PESTLE ANALYSIS OF COTTAGE AND SMALL SCALE INDUSTRIES
Foreword
AS MBA Degree requires equal attending practical every bit good as theoretical facet of the concern, assorted jobs are to be dealt with in these classs, that is why research plans are at that place to give deep every bit good as through cognition of the topics.
I have attempted to populate up these necessities while fixing this term paper. It is portion of professional classs. With the aid of term paper we can able to understand the deep cognition about the specific subject assign to us.
OBJECTIVES OF STUDY
* To cognize what is PESTLE.
· PESTLE analysis of COTTAGE AND SMALL SCALE INDUSTRIES.
· To happen the jobs faced by the Cottage and little graduated table industries and give suggestion.
PESTLE analysis
Introduction
PESTLE analysis stands for “ Political, Economic, Social, Technological, Legal and Environmental analysis ” and depict a model of macro-environmental factors used in the environmental scanning constituent of strategic direction. Some analysts added Legal and rearranged the mnemonic to SLEPT ; infixing Environmental factors expanded it to PESTEL or PESTLE, which is popular in the UK. The theoretical account has late been farther extended to STEEPLE and STEEPLED, adding instruction and demographic factors. It is a portion of the external analysis when carry oning a strategic analysis or making market research, and gives an overview of the different macroenvironmental factors that the company has to take into consideration. It is a utile strategic tool for understanding market growing or diminution, concern place, possible and way for operations.
The turning importance of environmental or ecological factors in the first decennary of the twenty-first century hold given rise to green concern and encouraged widespread usage of an updated version of the PEST model. STEER analysis consistently considers Socio-cultural, Technological, Economic, Ecological, and Regulatory factors.
* Political factors, are how and to what degree a authorities intervenes in the economic system. Specifically, political factors include countries such as revenue enhancement policy, labour jurisprudence, environmental jurisprudence, trade limitations, duties, and political stableness. Political factors may besides include goods and services which the authorities wants to supply or be provided ( merit goods ) and those that the authorities does non desire to be provided ( demerit goods or virtue bads ) . Furthermore, authoritiess have great influence on the wellness, instruction, and substructure of a state.
* Economic factors include economic growing, involvement rates, exchange rates and the rising prices rate. These factors have major impacts on how concerns operate and make determinations. For illustration, involvement rates affect a house ‘s cost of capital and hence to what extent a concern grows and expands. Exchange rates affect the costs of exporting goods and the supply and monetary value of imported goods in an economic system
* Social factors include the cultural facets and include wellness consciousness, population growing rate, age distribution, calling attitudes and accent on safety. Tendencies in societal factors affect the demand for a company ‘s merchandises and how that company operates. For illustration, an ageing population may connote a smaller and less-willing work force ( therefore increasing the cost of labour ) . Furthermore, companies may alter assorted direction schemes to accommodate to these societal tendencies ( such as enrolling older workers ) .
* Technological factors include ecological and environmental facets, such as R & A ; D activity, mechanization, engineering inducements and the rate of technological alteration. They can find barriers to entry, minimal efficient production degree and influence outsourcing determinations. Furthermore, technological displacements can impact costs, quality, and lead to invention.
* Environmental factors include conditions, clime, and clime alteration, which may particularly impact industries such as touristry, agriculture, and insurance.Furthermore, turning consciousness to climate alteration is impacting how companies operate and the merchandises they offer — it is both making new markets and decreasing or destructing bing 1s.
* Legal factors include favoritism jurisprudence, consumer jurisprudence, antimonopoly jurisprudence, employment jurisprudence, and wellness and safety jurisprudence. These factors can impact how a company operates, its costs, and the demand for its merchandises.
Bungalow AND SMALL INDUSTRIES
Introduction
Small-scale and bungalow industries play a really critical function in the state ‘s economic system despite the phenomenal growing in the large-scale sector. In fact, the small-scale sector is playing a critical function in the growing of national economic systems the universe over and is considered to be the engine of growing in most states. The small-scale industries are labour – intensive and supply employment to about 1.86 crores individuals in the state.
The accent on Village and Small-Scale Industries ( SSIs ) has ever been an built-in portion of the Indian Industrial scheme, more so after the Second Five Year Plan. It was envisaged that Village and Small-Scale Industries would play an of import function as manufacturer of consumer goods and absorber of excess labor thereby turn toing to the jobs of poorness and unemployment. Other advantages of little industries are that they guarantee a more just distribution of national income, enhance balanced regional industrial development, act as a baby’s room for entrepreneurship and facilitate mobilisation of local resources and accomplishments which might otherwise stay unutilized.
