1.

INTRODUCTION

1.1 INTRODUCTION:

Industrialization is the period of social and economic change that

transforms a human group from an agrarian society into an
industrial one involving the extensive reorganization of an
economy for the purpose of manufacturing.

Industrialization is a process that happens in countries when they

start to use machineries to do work that was once done by
people. Industrialization changes the society as it happens. During
the industrialization of a country people leave farming work to
take higher paid jobs in factories.

It is a part of a process where people adopt easier and cheaper

ways to make things. Using better technology it becomes possible
to produce more goods in a shorter amount of time. A single
person can produce more things.

As such industrialization plays a major role in the economic

development of under developed countries like India with vast
manpower and varied resources. The policies of privatization,
deregulation and liberalization of the economy are being pursued.
Some of the role of industrialization in the Indian economy:

(i) INCREASE IN NATIONAL INCOME:

Industrialization makes possible the optimum utilization of

the scarce resources of the country. It helps in increasing the
quality and quantity of various kinds of manufactured goods

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 and thereby makes a large contribution to gross national
product.

(ii) HIGHER STANDARD OF LIVING:

Industrialization helps in increasing the value of output per

worker. The income of the labour due to high productivity
increases. The rise in income raises the living standard of the
people.

(iii) ECONOMIC STABILITY:

Industrialization is the best way of providing economic

stability to the country. A nation which depends upon the
production and export of raw material alone cannot achieve
a rapid rate of economic growth. The uncertainties of
nature, the restricted and fluctuating demand of the
agricultural raw material hampers economic progress and
leads to an unstable economy.

(iv) IMPROVEMENT IN BALANCE OF PAYMENTS:

Industrialization brings structural changes in the pattern of

foreign trade of the country. It helps in increasing the export
of manufactured goods and thus earns foreign exchange. On
the other hand the processing of raw material at home
curtails the import of goods and thereby helps in conserving
foreign exchange.

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(v) STIMULATES PROGRESS IN OTHER SECTORS:

Industrialization stimulates progress in other sectors of the

economy. A development of one industry leads to
development and expansion of other industries.

(vi) INCREASED EMPLOYMENT OPPORTUNITIES:

Industrialization provides increased employment

opportunities in small and large scale industries. In an
agrarian economy, industry absorbs underemployed and
unemployed workers of agricultural sector and thereby
increases the income of the community.

(vii) PROMOTES SPECIALISATION:

Industrialization promotes specialization of labour. The

division of work increases the marginal value product of
labour. The income of worker in the industrial sector is
therefore higher than that of a worker in agricultural sector.

(viii) RISE IN AGRICULTURAL PRODUCTION:

Industrialization provides machinery like tractors, thrashers,

harvesters, bulldozers etc to be used in the farm sector. The
increased use of modern inputs has increased the yield of
crops per hectare.

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(ix) EASY TO CONTROL INDUSTRIAL ACTIVITY:

The industrial activity compared to agricultural is easy to

control. The industrial production can be expanded or cut
down according to the price cost and demand of the
product.

(x) LARGE SCOPE FOR TECHNOLOGICAL PROGRESS:

Industrialization provides larger scope for on the job training

and technological progress. The use of advanced technology
increases the scale of production, reduces cost of
production and helps in widening the market.

The economy of Sambalpur district is basically dependent on

agriculture and secondly on forests. Forests play an important role
in the economy in terms of contribution to revenue, domestic
product as well as dependence of people for livelihood. The
people living adjacent to the reserved forests of Sambalpur Forest
Division are heavily dependent on these forests. In the past
Sambalpur has been a great centre of diamond trade. Kendu leaf
(diospyros melanoxylon) is also produced in Sambalpur. Kendu
leaf is one of the most important non wood forest products of
Sambalpur and is also called as Green Gold of Odisha.

Lately industrialization has started in the district and the prime

industries of power, alumina and steel have been established. The
place is famous for its handloom textile works, popularly known
as Sambalpuri textile. It has earns international frame for its

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unique pattern, design and texture. Apart from textiles,
Sambalpur has a rich tribal heritage and fabulous forestlands.

1.2 OBJECTIVES OF THE STUDY:

(i) To analyze the growth of industries in Sambalpur after

independence.
(ii) To study the growth of SSI units.
(iii) To evaluate the employment opportunities created by
industrial units.

1.3 RELEVANCE OF THE STUDY:

The study has been undertaken to evaluate the industrial

progress of the district in post independence era. It is pre
dominantly an agricultural district. However efforts are
been made to examine the progress of the district
through industrialization.
1.4 DATA SOURCE:

The study is dependent upon secondary data collected from the

books of account of RIC. The different officers of RIC have been
interviewed from time to time to collect relevant information
regarding the research work.

1.5 LIMITATIONS OF THE STUDY:

The present study is based upon a period of thirty years only.

Hence, the data relating to the period beyond thirty years has not
been analyzed.

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1.6CHAPTERISATION:

The present study is divided into five chapters.

CHAPTER 1 gives the introduction of the study.

CHAPTER 2 contains the district profile.

CHAPTER 3 contains the overview of the industrial development.

CHAPTER 4 contains industrial development in post independence

period.

CHAPTER 5 contains summary and findings of the study.

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2. DISTRICT PROFILE

Sambalpur in the eastern state of Odisha in India is the fourth

largest city by population in Odisha and is the district
headquarters of Sambalpur district.

Sambalpur is the seat of Sambalpur Metropolitan Area which

consists of Hirakud and Burla. The administrative entity for most
of the city is Sambalpur Municipality which has 1, 83,383
inhabitants in thirty different wards as per the 2011 census.
Hirakud and Burla are the two different Notified Area Councils of
Sambalpur Metropolitan Area and is also 5th largest city in the
state. The total population of Sambalpur Metropolitan Area is 3;
35,761.In the year 1883, Sambalpur was established as a
municipality. Later in 2013 Sambalpur got the Municipal
Corporation status. Sambalpur Municipal Corporation includes
Burla, Hirakud and neighbouring 12 Gram Panchayats. Sambalpur
is the region's economic and education hub. The city contains
many historic buildings and parks, and is also the commercial
capital of Western Odisha. In 1967 a university was established at
Burla, known as Sambalpur University. Hirakud Dam, the longest
earthen dam in the world and the largest artificial lake of Asia is
situated at Hirakud.
2.1 OVERVIEW:

After independence of India, many commercial and government

establishments sprung up around Sambalpur making it the
communication and administrative hub of Western Odisha and
5th largest city in the state. Sambalpur is a prime railway junction
in Odisha with the headquarters of Sambalpur Railway Division
located at this place; it connects the rest of Odisha with western
and northern India. National Highway 6, National Highway 42 and
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State Highway 10 pass through the city. Sambalpur is also the
headquarters of Mahanadi Coalfields Limited since 1992, a
subsidiary of Coal India Limited. Sambalpur is famous for Hirakud
Dam, Sambalpuri Saree, Sambalpuri songs, Sambalpuri Dance, the
Sitalsasthi Carnival, and Gandhi temple. Sambalpuri is the native
language of the place.

The King of Sambalpur Veer Surendra Sai played a very important

role in the freedom struggle of India which is still unrecognized.
He led a revolution against the British East India Company even
before Mangal Pandey in 1857. In 1849 Sambalpur came under
the British rule by the application of Doctrine of lapse. Sambalpur
has its own unique identity in-terms of its language, dress (Sari),
dance, cuisine, culture, festivals, temples, heritage, songs, drama
and music. This uniqueness has been there since centuries and its
time tested aroma can be savoured in its daily life.
2.2 ETYMOLOGY:

Sambalpur derives its name from that of the Goddess Samalei

(Odia: ସମଲେଇ ଠାକୁରାଣୀ), who is regarded as the reigning deity of
the region. The region in which Sambalpur city is located was also
known as Hirakhanda from ancient times.In history, it has also
been known as 'Sambalaka'. Claudius Ptolemy has described the
place as "Sambalak".According to Jean-Baptiste Tavernier, the
French traveller, and Edward Gibbon, the English historian,
diamonds were exported to Rome from Sambalpur.
2.3 HISTORY:

The history of Sambalpur, as depicted by eminent historians, is full

of events including Indian freedom struggle representing the
different sections of society. Since Sambalpur is one of the ancient

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places of India, which survived even in the prehistoric age and
holds a very important place in the history of Odisha and India.

Sambalpur is mentioned in the book of Ptolemy (Claudius

Ptolemaeus) as Sambalaka on the left bank of river "Manada",
now known as Mahanadi, other evidence are available from the
records of Xuanzang, and in the writings of the celebrated King
Indrabhuti of Sambalaka of Odra Desha or Oddiyan (oldest known
king of Sambalpur), the founder of Vajrayana Buddhism and the
Lama cult. He has written the book Jñānasiddhi.

French merchant Jean Baptiste Tavernier (1605–1689) in his travel

account “Six Voyages en Turquie, en Perse et aux Indes (1676–
77)” translated into English by Valentine Ball as “Travels in India”
(2d ed., 2 vol., 1925) wrote about the numerous famous diamond
mines of Sumelpur (Semelpur), the present day Sambalpur. He
states that, 8,000 people were at work in these mines at the time
of his visit, in the dry season at the beginning of February.

