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CHAPTER VIII SUMMARY AND CONCLUSIONS

The present study has provided a comprehensive geographical analysis of industrial development in district. The study has also aimed at analyzing the role of MIDC in the industrial development of the district. Industrial Policies are directed to exploit idle resources for productive purposes and contribute to the national income. The industrial policies affect industrial development in specified direction. Availability of infrastructure is also influencing factor of industrial development. M.I.D.C has a substantial share in the industrial development of . It accounts for nearly 50% of the total industrial units in Thane district. Working population engaged in M.LD.C. is more than 60% of the total factory employment in Thane district. It indicates the significant growth in number of industrial units and employment in Thane district due to the establishment of M.I.D.C. Most of the industrial units and employment are concentrated in Thane taluka but the important change is that, industries are established in all the talukas of Thane district. Industries are also coming up in rural as well as tribal areas. Growth centers are developed in Murbad, Talasari, Dahanu, lawhar and Wada talukas, which are less developed regions of Thane district. All the observations and findings drawn from the study are summarized here. Certain suggestions helpful to the industrial units are also made. The present study hypothesizes that (I) Industrial development in Thane district

1S the result of availability of infrastructural facilities, industrial policies and (II) MIDC has played an important role in the industrial development of Thane district. The analyses and interpretations based on different types of data collected validate the hypotheses. 8.1 Findings Following are the important findings and conclusions of the study. 1) Location of Thane district and its proximity to is an important factor in the establishment of industries. Suburban local trains and highways connect Dahanu, Palghar, Vasai, Thane, , Shahapur talukas of the district to Mumbai, which is the commercial capital of India. It may be stated that motor 276

able roads are available even in the most backward areas like Mokhada. There are more than 75-degree colleges of Arts, Science and Commerce, Engineering, Physical Education Training and Management in the district. Number of primary and secondary schools are providing educational facilities to deserving students. Commercially important cities like Thane. Kalyan, and are well served by many branches of different banks, financial institutes etc. Communication facilities are well developed. The Government has provided more than six lakh telephone connections to consumers in the district. Most of the villages in the district are electrified. 2) The industrial location policy (ILP) has helped in the industrial growth of the district. Due to the shifting of industriC!s from Mumbai to Thane, manufacturing intensity of Thane taluka is the highest in the entire district. Thane today is the largest centre of industrial employment. The factories have taken the advantage of the proximity to Greater Mumbai, where there have been restrictions on the establishment of new factories since 1962. The industrial policy resolution adapted by Government of India in 1956 was the first comprehensive industrial policy that defined the Government's basic approach towards the country's , . industrial development. has been the first state to adopt complementary policies for promoting rapid industrialization and encouraging development of backward areas. A study ofIndustrial Location Policy indicates that all round efforts by the state for the industrial dispersal have succeeded in directing flow of investment to growth centers. Another study by Bombay Chamber of Commerce and Industry also notes that the industrial base generates adequate employment in the growth center. The recommendations of the Regional Plan for BMR were sanctioned in 1973. Decentralization of industries from Mumbai, the major policy objective that was implemented, dispersed the industries from Mumbai Metropolitan region. 3) The distribution of industries is uneven in the study area. There is a distinct regional imbalance in industrial development. Industrial areas of Thane in -MMR are well developed but tribal talukas are developing slowly. The concentration of secondary activity - manufacturing is studied by calculating manufacturing intensity in all the talukas of Thane district and it is highest in Thane taluka followed by Palghar, Kalyan and Ulhasnagar talukas which are part ofMMR. Manufacturing Intensity is less in tribal talukas. 277

