Pic - :: A View Of Medium Scale Industry
The
Medium Scale Industry :: Time to rethink on the same and refurbish them - ::
It is well over 75 years that the medium scale
industry in India, has never been attached that kind of an importance at all,
and this sector has been not sincerely
taken care about .All the focus and the concentration in India for the last 75
years has been on the Small Scale Industries and the Heavy Industries.
Importance wise the Medium scale actually can
contribute a lot to the sector of Exports beside it can act as a beautiful
subsidiary to the Heavy Sector and if intelligently taken care of it can act as a LIASION between the Heavy Industry and the Small scale.
Some have made an attempt to inter- conglomerate
the Medium Scale along with the Small scale but that is a wrong affair of
equalizing and balancing the act to upgrade and better the medium scale
Industry. Let us first define as to what is a medium scale industry.
Definition
Of A Medium Scale Industry - ::
Of late the medium scale industry and it’s
definition has changed according to it’s Turn-over. What constitute a medium
scale industry. ?. Well here it is and hereby I make an attempt to define it.
A medium
enterprise, where the investment in plant and machinery or equipment does not
exceed fifty crore rupees and turnover does not exceed Two hundred and Fifty crore of rupees .
As written earlier, and as said, the present
National Government under the rule of Modi 2.0 has redefines the medium scale
industry /Amalgamation in terms of the defines of the Sma;ll Scale and the
Medium scale to put them om the same horizon of national planning has clubbed
these two industries and has brought out a meaningful definition citing the
criteria and classifying them as two SEPARATE entities under ONE Umbrella . I’m
trying to redefine the same as under-::.
New criteria for classification of Micro, Small and Medium
Enterprises
|
Existing MSME Classification |
||
|
Criteria: Investment in Plant and Machinery or Equipment |
||
|
Classification |
Micro |
Medium |
|
Manufacturing Enterprises |
Investment <Rs. 25 lakh |
Investment
<Rs. 10 crore |
|
Service Enterprises |
Investment <Rs. 10 lakh |
Investment <Rs. 5 crore |
The medium scale Industry at India, and it’s development in terms of the
economy has seen and has gone a change in the statics as well as the dynamics
.The operation and the entrepreneurial values also has taken a volutes’ change
and as such the definition in terms of it’s economy as well as in terms of it’s
realities has seen a change in the pattern and the system .On the actuality of the operational values
and schemes and the behavioral pattern of the same that relates to the Medium
Scale Industry, I hereby put down my lines on the actualities of the Medium
Scale Industries.
Economic development
refers to the transformation of an economy from a state of underdevelopment to
a state of development. The economic
improvement includes a consistent decrease in the portion of farming in GNP (
Gross national Produce ) and comparing
increment in the portion of businesses, exchange, banking development, and
administrations.
Industrialization
implies raising capital in the production process. The economic development of any country leads to a better
quality of life for its population. Several factors are involved in the
measurement of quality of life like education, literacy, life expectancy, and
nutritious food. In this article, we will look at medium scale industries in
India.
What is Medium Scale
Business?
Before we go into the
different aspects of medium scale business, we need to understand what
is medium scale business. When we look at it, according to the
Indian Government, we call a company medium scale industry when their overall
investment is more than Rs. 5 crores, and also less
than Rs. 10 crores.
In India as I have written
before, Small dominates the industries in India to
Medium Enterprise.
Medium-scale industries
in India contribute significantly to manufacturing output, employment, and
exports of the country. It is estimated that in terms of value, the sector
contributes 45% of manufacturing production and 40% of total exports
of the country. Inspite of all these,
the medium scale Industry does not finds any favour which could be construed as
important in the business circle and also by the Government at India. However
in the rule of Modi 2.0 this seems to somehow change a bit. The area is assessed
to utilize around 69 million people in more than 26 million units all through
the nation.
