ACKNOWLEDGEMENT

I express my gratitude and deep regards to my teacher for the subject Mrs. Mitali Tiwari for
giving me such a challenging topic and also for her exemplary guidance, monitoring and
constant encouragement throughout the course of this thesis.

I also take this opportunity to express a deep sense of gratitude to my seniors in the college for
their cordial support, valuable information and guidance, which helped me in completing this
task through various stages.

I am obliged to the staff members of the Madhu Limaye Library, for the timely and valuable
information provided by them in their respective fields. I am grateful for their cooperation during
the period of my assignment.

Lastly, I thank almighty, my family and friends for their constant encouragement without which
this assignment would not have been possible.

NAVEEL ISLAM

Enrollment no. 180101086

 TABLE OF CONTENTS

TENTATIVE CHAPTERISATION………………………………………….

1-INTRODUCTION………………………………………………………pg 3

2-LITERATURE REVIEW……………………………………………….pg 4

3-PROBLEM IN AGRICULTURAL SECTOR…………………..………pg 5-11

4-TECHNOLOGY ADVANCEMENT ………………………………..pg 12-19

5-IMPACT OF TECNOLOGY ON AGRICULTURE……………..…….pg 20-21

6- REMEDY FOR INDIAN AGRICULTURE SECTOR………………..pg 22

6-CONCLUSION………………………………………………………….pg 23

7-REFERENCES………………………………………………………..…pg 24
INTRODUCTION

The Small-Scale Industries (SSI) gathered momentum along with industrialization and economic
growth in India. It started growing due to the vision of our late Prime Minister Jawaharlal Nehru
who sought to develop core industry and have a sustaining sector in the form of small-scale
enterprises. Being a labor-intensive sector, they offer a higher productivity of capital than
capital-intensive enterprises due to low investment per worker. The SSI today constitutes a very
important segment of the Indian economy as they help in dispersal of industries, rural
development, and the decentralization of economic power. The central discussion of this project
is to highlights the importance of small industries and their role in the economy and the impact
of economic reforms on growth pattern and productivity performance of small-scale industries.
However, this is not to say that there are no shortcomings within the industry, or in public policy
relating to it. Small industries are faced with numerous problems major and minor, which make
them either uncompetitive, or sick. An attempt is made to address some solutions that can
improve their productivity by focusing on a sustainable vision.
LITERATURE REVIEW