4) Industrialization and urbanization are going hand in hand. Hence, as number of industries is increasing urbanization is increasing in all the talukas of Thane district. Because of this, infrastructural facilities are developing and there is change in land use pattern and conversion of agricultural land to non­ agricultural uses. Proportion of conversion of agricultural land to non­ agricultural land highly correlates with index of urbanization. Coefficient of correlation is 0.6, which indicates that change in land use and urban growth are closely related with each other. Industrial growth in Thane district was remarkable from 1961 to 1991 but from 1996 industrial growth has slowed down as indicated by number of industrial units and employment. 5) After the establishment of MJDC, industrial growth in the district has accelerated. Units in MJDC area account for 50 per cent of the total industries and 60 per cent of the factory employment. MIDC was established in 1962. Number of industrial units in Thane district was 227 in 1962 but in 1971 the number reached up to 7339. The industrial growth in Wagle, TTC, , Arnbernath and 8{ldalapur MIDC region was very fast as indicated by the growth in industrial units, employment, capital investment and possession of land. Wagle Estate in Thane was established in 1962 while other areas of MIDC were established in 1964. For comparison of all the MIDC areas in Thane district period from 1967 onwards was chosen. MIDC industrial areas were established in different talukas and growth centers were developed. The establishment of MIDC areas and industrial growth are influenced by transport, communication systems, educational facilities and accessibility to international trade centre- Mumbai. 6) Number of post offices, telephone exchanges and telephone connections has increased. Branches of Nationalized and Scheduled banks have increased. Development of electronic facilities helped faster communication. Sophistication in trade and commerce is indicated by e-commerce, e-marketing etc. 7) Occupational structure has changed due to industrial and urban development in Thane district. In rural areas workers are mainly engaged in primary activities but they are also engaged in tertiary activities or in service activities. Initially four per cent workers were engaged in service sector but now the proportion has increased up to eight per cent. Along the National and State highways, small 278

workshops, repairing units, tea stalls have been established. In this way service sector is increasing in rural areas of the district. The proportion of construction workers is also increasing due to ongoing construction activities in urban areas. With the industrial development environmental pollution increases, this is responsible for decline in fishing and horticultural activities. Some workers involved in these activities are compelled to change their occupation. This is observed at the border of Palghar and Dahanu talukas where large industrial zone of MIDC is established. Hundreds of fishermen have changed . he occupation because of water pollution and low catch of fish. Due to soil

pollution fruit gardening is done away from industrial areas. _ -~ _ - -' ~~ 8) Urban popuJation in Thane district has increased. It is 14.3 % ofMaharashtra' ~ urban population, which is second in the state. Urban popula!!9n--in tribal '- ~ , - - . -.. - talukas is increasing hence Urbanization Index is also increasing. Urbanization Index of Thane district was 30.21 % in 1961 but in 2001 it is 64.64 %. Literacy rate in the district was 69.54 % in 1991 while in 2001 it was 81 %. The study I emphasizes the need to improve the literacy and industrial growth in Mokhada ' taluka to accelerate the economic growth. 9) The study indicates that large-scale employment is generated because of

establishment of SSI. More than ] 1,000 permanent SSI units are ~stab1ished which generated 1.1 lakh jobs. Nearly 450 LSI units are engaging more than 78,000 workers. MIDC established appro x 50 % of industrial units, which have generated 60 % of total employment. 10) Agricultural land is converted into non-agricultural land mainly for industrial, commercial and residential use. Land values are increasing. Land values are high in Wagle MIDC area. All the infrastructural facilities are available in this area and it is nearer to Mumbai Metropolitan City. Higher land value (Rs .7000/ sq m) discourages entrepreneurs from purchasing a plot there. 11) Environmental pollution is the main problem in TIC, Tarapur, Dombivli, and Ambernath as these MIDC areas are identified as chemical zones. However, many units are trying to control the pollution by adopting different measures suggested by MPCB. The Government closed some of the highly polluting units down e.g. Sharda chemical industry in Dombivli MIDC is closed down by the order of MPCB-Kalyan. 279

