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`38 pc of small industry units staying closed'

M. Somasekhar

Hyderabad , Oct. 3

AROUND 8.68 lakh small-scale industry units, constituting about 37.65 per cent of the total 23.5 lakh units in the country, have been found closed, according to the quick results of the third census of small-scale industries (SSIs).

Among the States, where these defunct units were high, were Tamil Nadu (16.2 per cent); Uttar Pradesh (13.4 per cent), Kerala (8.4 per cent), Madhya Pradesh (7.4 per cent) and Maharashtra (7.1 per cent), with the combined total being 52.5 per cent of the 8.68 lakh units, the census report compiled recently said.

The Development Commissioner (SSI), under the Union Ministry of SSI, which studied the registered SSI units up to March 31, 2001 also found that 90 per cent of the units were proprietary driven and about 6 per cent partnerships.

For the first time, the Ministry also looked at the unregistered SSI sector and found that a total of 3,69,606 units were listed.

In terms of sickness, as per the latest definition of the Reserve Bank of India (RBI) given by the Kohli Committee, the percentage was 2.5 in the registered SSI sector, against 0.8 in the un-registered. Among the units having loan outstanding with institutional sources like banks and financial institutions, the sickness was about 14.08 per cent in the registered against 13.47 per cent in the unregistered categories, the report said.

Kerala, Karnataka, Chhattisgarh, Maharashtra and Tamil Nadu topped in the maximum share of sick units in the registered SSI sector. Lack of demand and shortage of working capital were the two main reasons cited for the sickness in both the categories of SSI units.

Compared to the last census done in 1991, the SSI sector seems to have undergone structural changes. While the proportion of working units remained the same, the domination of SSIs among these units has gone down from 96 per cent to 66 per cent. The main reason for this was an increase in the units engaged in services.

Similarly, the per unit employment has gone down from 6.29 to 4.6. And the per unit fixed investment has gone up from Rs 1.60 lakh to Rs 7.11 lakh, this steep increase has been attributed to the technological upgradation, which has become imminent following the opening up of sector for competition from foreign companies.

In the maiden attempt to study the unregistered sector, the census found that 52.3 per cent of the units were not aware of the provisions for registration, while 40.6 per cent of units indicated that they were not interested. About 49.8 per cent of the units were involved in services, 33.6 per cent in manufacturing and 16.6 per cent in repair/maintenance.

Interestingly, 97.2 per cent of the units were proprietary, 10.66 per cent run by women and the average employment rate was 2.11.

The task of collating information on the unregistered sector involved a sample survey of about 19,766 villages/urban blocks. The final report of the Census would be ready in another two months, Mr S.K. Tuteja, Secretary in the Ministry of SSI, told Business Line.

The last census survey of the SSI sector was carried out during 1990-91, with the data captured up to March 1988. Therefore, the available information on this sector, which has been exposed to intense competition from overseas had become old and needed updating. The third census was undertaken during November 2002 to April 2003, with the support of the census department, he said.

Interestingly, to process the data quickly the intelligent character recognition (ICR) technology was utilised. The Hyderabad-based CS Software Enterprise Ltd completed the data processing through ICR and designed and printed the data collection formats.

The main advantage of the ICR technology is that hand-written forms can be scanned and data extracted by the computerised equipment at high speeds, thus completing the task faster.

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