Expert Committee Report UGC Sponsored Minor Research Project

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1 Expert Committee Report UGC Sponsored Minor Research Project Name of Investigator Address : Dr. Mrs. Chougule Harsha Atul : Ganpatrao Arwade College of Commerce, North Shivaji Nagar, Sangli (Maharashtra) UGC File No. : /12 (WRO) dated 4/2/2013 Tenure of Project from 4/2/2013 to3/2/2015 Final Report submitted to UGC, New Delhi February, The Executive summary of this minor research work is posted on college website The minor research work done by Dr. Mrs. Chougule H. A. is satisfactory. In this research project there are six chapters. The investigator studied the growth of small scale industries in terms of numbers in Sangli Miraj M.I.D.C., the contribution of small scale industries in the development of Sangli district, the problems faced by small scale industries in Sangli district, the role of District Industrial Center, Sangli in the development of small scale industries in the district and various measures taken by government to promote small scale industries. For the present work primary as well as secondary data has been used by investigator. The present research work is based on the survey method. Primary data was collected from fifty small scale industrialists, the specialists and responsible officers in District Industrial Offices, Sangli M. I. D. C. Offices in order to focus on the relevant aspects of small scale industries. This Minor Research Project is very satisfactory, we are recommending to UGC authorities to accept expert committee report and executive summary. Thanking You, Yours faithfully Dr. B. S. Patil Dr. Mrs. V. P. Jagadale N. D. Patil Night College, P. V. P. College, Sangli Kavathe Mahankal

2 EXECUTIVE SUMMARY OF THE UGC SPONSORED MINOR RESEARCH PROJECT We are submitting herewith report of evaluation of final report prepared by Dr. Mrs. Chougule H.A., G. A. College of Commerce, Sangli. This research project is sponsored by UGC as minor research project as per the letter No /12(WRO) dated 4/2/2013. The title of the minor research project is A Study of Small Scale Industries as the Mechanism of Growth of Economy with special reference to Sangli- Miraj MIDC in Sangli District. The period of the project was from 2013 to The executive summary of the evaluated final report of work done on this minor project is placed on the college website as per the UGC guidelines. This minor research work done by Dr. Mrs. Chougule H.A. is satisfactory. In India, the small scale industries hold a vital role in as they make significant contribution to the national economy. Thus the development of small scale industries has significant priority. Keeping this in view, the Indian policy makers has given high priority to small scale industries under different five year plans as its potentiality in employment generation, export promotion and regional dispersal of industries and so on. Objectives of the Study Looking to the above facts, the present study is undertaken with the following specific objectives. 1. To study the growth of small scale industries in terms of numbers in Sangli Miraj M.I.D.C. 2. To ascertain the contribution of small scale industries in the development of Sangli district. 3. To analyze the problems faced by small scale industries in respect of production, marketing, personnel and finance in Sangli district. 4. To understand the role of District Industrial Center, Sangli in the development of small scale industries in the district. 5. To enumerate various measures taken by government to promote small scale industries. Hypotheses of the Study The present study is started with certain hypotheses. In the light of objectives of the study and variables selected, the following hypotheses have been formulated. Null Hypotheses H0 There is no significant growth of Small Scale Industries in Sangli, Miraj M.I.D.C. H0 Small Scale Industrialists do not face any problems in Sangli, Miraj M.I.D.C. Working Hypotheses H1 There is a significant growth of Small Scale Industries in Sangli, Miraj M.I.D.C.

