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SSI sector made rapid strides in the '90s

Our Bureau

KOCHI, March 30

THE output from the small-scale sector has far outstripped all expectations and has grown by close to 200 per cent in the nineties.

The total output from the SSI sector which was Rs. 1,78,699 crores in 1991-92 grew to Rs. 5,27,515 crores in 1998-99. However, despite the growth in output, there has been no corresponding growth in the number of small-scale units in the country.

The number of small-scale units have grown by just 50 per cent in the same time period, the nineties. The number of SSI units grew from 20.82 lakhs in 1991-92 to 31.21 lakhs in 1998-99.

Contributing over 40 per cent of the manufacturing sector production and over one third of the country's total exports, the pivotal role that the small-scale sector plays in the Indian economy is quite evident.

As in the case of output, there was no correlation between the growth in exports from the small-scale sector and the growth in its numbers. In fact, the disparities in their respective growth curves are a lot more striking.

While the number of SSI units grew by 50 per cent, exports from them grew stridently by over 250 per cent during the nineties. In absolute terms, exports from SSI units grew from Rs. 13,883 crores in 1991-92 to Rs. 49,481 crores in 1998-99.

The disparity between the growth in numbers and output as well as with exports is further reinforced by the slower pace of employment generation from the sector. While output has grown by 200 per cent, employment generation has been relatively modest at 31 per cent.

Employment in the small-scale sector, which was 129.80 lakh people as on 1991-92, grew to just 171.58 lakhs in 1998-99. In effect, the discordant note is not just between growth in numbers and output, but extend to job creation and exports as well.

It would seem that the incremental investment into small-scale sector was more for technology upgradation, for mechanisation and automation, rather than for a sheer growth in numbers. This explains the lower growth in employment as against higher growth rate in output.

Technology upgradation and modernisation was further facilitated when the Government revised the investment limit for SSI units five fold during 1997-98 from Rs. 60 lakhs to Rs. 3 crores. Instead of proliferation in numbers, this revision resulted in fur ther modernisation and upgradation. And the modernisation and upgradation often did not generate the perceived employment potential, the impact was more on output.

The technology and automation process generated qualitatively superior products which found greater acceptance in the international market, hence enhancing the value of exports from small-scale sector.