Core Infrastructure and the Development of Micro and Small Enterprises in Assam (A Case Study)

Abstract

The strategy of the Govt. has now tilted towards grass root development and it aims at decentralized industrial structure to mitigate the regional imbalances in the levels of economic development. Further, the existence of unutilized human resources has been a source of serious concern for Assam in particular and the entire North East India in general. The development of Micro and Small Enterprises can be the single answer to the dual problems of achieving balanced regional development and creating large scale employment avenues. Simultaneously it has been widely recognized that the development of indigenous entrepreneurship is the pre-requisite for the development of Micro and Small Enterprises in Assam. In fact, the development of entrepreneurship and Micro and Small Enterprises are intimately related to each other - so much so that the latter is always regarded as the seed bed for growing indigenous entrepreneurship. The significance of entrepreneurial activities towards development of an economy, having been realized the Govt. of India as also the state govt. have been extending support services in numerous ways for promotion of small scale enterprises in the state. In spite of having such supports, the micro and small enterprises in Assam suffer from capacity under utilization, and it has become an endemic problem of such enterprises. The study report prepared by the In dian Institute of Entrepreneurship, Guwahati, during 2004, for submission to the Ministry of Small Scale Industries, Govt. of India observes that the Small Scale Industrial units in the region are mostly operating at a much lower capacity utilization level and there is a constant decline in the utilized capacity (IIE, 2004). As per the census report (Third All India Census of SSI, 2001-02) the incidence of sickness among registered units at national level is 3.38% as against 20% in case of Assam (Google Books result, Jan. 2010). Thus it becomes a matter of serious concern for the policy makers. It is universally accepted that the core infrastructures viz. energy, transport and communication are indispensable factors of modern industrialization. Their inadequacy stands in the way of capacity utilization of the enterprises. Therefore, with a view to examining the impact of infrastructural backwardness on capacity utilization in Micro and Small Enterprises, a study was conducted on 145 registered Micro and Small enterprises operating from Tinsukia district of Assam. The field survey was conducted during the financial year 2007-08 and performance data are related to the average of three years viz 2004-05, 2005-06 and 2006-07.