chapter ii nature, scope, objectives and methodology of...

NATURE, SCOPE, OBJECTIVES AND METHODOLOGY OF THE STUDY

15

CHAPTER II

NATURE, SCOPE, OBJECTIVES AND

METHODOLOGY OF THE STUDY


16

CHAPTER II

NATURE, SCOPE, OBJECTIVES AND

METHODOLOGY OF THE STUDY

SR.

NO. PARTICULARS

2.1 INTRODUCTION

2.2 NATURE OF THE STUDY

2.3 CONCEPTUAL FRAMEWORK

2.4 STATEMENT OF THE STUDY

2.5 OBJECTIVES OF THE STUDY

2.6 IMPORTANCE OF THE STUDY

2.7 RESEARCH METHODOLOGY

2.8 SOURCES OF DATA

2.9 DATA ANALYSIS

2.10 SCOPE OF THE STUDY

2.11 CHAPTER SCHEME

2.12 HYPOTHESES OF THE STUDY

2.13 LIMITATIONS OF THE STUDY

2.14 REVIEW OF LITERATURE

2.15 FUTURE PROSPECTS OF THE STUDY

2.16 REFERENCES


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CHAPTER II

NATURE, SCOPE, OBJECTIVES AND METHODOLOGY

OF THE STUDY

This chapter focuses on introduction, nature, Statement of the study,

objectives, importance, scope, sampling method, sample size, data collection, tools

used for data analysis, hypotheses, testing of hypotheses, chapter scheme, limitations

of the study, literature review, and future prospects for the study.

2.1 INTRODUCTION. Entrepreneurship plays very significant role in industrial development. The

industrially developed countries like U.S.A., Germany and Japan bear the evidence

that an economy is an effect for which Entrepreneurship is the cause.

Entrepreneurship can be defined as a process of giving birth to a new enterprise.

MSMEs i.e. Micro, Small and Medium scale enterprises, including Khadi, Village and

Rural Enterprises, play very significant role in the overall industrial development of

the nation. With the advent of planned economy in 1951 and the subsequent industrial

policy followed by the Government of India, both the planners and the government

noticed a special role for Small-scale Enterprises and Medium scale Enterprises in the

Indian economy. That’s why, the business Enterprises i.e. Micro, Small and Medium

scale Enterprises known as the engine of growth. The Entrepreneurship Development

is the only panacea for economic development. The Jalna and Latur Districts have

come into existence on the same date i.e. 1st of May 1982. These two Districts are

industrially developing Districts and are part of the Marathwada Region i.e.

industrially backward Region in the Maharashtra State. So, to understand the pace of

industrialization in these two Districts, researcher has selected the comparative study

of Enterprises between these two Districts.

2.2 NATURE OF THE STUDY. The Micro and Small scale Enterprises are grown very rapidly over the years.

The Government of India has initiated number of program and schemes to promote

the business Enterprises. According to the fourth census of MSMEs Govt. of India,


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there are 15.64 Lakh registered and working MSMEs in India. Micro enterprises have

vast scope covering activities like manufacturing, servicing, financing, retailing,

construction, infrastructure etc. Manufacturing enterprise means enterprises engaged

in manufacturing, assembling and processing. Service enterprises include repairing

and maintenance services and others.

Graph 2.1

Percentage of Micro and other Enterprises in India

(Source: MSMEs 4th census Report, Govt. of India, 2014-15)

These 15.64 Lakh registered MSMEs providing employment to 93.09 Lakh

needful people. Out of 15.64 Lakh registered MSMEs, 10.49 Lakh (67.01 per cent)

are manufacturing Enterprises, 2.62 Lakh (16.78 per cent) are service Enterprises and

2.52 Lakh (16.13 per cent) are repairing and maintenance Enterprises in India. About

94 % of the total MSMEs are Micro Enterprises, i.e. Enterprises with investment less

than twenty five Lakh rupees. There are around 2443 clusters covering 321 products

in the MSMEs sector. There are many Enterprises in the unregistered sector and it is

estimated that almost 91.46 Lakh units are operating in this sector. Undoubtedly,

Small scale sector in India, which was earlier operating in a protected environment,

faces new challenges in the era of globalization. With the process of liberalization,

there is high increase in competition, free movement of goods, investment, strategic

alliances for product development, production, sourcing and marketing. After the

introduction of MSMEs Act 2006, new opportunities are opened up for growth and

expansions of business Enterprises in the economy. In view of the Government of

India’s ever rising significance given to the Micro and Small enterprises in the

95%

5%

Micro Enterprises

Other Enterprises


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national economy, more number of Micro and Small units is to be set up in the years

to come. The MSEs offer plenty opportunities to the people to suppose

entrepreneurial carrier. Thus, the nature of this study is comparative, between Jalna

and Latur Districts of the Marathwada Region, to understand the pace of

industrialization in these two Districts.

2.3 CONCEPTUAL FRAMEWORK. In India as per the MSMED Act-2006, the business Enterprises whether sole

Proprietorship, Hindu Undivided Family business, Association of persons, Co-

operative Society, Partnership firms or any other legal entity by whatever name be

they called was classified as under:-

Chart No. 2.1

Classification of Manufacturing and Service Enterprises

Sr.

No Category

Manufacturing

Enterprises

Service

Enterprises

1 Micro

Enterprises

Rs. 2.5 million/

*Rs. 25 Lakh (US$ 50,000)

Rs. 1 million/

**Rs. 10 Lakh (US$

20,000)

2 Small

Enterprises

Rs. 50 million/

*Rs. 5 Crore (US$ 1

million)

Rs. 20 million/

**Rs. 2 Crore (US$

40,00,000)

3 Medium

Enterprises

Rs. 100 million/

*Rs. 10 Crore (US$ 2

million)

Rs. 50 million/

**Rs. 5 Crore (US$ 1

million)

* Investment limit in Plant & Machinery ** Investment limit in equipment *** Rs 50 = 1 USD

(Source: Ministry of MSMEs, MSMEs Act 2006, Govt. of India, 2006)

I-Enterprises engaged in Manufacturing of goods.

Micro Enterprises:

In which the investment in fixed assets in plant and Machinery does not

exceed Rs. 25 Lakhs.


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Small Enterprises:

In which the investment in fixed assets in plant and Machinery is more than

Rs. 25 Lakhs but does not exceed Rs. 5 Crore.

