new employment
creating capacity of the small and medium enterprises in Japan has been
North they have been a valuable tool for development. In the first half of
the sixties the small and medium enterprises accounted for more than 50
and not dependent on imports or raw materials and hence, its net
power is lying idle. The per capita income is low. Capital is shy and scarce
1
and investment is lean. Production is traditional and the technique is
outdated. The out put is insufficient and the basic needs of the people
remain unfulfilled.3
direct, utilitarian and pragmatic. Such industries do not require huge capital
and hence suitable for a country like India. The small scale industries have
traditional form, which symbolize our heritage and past glory. These still
years, is one of the confusion and lacks clarity. Neither the Government,
nor the planners could provide a clear and graphic definition. Obviously
2
Small scale industries were not given such importance during the British
programes.5
time. Before Independence, the present small scale industry was meant to
denote the village and the urban cottage industry. This group included a
carpets, marble jigs, baskets, hand-loom cloth and the like. In fact, at that
time the term „cottage and Small scale industries‟ was used in juxtaposition
to develop them. The cottage and small scale industries found a prominent
Congress.
Prof. K.T. Sash was the first Indian economist, who realizing
which, he markets himself”6. He works in his home with his own tools and
3
materials and provides his own labour or at most the labour of such
members of his family, as are able to assist. These workers work mostly
by hand labour and personal skill, with little or no aid from modern power
industries. He was of the view that a small industry was the middle sector
and it would overlap both the cottage and the large industries.
The basic policy support of SSI sector had its roots in the
exemption, credit under priority sector lending from banks and financial
4
support, new management techniques, training and entrepreneurship
about 125 lakhs persons. The achievement of SSI sector in 1999 – 2000
were 32.25 lakhs SSI units providing production of Rs. 578299 crores,
persons.8
problems like inadequate credit flow from banks and financial institutions,
make this sector more growth oriented and enable it to withstand the
5
Liberalization and globalization are the order of the day. The
market forces will determine the systems and manner of production. The
Organization (WTO).
Singapore, Korea and Tiwan) has to some extent, promoted India to go for
during 10 years after implementation of the textile policy but the committee
limit or small and tiny enterprises. The committee has also made a
area such as small profit centers, protection versus promotion, level playing
6
ground, cluster based strategy of development and lead role of small scale
industry.10
1995 to revise the reservation list and the committee deleted 91 items from
the level of poverty. The committee pointed out that not even 3.3 percent
of the union budget is speared for SSI sector. While the government‟s
companies and the Indian corporate sector have back-door into the
SSI sector in a big way. The committee also pointed out that the SSI
The report pinpointed out the need for an active protectionist role by the
Government.11
7
great need to examine the financial practices of this sector, since it has its
very keen on the promotion and development of this capital sparing and
labour intensive sector. It has already been mentioned that a big role is
played both by the Public and Private Agencies for the promotion and
emphasized in the light of the fact that different problems are centered in
this sector and that this study aims at resolving the varied problems of this
sector.
problems of the small and tiny sectors. Further, the study may help the
conditions to resolve the problems of small and tiny sectors. The study
may also lead to further research in the field of small and tiny sectors.
follows:
8
The Small-scale industries find themselves at a loose end in
Small units suffer from inadequate work space, power, lighting and
Small scale industries in our country have suffered from the lack of
The shortage of finance affects the ability of the small units severely.
9
A serious problem which is hampering small scale sector is its
sickness. Many small units have fallen sick due to one problem or
Scale Industries are very poor and have little to offer as security for raising
committee on the Village and Small Scale Industries in its report has
10
stressed that the setting up of small scale industries will provide
Economic Growth under developed countries” pointed out that both the
capital out put ratio and wage capital ratio show an inverse relationship with
large unemployment.13
that the small enterprises with low-level of investment per worker tend to
Dr. Neelamegham, in his study says that the main reasons for
of products.15
observed that the growth in the number of units and the expansion of
capital intensity alone may not create the necessary impetus to the growth
further capacity utilization. Most of the units utilizing full capacity have
been either big export oriented industries or local need based activities.
11
The reason for this under utilization is mostly insufficient demand and
bottleneck. Scarce raw materials supplied through quotas are not sufficient
tangible securities.17
sales and realization of sale proceeds and this affected production of the
enterprise. This study also finds that the incentives provided by the state
and the centre are not with in the reach of all the entrepreneurs in rural
areas.
