[Reader-list] small scale industries in WB

[A. Mani]

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Pioneer in Small Scale Sector
Manab Mukherjee

The industrial scenario of West Bengal, often a topic for debate, has
become much brighter in recent period. While the focus of discussions
mainly centres round big industries, the state has gained a very
strong ground in small scale sector. This is particularly noteworthy
as a counter current in the era of neo-liberalism.
The factors on which the development of Small Scale Industries depends
are universal. One of them is definitely the demand generated by the
large and medium scale industries in the state. But this is not the
only source from where the demand is coming. Even small scale
industries can flourish to cater the commodity demands of the local
market. In this sector, West Bengal is pioneer in the country because
all of these factors are very strong in the State.
West Bengal is one of the oldest industrial belts in the country.
Geographically it was extended from Kolkata to Asansol on one hand and
with huge number of industries in the both banks of Hugli in other
direction. Unfortunately, after the 60’s due to indifferent and
negative attitude of the Central Government ruled by Congress, a good
number of industries left the State and industrial investment amount
recorded a net outflow.
In 1977 when the Left Front Government first came into power, the
industrial scenario in general in the State was in a very bad shape.
The Left Front Government took the historic initiative to implement
Land Reforms. It was followed by consorted efforts to rejuvenate the
industrial scenario of the State. The initiatives for Land Reform and
the demand for Haldia Petro-Chemicals were almost simultaneous. The
thrust on industrialization under leadership of Jyoti Basu was
severely jolted by the step-motherly attitude of the Central
Government. It was only after de-regularization, ending of the era of
Industrial Licence Raj and freight equalization policy which the
Central Congress government was forced to do to introduce new economic
policy in 1991, that the large industries with remarkable investments
started poring in the State. But it was a different case with respect
to Small Scale Industries. There was no scope for the Central
Government to impose regulation and so they grew up steadily since
1977. But neo-liberalism, in its inherent character, strongly stood in
the way of development of SSEs. The reserved list, which existed prior
to 1991 for the SSEs, was radically reduced and ultimately erased step
by step. Liberalization made the SSEs to face the extreme uneven
competitions from the National and International Corporate and thereby
staking their existence.
A good number of the Large Central PSUs which formed the backbone of
the industrial scenario in West Bengal were either closed or
privatized. This created additional negative effect in the State. A
huge number of Small Scale Industries which were dependent on those
large PSUs had to be closed. Even some part of the traditional
industrial belt from Kolkata-Howrah to Durgapur-Asansol looked
extremely deserted.
To protect the industries in West Bengal, a defensive struggle started
which culminated to a glorious come back. Some long term and short
term initiatives taken by the Left Front Government countered these
negative factors. The most important factor was successful
implementation of Land Reforms which gave rise to economic empowerment
to the poor rural people. Slowly but steadily purchasing power
capacity of rural people increased uniformly. The rural income
distribution comparatively became more equitable. As for example,
during last year rural Bengal purchased industrial commodities worth
Rs. 26,500 crore. A part of this amount has gone to the sales proceeds
of Small Scale Industries through local market. Some portion has gone
to savings which is also invested in the Small Units locally.
After 1991, opportunities for investments on large and medium
industries were opened. This resulted in automatic development of the
ancillary and downstream Small industries. The traditional industrial
belts became rejuvenated and new industrial outlets were formed like
Haldia, Kharagpur and Siliguri.
As already stated, the growth of Small Scale Industries does not
exclusively depend on investments in large industries. The new SSI are
not only geographically concentrated around the industrial belts but
it has been more or less uniformly distributed in all the 19 districts
of the State. These are the SSIs who are mostly dependent on the
demands created from the local market and supported by the local
investment. The rise in the figures of Small Scale Industries in West
Bengal in recent period is really unprecedented. According to report
of SSI Census conducted by the Government of India.
1st SSI 2nd SSI 3rd SSI 4th SSI
Census Census Census Census
1972 1987-88 2001-02 2006-07
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No. of Units 26,522   94,362   7,71,388     25,13,303
Employment 1,76,198   3,11,838   21,69,106   58,31,566

Comparatively the no of SSI units is highest in UP (slightly over
31lakhs) followed by West Bengal, Maharashtra, Tamilnadu which all
register the number in the range of 25 lakhs. But only the number of
SSIs cannot give the total picture of small scale industries in the
state. Equally important is the rate of survival of these SSIs.
Nationally the percentage of closed SSI is 21.47%, for UP it is
25.35%, Tamilnadu 25.08%, Maharashtra 24.85%. But for West Bengal the
figure is only 14.68%, which is one of the lowest in the country. SSIs
are adequately protected here.( Source: 4th SSI Census Report).
It is a product of State Government’s long term policy and short term
initiatives. For example, the monetary incentives of the Government in
different sectors, the Micro sector (i.e. less than Rs 25 lakh
investment in plant and machinery) is prioritized and has the largest
share, with focus on backward areas, women entrepreneurs and
marginalized section of the society. Preference is also accorded to
this sector in Government procurements and consumptions. The laborers
of this sector get the highest social securities.
However the principal obstacle for the progress in this sector is
institutional financing. The attitude of the Public Sector Banks has
been traditionally negative in West Bengal and the credit-deposit
ratio has been consistently below the national average. This has
severely hit the weakest section of the industries.

