Prob­lems & Prospects of In­dus­trial Units in Mi­zo­ram

- Lalh­man­gai­hzuali & - Dr. Amit Pal Singh

Economic Challenger - - NEWS - Lalh­man­gai­hzuali * Dr. Amrit Pal Singh** *Re­search Scholar, (PH.D.) Gauhati Univer­sity **As­so­ciate Pro­fes­sor, Depart­ment of Com­merce, Gauhati Univer­sity

IN­TRO­DUC­TION

The en­tire state of Mi­zo­ram is a No­ti­fied Back­ward Area and is cat­e­go­rized un­der No In­dus­try dis­trict. How­ever, con­certed ef­forts are be­ing made to ac­cel­er­ate the growth of in­dus­tries in the State. Even to­day, there are no largescale pri­vate in­dus­tries in the state. Small-scale in­dus­tries were set up re­cently while their growth rate is quite low. The in­dus­tries as a whole faced one com­mon prob­lem, that of limited sup­ply of elec­tric­ity. Apart from this, most of the prob­lems that can gen­er­ally be said are limited sup­ply of raw-ma­te­ri­als and mar­ket­ing prob­lems. There are some Pub­lic Sec­tor Un­der­tak­ings which are of medium or large scale. ZOHANDCO (Mi­zo­ram Hand­loom & Hand­i­craft De­vel­op­ment Cor­po­ra­tion Ltd.,) has an au­tho­rized cap­i­tal of Rs. 7 crores which can be said as a medium scale in­dus­try. MIFCO (Mi­zo­ram Food & Al­lied In­dus­tries Cor­po­ra­tion Ltd.,) has an au­tho­rized cap­i­tal of Rs. 20 crores which can be called as a medium or large scale in­dus­try. Apart from th­ese, there are other Pub­lic sec­tor Units which are on medium scale op­er­a­tions.

Al­most all the Pub­lic Sec­tor Units in­curred heavy losses ev­ery year since their in­cep­tion. Even if th­ese com­pa­nies are not pri­mar­ily set up for profit, it was quite ob­vi­ous that much can be done to re­duce losses or ex­penses in or­der to be at least less de­pen­dent or to be­come fully self re­liant.

The num­ber of Small Scale In­dus­tries reg­is­tered un­der the Direc­torate of In­dus­tries , Govern­ment of Mi­zo­ram from the year 2001-02 till 2011-12 is 2684. Even though Mi­zo­ram has th­ese reg­is­tered in­dus­tries, there has been no sig­nif­i­cant de­vel­op­ment in the state, which shows that th­ese in­dus­tries are not run­ning or func­tion­ing prop­erly to gen­er­ate in­come or profit. All th­ese units aim at as­sist­ing and de­vel­op­ing the peo­ple to im­prove their eco­nomic con­di­tion. In spite of their nu­mer­ous ob­jec­tives, they are still far from achiev­ing them. Most of the ob­jec­tives writ­ten in the Me­moran­dum of As­so­ci­a­tion were still ly­ing un­ful­filled. Yet the govern­ment has been spend­ing huge amounts of money to run th­ese cor­po­ra­tions.

In spite of many prob­lems, un­til date, no sys­tem­atic stud­ies have been un­der­taken to study the prob­lems and prospects of th­ese In­dus­trial Units in Mi­zo­ram. The pro­posed study will be a mod­est at­tempt to an­a­lyze the prob­lems and prospects of th­ese in­dus­trial units and other re­lated agen­cies and de­part­ments of Mi­zo­ram govern­ment.

The study will mainly con­cen­trate on all In­dus­trial Units, both in the Pub­lic as well as the Pri­vate Sec­tors in the state of Mi­zo­ram.