12
technology in certain selected areas. The committee recommends
contributing to the malaise. However these and other studies also refer to
the problem and importance of marketing function on the need for planning
industrialization and discussed the crises in Indian villages and the need for
13
local industrial growth, and agro-based industries, and mini-rural cement
degree of industrailisation.21
People T.S. has also shown that though the companies are
techniques are still not sophisticated. Small Scale Industry are also playing
stellar role in the economic development of the country but the problems in
practices of this sector, since it has its own limitations in adopting the
of the various problems faced by the industries in three states viz. Kerala,
Karnataka and Andhra Pradesh. This study revealed that the serious
problem faced by the units was the inadequate working capital. 69 percent
14
of units in Kerala, 44 Percent of units in Karnataka and 52 percent of units
in Andhra Pradesh are facing the working capital problem. The next
productivity of several units in all the states, especially in industry groups such
finance also hampered the productivity of the units and this leads to high
cost of production.23
capital.24
15
techniques. According to him, there are hundreds of items which can be
produced in rural and in small scale industrial units more economically than
in a large sector.26
community and economic back ground alone will determine the growth of
employment and capital. Majority of the small units are confronted with the
building markets.29
Sekhar A., in his World Bank Staff Working Paper No: 620,
employment are more equally distributed among the states during 1960
16
and 1971 by grouping cities by size and arrive at the conclusion that, for
industry has declined substantially between 1961 and 1971. However the
period.30
(i)
Some part of the assistance was provided to relatively larger
(ii)
Assistance was delivered to towns which were excluded from the
(iii)
Rural artisans did not receive adequate credit.31
rural areas and investment in basic services designed to realize the full
priority.33
17
Gholam Ali, in his study entitled, “Help makes small scale
industries viable” revealed that big and small industries have their share in
industrial sector.35
and request for speedier action and the DIC have no powers to hasten up
agencies and local bodies due to indifferent attitude and lack of empathetic
like term loan assistance, working capital assistance, capital subsidy, land
18
information. This study has tried to indicate certain deficiencies of various
schemes provided by DIC‟s but they have not evaluated the performance of
public and private sectors, including large scale and small scale enterprises
development and small scale industrial development are the obverse and
reverse of the same coin. The government and financial institutions have
(EDP). But they have still failed to attract the class of people for whom
(i) the entrepreneurs should be provided with more and more information
full assistance not only in preparing project reports but also in meeting
19
He also mentioned in his study that the growth rates have
been considerably lower for the intermediate goods and consumer non-
electronic appliances have forged a head reflecting the new high style
Such an uneven development would have been avoided, had the needs
entrepreneurship.40
with regard to small scale industries in India and the role played by the
20
Malcolm S. Adiseshiah, in his study entitled, “Foreign
sick according to the views of Reserve Bank of India, but some of the
further growth.46
21
Pon Murgan R., in his study entitled, “Industrial Estates in
identified the various factors which influences the growth of small scale
it is very much related with the growth of civilization, more specifically with
22
system of marketing has its own importance and suggested a strategy for
national level financial institutions. The study also discussed the role of
institutions and state agencies in extending credit to small scale units and
pin points their attitude of indifference in catering to the needs of the tiny
units. He was of the view that financial distributions have to attain their
lending policies in consonance with the need of the small sector in general
23
R. Natarajan, examines the trends in institutional financing to
SSI units in Andhra Pradesh for a period of one decade commencing from
1970.54
banks and state financial corporations to financing the small scale sector.
instead approaching the money lenders. The main findings of the seminar
is that besides providing finance, banks should also helps small scale
assistance provided by the State in the shape of direct credit order the
aids and credit from State Financial Corporation, State Bank of India and
and N.S. Gupta try to find out the role played by commercial banks in
24
financing small industries, the responsiveness of their enterprises to bank
finance in the state in particular and the county in general. They conclude
that commercial banks have not been able to induce small artisans and
Corporations in the order of the region and also evaluate its performance,
Corporation should pay greater attention forwards the financing of tiny units
the nations, he deals at length with their financial problems and the
25
G. Balakrishnan, in his work analyses the financial
predominate.63
reveals that lack of capital resources, mainly working capital, posses the
industries and their industries in backward areas and priority sectors, forms
source of long term and short term finance and the problems faced by the
26
units is raising such funds. He also enquires into policies procedures and
measures that would resolve the problems. The detailed objectives of the
(a) to examine the growth and working of small scale sector along with
27
(d) To investigate the reasons for sickness in the small and tiny sectors
(e) To bring out the need for proper support from the Government and
1.6. HYPOTHESES
out the relationship between the attitude towards the impact of financial
problems responsible for sickness of small scale industrial units and social
factors.