3 H1 There are some problems before the Small Scale Industrialists in Sangli, Miraj M.I.D.C. Research Methodology The present research work is based on the survey method. The data related to the year ending was considered for the study. This study focuses on the problems of small scale entrepreneurs in Sangli-Miraj MIDC in Sangli District. In Sangli Miraj M. I. D. C. in Sangli district there are 788 registered small scale industries at the end of Out of that 50 industries will be selected randomly. Thus, the sample for small scale entrepreneurs comprised of 50 small scale entrepreneurs for the present study. The present study is based upon the primary data collected by using survey method. To collect data one questionnaire for small scale industrialist was prepared circulated and collected. To collect data from District Industrial Center another questionnaire was prepared. The researcher personally discussed with the specialists and responsible officers in District Industrial Offices, Sangli M. I. D. C. Offices in order to focus on the relevant aspects of small scale industries.. The secondary data was collected through various Government Authorities such as Ministry of Agriculture, Ministry of Maharashtra State, District statistical office, District Industries Centre etc. Also various books and journals on agricultural marketing, agricultural export marketing, marketing of onion was referred. Conclusions The research study is divided into six chapters. These are as follows: 1. Introduction 2. Review of related literature 3. Research Methodology 4. Growth of small scale industries in India 5. Growth of small scale industries in Sangli, Miraj M. I. D. C. 6. Conclusions and Suggestions 1. In India out of total working units in registered sector majority (67.10 %) were manufacturing enterprises followed by service enterprises (16.78 %) and repairing and maintenance (16.13 %). 2. In the case of unregistered sector also manufacturing sector leads with majority units (52.59 %), followed by service sector (41.22 %) and repairing and maintenance sector (6.19 %). 3. Urban areas with 8.57 lakh of working enterprises accounted for per cent of the total working enterprises whereas rural area located 7.07 lakh working enterprises accounted for per cent of the working enterprises in registered MSME sector per cent of the enterprises

4 in the unregistered MSME sector were located in urban area and per cent of the enterprises were situated in rural area. It means that rural area constitutes major portion of MSME sector in unregistered sector. 4. India s registered MSME/SSI sector found lakh (96.81 %) enterprises to be operating perennially whereas share of enterprises running seasonal and casual were 0.46 lakh (2.97 %) and 0.03 lakh (0.22 %) respectively. 5. Out of the total working enterprises, proportion of micro, small enterprises were % and 0.17 % respectively in unregistered Indian MSME/SSI sector. 6. In terms of number of enterprises % units reported to be women enterprises where % were found to be owned by male in registered sector. 7. It was observed that in the case of unregistered sector also number of enterprises owned by male were dominant that that of women. 8. Out of the total working enterprises in registered sector (94.94 %) were micro, followed by small enterprises 4.89 % and medium enterprises 0.17 % respectively. 9. Out of the total working enterprises in unregistered sector, proportion of micro, small enterprises were % and 0.17 % respectively. 10. There was dominance of proprietary enterprises in registered MSME sector % of the enterprises in registered sector were proprietary enterprises, 4.01 % of the enterprises were run by partnership concerns and 2.78 % of the enterprises were run by private companies. About 0.54 of the enterprises were run by Public Limited Company % were owned by cooperatives and the rest 2.30 % were operated by others % of the unregistered MSMEs were proprietary concerns,1.33 % were partnership concerns and 0.03 % were private companies. There was very little activity in co-operative setup (0.12% ) and the rest 4.39 % were operated by other. 12.Ownership of working enterprises by religion of the owner indicates that of the enterprises owned by Hindus, 9.11% of the enterprises were owned by Muslims, Christians owned 4.12 % of the enterprises followed by Sikh (3.31%), 13. The ten leading states, in terms of enterprises are Uttar Pradesh (44.03 lakh), West Bengal (36.64 lakh), Tamil Nadu (33.13 lakh), Maharashtra (30.63 lakh), Andhra Pradesh (25.96 lakh), Kerala (22.13 lakh), Gujarat (21.78 lakh), Karnataka (20.19 lakh), Madhya Pradesh (19.33 lakh), Rajasthan(16.64 lakh). 14. The ten leading states, in terms of employment, are Uttar Pradesh (92.36 lakh), West Bengal (85.78 lakh), Tamil Nadu (80.98 lakh), Andhra Pradesh (70.69 lakh), Maharashtra (70.04 lakh), Kerala (49.62 lakh), Gujarat (47.73 lakh), Karnataka (46.72 lakh), Madhya Pradesh (33.66 lakh) and Odisha (33.24 lakh). 15. The number of plots developed and allotted was more in Sangli-Miraj industrial as compared to other industrial areas in Sangli district.