Medium Enterprises:


Rs. 5 Crore, but does not exceed Rs. 10 Crore.

II-Enterprises engaged in providing or Rendering Services as:-

Micro Enterprises:

In which the investment in fixed assets in plant and Machinery does not

exceed Rs. 10 Lakhs

Small Enterprises:


Rs. 10 Lakhs but does not exceed Rs. 2 Crore.

Medium Enterprises:


Rs. 2 Crore, but does not exceed Rs. 5 Crore.

III CLASSIFICATION OF ENTERPRISES.

1) Agro based Enterprises.

The agro based Enterprises means Enterprises engaged in the above activities-

Tamarind Processing, Noodles, Pepsi coca-cola, Milk and Milk Products, Pulses,

Confectionary, Soya products, Bio Fertilizers, Jagri, Jagri Powder etc.

2) Forest/Mineral/Wood based Enterprises.

Forest, mineral and wood based Enterprises means Enterprises engaged in the

activities of herbal products, electrical switch boards, saw mill, wooden furniture etc.

3) Food based Enterprises.

Food based Enterprises means Enterprises engaged in the activities of- Baby

food, Custard apple, Jam, Jelly, Juice, Pickles, Ayurvedic medicines etc.

4) Leather based Enterprises.

Leather based Enterprises means Enterprises engaged in the activities of- Ladies

and Kids Foot wears, Ladies Purses and Bags, School bags, Sheet Cover etc.


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5) Rubber/Plastic/Paper based Enterprises.

Rubber, Plastic, Paper based Enterprises means Enterprises engaged in the

activities of- Screen Printing, Offset Printing, Corrugated Boxes, Digital Flex Printing

PVC pipes, Card Board Boxes, etc.

6) Chemical based Enterprises.

Chemical based Enterprises means Enterprises engaged in the activities of-

Chemical products, Chemical Services, Chemicals & Pharma Industries etc.

7) Metal & Engg. based Enterprises.

Metal & Engg. based Enterprises means Enterprises engaged in the activities

of- Steel Furniture, Rolling Shutters, Deserts Coolers, Wire nails etc.

8) Electric/Electronic based Enterprises.

Electric/Electronic based Enterprises means Enterprises engaged in the

activities of- Decorative Bulbs series, Emergency Light Mfg. Units, TV Repairing

Units, Auto Horns, Radio, Transistor Assemble Units etc.

9) Readymade Garments based Enterprises.

Readymade Garments based Enterprises means Enterprises engaged in the

activities of Readymade Garments, Knitting Sweaters etc.

10) Service based and other Enterprises.

Service based and other Enterprises means Enterprises engaged in the

activities of Hotels, Bore well, Computer training institute, Software development,

Repairing and Servicing units, Tailoring, Xerox, Typing centers etc.

2.4 STATEMENT OF THE STUDY. This study is particularly related to the comparative analysis of business

environment and its economical impact in the development of Jalna and Latur

Districts of the Marathwada Region. Hence the topic of the study is:-

“A COMPARATIVE STUDY OF ENTERPRISES BETWEEN JALNA AND

LATUR DISTRICTS OF THE MARATHWADA REGION”


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2.5 OBJECTIVES OF THE STUDY. The proposed study is undertaken with the following objectives:

1. To study the concept, nature, and role of Entrepreneurship and concept of

MSMEs in India.

2. To Study the growth of the Micro and Small Enterprises in India and

Maharashtra in general and Jalna and Latur Districts in particular.

3. To compare the economical performance like investment, sources of

borrowing, credit policy, profitability, share in export etc. of Micro and Small

Enterprises between these two districts.

4. To study the employment generated by Enterprises in two districts under

study.

5. To study the availability of basic infrastructure in two districts under study.

6. To study the assistance policy of Govt. to MSEs.

7. To understand the role of MIDC, MCED, DIC and MITCON and Commercial

Banks, in promotion and assistance for rapid and orderly establishment of

Micro and Small enterprises.

8. To examine the various problems of Micro and Small Enterprises in Jalna and

Latur Districts.

9. To give recommendations to overcome the problems of Micro and Small

Enterprises in Jalna and Latur Districts.

10. To cover any incidental or collateral issues related to the present study.

2.6 IMPORTANCE OF THE STUDY. Micro and Small Enterprises play a vital role in the overall development of

any country. No one can dream economic development of the nation without rapid

industrial progress. In this regard, this study occupies very important role. This study

brings out the role of Micro, Medium and Small scale industries in the development

of Jalna and Latur Districts. On the recommendations of various committees formed

on the study of Small Scale Industries (SSI), the Govt. of India passed MSMEs

Development Act, 2006 and later on the new industrial policy. Thus, this study is

definitely useful to improve the investment, employment generation, profitability, and

import / export share of the MSEs of the Jalna and Latur Districts. This particular

study is also very useful to understand the role of business Enterprises in the rural and


23

urban development of the economy also. The research scholars also can use the

outcome of this study for their research references. People from rural and urban areas

can also be benefited by getting information and knowledge related to how to set up

of new Enterprises? They would also get information related to various schemes of

Central and State Govt. for the business Enterprises. This study is also helpful to

understand the effects of New Industrial Policy for MSMEs. This study is important

to know the changing role and challenges related to institutes like MCED, DIC,

MITCON and MIDC at District level. This study contributes a lot in the wake of

Globalization, Privatization, and Liberalization. It aims at studying the various

problems of MSMEs in Jalna and Latur Districts. It is also helpful to understand the

role of MSEs in the overall development of Jalna and Latur Districts. The overall

finding of the study reveals the importance of schemes of promotional agencies for

Entrepreneurship Development in Jalna and Latur Districts. It would enable the

agencies working for MSEs development to identify their strengths and weakness to

implement future programs.

2.7 RESEARCH METHODOLOGY.

RESEARCH AREA The present study deals with status of Micro and Small Enterprises in Indian

economy. For in depth study propose the Micro and Small Enterprises located in the

Jalna and Latur districts are selected. The principal objective of the present study is to

study the growth of Micro and Small Enterprises in Jalna and Latur Districts. It is also

covers assistance policy of Govt. for the Micro and Small Enterprises in India, in

Maharashtra State. This study included employment generation, investment and

profitability of the Micro and Small Enterprises in both the Districts of the Marathwada

Region. Ultimately this study covered progress, problems, challenges and potentials

of Micro and Small Enterprises in Jalna and Latur Districts.