In 1540 A.D., the kingdom of Patna, ruled by the Chauhan dynasty

was bifurcated. Southern portion of river Ang was ruled by
"Narasingh Deb" and his brother "Balaram Deb" received
northern part of the river, known as kingdom of "Huma". Balaram
Deb established his new capital at Sambalpur. Sambalpur was
ruled by the Chauhan dynasty till 1800. The kingdom of
Sambalpur was also known as Hirakhand and Sambalpur was its
capital.

Sambalpur came under the Bhonsle of Nagpur when the Maratha

conquered Sambalpur in 1800. After the Third Anglo-Maratha
War in 1817, the British Government returned Sambalpur to the
Chauhan king, Jayant Singh but his authority over the other
princely states were taken out.

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When the last ruler of Sambalpur, 'Narayan Singh', died in 1849
without a direct male heir, the British seized the state under the
Doctrine of Lapse. Sambalpur was kept under "South west
Frontier Agency" with headquarters at Ranchi. The official
language of this region at that time was Hindi. "South west
Frontier Agency" was renamed ‘Chhota Nagpur Division’ in 1854.
The name of Veer Surendra Sai, who fought against the British
Rule, is recorded in golden letters in the history of India's struggle
for independence. During the Sepoy Mutiny in July 1857 the
mutineers broke open the prison at Hazaribagh, where Veer
Surendra Sai was imprisoned and released all the prisoners. Veer
Surendra Sai fought against the British after reaching Sambalpur.

There was no mutiny in Cuttack division, so Sambalpur was

transferred to Cuttack division in 1858 and Oriya was made the
official language of Sambalpur. Sambalpur along with other
princely states of Western Odisha was included in the newly
created Nagpur division of Central Province in 1862. In January
1896, Hindi was made official language of Sambalpur. During the
partition of Bengal in 1905 Sambalpur and the adjacent
Sambalpuri speaking tracts were amalgamated with the Odisha
Division under Bengal Presidency. Bengal's Odisha division
became part of the new province of Bihar and Odisha in 1912 and
in April 1936 became the separate province of Odisha. After
Indian Independence on August 15, 1947, Odisha became an
Indian state. The rulers of the princely states of Western Odisha
acceded to the Government of India in January 1948 and became
part of Odisha state.

1825 to 1827, Lieutenant Colonel Gilbert (1785–1853), later

Lieutenant General Sir Walter Gilbert, 1st Baronet, G.C.B., was the
Political Agent for the South West Frontier with headquarters at
Sambalpur. He made few paintings during his stay at Sambalpur

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by an unknown artist which are currently with the British Library
and Victoria and Albert Museum.
2.4 GEOGRAPHY AND CLIMATE:

Sambalpur is located at 21°.27' North Latitude and 83°.58' East

Longitude. The average elevation is 150.75 meters above the
mean sea level. Sambalpur falls under the Zone-3 seismic number,
which shows the possibility of an earthquake.

Sambalpur lies on the bank of river Mahanadi. The river flows to

the west of the city and separates Burla from Sambalpur and
Hirakud. The Hirakud Dam lies upstream of Sambalpur. Budharaja
is a small reserve forest located within the city. Sambalpur
experiences extreme type of climate with hot and dry summer
followed by humid Monsoon and cold winter.

The hot season commences from 1st week of March and lasts till
the second half of June. In the month of May, temperature rises
up to 47°. Similarly in the month of December, the temperature
comes down to 5 °C. Sambalpur gets rainfall from South Western
monsoon.

The most pleasant months in Sambalpur are from October to

February, during which time the humidity and heat are at their
lowest. During this period, temperatures during the day stay
below 30 °C (86 °F) and drop to about 20 °C (68 °F) at night. This
season is soon followed by a hot summer, from March to May.
The summer gives way to the monsoon season.

Since 1982 as per the data available with District Emergency

section, Sambalpur, there has not been a single occurrence of
cyclone in Sambalpur. There are possibilities of strong winds with
the speed of 53 km/ph before on set of monsoon. The relative
humidity is high during rainy season being generally over 75%.
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After rainy season the humidity gradually decreases and the
weather becomes dry towards the winter.

The best time to visit Sambalpur is between Septembers to

March. Heaviest ever recorded rainfall is 581.9 mm in Sambalpur
in 1982 which was the highest ever in Odisha till September
2010.The areas of the Sambalpur town on Mahanadi river
side’s/low-lying areas are flood prone.
2.5 TRANSPORT:

ROAD

Sambalpur has a well networked transport facility for commercial

and public transportation. Sambalpur is connected with Cuttack by
NH42 and 288 km from Cuttack. Buses depart from the Bus
Terminal to Jharsuguda at every 10 minutes and to Bargarh at
every 15 minutes. The Bus Terminal is located at Ainthapali.
Rourkela-Sambalpur State Highway-10 is presently being
upgraded from a two lane highway to four lane and even six lanes
where it is necessary. An estimated amount of Rs. 1270 crores is to
be spent on this up-gradation and it is planned in such a way that
by 2017 it will have the capacity to handle 49,000 vehicles every
day.

City Bus services have started in Sambalpur from January 2014.

The service was inaugurated by Chief Minister of Odisha Mr.
Naveen Patnaik. It is run on a PPP (Public Private Partnership) by
two companies namely Western Odisha Urban Transport Service
Limited (WOUTSL) and Paschim Odisha Paribahan Company
(POPCO).
RAIL

There are five railway stations in Sambalpur City (since it gained

the corporation tag), namely Sambalpur Junction, Sambalpur
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Road Railway Station (SBPD), Hirakud Railway Station (HKG),
Sambalpur City Railway Station (SBPY) and Maneswar Railway
Station (MANE). Sambalpur City and Maneswar Railway Stations
are located on the Bhubaneswar-Sambalpur route (commissioned
in 1998), while rest three stations are located on the Jharsuguda-
Vizianagaram route.

There are direct train connections to all the metros and

prominent cities across India. It lacks direct connectivity to Indore,
Dehradun, Lucknow and Guwahati.
AIR

The nearest Airports are Swami Vivekananda Airport, Raipur

(262 km) and Biju Patnaik International Airport, Bhubaneswar
(325 km). A new airport is being constructed at Jharsuguda
(50 km).
2.6 DEMOGRAPHY:

Sambalpur city is governed by a Municipality which comes under

Sambalpur Metropolitan Area. As of 2011 India census, Although
Sambalpur city has population of 183,383; its urban /
metropolitan population is 269,575 of which 138,826 are males
and 130,749 are females which includes Burla and Hirakud.
Sambalpur has an average literacy rate of 85.69% of which male
and female literacy was 90.30 and 80.92 percent. Sex ratio is 942
and child sex ratio is 882. Total children (0-6) in Sambalpur city are
18,555 as per figure from Census India report on 2011. There
were 9,857 boys while 8,698 are girls.

Sambalpur is ethnically very diverse with about 14 communities

like Brahmin, Teli (oil extractors), Gour (milkmen), Guria (maker of
sweets), Agaria (industrious cultivators), Sunari (goldsmith), Kultas
(cultivators), Kewat (boatmen and fisherman), Dhobi (washer
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men), Bhuliya (weaver), Bhandari (barber), Kamar (blacksmith)
Ganda (pipers and drummers) and Muslims, Sikhs and Christians
cohabiting together.
2.7 ECONOMY:

The economy of Sambalpur is basically dependent on trade.

Majority of the residents are either salaried or self-employed.
Forest products play an important role in the economy in terms of
contribution to revenue and domestic product. Kendu leaf or
Coromandel Ebony or East Indian Ebony (Diospyros melanoxylon)
also forms part of the economy of Sambalpur with many bidi
manufacturing units functioning in Sambalpur.Gole Bazaar is the
main merchandising area of the city. It is famous for handloom
and other textile products. Other merchandising areas are
Khetrajpur, Fatak, V.S.S. marg, and Budharaja and farm road.

Mahanadi Coalfields Limited, a subsidiary of Coal India Limited

located at Sambalpur produced 100.28 million tonnes of coal and
had a profit before tax during 2010–2011 at Rs 4039.30 crore. The
Hirakud smelter, set up by Indal in 1959 at Hirakud, was the
country’s second aluminium smelter operating on grid power
sourced from the hydro power station of the Hirakud Dam. It was
the first in India to adopt clean coal combustion technology that
uses a circulating fluidized bed, which is considered
environmentally friendly. Currently the smelter has a capacity of
213,000 TPA; it provides employment to around 1700 persons.
2.8 EDUCATION:

The pre-collegiate medium of instruction in schools is

predominantly English and Oriya and medium of instruction in
educational institutions after matriculation in colleges is English.
Additionally, other media of instruction exist in Sambalpur.

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Schools and colleges in Sambalpur are either government-run or
run by private trusts and individuals. The schools are affiliated
with either the Orissa State Board under BSE or CHSE, Indian
Certificate of Secondary Education (ICSE) and the Central Board
for Secondary Education (CBSE).

