Several studies have been made to determine the extent and the cause of sickness in small-scale industry.The study team of the State Bank of India headed by Shri J.S. Varshneya(1975) examined 120 small scale units with aggregate borrowing in excess of Rs. 2 lakhs. The study team found that 100 units were in the unsatisfactory group and barely 20 were in the success group. Among the factors which were responsible for extensive sickness, the most important was lack of management expertise and lack of adoption of sound business principle in running the enterprise.
We may take the example Entrepreneurial Development Programme in Gujrat which were considered to be performing unsatisfactorily. The study revealed the following:
(1) Performance of the enterprise is positively associated with the age of the enterpreneaur. As the age of the entrepreneur improves, performance also improves.
(2) Lab-our problems were the least important causes failure in small -scale industries.
63% of the students performed very poorly as entrepreneurs. Performance of professionals covering managers, seniors executives, professors, etc was very commendable as the failure rate in this category was only 9 per cent.
Principle factors responsible for sickness of small units:
1. Lack of Management expertise.
2. Non-observance of the basic principles of business management
3. Under-utilization of capacity
4. Easy approval of small-scale units by the state
5. Non payment by the principals.
Measures to prevent sickness in small units:
1. The reserve bank of India should issue guidelines for the operation of small units and thus make professional management expertise available for the guidance of small entrepreneurs.
2. The government can accord priority in allocation of scare raw materials, extending marketing assistance and grating certain rebates and concession to small units.
3. The government should take small penal action against the principals for non payment for the delivery of goods by small units.
Conclusion:
The government should try to enhance entrepreneurship in small level which may lead to further level. As the many business school is coming up with management expertise skilled Programme which may be helpful in future to change the huge manpower of India into Skilled Man power
. If sickness is controlled in the beginning, it will involve much less social costs--- both in terms of financial burden on the state exchequer and in terms of displacement of labour, loss of production and its effect on other industries. Sickness in one industry affects all those industries which are connected with it on account of forward/backward linkages.
We may take the example Entrepreneurial Development Programme in Gujrat which were considered to be performing unsatisfactorily. The study revealed the following:
(1) Performance of the enterprise is positively associated with the age of the enterpreneaur. As the age of the entrepreneur improves, performance also improves.
(2) Lab-our problems were the least important causes failure in small -scale industries.
63% of the students performed very poorly as entrepreneurs. Performance of professionals covering managers, seniors executives, professors, etc was very commendable as the failure rate in this category was only 9 per cent.
Principle factors responsible for sickness of small units:
1. Lack of Management expertise.
2. Non-observance of the basic principles of business management
3. Under-utilization of capacity
4. Easy approval of small-scale units by the state
5. Non payment by the principals.
Measures to prevent sickness in small units:
2. The government can accord priority in allocation of scare raw materials, extending marketing assistance and grating certain rebates and concession to small units.
3. The government should take small penal action against the principals for non payment for the delivery of goods by small units.
Conclusion:
The government should try to enhance entrepreneurship in small level which may lead to further level. As the many business school is coming up with management expertise skilled Programme which may be helpful in future to change the huge manpower of India into Skilled Man power
. If sickness is controlled in the beginning, it will involve much less social costs--- both in terms of financial burden on the state exchequer and in terms of displacement of labour, loss of production and its effect on other industries. Sickness in one industry affects all those industries which are connected with it on account of forward/backward linkages.
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