SAMPLING. For the research study, multistage sampling method is applied. As per the

report of MSEs, Marathwada Region, 2012-2013, total 2270 number of Micro and

Small Enterprises was working as on 31st Mar 2012; in Jalna District and 2051 were in

Latur District of Marathwada Region. For the comparative study purpose only, 5%

App. (i.e. 100) units of Jalna District as well as 5% App. (i.e. 100) units of the Latur


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District are selected. As per this report in both the Districts in an average 75%

working units are Micro and 25 % are Small Enterprises. Hence, for the comparative

study purpose 75 Micro and 25 Small units of both the Districts are selected.

Table No. 2.1

Sample Design

S.

No Category

Name

of

District

Total Population Selection of Sample

Mic

ro

Smal

l

Tota

l

Mic

ro

Smal

l

Tota

l

1

Micro and

Small

Enterprises

Jalna

1661

(73.16%)

609

(26.84)

2,270

(100 %) 75 25

100

(5%

App.)

Latur 1560

(76.06%)

491

(23.94%)

2,051

(100 %) 75 25

100

(5%

App.)

Total 3221

(100%)

1100

(100%)

4,321

(100%) 150 50

200

(5%

App.)

2

Selection of

officers

(Number

in bracket)

Jalna MCED

(1)

DIC

(1)

MITCON

(1)

MIDC

(1)

Commercial

Bank(1)

5

Latur MCED

(1)

DIC

(1)

MITCON

(1)

MIDC

(1)

Commercial

Bank(1)

5

Total 2 2 2 2 2 10

Total Sample 210


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Table No. 2.2

Classification of sample

Sr.

No. District

Line of activity of

the business

Total

Units

Frequency

(Selected

Sample)

Percentage

(%)

Rank of

Top Five

Enterprises

1 Jalna

Agro based 357 16 16% III

Forest/Mineral/Wood

based 174 08 08%

V

Food based 115 05 05%

Leather based 274 12 12% IV

Rubber/Plastic/Paper 114 05 05%

Chemical based 90 04 04%

Metal & Engg. based 514 22 22% I

Electric/Electronic

based 131 06 06%

Readymade Garments

based 128 06 06%

Service based/ Others 373 16 16% II

Total 2270 100 100.00

2 Latur

Agro based 179 09 09% IV

Forest/Mineral/Wood

based 312 15 15%

III

Food based 609 29 29% I

Leather based 32 02 02%

Rubber/Plastic/Paper 158 08 08% V

Chemical based 49 02 02%

Metal & Engg. based 63 03 03%

Electric/Electronic 80 04 04%

Readymade Garments 144 07 07%

Service based/ Others 425 21 21% II

Total 2051 100 100.00


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Table No. 2.3

Sub-classification of Sample

Sr.

No. District

Line of activity of

the business

Frequency

(Selected Sample)

Micro

Enterprises

(75%)

Small

Enterprises

(25%)

Total

(100%)

1 Jalna

Agro based 12 04 16

Forest/Mineral/Wood based 06 02 08

Food based 03 02 05

Leather based 09 03 12

Rubber/Plastic/Paper based 04 01 05

Chemical based 03 01 04

Metal & Engg. based 16 06 22

Electric/Electronic based 05 01 06

Readymade Garments based 05 01 06

Service based/ Others 12 04 16

Total 75 25 100

2 Latur

Agro based 07 02 09

Forest/Mineral/Wood based 11 04 15

Food based 21 08 29

Leather based 02 00 02

Rubber/Plastic/Paper based 06 02 08

Chemical based 02 00 02

Metal & Engg. based 02 01 03

Electric/Electronic based 03 01 04

Readymade Garments based 05 02 07

Service based/ Others 16 05 21

Total 75 25 100


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The Micro and Small Enterprises again classified in to line of activity wise i.e.

Agro based, Forest/Mineral/Wood based, Food based, Leather based,

Rubber/Plastic/Paper based, Chemical based, Metal & Engg. based,

Electric/Electronic based, Readymade Garments based and Service based/ Other

Enterprises of the Jalna and Latur Districts. Out of this classification 75% Micro and

25% Small units as per line of activity are deliberately selected. This study highlights

on growth, sources of finance, investment, production, employment and contribution

in imports and exports of Micro and Small Enterprises between Jalna and Latur

Districts.

2.8 SOURCES OF DATA. This is a descriptive study. Hence, the data and the other information required

for the study was collected from both primary and secondary sources.

PRIMARY DATA. A scheduled questionnaire was constructed by the researcher for the collection

of primary data from sample Enterprises. For the in depth study purposes the Micro

and Small enterprises working in the Jalna and Latur districts were selected. To

understand the contribution of various institutions in the Entrepreneurship

Development of both the Districts, five officers, each one from the offices of DIC,

MCED, MIDC, MITCON and Commercial Bank are also selected.

SECONDARY DATA. Secondary data is collected from the following sources

The Economic Survey of India – 2004 to 2014.

The Economic Survey of the Maharashtra State- 2004-2014.

Maharashtrachi Arthik Pahani – “Paryayi Drishtikon”, edited by Shri Govind

Pansare, 2004-2014

Udyog Mitra, Govt. of Maharashtra Organization.

Annual Reports of the Directors of Industries, Mumbai.

Reports of the Directors of Industries, Aurangabad Region, Aurangabad.

Past research work, research journals and various periodicals, published and

unpublished materials.


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Data resources of the MCED, MIDC, DIC, MITCON, Lead Bank annual

report, Annual Credit Plan and Annual Socio Economic Reports of Jalna and

Latur Districts etc.

Library resources of the Swami Ramanand Teerth Marathwada University,

Nanded, Dr. Babasaheb Ambedkar Marathwada University, Aurangabad,

Rajarshi Shahu Mahavidyalaya (Autonomous), Latur, Dayanand Commerce

College, Latur, Mahatma Basweshwar Mahavidyalaya, Latur etc. was also

used for the study purpose.

Websites-Google.com, Wikipedia.com, MSMEs.com, Udyog Mitra.com.

Report of various Committees etc.