Consequently, the Government of India had been promoting and back uping the publicity of Small-scale Industries through calculated policies such as:
1 ) Protection from large-scale industries,
2 ) Capital subsidies,
3 ) Differential revenue enhancement intervention,
4 ) Reservation etc.
The Government continues to supply protection to the little graduated table sector, inter-alia, through the policy of reserving points for sole industry in the small-scale sector. Industrial undertakings other than the small-scale industrial projects engaged in the industry of points reserved for sole industry in the small-scale sector are required to obtain an industrial license and set about an export duty of 50 per cent of the one-year production. However, the status of licensing is non applicable to such industrial projects runing under 100 per cent Export Oriented Undertakings Scheme, the Export Processing Zone and the Particular Economic Zone Schemes.
The reserve policy was introduced in 1967 an effort to protect SMEs from competition from corporations and 44 goods were specified to be entirely manufactured by SMEs ( Large Corporations were allowed to come in this sector on status that 50 % of their green goods would be exported ) . As a consequence, SMEs dominated readymade garments, leather goods, autocomponents, electrical contraptions and the manus tool industries. Over the old ages, the figure of points reserved for SMEs increased and it stood at over 800 in 1989.
However, the Abid Hussain Committee set up by the Government of India which submitted its study in January 1997 observed that the reserve policy was inconsistent with the current trade reforms which allow free import of a big bulk of the goods and most of the staying can be imported under the particular Import Licence. The figure of reserved points has, hence, been coming down.
Industrial projects with investing in works and machinery up to Re. 1 crore qualify for the position as small-scale or accessory industrial project with consequence from 24 December 1999. The investing bound for bantam units is Rs. 25 hundred thousand.
The Small-scale Industry sector has emerged as a dynamic and vivacious sector of the Indian economic system in recent old ages, exposing phenomenal growing in the field of production, employment and dispersed development in general and exports in peculiar. There are about 34 lakhs Small-scale
Industries in the county accounting for approximately 40 % of the gross value of end product in the fabrication sector and about 34 % of the entire exports of the state. It provides employment to about 186 lakhs individuals, which is 2nd merely to agribusiness.
The Small-Scale sector contributes richly to other socio-economic facets such as decrease in income inequalities, merchandise variegation, dispersed development of little industries and linkage with other sectors of the economic system.
Position as in 2007-2008
No. of little graduated table industries units Rs.66.70 hundred thousand
Production at current monetary values Rs.9,45,496 crores
Employment 386 lakh individuals
Exports Rs.89,978 crores
Political ANALYSIS-
Eleventh Plan Programmes
During the twelvemonth 2008-09, a figure of new strategies were or are to be taken up for execution.
· New Anna Marumalarchi Thittam under 15 Points Programme of Chief Minister to advance Agro-Based /Food Processing Industries with investing of one crore and above in each of 385 blocks of the State with particular bundle inducements and Escort Support, to bring forth employment and to elate rural economic system.
· On-line Registration and issue of Provisional SSI Registration Certificate to new Entrepreneurs through the sanctioned Browsing Centres at District and Taluk Headquarters was inaugurated by the Chief Minister on 12.9.2002. On-line filing for Permanent SSI Registration Certificate is besides proposed to be introduced. The trappings of informations by SSI units through online will besides be introduced.
· Public Private Partnership Concept for care and substructure in the Estate, Business Development/ Documentation / Advisory Services / Consultancy Services/ Marketing Assistance, Common Facility Centres and Product Display Business Development Centres, Human Resource Development for development of SSI sector. Under this strategy, a portion of Capital Cost shall be borne by the Association / State and Central Government and the Balance Capital Cost shall be obtained as loan from fiscal establishments
· Cluster Development Scheme with 75 % of the cost of the Project as Grant will be provided by Government of India towards creative activity of substructure facilities/ services for development of Industrial Clusters.
· Formation of Export Guidance Cell under the chairmanship of the District Collector in the District Industries Centres to supply information on export activities, possible and procedural affairs for export and to originate steps for development of export in the State.
On Traveling Schemes
Centrally Sponsored Schemes
1 ) Puting up of Nucleus Cells
A new Scheme of Collection of monthly production inside informations from the selected sample Small Scale Industrial Units was introduced for the intent of calculating Index of Industrial production so as to measure the growing of this Sector. This has assumed national importance because of the present economic scenario. The DC ( SSI ) has provided Computer Hardware and Software to the 11 selected District Industries Centres and to the territory offices for reassigning the IIP to the Directorate of National Informatics Centre, and DC ( SSI ) , New Delhi.
