1/21/13

SSIs- PROBLEMS
Click to edit Master subtitle style

1/21/13

MAJOR PROBLEMS
No

easy access to timely and adequate credit obsolescence bottlenecks

Technological Infrastructure Marketing Plethora

constraints

of rules and regulation

Problems of SSIs
O External Vs. Internal Problems O Licence O Marketing O Location O Raw materials O Labour O Finance O Technology O Faulty Planning
1/21/13

External Vs. Internal Problems

External

Choice of Idea Feeble structure Faulty planning Poor Project implementation Poor Management Poor Production Quality Marketing Labor Problem Capacity Utilisation

1/21/13

Infrastructural ( Location, Power, Water, Post Office etc.) Financial ( Capital, Working Capital) Marketing Taxation Raw materials Industrial & Financial Regulations Inspections Technology

Licence
The problem start from the stage of obtaining licence. The rules and regulations are so rigid that many small entrepreneurs cannot sustain the procedural aspects in establishing SEs and give up in the initial stages.

1/21/13

Marketing

Marketing the products of small units is a major disturbing factor. Many of the small manufacturing units, supply their products to big units who in turn sell these products in their marketing network. Most of time, SEs have to resort to credit sales except in case of products which are in great demand.

1/21/13

Location

1/21/13

Location for establishing the small business units is also a problem. Factors determining the location such as availability of raw materials, easy availability of finance resources, availability of labor, availability of power and good transport system can make the unit strong.

1/21/13

Raw materials

Continuous supply of raw material at standard price is again a problem for small enterprises. There is a geographical problem in supplying raw materials. Because of this, cost of inventory will be on a higher side which SEs cannot sustain.

1/21/13

labour
Handling labour, which is a major contributor to industrial production, is one of the most difficult tasks of the industrial because of human element involved in it.

Finance
The finance for running the SEs were provided by entrepreneurs themselves as they could not satisfy the surety regulations of banks and other specialised financial institutions. But now the scenario is slowly changing to encourage small entrepreneurs.

1/21/13

1/21/13

Technology
Availing latest technology for manufacturing purpose is a major problem. Recent government initiatives in providing information about technology and the in providing information and assistance given by Chamber of Commerce and industries and other such organisations have eased the situation.

Faulty planning
The report of a study team of the state bank of India (1975), which examined the difficulties and problems of the small sector, came to the conclusion that over 40 per cent of the sample units examined by it were stalled with feasibility or detailed project reports.

1/21/13

High Infant Mortality

Many SSIs will have initial problems and considerable units cannot sustain such problems. Because of this SSI sector, infant mortality rate is very high.

1/21/13

The Management
Managerial inefficacy is one of the major factors contributing for the failure of SSIs on a large scale. However, many specialised institutions have emerged to impart knowledge to manage these units in all the areas of business viz, finance, marketing, HRD etc.

1/21/13

STEPS TAKEN TO SLOVE THE PROBLEMS OF SSIS

1/21/13

Institutions Promoting SSI

Development Corporation

mitra

National Khadi Small

Small Industries Corporation(NSIC) and Village Industries Commission (KVIC) Scale Industries Board Industrial development 1/21/13 Corporation

National

Institutions offering Financial Support

Industrial finance Corporation Of India (IFCI) Industrial Credit and Investment Corporation of India (ICICI) Industrial Development Bank Of India ( IDBI) Industrial Reconstruction Bank of India (IRBI) Small industries Development Bank of India (SIDBI)

1/21/13

Institutions offering technical Support

q q

Central Institute of Tool Design (CITD) National Institute of Design(NID) Technology Development and Information Company of India Ltd Product and Process Development center's Industrial and Technical Consulting Organisation

1/21/13

Institutions offering Marketing Support

1/21/13

State Trading Corporations Export-Import Bank of India Export Promotion Councils and Commodity boards Indian Institute of Packaging

Institutions Promoting Entrepreneurship

Centre for Entrepreneurship Development Entrepreneurship Development Institute of India (EDII) Indian Institute of Entrepreneurship National Institute for Entrepreneurship and small Business Development (NIESBUD) The National Science and Technology Entrepreneurship development Board (NSTEDB) National Institute for small Industry Extension and Training (NISIET) 1/21/13

o o

SSI - SICKNESS
According

to Reserve Bank of India (RBI) , a sick unit should be considered so if it has incurred cash loss in the previous accounting year and is likely to continue to incur cash loss in the current accounting year, and has an erosion on account of cumulative cash losses to the extent of 50 % of those of its net worth.

1/21/13

EXTENT OF SICKNESS

1/21/13

CAUSES OF SICKNESS
A.

Internal Causes

1. Planning (a) Technical feasibility

technical know-how

Locational disadvantage Outdated production process High cost of input Break-even point too high
1/21/13

(b) Economic feasibility

2. Implementation Cost overruns resulting from delays in getting licenses and sanctions etc. Inadequate mobilization of finance . 3. Production
(a) (b) (c) (d) (e)

Production management Labour management Marketing management Financial management Administrative management 1/21/13

B. External causes (a) Infrastructural bottlenecks

1/21/13