The present study is based on secondary data also. That’s why, for the last 10

years data i.e. from 2003-04 to 2012-13 was collected from secondary sources. The

every latest reference of the years 2013-14 is also included logically for the fair

conclusions.

2.9 DATA ANALYSIS.

Data analysis is done by compilation and tabulation of the data. The following

statistical tools are applied for analyzing the data:-

Averages

Percentages

Indices

Ratio’s

Growth trends

Simple Ranking, Garratt’s Ranking.

Correlation etc.

2.10 SCOPE OF THE STUDY. The scope of the study included the following aspects:-

(A) Periodical.

The period of 10 years is covered in the present study i.e. from 2003 -04 to

2012-13.


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(B) Functional.

The study is strictly restricted to the economical, marketing, production,

financial, employment, infrastructural and its related functions of the Micro and Small

Enterprises in Jalna and Latur Districts.

(C) Geographical.

Jalna and Latur District are the part of Marathwada Region. The deliberate

choice of these two Districts Enterprises gives justice to the selected topic. Industrial

profile of these two Districts is somewhat different from each other. Thus, this study

pinpoints the problems challenges and potential opportunities for the development of

Micro and Small Enterprises in the Jalna and Latur Districts.

2.11 CHAPTERS SCHEME. The present study is divided into seven chapters, each chapter distinctively

highlights on various points.

Chapter I – Definition, history and theories of Entrepreneurship.

This chapter deals with introduction, origin, concept and different theories of

Entrepreneurship. The new definition of Enterprises i.e. Micro, Small and Medium

scale Enterprises (MSMEs) are also discussed in this chapter.

Chapter II – Nature, scope, objectives and research methodology of the study. This chapter focuses on introduction, nature, Statement of the study,

objectives, importance of the study, data collection, tools of research, scope of the

study, sample selection and sample size, hypothesis, chapter scheme, limitations,

hypothesis testing, and literature review of the present study.

Chapter III – Profile of Jalna and Latur Districts.

This topic covers in detail socio-economic profile of the Jalna and Latur

Districts. This information would be helpful to understand the demographic, industrial

and socio-economic profile of both the Districts. It has helped to evaluated the

performance of MSEs in both the districts.

Chapter IV – Promotional schemes and performance MSMEs.

This chapter deals with the various institutional supports to the Micro and Small

Enterprises in our economy. This topic covers the Governments and Private

promotional schemes and activities for the development of the Micro and Small

Enterprises in India and in Maharashtra. The performance of Enterprises in India, in


30

Maharashtra in general and in Jalna and Latur Districts in particular also discussed in

this chapter. This chapter purely based on analysis of secondary data.

Chapter V- Data Analysis.

In this chapter the description overview of the collected data analyzed. The

comparative analysis of the economical aspects based on primary data with the help

of various statistical tools is discussed in this chapter. The personal information,

capital formation, employment generation, investment, infrastructure, marketing and

all other related aspects are analyzed in this chapter.

Chapter VI- Problems and challenges before the Jalna and Latur Districts Micro

and Small Enterprises.

This topic covers the problems and challenges before the Jalna and Latur

Districts Micro and Small Enterprises. The various problems related to marketing,

infrastructure, competition, Govt.’s Tax policy etc. are discussed in the present

chapter.

Chapter VII- Summary of findings and suggestions.

The summary of findings and suggestions are in detail discussed in this

chapter. The overall conclusion of the study, the problems related suggestions and the

respective scope for future study also cited in this chapter.

2.12 HYPOTHESES OF THE STUDY. The following hypotheses are formulated for the study.

H1: The progress of MSEs in Latur District is better than the progress of MSEs in

Jalna District.

H2: There is no direct relationship between investment and employment in MSEs

in both the Districts.


31

TESTING OF HYPOTHESES.

H1: The progress of MSEs in Latur District is better than the progress of MSEs in

Jalna District.

Table No.2.4

MSEs in Jalna and Latur Districts

Sr.

No. Year

Jalna District Latur District Total

Units

Units

* %

Increase/

Decrease

** %

Increase/

Decrease

Units

* %

Increase/

Decrease

** %

Increase/

Decrease

1 2003-04 788 ---- 100 134 ---- 100 922

2 2004-05 650 -17.51 82.49 265 97.76 197.76 915

3 2005-06 372 -42.77 47.21 453 70.94 338.06 825

4 2006-07 1083 191.13 137.44 595 31.35 444.03 1678

5 2007-08 696 -35.73 88.32 688 15.63 513.43 1384

6 2008-09 682 -2.01 86.55 770 11.92 574.63 1452

7 2009-10 785 15.10 99.62 827 7.40 617.16 1612

8 2010-11 1023 30.32 129.82 879 6.29 655.97 1902

9 2011-12 2879 181.43 365.36 1017 15.70 758.96 3896

10 2012-13 2270 -21.15 288.07 2051 101.67 1530.60 4321

Total 11228 (59.39%) 7679 (40.61%) 18907

(100.00)

Mean 1122.8 767.90 1890.70

Ratio 1:0.68

T Test 1.1675

(Source: The data for the period up to 2005-06 is for Small Scale Industries (SSI) and

subsequent to 2005-06 data is with reference to Micro and Small Scale Enterprises

which is compiled from reports of MSEs, Jalna and Latur Districts of respective

years) Note: * Represents growth over the previous year.

** Represents growth over the base year.


32

Table No.2.5

Investment in MSEs in Jalna and Latur Districts (Lakh Rs.)

Sr.

No. Years

Jalna District Latur District

Tota

l

Inve

stm

ent

Lakh

Rs.

% to

total

* %

**

Trend

Lakh

Rs.

% to

total

* %

**

Trend

1 2003-04 3840 86.18% ----- 100 616 13.82% ------ 100 4456

2 2004-05 3722 76.15% -3.07 96.93 1166 23.85% 89.29 189.29 4888

3 2005-06 2349 52.07% -36.89 61.17 2162 47.93% 85.42 350.97 4511

4 2006-07 7978 64.28% 239.63 207.76 4434 35.72% 105.09 719.81 12412

5 2007-08 9354 59.08) 17.25 243.59 6480 40.92% 46.15 1051.95 15834

6 2008-09 10545 56.44% 12.73 274.61 8140 43.56% 25.62 1321.43 18685

7 2009-10 3585 27.83% -66.00 93.36 9299 72.17% 14.24 1509.58 12884

8 2010-11 12762 55.12% 255.98 332.34 10391 44.88% 11.74 1686.85 23153

9 2011-12 9719 42.41% -23.84 253.10 13199 57.59% 27.02 2142.69 22918

10 2012-13 17968 57.27% 84.87 467.92 13406 42.73% 01.57 2176.30 31374

Total 81822

(54.15%)

69293

(45.85%)

151115

(100.00)

Mean 8182.20 6929.30 15111.50

Ratio 1:0.85




years)

Note: *Represents growth over the previous year.