A amount of Rs. 4.25 crores has been proposed for 11th Plan for this strategy towards staff costs which will be to the full met by Government of India.
2. Prime Ministers Rozgar Yojana Scheme ( PMRY )
PMRY.scheme for supplying Self-Employment to Educated Unemployed Youth was announced by the Prime Minister of India on 15th August 1993 to supply Self-employment chances to one million educated unemployed young person in the state. This Scheme benefits individuals who are educated unemployed young person in the age group of 18 to 35 old ages and holding passed VIII criterion with household income non transcending Rs. 40,000/- ( per annum ) . The age bound has been relaxed upto 45 Old ages in regard of SC/STs, Ex-Serviceman, physically handicapped and adult females from 1.4.99 onwards. Preference is being given to those who have received preparation in any trade in Government approved/ recognised Institutions ( I.T.I. etc ) for a period of at least 6 months. The Scheme envisages 22.5 % reserve for SC/ST campaigners and 27 % for other backward categories. An spending of Rs. 8.50 crores is proposed for execution of the Scheme during Tenth Plan. The full sum will be borne by Government of India.
Centrally Shared Schemes
Market Development Assistance State ‘s Share – for sale of coir by Indl. Co-operative Socities
Under this strategy, all the Coir merchandises are eligible for aid throughout the twelvemonth. A amount of Rs. 2.25 crores has been provided for 11th program period towards the State ‘s portion for this strategy.
Entrepreneur Development Institute ( E.D.I. )
It is proposed to set up an E.D.I. with theoretical account of E.D.I. Ahmedabad. This is meant to run into the entrepreneurial demands of the Southern Region in hereafter.
During 11th Plan a amount of Rs. 4.50 crores has been provided for this strategy towards State ‘s portion.
State Schemes
1.Industrial Estates-Maintenance ( Maintenance of Additional sheds in TACEL at Vridhachalam. )
TACEL Industrial Estate, Vridhachalam comprises of entire country of 42.80 estates and at present there are 64 Unit of measurements on rental footing. For care of the sheds in the Industrial Estate during the 11th Plan period a amount of Rs. 50 hundred thousand will be provided.
2. Technical Information Sections in Industrial Estates
The Technical Information Sections are working at Guindy, Ambattur, Madurai, Pettai, Katpadi, Trichy, Coimbatore and Salem to circulate information to the industrialists and prospective enterprisers. The Sections have libraries incorporating proficient books on Science, Technology, Management, Industrial Information Digests and Journals, Project profiles on SSI and inside informations of ISI specifications for assorted merchandises. The Technical Information Section, Guindy has a well-furnished auditorium with a picture range system. For the 11th Plan period Rs. 80 hundred thousand is provided for care of Technical Information Sections.
3. State Industries Centres – EDP Training, Women Entrepreneur Development Programme, Construction of DIC edifice, care, part to specific fund ( TTM ) etc. It is proposed to develop 1,25,000 adult females entrepreneurs within a period of five old ages from 2007-08 to 2011-12 at the rate of 25,000 adult females per twelvemonth. . An sum of Rs. 9.97 crores is provided.
ECONOMIC ANALYSIS
In 1947 after deriving independency, India initiated a way of industrialisation to accomplish economic prosperity. India focused on developing the fabrication base. Much of the states development was done through the five twelvemonth programs. Industries like Fe and steel, oil refineries, cement and fertiliser were brought under the gamut of public sector endeavors. The determination shapers so encouraged the development of little graduated table industries. They perceived that Indian little graduated table industries would play a critical function in the economic advancement of the state and had immense possible for employment coevals. Developing little graduated table sector would besides ensue in decentralised industrial enlargement, better distribution of wealth and to promote investing and entrepreunial endowment.
The authorities has initiated several policies for the growing and development of little graduated table industries. They included reserve of certain points to be manufactured merely by the little graduated table sector. Other steps include recognition selling, engineering, and entrepreneurship development, financial, fiscal and infrastructural support. In 1999, the authorities established the Ministry of Small Scale Industries and Agro and Rural industries to do policy determinations for the development and good being.
Initially the little graduated table sector was characterized as traditional labour intensive units with out-of-date machineries and inefficient production techniques. But in the recent past the status of the little graduated table units has improved. Today they have installed modern machines, applied better direction techniques and are much more productive.
