CH 1 Introduction

PROBLEMS OF SSI IN ULHASNAGAR
CHAPTER NO. 1
INTRODUCTION
1.1 INTRODUCTION OF INDUSTRY:
Industry refers to the production of an economic good (either material or

a service) within an economy. There are four key industrial economic sectors: the
primary sector, largely raw material extraction industries such as mining and
farming; the secondary sector, involving refining, construction, and
manufacturing; the tertiary sector, which deals with services (such as law and
medicine) and distribution of manufactured goods; and the quaternary sector, a
relatively new type of knowledge industry focusing on technological research,
design and development such as computer programming, and biochemistry. A
fifth, quinary, sector has been proposed encompassing nonprofit activities. The
economy is also broadly separated into public sector and private sector, with
industry generally categorized as private. Industries are also any business or
manufacturing.
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1.2 INTRODUCTION OF SSI:
Small-scale industries are the backbone of the Indian industrial structure.

They provide a variety of non-traditional low technology product. They are also
engaged in the processing, preserving manufacturing and servicing activities.
Small-scale industries (SSIs) constitute an important and crucial segment of

the industry sector. Promotion and growth of SSI sector has been a cardinal
feature of Indian Industrial Policy. SSIs in India have been given a distinct
identity and the Govt. has accorded high priority to this sector on account of the
vital role it plays in balanced and sustainable economic growth.
It plays crucial role in the process of economic development by value

addition, employment generation, equitable distribution of national income,
regional dispersal of industries, mobilization of capital and entrepreneurial
skills and contribution to export earnings.
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It has all the characteristics of the decentralized sector such as small size and
employment intensity and a he entire lot belongs to private sector. The
contribution of SSI sector to employment is next only to agriculture as a dynamic
and vibrant sector of the economy.
Small-Scale Industries play a key role in the Industrialization of developing

country. This is because they provide large-scale employment and have a
comparatively higher labour-capital ratio. They need a shorter gestation period
and relatively smaller market to be economic. They need lower investments, and
facilitate an effective mobilization of resources of capital and skill which might
other-wise remain unutilized.
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OBJECTIVES OF THE SYUDY:
1) To study the importance of small-scale industries in Ulhasnagar.
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2) To study the benefits of small-scale industries in Ulhasnagar.
3) To study the regulations governing small-scale industries in

Ulhasnagar.
4) To study the problems of small-scale industries in Ulhasnagar.
HYPOTHESIS:
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1) Small-scale industries are facing adverse situations in Ulhasnagar.
2) Small-scale industries are incurring high cost of production in

Ulhasnagar.
3) Small-scale industries are affected by the inflation in Ulhasnagar.
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RESEARCH METHODOLOGY:
For the proposed project data has been collected from primary & secondary
sources.
Primary data has been collected through structured questionnaire. The sample size
is approximately 50 respondents in the area of Ulhasnagar.
Random sampling method has been used to collect data.
The secondary data has been collected from News Paper, Magazines, & Case
Studies,etc.
Charts & Percentages has been used as statistical technique to analyse the data.
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LIMITATION OF THE STUDY
1) Shortage of time for preparation of project.
2) Respondents were not giving accurate & proper response.
3) Lack of suffient & relevant data for this project.
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CHAPTER NO. 2
SMALL-SCALE INDUSTRIES IN ULHASNAGAR
2.1 SMALL-SCALE INDUSTRY IN ULHASNAGAR:
Most Sindhi businesses are small-scale, the estimated 10,000 units here
have a turnover of about Rs 5,000 crore. Every family has a business. Even if the
men have jobs in far-off Mumbai, they typically run a printing press or deal in
garments in the evenings. An average Sindhi will, on his way back from office,
visit clients and take orders for his side-business which he'll honour probably
early in the morning before reporting for work. The Rs 20-crore papad industry
involves 12-hour workdays for widows and older women of over 500 families.
No job for the Sindhi is too modest as long as it's commercially rewarding. And
there is very little apparent discrepancy between people of different trades.The
readymade industry has a turnover of about Rs 32 crore. Ulhasnagar has about
4,000-5,000 such units most are in Camp 5.
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2.2 HISTORY OF SMALL SCALE INDUSTRY:
Ministry of Agro and Land Rural Industries and Ministry of SSI have
been merged into a single namely, Ministry of Micro Small & Medium
Enterprises.The President under Notification 9th May 2007 has amended the
Government of India (Allocation of business) Rules 1961, Pursuant to this
amended Ministry of Agro and rural Industries (Krishi Evam Gramin Udyog
Mantra lay) and ministry of SSI (Laghu Udoyag Mantralay) have been merged
into a single Ministry, namely, Ministry of Micro Small & Medium Enterprises
(Suksham Laghu Aur Medium Udyam Mantralay)
2.3 CONCEPT OF SSI:
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In most parts of the world the nomenclature used is small and Medium
Enterprises (SMEs) and the criteria for defining include the number of employees
and /or the turnover. In India the Small Scale Industry evokes different meanings
for different agencies and the financial institution. For example for the purpose of
excise and sales Tax Exemption, the turnover alone is the determining criterion.
However in broader terms, currently, an SSI is defined in terms of investment
ceiling on the original value of instilled plant and machinery.The small scale
sector has played a very important role in the socio-economic development of the
country during the past 50 years. It has significantly contributed to the overall
growth in terms of the Gross Domestic Product (GDP), employment generation
and exports.
2.4 DEFINITION OF SSI:
Small-scale Industrial Undertakings are those which are engaged in the

manufacturing, processing or preservation of goods and in which investment in
plant and machinery (original cost) does not exceed rs. 1 crore. These would,
interalia, include units engaged in mining or quarrying servicing of machinery.
2.5 CLASSIFICATION OF SSI:
Small-scale Industries can be classified into five main groups:
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1) Manufacturing Industries i.e. industries manufacturing complete article.
2) Serving Industries – It covers light repair shops necessary to maintain

mechanical equipment.
3) Feeder Industries – It specializes in certain types of products and services

e.g. electroplating, casting welding etc.
4) Ancillary to large Industries – It produces parts and components and

rendering services.
5) Mining or quarrying.
2.6 THE SMALL SCALE INDUSTRIAL UNDERTAKING:
An industrial undertaking in which the investment in plant and machinery,

whether held on ownership terms or on lease/hire-purchase basis, does not exceed
Rs.10 million (Rs.1 crore) is regarded as a small scale undertaking. These include
manufacturing and service units. Status of Small Scale Industries Undertaking
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1) Ancillary Industries Undertaking :-
Engaged in manufacture of parts, component Sub-assemblies, The

investment in fixed assets doesn’t exceed 1 crore.
2) Tiny Industries :-
All small scale units, which investment on plant & machinery