Medium Industry
Information
It is well known that
the MSME
sector provides maximum opportunities for both self-employment and jobs, outside
the agricultural sector. The inclusiveness of the industry is
underlined by the fact that disadvantaged groups of society own 50%
of the MSME. To make the industry a significant player in the
global marketplace, the Government has taken a number of policy initiatives in
the recent period.
The definitions and
coverage of the MSME sector were broadened significantly under the Micro,
Small, and Medium Enterprises Development Act 2006 which recognized the concept
of the enterprise to include both manufacturing and service sectors, besides,
defining the medium enterprises, setting up a board for developing policy
frameworks and indicating a procurement policy.
Role of Medium Scale
Industries in India ::
Let us start from the point of the view of the employment in the Medium
Scale Industry.
Employment: Medium-scale enterprises are labour intensive and thus create
more employment per unit of capital employed. In all spheres of production in a
developing economy, medium scale industries help enlarge the volume of
employment with only scarce capital. Medium enterprises emulate output from low
capital and entrepreneurship.
|
Capital Size |
Fixed Capital Per
Employee |
|
|
1965-66 |
Small |
2018 |
|
Medium |
2044 |
|
|
1974-75 |
Small |
3706 |
|
Medium |
7935 |
|
|
1978-79 |
Small |
16582 |
|
Medium |
27610 |
Equality: It suggests that the income generated in a large number of medium
enterprises is dispersed more widely in the community than the revenue
generated in a few large enterprises. Medium
enterprises bring about greater equality of income distribution. As
most of the medium enterprises are either proprietary or partnership concerns,
the relations between the workers and the employees are more harmonious in
medium enterprises than in large enterprises.
Growth of Medium Scale
Industries in India
There has been a phenomenal
increase in the number of medium-scale industries in India. With
the growth in large scale industries, the medium sector has witnessed
development. The medium and ancillary industry acts as a supplementary for
large-scale and small-scale industries. The large scale and
small-scale industry are dependent on the medium scale industries for meeting
their production and sales requirements.
Medium-scale industries in India contribute
significantly to manufacturing output, employment, and exports of the
country. It is estimated that in terms of value, the sector contributes 45% of manufacturing production
and 40% of total exports of
the country.
Why are SMEs so important in developing
countries?
SMEs contribute
to employment creation, wealth creation, poverty alleviation and income
generation. ... The support for SMEs by the local government, private
sector and civil society should be enhanced in order to increase the
contribution of SMEs to local economic development.
After discussing
everything in terms of the importance and the place that the Medium Scale
Industry holds at India, it becomes necessary to write and describe all about
the role the Medium Scale Industry holds at India.
1. Development of medium and
large scale industries help to remove the problem of unemployment by creating
wide range of unemployment by creating wide range of employment opportunities
to unskilled, semi-skilled and skilled human resource.
2. Proper
utilization of resources
Medium
and large scale industries are necessary for the scientific utilization of
available natural resources such as forest resources, mineral resources, human
resources and water resources.
3. Sources
of Government Revenue
These
industries produce huge amount of goods, generally expensive one. They are
exported to foreign land and Government earns tax, VAT, Sales tax, etc. which
increases Government Revenue.
4. Development of basic
infrastructure
Medium and large scale
industries cannot be operated without proper infrastructure. So, along with the
development of industries, infrastructure of development also increases
simultaneously.
5. Development
in agricultural sector
Modem tools and equipment are
produced by medium and large scale industries. Implementation of modern tools
in agricultural sector can be done. Finally, there will be development in the
sector of agriculture.
So we have finished examining
and highlighting the issues of the Medium Scale Industries. It is time that we
also discuss the advantage and the role that is linked with the advantage of
the Meduim Scale Industry .
Advantage Of
Medium Scale Industry - ::
Developing small and
medium enterprises (SMEs) as well as the medium scale industry helps to achieve sustainable growth as a
centralized theme. SMEs play a vital role in the country’s overall production networks
and they are core to the economic growth of developing countries.
The contributions of
formal SMEs are 50% of total employment and 33% of the
national income of emerging economies. While including informal SMEs the
percentages will be increased. Finance accession is the main constraint to SME
growth, without that many SMEs are declined. There are many advantages for SMEs ands the Medium Scale Industries which are described beneath.
