EFFICIENCY OF SSI SECTOR

8.1

The SSI sector had shown resilience in spite of heavy competition over the years and recession in some of the years. The sector has grown from strength to strength. One of the interesting aspects would be to see as to how the small scale sector compares with the large scale sector.

8.2

The Central Statistical Organisation (CSO) in the Ministry of Statistics & Programme Implementation has been conducting a survey every year on organised manufacturing activities. This survey is called ‘Annual Survey of Industries (ASI)’. The ASI covers inter alia all the units registered under Sections 2 (m) (i) and 2 (m) (ii) of the Factories Act. The coverage under the ASI includes manufacturing and repair & maintenance activities. Services sector is not covered in ASI.

8.3

The results of Third Census of SSIs in respect of manufacturing and repair & maintenance activities are compared with the ASI results in the following table. The latest final results available of ASI are of ASI 2000-01. However, the CSO released Quick Estimates of ASI 2001-02. The Quick Estimates covered information on number of units, employment and output which could be compared with Third Census. With regard to Fixed capital and other ratios relating to that, comparison with Third Census was made on the basis of results of ASI 2000-01.

8.4

The comparison of SSI sector with large scale manufacturing sector covered through ASI reveals that the SSI sector is a better employment-generating sector. Third Census showed that the employment generated by the SSI sector per Rs. one lakh investment was 1.39, as against only 0.20 in respect of ASI. This means that the organised sector requires an investment of Rs.5 lakhs to generate employment to one person whereas the SSI sector generates employment for 7 persons with the same investment. With regard to investment - output ratio also, the SSI sector fared almost on par with the organised sector. The following table shows that an investment of about Rs.43,000 was required in the organised sector to generate an output worth Rs. one lakh, whereas in SSI sector, marginally higher investment of Rs. 48,000 would be required to generate the same amount of output.

TABLE 50: -COMPARISION OF SSI SECTOR WITH ORGANISED SECTOR