(excluding land & building) up to Rs.25 Lakhs.
3) Export Oriented Units:-
All small scale units which export more than 50% of their output.
Tiny Enterprises A unit is treated as a tiny enterprises where investment in
plant and machinery does not exceed Rs.2.5 million (Rs.25 Lakhs)
irrespective of the location of the unit. Many shops, Export Oriented Unit
[EOU]
2.7 CHARACTERISTICS OF SSI:
1) Small Capital Investment:
Small-scale industries require less capital as compared to medium

or large-scale industry. Cottage Industries require very little capital An
artisan family could start their business with just a few hundred rupees.
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2) Generate employment:
Small-scale industries are generally labour intensive and hence

create employment opportunities which is the need of hour. It is very
helpful in a developing country like India where we have a lot of
underemployment problems.
3) Personal Contact:
There is a personal supervision of all the activities i.e., production,

purchase labour and marketing of goods and it is done by the entrepreneur
himself.
4) Location:
Small-scale industries are generally located in Rural and semi

urban areas. They can be easily located anywhere provided raw material,
labour and finance are easily available.
5) Exploitation of Human Resources:
Child and women labour in particular are exploited by small-scale

industries. The exploitation takes place in industries located in rural areas.
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6) Entrepreneurial Growth:
Small-scale industries activity is a beehive of entrepreneurship.

The small-scale industrial activity has been growing at faster rate even
then the large-scale sector.
7) Technology:
Small-scale industries do not require high level of technology.

Indigenous technology is used as far as possible. Being labour intensive
not much of capital is needed.
8) Dispersal of Manufacturing Activity:
The metropolitan cities have become congested. Small-scale

industries make it possible to transfer manufacturing activities from
congested metropolitan cities to the rural and semi urban areas.
9) Poor Organisation and Management:
The management and organisation of small-scale industry is poor

and negligible. Very often the management is on trial and error basis.
There is no delegation of authority.
10) Ownership:
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Most of the small-scale industries are privately owned and

organised as sole proprietorship.
2.8 OBJECTIVES OF SSI:
1) To create vast employment opportunities for the people.
2) To effect decentralisation of industries by creating industrial estates.
3) Redistribution of economics power as well as income.
4) To raise the standard of living of the people.
5) To increase industrial production.
6) To facilitate mobilisation of resources.
7) Promoting industrial development of backward areas.
8) To bring about an integration of development of rural economy on

one hand and large-scale industry on the other.
9) To utilise the available resources.
10) To tap latent resources like entrepreneurial ability hoarded wealth etc.
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2.9 ROLE & PERFORMANCE OF SMALL-SCALE INDUSTRIES:
Table no: 2.1
PERFORMANCE OF SMALL-SCALE INDUSTRIES:
Number of Enterprises (Lakh Production Share

Empl. (Rs. Crs.) Growth
Nos.) In
Year (Lakh
at Current Rate GDP
Registered Unregistered Total Person)
prices (%) (%)
2002-2003 15.91 93.58 109.49 263.49 314850 8.68 5.92
2003-2004 16.97 96.98 113.95 275.30 364547 9.64 5.79
2004-2005 17.53 101.06 118.59 287.55 429796 10.88 5.84
2005-2006 18.71 104.71 123.42 299.85 497842 12.32 5.83
2006-2007 20.98 107.46 128.44 312.52 587196 12.65 5.94
2007-2008
24.68 108.99 133.67 322.28 695126 13.00 NA
(Projected)
Small-scale and cottage industries are the most important employment

providing sectors of the economy after agriculture. The performance and role of
small-scale and cottage industries can be discussed under the following headings.
1) Expansion of Small-Scale Sector :
The study of expansion of small-scale sector over a long period of

time is not possible as the definition of small-scale undertakings have
changed over the time.
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A study of the data contained in Economic Survey 2007-08 gives

the following results for the period 2002-03 to 2007-08:
a) The number of small-scale units stood at 263.49 lakhs in 2002-03 and

this rose to322.28 lakhs in 2007-08.
b) The output of small-scale unit was Rs.587196 crore in 2002-03 and

this rose to Rs.695126 crore in 2007-08.
1) Employment Generation:
The small scale units employed 263.49 lakhs people in 2002-03

and this number consistently risen to 322.28 lakh in 2007-08.creation of
employment opportunities depends crucially on the development of small-
scale and cottage industries, given the acute problems of unemployment in
India.
2) Registration of the small-scale industries:
The small-scale units registered in the year 2002-03 was 15.91

lakhs units which has been rose to 24.68 lakhs units in the year 2007-08.
3) Growth of small-scale industries:
There is rapid growth of small-scale industries in the recent years

the above table represents the percentage increase in the number of small-
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scale industries. In the year 2002-03 the8.68 % which has increased

to13.00% in the year 2007-08.
4) Share in GDP:
Initially the percentage of share in GDP in the year 2002-03 was

5.92 that has been increased to5.94 in the year 2006-07.The percentage
share of GDP in the year 2007-08 has yet not recorded.
2.10 IMPORTANCE OF SSI:
Small-scale industries play an important role in the process of country’s

industrial development. It accounts for 40% of the total value of industrial
production and contributes directly about 33% of the aggregate exports.
In a developing country like India it is a small-scale industry that

constitutes the backbone of the industrial structure. Its development has created
vast employment opportunities and has brought about decentralization.
The following points suggest the importance of SSI.
1) Labour Intensive:
Small-scale industries do not require large amount of capital. They

are labour intensive and can provide employment to large amount of
people. The energy the unemployed and the underemployed may be
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utilized for productive purpose in the economy.
2) Equitable Distribution of Income and Wealth:
By creating opportunities for small business, small enterprises can

bring about a more equitable distribution of income and wealth which is
socially necessary and desirable.
3) Production:
Small-scale industries projects can be undertaken in a short period

