Small Scale Industries
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Transcript of Small Scale Industries
“ENGINES FOR GROWTH & EMPLOYMENT”
PRESENTED BY :-Prakash Sharma
PGDM/ MBA, 2nd Sem.IMM, New Delhi
DEFINITION OF SMALL INDUSTRIES
Year 1950
Size of Gross Investment in fixed assets in plant and
machinery, land, building etc. (not exceeding Rs. 5 lakhs and
strength of workforce (employment less than 50 workers / day
using power or less than 100 workers / day without use of
power).
“Eligibility criteria based on investment in Machinery and Equipment only.”
SSI – THE MOST VIBRANT & POTENTIAL GROWTH SEGMENT
A recent World Bank Report states: “There is now widespread recognition within India that vibrant SMEs are potentially a key engine of economic growth, job creation and greater economic prosperity”.
10th Plan Document of Govt. of India states: “Growth as planned will come from a sharp step-up in industrial and services growth, spurred by SMEs”.
SSI SECTOR – SIGNIFICANCE IN INDIAN CONTEXT
SSIs are generally less capital-intensive and more labour-intensive.
Are best suited for countries like India, China and most of the developing world having abundant supply of low-cost manpower and bountiful natural resources
Have provided seed bed for Enterprise Development in the country
Provide large scale employment, ensure equitable distribution of income and facilitate effective mobilization of resources of capital and skills, which would otherwise remain unutilized, particularly in rural and backward areas.
India has already established a niche in SME Development Strategy and providing excellent support in product development, R&D, financial instruments, Infra-structure, marketing and export development
Consequently, India is fast emerging as a global hub for labour-intensive manufacturing and knowledge-oriented businesses.
PERFORMANCE OF SSI SECTOR IN INDIA
Year No. of Registered SSI working Units
(Million)
No. of Unregistered SSI working
Units (Millions)
Total SSI working Units
(Millions)
Production (Rs. Billion)Employment
(Million Persons)At current
pricesAt constant
prices (1993-94 prices)
1990-1991 0.79 6.00 6.79 635.18 682.95 15.834
1991-1992 0.87 6.19 7.06 730.72 791.80 16.599
1992-1993 0.99 6.36 7.35 855.81 935.23 17.484
1993-1994 1.06 6.59 7.65 988.04 988.04 18.264
1994-1995 1.16 6.80 7.96 1222.10 1091.16 19.140
1995-1996 1.16 7.12 8.28 1482.90 1216.49 19.793
1996-1997 1.20 7.42 8.62 1684.13 1353.80 20.586
1997-1998 1.20 7.77 8.97 1891.78 1478.24 21.316
1998-1999 1.20 8.14 9.34 2129.01 1594.07 22.055
1999-2000 1.23 8.48 9.71 2342.55 1707.09 22.910
2000-2001 1.31 8.80 10.11 2612.89 1844.28 23.909
2001-2002 1.37 9.15 10.52 2822.70 1956.13 24.909
2002-2003 1.59 9.36 10.95 3119.93 2106.36 26.021
2003-2004 1.70 9.70 11.40 3514.27 2265.81 27.142
2004-2005 1.85 10.11 11.86 4182.63 2515.11 28.257
2005-2006 1.87 10.47 12.34 4762.01 2776.68 29.491Source : SIDO’s Half Century y DCSSI, Govt. of India, 2004, and Economic Survey, Govt. of India, 2006-2007, Feb. 2007
COMPARATIVE GROWTH RATES OF SSI SECTOR AND TOTAL INDUSTRIAL SECTORYear SSI Sector Growth Rate Total Industrial Sector
Growth Rate
1993-94 5.65 6.00
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
TRENDS OF LENDING BY BANKING SECTOR TO SSI
Rs. in Crores
As at end March Total advances by Banking Sector
Total Advances to SSI Sector
Proportion of SSI to Total Advances
1999 246203 42674 17.30
2000 292943 45788 15.63
2001 469153 56002 1.94
2002 536727 57199 10.66
2003 669534 60394 9.02
2004 764383 65855 8.62
2005* 972587 76114 7.83
Source : RBI Report on Trend and Progress of Banking in India
* Provisional
INDIAN SSI SECTOR – AT A GLANCESSI units : 12.3 million
Employment generated in SSIs : 29.5 million
Production : At current Princes Rs. 4762.01 billion
Exports : Rs. 1215 billion
SSIs account Industrial Production : 40%Exports : 35% (50% of
Direct & Indirect)GDP Share : 7%
Ownership pattern : Proprietorships : 78% Partnerships : 16%Corporate & Others : 6%
Industrial Units : 96%
Service Enterprises : 3%
Ancillary Units : 1%
Produces Diverse range of products (more than 8000- consumer items, capital goods and intermediates)
Contribution Of SSI In India
AIMA –Impact AssessmentAIMA –Impact AssessmentIMPEDIMENTS TO GROWTHIMPEDIMENTS TO GROWTH
Problems Faced by SSIs as Barriers to Growth
Market Related 70%Market Related 70%
Finance Related 25%
Government Policy Related 12.78%
Power Related/Infrastructure 14.0%
Technology 14.60%
FUTURE ASPECTS OF SSITo facilitate growth of this sector with changing economic
scenarioTo facilitate growth within the framework of social and
economic policy of the countryTo encourage technology modernizationTo promote entrepreneurship among technically qualified
personsTo improve product standardsTo create opportunities for in house R&DTo provide greater export thrust
OPPORTUNITIES FOR SSIHEALTH TECHNOLOGY INFORMATION TECHNOLOGY Personal Health Care Preventive Health Care Yoga & Naturopathy Herbal Therapies Environmental Health Food Supplements Food, Inspection and Testing
etc. Medical Waste Management Hospital Supplies & Staffing
Services
Media & Entertainment Contents, Animation, Games, Gaming.
Contd….FASHION TECHNOLOGY DESIGN TECHNOLOGY
Personal Embellishment (Face, Hair, Hands, Feet, Cosmetics, Perfumes etc.)
Glamour & LimelightCreative Fashion Accessories (purses, bags,
carryon, watches etc.)
• Interiors - (Furniture & Furnishing – homes, work places, community, hospitals, schools, shopping places, recreation, sports) • Exteriors - (Architectural)• Dies and tools• Watches • Jewellery• Hospital equipments
INDIA: ECONOMIC ENABLERS FOR SSI
10th largest economy in the world - 4th in terms of PPP Will overtake Japan in PPP terms by 2010, to be 3rd
largest in the world Large entrepreneurial base and diversified manufacturing
structure Large reservoir of skilled labour at internationally
competitive cost Vast pool of scientifically and technically qualified
manpower of 20m A large domestic market - 300 m + strong middle class
population having substantial purchasing power Largest democratic set - up A broad based and transparent legal framework including
arbitration
CONTD….. Vast network of bank branches, financial
institutions and well-organized capital and money markets A network of technical and management institutes
of highest International standards for development of
human resources India has a record of meeting its international
financial obligations as Per schedule and has never been a defaulter No communication barrier, as English is the most
prevalent business Language Strong and vibrant small scale sector that is keen
to establish Strategic alliances with their foreign counterparts
CONCLUSIONS It can be seen that the policy framework is consistent since
independence
The specific definition for medium enterprises augurs well for graduation of micro enterprises to small and small enterprises to medium enterprises
With more budgetary allocation to service sector, SSIs will be able to generate more employment opportunities to educated unemployed youth
The launching of Technology Mission will facilitate the Government to work out a long term action plan to ensure organized growth of this sector to face competition in liberalized services sector and knowledge based economic scenario