** Represents growth over the base year.

+/- indicates increase and decrease


33

Graph No. 2.2

MSEs in Jalna and Latur Districts

(Source: Table No.2.4)

Graph No. 2.3

Investment in MSEs in Jalna and Latur Districts


788650

372

1083

696 682785

1023

2879

2270

134265

453595

688 770827 879

1017

2051

0

500

1000

1500

2000

2500

3000

3500

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Jalna Latur

3840 3722

2349

79789354

10545

3585

12762

9719

17968

616 11662162

4434

6480

81409299

10391

13199

13406

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Jalna Latur


34

Table No. 2.4 and 2.5 are used for testing the first hypothesis i.e.“The progress

of MSEs in Latur District is better than the progress of MSEs in Jalna District”. For

the test of the hypothesis secondary data is used. Table No.2.4 denotes number of

MSEs in Jalna and Latur districts. The number of MSEs in 2003-04 in Jalna district

was 788 which came down to 650 in 2004-05, showing a decrease of 17.51%. In

Latur district 134 units were registered in the year 2003-04 which became 265 in the

year 2004-05, showing an increase of 97.76%. Year 2006-07 was the watersheding

year for Jalna district, in which 1083 units were registered, showing an increase of

191.43% over the previous year 2005-06, whereas highest number of units was

registered in the year 2011-12 i.e. 2879. For Latur district 2012-13 was the

watersheding year in which 2051 units were registered, showing an increase of

101.67% units, for the previous year2011-12. The overall observation of the table

during the study period shows that the trend of growth in MSEs in Jalna district is

better than Latur. The mean value of Latur district units stands 767.90, whereas Jalna

district mean value is 1122.8 which shows progress of Jalna district enterprises is

better than the progress of Latur district enterprises. The ‘T’ test is also applied to test

this hypothesis. For table No. 2.4, the tabulated value of ‘T test’ for 18 d.f. at 25%

level of significance is 0.688. Since, the calculated value of ‘T test’ is 1.1675; it is

more than the tabulated value. It is significant. Hence, this hypothesis of the study

may not be accepted and we can conclude that, the progress of MSEs in Latur District

is not more than the MSEs in Jalna District. So, the hypothesis of the study is not

proved positively, hence rejected.

Table No.2.5 denotes investment made in MSEs in Jalna and Latur. The

investment made in MSEs in Jalna in 2003-04 was Rs.3840 Lakh which came down

to Rs. 3722 Lakh in 2004-05, showing a decrease of 3.07%. In Latur district

investment made in MSEs in 2003-04 was Rs.616 Lakh which become Rs. 1166 Lakh

in 2004-05, showing an increase of 89.29%.Year 2010-11 was the watersheding year

for Jalna district, in which investment of Rs. 12762 Lakh was made, showing an

increase of 255.98% for the previous year 2009-10, whereas, highest investment in

MSEs was made in the year 2012-13 i.e. Rs. 17968 Lakh. For Latur district 2006-07

was the watersheding year in which investment of Rs. 4434 Lakh was made, showing

an increase of 105.09%, for the previous year 2005-06, whereas, highest investment in

MSEs was made in the year 2012-13 i.e. Rs. 13406 Lakh. The overall observation of

the table during the study period shows that the trend of investment made in MSEs in


35

Jalna district is better than Latur. The mean value of Latur district investment in

MSEs stands 6929.30, whereas Jalna district mean value is 8182.20, which shows

investment made in Jalna district enterprises is better than investment made in Latur

district enterprises. Percentage is also used to test the hypothesis. In the year 2003-04

in Jalna district the investment was 86.18% and in Latur was 13.82% out of total

investment. The overall percentage indicates that the investment in Jalna district was

54.15% and in Latur it was 45.85% out of the total investment in both the districts

during the period 2003-04 to 2013-13. Hence, this hypothesis of the study may not be

accepted and we can conclude that, the progress of MSEs in Latur District is not more

than the MSEs in Jalna District. So, the hypothesis of the study is not proved

positively, hence rejected.

On the basis of trends, percentage, mean, Ratio and ‘T’ test it came to the

conclusion that, the H1 of the study i.e. “The progress of MSEs in Latur District is

better than the progress of MSEs in Jalna District”, is not proved positive, hence

rejected.


36

H2:- There is no direct relationship between investment and employment in MSEs

in both the Districts.

Table No. 2.6

Investment and employment generation in MSEs in Jalna and Latur Districts

Sr.

No Years

Investment and Employment

Jalna District Latur District

Investment Employment Investment Employment

Lakh

Rs.

* %

Increase/

Decrease

In

Persons

(No.)

*Trend

Lakh

Rs.

* %

Increase/

Decrease

In

Persons

(No.)

*Trend

1 2003-2004 3840 ----- 1136 ----- 616 ----- 1742 -----

2 2004-2005 3722 -3.07 1140 00.35 1166 89.29 2972 70.61

3 2005-2006 2349 -36.89 1857 62.90 2162 85.42 4412 48.45

4 2006-2007 7978 239.63 11175 501.78 4434 105.09 6258 41.84

5 2007-2008 9354 17.25 19797 77.15 6480 46.15 7374 17.83

6 2008-2009 10545 12.73 29730 50.17 8140 25.62 9237 25.26

7 2009-2010 3585 -66.00 6050 -79.65 9299 14.24 11992 29.83

8 2010-2011 12762 255.98 33074 446.68 10391 11.74 15279 27.41

9 2011-2012 9719 -23.84 36375 09.98 13199 27.02 20060 31.29

10 2012-2013 17968 84.87 17368 -52.25 13406 01.57 24380 21.54

Mean 8182.20 15770.20 6929.30 10370.60

**Correlation 0.6916 0.9597

Ratio 1:1.93 1:1.50

T Test -1.6536 -1.2241




years)

Note: *Represents growth over the previous year

** Linear correlation


37

Graph No. 2.4

Investment and employment generation in MSEs in Jalna


Graph No. 2.5

Investment and employment generation in MSEs in Latur


3840 3722 2349

79789354 10545

3585

127629719

17968

1136 1140 1857

11175

19797

29730

6050

33074

36375

17368

0

5000

10000

15000

20000

25000

30000

35000

40000

Investment Employment

616 11662162

44346480

81409299

1039113199

13406

17422972

44126258

73749237

11992

15279

20060

24380

0

5000

10000

15000

20000

25000

30000

Jalna Latur


38

Table No. 2.6 is used for testing the second hypothesis i.e. “There is no direct

relationship between investment and employment in MSEs in both the Districts”.