and hence can increase the production in the short run and long run. The
small-scale sector produces a large proportion of the national products.
4) Dispersal of Manufacturing Activities:
Small-scale industries will make possible transfer of manufacturing

activity from congested cities to the rural and semi urban areas. This
will help in bringing about a balanced regional growth.
5) Linkages:
The large-scale industries create an opportunity or facility for the
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growth of small-scale industry. The growth of large motor industry will

create opportunities for setting up of small service station and repair
centres.
6) Own Identity:
Small-scale enterprises have their own place in the country’s

economy. Imperfect competition protects the small firms market and
enables them to exist even if they are not efficient in terms of cost.
7) Training Ground for Local Entrepreneur:
Small-scale industrial enterprises are training ground for local

entrepreneurs. small-scale industry knowledge and skill can be
transferred to other enterprises.
8) Mobilization of Services:
In the rural areas savings are generally used in unproductive

consumption. The growth of cottage and small-scale industry can offset
the investment opportunities to people living in under-developed
countries.
9) Facilitates Capital Formation:
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The development of small-scale industries will generate additional

incomes and additional savings, this will facilitate capital formation in
the economy.
10)Export Potential:
Nearly 20% of the total value of export comes from small-scale

industry. The main items of exports of small-scale sectors include
engineering goods, pharmaceuticals, sports goods, finished leather,
readymade cotton garments, processed foods, etc.
2.11 ADVANTAGES OF SSI:
1) They are innovative and productive.
2) Some small-scale industries do not require a high level of

technology.
3) Small – scale industries are generally labour intensive and do not

require a large among of capital. The energy of unemployed and
under – employed people may be used for productive proposes in
an economy in which capital is scarce.
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4) Small – scale industries projects can be undertaken in a short

period and hence can increase production both in the short and
long run.
5) Most developing countries are rich in certain agricultural, forest

and mineral resources; small – scale industries can be based on the
processing of locally – produced raw materials.
6) It is possible both to save and to earn foreign exchange by

producing and exporting goods process from local resources.
7) Small enterprises create immediate & permanent employment at a

relatively small capital cost.
8) They meet a substantial part of increased demand for consumer

goods including mass consumption goods.
9) They facilitate mobilisation of resources of capital & skill which

often would remain inadequately utilised.
10) They bring integration with rural economy on the hand & large-
scale enterprise on the other.
11) They offer a method of ensuring equitable distribution of national

income.
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12) They involve a short gestation period.
13) They do not require as heavy & costly infrastructure as larger

enterprises.
14) The products of these enterprises earn a substantial exchange.
15) They assist in dispersal & avoid problems which unplanned

urbanisation tends to create.
2.12 PROCESS OF SETTING UP A INDUSTRY
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2.13 REGULATION GOVERNING SSI:
1) THE TRADE UNION ACT 1926:
Objective
- To confer a legal and corporate status on registered trade unions.
Scope And Coverage
- Applicable to unions of workers as well as associations of employers.
- Extends to the whole of India. - A central legislation but administered

and enforced by the state governments.
Main Provisions
- Defines trade union.
- Registration of a trade union by any seven or nine workers of an

establishment on applying with a copy of the rules of the union, the name
and address, and the list of office bearers.
- Cancellation and dissolution of trade unions.
- Obligations of registered trade unions.
- Rights of registered trade unions.
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When To Consult And Refer
- At the time of start of an enterprise.
- Throughout the running of the enterprise
2) THE WORKMEN COMPENSATION ACT 1923:
To provide compensation for workmen in cases of industrial

accidental / occupational diseases in the course of employment resulting
in disablement or death. Coverage for persons employed in Factories,
Mines, Plantations, the Railways and others mentioned in Schedule II of
the Act.
Benefits
Compensation for Death
- Minimum - Rs.20,000 Maximum - Rs.1,14,000
Compensation for Permanent disablement
- Minimum - Rs.24,000 Maximum - Rs.70,000
Temporary disablement
- 50% of wages for a maximum period of 5 years.
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3) THE EMPLOYEE STATE INSURANCE ACT 1936:
Objective
To provide for health cover, Medical care and Cash benefits for
- Sickness
- Maternity
- Employment injury
- Pensions to dependents in case of Death (or) Employment injury.
Eligibility
- Employees drawing wages not exceeding Rs.3000/- per month
Benefits
- Compensation for Death Minimum - Rs.20,000 Maximum - Rs.1,14,000
- Compensation for Permanent disablement Minimum - Rs.24,000

Maximum - Rs.70,000
- Temporary disablement 50% of wages for a maximum period of 5

years.
4) THE MINIMUM WAGES ACT 1948:
Objectives
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- To determine the minimum wages in industry and trade where labour

organisations are non-existent or ineffective.
Scope and coverage
- Applicable to all employees engaged to do any work, skilled, unskilled

manual or clerical, in a scheduled employment, including out-workers.
- Fixation of minimum wages.
Main provisions
- Fixation of minimum wage of employees.
- Procedure for fixing and revising minimum wages.
- Obligation of employees.
- Rights of workers.
When to consult and refer
- At the time of fixation of salary of new/existing employees.
5) THE PAYMENT OF GRADUITY ACT 1972:
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Objective
- To provide for payment of gratuity on ceasing to hold office
Coverage
- Factories, Mines, Oil fields, Plantations, Ports, Railway Companies,

Shops & Commercial Establishments and to other establishments to which
the Government extends the law.
Eligibility
- Employees drawing wages not exceeding Rs.3500/- per month
CHAPTER NO. 3
PROBLEMS FACED BY SSI
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1) Difficulty in obtaining from commercial banks because of their

general inability to provide security.
2) Inability to offer liberal credit terms in the sale of their products.
3) Absence of management expertise. Often management is by one

person who performs a number of functions usually with no formal
training.
4) Difficulty in competing with imported products due to high

production costs.
5) Difficulty with competition from other local entrepreneurs in the same

line of business competing for the limited local market.
6) Difficulty in obtaining industrial land in towns & cities. The shortage

of industrial land is giving rise to more backward operations.
7) Under capitalization.
8) Difficulty in identifying appropriate technology technical assistance.
9) The manner in which both the needs of the economy & linkage with
existing industry can best be served.
10) Bureaucratic red tape & regulations.
11) Surveys of the material & human resources of the countries to