In Mi­zo­ram, there are some ideal fields for in­vest­ment where the state govern­ment or pri­vate en­trepreneurs may have many ad­van­tages to step for­ward. Th­ese sec­tors are:

1). Bam­boo Sec­tor : Mi­zo­ram has an abun­dant re­serve of Bam­boo for­est cov­er­ing 12,54,400 ha con­tribut­ing to 14% of All In­dia Bam­boo dis­tri­bu­tion. Ato­tal of 23 species of bam­boo have been recorded in the for­est of Mi­zo­ram. Bam­boo is use­ful for con­struc­tion of build­ing, weav­ing, pulp­ing and the pro­duc­tion of small soft­wood prod­ucts such as in­cense sticks, chop­sticks and tooth­picks. The shoots can also be eaten and are of high qual­ity.

As bam­boo serves many use­ful pur­poses, it has a high po­ten­tial for sus­tain­able de­vel­op­ment. It can be used for sev­eral pur­poses. It is use­ful in agri­cul­tural sec­tor. Bam­boo pipes are used for ir­ri­ga­tion in some ar­eas of agri­cul­tural land. It can also be used in mak­ing of dams, dikes, sluice gates, farm im­ple­ments, props, stakes etc. It is also used for con­struc­tion of shel­ter to at­tract tourists and in some coun­tries bam­boo houses are tra­di­tional. Bam­boo is used for pil­lars, rafters, roof­ing, floor­ing, walling etc.

Bam­boo's nat­u­ral el­e­gance and easy work­a­bil­ity make it a choice ma­te­rial for hand­i­crafts. Many Mi­zos are en­gaged in mak­ing of hand­i­crafts with bam­boo and par­tic­i­pate in the state fairs or­ga­nized time to time, and exhibitions of hand­looms and hand­i­crafts. Mi­zo­ram in­vites prospec­tive pri­vate in­vestors and FDIs (For­eign Di­rect In­vest­ment) for set­ting up in­dus­trial units for mak­ing bam­boo chips, bam­boo mat plies, tooth­picks, bam­boo blinds, chop­sticks, in­cense sticks (agar­batti) ei­ther in Joint Ven­ture with Mi­zo­ram Bam­boo De­vel­op­ment Agency or with other lo­cal en­trepreneurs.

2). Agro-Hor­ti­cul­ture Sec­tor: There is a high po­ten­tial to grow and mar­ket va­ri­eties of crops like pas­sion fruit, or­ange, chill­ies, ginger, cot­ton, turmeric, tomato, se­same, iskut(squash), broc­coli etc., Depart­ment of Trade and Com­merce and Khadi and Vil­lage In­dus­tries (KVI) Boards, Govt. of Mi­zo­ram and, two Govern­ment of Mi­zo­ram un­der­tak­ings viz,.the Mi­zo­ram Agri­cul­ture Mar­ket­ing Cor­po­ra­tion Ltd

(MAMCO) and the Mi­zo­ram Food and Al­lied In­dus­tries Cor­po­ra­tion Ltd.( MIFCO) are presently deal­ing with hor­ti­cul­ture pro­duce and pro­cess­ing. Be­sides, there is a great scope for set­ting up of cot­tage in­dus­try and Tung (Aleu­rites Mon­tana) cul­ti­va­tion in Mi­zo­ram.

3) Food Pro­cess­ing In­dus­try: At present there are two fruit pro­cess­ing units in Mi­zo­ram, one at Sairang and the other at Ch­hingch­hip. A Food Park is also set up at Ch­hingch­hip. The food pro­cess­ing in­dus­try would help in har­ness­ing and ex­ploit­ing lo­cal re­sources. Mi­zo­ram is hav­ing po­ten­tial for large scale Fruit Pro­cess­ing Units to pro­duce fruit, tof­fee, snack fruits, dried veg­eta­bles, canned veg­eta­bles and many more.