Table No.2.6 denotes investment made in MSEs and employments generated by

MSEs in Jalna and Latur districts. The year wise changes in the investment in Lakh

Rs. of Jalna and Latur Districts are not directly related with the changes in the

employments generated in persons. In the Jalna District, the investment in MSEs

indicates the increasing trend i.e. from Rs.3840 Lakh in the year 2003-04 to Rs.

17,968 Lakh for the year 2012-13. The employment also increased from 1136 persons

number to 17368 person number in Jalna District, but this increase is not directly

equal with the increase in investment. In Latur District the investment in MSEs

increased from Rs. 616 Lakh to Rs.13,406 Lakh and employment also increased from

1742 persons in number to 24,380 persons in number during the study period. Thus,

in the Latur District also an increase in investment is not equal with the increase in

employments. The trend also indicates that, the trend of investment is not identical

with the trend of income for both the Districts. The correlation values of Jalna and

Latur Districts i.e. 0.6916 and 0.9597 reflects that, the investment and employment

are positively co-related with each other, but there is no direct relationship between

investment made and employments generated. Mean values of both the districts

employment and investment are not equal with each other. Thus, it is clear that that

for both the Districts MSEs the investment and employment are not directly related

with each other. The ‘T’ test is also applied to test this hypothesis. For table No. 2.6

for Jalna District, the tabulate value of ‘T’ for 18 d. f. at 5% level of significance is

2.101. Since, the calculated value of ‘T’ is 1.6536; it is less the tabulated value. It is

not significant. Hence, it can be concluded that, there is no direct relationship between

investment and employment in MSEs in Jalna District. For the Latur District, the

tabulated value of ‘T’ for 18 d.f. at 5% level of significance is 2.101. Since, the

calculated value of ‘T’ is 1.2241; it is less than the tabulated value. It is not

significant. Hence, it is conclude that, there is no direct relationship between

investment and employment in MSEs in Latur District.

Thus, on the basis of trend, mean, correlation, ratio and ‘T’ test it came to the

conclusion that, second hypothesis of the study i.e. H2, “There is no direct relationship

between investment and employment in both the Districts”, is proved positive, hence

accepted.


39

2.13 LIMITATIONS OF THE STUDY. 1. The study covers only two districts out of 8 districts in the Marathwada

Region.

2. This study covers only the Micro and Small Enterprises located in Jalna and

Latur Districts of the Marathwada Region.

3. The conclusions of the study may not be generalize to the Micro and Small

Enterprises in other parts of the country

2.14 REVIEW OF LITERATURE. Various Macro as well as Micro level studies on SSI, MSMEs and their impact

on economic development in India have been conducted by different researchers and

economists. The main findings of the past studies have been discussed in this section.

It symbolically presents the bird’s eye view, to enhance knowledge over the research

topic.

UNIDO (1969).

This study based on evidence from a number of developing countries indicated

that Small Enterprises with a lower level of investment per worker tend to achieve a

higher productivity of capital than do the larger, more capital intensive Enterprises.

Khanka S.S. (1990).

He studied 50 Small scale Entrepreneurs in a notified background Region of

the Kumaun division of Uttar Pradesh State regarding the performance, emergence

and problems of Entrepreneurship. As per this study it is true that display of the

Entrepreneurial role and attributes can be well seen only in the matter of Small Scale

industries. The study brings under its purview Entrepreneurial setting, entry into

Entrepreneurship, financing of Entrepreneurship, Entrepreneurial performance and

their problems.

Garg, C, Charu (1996).

Mr Garg in their research paper describes the growth of SSI with some policy

issues. Here the comparative analysis has been made between large scale and Small

scale industries taking into the industrial policy resolutions.

Vuasulu (2000).

Vuasulu reveals that Small scale and cottage industries plays a significant role

in India’s industrial progress. It has been estimated that they account about 50% of


40

gross value of output originating in the manufacturing field. These industries are

opened, inter alia to create immediate and concrete employment on a big scale at

relatively Small costs to ensure equitable allocation of the national income to effect

decentralization of the industries by creating industrial eState and to increase the

standard of the common man.

Bill Bolton (2001).

Bill Bolton says that the success of MSEs depends on the EVR (Environment,

personal values and Resources) congruence model. The blending of the 3 forces i.e.

Environment, the personal values and the available resources will give rise to prefer

of a perfect enterprise.

Kalyan Singh (2001).

Mr Kalyan Singh said that - “empty hands will surely lead to empty pockets”

& “empty pockets will lead to empty homes”. He stressed on the need to find an

substitute model for development that will come in the form of Micro finances for the

needful people to survive to save and to thrive in and through the economic process

and States that developing Micro finance for the rural MSEs is the very urgent need

of the hour.

The Global Entrepreneurship Monitor (www.gemconsortium.org 2001).

In this study a parametric relationship established by using Karl Pearson’s

Coefficient of correlation found out that large differences existed in the prevailing

rates for opportunity Entrepreneurship and necessity Entrepreneurship in developed

and developing countries. India’s Total Entrepreneurial Activity (TEA) index of 11.2

% placed it at ninth from the top. However, when the TEA index is sub-divided into

indices for opportunity and necessity Entrepreneurship, a more disturbing picture

emerges.

Lissa John Irimpar (2001).

She analyzed the role of the Micro financial institutions in the development of

the needful peoples in India. She highly focused on the development of Micro

Enterprises financed by Micro financial organizations and the benefits arising to the

SHGs through the bank linkages. At last the researcher concluded ’that the moment

arranging for funds is not the key issue in MSEs.