Encourages Team Spirit
Big companies
employees do work on different floors and buildings. Though many work for long
years, meeting one-to-one would not be possible. Always department competitions
and staffing will be pervading among the people. But in Small and Medium-sized
companies, the owner recognizes every employee and understands their
importance. Cross training will happen in the case of allotting one employee in
another place in case of vacation, illness etc.,
Availed with easy loan
There are numerous
loan programs available for SMEs whereas the big companies don’t qualify for
such loans. The loans are backed up with Small Business Administration. Even a
local bank accepts the loan application of SMEs. The Small Business Associate
guarantees the loan for SMEs but they don’t directly provide the loan.
SMEs direct involvement
SMEs can well control
over their output and customers interaction than the biggest companies. For
instance, the owner can be in a position to scrutiny the product quality and
rectify if any issue occurs thus the risk is minimized and crisis are prevented
on the earlier stage itself. Small business can directly contact with potential
customers to promote them freely. Out of the digital revolution, the cost of
advertisement is cut down. Plenty of costs effective, professional solutions
are available for start-ups and SMEs to promote their catchy brands and other
marketing materials.
Taking immediate decision
SMEs can quickly react
according to the marketplace changes. It does not follow with an official
hierarchy which might slow down the decision-making process. If the business
owner tends to see there is a wide opportunity to challenge with his
competitor, it can be done at a moment since he need not wait for others
approval. An employee in an SME is given the open opportunity to learn other
department works, if and only if he is quite knowledgeable. But big companies
have its own limitation for employees work description which is a great
obstacle for an employee’s growth.
Importance of SMEs
SME and the Medium
Scale Industry, and it’s establishment
is considered to be important at present days. They involve in job creation in
this modern day economy. In recent times it would have been noticed that the
unemployment reduction all over the world is due to the lots of emerged SMEs.
Out of the SMEs contribution, there is a significant growth in GDP and proper
money flow across the economy is noticed. SME charges lower rates to their
clients by providing a quality business. When the state economy is in
better condition, the SMEs will flourish. If the economy is volatile, the SMEs
will face a risk of going down, as they survive within a small budget. SMEs
boost the country economy by affording extra revenue and employment.
It has been concluded
as SMEs offer multiple advantages and being a source of growth for several
countries. SMEs in the coming days will involve with unforeseen
revolution for improving our country’s economic growth.
Small and medium scale Industries play an important role in terms of employment generation and growth of Indian economy. Small and medium enterprises have achieved steady progress from last decades it facilitate the taping of resources which otherwise would remain unused. In low capital cost small and medium enterprises create employment opportunities especially in rural areas. Small and medium enterprises help to alleviate poverty and propel sustainable growth in rural areas. The problem of surplus manpower in non agricultural sector, small scale industries provide additional employment opportunities for growing population in rural areas.
HUMAN RESOURCES DEVELOPMENT
Human Resources development is one of the important concepts contributes in accelerating economic growth. Development of people is the essence of any human resource development effort. All forms of development social, economic, technological and agricultural are ultimately meant to serve the people in terms of improving their happiness through better standard of living. It is an important for all other development activities like plans policies and programmes. Human resources development leads to better and efficient utilization of the available resources with the human being. They hold the key for economic development through enabling people become more productive. Human resources are just as important as physical and financial resources.
Economic development of any country depends upon development of population through participation, empowerment and better access of human resources. Many developing countries are becoming aware of the need of involvement of the people in economic activity. The objective of human resource development is to enhance competency in individual and groups. Developing human resources is never ending process because development in competency is the driver of any developing nation. Human resource development is major contributor to accelerate economic growth of country. Development must be woven around people, not people around development. Development should empower individuals and groups.