5 16. There are total six co-operative industrial estates in Sangli district. These co-operative societies are playing important role in industrialization of Sangli district. 17. Micro sector with 4035 working enterprises accounted for 79.13% of working enterprises of MSME sector in Sangli district. The micro segment, thus dominated MSME sector in terms of number of working enterprises. Small sector with 4 working enterprises accounted for 20.79% and 0.08% working enterprises in Sangli MSME sector respectively. 18. The classification of working enterprises by type of activity indicated that per cent enterprises were engaged in manufacturing activity, 6.96 per cent of enterprises were engaged in services. Again micro sector leads with 3769 units in manufacturing followed by small sector industries with 972 units. 19. MSME sector in Sangli district has provided employment to persons. Micro sector had a share of 61.95% of the total employment followed by small sector (37.48%) and medium sector (0.57%) respectively. 20. Manufacturing enterprises contributed the most to the total employment by accounting for 94.75% of the total employment in the sector followed by services (5.25%). 21. Small sector with a share of 73.67% of the total fixed investment ranked the first in total investment in MSME sector in Sangli district followed by Micro (23.78%) sector, Medium sector contributes only a little part (2.55 %) of the investment in plant and machinery. 22. Manufacturing enterprises accounted for a very high share of investment (93.44%) followed by services sector (6.56%) in Sangli district. 23. Small sector with production capacity dominated MSME sector of Sangli district followed by Micro sector (34.45 %) and medium sector (1.00%). 24. Manufacturing enterprises have higher production capacity (95.39%) than service sector in Sangli district. 25. Up to there were total 1074 registered units in Sangli SSI/MSME sector which have created employment of 7518 with investment of Rs lakh in plant and machinery. In total units registered with Sangli DIC was a hike. The fixed investment in plant and machinery was also higher with Rs /- lakhs generating employment to 1300 people. In the number was units registered with DIC were less as compared to other year. This may be due to recessionary conditions during that period. In the year total units registered were 439 with investment in fixed assets of Rs lakhs and created employment opportunities to 4657 more people. 26. The total turnover of SSI/ MSME of Sangli district for was of Rs.3200/- crores and the total export from SSI/ MSME of Sangli district for was of Rs.289/- crores. The major exportable items of Sangli SSI sector are turmeric, raisins, grape wine, grapes, few engineering components, readymade garments etc.

6 27. The average size of the family of the sample respondents i.e. small scale industrialists was about eight members per family. The proportion of adult female in the total family size was about 40 per cent. 28. It is seen that, the percentage of illiterate respondents and the respondents having education upto primary and secondary level was nil. It was further observed that among the small scale entrepreneurs, the respondents having education up to higher secondary was just 5 per cent. the respondents having education up to diploma and graduation level were more. (30.00 % and 55 % respectively). The respondents educated up to postgraduate level were less than the respondents having education up to diploma and graduate level. Thus, the small scale industrialists were educated and some technical knowledge was taken by them to manage the industry. 29. A very few (22.5 %) respondents were having an experience of less than ten years of SSI/MSME management. 35 % of the respondents were having an experience of more than 20 years. Majority of the industrialists were having experience of 10 to 20 years in SSI/MSME secator. 30. Small sector with 38 working enterprises accounted for 70% of working enterprises of MSME sector in sample units of Sangli Miraj MIDC. The small segment, thus dominated MSME sector in terms of number of working enterprises. Micro sector with 12 working enterprises accounted for 30% of working enterprises. 31. Majority (92.50 per cent) of the enterprises were engaged in manufacturing activity, 7.5 per cent of enterprises were engaged in services in sample units of Sangli-Miraj MIDC. 32. The sample MSME sector in Sangli-Miraj MIDC district has provided employment to 429 persons. Small sector had a share of % of the total employment followed by micro sector (30.76%). 33. The sample manufacturing enterprises in Sangli-Miraj MIDC contributed the most to the total employment by accounting for 92.00% of the total employment in the sector followed by services (8.00%). 34. Small sector with a share of % of the total fixed investment ranked the first in total investment in sample MSME sector in Sangli district followed by Micro (19.54%) sector. 35. Manufacturing enterprises accounted for a very high share of investment (94.00%) followed by services sector (6.00%) in sample Sangli-Miraj MIDC sector. 36. Small sector with 1748 production capacity dominated the sample MSME sector of Sangli- Miraj MIDC followed by Micro sector (24.00 %). 37. Manufacturing enterprises have higher production capacity (95.00 %) than service sector in sample units. 38. All the small scale industrialists reported that shortage of power and high cost of electricity is the major problem faced by small scale industrialists. The electricity charges in Maharashtra are more than some of other neighbouring states like Karnataka. Lack of demand is one of the other constraints reported by majority of respondents (90.00%). Other constraints reported by small