After completing 10 years of schooling in secondary education,

students enroll in Higher Secondary School, specializing in one of
the three streams – Arts, Commerce or Science. Since the 2000s,
there have been a large number of professional institutions
established in a variety of fields. The earliest schools established
in Sambalpur were the CSB Zilla School (1852) and the Lady Lewis
Girls High School (1942). The VSS Medical College was established
in 1959 and VSSUT in 1956. High School for Blind (1972) and High
School for Deaf & Dumb (1972), Burla are Govt. educational
institutions imparting education to physically challenged children.

Sambalpur Kala Parishad is the pioneering organization for the

promotion of Sambalpuri dance, has been responsible for the
revolutionary growth of this dance. It imparts education and
training on this form of dance. Sambalpur Football Academy,
Pitapali, this institution imparts football training to specially
selected players with free boarding and schooling. The campus is
located on the periphery of the left dyke of the Hirakud Dam.

Sambalpur is having one of the best facilities for education in the

state with many schools and universities. Popular educational
institutions in the city are Gangadhar Meher
University,Sambalpur , Women's College, Netaji Subhash Chandra
Bose College, Lala Lajpat Rai Law College, Silicon Institute of
Technology (SIT), Delhi Public School, Kendriya Vidyalaya, St.
Joseph's Convent Higher Secondary School (SJC-SBP), Gurunanak
Public School, Madnawati Public School (MPS), Indian Public
School (IPS), St. John's School, Seven Hills Residential School
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(SHRS), Sri Aurobindo School (SAIIE&R) and DAV Public School.
And IT Education (Computer Education) Facilities provided by
SCAT Corporation and it has multiple branches with named SCAT
Learning
2.9 POLITICS:

Sambalpur is part of Sambalpur (Lok Sabha constituency). Sitting

MP from Sambalpur is Mr Nagendra Kumar Pradhan. Current MLA
from Sambalpur Assembly Constituency is Dr Raseswari Panigrahi
of BJD. Previous MLAs from this seat were Mr Jayanarayan
Mishra, Mr Durgashankar Pattanaik of INC who won this seat in
1995 and 1990, Sraddhakar Supakar of INC in 1985, Ashwini
Kumar Guru of INC (I) in 1980, and Jhasketan Sahoo of JNP in
1977.

Although the struggle for a separate State of Kosal is more than

two decades old, a mass movement has emerged in this area and
majority of the people in this region are demanding a politically
separate Kosal state by carving out 10 western districts from
Odisha. The foremost argument being put forth in favour of a
separate state is lack of development of the region. This
movement has gained broader and detailed support of the local
populace basically farmers and students. A regional political party
Kosal Kranti Dal has been very active with this demand of a
separate state and is the only political party till date supporting
this demand.

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3. AN OVERVIEW OF INDUSTRIAL DEVELOPMENT

Economic development is the primary objective of the majority of

world nations. This truth is accepted almost without any
controversy. As a consequence of rapid growth in Indian economy
the industrial development has become a matter of serious
concern for the planners and policy makers. Industrialization plays
a vital role in the development of developing countries because
they can solve their problems of general poverty, unemployment,
backwardness, low production, low productivity and low standard
of living. It is equally important for developed countries as it helps
them not only to maintain their existing growth but also to enjoy
still higher standard of living to avoid cyclic fluctuations. Therefore
rapid industrial growth has been a major objective of planning in
India.

A large number of industries have been established in the post

independence India in private, public and joint sectors. There are
a lot of industrial resources and raw materials available in India.
Bhilai, Bokaro, Rourkela, Ranchi, Jamshedpur etc emerged as
major centres during the first one and a half decades of
independence.

However later on industrialization at medium and small scale was

taken up in all the states. The main sectors of industrialization
today are electronics, transport and tele communication.
Compared to advanced states of India there is very little
industrialization in Sambalpur district of Odisha. About 10% of the

17
total workers are employed in the organized industrial sector.
Both private and public sector have grown side by side since
independence.

The state enterprises and public sector undertakings ran into

heavy losses and this put a question mark on the capabilities of
the Indian state and its approaches in managing its own
establishment.

Many of the government enterprises were handed over to private

entrepreneurs and industrialists. Privatization has entered in a
selected way in offices and transport sector including roads,
railways, and airways. Contractualism is the new slogan today.

Rate of industrial growth in Sambalpur was fluctuating between

1% to 5%. However there was a steady industrial progress after
1967. The enduring factors which have contributed to the growth
are vast natural resources, large labour force and a stable political
structure etc. currently the growth rate in Sambalpur is 3%.

3.1 STEPS TO START A INDUSTRY:

(i) IDENTIFYING THE OPPORTUNITY:

It all begins with an idea. The overriding reason for anyone

to think of establishing a industry can be summarized in one
word- opportunity. An opportunity to provide a product or
service which can generate sufficient surplus. This is all the

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 more true if one is a believer in the maxim, “small is
beautiful”.
Once the ideas are screened and a viable business
opportunity emerges the project has to be conceptualized in
all its dimensions. The 4 Ps of project conception is:
- Product
- Process
- Place
- Partner

(ii) MAKING A PRODUCT CHOICE:

In a project conceptualization stages making a product

choice following factors are related to product need to be
considered:
- Product line
- Packaging
- Branding
- Warranties
- After sales service

Some other factors that one should consider while finalizing

the product choice are:
- ease of availability of raw material
- Process technology
- Accessibility to the market
- Incentive and support from government

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 Market information is also important for product selection.
Products which are likely to have a number of players in the
market are best avoided. Some such products in the recent
past have been plastic footwear, audio cassettes, disposable
gloves and bulk drugs.

The development of export product portfolio can be done by

considering 4 parameters viz.
- External demand conditions
- Internal supply capability
- Complexity of marketing tasks
- Amount of investment required to penetrate the market

EXIM (export import bank of India) bank has also developed

an excellent model to conduct the export portfolio analysis
on three parameters viz.

- Supply capability in product group

- Domestic environment
- Export market attractiveness

This analysis gives rise to product groups with high potential

or low potential. It has now become important to
understand the implications of the various agreements
which form part of WTO.

(iii) PROCESS SELECTION:

Choice of process technology emerges once the product is

finalized. For some complex products, process know how

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 has to be imported. In such cases agreements for technology
transfer should be made with due care to safeguard interest.
While checking out on a process technology, the following
needs to be considered with utmost care:
- Whether process requires very high level of skilled workers
or complex machines?
- Whether process requires large quantities of water or
power?
- Whether any process or product patent needs to be
honoured while utilizing the selected process technology.
- Any special pollution or environmental regulations.
- Finally the appropriateness to the Indian environment and
condition.

(iv) ARRANGING FINANCE:

No MSME unit can take off without monetary support. This

need for finance can be classified into following types:
- Long and medium term loans
- Short term or working capital requirement
- Risk capital
- Seed capital/marginal money
- Bridge loans

Financial assistance in India for MSME unit is available from

a variety of institutions. The important ones are:

- Commercial, regional rural, cooperative banks

- SIDBI

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- State Financial Corporations, State Industrial Development
Corporations
A sanction or rejection letter is issued by bank after its
assessment of the application. After receiving a sanction
letter, applicant needs to indicate in writing their acceptance
of terms and conditions laid by banks or FIs.
Subsequently loan is disbursed according to the phase
implementation of the project.

(v) FILING OF ENTREPRENEURS MEMORANDUM:

- Form of the Entrepreneur Memorandum can be

downloaded from the internet, the address of which can
be obtained from Directorate dealing with micro, small and
medium enterprises of the State Government or the hard
copies of the same can be obtained from the District
Industries Centres.
- Any person who intends to establish a micro, small or
medium enterprise at his discretion shall file the
Memorandum of micro, small or medium enterprise with
District Industries Centres of its area.
- The District Centre shall fill all the codes in the form of the
Memorandum and issue an acknowledgment after allotting
an EM number.
- Before issuing the acknowledgment the District Industries
Centre shall make sure that all the form is complete in all
respect and the form is signed and is accompanied with an
undertaking.

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- The district Industries Centre shall in addition of keeping a
record in writing shall also maintain record electronically
on computer.

(vi) CONSTRUCTION OF BUILDING:

Once an industrial plot for the unit is secured then the next
job is that of finding a suitable architect. Design of factory
building has to be in consonance with the type of industry
and have an appropriate plant layout.
An architect’s estimate of building construction is essential
for loan applications. Further, architect’s certificate for
money spent on building is needed for disbursement of loan.

(vii) GETTING THE UTILITY CONNECTIONS:

Among the utilities of prime importance are power and

water. In many cases getting power connections causes
delay in setting up of plant. Therefore, it is imperative to
commence work on these aspects with diligent follow up.

A formal application need to be made in a specified form to

the state electricity board. An electrical inspector is deputed
for evaluation of application to factory site after which the
load is sanctioned. In areas of power shortage it is advisable
to augment the power supply with a captive generation set.