For the purpose of the study the required information relating to number of SSI units, labor
employed, production and exports at all India level were complied from various issues of
Economic Survey and of Annual Survey of Industries. The data on number of sick SSI units
were complied from Report on currency and Finance, RBI bulletin, various issues. The average
annual growth rates, growth patterns and the number of times increase in growth of SSIs, their
employment, production and exports are calculated for the reference period.
DEFINITION OF SSIs
The definition for small-scale industrial undertakings has changed over time. Initially they
were classified into two categories- those using power with less than 50 employees and those
not using power with the employee strength being more than 50 but less than 100. However,
the capital resources invested on plant and machinery buildings have been the primary
criteria to differentiate the small-scale industries from the large and medium scale industries.
An industrial unit can be categorized as a small- scale unit if it fulfils the capital investment
limit fixed by the Government of India for the small-scale sector.
As per the latest definition which is effective since December 21, 1999, for any
industrial unit to be regarded as Small Scale Industrial unit the following condition is
to be satisfied: -
Investment in fixed assets like plants and equipments either held on ownership terms
on lease or on hire purchase should not be more than Rs 10 million.
However, the unit in no way can be owned or controlled or ancillary of any other
industrial unit.
YEAR INVESTMENT LIMITS
1960 Upto Rs 5 lacs in Plant & Machinery
1966 Upto Rs 7.5 lacs in Plant & Machinery
1975 Upto Rs 10 lacs in Plant & Machinery
1980 Upto Rs 20 lacs in Plant & Machinery
1985 Upto Rs 35 lacs in Plant & Machinery
1991 Upto Rs 60 lacs in Plant & Machinery
1997 Upto Rs 100 lacs in Plant & Machinery
1999 Upto Rs 100 lacs in Plant & Machinery
CLASSIFICATION OF SSIs:
A common classification is between traditional small industries and modern small
industries.
Traditional small industries include khadi and handloom, village industries,
handicrafts, sericulture, coir, etc. Modern SSIs produce wide range of goods from
comparatively simple items t sophisticated products such as television sets,
electronics, control system, various engineering products, particularly as ancillaries to
the large industries..
The traditional small industries are highly labour-intensive while the modern smallscale
units make the use of highly sophisticated machinery and equipment. For
instance, during 1979-80, traditional small-scale industries accounted for only 135 of
the total output but their share in total employment was 56%. As against this, the
share of modern industries in the total output of this sector was 74% in 1979-80 but
their share in employment was only 33%. Obviously, these industrial units would be
having higher labour productivity.
One special characterstic of traditional small-scale industries is that they cannot
provide full time employment to workers, but instead can provide only subsidiary or
part time employment to agricultural laborers and artisans. Among traditional village
industries, handicrafts possess the highest labour productivity, besides handicrafts
make a significant contribution to earning foreign exchange for the country.
Nowadays Indian small-scale industries (SSIs) are mostly modern small-scale
industries. Modernization has widened the list of products offered by this industry.
The items manufactured in modern Small-scale service & Business enterprises in
India now include rubber products, plastic products, chemical products, glass and
ceramics, mechanical engineering items, hardware, electrical items, transport
equipment, electronic components and equipments, automobile parts, bicycle parts,
instruments, sports goods, stationery items and clocks and watches.
ROLE OF SMALL SCALE INDUSTRIES IN
INDIAN ECONOMY
The small-scale industrial sector plays a pivotal role in the Indian economy in terms
of employment and growth has recorded a high rate of growth since Independence
inspite of stiff competition from large-scale industries. There are several important
reasons why these industries are contributing a lot to the progress of the Indian
economy:
 Censuses

o  The First All-India Census of Small Scale Industrial Units was conducted
in 1973-74 by Small Industry Development Organisation (SIDO), covering units
registered with the State Directorate of Industries and falling in the purview of SIDO to
collect detailed data on various parameters of importance namely, production, capacity,
employment, investment, borrowings, raw material used, fuel consumed, exports, etc.
The census covered 1.4 lakh registered SSI units up to December 1970.
o  A Plan Scheme known as “Collection of Statistics of SSI” with a 100 per
cent central assistance was introduced during the Fifth Five-Year Plan and was
implemented with the help of the Small Industries Service Institutes (SISIs), State
Directorate of Industries (SDIs) and District Industries Centres (DICs). The scheme
aimed at updating the data provided by the Census on an annual basis through
registration records. The Plan Scheme was also meant for compilation of the Index of
Industrial Production for the Small Scale Sector.
o  The Office of DCSSI conducted the Second All-India Census of
Registered SSI units to collect complete data on the working of all registered SSI Units
in 1990-91 with reference year as 1987-88. The data collected through this Census
happens to be the latest available data on the SSI sector. Out of a total number of 9.87
lakh registered SSI units, the census revealed that about 37 per cent of the units were
either closed or non-traceable.
 The Third Census of SSI units, scheduled to be conducted during 2001-02 with the
reference year as 2000-01, is aimed to cover for the first time both registered and
unregistered units in the SSI sector. The registered sector consists of units registered
with State Directorates of Industries. However, traditional industries falling under the
purview of Khadi and Village industries, Handlooms, Handicrafts, Sericulture, Coir
sectors as well as Powerlooms sector will not be covered in the Third Census of SSI.
The units that are registered as on 31 March 2001 will be covered on a complete
enumeration basis. The unregistered sector consists of units, which are eligible for
registration as per the definition of the SSI but are not registered, as the registration in
SSI is voluntary. The unregistered SSI units, which are eligible for registration as on 31
March 2001, will also be covered in the Third Census through a sample survey. In this
survey, a sample of about 2500 villages will be selected first and details of about 2.5
lakh sample units will be collected from the selected villages. The census will also cover
the aspect of sickness and incipient sickness and their causes, which have not been
covered in the earlier censuses. The fieldwork for the Third Census is expected to
commence from August 2001 and is likely to continue till February 2002. Data
processing and release of results are planned for completion by 31 March 2003.
 Ad hoc Surveys and Studie
  To analyse specific aspects of the Small Scale Sector like sickness, size of
unregistered SSI sector, etc. ad hoc surveys and studies were conducted from time to
time. So far, the Office of DCSSI has completed two diagnostic surveys on sickness
during 1982-83 and 1994-95. One study for assessing the size and contribution of the
unregistered units in the SSI sector was conducted through an independent agency
namely, the Socio-economic Research Centre during 1994-95.
 Index of Industrial Production – Small Scale Industries