7 scale industrialists were shortage of working capital (80.00 %), non- availability of skilled labour (62.50%), problem of marketing the products (52.50%), poor information about government schemes (50.00%), problem of raw material (20.00%), old technology for production (15.00%). 39. In Sangli-Miraj MIDC area skilled, competent, trained labour is available. But industrialists expect that this labour should work for them at cheaper rates, they are not tending towards paying higher charges to trained and skilled workers. It was observed that majority of small scale industrialists do not offer job security to their employees. So labour turnover was more in such industries. 40. There were several middleman whose commission charges increases the cost of raw material. Small entrepreneurs do not have a capacity to stock raw material, so they cannot keep their production steady. 41. Small Scale Industries in Sangli Miraj MIDC are not getting enough financial assistance from commercial banks and other financial institutions. So, these industries are not modernizing themselves and are not increasing their production. 42. The units are facing problems of high cost of production, more taxes etc. Further, these units have to compete with large industries in some cases. Suggestions 1. In order to make small scale sector more competitive suitable training should be given to employees. 2. Efforts have to be done to change the attitude of employers regarding salary, wages and other benefits of employees. 3. There is a need to make the small scale entrepreneurs aware about different incentives offered by government to small scale industries. 4. The different incentives offered by government to small scale industries should be circulated in local language. 5. Common marketing centres should be developed with modern infrastructural facilities. 6. There is major problem of power-cuts. Some measures should be taken by government to improve the power situation. 7. The electricity charges in Maharashtra are high as compared to other states. So these charges should be lowered. 8. Large scale industries should be established in the underdeveloped areas of Sangli district. Government should provide special incentives for the establishment of Large Scale Industries in such areas. 9. Small scale industries are in need of finance facilities. Hence, necessary arrangements should be made for timely and adequate finance.

8 10. In order to increase efficiency and productivity of working of small scale industries technology should be up-graded. 11. Infrastructural facilities such as highway connectivity roads, airport should be developed. 12. Exhibitions of industrial machinery, products should be arranged periodically. 13. Taking into account the growing importance of service sector efforts should be taken to increase service sector industries. In Sangli Miraj MIDC SSIs have played an important role in economic development Though these industries are facing some problems, it has bright future. There is imbalanced growth of Small Scale industries in Sangli district. Government should announce special grants, schemes, subsidies to establish industries in the remote areas. Along with this, concession in sales tax, concession in electricity charges, interest subsidies should be allowed to those industrialists who are willing to establish their industrial units in these undeveloped talukas. This Minor Research Project is very satisfactory, we are recommending to UGC authorities to accept expert committee report and executive summary. Thanking You, Yours faithfully Dr. B. S. Patil Dr. Mrs. V. P. Jagadale N. D. Patil Night College, P. V. P. College, Sangli Kavathe Mahankal