CHAPTER - 2

* Waste Minimisation Concept (WM)

1.0 Industrial Scenario
1.1 Characteristics of Small and Medium Enterprises (SME's)

1.0 Industrial Scenario

The industrialisation process in the country is picking up. India has wide industrial base and almost all types of manufacturing industries are existing or being set up. The pace of industrialisation has been accelerated with the recent liberalisation programmes in the country and has been stimulated by the entry of well known multinationals and foreign capital. The controls are gradually being relaxed with continuous reforms in duties. taxes and administrative structure. However, the development of infrastructure has not picked up with the same pace as industrialization and is proving to be a bottle-neck. The Government of India is paying a lot of attention to attract private investment in this vital sector.

About 7500 large scale and a very large number of small and medium enterprises (SME's) are operational in India. The large scale enterprises are more or less compatible with industries anywhere else. However, SME's have special characteristics and deserve elaborate explanation.

1.1 Characteristics of Small and Medium Enterprises (SME's)

In India a small enterprise is defined as a company whose total investment in plant and machinery is not more than Rupees 7.5 million. There is no clear cut definition of medium scale enterprises. However units other than some well known larger industries like refinerv. fertilizer. petrochemical, automobile (car & truck), multinationals, integrated textile mills. integrated steel mills, wood based pulp & paper mills etc. can be categorised as medium scale enterprises.

The Government of India is continuing to promote the development of SME's due to many reasons. Some of them are:

-SME produce accounts for more than 50% of the total GDP
-SME's are labour oriented (particularly small companies) which provide employment to a large population of the country. It is very important keeping in mind socio-economic conditions of the country, in this regard some industrial sectors / sub-sectors have been reserved for small scale.
-SME's contribute to a large extent to earning of precious foreign exchange which is very important for importing crucial raw materials like oil, machinery, chemicals etc.
-SME's are less capital intensive
-Growth of small companies has resulted in clustering of similar type of industries in some areas and towns, which stimulates the development of localised skills and low cost technologies.


It is no wonder that there are about 3 million SMEs in the country. Over a period of time SME's have developed peculiar characteristics, these are :-
- family managed companies
- loose management structure
- use of conventional and old technology
- lack of highly specialized technical skills and professional management
- They don't try to grow in size due to fiscal incentives available for being small
- lack of financial resources in general
- lack of R & D activities and little emphasis on training of employees