OB­JEC­TIVES OF THE STUDY AND RE­SEARCH QUERIES TO BE IN­VES­TI­GATED:

Since the role of in­dus­trial units in the eco­nomic de­vel­op­ment of Mi­zo­ram is vi­tal, the present re­search en­quiry has the fol­low­ing ob­jec­tives: 1. To study the growth and de­vel­op­ment of

in­dus­trial units in Mi­zo­ram since its in­cep­tion. 2. To look into the var­i­ous poli­cies of both the Cen­tral and the State Gov­ern­ments to­wards the pro­mo­tion of in­dus­trial units over the var­i­ous plan pe­ri­ods. (since at­tain­ing state­hood in 1987) 3. To study the pat­tern of growth of in­dus­trial units in var­i­ous parts of the State and their com­po­si­tion. 4. To have an un­der­stand­ing of the or­ga­ni­za­tion and man­age­ment pat­tern of in­dus­trial units in Mi­zo­ram.

5. To ex­am­ine the prob­lems af­flict­ing the in­dus­trial units. 6. To iden­tify the prospects and of­fer pos­si­ble sug­ges­tions for the fur­ther de­vel­op­ment and growth of in­dus­trial units in Mi­zo­ram.

SOURCES OF DATA

The study mainly re­lies on pri­mary and

sec­ondary data. Pri­mary data has been col­lected by float­ing ques­tion­naires. Field­work was con­ducted and the re­spon­dents were met per­son­ally and in­ter­viewed and their re­sponses were recorded. Sim­ple math­e­mat­i­cal and sta­tis­ti­cal tools were used whereever nec­es­sary to in­ter­pret the re­sults.

For this study, all the con­cerned au­thor­i­ties, sup­pli­ers, ul­ti­mate buy­ers, Agri­cul­ture, Ser­i­cul­ture, Trade & Com­merce de­part­ments etc., were con­tacted and their views ob­tained and an­a­lyzed.

RE­SULT OF ANAL­Y­SIS

Out of the present reg­is­tered Small Scale In­dus­tries in Mi­zo­ram, man­u­fac­tur­ing of Fab­ri­cated Me­tal Prod­ucts rep­re­sents the high­est num­ber fol­lowed by man­u­fac­tur­ing of Wear­ing Ap­par­els and man­u­fac­tur­ing of Wood and Wood Prod­ucts com­ing to the third. Man­u­fac­tur­ing of food prod­ucts and bev­er­ages, con­struc­tion and re­pair and main­te­nance of mo­tor ve­hi­cles, re­tail sale of au­to­mo­tive fuel also rep­re­sent sig­nif­i­cant num­ber.

From the ta­ble given be­low we can see that the num­ber of reg­is­tered units in­creased year af­ter year till the fi­nan­cial year 2008-09 but started to de­cline in sub­se­quent years. While en­quir­ing about this de­cline, it was found that the main rea­son was the stop­page of pro­vid­ing in­cen­tives by the govern­ment.

In this re­search, 75 ques­tion­naires re­gard­ing small scale in­dus­tries were col­lected and an­a­lysed. Datas were col­lected from all the 8 dis­tricts within the state, through the anal­y­sis the fol­low­ing re­sults have been found. 1. Out of 75 in­ter­viewed own­ers/ pro­pri­etors, only 22 of them had at­tained train­ing in their own re­spec­tive fields. This some­how re­sulted in poor per­for­mance due to lack of knowl­edge, tech­ni­cal knowhow etc.

2. Through own sur­vey it was found that most of them had run their busi­ness only to sus­tain their liveli­hood, they said that they did not have any other op­tion to sup­port their fam­i­lies. This is why they run their busi­ness with­out much in­ter­est. They do not fo­cus on en­large­ment of their busi­ness size so as to earn more. They are some­how sat­is­fied as long as they earn some profit which is suf­fi­cient to sup­port their daily ba­sic needs. 3. None of them re­ceived any govern­ment sup­port like Grant-in-aides, Sub­si­dies etc,. They found it very dif­fi­cult to avail loan from Banks also. So most of them started and ran their busi­ness within their own ca­pac­i­ties. Some of the own­ers wished to en­hance their in­vest­ment so as to earn more and pro­vide more em­ploy­ment op­por­tu­ni­ties. They said that even if they ap­plied for loans from banks, they found it very dif­fi­cult to com­ply with all the for­mal­i­ties re­quired by the banks. This is why busi­ness was be­ing started with own funds which was usu­ally not suf­fi­cient to ful­fil all the re­quire­ments like in­vest­ment in Plant & Ma­chin­ery, Work­ing Cap­i­tal, etc., From the fol­low­ing ta­ble, it is quite ob­vi­ous that max­i­mum num­ber of units have been started with own funds. 4. Through this re­search work, ma­jor prob­lems