identify the regions or areas for the development of small-scale &
medium-scale industrial enterprises.
12) Identification of industrial projects for development.
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13) Project preparation & evaluation.
14) Financial or credit support & investment promotion.
15) Consultancy & counseling services.
16) Technology development & applications such as, the designing of

proto-type machines for products identified according to country
resources & requirements.
17) Development of infrastructure of various kinds in the appropriate

areas.
18) Entrepreneurship development.
19) Industrial training & formation.
20) Linkages between large & small industries & the creation of sub-
contracting facilities at the national, regional & international levels.
21) Quality control & testing facilities.
22) Market promotion, both domestic & export.
23) Scientific & industrial research.
24) Information collection & dissemination on technology, markets, etc.
25) Identification of & assistance to enterprises which are experiencing

difficulties.
26) Management & reorganization or restructuring of small-and/or

medium-scale enterprises through various schemes.
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27) Productivity increases through modernization.
28) Incentives measures, by industry & by area.
29) Local initiative.
30) Creation of institutions & changes in prevailing institutional

arrrangements.
31) Regional & international technical & financial assistance.
32) Co-operation among the developing countries.
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CHAPTER NO.4
REVIEW OF LITERATURE:
4.1 REDOUBLE EFFORTS TOWARDS BETTER CUSTOMER

SERVICE:
Small and medium companies are the engines of the Indian economy. The
time of small scale is up and that big is beautiful. If anything, small is even more
relevant today than before. My convictions are based on sound reasoning.
In this era of super specialisation, small can really add value to a product
category. For instance, over 75% of Indian apparel export takes place from units
whose turnover is less than Rs.50crores. They are the backbone of apparel
industry. The product diversity, specialisation and the care they give to their
clients is unsurpassed.
The small scale rather than giving up hope and throwing in the towel,
must redouble its efforts and energies towards better customer service.
4.2 REVISE PROPERTY TAX OR WE WON'T PAY: SSIS:
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BANGALORE: There's a tug-of-war going on between the BBMP and

small-scale industries in Bangalore.
There are nearly 80,000 small-scale industry units almost 70-80% of them
have not paid property tax in protest, for the past three years! On a rough
estimate, the loss in revenue for the Palike amounts to at least Rs 150-200 crore a
year. "Why must we pay when we are not heard even after several
representations?" asks J Crasta, immediate past-president of FKCCI.
One of their main complaints against the revised Self-Assessment Scheme

(SAS) law for property tax is that it broadly categorises all properties under
residential and commercial. There is no separate slab for industries.
"Technically speaking, the rate for industries has not been fixed till now.
But the Palike wants to collect it under the commercial slab, which is not feasible
for us. We will not pay until this issue is sorted out," Srinivasamurthy added.
All industries also get added benefits — of their total built-up area, 25%
is considered utility area and charged at 50% of unit area value (UAV). Owner-
occupied industries get flat 50% rebate in UAV."
4.3 BUDGET GIVES BOOST TO A SMALL-SCALE INDUSTRY:
NEW DELHI: Considering huge job losses due to economic recession, the
UPA government is doing its bit to shore up the small scale industry. The
government enhanced fund allocation for micro, small and medium enterprises.
While it contributes 8% of the country's GDP, the sector employs about 60

million people through 2.6 crore enterprises and contributes about 40% to the
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country's exportsMukherjee said, "A high-level council on small and medium

enterprises will monitor implementation of the recommendation and the agenda
for action".
4.4 GET THE BEST OUT OF WASTE:
A majority of companies across industries in India are small and medium

enterprises (SMEs) and these account for a huge segment of the country’s
economy. According to a report by the Government of India, around three million
SMEs are currently operational in the country, generating over 40% of the
nation’s GDP. “SMEs account for a majority of environmental pollution due to
their poor production methodologies and obsolete waste management
techniques.”
To mitigate environmental issues, SMEs were urged to adopt conventional

technologies such as end-of-pipe systems for waste treatment, but these failed
upon large-scale implementation due to cost constraints. Adopting the new
practices also helps SMEs become compliant with international regulations for
ecological safety. A few initiatives that have assisted SMEs in terms of waste
minimisation, regulatory compliance and revenue enhancement are discussed
below.
As the chemical is included in the government’s list of highly toxic

agents, the manufacturing unit was under strict surveillance by regulatory
agencies monitoring environmental pollution.
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4.5 CALL TO SAVE SMALLSCALE INDUSTRIES FROM

RECESSION:
SHIMOGA: The small scale industrial sector which was all along an
ailing sector is now facing an unbearable threat from economic recession and it is
a pity that the government is indifferent towards it despite repeated requests,
observed president of Chamber of Commerce and Industry Murlidhar.
He said the state government should immediately step in to save the

industry on the lines of the Centre and RBI with special package and support
incentives. He said many industries which exhibited courage to face the
competition and challenges are on the verge of closure due to the global
meltdown.
He observed that reduction of VAT and Entry tax system and stereotyped
official grip have been pushing the ailing sector to further agony and towards
virtual closure.
REFERENCES OF REVIEW OF LITERATURE:
4.1) REDOUBLE EFFORTS TOWARDS BETTER CUSTOMER SERVICE,

FROM THE ECONOMIC TIMES, JULY 16, 2010.
4.2) REVISE PROPERTY TAX OR WE WON'T PAY, SMALL-SCALE
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INDUSTRIES, FROM TIMES OF INDIA, JULY 12, 2010.
4.3) BUDGET GIVES BOOST TO A SMALL-SCALE INDUSTRY, FROM

TIMES OF INDIA, ON FEB 27, 2010.
4.4) GET THE BEST OUT OF WASTE, FROM THE ECONOMIC TIMES,
ON FEB 2, 2010.
4.5) CALL TO SAVE SMALLSCALE INDUSTRIES FROM RECESSION,

