Share of SSIs in manufacturing to go down: Assocham
An Assocham study states contribution to manufacturing and job creation by small scale industries is likely to slip by 5% and 3%. Business Humour | Day in Pics
By PTI |
NEW DELHI: The share of small scale units in the country's manufacturing sector may decline as newer technologies, trade barriers and strict quality norms erode their competitiveness, industry body Assocham said on Tuesday.
According to a study by Assocham, the contribution to manufacturing and job creation by small scale industries (SSI) is likely to slip by five per cent and three per cent respectively as it has already plunged into deceleration because of its inability to absorb latest technologies.
The report, "Prospects of SSIs in 2008 vis-a-vis other Booming Sector", said that large and medium industries are sourcing their inputs through cheaper imports that have endangered SSIs' existence and the trend is unlikely to be arrested in the coming year.
"SSIs will encounter a gloom period, beginning 2008 as its contribution to manufacturing will come down to 35 per cent as compared to 40 per cent of now and over 45 per cent preceding year until 2006-07," chamber president Venugopal N Dhoot said in a press release.
The number of SSI units in 2006-07 were estimated at 44 lakh with employment capacities for nearly 2.38 crore workers with Rs 14 lakh crore of output to manufacturing, it said.
"As a result of deceleration, the number of units in SSIs have come down to around 40 lakh by now and employment generation has shrunk to 2.25 crore workers. Their output to manufacturing has come down to Rs 12 lakh crore," Dhoot said.
The report pointed out that due to lack of visible policy decisions, the export by SSIs would also decline by 7-8 per cent as the inputs being produced by the entire sector are costing to their supplier higher by over 6-7 per cent.
According to a study by Assocham, the contribution to manufacturing and job creation by small scale industries (SSI) is likely to slip by five per cent and three per cent respectively as it has already plunged into deceleration because of its inability to absorb latest technologies.
The report, "Prospects of SSIs in 2008 vis-a-vis other Booming Sector", said that large and medium industries are sourcing their inputs through cheaper imports that have endangered SSIs' existence and the trend is unlikely to be arrested in the coming year.
"SSIs will encounter a gloom period, beginning 2008 as its contribution to manufacturing will come down to 35 per cent as compared to 40 per cent of now and over 45 per cent preceding year until 2006-07," chamber president Venugopal N Dhoot said in a press release.
The number of SSI units in 2006-07 were estimated at 44 lakh with employment capacities for nearly 2.38 crore workers with Rs 14 lakh crore of output to manufacturing, it said.
"As a result of deceleration, the number of units in SSIs have come down to around 40 lakh by now and employment generation has shrunk to 2.25 crore workers. Their output to manufacturing has come down to Rs 12 lakh crore," Dhoot said.
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The report pointed out that due to lack of visible policy decisions, the export by SSIs would also decline by 7-8 per cent as the inputs being produced by the entire sector are costing to their supplier higher by over 6-7 per cent.
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