faced by small scale in­dus­tries were stud­ied.

From the Chart shown above, we see that only 37% of them had prob­lems of in­ad­e­quate power sup­ply, this may in­di­cate less of power sup­ply prob­lem which is not cor­rect as this per­cent­age is taken in gen­eral in­clud­ing all the in­dus­tries which do not need any power sup­ply. In re­al­ity, all the busi­nesses op­er­at­ing with elec­tric power are fac­ing prob­lems of in­ad­e­quate power sup­ply from time to time which in­ter­rupts their op­er­a­tions. The ir­reg­u­lar in­ter­rup­tion of op­er­a­tions au­to­mat­i­cally ham­pered the growth of the busi­ness.

Only 4% showed a trans­port prob­lem, this is due to the fact that most of the prod­ucts are sold in the lo­cal mar­ket and the raw ma­te­ri­als re­quired are also eas­ily avail­able in the nearby ar­eas. Those who are deal­ing with alu­minium, iron and steel, hand­loom, bak­ery etc.,whose raw ma­te­ri­als are im­ported from out­side the state are fac­ing this prob­lems. As the state is in a re­mote and hilly area, the cost of trans­porta­tion is gen­er­ally high and the du­ra­tion is also longer as com­pared to plain ar­eas.

CON­CLU­SION

Through field sur­vey and af­ter ob­tain­ing opin­ions of aca­demi­cians, politi­cians, in­dus­tri­al­ist, etc., it can be con­cluded that up­lift­ing of present ex­ist­ing in­dus­trial units seemed a dif­fi­cult task un­less the com­mer­cial banks are more le­nient in their for­mal­i­ties to pro­vide loans to Small Scale In­dus­tries or un­less the govern­ment pro­vides in­cen­tives. Th­ese two im­por­tant fac­tors seemed im­pos­si­ble as they were be­yond con­trol. Proper train­ing to the pro­pri­etors and em­ploy­ees i s highly rec­om­mended. Proper chan­nel for mar­ket­ing of prod­ucts and fix­a­tion of prod­ucts at rea­son­able price will be of a great help. This re­spon­si­bil­ity can be en­trusted with the govern­ment. Bet­ter roads and com­mu­ni­ca­tions will also con­trib­ute sig­nif­i­cantly to the growth of in­dus­tries which the govern­ment is also aware of and has since started work­ing on it. Be­sides, by know­ing the im­por­tance of ad­e­quate power sup­ply, the govern­ment is work­ing on the gen­er­a­tion of elec­tric­ity by con­struct­ing many hydel projects.

Re­gard­ing the semi- govern­ment un­der­tak­ings, though the govern­ment has not de­clared them as sick units but, prac­ti­cally they are a dy­ing in­dus­try. Em­i­nent per­sons are asked their opin­ions about what would be the best so­lu­tion to avoid heavy losses in­curred ev­ery year or the pos­si­ble re­me­dial mea­sures for the same. Af­ter analysing their opin­ions, one can ar­rive at the fol­low­ing con­clu­sion or sug­ges­tions.

Amal­ga­ma­tion/Merger : Though this is pos­si­ble, it will be a very dif­fi­cult task be­cause all the un­der­tak­ings are deal­ing with dif­fer­ent busi­ness ar­eas like preser­va­tion and pro­duc­tion of ready to serve food, pro­duc­tion of hand­loom and hand­i­crafts, khadi and vil­lage in­dus­tries and pro­vid­ing loans. This is why amal­ga­ma­tion or merger may not be ad­vis­able.