o  For understanding the trend in production in the Small Scale Sector at the
industry group level, a system of collection of production data was introduced in 1976.
With these data, the Index of Industrial Production (Small Scale Sector) is being
compiled by the Office of DC (SSI) with the object of estimating the growth of production
in the Small Scale Sector on a regular basis. For this purpose a 2per cent sample was
selected from the frame of working units available from the First All-India Census of
Registered Small Scale Industrial Units (reference year 1970). The sample covered
2,400 units from which monthly production data on 356 important items is being
collected on a quarterly basis. The quarterly Index of Industrial Production of the Small
Scale Sector is being computed by the Office of DC (SSI) with base year 1970 for
internal use only.
o  The Office of DCSSI has launched a revised scheme of data collection to
improve the coverage of units in the Index of SSI Production. The scheme envisages
the collection of data on about 500 items from 28,000 units capturing about 74per cent
of the SSI production.
 Representation of SSI in the Index of Industrial Production (IIP) Prepared
by CSO

o  A scheme was introduced during the Sixth Five-Year Plan to give proper
representation to the Small Scale Sector in the All-India Index of Industrial Production
(IIP) compiled by the CSO. The Office of DCSSI regularly provides monthly production
data to the CSO on 18 reserved items collected from about 4,800 SSI units selected
from the frame of SSI units registered up to 1984-85 in order to provide representation
of the Small Scale Sector in the IIP
o  The Office of DCSSI could not supply the monthly production data for any
of the additional items included in the 1993-94 series of IIP. Thus the representation of
the Small Scale Sector in the All-India IIP remained inadequate. The Working Group on
Commerce, Industry and the Corporate Sector under the Chairmanship of Dr. Arun
Ghosh also examined this issue and recommended that the IIP should attempt to give a
good estimate of the trends in the output of industries in the registered sector and a
separate index for SSI Sector could be attempted on a quarterly basis.
o The coverage of units in the unorganised manufacturing sector by the
Office of DCSSI is not complete, since the units belonging to Handloom, Power Loom,
Handicrafts, Coir, Sericulture, Khadi and Village Industries are under the purview of
different All-India Boards and some of them under different ministries. However, an idea
of the entire unorganised manufacturing sector could be obtained from the Economic
Census conducted by the CSO. But the Economic Census does not capture all the
relevant details of the working of these units and there are problems of differences in
the definition of SSI as adopted by the Office of DCSSI and that adopted by the CSO for
their censuses and surveys. The Economic Census provides information on broad
parameters only like the number of units, employment, type of activity, location, etc.
Detailed information on the unorganised manufacturing sector is collected through
Follow-up Enterprise Surveys on unorganised manufacturing covering Directory
Manufacturing Establishments (DME), Non-Directory Manufacturing Establishments
(NDME) and Own Account Enterprises (OAE) in the Ministry of Statistics and
Programme Implementation. The results of the Census and Follow up Enterprise
Surveys could not provide information for the SSI sector separately. Some of the other
deficiencies are as under:

 The definition of Small Scale Industry, which is based on

investment in plant and machinery (original value), has undergone frequent changes
over time (see Annexe 5.18). The changes in the definition restrict the precise
temporal comparison in growth of units or of the corresponding contribution.
 Many SSI units do not get registered with State Directorate of
Industries firstly, because registration is voluntary, and secondly as in metro areas,
there are restrictions on registration under municipal rules. Further, no benchmark data
is available for an estimation of the economic parameters of the entire SSI sector.
However, the data on the registered SSI sector can be culled out by cross tabulation of
data collected in the Follow-up Enterprise Surveys of the Economic Census and ASI.
 The data collected by the Office of DCSSI are confined to
registered SSI units only. There does not exist a system of removing closed units from
the frame of registered units as the information regarding such units is not regularly
available. The nature of SSI registration is voluntary as there is no legal backing for
collection of data from this sector.
 The SSI sector overlaps with units covered by the ASI and the
unorganised sector on account of varying definition being adopted by the two
organisations namely, DCSSI and Ministry of Statistics and Programme Implementation.
Since the Ministry of Statistics and Programme Implementation is not collecting the
information required to identify the SSI sector uniquely, this poses difficulties in properly
estimating the extent of the overlap
 The contribution of the unregistered manufacturing sector in the
weighting diagram, estimated on the basis of Gross Value Added in 1993-94, is about
29 per cent in the overall IIP. On account of the non-availability of regular monthly
production data, the unregistered manufacturing sector is represented by only 18
 reserved items from the SSI sector, which constitutes less than one per cent in the all-
India IIP. Further, the production data for these 18 reserved items is based on an
outdated sample of about 4800 units selected from the frame of SSI units registered up
to 1984-85.
 The revised scheme launched by the Office of DCSSI to enhance
the coverage of SSI sector in IIP and to improve the timeliness in supplying the data to
CSO within 4 to 5 weeks as required under Special Data Dissemination Standards
(SDDS), envisages the collection of data in respect of about 500 items from 28,000
units capturing about 74per cent of the SSI production. However, the production data for
all the 500 items are not available on a continuous basis since 1993-94. Even the base
year data for 1993-94 is not available. In the absence of the availability of base year
data, the representation of the SSI sector in IIP was restricted to only 18 items and thus
remained inadequate.
 The Office of the DCSSI does not cover the entire Village and
Small Scale Industries (VSI), as the units in Handicraft, Handloom, Khadi and Village
Industries, Coir, Sericulture and Powerlooms are not within its purview.

Recommendations

o 5.3.12 In view of the above mentioned deficiencies, the Commission

recommends the following:-
o The representation of the SSI sector in the all-India IIP should be
improved by extending the coverage of items for which DCSSI is collecting regular
monthly production data.
o Since the frames maintained by the source agencies do not make a
distinction between the registered and unregistered units, a mechanism should be
devised to avoid overlapping of units belonging to SSI and other source agencies, in
respect of common items for which the production data is reported by two agencies.
o The Office of DCSSI should make efforts to compile monthly IIP as
against the present practice of compiling quarterly IIP, for monitoring the trend of the
Small Scale Industries. Efforts should be made to enlarge the coverage of items in order
to make the index more representative of the SSI sector. The base year of the two
indices namely, all-India IIP and DCSSI index should be in close proximity if not the
same.
o The Office of DCSSI should publish the index for use by the Government,
private agencies and researchers.
o The Economic Census and the Follow-up Enterprise Surveys should
collect the information on “investment in plant and machinery (original value)” and
“whether registered as SSI unit or not”. The Economic Census would help in providing
the number of registered and unregistered SSI units while the Follow-up Surveys would
enable estimation of various parameters of these sectors. Similar information in ASI
should also be collected to estimate the different characteristics of registered and
unregistered SSI units in the total organised sector.
o With the availability of information on the SSI sector from the Economic
Census and Follow-up Enterprise Surveys, as mentioned above, the utility of conducting
 a future census of small-scale units should be examined. The detailed information, if
any, required for the sector could be collected through sample surveys.
o To facilitate evaluation over time, the Office of DCSSI should present data
to enable time series comparison keeping in view the changes in the definition of the
SSI sector.
o The NSSO as a part of their tabulation programme should generate data
on the principal characteristics relating to the SSI sector to enable cross comparison
with DCSSI data.
o Though administratively, the Small Scale Sector is divided into seven sub-
sectors, which are under the control of different ministries and departments, the Office
of DCSSI that is controlling the major segment of this Sector, should coordinate with the
remaining six departments and generate a database for the sector. Thereafter, efforts
should be made to compile an index of the overall Small Scale Sector.