FROM TIMES OF INDIA, MAR 16, 2009.
CHAPTER NO.5
AREA OF THE STUDY
The researcher tries to study problems faced by small-scale industries had

selected the area of Ulhasnagar to collect data from approximately 50
respondents.
AREA OF ULHASNAGAR:
Ulhasnagar (Marathi: उलासनगर, Sindhi ‫ ُالهاسنگر‬or ‫( سنڌُونگر‬Sindhunagar)) is a
small city located on coast of the West India, approximately 60 kilometres (37
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miles) northeast of the city of Mumbai, in the Thane district in the state of
Maharashtra. This city is part of Mumbai Metropolitan Region managed by
MMRDA.
Ulhasnagar, also referred to as Sindhunagar (‫)سنڌُونگر‬, has an estimated

population of 472,943 people (2001). The name derives from the Ulhas river
which flows through it. Kalyan is situated near Ulhasnagar. Over the years, the
city has grown a reputation for all types of small business.
Ulhasnagar is a municipal town and the headquarters of the Tahsil bearing

the same name. It is a railway station on the Mumbai-Pune route of the Central
Railway. Ulhasnagar, a colony of migrants in the aftermath of Partition, is 61
years old. Situated 58 km from Mumbai, the once-barren land has developed into
a rich town of Thane district. Originally, known as Kalyan Military transit camp
(or Kalyan Camp), Ulhasnagar was set up especially to accommodate 6,000
soldiers and 30,000 others during World War II.
CHAPTER NO.6
ANALYSIS OF THE STUDY
The researcher to study the problem of small-scale industries has collected

the data from the 50 respondents in the area of Ulhasnagar by using
questionnaire, & observation. A Researcher after collecting the data has arranged
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it systematically & has analyses & interpreted the data. The data shows the
perception of the 50 small-scale industries owners of the area of Ulhasnagar.
PERCEPTION OF THE SMALL-SCALE INDUSTRIES

OWNERS OF THE AREA OF ULHASNAGAR:
Table no: 6.1
INITIAL INVESTMENT
Particulars 50000-100000 100000- 150000- 200000 & more

150000 200000
How much was 2 17 9 22
the initial
investment (4%) (34%) (18%) (44%)
made by you?
Chart no: 6.1
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Capital is essential for business. Capital is backbone of all business

entrepreneurs. The amount invested in the business is called Capital. The initial
investment dumped in the business to carry out business operations smoothly.
In the above chart 6.1 we can see that 22 (44%) of the respondents has
started their business with initial investment of more than 2 Lakhs rupees.
Whereas 9 (18%) has invested between 150000-200000. The amount invested in
the business depends upon the nature of business. As the nature so will be the
investment. Whereas 17 (34%) the amount invested is between 100000-150000.
As the business is dependable on amount of capital. It helps in smooth
functioning of the business. Whereas Only 2 (4%) has started their business with
the initial investment of rupees between 50000-100000.
As the nature of their business is very small such as plastic & parsons
food products can be conducted with small amount of the money invested.It is
founded that amount invested far business depends on size of business. Small
scale industries does not mean small amount invested. Smooth & proper
functioning require as much as capital needed by the proprietor.
Table no: 6.2
SOURCES OF FINANCE
Particulars Owned loan Partly owned

partly borrowed
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What were 10 7 33
the sources
(20%) (14% (66%)
of finance?
)
Chart no: 6.2
As the business operations requires capital. The capital for the business is
not totally owned by the proprietor it may be arranged from financial sources
such as Bank, friends, etc. E.g., it may be partly owned & partly borrowed.
It was found that 33 (66%) of the respondents in Ulhasnagar has started up

their business with the help of financial institutions & there owned money i.e
partly owned & partly borrowed. Whereas 10 (20%) of the owners has invested
their capital without any help from outside sources. He has invested hi owned
capital .wheras 7 (14%) has informed their business is fully taken up with the help
of financial companies which agreed to change nominal rate of interest to start up
their profit.Since small-scale industries involves small investments it involves
less risk & majority of source of finance was found that there were mainly partly
owned & partly borrowed.
Table no: 6.3
PROBLEMS FACED IN GETTING RAW MATERIAL
Particulars Non- Poor Increased All of the
Page 42
availability quality cost above
What are the problems 7 8 30 5

faced by you in
getting supply of raw (14%) (16%) (60%) (10%)
material?
Chart no: 6.3
Availability of raw materials at proper time from proper channels enable

the entrepreneur to carry out the business operations smoothly & the orders can
be executed in time.
The chart 6.3 shows the opinion of the respondents which represent 30
(60%) of the entrepreneur faced the problem of availability of raw materials due
to increased cost. They were of the opinion that increase in cost affects the price
increases the demand for the product decreases. Further 8 (16%) of the
respondents agreed the problems relating to raw materials is its poor quality. The
quality of raw materials is not proper which affects their business. Whereas 7
(14%) respondents were of the opinion that the non-availability of raw materials
is problem faced by them. As a raw material is not available in proper time their
orders are not completed in time. They have to face cancellation of orders or
delay in dispatchment of goods. And finally 5 (10%) of the respondents has
suggested that they had to suffer all three above stated problem which affect their
business.
Page 43
Table: 6.4
EMPLOYEES
Particulars 0-25 26-50 51-75 76-100

How many many 32 11 6 1
employees are
employed in your (64%) (22%) (12%) (2%)
SSI?
Chart no: 6.4
An detail analysis of the data it was found that maximum number of

respondents i.e. 32 (64%) agreed that they employ 0-25 number of employees,
further it was found that majority of small-scale industries in Ulhasnagar employs
small number of employees as their size of business is small & further they were
of the opinion to carry out business functionised smoothly number of employees
to be lessened. They are in favour of less number of employees. Whereas 11
(22%) are in opinion to have 26-50 workers. Whereas 6 (12%) are founded to
have employees between 51-75. & only 1 (2%) respondents have employees
between 76-100.
Table: 6.5
OBSTACLES FACED IN TRAINING UNTRAINED MANPOWER
Page 44
Particulars Resistance Absenteeism Pessimistic All of the

above
What are the different 1 27 2 20
obstacles faced by you
in training untrained (2%) (54%) (4%) (40%)
manpower?
Chart no: 6.5
Obstacles & hindrances are ought to be found in the path of business.