Keeping these parameters in view, the State Government has put much
stress on the programme of Self Employment. West Bengal is much ahead
of the remaining States in India in this respect also. Prime
Minister’s Employment Generation Programme (PMEGP) is the flagship
employment generation programme in the country. The programme has been
running for the last three years. Since inception, in terms of number
of cases, West Bengal has been heading the performance across states
in India and from the trend of progress there is enough reason to be
confident that the state will continue to maintain its position this
year also. In the last year the total no of approved units in the
state was 8610, and total employment generated was 81,241. Among these
small entrepreneurs 32.56% is from Minority section, 20.42% is from
backward community and 22.56% are women ( Source: Reports on PMEGP,
Ministry of Micrao, Small and Medium Enterprises).
The state also registered highest success across the state for the
nationwide Special Self employed Scheme of Minorities.
Along with these, State Government in its own initiative provided huge
financial support and introduced Bangla Swanibhar Karma Sansthan
Prakalpa (BSKP) which received tremendous response from the people.

REPORT ON BSKP

Year No of cases Project Subsidy
Sanctioned cost involved involved

2008-09 22315 Rs.46325 lakh Rs.8836 lakh

2009-10 24691 Rs 8200 lakh Rs.12848lakh

2010-11 16321 Rs.36648lakh Rs.7329lakh
(Up to 31.12.10)


The Self Employment Schemes are also the other way of setting up SSEs
with the support of the state. So, the Banks are compelled to extend
financial resources to some extent . This is one of the most
prioritized area in the programme of the Left Front Government and in
this sense West Bengal stands as an example in the whole country. In
spite of the difference in the origin of philosophy of Khadi & Village
Industries, under the stewardship of the State Government, the West
Bengal Khadi & Village Industries Board has been formally recognized
as the best performing Khadi Organization by the Central Government.
It is extending continuous help for promoting other Khadi activities
including village industries throughout the State.

In West Bengal, there are few traditional sectors which create huge
employment. Handicrafts is one of them. More than 5.52 lakh artisans
are engaged in this activity. Here not only quantity but also quality
is a challenge to this sector. The State Government continuously helps
these artisans by way of giving financial and marketing support. The
Left Front Government has been promoting their artifacts not only in
India but in the international market and met huge success. Encouraged
with the additional support from the Government, the artisans have
formed Self-Help Groups. Besides these, the Government provides
Special Welfare Schemes for them. They have been receiving State
sponsored Old Age Pension Provident Fund facilities. The West Bengal
Handicrafts Development Corporation (Manjusha), a State Government
Undertaking, works for the development and, promotion and marketing of
the products of the artisans.

West Bengal has been traditionally rich in another allied sector which
is the Handloom sector. Although this sector is passing through severe
distress in the period of neo-liberalisation, still there are signs of
reversal in West Bengal. The figure of the last Handloom Census shows
that though the no of handloom weavers are reducing nationally, in
West Bengal it is the reverse, the number of weavers is now 6.66 lakh
which is second in rank across states in the country. State government
has also taken adequate steps to place the handloom products in the
National and International market and for production of diversified
handloom articles. Already 3 lakh weavers are covered under Health
Insurance Scheme and more that 25% of them have been covered by Life
Insurance Scheme. Old Age Pension for Handloom weavers has been
introduced. The West Bengal State Handloom Co-operative Society
(Tantuja), a State Government Undertaking, is primarily engaged in
organizing and developing markets for handloom products.

Another traditional sector, which has been protected and developed by
the Government is Sericulture. Sericulture is a combination of both
agriculture and industrial activities. The total Sericulture
production in the State secured third position among the states in the
country. The total number of people earning their livelihood from this
sector is 3.26 lakh. Not only adequate social security measures,
Government provides huge subsidies in inputs and infrastructure.

To protect the Small Industry sector from the grab of the uneven
competition of the large industries, the Left Front Government has put
much emphasis on the Cluster Development Programme(CDP) for the same
kind of industries. The groups may consist of high-end production or
very small productions of cottage scales. Composite infrastructure,
latest technology, marketing openings, guaranteed supply of raw
materials is the key components for this programme. To create the
physical infrastructure, 90% finance is provided by the Govt. and the
rest by the Industry Association or by the Special purpose Vehicle
formed therein. In CDP some are Exclusively State Government’s
initiative and some are done jointly with the Central Government. The
number of CDPs in joint venture with the Central Govt. in West Bengal
also ranks second across states in the list after Uttar Pradesh in
Micro and Small Scale sector. Besides, huge number of Clusters has
been developed in the Handloom sector. A Mega Handloom Cluster, one of
the largest in the country, is being set up in the districts of
Murshidabad and Nadia with Joint participation of the Central and
State Governments. A total of 103 Clusters are being set up in the
State in various sectors. The Left Government believes that the
Cluster Development Programme could be used as an important tool for
catering to the uneven competition from the large industries faced by
the Small ones.

In the industrial scenario in West Bengal, the Left Front Government
has indicated drive and policy thrust in the development of Small
Scale Industries. According to the last NSS data, there are 27.5 lakh
unorganized industrial units in West Bengal with the employment
generation for 55 lakh people which is the highest in the country.

After the promulgation of MSME act in October, 2006 the total set up
has been restructured. During the period from 2006-2010, it is seen
that 45,495 Micro and Small Scale Units have started operation with
employment for 4, 65,704 persons and investment of about Rs.3, 882
crores. We are certain to keep this trend in the days to come.

The reported data make it visible that the Left Front Government in
the state is aware of the threats and challenges posed against the
Small Scale Industries in the era of neo-liberalism and is committed
not only to protect these sectors from the threats, but also has a
vision to create an alternative model of industrial development in the
country.




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