In economic terms HRD in the early years 1950-60 was equated with human capital formation HRD is the most important assets of any economic activity and it can be developed and increase to an unlimited extend. Now any developing country on the allegation of poverty to the most possible extent through the human resources development strategies for the purpose investment in education and health services and basic level and creation of employment and self employment opportunities at the later become very critical. In the fast changing environment HRD is the need of any nation which wants to be dynamic and growth oriented and to success.
A well trained, highly skilled and knowledgeable human resources country can become competent in the global environment. Development of human resources of the country creates progress and development to the country and benefits spread all over the country. For the upliftment of living standard of rural population of the country a number of policies were made and implemented by the Indian government in spite of this poverty has been one of the persisting social evil hunting the rural masses in India. The biggest challenge to the Indian Government is that, a large people resides in rural area are still living below poverty line and the task of uplifting them has become constitutional responsibility of the local, state and central government. For the development of rural people the Government of India made various schemes and policies through small and medium scale industries.
Advantage Of The
Medium Scale Industry-::
The MSME
registration is an online process and makes seeking help from professionals
much more easier. Here, we will be knowing the 9 major MSME advantages or
benefits of getting MSME registration for your business.
In our
last post, we discussed the procedure and other details of obtaining MSME registration and broadly touched upon
why we need micro, small and medium units for our economy and its growth. In
this article, we enlist the top nine benefits of MSME registration that can be
availed with the grant of MSME registration. These include monetary as well as
non-monetary advantages relating to trade and entrepreneurial development.
Let us now look at the 9
essential benefits of MSME registration. The MSME registration benefits will
highly help you in your business for the development, improvement and for
forming proper business models.
1. Priority Lending:
Our first MSME benefit is priority lending. Whether you’re the proud owner of a cutting-edge technology business or a masala packing company, employing rural women, credit and loan is something that your business will inevitably require for long- and short-term financing. Banks, by virtue of the directions issued by the Reserve Bank of India, have certain earmarked funds that have to mandatorily be given to MSME businesses. Producing MSME certificate benefits to entitle one to avail this loan on a priority basis with fewer hassles.
2. Fewer interest rates and availability and access to greater credit:
In the absence of collateral
security (any property/cash given as a security against a loan), many business
owners may find it extremely hard to secure a loan for starting in their
industry. However, with an MSME Registration, all banks are specifically
instructed to offer loans at interest rates lower than the usual and
one may be able to avail this benefit from several banking institutions
for their financing needs.
3. Income
Tax exemption:
There are several MSME
registration benefits that can save lakhs of the amount that may be assessable
to tax in the absence of this certificate. The benefit of a presumptive basis
of taxation is available to enterprises, which relieves one from maintaining
detailed books of accounts and undergoing audit procedures.
4. Credit Linked Guarantee
Scheme:
The Ministry of Micro, Small and
Medium Enterprises and the Small Industries Development Bank of India (SIDBI)
have established a Trust named Credit Guarantee Fund Trust for Micro and Small
Enterprises (CGTMSE) specifically to implement Credit Guarantee Fund Scheme for
micro and small enterprises. This scheme allows collateral-free loans of up to
50 lakhs for individual MSMEs.
5. Market assistance from
the government and Export Promotion:
The Government of India
organizes several exchange programs, craft fairs, exhibitions, and
trade-related events internationally. Being categorized as a micro, small or
medium enterprise gives access to all of these platforms for international
cooperation on trade-related aspects with different countries and fosters new
business connections. The government also incentivizes the export of goods and
services by MSMEs by way of subsidies, tax exemption, and technical support.
6. Capital and other grants
for infrastructure development:
Since MSMEs is a sector
generating employment and giving entrepreneurial ventures a boost, the
government also identifies training sectors for MSME and gives capital grants
for improvisation of the infrastructure and support for entrepreneurial
development.
7. Reimbursement of ISO
Certification:
To promote the standards and
certifications received by MSMEs in a bid to enhance their performance across
sectors, all registered micro and small industries can avail an exemption of
all expenses incurred for obtaining ISO 9000, ISO 14001 and HACCP
certifications.