SSI-Location
Small Scale Industries are located throughout the state, though preponderantly in the rural countries. The little graduated table industries in the rural countries are skill based, wherein the accomplishment for fabrication is passed on from one coevals to another. Some of the goods manufactured in these units are textile handcrafts, woodcarving, rock carving, metal ware etc. Small scale industrial mills are besides present in urban countries and normally they account for the maximal volume of production for that peculiar good in the state. For e.g. Ludhiana in the province of Punjab is the chief centre in the state for bring forthing woollen hose, run uping machine parts, bikes and its parts, likewise Tiruppur in Tamil Nadu histories for little scale houses.
Post
Liberalization
Post liberalisation economic conditions has created huge growing chance for the little graduated table industries. The authorities has besides supported the little graduated table industries by the manner of implementing policies like investing ceiling for the SSI sector and precedence loaning. The formation of WTO in 1995 resulted in a major challenge to the well being of the SSI. The protection given to the SSI in the signifier of reserve and quantitative limitations has been withdrawn. More than 160 points reserved under the SSI class have been de reserved. It has been found that if the SSI upgrades the engineering, follow better direction patterns, reengineer the mills to better productiveness and supply qualitative merchandise, they would be competitory in the station WTO scenario. The promotion in computing machine and telecommunication engineering, addition in e commercialism, opening up of markets due to WTO, amalgamations and acquisitions, improved substructure and outsourcing noncore country of concern have all contributed to the growing of SSI.
SOCIAL ANALYSIS
The little graduated table sector has played a really of import function in the socio-economic
development of the state during the past 50years. It has significantly contributed to the overall growing in footings of the Gross Domestic Product ( GDP ) , employment coevals and exports. The public presentation of the little graduated table sector, hence, has a direct impact on the growing of the overall economic system. The public presentation of the little graduated table sector in footings of parametric quantities like figure of units ( both registered and unregistered ) , production, employment and exports is given in
Table 7.15.
Harmonizing to projections made by the Ministry of Small Scale Industries during 2007-08, the SSI sector recorded growing in production of 8.09 per cent over the old twelvemonth. The little graduated table industries sector has recorded higher growing rate than the industrial sector as a whole ( 6.9 per cent during 2007-08 ) . It contributed approximately 40 per cent towards the industrial production as a whole and 35 per cent of direct exports from the country.The Government has been taking assorted steps from clip to clip in order to heighten the productiveness, efficiency and fight of the SSI sector. In pursuit of the comprehensive policy bundle announced last twelvemonth, the major developments that have taken topographic point in the SSI sector during 2007-08.
Illness in the SSI Sector
As on March 31, 2008, there were 5,49,630 ill SSI units which had obtained loans from Bankss. An sum of Rs. 6,506 crore of bank recognition was blocked in these units. Of these lone 23,076 units were considered potentially feasible by the Bankss with outstanding recognition of Rs. 399 crore. Further, Bankss had identified 4,25,488 units with outstanding bank recognition amounting to Rs. 5,943 crore as unviable.
Rehabilitation of ill units is a dearly-won proposition as it involves rescheduling of past overdues with grants on involvement sum due, extra recognition for modernization and engineering upgradation and proviso for fresh on the job capital.
Soon, the State Level Inter- Institutional Committee ( SLIIC ) of Bankss and fiscal establishments is the lone forum looking into rehabilitation of potentially feasible ill SSI units. However, in the absence of statutory backup, SLIICs has no power to implement its determinations. To undertake the job of rehabilitation of potentially feasible ill SSI units, the RBI constituted a working group on November 25, 2008 under the chairmanship of Shri S.S. Kohli, the president of Indian Banks Association, to look into the issue. The Working Group submitted its study in May, 2008.
All the major recommendations of the working group have been accepted by the RBI, including a alteration in the definition of Sick SSI units, norms for make up one’s minding on the viability of ill units, etc. The revised definition would enable Bankss to take action at an early phase for resurgence of the units.Based on the recognized recommendations of the Working Group, the RBI has drawn up the revised guidelines for Rehabilitation of Sick SSI units, which have been circulated on January 16, 2008 to all the Banks for execution.