Rahul Celly (2002) .

He narrated the promotional factors like Desire, power and ambition which

promotes Entrepreneurs to climb the ladder of progress and concludes that


41

Entrepreneurs must decide and go by the values which builds courage, gives peace of

mind, and improves energy and enthusiasm.

Hareram Hajra (2002).

He reveals the part of venture capital funds in India to encourage

industrialization through Entrepreneurship growth by supplying start up fund or seed

capital fund to the new Entrepreneurs who has expertise and special acumen in the

management and other technical fields.

Vipin Gupta, Neelu Rohmetra, Dinesh Sharma (2002).

This team of researcher collected managerial data from Jammu, constructs and

provides a sound characterization of the dependency between contextual conditions

and the potentials for the Entrepreneurial strategy.

Thalia Kidde (2002).

They proposed a modern concept relating to the needful people, the

‘need for patient capital’. Subsidies may continue for long as a social imperative

response to the local concerns: NGOs should continue to enforce a strategic role in

their development. The most important concern according to the authors is to increase

the availability of resources for MSEs.

The Global Entrepreneurship Monitor (www.gemconsortium.org 2002).

This study reveals that the levels of Entrepreneurship vary sharply throughout

major nations and account for dominant differences in economic progress by applying

parametric relationship test of Karl Pearson’s Coefficient of Correlation.

Aruna Kaulgud (2003).

Author described Micro and Small potentials, to propose a training module,

and suggests possible steps of market development. Various types of SMEs who go

into roaring progress are those with the above indicated important points

“Determination, Dedication, Desire, Discipline, Devolution-all leading to Dignity” of

being an Entrepreneur and says that the present threats is whether these traits can be

imbibed or imparted through proper training programs.

Bankimchandra V.Vaidya (2003).

He reveals that Entrepreneurs can be trained to start industrial Unit or a Micro

and Small enterprise or as a service provider in various fields, if proper inputs in the

form of training are given.


42

Pulak Mishra (2003).

Pulak Mishra emphasizes on the ways taken by the government and the

planning commission of India to examine the employment and unemployment

situation in the country and suggest various strategies for generating employment

opportunities in India.

Bheemappa (2003).

Researcher focused on the role of Entrepreneurship in the various fields of

social endeavor-business, Agriculture, Education, industry,, and social work. Certain

abilities of Entrepreneurs which according to him can be inculcated by training and

promotion are mentioned in detail in this book.

Randall G. Holcombe (2004).

He reflects in his research how theories of Entrepreneurship can be wholly

associated into a model of the competitive process. As per his opinion

Entrepreneurship is the engine of economic growth, for firms to long live in

competitive environment of markets.

Saras D Sarasvathy (2004).

Sarasvathy reveals that if there are some common elements that different

Entrepreneurs share and if there is a unique way the Entrepreneurs think. The

difference between “effectual” reasoning which is mainly used by the Entrepreneurs

and “casual” reasoning which is most often used in Micro and Small units by

professional managers are mentioned in this paper.

Paul Schumann & Donna Prestwood (2004).

He argues the requirement to focus on efforts to produce effective and

required innovations and presents a modern approach to target these innovation

efforts. Market driven innovation technique as a means to approach the organisations

potentials and threats are proposed in detail in this article.

Gary Knight (2004).

This researcher investigated the effect of Entrepreneurial orientation on the

development of Small and Medium sized firms in the globalized context while

competing with the global companies. The author constructed a hypothetical model

and tests the hypothesis with a Markey observation of Small and Medium Enterprises

from industries like textiles, electronics and apparel related products which have been

affected more by the forces of globalization than some other industrial units.


43

Dhrupad Mathur (2004).

He stresses on the need for an e-application like Technical and Entrepreneurial

Research Information System (TERIS), which enables communication among

academic, industries and various agencies related to researchers for rapid

Entrepreneurship Development. The functional details of the model are also analyzed

by the author in this paper.

Sahoo, K, Sukanta. (2004).

He examined the contribution of SSI in the industrial sector and concluded

that with the decline in agricultural employment and virtual stagnation in the

organized manufacturing sector, employment in SSI sector has emerged as the only

ray of hope.

Bodla, B. S. (2004).

He concluded that SSI has produced the maximum attainable output given the

inputs of capital, labour and the available existing technology. It has also been

observed that the SSI sector is no way less than its counterpart large scale industries

in so far as the utilization of resources is concerned.

Hashim, (2004).

Author has provided an insight into the strengths and weaknesses of Small and

Medium-sized Enterprises. It can also be concluded that there are certain weaknesses

that prevail in SMEs and need to be removed.

Hussain, V. Syed (2004).

Author has analyzed that to survive in the world market SSIs should have to

lay greater emphasis on international standards with regard to quality, health and

hygiene to be offered by them.

Sudan, F. K. (2005).

He described the challenges in Micro and Small Scale Enterprises

Development and policy issues by arising different questions related to Micro and

Small Enterprises. The study explained the meaning, advantages, problems and policy

options of MSE sector.

Arundhati Chattopadhyay (2005).

Arundhati Chattopadhyay in her research paper notes that Economic

empowerment is a sine qua non for elevating the status of SMEs in our nation. At last

he says that one possible approach towards achieving this end could be through

Entrepreneurship progress.


44

Michael H. Morris, John W. Altman and Leyland F. Pitt (2005).

He studied a sample of 21 Entrepreneurs of Micro and Small founded within

the recent five years. These Entrepreneurs is first of all asked to estimate the amount

of changes that had been made by them in the following seven areas they are - product

offered, service offered, and target of customer profile, distribution policy, facility

requirements, marketing strategy, personnel resources and financial necessities.

Keith D Brothers and George Nakos (2005).

Keith studied the relevance of transaction mode choice of a sample of 207

Greek and Dutch MSEs having business interest in Europe.

Vijay Chandok (2005).

The researcher proves that Micro and Small enterprises need a broad range of

banking facilities of which loans is just single of them. They have customized and

gathered a range of transaction banking services, trade and finance services bringing

in convenience and speed for the new globalised MSEs besides bring them

competitive lending products.

William R Sandberg, Richard Robinson and John A Pearce II, (2005).