8. Exclusive purchases and
sheltering from the competition:
As part of the MSME Market
Development Assistance Scheme, the Central Government follows a Price and
Purchase Preference policy. Wherein more than 358 items are listed under it for
exclusive purchases by Central Government from the medium, micro and small
units only.
9. Technology and quality
up-gradation support to MSMEs:
In order to enhance the
cost-effectiveness and promote clean energy use in manufacturing, the
government reimburses project costs towards these goals for MSME sector units
and also expenditure incurred for the implementation of clean technology,
preparation of audit report and subsidies for licensing products according to
national and international standards.
DISADVANTAGES OF BEING A MEDIUM SCALE
INDUSTRY - ::
They
have more difficulties to find funding
Normally, SMEs
do not have the financial power that large companies have. For this reason,
they will usually need external financing, which will also be more limited and
in worse conditions, without the ability to access financial instruments
available to large corporations, such as listing on stock markets, capital
increases, etc.
It
may be difficult to reach a large number of customers and earn their trust.
The task of reaching its
customers can be very hard for an SME. The
financial power of large companies allows them to make themselves known through
mass media by advertising, but for small and medium companies, reaching a
significant number of customers can be a task that requires years of effort. In
addition, being less well-known than its larger competitors, SMEs may find it
more difficult to convey to their customers the security that a large company
can offer them.
The
costs are higher
SMEs will have
enormous impediments to benefit from the economy of scale, which will cause costs to be
higher in certain types of business, as well as creating difficulties to adjust
the prices offered to users.
It
is not easy to endure prolonged periods of crisis
Despite being
more flexible in dealing with changes, the lack of financial capability can
cause major problems for an SME if it is forced to endure long periods of
crisis. For this reason, during
economic depressions, small and medium-sized enterprises often face enormous
difficulties to survive, which causes the closing of many of
them.
Low
bargaining power with suppliers and customers.
Being a large
company, and therefore generating huge amounts of business, provides a position
of power when negotiating with suppliers and customers . For an SME, it is much more difficult to achieve
beneficial conditions and are often forced to give in more
than they would like.
Access
to less skilled personnel.
Given the
greater limitations that an SME usually offers to develop a career (there will
be fewer possibilities of advancement), it will be more difficult to attract talented
and well-prepared workers who will usually be more tempted to develop their
skills in a large enterprise. However, this does not mean that an SME can not
attract talent, but will often have to offer other incentives.
They
will have more difficulty in accessing technology
Unfortunately,
and again for financial reasons, an SME will have more difficulties to adapt to
technological changes, which could lead to obsolescence. However, there are
very interesting technological solutions that SMEs can access.
And now that we have already seen some of the advantages and
disadvantages of being an SME, here comes a question: Do you know about Integria IMS? Integria IMS is a software that has many tools that can help your company to not fall
behind. Discover all that Integria IMS can offer you.
OK- this is all for the one’s to read it
THANKS for reading it
Thanks for reading.
Well , that is it and That sums it all.
Regards and Thanks
Pics
Shyamal Bhattacharjee
Mr Shyamal Bhattacharjee, the author was born at West Chirimiri Colliery at District Surguja, Chattisgarh on July 6th 1959 He received his early education at Carmel Convent School Bishrampur and later at Christ Church Boys' Higher Secondary School at Jabalpur. He later joined Hislop College at Nagpur and completed his graduation in Science and he also added a degree in B A thereafter. He joined the HITAVADA, a leading dailies of Central India at Nagpur as a Sub-Editor ( Sports ) but gave up to complete his MBA in 1984 He thereafter added a Diploma In Export Management. He has authored THREE books namely Notable Quotes and Noble Thought published by Pustak Mahal in 2001 Indian Cricket : Faces That Changed It published by Manas Publications in 2009 and Essential Of Office Management published by NBCA, Kolkatta in 2012. He has a experience of about 35 years in Marketing .
This website is maintained , controlled and managed by OOK’S Technologies, by Mr Amook Vandan Yadav , Phone Number 8090848585 , Varanasi
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