11 Arihant Surana - Small Scale Industries and Their Role in.pptx (2) (1)

7/30/2019 11 Arihant Surana - Small Scale Industries and Their Role in.pptx (2) (1)

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Small Scale Industries And Their Big Role

.

Arya

Institute of Engg.&Technology

Kukas, Jaipur

Submitted by: Submitted To :

Renuka Chaudhary Dr. Manish Jain

MBA II Sem Head of MBA Department

Batch 2011-13

RTU Roll no.

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


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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.


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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 ofcompletion 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.


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TABLE OF CONTENTS

S.No. Page No.

1. Acknowledgement 4

2. Interim Report 5

3. Introduction of the Industry 6

3. Objective 8

4. Literature Review 10

5. Questionnaire

12

6. Methodology 17

7. Reference 21


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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 inexports, 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

any industrial unit to be regarded as Small Scale Industrial unit the following

condition is to be satisfied: -


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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 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.


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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 )


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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


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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 2001-

02

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 small-

scale sector the Government has adopted a policy of reservation for allowing

certain products to be exclusively manufactured by the small-scale sector.


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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


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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 conditionis 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


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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


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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 SSI Sector Growth Rate Total Industrial Sector

Growth Rate

1994-95 10.44 9.10

1995-96 11.49 13.00

1996-97 1.29 6.10

1997-98 9.19 6.70

1998-99 7.84 4.10

1999-2000 7.09 6.70

2000-01 8.04 5.00

2001-02 6.06 2.70

2002-03 7.68 5.70

2003-04 8.06 6.09

2004-05 9.96 8.04

Source: SIDO Half Century by DCSSI, Govt. of India 2004 and

Annual Report of the Ministry of SSI 2005-06


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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 beflourishing 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


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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.

INDIAN SME SECTOR AT A GLANCEINDIAN SME SECTOR AT A GLANCE

2005-062005-06

SSI units :SSI units :12.3 million12.3 million

Employment generated in SSIs :Employment generated in SSIs :29.5 million29.5 million

Production : At current PricesProduction : At current PricesRs.4762.01 billionRs.4762.01 billion

Exports :Exports :Rs. 1215 billionRs. 1215 billion

SSI account:SSI account:Industrial Production:Industrial Production:

40%40%

Exports:Exports:

35%35%

(50% of(50% of

Direct & Indirect)Direct & Indirect)

GDP Share:GDP Share:7%7%

Ownership pattern :Ownership pattern :


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Proprietorships :Proprietorships :78%78%

Partnerships :Partnerships :16%16%

Corporate & Others :Corporate & Others :6%6% Industrial Units :Industrial Units :

96%96% Service Enterprises :Service Enterprises :

3%3% Ancillary Units :Ancillary Units :

1%1% Produces Diverse range of products (more than 8000-Produces Diverse range of products (more than 8000-

consumer items, capital goods and intermediates)consumer items, capital goods 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


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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 willincrease dispersion of these industries.

PERFORMANCE OF MICRO & SMALL ENTERPRISES

Year

Number of Enterprises

(Lakh Nos.) Empl.

(Lakh

Person

)

Productio

n (Rs.

Crs.)

Growt

hShare In

Register

ed

Unregister

edTotal

at

Current

prices

Rate

(%)GDP (%)

2002-

200315.91 93.58

109.

49

263.4

9314850 8.68 5.92

2003-

200416.97 96.98

113.

95

275.3

0364547 9.64 5.79


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2004-

200517.53 101.06

118.

59

287.5

5429796 10.88 5.84

2005-

200618.71 104.71

123.

42

299.8

5497842 12.32 5.83

2006-

200720.98 107.46

128.

44

312.5

2587196 12.65 5.94

2007-

2008

(Project

ed)

24.68 108.99133.

67

322.2

8695126 13.00 NA

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.

Problems Faced by SSIs as Barriers toProblems Faced by SSIs as Barriers toGrowthGrowth

Market RelatedMarket Related 70%70%


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Finance RelatedFinance Related 25%25%

Government Policy RelatedGovernment Policy Related 12.78%12.78%

Power Related/InfrastructurePower Related/Infrastructure 14.0%14.0%

TechnologyTechnology 14.60%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.


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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 beenlaunched 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 (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:


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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,


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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


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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 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.


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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 small-

scale sector.


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Year Target Achievement

1991-92 3.0 3.1

1992-93 5.0 5.6

1993-94 7.0 7.1

1994-95 9.1 10.1

1995-96 9.1 11.4

1996-97 9.1 11.3

1997-98 * 8.43

1998-99 * 7.7

1999-00 * 8.16

2000-01 (P) * 8.90

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 Non-

metallic 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,
http://www.dcmsme.gov.in/ssiindia/performance.htm#Performance


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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 of2.4 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 Non-

metallic 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


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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

(lakh nos.)

Achievement

(lakh nos.)

Growth rate

1992-93 128.0 134.06 3.28

1993-94 133.0 139.38 3.28

1994-95 138.6 146.56 5.15

1995-96 144.4 152.61 4.13

1996-97 150.5 160.00 4.88

1997-98 165 167.20 4.50

1998-99 170.1 171.58 2.61


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1999-00 175.4 177.3 3.33

P-Provisional

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-scaleindustrial 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.
http://www.dcmsme.gov.in/ssiindia/performance.htm#Performance


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Year Exports

(Rs. Crores)

(at current prices)

1994-95 29,068

(14.86)

1995-96 36,470

(25.50)

1996-97 39,249

(7.61)

1997-98 43946

(11.97)

1998-99 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 Destinations

The Export Destinations of SSI products have been identified for 16 productgroups. More..

Opportunity
http://www.dcmsme.gov.in/ssiindia/exportmkt.htmhttp://www.dcmsme.gov.in/ssiindia/exportdest.htmhttp://www.dcmsme.gov.in/ssiindia/performance.htm#Performancehttp://www.dcmsme.gov.in/ssiindia/exportdest.htmhttp://www.dcmsme.gov.in/ssiindia/exportmkt.htm


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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


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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 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 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,


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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 3.57 Million

Employment 19.96 Million

Share in Industrial Value Added 39%

Share in Total Exports

DirectOverall

45%34%

Total Number of Items Produced Over 8000

Number of Reserved Items 675

(Figures for 2002-2003)

TRENDS IN GROWTH SSI & INDUSTRIAL SECTOR (in %)

Year SSI Sector Industrial Sector

1991-92 3.1 0.6
http://www.dcmsme.gov.in/ssiindia/statistics/economic.htm#top


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1992-93 5.6 2.3

1993-94 7.1 6.0

1994-95 10.1 9.4

1995-96 11.4 12.1

1996-97 11.3 7.1

1997-98 8.43 5.8

1998-99 7.7 4.0

1999-2000 8.16 6.5

TRENDS IN GROWTH OF EMPLOYMENT IN

SSI & INDUSTRIAL SECTOR (in %)

PeriodGDP Growth per

annum

Increase in jobs per annum

Organised Sector

including

Government

SSI

sector

1980-

19905.7% 1.59% 6.7%

1991-

19975.7% 0.86% 3.5%

1980 - 1997

Organised Sector 53.66 lakh new jobs

SSI Sector 80.00 lakh new jobs
http://www.dcmsme.gov.in/ssiindia/statistics/economic.htm#top

11 Arihant Surana - Small Scale Industries and Their Role in.pptx (2) (1)

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