Large scale& Small scale industries in India.

Grouping of large scale industries is based on size and end use.Present scenario of large scale industries,role of large scale industries and the initiatives taken by the government.A birds eye view of SSI is also discussed.

1. LARGE & SMALL SCALE INDUSTRIES IN INDIA BY Dr.S.Subbalakshmi,Ma,MPhil,PhD Chair, Business & Economics FBS Business School Vijayawada & Bangalore

2. LARGE SCALE INDUSTRIES IN INDIA GROUPING OF INDUSTRIES ON THE BASIS OF SIZE ON THE BASIS OF END USE LARGE LARGE SCALE MEDIUM SIZE SMALL INDUSTRIE S MEDIUM SISE SMALL SCALE BASIC GOODS INDUSTRIES (MINERALS , FERTILIZERS, CEMENT ,IRON AND STEEL ,ELECTRICITY ) CAPITAL GOODS INDUSTRIES (MACHINARY , RAIL ROAD EQUIPMENT CONSUMER GOODS INDUSTRIES (CONSUMER DURABLES,NON DURABLES LARGE SCALE INDUSTRIES MINING, B) MANUFACTURING C) ELECTRICITY , D) GAS & WATER SUPPLY

3. INDUSTRIAL GROWTH IN INDIA Steady growth of 8% during the first 3 plan periods (1951 to 65) 1965 to 1980 , a period of deceleration and retrogression, growth rate falling down to 4.5% per annum. 1980 to1991, the annual industrial growth rate was 7.8% per annum. 1991 , a year of new economic reforms ,limiting the domain of public sector, encouraging FDIs ,foreign portfolio investments , liberalization of licensing policy.

4. Continuation… 5) 1991 to 2000 average annual growth rate fell to 5.7%. 6) Tenth plan (2002-2007) the achieved growth rate 8.7%. 7) 11 th plan (2007 -2012) the annual growth rate 7.4%. 8) Targeted growth rate of 12 th plan 8 to 8.5%

5. Present Scenario Only 2 industries that are reserved for the public sector – Atomic energy and rail transport. Total number of PSUs – 220 are in operation. 158 are earning profits and 62 are incurring losses. The number of big business houses have increased from 2to 80 since 1951 giving rise to concentration of economic power. To restrict the monopoly practices competition act was enacted in 2002 replacing MRTP act 1969

6. Role of Large scale industries in India Modernizing agriculture, Providing Employment to 22% of population Share in GDP 30 % (Data 2016-17) Two thirds of export earnings are from industry. Raising incomes of people by enhancing the economic growth. Industrial growth meets the ever increasing demand for industrial goods which have high income elasticity. Strengthening the economy by providing infrastructure like railways dams which are not importable

7. Make in India An initiative launched by Government of India to encourage national , multinational companies to manufacture their products in India. Launched by Prime Minister Narendra Modi on 25 th September 2014. It made India top destination globally for foreign direct investment surpassing USA and China receiving 63 US billion dollars in FDI.

8. Problems of Large scale Industries Below targeted growth rate in all the five year plans except the first five year plan. Under utilisation of the plant’s capacity to the extent of 40% to 50%. Increasing capital output ratio from 2.95 in the first five year plan to 4 during eighth, ninth, tenth ,eleventh plans Absence of world class infrastructure ex: lack of transport facilities, frequent power failures.

9. Continuation 5)High cost industrial economy is attributed to out dated technology, import substitution , government protection to PSUs , low MPL, uneconomic size of industrial units, monopolistic tendencies. 6) Poor performance of public sector units. 7) Sectoral imbalances implying inadequate support from agriculture and service sectors. 8) Industrial development is lopsided region wise. Large scale industries are concentrated in regions like Tamilnadu, Andhra Pradesh, Maharashtra, and Gujarat.These four states account for 50% of total capital and 50% of total factories.

10. Small Scale Industries These are of two kinds MANUFACTURING SERVICES MICRO SMALL MEDIUM

11. MANUFACTURING SECTOR –INVESTMENT LIMIT Micro Enterprises -- Up to Rs 25 lakhs Small Enterprises --- Rs 25 lakhs to 5 crores Medium enterprises -- 5 crores to 10 crores SERVICE SECTOR– INVESTMENT LIMIT Micro Enterprises -- Up to Rs 10 lakhs Smallenterprises ---Rs 10 lakhs to 2 crores Medium Enterprises -- Rs 2 crores to 5 crores

12. Role of Small Scale Sector Contributes 8% of country’s GDP, 45% of manufactured output of India is from this sector, Contributes 45% to India’s total exports, Produces 8000 value added products, Employs 40 % of work force in India, Maintains a consistent growth rate of 10 % annually.

13. Start up India Aiming at promotion of bank financing for start up ventures to encourage small scale sector. Meant mainly for employment generation Under this Micro units are refinanced by new institution MUDRA(Micro Unit Development & Refinance Agency) Bank with a refinance fund of Rs 200 billion US dollars It is named in rural version as Deen Dayal Upadhyay Swaniyojan Yojana

14. Problems of Small scale sector Finance : Entrepreneurs are forced to borrow from money lenders at high rate of interest as institutional finance is not available due to their lack of creditworthiness. In competition with large scale sector this sector fails to corner adequate , qualitative raw material. Under utilization of capacity to the extent of 40 to 50%

15. continuation 4) Not having information about changing technologies and consumer tastes. 5)Bottlenecks of infrastructure like power, transportation, lack of network facility. 6) Lack of skilled man power. 7) Managerial inadequacies like demand vision , aptitude ,lack of training . 8) Poor project planning.

16. Support system Trade Fair Authority of India, State trading Corporation, National Small Industries Corporation help in selling the products of this sector in domestic and export markets. Small Industries Development corporation of India provides cheap finance. Nationalized commercial banks are supposed to extend credit facility. Product Reservation

17. Product Reservation Food and Allied industries : Pickles and chutneys, Bread , Mustard oil ,ground nut oil etc.. Wood and Wood products : Wooden furniture and fixtures Paper products :Stationary. Thermo Plastic products :PVC pipes, Fittings for PVC pipes , Chemical products :Wax candles, Safety matches, Fire works , Agarbatties

18. Continuation…. 6)Glass and Ceramics : Glass bangles 7) Mechanical Engineering :Steel Almirah, Rolling shutters ,Steel chairs , Steel furniture Domestic steel utensils

19. Skill India A campaign launched by Prime Minister Sri Narendra Modi on July 15-2015 aiming to train youth in different skills. It includes initiatives like Pradhan Mantri Kousal Vikas Yojana and the Skill loan Scheme through National Skill Development Corporation. Creates a hall mark called “Rural India Skill” so as to standardize and certify rural skills beneficial for small scale sector

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