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Dr. B. Augustine Arockiaraj Dr. B. Augustine Arockiaraj SMALL SCALE INDUSTRIES MANAGEMENT Issues, Challenges and Opportunities India | UAE | Nigeria | Uzbekistan | Montenegro SMALL SCALE INDUSTRIES MANAGEMENT Issues, Challenges and Opportunities By: Dr. B. Augustine Arockiaraj Head and Assistant Professor Department of Business Administration School of Management Studies St. Joseph’s College (Autonomous), Tiruchirappalli, Tamil Nadu First Impression: 2019 Small Scale Industries Management: Issues, Challenges and Opportunities ISBN : 978-81-941253-9-6 Rs. 650/- ( $18 ) No part of the book may be printed, copied, stored, retrieved, duplicated and reproduced in any form without the written permission of the author/publisher. DISCLAIMER Information contained in this book has been published by Empyreal Publishing House and has been obtained by the author from sources believed to be reliable and are correct to the best of his knowledge. The author are solely responsible for the contents of the articles compiled in this book. Responsibility of authenticity of the work or the concepts / views presented by the author through this book shall lie with the author and the publisher has no role or claim or any responsibility in this regards. Errors, if any, are purely unintentional and readers are requested to communicate such error to the author to avoid discrepancies in future. Published by: Empyreal Publishing House DEDICATED To My Grand Parents Beloved Parents S. Balu Rethinam V. Mary Victoriya (Late) & My Wife & Children’s Preface I am happy to be able to contribute to the emerging concept of entrepreneurship. The need of the hour in our country is to develop entrepreneurship. Our future lies in entrepreneurship. The unique characteristics of our country are huge population, vast country, dependence on agriculture and its allied operations in rural areas, high unemployment and under-employment among educated youth, low levels of literacy, diversity in religion, culture, long history, rich resources and multiplicity of language. People of our country are intelligent and talented. However they need to be encouraged and supported by government polices and programmes. They should be provided with opportunities, given confidence and courage to be on their own and perform. It is here, that students of a young age should get motivated to be job provides rather than job seekers. India needs entrepreneurs of different types and in large numbers. There is a strong correlation between entrepreneurial growth and economic growth. Growth in entrepreneurship will accelerate economic growth. I have to share my research experience of being an entrepreneur and with young minds. I have made an attempt to put before you, the relevant concepts, benefits, problems, issues of the subject matter and present step approach to become an entrepreneur. Hope Small Scale Industries Management: Issues, Challenges and Opportunities book will motivate the students to become an entrepreneur one day Author V Acknowledgements I owe to express my special gratitude to my beloved Parents, my Wife, my children and relatives for their benign support at the time of my career, research work and publication of book. I express my sincere and whole hearted thank to the Jesuit Management, St. Joseph’s College, (Autonomous), Tiruchirappalli. Tamil Nadu, India for having moral support and encourage for my academic career. I record with great pleasure my love and gratitude to my beloved School teachers, College teachers and my research guide for their special contributions, suggestions, interactions and inspiring comments towards my book work. I owe a special thanks to all the faculty members of School of Management Studies, St.Joseph’s College(Autonomous), Tiruchirappalli, Tamil Nadu for their valuable and inspiring guidance which enable me to bring out this book successfully. I would like to express my heartfelt gratitude to a number of people without whose guidance, support and encouragement this book would not have been possible. Above all, I am indeed thankful to God Almighty for the successful completion of my work. Dr. B. Augustine Arockiaraj VI Table of Contents Preface V Acknowledgement VI Table of Contents VII Chapter – I : Introduction 1 – 12 Chapter – II : Concepts and Review of Literature 13 – 35 Chapter – III : Profile of the Study Area 36 – 48 Chapter – IV : Performance of SSI Units in India, Tamil Nadu and 49 – 84 Tiruchirappalli District Chapter – V : Analysis of Data and Interpretation 85 – 109 Chapter – VI : Summary and Conclusion 110 – 120 List of Tables 121 – 123 List of Figures 124 List of Abbreviations 125 VII Small Scale Industries Management: Issues, Challenges and Opportunities Chapter – I Introduction 1 Small Scale Industries