Obstacles may be of different types but it remains in the business. It has to be
faced by every entrepreneur.
According to char 6.5 27 (54%) of respondents are of opinion that training

untrained manpower they face problem of the absenteeism. i.e.
workers/employees employed are tend to take holidays which effect the working
conditions of the firm. Further 20 (40%) respondents found that they suffer all the
problems i.e. Resistance, absenteeism, pessimistic outlook, etc. Whereas 2 (4%)
suffer from pessimistic outlook that means negative outlook by the employees.
Whereas 1 (2%) suffer from Resistance. Every businessmen has to overcome all
these obstacles to be a successful businessmen.
Table no: 6.6
PROBLEMS FACED IN RUNNING SHIFTS
Page 45
Particulars Power Absenteeism Improper working All of the

failure conditions above
What are the 30 4 7 9
problems faced by
you in running shift (60%) (8%) (14%) (18%)
to produce the
products
Chart no: 6.6
Small-scale industries in order to execute orders in time & carry out their
production efficiency they are run in shifts. But currently to run shifts they are
facing number of problems such as power failure, improper working conditions &
absenteeism.
The above chart shows 30 (60%) respondents are facing power shortage
problems in running shift to produce the products. Whereas 9 (18%) respondents
are facing the problems regarding power shortage, absenteeism of employees,
Page 46
improper working conditions. Whereas 7 (14%) are facing the problems due to
improper working conditions. Whereas 4 (8%) are suffering from absenteeism of
the employees. The employees usually go to their native village for 1-2 months
which affects the respondents business.
Table no: 6.7
PROBLEMS DUE TO COMPETITION
Particulars Yes No
Do you face problems due to 41 9
competition?
(82%) (18%)
Chart no: 6.7
Competition is the major problem suffered by the businessmen. In today’s

modern competitive world we has to be more conscious about their competitors.
They had to take into account the competitors products, price & all other things
which affects the business.
Page 47
The chart 6.7 shows 41 (82%) of the respondents are victims of

competition. The major problem suffered by them is competition. They also
informed that they are suffering from duplication of the products. All the
consumers want t0 purchase the commodity at low prices i.e. is very difficult for
the businessmen in terms of maintaining quality measures. Whereas 9 (18%) are
of the opinion that there business & goodwill is already maintained due to which
they are not affected by competition.
Table no. 6.8
FIXING THE PRICE
Particulars Based on Based on Based on All of

demand competition availability of these
raw material
How do you fix 9 5 11 25
the price of a
product? (18%) (10%) (22%) (50%)
Chart no: 6.8
Price of the commodity is to be fixed as per the needs of the customer.

Price of the product should not be high, it should be within the reach of customer.
Price fixing is one of the important task.
The above chart 6.8 represents 25 (50%) of the respondents fix the price
of the commodity on the basis of demand, competition & availability of raw
Page 48
materials. All these factors helps the respondents to fix the price of the
commodity. Whereas 11(22%) respondents stated that they fix the price on the
availability of raw materials. As raw material is available easily & at cheaper rate
then the price fixed is less. Whereas 9 (18%) respondents stated they fix the price
on the basis of demand of product. Higher the demand, more will be the price.
Whereas 5 (10%) respondents are in opinion that they fix the price on the basis of
competition. To be in the competitive market sometimes it becomes need to lower
the price of the commodity.
Table no: 6.9
INNOVATION & DIVERSIFICATION
Particulars Increase the Lack of Customer All of

demand response satisfaction these
Why do you bring 13 1 30 6
innovation &
diversification of (26%) (2%) (60%) (12%)
your product?
Chart no: 6.9
Innovation & diversification are important task for expansion of business.

Innovation means launching new product in the market. Diversification means
diversifying the product quality according to the need of customer.
Page 49
The above chart 6.9 represents 30 (60%) respondents makes innovation &
diversification for attracting customers. If these are any schemes of some
concessions customers are attracted to it. Whereas 13 (26%) stated that they bring
this type of changes in the product to increase the demand of the product.
Whereas 6 (12%) respondents are of opinion bring changes due to various factors
such as increase in demand, customer attraction, lack of response, etc. Whereas
1(2%) one of the respondents only stated they bring change due to lack of
response of their product in the market.
Table no: 6.10
INCREASING INFLATION AFFECTS BUSINESS
Particulars Yes No
Does increasing inflation affecting your 34 16
business?
(68%) (32%)
Chart no: 6.10
Inflation means being increased in value but the amount payable for
services or products are less. Nowadays major problem suffered is inflation.
The above chart 6.10 represent 34 (68%) of the respondents are prey to
inflation. There business has been highly affected due to inflation. Whereas 16
(32%) respondents are of opinion that inflation does not affect their business.
Page 50
Table no: 6.11
GOVERNMENT RULES & REGULATIONS AFFECTS PRODUCTION
Particulars Yes No
Does government rules & regulations 23 27
affects your production?
(46%) (54%)
Chart no:6.11
Every entrepreneur has to follow the rules & regulations framed by the
government. Everyone is abide to follow. It working without rules & regulations
may affect the business.
According to chart 6.11 23 (46%) respondents stated that most of the

government rules regulations affects the production. The increase in VAT, octroi,
& other taxes makes the product costlier which decrease the demand of the
product. Whereas 27 (54%) of the respondents are of opinion that their business is
not affected due to rules & regulation of government.
Table no: 6.12
PROBLEMS OF POWER SHORTAGE & POWER CUT
Particulars Yes No
Page 51
Do you have power shortage & power 49 1

cut problems?
(98%) (2%)
Chart no: 6.12
Electricity is the main facility required for the production process. Proper
pwer supply makes its easily for the business to carry out all business operations
smoothly & efficiently.
The above chart 6.12 represents 49 (98%) of the respondents of

Ulhasnagar suffers from power shortages & power cut problem. Due to load
shedding the whole Ulhasnagar town suffers from power cut. 3-5 hours power cut
efhects the business. Orders cannot completed at time. Due to no light on the
roads the customers shows less interest to make purchasing or they go for
marketing during the hours when electricity is available. Whereas 1 (2%) of
respondents does not have power shortages problem & this situation is unique.
Table no: 6.13
PROBLEMS FACED IN MARKETING
Particulars Non Lack of Non All of

availability of finance availability of the
sales person agents above
Page 52
What are the problems 4 1 4 41

faced by you in marketing
of your product? (8%) (2%) (8%) (82%)
Chart no: 6.13
Marketing of product is the important task that has to be carried out

carefully. This has to be done through proper channels & proper middleman.
The above chart 6.13 represents that 41 (82%) of the respondents of