Water connection is also obtained likewise by applying in

advance in formal forms. The water supply can be
augmented by installation of tube well.

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(viii) GETTING 3M’s RIGHT:
MEN

Projections for manpower and staffing are made in the

project report. However it is necessary to time the induction
of manpower in a planned manner. The engineers and
operatives must be available before the installation of the
machinery.
MACHINERY

Choosing and ordering of right machinery is also of

paramount nature. In many cases technology or process
provides us with specifications which are not provided, and
then an extensive techno-economic survey of machinery and
equipment available must be carried out.
MATERIALS

Materials procurement and planning are critical to success.

Inventory management can lead to manageable cash flow
situations, otherwise if too much is ordered too soon
considerable amount of working capital gets locked up. On
the other hand, non-availability may result in production
holds up.

(ix) EXEMPTION FROM COMPULSORY LICENCE:

Licensing in the industries sector is governed by the licensing

exemption notification issued by Govt of India in July 25
1991 under the Industries (Development and Regulation) Act
1951.

24
 In SSI there is virtually no licensing restriction. No industrial
license is required except in case of 6 product groups
included in compulsory licensing.

But if a small scale unit employs less than 50-100 workers

with or without power then it would not require a license
from the Govt of India even for the 6 product groups.
3.2 EXISTING STATUS OF INDUSTRIAL AREA IN SAMBALPUR DISTRICT:

SL NAME OF LAND LAND PREVAILING TOTAL SHEDS VACANT

NO AREA AREA ALLOTED LAND RATE SHEDS ALLOTTED SHEDS

1 Sambalpur 19.680 9.918 30.00 37 36 1

2 Rengali 21.170 0.480 10.00 4 3 1

Source: RIC of Sambalpur.

Analysis:

The total land area in Sambalpur is 19.860 and the land allotted for
industries is 9.918 at the prevailing rate of rs 30.00.

Whereas the total land area in Rengali is 21.170 and the land allotted
for industries is 0.480 at the prevailing rate of rs 10.00.

25
3.3 INDUSTRIAL SCENARIO OF SAMBALPUR:

SL HEAD PARTICULARS
NO
1 Registered industrial unit 1258

2 Total industrial unit 5990

3 Registered medium and large unit 15

4 Estimated number of daily worker 38615

employed in small scale industries

5 Employment in large and medium 7011

industries
6 Number of industrial area 2

7 Investment of small scale Rs 17956.31

industries(in lacs)
8 Investment of medium and large Rs 17022290.92
industries(in lacs)

Source: RIC of Sambalpur.

Analysis:

The total number of industrial unit in Sambalpur district is 5990.

Out of these the registered ones are 1258. There are 15 large

26
scale registered units giving employment to 7011 unemployed
youth. The total investment in large scale industries is rs
17022290.92 lacs.

38615 youth are employed in small scale industries and the

investment value in small scale industries is rs 17956.31 lacs.

27
 3.4 DETAILS OF EXISTING MICRO AND SMALL ENTERPRISES:

NIC code Type of industry No of Investment employment

no units (in lacs)
20 & 22 Agro based and soda 1594 8848.78 8870
water
23, 24, 25 Textile based 291 153.68 1540
& 26
27 Wood/ wooden 311 149.49 1892
based furniture/
forest based
28 Paper and paper 157 356.72 713
products
29 Leather based 36 10.86 164
30 Rubber, plastic and 122 548.92 535
petro based
31 Chemical/chemical 193 1069.13 1722
based
32 Mineral based 621 1676.25 13131
33 & 35 Engineering and 628 2152 3990
metal based
36 Electrical, machinery 55 55.72 254
and transport
equipment and
electronics
97 Repairing and 1657 2448.06 4530
servicing
01 others 325 486.70 1274

Source: RIC of Sambalpur.

28
Analysis:

The total number of agro based and soda water industries in Sambalpur
is 1594 giving employment to 8870 youth with an investment of rs
8848.78 lacs.

Textile based industries have 291 units that gives employment to 1540
youth with an investing capacity of rs 153.68 lacs.

Wood/wooden based furniture/forest based enterprises have 311 units

giving employment to 1892 youth with an investment of rs 149.49 lacs.

The total number of industries of paper and paper based products are
157 giving employment to 713 youth with an investment of rs 356072
lacs.

Leather based industries have 36 units and rubber, plastic and petro
based industries have 122 units. 164 and 535 youths are employed in
respective industries with an investment of rs 10.86 lacs and 548.92
lacs.

Chemical based industries are 193 giving employment to 1722 youth

with an investment capacity of rs 1069.13 lacs.

Total number of mineral based industries is 193 with an investment of

rs 1676.25 lacs giving employment to 13131 youth.

Engineering and metal based industries are 628 giving employment to

3990 youth with an investment of rs 2152 lacs.

Repairing and servicing enterprises are 1657 with an investment of rs

2448.06 lacs giving employment to 4530 youth.

29
3.5 LARGE SCALE INDUSTRIES AND PUBLIC SECTOR UNDERTAKINGS:

List of the units in Sambalpur district:

(i) M/s. Maa Samaleswari Sponge Iron Ltd., Katrabag,

Sambalpur
(ii) M/s. T.R.Chemicals Pvt. Ltd., Belpada, Bamra
(iii) M/s Hindalco Industries Ltd., Hirakud,
(iv) M/s. Samaleswari Ferro Metal Pvt. Ltd., Dishalkhinda,
Dhankauda
(v) M/s.Bhusan Steel & Power, Thelkuli, Rengali
(vi) M/s.Aryan Ispat & Power Projects Pvt. Ltd., Bamloi, Rengali
(vii) M/s.Rathi Steel & Power Projects Ltd., Sikridi, Pitapali,
Rengali
(viii) M/s.R.B.Sponge Iron Ltd., Kenghati, Jujumara
(ix) M/s.Hindalco Industries Ltd.,(Captive Power Plant),Hirakud
(x) M/s Jay Jagannath Steel & Power Ltd., Belpada, Bamra
(xi) M/s.Shyam DRI, Power Ltd., Rengali
(xii) M/s .Viraj Steel &Energy Ltd, Gurupali,
(xiii) M/s Maa Samaleswari Industries Pvt. Ltd., Lapanga
(xiv) M/s.Aditya Aluminium Ltd., Lapanga
(xv) M/s Mahanadi Coal Fields Ltd., Jagruti Vihar, Burla

3.6 GROWTH TREND:

In the recent years, the government of Odisha has signed a

number of memorandums of understandings for setting up of
different mega projects in Steel Power, Cement and Aluminium
sector. Due to setting up of increasing number of large and
medium industries in Sambalpur and in its surrounding areas and
also presence of Rourkela Steel Plant, the biggest PSU in the state
in neighbouring Sundargarh district, there is positive growth in the
large and medium enterprises in the area.

30
3.7 ANCILLARISATION OF THE INDUSTRY:

Rourkela Steel Plant being the largest PSU and being located in
the neighbouring district of Sundargarh, there has been the
growth of MSMEs in the district of Sambalpur who are catering to
the needs of the large industries in Sambalpur and also in
Sundargarh district. So there is scope for further growth of
MSMEs considering the fact that a number of large industries
have already been set up and started production and more are in
the pipe line. The following ancillary and downstream industries
can be set up in the district.

1. Oxygen Gas/Acetylene gas

2. Refractory materials
3. Refractory Bricks
4. Lancing Pipes
5. Steel casting
6. Foundry
7. Nut, Bolts, Rivets and Fasteners
8. Sophisticated machine shops
9. Structural Fabrication workshops
10. Ferric alum
11. Grease
12. Hard Pitch
13. Bleaching powder
14. Conveyor belt
15. Welding Electrodes
16. Electrical Junction box/fittings
17. Repairing Workshops of heavy electrical meters/equipments
18. Hand gloves/safety helmets
19. Hard Coke
20. Lime
21. HDPE woven sacks

31
22. Consumables
23. Repair and Maintenance Workshops
24. Bucket and Bucket Chain
25. Roof bolt, bearing plate
26. Coal Drill spares
27. Steel Square Cog
28. Copper Power Cables of different specifications
29. GI Pipe fittings
30. GI Wires of various sizes
31. Insulators of Voltage range (50 V to 33 KV)
32. Electric Tubes, chokes, starters, frames with holders
33. Welding cables.
34. Cotton waste

3.8 AVAILABILTY OF MINERALS:

The minerals viz; Bauxite, Coal, Dolamite, Graphite and Coarse

Crystal Quartz are found In the District.

Sl no Name of minerals Production (in tonnes)

1 Coal 2907

2 Chinaclay 6200

3 Graphite 8085

32
4. INDUSTRIAL DEVELOPMENT IN POST
INDEPENDENCE PERIOD

At the time of independence, India did not have a balance and well
developed industrial structure. There were too many large and small
units but the numbers of medium size units were very few. Besides
this, there was a preponderance of consumer goods industries
compared with capital goods industries. As result the country had to
depend upon other countries for importing capital goods.

