Kerala Hotels :
Kerala Economy
Kerala Economy
The foundations, of the economic life of Kerala were
laid during the Sangam Age. Agriculture was the chief occupation of
the people. The land was very fertile and the harvest was plentiful
always. Agricultural implements were made of iron. Cattle rearing
was very common and villages had common grazing grounds.
Besides agriculture, people took to spinning weaving, carpentry,
leather works, fishing etc. as supplementary jobs. Salt was
manufactured in salt pans. Barter system was common. As far as
internal trade was concerned, coins like dinar, kanam etc. were also
current.
During the Sangam Age vigorous foreign trade was carried on in
pepper, and other spices. Other articles of merchandise exported on
a large scale were ivory, precious stones and pearls. The Greeks and
the Romans carried on extensive trade with Kerala. The wide de-spersion
of Roman trade contact is borne out by the discovery of good deal of
Roman coins in many parts of Kerala.
Classical writers of Rome made frequent references to the prosperous
trade that passed through Muziris. The author of Periplus and Piny
vouch for the vigorous trade carried on in the first century after
Christ. Ptolemy who wrote somewhere about the middle of the second
century A.D. refers to the great prosperity of Muziris. Besides this
port, there were other ports too, which attracted large volumes of
trade. They were Tyndis, Berace, Nelcynda, Balita and Naura. It was
this foreign link that paved the way for the coming of Christianity,
Judaism and Islam into Kerala.
From time immemorial Kerala had commercial contact
with distant countries. This contact extended from the Arabian sea
to the Red sea, the nineth and tenth centuries A.D. witnessed the
'Golden Age' in the history of Kerala. However, with the advent of
the Europeans in the sixteenth century Kerala economy underwent
numerous vicissitudes of fortune.
POST INDEPENDENCE PERIOD
Though the First Five Year Plan attempted a process of all-round
balanced growth, it did not produce any tangible effect on the
economy of Kerala,, for, while Malabar continued to be an integral
part of the Madras state, the United State of Travancore-Cochin as a
'B' class state was able to attempt only a special plan, which was
more professed than accomplished. However, a full-fledged plan of
economic development was introduced only after the creation of the
State of Kerala in 1956, which synchronised with the Second Five
Year Plan (1956-61).
STANDARD OF LIVING
The economic situation of Kerala has been showing mixed trends over
the years. The state income of Kerala (State domestic product) in
1988 is estimated at Rs.8869 crore at current prices, (new series)
as against Rs.7873.23 crore in 1987-88, showing a growth-rate of
12.7 per cent. At constant prices the state income went up from
Rs.4047.79 crore in 1987-88 to Rs.4203.08 crore in 1988-89 showing
an increase of only 3.9 per cent over the previous year. This is in
contrast to the national income at current prices which is estimated
at Rs.306822 crore in 1988-89 as against Rs .257913 crore in
1987-88, indicating a growth-rate of 19 per cent.
The per capita state income is estimated at Rs.3054 for 1988-89 as
against Rs.2754 in 1987-88 representing an increase of 10.9 per cent
at current prices. The per capita income at constant prices has
however grown only by 2.2 per cent from Rs.1416 in 1987-88 to
Rs.1447 in 1988-89. This figure is in striking contrast to the per
capita national income for 1988-89 which is estimated at Rs.2082 as
against Rs.1910 in 1987-88 indicating a growth rate of 9 per cent.
At current prices the per capita income in 1988-89 is estimated at
Rs.3835 showing an increase of 16.7 per cent over 1987-88 figure of
Rs.3286.
The wholesale price index of agriculture commodities has also been
showing variations. 1989 witnessed a remarkable down swing in
contrast to the last few years. The index decreased by 59 points,
from 962.9 in 1988 to 904 in 1989. The retail prices of essential
commodities showed a mixed trend during 1989. The average consumer
price index for the selected centres of Kerala in 1989 was 412
compared to 395 in 1988.
Eventhough the whole sale price index of agricultural commodities
showed a declining trend, the wage rate of both skilled and
unskilled labourers has been on the increase. However, if the
performance of Kerala's economy is measured in terms of the
happiness of the people, it should be concluded that the state is
comparatively ahead of other states.
Kerala is the only state in India where the system of rationing of
essential food items is enforced throughout the state. The system
has the following unique features.