28
5. There is no relationship between the scientific system adopted by
for sickness.
29
12. There is no relationship between sufficient capital in small scale
1.7.1. SSI
undertaking with the investment not exceeding Rs. 100 lakhs in plant and
30
1.7.2. Tiny Industry
the unit.
1.7.3. Industry
1.7.4. Trade
as and when people need and want things that are produced by others.
1.7.5. Business
goods and services. These activities range small shops owned by one
1.7.6. Capital
31
1.7.7. Working Capital
financial institutions for the purchase of machineries and equipment for the
initial period.
32
1.8. METHODLOGY
data are used to analyze the growth, performance of exports and the like of
New Delhi.
The primary data were used mainly for evaluating the financial problems of
33
entrepreneurs. A rough draft of the interview schedule was prepared and
was circulated among fellow researchers for critical evaluation. The draft
was then revised in the light of their comments. The revised interview
entrepreneurs for a pre test. Their suggestions were incorporated and the
For developing sample design, the researcher collected the list of small
with the District Industries Centers, 250 samples were selected by using
and Thiruvananthapuram.
34
1.13. FIELD WORKS AND COLLECTION OF DATA
The researcher himself carried out the field work for the
study. The work was conducted during the period from June 2005 to
March 2008. The researcher used interview schedule for the collection of
data from Small scale industries. The filled up schedules were checked
and edited. The omissions and commissions in the schedule were rectified
on the spot.
schedules were edited properly to make them ready for coding. The
master table was prepared to incorporate all the information available in the
the help of master table. The classification tables were prepared with the
help of master table and the classification tables were prepared with the
compound Growth rate has been applied for each industry. To test the
35
consistency of growth performance, the Coefficient of Variation for each
problems and the problem faced by the small scale entrepreneurs, the
data. The sample units were selected from the population having
functioning for a period less than 5 years were not selected for the study.
selected industries.
36
1.17. SCHEME OF REPORT
of the study, period of the study, field work and collection of data, data
the report.
measures the impact of financial problems and causes for poor financial
performance.
ranks the factors responsible for the impact of poor financial performance.
37
The sixth chapter analyses the impact of financial problems of
small scale industries and the causes for their sickness. It also focuses on
the attitude of the entrepreneurs and the factors responsible for industrial
sickness.
and suggestions based on the study and it also includes conclusion of the
study.
38
REFERENCES
9. Ibid. P. 33
10. Ibid. P. 35
11. Ibid. P. 36
39
13. Jagen. Wu. 1970, Capital Intensity and Economic Growth under
Developed Countries, Ising Hua journal of Chinnes studies, New
Series III – IV , pp. 219-245.
14. UNIDO SSI in Latin America, Publication No: 111337 (1970) P. 56.
40
of Industrial estates in India, Seminar, Industrial development Bank
of India.
41
34. Gholam Ali. 1999, Help makes small scale Industries viable, Yojana
Oct. 15 ,Vol. 31, No. 12, pp. 12-17.
41. Ramakrishna .K.T. 2001, Finance for small scale industry in India,
Yojana, May 15, Vol. 35, No. 8, pp. 24-25.
42
46. Mahesh Prasad. 2002, Industrial Development, Yojana, Jan 1-15,
Vol. 41, No. 1, pp. 56-58.
50. Suresh Chandran Jain. 2003, Institutional Financial for small Scale
industries in Utter Pradesh” Unpublished Ph.D thesis Agra
University.
53. Nikhil Bhushan Dey. 2004, “Small Scale industries in cachar District
in Andhra Pradesh”. Unpublished Ph.D thesis, Kakatiya University.
43
55. R.C. Reddy. 2005, “Financing of Small Scale Industries A case
study of Visakhapatanam District in Andhra Pradesh”, Himalaya
publication.
57. K.T. Ramakrishna. 2005, Financing for small scale industry in India
Bombay: Asian publication.
58. Inderjit Sing and N.S. Gupta. 2005, Financing of small industry.
Dew Delhi: S. Chend and Co. Ltd.
62. S.K. Basu. 2007, Place and problems of small scale industries.
Calcutta: Mukerjee and Co. Pvt. Ltd.
44
66. B. Narayanas 2008. „Financing of industries in Bihar - An Industrial
Development Bank for Bihar. Unpublished Ph.D Bihar University.
45