4.1 DETAILS OF LARGE SCALE INDUSTRIES OF THE DISTRICT:

1. M/s. Maa Samaleswari Sponge Iron Ltd., Katrabag, Sambalpur

Maa Samaleswari Sponge Iron ltd is a public company

incorporated on 23 January 2003. It is classified as Indian Non-
government Company and is registered at Registrar of
Companies, Cuttack. Its authorized share capital is rs
25,000,000 and its paid up capital is rs 23,425,000. It is involved
in manufacturing of basic iron and steel.

Maa Samaleswari Sponge Iron ltd’s Annual General Meeting

(AGM) was last held on 30 September 2105 and as per records
from Ministry of Corporate Affairs (MCA) its balance sheet was
last filed on 31 March 2016.

Directors of Maa Samaleswari Sponge Iron ltd are Subhendu

Pattnayak, Dinesh kumar Agrawal, Munu Behera, Prem kumar
Agrawal.

33
 Maa Samaleswari Sponge Iron ltd’s Corporate Identification
Number (CIN) is U27102OR003PCL007039 and its registration
number is 7039. Registered address is AT Saharapara, PO
Katrabag, VIA Rengali, Sambalpur 768212.

2. M/s. T.R.Chemicals Pvt. Ltd., Belpada, Bamra

T R Chemicals Pvt Ltd is a public company registered on 14 may

1993. It is classified as Indian Non-government Company and is
registered at Registrar of Companies, Cuttack. Its authorized
share capital is rs 50,000,000 and paid up capital is rs
23,330,000. It is involved in manufacturing of basic chemicals.

T R Chemicals Pvt ltd’s Annual General Meeting (AGM) was last

held on 30 September 2015 and as per records from Ministry of
Corporate Affairs (MCA) its balance sheet was last filed on 31
March 2016.

T R Chemicals Pvt Ltd currently has 4 active directors- Gurdas

Kapoor, Sanjeev kumar Kapoor, Sambasiva Rao Avula, Binay
kumar Sahu.

T R Chemicals Pvt Ltd’s corporate Identification Number (CIN) is

U24132OR1993PLC003326 and its registration number is
003326. Registered address is Subhash Chowk, Rajgangpur,
Sundergarh, 770017.

3. M/s Hindalco Industries Ltd., Hirakud

Hindalco industries ltd, an aluminium manufacturing company,

is a subsidiary of the Aditya Birla Group. Its headquarters are at
Mumbai, Maharashtra, India. It is the flagship of the company
in the metals business.

34
 The Hindustan Aluminium Corporation was established in 1958
by the Aditya Birla Group. In 1962 the company began
production in Renukoot in Uttar Pradesh making 20 thousand
metric tons per year of aluminium metal and 40 thousand
metric tons per year of alumina. In 1989, the company was
restructured and renamed Hindalco.

The company has annual sales of US$ 15 billion and employs

around 20,000 people. It is listed in the Forbes Global 2000 at
895th rank. Its market capitalization by the end of May 2015
was US$ 3.6 billion.

Hindalco is one of the world’s largest aluminium rolling

companies and one of the biggest producers of primary
aluminium in Asia.

4. M/s.Bhusan Steel & Power, Thelkuli, Rengali

Bhusan Steel and Power is the largest manufacturer of auto-

grade steel in India. Bhusan steel with a large amount of debt
in proportion to its equity (305 times more) is a highly
leveraged company. The company’s consolidated debt stands
at rs 31,839 crore having risen 18% from a year ago. The
company is spending rs 260 billion to expand its capacity to 12
million tonnes annually from the present installed capacity of
around one million tonnes.

Brij Bhusan Singal is chairman of the board of directors of

Bhusan steel. Neeraj Singal is the managing director of Bhusan
steel limited.

35
 Bhusan power and steel limited has seven plants at four
locations- Chandigarh, Derabassi in Punjab, Bangihatti near
Dankuni in West Bengal and Thelkoloi in Odisha.

Its biggest expansion is in Odisha- it has signed an agreement

with the Government of Odisha for setting up of a three million
tonnes capacity steel plant at Meramandali in Dhenkanal
district at a cost of 52 billion and its subsequent backward
integration and expansion to 4 million tonnes.

5. M/s.Aryan Ispat & Power Projects Pvt. Ltd., Bamloi, Rengali

Aryan Ispat and Power Project Ltd is situated on the SH-10

linking Sambalpur-Rourkela i.e. at village Bamloi via Lapanga,
Sambalpur and is just 32 km away from District Head Quarter,
Sambalpur. The plant is well connected by both rail and road.
The nearest railway station is Lapanga which is 05 km away
from factory and Rengali is just 12 km away from factory.

This company was commenced with projected capital outlay of

rs 393.14 crore as per the memorandum of understanding
signed with Government of Odisha to produce 0.26 MTPA of
sponge iron, 0.10 MTPA pig iron, 0.30 MTPA of steel billets and
45 MV of power generation. In order to facilitate for
procurement of raw materials by rack, the company
commissioned a railway sliding of its own in the month of
January 2009.

The basic mission and vision of the company to manufactures

high grade sponge iron, pig iron, steel billets which will have
the market potential all over India and efforts are being made
to export the materials to overseas in order to earn foreign

36
 exchange which will help to strengthen the economy of the
country.

6. M/s.Rathi Steel & Power Projects Ltd., Sikridi, Pitapali, Rengali

Rathi Industries Limited is a company established in the year

1992 with the objective of establishing a fully integrated
network of manufacturing, distribution and retailing of
construction steel bars all over India.

The Group owes its presence in the steel industry to the

farsightedness of late Seth Gordhan Das Rathi. He set up a
small re-rolling mill in Delhi in early 40’s. Since then the group
has been growing continuously.

Rathi Industries Limited after intensive research has

established a unique and effective lay out to roll steel bars.

R. K. Agrawal is the president of the Rathi Steel and Power

Projects Ltd. Its registered address is AT Sikirdi, Kantapali.

7. M/s.R.B.Sponge Iron Ltd., Kenghati, Jujumara

R B Sponge Iron Ltd is a private company incorporated on 3

September 2004. It is classified as Indian Non-Government
Company and is registered at Registrar of Companies, Cuttack.
Its authorized share capital is rs 40,000,000 and its paid up
capital is 32,393,000. It is involved in manufacture of basic iron
and steel.

R B Sponge Iron ltd’s Annual General Meeting (AGM) was last

held on 30 September 2015 and as per record from Ministry of

37
 Corporate Affairs (MCA) its balance sheet was last filed on
March 2016.

Directors of the company are Babulal Pruseth and Sunder lal

Pruseth.

R B Sponge Iron Ltd’s Corporate Identification Number (CIN) is

2016U27102OR2004PTC007765 and its registration number is
1165. Its email address is rbsipl@rediffmail.com and its
registered address is AT Kenghati, Jayantpur, Sambalpur,
768112.

8. M/s Jay Jagannath Steel & Power Ltd., Belpada, Bamra

Jay Jagannath Steel and Power Ltd is a public company

incorporated on 28 February 2007. It is classified as Indian Non-
Government Company and is registered at Registrar of
Companies, Cuttack. Its authorized share capital is rs
30,000,000 and its paid up capital is rs 23,420,000. It is involved
in manufacture of basic iron and steel.

Jay Jagannath Steel and Power Ltd’s Annual General Meeting

(AGM) was last held on 30 September 2015 and as per record
from Ministry of Corporate Affairs (MCA) its balance sheet was
last filed on March 2016.

Directors of Jay Jagannath Steel and Power Ltd are Kriti

Agrawal, Mukesh kumar Agrawal and Sunita Agrawal.

Jay Jagannath Steel and Power Ltd’s Corporate Identification

Number (CIN) is U2710OR2007PLC009196 and its registration
number is 9196. Its email address is jjspl@gmail.com and its
registered address is Uditnagar, 769012.
38
9. M/s.Shyam DRI, Power Ltd., Rengali

The Shyam Group of Industries is one of the front runners in

the Iron and Steel sector in the eastern Region and features
amongst the largest manufacturers of Ferro Alloys in the
country. The group has also diversified into several crore
infrastructure sectors such as power (biomass, waste heat,
thermal and hydel), cement, logistics and industrial parks. The
Group with a turnover of more than rs 3,500 crores provides
direct-indirect employment to more than 14,000 people.

The Group is proactively increasing its steel making capacities

and would soon be commissioning integrated steel and power
plant with a capacity of 1.1 million TPA of finished steel and
1000 MV Captive Power Plant in West Bengal for which MOU
has been signed.

The main focus of the Group has been in the core and
infrastructure industries and the group has recently signed an
MOU to build a 600 MV of independent Power Plant.

The headquarter is at Kolkata. The Netherlands, Italy, UAE,

Taiwan are some of the countries where the products of the
Group are exported.

As a corporate focused on value creation, the Shyam group

plans to strengthen its presence and diversify into several core
infrastructure sectors such as power, port, logistics, cement,
industrial parks and SEZ.