Dis­so­lu­tion: This is also pos­si­ble but not ad­vis­able be­cause there are many ex­ist­ing em­ploy­ees which should be taken care of. There is a huge over staffing in ev­ery un­der­tak­ing, for ex­am­ple, MIFCo alone has about 60% over em­ploy­ees on which the govern­ment has to spend lakhs and lakhs of ru­pees ev­ery year for their salaries and other wel­fare fa­cil­i­ties. Un­less the govern­ment is in a po­si­tion to ab­sorb all the ex­ist­ing em­ploy­ees to some other govern­ment of­fices, it would be very un­fair to leave them job­less af­ter dis­so­lu­tion. The govern­ment on the other hand is not in a po­si­tion to ab­sorb the ex­ist­ing em­ploy­ees in the govern­ment of­fices.

Pri­vati­sa­tion: Un­less the govern­ment is not tak­ing any ac­tion to­wards th­ese un­der­tak­ings and th­ese con­tinue to ex­ist as they are to­day, it is quite ob­vi­ous that it has to bear more and more losses ev­ery year which di­rectly or in­di­rectly af­fects the eco­nomic con­di­tion of the state. Though there is no point of cor­rect­ing the past, yet some­thing should be done to avoid fu­ture losses. As long as amal­ga­ma­tion/merger or dis­so­lu­tion are not ad­vis­able, the only pos­si­ble re­me­dial mea­sure that can be taken in prac­tice is

'Pri­vati­sa­tion'. The govern­ment is also ad­vised to pay heed to the ac­tual sta­tus of th­ese un­der­tak­ings. When losses or prof­its di­rectly af­fect the owner/s of the un­der­tak­ings, it is quite ob­vi­ous that no one will be neg­li­gent, in­stead they will pay all of their might and main­tain the busi­ness to pros­per. When the busi­ness pros­pers it will cre­ate more em­ploy­ment op­por­tu­ni­ties and con­trib­ute to the eco­nomic de­vel­op­ment of the coun­try.

The govern­ment may con­tinue to take up re­spon­si­bil­i­ties re­gard­ing all the ex­ist­ing em­ploy­ees till their re­tire­ment. For this pur­pose, the govern­ment may be made share­holder to re­coup its ex­pen­di­ture. The newly re­cruited em­ploy­ees may au­to­mat­i­cally lie in the hands of the new em­ploy­ers. The govern­ment on the other hand may hand over all the ex­ist­ing planst and ma­chiner­ies by way of loan. In this way all the fu­ture losses which are likely to be in­curred can be avoided and the heavy losses which have al­ready been in­curred may be re­couped in the long run.

REF­ER­ENCES

1. Dwivedi R.S. : Cor­po­rate Ex­cel­lence- The

Ex­ter­nal Quest; Macmil­lan In­dia Ltd; 1998 2. Baron , David P.: Busi­ness and its En­vi­ron­ment; Hi­malaya Pub­lish­ing House; 2003 3. Nara­sa­iah ,M.L.:Small Scale En­ter­preneur­ship; Dis­cov­ery Pub­lish­ing House; New Delhi, 2001 4. Mit­tal, K.C.:In­dus­trial En­ter­preneur­ship; Deep & Deep Pub­li­ca­tions Pvt. Ltd.; New Delhi-110027. 5. Chan­dra , Ramesh : C o rpo ra te Man­age­ment; Kal­paz Pub­li­ca­tions Delhi. 2002 6. Sta­tis­ti­cal Ab­stract of Mi­zo­ram: 2011, Direc­torate of economics & Statis­tics, Govern­ment of Mi­zo­ram. 7. Busi­ness op­por­tu­ni­ties in Mi­zo­ram: In­dus­tries

& ITde­part­ment, govern­ment of Mi­zo­ram.

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