Problems & Prospects of Industrial Units in Mizoram
- Lalhmangaihzuali & - Dr. Amit Pal Singh
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.
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.
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