Ulhasnagar face problems in marketing their product due to non-availability of
proper channel distribution, non-availability of agents or middlemen & some of
them cannot afford higher marketing expenses such as advertising, commissions,
etc due to lack of finance. Whereas 4 (8%) are found to be facing problem to non-
availability of proper sales persons. Whereas 4 (8%) are of opinion that they are
facing problems due to honest middlemen agents. Agents are cheating the
business in regard with the reputation of the buyer. Whereas 1 (2%) of the
respondents of Ulhasnagar stated that they could not afford advertisement
changes, middlemen changes, commissions high due to lack of finance.
Table no: 6.14
SUBSIDIES FROM THE GOVERNMENT
Particulars Yes No
Page 53
Do you get any subsidies from the 1 49

government ?
(2%) (98%)
Chart no: 6.14
Government provides new for small enterprise gives importance for

speedy modernisation, upgradation of technology, availability of cheap, adequate
& timely credit & quality control.
The above chart 6.14 represents that government of ulhasnagar does not
allow such susidies to the businessmen. According to the survey 49 (98%) of the
respondents of ulhasnagar has major problem of not getting any allowance,
concessions from the government of ulhasnagar i.e. Muncipal Coroporation.
Whereas 1 (2%) of the respondent stated that sometimes he receives some
allowance from the Government. He may be under pressure so he replied the
answer which was different from all.
Table no: 6.15
SSI CONTRIBUTES TOWARDS THE ECONOMIC DEVELOPMENT OF

INDIA
Particulars Yes No
Do you think SSI contributes 48 2
towards the economic
Page 54
development of a country? (96%) (4%)
Chart no: 6.15
The problems of industries, whether small-sector or in the organised

sector are almost identical. The organised industry is financially very strong & its
resources are large, it can therefore face problems more effectively. Because of its
weak financial structure, the resources of small-scale industries are limited.
According to chart 6.15 the 48 (96%) of respondents of ulhasnagar

believed that if they get proper Government support for speedy modernisation,
upgradation of technology, availability of cheap adequate & timely credit 7
quality control which enables the small-scale industry to help the economic
development of the country. The development of small-scale industry results in
developments of contry. Whereas 2 (4%) are of the opinion that development of
small-scale industry do not contributes towards the economic development.
Page 55
Page 56
Page 57
CHAPTER NO.7
CONCLUSION
Whether in small industry or large, problems always exists. Some takes

those problems as a challenge because that is the road to advancement. If there is
no problem or challenge, we tend to feel complacent, which is the beginning of
our degeneration. The problems of small-scale industries should therefore be
treated in this spirit.This study has helped to gain insight about the problems of
small-scale industries & overcoming these problems is major aspect considered
by the Government.
Page 58
1. Small-scale industries are facing adverse situations in ulhasnagar.
The problems of entrepreneurs in ulhasnagar are multidimensional which

gives rise to face the adverse situations. Finally the study show problems are
growing from professional manager & finally to administrator in order to
successfully come out of the growth crisis which he starts facing his enterprise
growth from small-scale business to large enterprise. The other factors that needs
to make SSI come out of the adverse situations are upgrading of the skill through
industrial training, promotion of market& procurement of raw materials.
2. Small-scale are incurring high cost of production in ulhasnagar.
Ulhasnagar always being the important trading centre too face the
problem of high cost. Today the city has gained heavy strength in manufacturing
& exporting quality products in its own name, instead of duplication. Maintaining
good quality & better reputation increase the cost of production.
3. Small-scale industries are affected by the inflation in ulhasnagar.
Inflation too affects the business in ulhasnagar. Inspite of increase in the value of
product the amount paid for services is less. This is the main problem suffered by
the enterpreneurs. The customers are likely to pay the same amount for the
product whether the quality maintained is same as or not. The price of the product
is important for customers which forces the entrepreneurs to maintain good
quality at low prices, which is not possible for every small business enterprise.
Page 59
CHAPTER NO.8
SUGGESTIONS
Page 60
To find out the problems of small-scale industry survey was done through
questionnaire, observation & interview method. On the basis of which would the
following suggestions were given.
1) According to a study, the high road to small industry development lay

through acquisition of collective ability to respond to new & changing
customer preferences.
2) In an ideal case a cluster of small firms need to include in one & same
geographical area, all activities required for development,
manufacturing & commercialization of a product.
3) The 20th century would ensure a bright future for the small industry
only if a conscious & sincere effort is initiated for overcoming
hardships faced by this sector.
4) The entrepreneur has to lay more emphasis on the quality of their

production.
5) The gospel truth is better quality & better productivity.
6) The process should start with the top & work down to the middle
management, first line management & finally to the first line
employees.
7) The present trend does indicate qualitative & quantitative growth in

terms of industrial production, exports, investment, modernization &
up gradation of technology etc but there is need also to give shape to
the policy frame works adopted till now.
Page 61
8) Extended financial assistance for locational shift of affected units in

addition to the provision of infrastructural facilities to enable SSIs to
conform to environment cleanliness norms and pollution control
measures.
9) A pro – active role from Industry Associations has been expected in

the areas such as building up of common use/comprehensive
information base and dissemination thereof and setting up of
marketing and testing facilities. State authorities might take part in
designing a support mechanism by way of providing financial
assistance for this purpose
10) Revisiting the laws governing small-scale industries & making them
simpler so as to enable small entrepreneurs to comply with the
simplified procedures.
Page 62
BIBLIOGRAPHY
FROM BOOKS:-
➢ Management of small-scale industries in india.
➢ Problems faced by small-scale industries in india.
FROM WEBSITES:-
➢ www.docstoc.com
➢ www.sindunagar.com
➢ www.wikipedia.com
➢ www.msme.com
➢ www.ssi.nic.in
FROM NEWSPAPERS:-
➢ The economic times
Page 63
➢ Times of india
FROM SEARCH ENGINES:-
➢ www.google.com
➢ www.yahoo.com
ANNEXURE
ANNEXURE OF QUESTIONNAIRE
Name:
Name of industry:
Product:
Address:
Mobile no.:
Questions to be Answered
1) How much was the initial investment made by you?
50000-100000 100000-150000
150000-200000 200000 & more
Page 64
2) What were the sources of finance?
o Owned Loan Partly owned partly borrowed
3) What are the problems faced by you in getting supply of raw material?
Non-availability Poor quality

Increased cost All the above
4) How many employees are employed in your SSI?
0-25 26-50 51-75 76-100