12) Though the number of industrial units IS increasing the problem of sick industries is acute. Due to economic reforms industries are facing severe competition in the market. About 40 % industries are sick, 20% have been closed down for various reasons and 20 % industries are working moderately while only 20% industries are working well. Different types of taxes on raw materials and manufactured products is the major factor influencing the price of the product. Due to closure of many industries unemployment is increasing which leads to social problems and crimes. 8.2 Suggestions On the basis of observations, information collected and analysis of statistical data the conclusions are drawn and following suggestions are made. I) Industrial sickness of small-scale industries in India is a major problem therefore proper diagnosis should be made. If the sickness is due to unsatisfactory quality of the goods supplied in the markets the funds should be made available for improving the quality of goods and upgradation. Shortage of funds is one of the major causes for the sickness of industries or low quality of

the product produced by the industrial units. Entrepreneurs, are to be provided with loans as per their needs and funds should be utilized properly which should be monitored by the banks otherwise corrective measures should be taken against entrepreneurs. The procedure for getting permission to start the business, registering the unit and to carry out the particular activity is very complicated and time consuming. The entire procedure should be streamlined Strengthening the capital base of the small-scale units must receive greater attention. 2) Many labour laws are rigid. The freedom should be gIVen to the State Government to modify the laws according to the needs of the entrepreneurs. 3) Closure or shifting of the industries is increasing in Thane because octroi rates are very high which should be reduced by l.5% across the board and exempt octroi input or refund 1% export value. There should not be any discrimination and uniformity should be ensured. Thane Manufacturers Association suggests that increase in storage license fees is exorbitant which should be reduced. The drainage and sewerage tax should be rationalized and to be charged only to the beneficiaries. Compensation for road widening is another suggestion of the entrepreneurs. Proper TDR or monetary benefit should be given to industries 280

with interest. For the industrial solid waste, eannarked specified area or land should be fixed and to initiate disposal and treatment activities as done in . Municipal authorities and industries have to join together to resolve the problems in a democratic way. 4) The S.L.Kapoor Committee recently set up by the reserve Bank of India has made a number of recommendations for strengthening the small-scale sector. There is a need to strengthen the institutions providing marketing facilities to the small-scale enterprises. Therefore, there is a need for greater co-ordination among the financial agencies, which provide short tenn and long-tenn finance to the small-scale entrepreneurs. 5) To face the world market competition, upgradation of technology becomes important. Hence, speciaJ technical cells should be built up to improve the technology. A serious problem faced by the small-scale industries is delayed payments by buyers. Hence, they cannot repay the amount of loan drawn fr)m the banks. 6) The study has indicated greater scope for employment of the rural residents in small industries in Murbad M.I.D.C. and spedial efforts are to be made for its promotion. Large-scale industries should take the lead to set up ancillary industries and train local skilled and unskilled labour so that employment problem will be minimized. Vocational training should be given to local students during their summer vacation. Wadilal Ice Cream producing industry in Tarapur encourages local students by providing them jobs during summer vacation. 7) Local consumers should be educated to purchase local products instead of Chinese or any other imported product. People should understand that by purchasing foreign products local industry will be closed down and hamper the manufacturing activity. People should try to change their attitude to im~rove the condition of Indian market. 8) Local political leaders instigate local people in the industrial areas whose land has been acquired by the Government. This is responsible for the strained relations between these people and the entrepreneurs. Mutual understanding and negotiations could avoid such problems. 281