39
10. M/s .Viraj Steel &Energy Ltd, Gurupali

Viraj Profiles Limited (VPL) is the second largest manufacturer

of stainless steel long products in the world and is ranked
number one in stainless steel flanges. It has a strong global
presence with their products being exported to more than
1300 customers in over 90 countries worldwide spread across 6
continents.

It is one of the fastest growing business houses in India, is

currently a major player in the global stainless steel market.

Viraj Profiles Limited rightly called the silent giant commenced

operations with less than 150 employees and a production
capacity of 1000 MT in 1992. With what started as a small
induction furnace to manufacture utensil grade steel for
domestic markets has now transformed into one of the world’s
largest stainless steel manufacturers.

The company has integrated production facilities and is set to

increase its total melting capacity in the coming years.

Viraj Profiles are incorporated in 1990 and its first melt shop
was commissioned in 1991 but the company’s journey truly
began in 1992. In 1995 Viraj started increasing its production
capacity, diversifying its product grades and product range and
enhancing its production processes. Almost every year since
then Viraj has added a new type of product to its range
including sections and profiles, fasteners, wire and wire rods.

40
11. M/s Maa Samaleswari Industries Pvt. Ltd., Lapanga

Maa Samaleswari Industries Pvt Ltd is a private company

incorporated on 16 April 2004. It is classified as Indian Non-
Government Company and is registered at Registrar of
Companies, Cuttack. Its authorized share capital is rs
85,000,000 and its paid up capital is rs 81,847,504. It is involved
in manufacture of basic iron and steel.

Maa Samaleswari Industries Pvt Ltd’s Annual General Meeting

(AGM) was last held on 28 September 2015 and as per records
from Ministry of Corporate Affairs (MCA), its balance sheet was
last filed on 31 march 2016.

Directors of Maa Samaleswari Industries Pvt Ltd are Sunil

kumar Agrawal, Gouri Shankar Agrawal, Jaideo Prasad Minda,
Ashwani Minda, and Anil Minda.

Maa Samaleswari Industries Pvt Ltd’s Corporate Identification

Number (CIN) is U27103OR2004PTC007572 and its registration
number is 7572.

12. M/s.Aditya Aluminium Ltd., Lapanga

Aditya aluminium ltd is a 900-megawatt (MV) power station of

HINDALCO INDUSTRIES to supply Aditya Alumina and
Aluminium project in Odisha, India.

Aditya aluminium was established in 1991, which is an

aluminium project that consists of aluminium smelter and
refinery.

41
 Hindalco approves that the project also has a 20 million TPA
joint venture coal mine at Ib valley and a 900 MV captive
power plant at Lapanga. The project was reported as in
operation by 2014.

13. M/s Mahanadi Coal Fields Ltd., Jagruti Vihar, Burla

Mahanadi Coalfields Limited (MCL) is one of the major coals

producing company of India. It is one of the eight subsidiaries
of Coal India Limited. Mahanadi Coalfields Limited was carved
out of South Eastern Coalfields Limited in 1992 with its
headquarters at Sambalpur. It has its coal mines spread across
Odisha. It has total seven open cast mines and three
underground mines under its fold.

MCL has two subsidiaries with private companies as a joint

venture. The names of these companies are MJSJ Coal Limited
and MNH Shakti Limited.
There are 45 sanctioned mining projects in MCL with a capacity
of 190.83 Mty capacity of coal. The total capital outlay of 45
projects is rs 6076.78 crores and out of which 28 have been
completed with a sanctioned capital investment of rs 2348.61
crores. Out of the 28 completed projects, 2 have been
exhausted. One expansion project is going to be approved
within a short period of time.

42
4.2 GROWTH OF INDUSTRIAL DEVELOPMENT:

 Data of 5 years from 1984-85 to 1988-89 with the number of

registered units, employment and investment in Sambalpur
district:

Table 1
YEAR NUMBER OF EMPLOYMENT INVESTMENT
REGISTERED (IN LACS)
UNITS

1984-85 579 6055 348

1985-86 27 285 29.12
1986-87 33 307 33.03
1987-88 29 362 35.29
1988-89 36 353 48.64
Source: RIC of Sambalpur.

Analysis:

In the year 1984-85 there are 579 registered units in Sambalpur

giving employment to 6055 youth with an investment of rs 348
lacs. The number of employment is rising year after year with an
increase in the investment capacity.

43
 7000

6000

5000

4000

Series 1
Series 2
Series 3
3000

2000

1000

0
1984-85 1985-86 1986-87 1987-88 1988-89

In the above graph, series 1 shows the number of registered units.

Series 2 shows the employment generation in Sambalpur.
Series 3 shows the investment (in lacs) for the industrial set up.

44
 Data of 5 years from 1989-90 to 1993-94 with the number of
registered units, employment and investment in Sambalpur
district:

Table 2
YEAR NUMBER OF EMPLOYMENT INVESTMENT
REGISTERED (IN LACS)
UNITS
1989-90 40 471 82.69
1990-91 28 410 141.85
1991-92 20 314 98.54
1992-93 22 461 56.06
1993-94 15 155 29.35
Source: RIC of Sambalpur.

Analysis:

There is huge increase in investment in the year 1990-91. In the

year 1989-90 the investment was only rs 82.69 lacs whereas in
1990-91 it was rs 141.85 lacs. This is because of the adoption of
the industrial policy or the new economic policy 1991.

In response, Prime Minister Narasimha Rao along with his Finance

Minister Manmohan Singh initiated the economic liberalization of
1991. The reforms reduced tariffs and interest rates and ended
many public monopolies allowing automatic approval of foreign
direct investment.

The New Economic Policy of 1991 brings about huge changes in

the economy. Liberalization, privatization, globalization were the
main aspects of the policy. It brings revolution in all over India.

45
 500

450

400

350

300

Series 1
250
Series 2
Series 3

200

150

100

50

0
1989-90 1990-91 1991-92 1992-93 1993-94

In the above graph, series 1 shows the number of registered units.

Series 2 shows the employment generation in Sambalpur.
Series 3 shows the investment (in lacs) for the industrial set up.

46
 Data of 5 years from 1994-95 to 1998-99 with the number of
registered units, employment and investment in Sambalpur
district:

Table 3
YEAR NUMBER OF EMPOLYMENT INVESTMENT
REGISTERED (IN LACS)
UNITS
1994-95 21 312 225.17
1995-96 10 101 38.92
1996-97 16 177 70.13
1997-98 38 450 262.64
1998-99 31 261 117.71
Source: RIC of Sambalpur

Analysis:

In the year 1994-95 the investment was rs 225.17 lacs whereas in

1995-96 and 1996-97 the investment goes down to rs 38.92 lacs
and rs 70.13 lacs respectively. Then in the year 1997-98 the
investment rose up to rs 262.64 lacs. This is because the number
of industries subject to compulsory industrial licensing has been
reduced from 14 to 9. Five industries namely animal fats and oil
tanned or dressed fur skin, chamois leather, asbestos and
asbestos based products, plywood, veneers of all types and other
wood based products were removed from the requirements of
compulsory licensing.

The Union Budget for 1997-98 reduced the prevailing corporate

and personal income tax rates and abolished tax on dividends in
the hands of shareholders.

47
 500

450

400

350

300

Series 1
250
Series 2
Series 3

200

150

100

50

0
1994-95 1995-96 1996-97 1997-98 1998-99

In the above graph, series 1 shows the number of registered units.

Series 2 shows the employment generation in Sambalpur. Series 3
shows the investment (in lacs) for the industrial set up.

48
 Data of 5 years from 1999-2000 to 2003-04 with the number of
registered units, employment and investment in Sambalpur
district:

Table 4
YEAR NUMBER OF EMPOLYMENT INVESTMENT
REGISTERED (IN LACS)
UNITS
1999-2000 29 187 197.43
2000-01 45 267 95.92
2001-02 55 270 174.01
2002-03 35 140 58.32
2003-04 32 166 75.27
Source: RIC of Sambalpur.

Analysis:

In the year 1999-2000 the investment value was rs 197.43 lacs

which were highest among those five years. This is because the
financial sector reforms announced monetary and credit policy
through repos and lending against collateral of government of
India securities.

The effects of monetary policy on output and inflation are

transmitted through various segments of the financial markets.

49
 300

250

200

Series 1
150
Series 2
Series 3

100

50

0
1999-2000 2000-01 2001-02 2002-03 2003-04

In the above table and graph, series 1 shows the number of

registered units. Series 2 shows the employment generation in
Sambalpur. Series 3 shows the investment (in lacs) for the
industrial set up.

50
 Data of 5 year from 2004-05 to 2008-09 with the number of
registered units, employment generation and investment.

Table 5
YEAR NUMBER OF EMPLOYMENT INVESTMENT
REGISTERED (IN LACS)
UNITS
2004-05 22 120 95.19
2005-06 17 244 329.73
2006-07 18 155 160.06
2007-08 17 162 324.24
2008-09 8 53 12.55
Source: RIC of Sambalpur.

Analysis:

In 2004-05 the investment value was rs 95.19 lacs. In 2005-06 it

was rs 329.73 lacs. In 2006-07 it was rs 160.06 lacs. In 2007-08 it
was rs 324.24 lacs. In the year 2008-09 the investment value goes
down to rs 12.55 lacs.