Mr willium refers that many Entrepreneurs and Small company owners feel

the need for strategic planning .As per the opinion of authors some form of a Micro

and Small enterprise or company description and financial projection, are essential in

establishing a line of credit, getting a loan, or attracting an investor.

Sunil Gupta (2005).

The researcher tries to explore the presence of self-serving attribution bias and

actor-observer bias. Analysis is carried by questioning the Entrepreneurs related to the

various factors affecting on the success or failures of their Micro and Small units.

Vasant Desai (2005).

In his study report on the role of Entrepreneurship Development programs in

accelerating industrialization he focused on industrial development. He suggested

that the agencies involved in the task should work with determination, zeal and a

sense of dedication and commitment..

Ashes Bhattacharyya (2005).

Researcher States that skill, excellence, knowledge thinking with a positive

attitude and outlook of the individual are the most important order of the day. To cope

with the existing deficiencies in our present pattern of education, revolutionary


45

transformation is required in the system to produce the quantity of skilled manpower,

the nation needs today.

Nair K.R.G. and Anu Pandey (2006).

He examined some of the social economic and attitudinal matters in the field

of manufacturing industry in the Kerala State. They believed to spur people to launch

Entrepreneurial ventures by using Chi-square test and Yule’s Coefficient. The results

do not indicate the Micro and Small enterprises acumen run in families. Religious

community to which one belonged did not have any impact. The Schumpeterian view

that Entrepreneurs are innovative in their attitudes is substantiated.

Sahay A. and Rai S.K. (2006).

This group studied 30 sample from each of the cities of Varanasi and

Lucknow, to identify and to analyze the socio-economic characteristics of the

Entrepreneurs in Cyber café business by establishing a parametric relationship. . This

group highlights that professionally qualified Entrepreneurs in Lucknow is higher

when compared to Varanasi. Entrepreneurs from Lucknow started their business at

much younger age in comparison to Entrepreneurs of Varanasi. The aspiration of

these Entrepreneurs depicts their orientation and inclination towards better

performance in future.

Muruganathan G. and Kaliya Moorthy S. (2007).

The researcher concluded in his study report the following sources for

business idea generation, namely careful observation of the market, tracking attitudes,

studying prospective consumer needs, desires and aspiration of customers, hiring

consultants, success story of a friend or relative, demand for certain products, chances

of producing a substitute for imported article, visit to trade fairs and exhibitions, study

of project profiles and industrial potential survey, meeting with government agencies,

better equipped / a formal research and development and so on.

Rathod, C. B. (2007).

He described the importance of Small scale industrial sector and also the

contribution of Indian Small scale Entrepreneurs in world economy. The main

objective of the study was to study the growth and pattern of the SSI sector and

identify the reasons for success/ failures, to evaluate the impact of globalization on

SSIs and export opportunity, to identify the barriers and constraints that SSIs were

facing to cope with globalization.


46

Kansal et al. (2009).

In his report author study, an attempt has been made to analyze the impact of

globalization on the growth of Small scale industries. The comparative analysis of

growth pattern of key parameters between Pre- and Post – Globalization periods

reveals that the “globalization” had a negative impact on the growth of Small scale

sector measured in terms of number of units, production, employment and exports. It

shows that globalization had a negative impact on the growth of SSI.

Bargal et al. (2009).

He examined the causal relationship among the three variables GDP, SSI

output and SSI exports and also has compared the performance parameters of SSIs in

the pre and post liberalization era.

Al-Mudimigh, M Zairi, M. Al-Mashari (2010).

In this paper the author noted that ERP Implementation-a complex process and

required at all times proper planning and execution. Complex success factors have

been looked in great details and a frame work had been placed so that potential

customers benefited. Researcher also focused on many elements technical, human

relations and organizational behavior, organization culture etc affected the outcome of

the ERP project implementation.

A.K. Dixit, O. Prakash (April 2011).

A. K. Dixit, O. Prakash in this article focused on ERP Implementation in

Small and Medium Enterprises in India. Authors had drawn upon some four

parameters that seemed to be critical and definitely required continued and focused

approach - a concerted action that achieved predesigned competitive advantage/

strategic edge that emerged as survivors and additionally achieved the predesigned

consolidated growth.

Aishamrani (2012).

Author revealed about the significance of Reverse Logistics Inventory Model.

Author derived complex algorithm and connected various elements. Author also

discussed the adoption process for these complex algorithms. The author also

described in details the two essential business elements that is the key to these

algorithms. This is uncertain deterioration and disposal rates.


47

Garg, Ishu. And Walia, Suraj (2012).

He confirms that the significant growth of MSEs have been taken place over a

period of time and this sector is the major donor to gross domestic product (GDP),

employment and exports in Indian economy using the OLS technique.

Annual Report of MSME (2012-2013).

It gives the overall view of MSEs with respect to its performance and growth

in production, employment, export, and number of industries, detail view of various

schemes and of various departments of MSEs.

Alshamaila, Yazn, Papagiannidis, Savvas Feng Li, (2013).

In this paper authors highlighted on the way the Cloud computing technology

could serve the MSME segments in business processes execution through ERP

systems. This technology enabled/ imposed the SME segments with tool and

techniques there by, offered economic options to implement complex IT systems/

ERP systems.

2.15 FUTURE PROSPECTS OF THE STUDY. India is going to experience the emergence of the Small industries, which is

qualitatively superior, technologically vibrant and internationally competitive. The

objective of the policy-makers as well as Small industry associations is to enable this

sector more vibrant and competitive in the next 10-15 years. The progress of MSEs

would make a sustainable contribution to national income, employment, productivity

and exports. The present prime minister of India introduced, Make in India, Made in

India, Digital India, Start-up India, Stand-up India etc. to enhance the number of

Micro and Small enterprises in the economy. So, it has great potential to conduct

research studies over the issues related with above programs.

2.16 REFERENCES. 1. Khanka, S.S., (1990), Entrepreneurship in SMEs, Himalaya Publishing House,

Bombay .

2. Tiwari, Sarita, Inter Regional Patterns of Industrialization in U.P., Giri Institute

of Development Studies, Lucknow, 1992.

3. Garg, C, Charu, (1996), “Growth of Small Scale Industries in India: Some Policy

Issues”, Online available at www.google.com.

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