Management: Issues, Challenges and Opportunities 1.1. INTRODUCTION “It is only when India has acquired the ability to design fabricate and erect its own plants without foreign assistance that it will have become a truly advanced and industrialized country”. - Jawaharlal Nehru “Let us make umbrellas and ploughshares; Let us make gunnies and nails of iron………. Let us make painting and needles Let us willing undertake all trades of world” - Mahakavi Bharathiyar The Micro, Small and Medium Enterprises (MSME) play a pivotal role in the economic and social development of the country, often acting as a nursery of entrepreneurship. The MSME sector contributes significantly to the country’s manufacturing output, employment and exports. In the Global Economy Micro, Small and Medium Enterprises (MSMEs) are a very heterogeneous group of business usually operating in the manufacturing, trade, agri-business, and service sectors. They include a wide variety of firms such as village handicraft makers, small machine shops, and computer software firms that possess a wide range of sophistication and skills. Some are dynamic, innovative, and growth-oriented while others are satisfied to remain small and perhaps family owned. MSMEs usually operate in the formal sector of the economy and employ mainly wage-earning workers. MSMEs are often classified by the number of their assets. The size classification varies within regions and advantage of across countries relative to the size of the economy and its endowments. The majority of the sector is its employment potential at low capital cost. The labour intensity of the MSME sector is much higher than that of large enterprises. MSMEs constitute more than 90% of total enterprises of the countries. In India MSMEs play an essential role in the overall industrial economy of the country. In recent years the MSME sector has consistently registered higher growth rate compared with the overall industrial sector. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to survive the recent economic downturn and recession. The MSME sector in India is highly heterogeneous in terms of the size of the enterprises, variety of products and services, and level of technology. The sector not only plays a critical role in providing employment opportunities at comparatively lower capital cost than large industries but also helps in industrialization of rural and backward areas, reducing regional imbalances and assuming more equitable distribution of national income and wealth. MSMEs complement large industries as ancillary units and contribute enormously to the socio-economic development of the country. MSME sector plays a major role in India’s present export performance. As per available statistics (4th Census of MSME Sector), this sector employs an estimated 597 lakh persons spread over 261 lakh enterprises. It is estimated that in terms of value, MSME sector accounts for about 45% of the manufacturing output and around 40% of the total export of the country. As a result, MSMEs are today exposed to greater opportunities for expansion and diversification across the sectors. The Indian market is growing rapidly and Indian industry making remarkable progress in various Industries like Manufacturing, Precision Engineering, Food Processing, Pharmaceuticals, Textile & Garments, Retail, Information Technology (IT), Agro and Service sectors. MSMEs are finding increasing opportunities to enhance their business activities in core sectors. The MSME sector has a major contribution to the economy to the economy of Tamil Nadu has 8.44 lakh registered MSMEs (as on 28.12.2013). This sector contributes about 10% to the GSDP, provides employment to about 58.83 lakh persons and accounts for a total investment of Rs.48,189 corers. MSNEs in Tamil Nadu produce over 8000 varieties of products including engineering products, electrical, electronic, chemicals, plastics, matches, textiles, hosiery and readymade garments. As per the 4th All India Census of MSMEs (2006-2007) Tamil Nadu Accounts for 14.95% of the total working enterprises in the country. 15.24% of these enterprises are micro enterprises, which is the highest in the country. 9.60% of them are 2 Small Scale Industries Management: Issues, Challenges and Opportunities small enterprises, which is the 3rd highest in the country. Further 9.21% are medium enterprises, which is the 2nd highest in the country. MSMEs in Tamil Nadu provides the largest number of employment in the country (15.32%). Government of India enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 to facilitate integrated development of Micro, Small and Medium Enterprises. It provides the first-ever legal framework for recognition of the concept of “enterprises” which comprises both manufacturing
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