Table 7.15
Overall public presentation of Small Scale Industry
Year No. of units Production Employment Exports ( in million ) ( at current ( at invariable ( at current monetary values ) monetary values ) monetary values )
( 1993-94 )
( Rs.crore ) ( Rs.crore ) ( in 1000000s ) ( US $ in Billions )
2001-02 2.94 4,62,641 3,57,749 16.72 11.96
( 5.0 ) ( 12.3 ) ( 8.4 ) ( 4.5 ) ( 8.1 )
2003-04 3.08 5,20,650 3,85,296 17.16 11.64
( 4.8 ) ( 12.5 ) ( 7.7 ) ( 2.6 ) ( -2.7 )
2005-06 6.21 5,72,887 4,16,736 17.85 17.51
( 4.2 ) ( 10.0 ) ( 8.2 ) ( 4.0 ) ( 7.5 )
2007-08 ( E ) 9.37 7,45,496 6,50,450 26.56 24.13
( 6.0 ) ( 17.7 ) ( 15.1 ) ( 8.0 ) ( 9.0 )
Notes:
s in the brackets give per centum growing over old twelvemonth.
Tocopherol: Estimates
BOX 7.6
Developments that have taken topographic point during the twelvemonth 2007-08 for the SSI Sector
1.The investing bound for units in hose and manus tool bomber sectors was enhanced from Rs. 5 crore to Rs.10 crore
2. The principal fund set up under the Credit Guarantee Fund Scheme has been raised to Rs. 200 crore from Rs. 525 crore.
3. Credit Guarantee screen against an aggregative recognition of Rs. 52.88 crore was provided.
4. 14 points were dereserved on June 29, 2008 related to leather goods, places and playthings.
5. A new strategy named Market Development Assistance Scheme was launched entirely for the SSI sector.
6. Under the Cluster Development Programme, 4 UNIDO assisted undertakings have been commissioned during the twelvemonth.
ENVIRONMENTAL ANALYSIS
With a position to run intoing the substructure needs of the micro, little and average endeavors ( MSMEs ) in the province, the authorities programs to put up sole industrial Parkss for these units in different provinces.
The proposed industrial Parkss will come up in major industrial hubs in the province and will hold all basic substructure installations like H2O supply, power, waste direction, proving research labs and other civic comfortss.
The locations identified for constitution of these industrial Parkss include NOIDA in U.P, MOHALI in Punjab, SIDCUL in Uttarakhand, Kalinga Nagar, Barbil, Jharsuguda, Sambalpur, Dhenkanal, Angul, Paradeep, Rourkela, Bragarh, Balasore, Dhamra, Gopalpur, Chhatrapur, Raygada, Kalahandi and Choudwar etc.
The authorities besides intends to put up industrial Parkss closer to the particular economic zones ( SEZs ) . The state-owned Industrial Infrastructure Development Corporation ( Idco ) has been entrusted with the publicity of the industrial Parkss, beginnings said.
It will set in topographic point the needed substructure for the MSMEs and will besides upgrade and keep the substructure installations in the bing industrial estates and growing Centres in association with the user industries.
It may be noted that the new MSME Development Policy adopted by the province authorities emphasizes substructure development to run into the demands of the MSMEs. Besides, it says that 20 per cent of the country in the industrial Parkss, industrial estates, industrial corridors and land Bankss will be reserved for MSME units.
The services of the big units are largely outsourced, which provides ample range for the growing of the micro and little units. With the female parent industry about, the external substructure will be automatically developed, and the proposed industrial Parkss being equipped with all the basic substructure installations, the MSMEs can readily travel in and put up their units.
To ease the puting up of downstream and accessory industries in the province, 10 per cent of the entire land demand of the big and mega units, capable to a ceiling of 200 estates, is proposed to be earmarked for such industries. Besides, sector-specific accessory and downstream industrial Parkss are proposed to be set up by Idco, sooner in association with the female parent workss.
Decision:
The Cottage and little graduated table industries constitute a dateless portion of the rich cultural Heritage of India. The component of art and trade nowadays in these industries makes it a possible sector for the upper sections of market domestic every bit good as planetary. However, the sector is beset with multiplex jobs such as disused engineerings, unorganised production system, low productiveness, unequal working capital, conventional merchandise scope, weak selling nexus, overall stagnancy of production and gross revenues and, above all, competition from power loom and factory sector. As a consequence of effectual Government intercession through fiscal aid and execution of assorted developmental and public assistance strategies, the bungalow and little graduated table sector, to some extent, has been able to surge over these disadvantages. Therefore, bungalow sector forms a cherished portion of the generational bequest and exemplifies the profusion and diverseness of our state and the prowess of the weavers.
Bibliographies:
1. texmin.nic.in/annualrep/ar02_c05.
2. apparel.indiamart.com/industry/handlooms/
3. www.hepcindia.com
4. texmin.nic.in/tex_07.htm
5. www.ieport.com/epc.htm
6. www.indiatogether.org/2006/feb/eco-handloom.htm
