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Introduction
Among the six basic principles of the governance
underlying the National Common Minimum Programme of the Govt.
of India, sustained “economic growth in a manner that
generates employment” has a pride of place. It also
describes the small scale industries as “the most employment
- intensive segment”.
This is indeed so. The small scale industries
have a long history of promoting economic growth that is employment-oriented
and spatially widespread, and hence inclusive. The contribution
of this segment to the economic sinews of the country is no
less significant. Nearly 39 percent of the gross manufacturing
output and 34 percent of the exports of India arise from these
enterprises. During the last four years of the 10th plan,
the output of the segment has recorded a real growth rate
of 8.87 percent annually. Over six thousand products manufactured
by these include several sophisticated items used in high
technology areas like nuclear power, missile and space programmes,
information technology, biotechnology, etc. The level of exports
by this segment also testifies to its overall competitiveness
in the global markets
While examining
the characteristic features of the economy of J&K State,
one comes to the conclusion that the State is economically
backward as compared to the other States of the Country. In
view of this state of affairs, it is highly essential to diversify
its economic structure by developing industries so that the
socio-economic conditions of the State are improved. Industry
will not only play a significant role in providing employment
to a large number of educated youth, it will also give solution
to the unemployment crisis through which the state is passing
during these days, and also would contribute to raising per
capita productivity.
We are aware that ours is a Land Locked State
and is severely handicapped due to locational disadvantages.
This results in increase in the cost of production as compared
to our neighboring States. In order to offset this additional
cost, the State Govt. and Govt. of India has provided special
package of incentives to the industrial sector so as to make
it competitive. However the effect of these concessions cannot
be presumed as direct addition in profits.
When State Industrial Policy was introduced
w.e.f 1st Feb. 2004, some new elements were introduced:
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a) |
Developing World Class Infrastructure
for speedy industrial development. |
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b) |
Encourage industrialization of the backward blocks
of the State. |
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c) |
Encourage existing industrial units to modernize. |
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d) |
Provide incentives on brand promotion keeping in
view the role of brands in promoting sales. |
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e) |
Concentrate on thrust areas for development as per
the list of Central Govt. |
This spirit behind this was to encourage and sustain the
existing struggling industry of J&K out of red and simultaneously
attract new investments. But unfortunately the desired results
could not be attained and we could muster only 3000 Crores
of new investments in comparison to 50000 Crores by Himachal
Pardesh during the same period.
However, we are convinced that J&K Small Scale Industry
has a future. But while looking at the future, certain considerations
will need to be kept in mind. The most important is the diversity
in the small scale sector. We do realize that there are still
some speed breakers on our super-highway to success. The rationalization
of the tax structure is one such example. A good deal of reforms
has already taken place and some are under way. Even today
the single-man unit is subjected to a minimum of 37 inspections,
52 laws and 116 forms and registers. The govt. should try
to frame a single legislation for the small scale sector which
would reduce procedural hassles and do away with the Inspectorism.
An environment should be created where the accent is on trust
rather than mistrust ; on facilitation rather than regulation
; and, on togetherness rather than on division, where the
words ‘you’ and ‘I’ are replaced by
‘ourselves’.
The foregoing discussion leads to several conclusions:-
1. The role of the government
and its agencies is very important in promoting competitiveness
of the industry in general and small scale industries in particular.
2. Innovative and tactical ways
of protection needs to be devised for providing a period of
adjustment to SSI’s and also lending them some breathing
space.
3. The govt. should take some
financial and tax measures to assist SSI’S such as :
 provision
of subsidies for R&D costs,
guarantee of loans when extended by the Credit Guarantee Association,
provision of venture capital funds,
tax reduction for capital funds,
loans
at low interest rates,
loans
for modernization of equipment, and others.
4. Opening of trade routes
with Pakistan like R.S.Pura – Sialkot,
Rajouri – Mirpur routes.
5. Setting up “SAARC Knowledge
Platform” including areas like e-networks, energy, water,
healthcare, agriculture, food processing and capacity building
- which will meet the unique needs of regional development
and help frame a road map for its time bound implementation.
6. Govt. Mind set has be changed
from red- tapism to red carpet welcome to entrepreneurs which
will inspire investor confidence and in return boost industrial
activities in J&K.
7. For competing internationally,
the firms and the entrepreneurs should develop pro-active
attitude and approach, and should upgrade technology used
in their SSI’s and also focus on upgrading skills and
competence of their personnel through appropriate training
by developing competence for training needs identification.
8. Entrepreneurs should analyze
implications of all international agreements and treaties
as well as other international developments in the country,
industry and own enterprise.
9. Entrepreneurs should be vigilant
on the changes in the factors that affect the product demand,
raw material supplies and their prices and fluctuations in
the same. Forecasting of these economic parameters for the
firm and the industry on a regular basis would help in decisions
regarding production planning, human resources management,
marketing and strategic decisions like diversification, etc.
10.The SSI’s should undertake
ISO 9000 and other quality management
system certifications to achieve the level playing field.
Further
entrepreneurs should initiate efforts towards global success
and ultimately aim at global leadership.
Thus, the J&K Small Scale Industries can successfully
meet the challenge of globalization.
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