Problems Of Small Scale Industries In English

 

 Problems Of Small Scale Industries In English

Small Scale Industries In English – Hello Engineers, how are you, hope you will be fine and you will get well if you study today, those who share today are about the problem of Small Scale Industries of Entrepreneurship, so if you want to know what these are then you You can read this post completely, and if you understand then you can share it with your friends.

 

Problems Of Small Scale Industries In English

 

Problems Of Small Scale Industries In English 

There is a huge potential for the development of small scale industries in India. But small scale industries are suffering from many problems, so they have not been able to develop satisfactorily. Due to these problems, many small industries have taken the form of sick units. Many are also closed. Therefore, it is necessary that the problems of these industries should be studied and remedial measures should be found :-

(i) Finance and credit problems – 

The problem of lack of finance and credit is a major obstacle in the development of small scale industries. There is a complete lack of capital with our artisans and handicraftsmen. They take loans from moneylenders at very high rates of exploitative interest or high interest. Due to the background of lack of credit and poverty, they are unable to get loans from commercial banks. Due to illiteracy and lack of knowledge, small entrepreneurs do not even know about other sources of finance. Thus, in the absence of good financial image, they are not able to get loans at reasonable rates of interest.

(ii) Rudimentary fundamental features

In a survey conducted by Keshavdas and Morris of 1063 small units, it was found that 716 units are suffering from the acute problem of underdeveloped infrastructure. Most of the small units are deprived of basic facilities like electricity, water, roads, transport, communication banks and so on. In the absence of these facilities, the capacity of the unit is not fully utilized and there is an increase in wastage.

(iii) Raw material problem – 

The raw materials are not supplied in the desired quantity to the small scale units. Due to the weak economic condition, they are not able to take the services of an intermediary for the procurement of raw materials. In some areas there is a complete shortage of raw materials or substandard crimson goods are available at high prices. For example, the handloom industry is dependent on local traders for the supply of cotton. These traders supply cotton with the condition that the goods should be sold only to them after it is ready, thus the weavers are double exploited and they are not able to utilize their full potential. This not only increases the cost of production but also affects their competitiveness in the market.

(iv) Old Technic – 

Most of the small scale industries depend on the traditional technology of production. They use old machines and tools. Many industries use second hand machines and tools. Due to lack of capital, such people are not able to modernize their industries and workshops. As a result their product is of low quality, productivity is low and production value remains high.

(v) Problem of low capacity utilization – 

It has been known from many studies and surveys that small scale industries are not able to make full use of their standard capacity. Consistent surveys show that small scale industries fail to utilize an average of 40 out of 50 percent of their installed capacity.

(vi) Problems of electricity and water – 

There is a problem of not getting the required supply of electricity and water related to the inability to make full use of the production capacity. Electricity supply is irregular in rural areas. Apart from this, small entrepreneurs are not able to arrange other options for electricity. Water supply is also not always available in villages. This has an adverse effect on their productivity.

(vii) Unskilled workers – 

Labor has a special role in small units. But there is a lack of training facility for the workers in the small sector. Most of the workers are unskilled, incompetent, untrained and uneducated. Therefore, they are unable to face the challenges of modern production system. Professional and trained technicians also shy away from working in the small scale sector. Due to this problem of labor, small scale industries are not able to improve their productivity.

(viii) Inappropriate site – 

Small scale industries also face the problem of not being able to select suitable site for plant and workshop. Selection of site is dependent on many factors like availability of basic facilities, cost of site, availability of skilled labor, market and availability of raw material etc. But small entrepreneurs have to consider many things like cheap land, their traditional place of work, family business and their family property and emotional attachment to workplace etc. In this way, small entrepreneurs are not able to choose the suitable workplace properly.

(ix) Marketing problem – 

Another problem faced by small scale industries is marketing. These units do not have any ‘marketing organisation’. They lack arrangements for transportation, storage etc. They did not have any sales union. They also do not use methods like advertising and publicity. They also do not use methods like propaganda. Therefore, these units do not get success in the field of competition from big industries. These units also lack bargaining dexterity and the ability to stay afloat in the market. Therefore, they are forced to sell their products at very low prices. To save small scale industries from this problem of competition from big industries, the government has reserved some products for production in small scale sector.

(x) Wrong Project Planning – 

In the absence of low level of education and experience, small entrepreneurs often depend on consultancy agencies for project planning. They take the services of hired experts for project formulation. They do not understand the project in detail. In this way, the cost of production and other expenses increase due to wrong planning.

(xi) Problems of ancillary industries – 

Ancillary industries have their own problems. One of these problems is the delayed payment. The ancillary industries suffer from the problem of paucity of funds due to late payments made by big industries and government departments. Other problems are – lack of technical support by the parent unit, not following the quality and supply schedule, lack of bargaining ability etc. It is often seen that the buyers do not pay the ancillary industries for one year each. Thus, the problem of shortage of working capital arises before them.

(xii) Fake Undertakings

The government gives many facilities and grants to small scale industries. To get these facilities and benefits, many so-called entrepreneurs show fake undertakings only on paper. Thus, genuine enterprises find it difficult to avail these benefits and facilities. Availability of cheap finance also encourages fake enterprises to enter the small scale sector. This trend indirectly encourages medium and large scale industries to get raw materials at low rates.

(xiii) Competition from larger units

Small scale industries have to face stiff competition from the competitors of their medium and large units. Today many products reserved for small scale industries are being freely imported. Large industries produce good quality products at low prices. They also have excellent marketing and advertising facilities. They employ a large number of intermediaries. Due to all these big industries get an advantage in the competition. In reality, small scale industries are unable to compete with big industries because their scale of production is small and the products are expensive.

(xiv) problem of disease

Sick small scale industries (such industries which are running new, have come to a standstill) are a burden on the national economy. Capital gets stuck in sick units. The number of sick units in the small sector is very high. This is immovable. The number of sick small units as on March 31, 2004 was 1, 38, 811. A total of 5, 284 on these units. The loan amount of Rs 54 crore was outstanding. He had obtained these loans from banks. Rehabilitation of sick units is a costly task. The Reserve Bank of India has made some new provisions for the rehabilitation of sick industries, which have been circulated to the banks. This has resulted in some reduction in the number of sick units in the recent years also.

(xv) Inappropriate data base

The data base of small scale industries is inappropriate. Jointly, complete information related to small scale industries is not available from any source. Estimates are made on the basis of partial data. Surveys are conducted over a long period of time. There is no regular and systematic process of collection of data in the small sector. It is a difficult task to collect the latest information for decision making for the rapid development of small scale industries.

( xvi ) Other problems

In addition to the above constraints, some other problems of small scale industries In English  are as follows:-

 

(a) Inadequate management, Insufficient management

(b) Lack of trained technicians, lack of trained technicians

(c) obsolete technology, obsolete technology

(d) the unorganized nature of the working method

(f) Lack of coordination between various subsidiaries

(g) indifference to quality,

(h) Inappropriate cost structure, inappropriate cost structure,

(i) Lack of organized marketing channels, lack of organized marketing channels

(k) incomplete knowledge of market conditions, incomplete knowledge of market conditions

(l) Lack of sub-contract and detailed ancillary. Lack of sub-contract and detailed subsidization

Due to all the above problems, the small industries have to compete with the big industries. is happening. Both in the domestic and overseas market.

 

Final Word

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