9) Supply of electricity should be continuous and load shading should not be frequent and it should be infonned to entrepreneurs well in advance for corrective measures. 10) Transport and communication facilities should be available without any problem. 11) Maharashtra Pollution Control Board should take strict actions against entrepreneurs who are responsible for polluting environment. Supervisors of the board should check C.E.T.P. and pollution controlling system. The board should have emergency squad to visit polluting units without any prior intimation so that to some extent pollution can be controlled. 12) In short efforts should be made by entrepreneurs, Government Organizations, Industrialists and society to take positive steps to avoid sickness of industries, unemployment and social problem. 8.3 Future The study indicates that in Thane district, the industrial growth is not as rapid as compared to the sixties and seventies. Growth in manufacturing units, employment and capital investment is very slow. It has been observed that infrastructural facilities are , not that adequate to attract the industries in the interior parts of the district. There are no industries at all in the backward tribal taluka of the district viz. Mokhada. But due to the development of roads, railways, telephones, banking facilities etc, the mini industrial areas and growth centers are developing. Government policies are encouraging electronic and biotechnological industries. Efforts are made to strengthen and develop the scientific base for research and development, since science and technology would continue to hold the key to future progress. Quality improvement is needed for maximum benefits from globalization. In this era of globalization there is need to intensify the efforts to attract foreign investment. Steps have already been taken in the right direction. Apart from this FDI can bring in new technology and provide continuous access to changes in technology. It can impart new managerial and marketing skills, stimulate domestic competition, provide entry into export market, help lower protective barriers in the home countries of MNC's and help local suppliers improve their quality and competitiveness. Maharashtra's infonnation technology policy was implemented in 1998 and biotechnology policy, 2001 is also implemented which is favourable to agriculture and agro based industries. M.I.D.C and others are ready to help to accelerate industrial growth of Thane district. M.I.D.C may also 282 examine the possibility of developing industrial areas at other suitable places in the district. The D.LC has prepared a list of industrial units which are rapidly generating employment in undeveloped talukas of Thane district. The D.I.C. also may provide financial assistance to such units. They have implemented many policy packages on SSI and Tiny sector announced by the Prime Minister on 30th August 2000. Special capital incentives will be given to SSI. Existing SSI and small scale IT ahd BT units will be eligible for 75 % of the subsidy admissible for expansion, diversification or modernization involving additional investment to the extent of 5 % or more. New textile, hosiery and knitwear small scale industries setting up in different parts of the state will also be eligible for interest subsidy on the interest actually paid to the financial institutionslbanks on the term loan for creating fixed capital assets, equal to the interest payable at 5 % per annum. Up to 31 51 March 2006 the sales tax rates on IT products would be maintained at the level of the minimum floor rates wherever applicable. No turn over tax, additional sales tax, surcharge or any other additional levy to sales tax will be applied to IT products. Twice the applicable Floor Space Index (FSI) is allowed for certain type of IT units setting up in IT Parks promoted by public bodies. Such units are also permitted in No Development Zones of cities up to FSI 0 to 0.2. Captive power generation is permitted for industries throughout the state in respect of IT units and in the case of co-generation, hydro-electricity and non­ conventional energy. New as well as existing industries in underdeveloped and tribal areas will also be permitted to set up captive power plants. 'Independent Power Producers' for the dedicated provision of power to IT and BT Parks and Special Economic Zones are promoted and problems in supply of power will be minimized. Sick SSI units and closed units are the major problems for manufacturing growth. Issues relating to the rehabilitation of sick SSI units are reviewed in the State Level Inter Institutional Committee and sub committee of Reserve Bank of India and in the district level committee. Such SSI units taken up for nursing by the banks and financial institutions are at present eligible for reschedule of arrears of Government and electricity dues, to be repaid in 36 monthly installments at 13 % interest. It will now be reduced to 10 % in all except' A' areas of the state. SSI units suffer from marketing difficulties as their products are not standardized and of variable qualities. Modernization and up dating technoJogy are essential to reduce the cost and prices and increase competitive power. In order to 283 provide guarantee for sale the Government gives preference up to 15 % of some of the products sold by SSI. NSIC (National Small Industries Corporation) assists in obtaining a greater share of Government and defense purchases but does not assume marketing responsibility. State Small Industries Development Corporation (SSIDC) plays an important role in providing assistance to SSI. Maharashtra State Small Industries Development Corporation (MSSIDC) has provided export assistance, for export promotion. MSSIDC helps for marketing assistance and organizes industrial exhibitions for SSI at National and Inter National levels. As per the Planning Commission Report, the