1. It covers virtually all the households in the state.
2. There is a wide net-work of retail outlets providing easy access
to card holders.
3. It provides assured supply of essential commodities at notified
prices.
Kerala has made much more progress in land reforms than any other
state in India, so that there is a basic equality in agrarian
relations. Wages in the urban and rural areas in Kerala are
regulated by legislation and what is equally important, the
inforcement machinery is not only governmental but the trade union
organisations of agricultural and non-agricultural workers.
Kerala is the only state which has registered a declining
birth-rate, with economic and social motivating factors operating
behind this much sought after goal of the entire country. Likewise,
the education system in the state at the primary level operates with
a much lower rate of drop-outs than is characteristic of the system
in other states and in the country as a whole. Perhaps more
encouraging is the general health standards maintained by the state.
The standards achieved by Kerala in this regard are comparable to
those of some of the developed countries, as reflected in the
achievements in respect of death rate and infant-mortality rate. The
health facilities have been so planned and distributed that they are
available to even the rural people more adequately than in other
states.
INDUSTRIES AND MANUFACTURE
Kerala was relatively backward in industry. Yet the situation
has been changing for the better in the last three decades of the
twentieth century not only in the public and co-operative sectors
but also in the private sector. The industrial scenario as it now
emerges, presents a mixed trend. When several industries registered
an upward trend, several others plummeted a downward trend.
Currently (as per data available in 1988) Kerala has been witnessing
remarkable improvement in its industrial climate. There was for
instance considerable fall in the number of industrial disputes and
loss of mandays. Another noteworthy characteristic associated with
small scale industries was their impressive growth and the declining
incidence of sick units. The index of industrial production evinced
marginal improvement during 1987-88 over that of the previous year.
There was 2.5 per cent increase in industrial production during
1987-88, when the index of industrial production increased from
170.95 in 1986-87 to 175.19 in 1987-88. Likewise, there was increase
in industrial production in the sub groups of manufacture of food
products, cotton textiles, wood and wood products, paper and paper
products, rubber, plastics, petroleum and coal products, chemical
and chemical products, non-metallic mineral products etc. Food
products increased by 5.1 per cent and cotton textiles by 9.2 per
cent during 1987-88 over the previous year's performance.
Manufacture of paper and paper products increased substantially by
33.7 per cent, chemical and chemical products by 7.5 per cent and
non-metallic minerals products but 13.5 per cent during the year.
The important industrial products, the production of which declined
during 1987-88 over that of the previous year were wool, silk and
synthetic fibre textiles (36.9 per cent), textile products including
wearing apparel other than foot-wear (37.5 per cent), metal products
and parts except machinery and transport equipment (37.8 per cent),
transport equipment and parts (25 per cent) and electricity (12 per
cent).
The total number of working factories in Kerala was 12,483 (1988),
which was 4.2 per cent more than that of the previous year.
Similarly the total number of workers also increased from 2,99,761
in 1987 to 3,10,412 in 1988, registering a growth of 3.6 per cent
over the previous year. It was the cashew industry that offered the
maximum employment opportunities. The factories engaged in the
general engineering, manufacture of cotton textiles, chemical
products, rubber products, tiles and automobile repairing were the
other major employers in the factory sector of the state in 1988.
JOINT STOCK COMPANIES IN KERALA
In Kerala, there were 3634 joint stock companies as on
31-3-1989, consisting of 651 public limited and 2983 private limited
companies. A total number of 326 companies were newly registered in
the state during 1988-89. Of these, 297 were private limited and 29
were public limited. On the other hand, eleven companies including
seven private and four public limited companies were wound up while
17 companies were struck off for various reasons. The net addition
to the total number of companies during 1988-89, was 298 comprising
274 private and 24 public limited companies. During this period, a
new company, viz. "Kerala State Horticultural Products Development
Corporation Limited" was registered as a fully owned government
undertaking of the state government. The total number of government
companies has thus increased to 98 by the end of March, 1989 from 97
in March, 1988.
INDUSTRIAL PROMOTIONAL AGENCIES
Kerala State Industrial Development Corporation Limited
This corporation which is the premier agency engaged in the
promotion of large and medium industries in the state, sanctioned
financial assistance aggregating Rs. 2459. 41 lakh during 1988-89 by
way of share capital, loan and guarantees to various industries in
the state. Disbursement of financial assistance amounted to
Rs.1334.89 lakhs during this period. The Corporation got sanctioned
Rs. 1005.69 lakhs from the IDBI as refinance loan and Rs.31.63 lakh
as seed capital assistance for the projects assisted by the
Corporation.