The reason behind this great fall was worldwide depression. The
basic cause of the crisis was largely an unregulated environment,
mortgage lending to subprime borrowers. Since the borrowers did
not have adequate repaying capacity.

Later it was found that Foreign Direct Investment was drying up

and this affected investment in Indian economy. The industries
were most affected by weakening demand. It further led to
unemployment.

51
 350

300

250

200

Series 1
Series 2
Series 3
150

100

50

0
2004-05 2005-06 2006-07 2007-08 2008-09

In the above table and graph, series 1 shows the number of

registered units. Series 2 shows the employment generation in
Sambalpur. Series 3 shows the investment (in lacs) for the
industrial set up.
52
 Data of 5 years from 2009-10 to 2013-14 with the number of
registered units, employment generation and investment.

Table 6
YEAR NUMBER OF EMPLOYMENT INVESTMENT
REGISTERED (IN LACS)
UNITS
2009-10 15 131 164.69
2010-11 20 141 131.06
2011-12 18 115 121.07
2012-13 15 121 132.01
2013-14 17 118 129.02
Source: RIC of Sambalpur.

Analysis:

In 2009-10 the total investment was rs 164.69 lacs giving

employment to 131 youth with 15 registered units.
India along with other emerging market economies continued
to be the fastest growing economies in 2009-10.

The annual budget for the financial year 2009-10 was

presented in the background of signs of recovery in the global
economy led by emerging market economies.

The employment generation in the district was rising

increasingly.

53
 180

160

140

120

100
Series 1
Series 2

80 Series 3

60

40

20

0
2009-10 2010-11 2011-12 2012-13 2013-14

In the above table and graph, series 1 shows the number of

registered units. Series 2 shows the employment generation in
Sambalpur. Series 3 shows the investment (in lacs) for the
industrial set up.

54
4.3 INDUSTRIAL POLICY:

Industrial policy, sometimes called IP refers to the government

policy towards the establishment, working and management of
industries in the country. These policies have a significant impact
on industries. To a great extent, the opportunities and threats of a
business are determined by industrial policy and regulations. They
lay down limits and norms for the conduct of business. Industrial
policy is a part of economic policy.

The actions taken by government in an economy are called

economic policies. These policies can influence the nature and
structure of an economy. These policies define the role of
government in economic field.

4.4 INDUSTRIAL POLICIES IN INDIA:

Since independence industrial activity in India is carried on

according to the industrial policy statements made by the
government from time to time.

1. INDUSTRIAL POLICY RESOLUTION, 1948:

This industrial policy was designed to achieve the following

objectives:

(i) To establish a social order wherein justice and equality of

opportunity shall be secured to all the people.
(ii) To promote standard of living of people by exploiting
resources.
(iii) To increase both agriculture and industrial production.
(iv) To offer employment opportunities to all.

55
 There were four broad categories to classify Industries:

- Central government would have the sole ownership,

control and management on the manufacture of arms and
ammunitions, atomic energy and railways.

- The second category, compromising coal, iron, and steel

manufacturers of telephones telegraphs and wireless
machines, other than radio sets. New units in this category
of industries would be set up by the government only.

- Industries included in the third category were of basic

importance and therefore would be planned and regulated
by the state. The industries were salt, automobiles,
machines tools, chemical, fertilizers, non-ferrous metals,
rubber manufacturers, power and industrial alcohol,
cotton, and woolen textiles, current, sugar, paper, news
print, air and sea transport, minerals and industries related
to defence.

- Fourth category included all remaining industries, which

were left to the initiative of private sector (individual as
well as cooperatives). Private sector was free to own,
control and mange these industries without the
intervention of the state. However state had the authority
to supervise these industries too.

2. INDUSTRIAL POLICY RESOLUTION, 1956:

Adoption of the constitution of India in 1950, initiation of the

first five year plan in 1951 and acceptance by the parliament of
the socialist pattern of society as the basic goal of social and
economic policy necessitated a new industrial policy which was
56
 announced in 1956. Industrial policy 1956 sought to achieve
the following objective:

(i) To reduce disparities in income and wealth.

(ii) To prevent monopolies and concentration of economic
power.
(iii) To build a large and growing public sector.
(iv) To develop heavy and machine making industry.
(v) To accelerate the rate of industrialization and economic
growth.

All industries were classified into three broad categories:

- Schedule A- State owned industries (17 industries)

- Schedule B- Mixed sector to be progressively owned by the

State (20 industries)
- Schedule C- Private Sector

The focus of the policy was on cottage and small scale

industries, industrial corporate, development of backward
areas, education and training of managerial and technical
personnel for the growing public sector.

3. INDUSTRIAL POLICY STATEMENT, 1977:

The janata part government announced new industrial policy in

December 1977. It was stated that the industrial policy of 1956
had resulted in certain distortion like unemployment, rural
urban disparities, industrial sickness etc. the main features of
1977 policy were:

(i) Focus on the development of small scale sector.

57
 (ii) Classification of large scale sector into-
-basic
-capital goods
-high technology
-others
(iii) Control of large business house.
(iv) Expansion of public sector.
(v) Majority ownership and control to be in Indian hands
except in case of export oriented areas.

4. INDUSTRIAL POLICY RESOLUTION, 1980:

After the re-arrival of late smt Indira Gandhi as the prime

minister of the country, there was a change in the reins of
governance. It was felt necessary to revisit the industrial policy
statement of 1977. Industrial policy of 1980 focused on the
following:

(i) With the objective of raising the industrial output at the

rapid rate, it was to emphasize optimum utilization of
installed capacity.
(ii) Effective management of the public sector.
(iii) Boosting the development of small scale industries.
(iv) Consumer protection against high prices and poor quality.
(v) Promotion of industries in rural backward area.

5. INDUSTRIAL POLICY RESOLUTION, 1990:

The national front government announced its industrial policy

on May 30, 1990. The main objectives of the policy were:

(i) Employment generation.

(ii) Industrial dispersal and decentralization.

58
 (iii)Rural industrialization.
(iv) Export promotion.
(v) Promotion of small and agro based industries.

6. INDUSTRIAL POLICY, 1991:

Following are the objectives of new economic policy 1991:

(i) To follow the policy of self reliance.

(ii) Up gradation of technology.
(iii) Encouragement of foreign investments.
(iv) Encouragement of entrepreneurship and research &
development.
(v) To ensure that the public sector plays its role in
developing the socio-economic structure of the country.

Current situation:

Currently the government of India is doing hard efforts in

industrial sector. The government is very concentrated towards
this sector. Government is willing to give a business friendly
environment to the industrial sector. Reforms in investment area
will be contributing to the India’s economic growth and
development. Ratings of standard & poor also give a positive sign
in this regard.

Investment reforms to aid India’s growth:

Recently, global credit ratings firm Standard & Poor's has said,
reforms that strengthen fiscal health and improve investment
climate could boost India's growth prospects. India is expected to
grow in excess of 6% coming financial year starting April, after an
around 5.5% expansion this year. "Further reforms that improve
59
the investment climate and strengthen fiscal health in India and
Indonesia could brighten long-term growth prospects," S&P said
in its review of Asia-Pacific ratings.

Inflation has already moderated significantly and growth is

looking up. The new government has taken measures to improve
sentiment, which are welcomed by investors.

Government committed to business-friendly environment:

The government has introduced many reforms through

legislation, including GST, as against a few via the Ordinance route
and is committed to making India a business friendly destination,
said Minister of State for Finance Jayant Sinha.
The Goods and Service Tax (GST) is a Value (VAT) to be
implementing India. It will replace all indirect taxes levied on
goods and services by the Indian Central and State governments.
It is aimed at being comprehensive for most goods and services.

Amendment Bill has been taken through legislation route," Sinha

said at India Today Global Round Table. "It demonstrates our
intent that we are undertaking very fundamental reform
measures. We are doing it all for the purpose of ease of doing
business”.
.
On Foreign Direct Investments:

"There is a tidal wave of investment that is coming in. There are

other big ticket FDI announcements that have to come over the
time. FDI is something that is permanent money. It is associated
with projects, it is associated with business plans, and so we
should just wait for all these things to happen.

60
ET GBS:

Capitalize on Narendra Modi government’s Make in India

campaign

Instead of harping on the bottlenecks of the past, businesses must

capitalize on the new impetus that will be provided by the
Narendra Modi government's Make in India campaign,
department of industrial policy and promotion (DIPP) secretary
Amitabh Kant told industry participants at the roundtable on the
manufacturing initiative at the ET Global Business Summit. Kant
rejected the argument that Make in India should focus on the
domestic market, saying that no one manufactures only for India.
Central bank governor Raghuram Rajan, among others, has
suggested that an export-led strategy modeled on China may no
longer be valid because of changes in global trade trends. Kant
said industry must believe in the principle of "export or perish",
especially since some of
China's strengths may be fading.