target for export through SSI, their production and employment generation is as equal as estimated values. Special efforts will be done by the Government to regularize the working of small-scale industries. Ancillary industries will be established while foreign investment in large-scale industries will be increased. The Government and other development organizations continue to provide marketing assistance, export promotion during the current recession period and more competitive world. Nowadays things have changed grossly and quality control measures have increased. It is a challenging. situation to fulfill customer requirements by showing flexibility, discipline and better quality of the product at affordable price. If the industrial units have to retain profitability the only way is to reduce cost of the product. It will be possible only by reducing manpower, wages of labour, bonus payments and withdrawal of perks and facilities. lmproving productivity can control the cost of the production. Entrepreneurs have the opportunity to establish their credentials as a high quality, low cost and highly dependable supplier both for local and foreign markets. Once they establish themselves as a truly global supplier there will be no shortage. of orders. It will g~nerate more employment, more profit and ultimately industries will flourish. If the industries loose this opportunity and fail to meet the challenges, demands of their customers in terms of quality product, delivery reliability, prices and flexibility the customer will ignore them and look out for other sources. The customer will surf international market to buy their products. If our entrepreneurs fail to grab the opportunity that exists today, it is like killing the goose that will lay golden eggs which means no additional industrial growth, diminishing profit margins and hence reduced employment opportunities which is dire need of today. The reputed entrepreneurs should diversify their manufacturing activity to rural areas where cheap labour is available so that profit margin can be increased. Many large-scale industrial units are 284 established in Murbad rural area of Thane district. Small-scale industries are depending on large-scale industries and if LSI is successful the SSI will also flourish and generate more employment opportunities. Reputed Century Rayon Industry at Shahad is also planning diversification and investing a lot of money in the production of high quality thread by using latest technology so that manpower can be reduced. Many small-scale industries of Bhiwandi, which can provide more jobs, depend on quality thread produced by Century Rayon. Small-scale units should also diversify and produce required product at low cost by using latest technology. They can play major role in flourishing LT. and Bio Technological industries. Most drugs and pharmaceutical international companies )ike Glaxo SmithKJine, Novartis, Pfizer, Johnson & Johson, Abbott, A ventis, Knoll, and many others have shown their preference for Maharashtra. Major Indian companies like Wockhardt, ClPLA, LUPIN, Nicholas Piramal, Unichem etc. are moving in a major way in innovative drug research. Reliance Life Sciences have made forage into stem cell research and have already been recognized as one of the key suppliers of cell lines by U.S. Government. With the help of these industries the State Government could be effectively explored for aquaculture, fisheries, marine microbes, horticultural crops like banana, chicoo, cashew and mangoes for divorce I purposes and new drug development for solving the environmental problems of urban India. They would form an important industry for developing newer food products and other derivatives. Hence it will boost Biotechnological industry in Thane district. According to the list produced by D.Le. many resource based industries can be established in the rural area of Thane district viz. rice mills, instant food, canning of fruits, texturisation of vegetables, mineral water, herbal pesticides, leather goods, hand paper, wood products, protein insolates from groundnuts and soyabeans. If demand based industries like soft drink concentrates, oils from spices, ready made garments, automotive looms, production of foot wares, umbrellas, pharmaceuticals, electronic goods producing units are established in tribal areas employment will be generated and cheap labour will be available so that cost of production will decrease. These industries will be axillary industries to the large-scale industries. In this way small-scale industries should be encouraged to make a sustainable contribution to the income and employment of Thane district so that rural tribal area in the district will also develop industrially and regional industrial imbalance will minimize. 285

New Railway transport route (Thane-Turbhe) will commence shortly through TTC. M.I.D.C. area. This large industrial belt is badly affected after 1991 because of poor conditions of roads and costly, time-consuming transport facilities. There are more than sixty to seventy thousand workers commute from different places such as Navi Mumbai, Mumbai and Thane district. Skilled labours were not happy to commute due to unavailability of suitable cheap transport and entrepreneurs of SSI were not able to provide conveyance allowances. Because of these problems many workers resigned which lead to closure of many industries. But now with new railway line these workers can very well accept jobs in industries like Poiasha, NOClL and Proctor & Gambol. More than 250 plots in M.I.D.C. are already sold out and prices of land are increasing rapidly in this area. Mahadik Vikas has written very informative article in daily newspaper Loksatta dated 24th August 2004, regarding Thane - Turbhe Railway hne and its impact on industrial belt of TTC. There will be employment generation and hence future of industries is bright.