The International journal of analytical and experimental modal analysis ISSN NO:0886-9367 An empirical study on MSME units in Dharwad and Belgaum regions of Karnataka Sunilkumar R Hiremath 1, Dr.V.Sharada 2* 1 Research Scholar, Karnatak University, Dharwad (Karnataka) *2 Associate Professor, Karnatak Arts College, Dharwad (Karnataka) *E-mail: [email protected] *Contact: 99459 03072 Abstract—MSME (Micro, Small and Medium Enterprises) play an important role in economic and social development of the India in terms of industrial output, employment generation, export etc. Next to agriculture, it provides the largest employment base at a considerably lower capital cost and in terms of employment base, the MSME provide seven times more employment than large industries. Not only employment base, MSME’s also plays a major role in industrial output at 45% and exports at 40%. Karnataka is a state in India, ranking fifth in terms of number of registered MSME units of around 38.34 lakhs as on 2018. This work studies the MSME units in Dharwad and Belgaum districts of Karnataka. Study is done with goal to identify the nature of business, employment provided, their impact on the socio economic conditions, challenges faced by the units etc. Among the wide variety of MSME units, this study restricts its scope to auto ancillary units and engineering units. Keyword: MSME Units, Auto ancillary parts, Food Processing, Dharwad, Belgaum. I. INTRODUCTION MSMEs occupy a major role in economic progress of any county and India is no exception with 40% of working population is employed in MSME. MSME is also a major contributor to industrial output with 45% of total industrial output with diverse range of products and services meeting the domestic and global market needs. Karnataka, a state in southern part of India, is a fastest growing state with a strong industrial base and vibrant service sector. Industrial proportion is unique in Karnataka with host of large industries supported by strong MSME units. This proportion is propelling the overall economic development of Karnataka. Compared to other states, Karnataka ranks fifth in terms of number of MSMEs with around 38.34 lakh registered MSME units in different sectors of agro, textiles, furniture, leather, metals , engineering , readymade garments etc. Volume XII, Issue XII, December/2020 Page No:56 The International journal of analytical and experimental modal analysis ISSN NO:0886-9367 The states robust growth in different sectors is accelerated with setting up of Industrial hubs in various districts of Karnataka. Following are some of important industrial hubs 1. Belgaum 2. Ramanagara 3. Shimoga 4. Dharwad 5. Kolar 6. Mysore 7. Mangalore Various expertise in terms of Aerospace, Automobile, IT, Steel zone is being setup in different districts to reduce regional imbalances and to create inclusive growth and development across the state. This work is an empirical study on MSME units spread across Dharwad and Belgaum districts of Karnataka. The study is based on both primary data collected through questionnaire and the secondary data published by various government agencies. The study analyzes the MSMEs in different sectors and summarizes sum of common problems faced by MSMEs as identified through a structured questionnaire. Volume XII, Issue XII, December/2020 Page No:57 The International journal of analytical and experimental modal analysis ISSN NO:0886-9367 II. MSME UNITS IN DHARWAD Dharwad district is north western district of Karnataka with a total of 5 industrial areas. As per the latest reports from MSME development institute of Karnataka, the district has around 900 MSME units in operation in various sectors. The units in engineering and auto ancillary parts are as below Sector Number of Units Investment in Lakhs Employment Engineering 202 1200.04 1800 Auto ancillary 400 32000 4000 Engineering units are about 22.44% and auto ancillary are about 44.44% of total registered MSME units in the district. The mean investment in engineering units is about 5.94 lakhs and mean investment in auto ancillary is 80 lakhs. Engineering units provide an employment of about 150 per investment of 100 lakhs, but auto ancillary units provide employment of only about 12.5 per investment of 100 lakhs. Some of very important MSME units in the district are 1. M/s. Gujarat NRE Coke Pvt. Ltd., Belur Industrial Area, Dharwad 2. M/s. Murudeshwar Ceramics, Krishnapur, Hubli 3. M/s. Kirloskar Electric Company, Gokul Road, Hubli 4. M/s. I.A.L. International Auto Ltd., Belur Industrial Area, Dharwad 5. M/s. M.M. Industrial Controls Pvt. Ltd., Belur Industrial Area, Dharwad 6. M/s. Apex Auto Pvt. Ltd., Belur Industrial Area, Dharwad Even through the turnover is over 200 crores from these units, the export value is only about 20 crores about 10% of the total turnover. Valves, fabrication and Machinery Components are having more export