"With just 1.6 per cent share in global exports, India has a large
potential market to tap," he said. "China is becoming cost
incompetent, which offers a big opportunity to India."
The Make in India campaign launched by Prime Minister Modi in
September aims to increase ease of doing business in the country
by focusing on 25 manufacturing sectors.

Venkatesh Kini, president of Coca-Cola India and Southwest Asia,

said making in India for the world looked unviable due to
infrastructural constraints.

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Kant underlined that the proposed industrial corridors will
significantly drive down transportation costs, making it easier for
companies and encouraging outbound trade.
The dedicated freight corridor between Mumbai and Delhi is
expected to be completed toward the end of 2017, leading to
drastic savings in time and money. "The western dedicated freight
corridors being planned will bring down the time of
transportation for goods between Delhi and Mumbai from 13
days to 13 hours," Kant said.
Delhi Mumbai Industrial Corridor Development Corp. under the
DIPP is expected to launch four industrial cities by March,
beginning with Dholera in Gujarat. These are to be developed as
part of the ecosystem that will be created.

The government is currently working on five industrial corridors--

Delhi-Mumbai, Amritsar-Kolkata, Chennai-Bengaluru, Bengaluru-
Mumbai and Vizag-Chennai—linking various parts of India. While
the government plans to put in place a wide range of reforms,
industry needs to push for innovation, Kant said.
"Besides reforms, mindset change is very important”.
"Government is taking the ordinance route for a lot of significant
reforms. Predictability in policy is very important. There are
strong legacy issues related to lack of predictable policy regime."

4.5 IMPACT OF INDUSTRIAL POLICIES:

One of the important tasks of the government is to manage

economy of the country. It has to decide the means and
methods to be used towards this. Industrial policy is a typical
character of a mixed economy. Government’s support toward
renewable energy sector, organic farming, and food processing
and export promotion of various products are all part of
industrial policy.

62
 (i) India after independence deliberately opted to promote
heavy capital industry which was to be under state
control. Investments were made through state owned
PSUs in various sectors such as hydro, thermal, nuclear
power, mining etc.

(ii) There was some eminent support to traditional handicraft

sector and agro economy which was employment
intensive.

(iii) India’s small scale industry was protected from external

and domestic competition.

(iv) For protection from external competition high tariff and

non-tariff barriers were placed.

(v) Aforesaid policies are generally targeted toward import

substitution. This means import are to be avoided and
products are to be manufactured domestically.

(vi) Apart from these there are controls such as licensing

requirements under which operations can be commenced
only after license has been granted.

4.6 IMPACT OF INDUSTRIAL POLICIES IN SAMBALPUR:

The primary industries are manufacturing, mining and

quarrying, electricity, gas and water supply and construction.
The industrial sector’s contribution to the state’s GDP was
estimated at 33.45% in 2014-15. Most of the Sambalpur’s
industries are mineral based. Sambalpur has 15% iron reserves.

63
 It has 5% of India’s production capacity in steel. Sambalpur is
the top aluminium producing district in India. Mining
contributed an estimated 6031% to the GDP.

4.7 CONTRIBUTION IN NATIONAL DEVELOPMENT:

1. MODERNISATION OF AGRICULTURE:

Industrial development is necessary for modernization of

agriculture. In India, agriculture is traditional and backward.
The cost of production is high and productivity is low. We
need tractors, threshers, pump sets and harvesters to
modernize agriculture. To increase productivity, we need
chemical fertilizers, pesticides and weedicides etc. These are
all industrial products. Without industrial development,
these goods cannot be produced. Agricultural products like
jute, cotton, sugarcane etc are raw materials. To prepare
finished goods like flex, textiles and sugar etc we need
industrialization.

2. DEVELOPMENT OF SCIENCE AND TECHNOLOGY:

Industrial development encourages the development of

science and technology. The industrial enterprises conduct
research and develop new products. Ethanol in the form of
bio fuel is an example of industrial development. Industry
conducts research on its wastes and develops byproducts
like bio diesel from Jatropha seeds. Due to industrialization,

64
 we have made progress in atomic science, satellite
communication and missiles etc.

3. CAPITAL FORMATION:

Acute deficiency of capital is the main problem of Indian

economy. In agricultural sector the surplus is small. Its
mobilization is also very difficult. In large scale industries,
the surplus is very high. By using external and internal
economies, industry can get higher profit. These profits can
be reinvested for expansion and development.

4. INDUSTRIALISATION AND URBANISATION:

Urbanization succeeds industrialization. Industrialization in a

particular region brings growth of transport and
communication. Schools, colleges, technical institutions,
banking and health facilities are established near industrial
base. Many ancillary units have been established after
setting up of big industry.

5. SELF RELIANCE IN DEFENCE PRODUCTION:

To achieve self reliance in defence production,

industrialization is necessary. During war and emergency
dependence on foreign countries for war weapons may
prove fatal. Self reliance in capital goods and industrial infra
structure is also necessary. Atomic explosion at Pokhran

65
 (Rajasthan) and Agni Missile are examples of industrial
growth.

6. IMPORTANCE IN INTERNATIONAL TRADE:

Industrialization plays an important role in the promotion of

trade. The advanced nations gain in trade than countries
who are industrially backward. The underdeveloped
countries export primary products and import industrial
products. Agricultural products command lower prices and
their demand is generally elastic. While industrial products
command higher values and their demand is inelastic. This
causes trade gap. To meet the deficit in balance of payments
we have to produce import substitute products or go for
export promotion through industrial development.

7. USE OF NATURAL RESOURCES:

It is a common saying that India is a rich country inhabited

by the poor. It implies that India is rich in natural resources
but due to lack of capital and technology, these resources
have not been tapped. Resources should be properly utilized
to transform them into finished industrial products. The
British people took India’s cheap raw materials for
producing industrial goods in their country. India was used
as market for their industrial products. So India fought with
poverty and England gained during industrial revolution.

66
8. ALLEVIATION OF POVERTY AND UNEMPLOYMENT:

Poverty and unemployment can be eradicated quickly

through rapid industrialization. It has occurred in industrially
advanced countries like Japan. The slow growth of industrial
sector is responsible for widespread poverty and
unemployment. So with fast growth of industrial sector,
surplus labour from villages can be put into use in industry.

9. MAIN SECTOR OF ECONOMIC DEVELOPMENT:

Industry is viewed as leading sector to economic

development. We can have economies of scale by applying
advanced technology and division of labour and scientific
management. So production and employment will increase
rapidly. This will bring economic growth and capital
formation.

10. FAST GROWTH OF NATIONAL AND PER CPITA INCOME:

Industrial development helps in the rapid growth of national

and per capita income. The history of economic
development of advanced countries shows that there is a
close relation between the levels of industrial development
and the levels of national and per capita income.

67
 11. SIGN OF HIGHER STANDARD OF LIVING AND SOCIAL
CHANGE:

A country cannot produce goods and services of high quality

in order to attain decent living standard without the
progress of industrial sector.

4.8 GDP GROWTH RATE:

Since the economic liberalization of 1991, India’s GDP has been

growing at a higher rate.

YEAR GROWTH (REAL) (%)

2000 5.6
2001 6.0
2002 4.3
2003 8.3
2004 6.2
2005 8.4
2006 9.2
2007 9.0
2008 7.4
2009 7.4
2010 7.1
2011 6.8
2012 6.5
2013 5.1
2014 6.9
2015 7.3

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5. CONCLUSION:
With the rapid industrialization in India, Sambalpur is also not
lagged behind. Different policies of the government taken at
various intervals of time proved useful for the Indian society.

The rapid growth in population and migration of people shows

both positive and negative impact on livelihood, business and
environment of the region.

5.1 FINDINGS OF THE STUDY:

 It is observed from the study that up to 1984-85, 579 units

have been registered with total investment of rs 348 lacs giving
employment to 6055 unemployed youth.

 It is further observed from the study that till 2013-14 there

have been 1308 registered units giving employment to 12864
unemployed youth with the total investment of rs 3817.71 lacs.

 The rapid growth in population and migration of people shows

both positive and negative impact on livelihood, business and
environment of the region. There is rise in pollution level and
environmental temperature at the same time.

 The industrial development in Sambalpur has boosted the

economy and business scenario. Many residential housing and
commercial projects offering modern amenities have come up

69
 in the city and are helping in shaping up the landscape in
organized manner.

So it can be said that Sambalpur is going towards a bright future

that will have high level of economic growth and development in
terms of GDP, national income, per capita income, better
employment opportunities.

5.2 SUGGESTIONS:

 RIC should undertake regular seminars to educate the

unemployed youth regarding the loan schemes available for
taking up industrial activity.

 The entrepreneur should be provided loan at a very low rate of

interest.

 The tax rate should be made as minimum as possible so as to

help the youth entrepreneurs for undertaking the industrial
activities.

70
 BIBLIOGRAPHY

 Economic times
 Entrepreneurship development and management by Dr. A. K.
Singh
 The Indian journal of industrial relationship (0019-5286)
 Industrial economies (1467-6457)
 Michael P. Todaro, Economic Development
 K. K. Sen , Economic Development in India
 Uma Kapila, Inida’s Economic Development since 1947

71