5) What are the different obstacles faced by you in training untrained
manpower?
Resistance Absenteeism
Pessimistic outlook All of the above
6) What are the problems faced by you in running shift to produce the products?
Power failure Absenteeism

Improper working conditions All of the above
7) Do you face problems due to competition?
Yes No
Page 65
8) How do you fix the price of a product?
Based on demand Based on competition
Based on availability of raw material All of these
9) Why do you bring innovation & diversification of your product?
Increase the demand Lack of response
Customer attraction All of these
10) Does increasing inflation affecting your business?
Yes No
11) Does government rules & regulation affect your production?
Yes No
12) Do you have power shortage & power cut problems?
Yes No
Page 66
13) What are problems faced by you in marketing of your product?
Non-Availability of sales person Lack of finance
Non-Availability of agents All of the above
14) Do you get any subsidies from the government?
Yes No
15) Do you think SSI contributes towards the economic development of a

country?
Yes No
Signature
LIST OF TABLES
Page 67
Sr. Title of Table Page

No. No.
1. PERFORMANCE OF SSI 15
2. INITIAL INVESTMENT 36
3. SOURCES OF FINANCE 38
4. PROBLEMS FACED IN GETTING RAW MATERIAL 39
5. EMPLOYEES 40
6. OBSTACLES FACED IN TRAINING UNTRAINED 41

MANPOWER
7. PROBLEMS FACED IN RUNNING SHIFTS 42
8. PROBLEMS DUE TO COMPETITION 44
9. FIXING THE PRICE 45
10. INNOVATION & DIVERSIFICATION 46
11. INCREASING INFLATION AFFECTS BUSINESS 47
12. GOVERNMENT RULES & REGULATIONS 48

AFFECTS PRODUCTION
13. PROBLEMS OF POWER SHORTAGE & POWER 49
CUT
14. PROBLEMS FACED IN MARKETING 50
15. SUBSIDIES FROM THE GOVERNMENT 51
16. SSI CONTRIBUTES TOWARDS THE ECONOMIC 52

DEVELOPMENT OF INDIA
Page 68
LIST OF CHARTS
Page 69
Sr. Titleof Charts Page

no. No.
1. INITIAL INVESTMENT 37
2. SOURCES OF FINANCE 38
3. PROBLEMS FACED IN GETTING RAW MATERIAL 39
4. EMPLOYEES 40
5. OBSTACLES FACED IN TRAINING UNTRAINED 41

MANPOWER
6. PROBLEMS FACED IN RUNNING SHIFTS 43
7. PROBLEMS DUE TO COMPETITION 44
8. FIXING THE PRICE 45
9. INNOVATION & DIVERSIFICATION 46
10. INCREASING INFLATION AFFECTS BUSINESS 47
11. GOVERNMENT RULES & REGULATIONS 48

AFFECTS PRODUCTION
12. PROBLEMS OF POWER SHORTAGE & POWER 49
CUT
13. PROBLEMS FACED IN MARKETING 50
14. SUBSIDIES FROM THE GOVERNMENT 51
Page 70

CH 1 Introduction

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PROBLEMS OF SSI IN ULHASNAGAR

1.1 INTRODUCTION OF INDUSTRY:

Industry refers to the production of an economic good (either material or

1.2 INTRODUCTION OF SSI:

Small-scale industries are the backbone of the Indian industrial structure.

Small-scale industries (SSIs) constitute an important and crucial segment of

It plays crucial role in the process of economic development by value

Small-Scale Industries play a key role in the Industrialization of developing

OBJECTIVES OF THE SYUDY:

1) To study the importance of small-scale industries in Ulhasnagar.

2) To study the benefits of small-scale industries in Ulhasnagar.

3) To study the regulations governing small-scale industries in

4) To study the problems of small-scale industries in Ulhasnagar.

1) Small-scale industries are facing adverse situations in Ulhasnagar.

2) Small-scale industries are incurring high cost of production in

3) Small-scale industries are affected by the inflation in Ulhasnagar.

is approximately 50 respondents in the area of Ulhasnagar.

Random sampling method has been used to collect data.

LIMITATION OF THE STUDY

1) Shortage of time for preparation of project.

2) Respondents were not giving accurate & proper response.

3) Lack of suffient & relevant data for this project.

SMALL-SCALE INDUSTRIES IN ULHASNAGAR

2.1 SMALL-SCALE INDUSTRY IN ULHASNAGAR:

2.2 HISTORY OF SMALL SCALE INDUSTRY:

2.3 CONCEPT OF SSI:

2.4 DEFINITION OF SSI:

Small-scale Industrial Undertakings are those which are engaged in the

2.5 CLASSIFICATION OF SSI:

Small-scale Industries can be classified into five main groups:

1) Manufacturing Industries i.e. industries manufacturing complete article.

2) Serving Industries – It covers light repair shops necessary to maintain

3) Feeder Industries – It specializes in certain types of products and services

4) Ancillary to large Industries – It produces parts and components and

2.6 THE SMALL SCALE INDUSTRIAL UNDERTAKING:

An industrial undertaking in which the investment in plant and machinery,

1) Ancillary Industries Undertaking :-

Engaged in manufacture of parts, component Sub-assemblies, The

All small scale units, which investment on plant & machinery

3) Export Oriented Units:-

2.7 CHARACTERISTICS OF SSI:

1) Small Capital Investment:

Small-scale industries require less capital as compared to medium

Small-scale industries are generally labour intensive and hence

There is a personal supervision of all the activities i.e., production,

Small-scale industries are generally located in Rural and semi

5) Exploitation of Human Resources:

Child and women labour in particular are exploited by small-scale

Small-scale industries activity is a beehive of entrepreneurship.

Small-scale industries do not require high level of technology.

8) Dispersal of Manufacturing Activity:

The metropolitan cities have become congested. Small-scale

9) Poor Organisation and Management:

The management and organisation of small-scale industry is poor

Most of the small-scale industries are privately owned and

2.8 OBJECTIVES OF SSI:

1) To create vast employment opportunities for the people.

2) To effect decentralisation of industries by creating industrial estates.

3) Redistribution of economics power as well as income.

4) To raise the standard of living of the people.

5) To increase industrial production.

6) To facilitate mobilisation of resources.

7) Promoting industrial development of backward areas.