scope from the ancillary units of Dharwad. Since Export value is low, there is a huge expectation on state orders from PSU’s for propelling the growth of MSME units. To study the problems faced by MSME, a questionnaire analysis was conducted across 50 MSME units in the Auto cluster of Hubli-Dharwad. The analysis was done with focus on problems in production and marketing. Multiple factors were identified in the production and marketing and these factors were rated in a Likert five point scale (1- highly disagree, 2- disagree, 3.neutral, Volume XII, Issue XII, December/2020 Page No:58 The International journal of analytical and experimental modal analysis ISSN NO:0886-9367 4.agree, 5.highly agree). The questions were in form of how much the factor is affecting the growth of MSME units in Dharwad. The factors identified in production and marketing category is given below Production Infrastructure Availability of skilled labour Availability of raw materials Technology Marketing Branding Knowledge of markets Access to market The responses for the production factors is given below Volume XII, Issue XII, December/2020 Page No:59 The International journal of analytical and experimental modal analysis ISSN NO:0886-9367 Availability of raw material is seen as top most problems with agreement of 90% next to availability of skilled labour with 70% and Infrastructure at 60%. Technology is not seen as big problem, as there are no restrictions on import of machinery for production. Most of units felt that government must open more polytechnic in Dharwad areas to address the shortage of skilled laborers. Raw material supply shortage must be compensated by supply of raw materials through railway lines from nearest districts. The responses for marketing factors is given below The agreement is above 70% on all marketing factors and thus a strong action plan is needed to address all the marketing vows. Government must aid to get access to market and provide knowledge about market for various auto ancillaries. As of now most of MSME units focus only of 4-5 ancillaries only. This can be extended through knowledge and access to market for more ancillaries. III. MSME UNITS IN BELGAUM Belgaum is also northwestern district in Karnataka. Unlike Dharwad, Belgaum district is rich in mineral deposits and thus has more congenial environment for growth of industries. As per the latest reports from MSME development institute of Karnataka, the district has around 35395 MSME units in operation in various sectors. The units in engineering and auto ancillary parts are as below Volume XII, Issue XII, December/2020 Page No:60 The International journal of analytical and experimental modal analysis ISSN NO:0886-9367 Sector Number of Units Investment in Lakhs Employment Engineering 3231 14704.17 29627 Auto ancillary 10866 101182 40525 Engineering industries are about 9.12% and auto ancillaries are about 30.7% of total registered MSME units in Karnataka. The mean investment in engineering units is about 4.55 lakhs and mean investment in auto ancillary is 9.3 lakhs. Engineering units provide an employment of about 201.49 per investment of 100 lakhs, but auto ancillary units provide employment of only about 40.05 per investment of 100 lakhs. Some of very important MSME units in the district are 1) Ashok Iron works Plant-1,Udyambag, Belgaum 2). Ashok Iron works Plant-II Mache Indl, Estate, Belgaum 3). Campbell Knit Wear Ltd, Marihal ,Belgaum 4). Riddi Siddi Gluco Boils, Ltd,FallsRoad,Gokak 5). Forbes Cambell knitware Ltd, Marihal, Bgm 6). Vega Funmobiles Pvt Ltd, Pl.No.12 B S.No.342 Bemcial Ind.estate Belgaum 7). Navage Plant,M/C Divn, Ashok Iron Cylinder Head Block, Navage, Belgaum Valves, Pumps, Machine components and Castings are having more scope for exports from the MSME units in the Belgaum industrial area. To study the problems faced by MSME, a questionnaire analysis was conducted across 50 MSME auto ancillary units in the Belgaum industrial area similar to the study conducted in Dharwad on the same factors in the production and marketing. Volume XII, Issue XII, December/2020 Page No:61 The International journal of analytical and experimental modal analysis ISSN NO:0886-9367 Technology is seen as the major problem with agreement of 40% followed by Infrastructure with agreement of 30%. Availability of raw materials and skilled labour are seen as problem only by about 20% unit as the Belgaum is rich in minerals and due to presence of technological university, the educational background is improved and availability of skilled labourer is not seen as big problem. The responses for marketing factors is given below Volume XII, Issue XII, December/2020 Page No:62 The International journal of analytical and experimental modal analysis ISSN NO:0886-9367 The marketing factors show same trend as that of Dharwad and a strong action plan is needed for accelerating the growth of MSMEs.