A Statistical Analysis to Evaluate the Factors Impairing Performance of the Tool and Auto-Component Industry

Small scale manufacturing industry (SSMI) is a very important sector of our economy. It contributes almost 40% of the gross industrial value added to the Indian economy and about 45% of the Indian exports. Small scale units offer high employment potential and have low capital-output and capital-labor ratios. These characteristics make small scale sector very significant in a capital scarce and labor abundant economy like India. Though there has been a conspicuous increase in the number of small scale units, industrial sickness in this sector has assumed very serious proportions. Many causes account for the sickness. The present work discusses the results of a survey conducted in 93 small scale industries. The main factors impairing the performance of machine tool, cutting tool and auto-component industry have been identified and discussed. The survey also analyzes the extent of government support to the industry in its technology development initiatives.