During 1988-89, eight projects involving a total cost of Rs. 14.24
crore and having direct employment potential of 1047 were
commissioned with the assistance of this Corporation. They were the
Deepthi Diamond Industries Ltd., Trichur, Salar Solvent, Extractions
Ltd., Palghat and BPL Sanyo Technologies Limited, Palghat in the
joint sector, Silver Foam India Limited, Trivandrum, Accelerated
Freeze Drying Co. Ltd., Emakulam in the Private Sector and the
diversification project of the Astral Watches Limited, one of the
subsidiary companies of this Corporation. As many as 21 projects
costing Rs.29.22 crore were taken up with the assistance of this
Corporation for implementation during this period. These projects
would employ about 1400 persons on completion. Besides, a total
number of 39 projects costing Rs.65.30 crores and having employment
potential of more than 3000 persons were under various stages of
implementaiton during 1988-89. Thirteen projects involving an
estimated cost of Rs.20 crore were under various stages of
implementation during 1988-89. Thirteen projects involving an
estimated cost of Rs.20 crore were under vart-ous stages of
finalisation.
Kerala State Electronics Development Corporation Limited
The Corporation, incorporated in 1972 with the major objective of
promoting an integrated and self reliant electronic industry in the
State in manufacturing a wide range of products including consumer
electronics and professional grade electronic items covering control
and instrumentation system through nine manufacturing divisions of
its own. Besides, the Corporation has promoted eight subsidiary
companies and five joint sector units in the state. Certain women's
co-operatives sponsored by the Corporation are now engaged in the
assembly of radios and tape recorders, in various districts.
Kerala State Industrial Enterprises Limited
The Kerala State Industrial Enterprises had seven government owned
companies under its management during 1988-89. They were the Kerala
Soaps and Oils Limited, Kerala Electrical and Allied Engineering
Company Limited, Kerala State Drugs and Pharmaceuticals Limited,
Kerala State Detdrgents and Chemicals Limited, Travancore Plywood
Industries Limited, Kerala Ceramics Limited and the Kerala State
Salicylates and Chemicals Limited. Among these, the Kerala State
Salicylates and Chemicals Limited has not started commercial
production so far. The value of production and sales turnover of the
six other companies have shown overall improvement during 1988-89 as
compared to those in the previous year. The total value of goods
manufactured by these companies during 1988-89 amounted to Rs.4175
lakh as against Rs. 3037 lakhs in 1987-88. Their total salels
turnover also increased to Rs.3971 lakhs from Rs.2978 lakhs during
this period. The Kerala Electrical and Allied Engineering Co.
Limited was the only company in the 'KSIE Group' which earned profit
during 1988-89. All otheres were running on loss during this period.
The total loss incurred by these five companies amounted to
Rs.732.89 lakh.
The main reasons for the poor working results of the subsidiary
companies are attributed to lack of adequate working capital,
scarcity of essential raw materials, technological obsolescence,
marketing constraints and hike in material cost. The efforts made by
the Holding Company to mobilise funds for replashment of cash loss
of its subsidiaries did not succeed as the banks and financial
institutions were reluctant to provide working capital due to the
poor performance of these companies. The inability of some of these
units eg. The Kerala Soaps and Oils Limited in exploiting the price
advantage in the purchase of raw materials has affected their
profitability advarsely. In the case of Kerala State Drugs and
Pharmaceuticals Limited, undue delay in the realisation of dues
outstanding from the state government has resulted in the blocking
up of working funds to the extent of Rs. 350 lakh. The major reasons
for the poor performance of the Travancore Plywood Industries
include underutili-sation of capacity and non availability of
timber. The company has already taken up with the government the
question of allotment of rubber, wood and cheaper varieties of
timber from the Plantation Corporation of Kerala.
The KSIE has drawn up rehabili-ation packages for all the subsidiary
companies which are incurring heavy cash losses. They are in
different stages of implementation. The basic feature of all these
rehabilitation schemes consist of concessions from financial
institutions, replenishment of margin money by the promoters,
sharing of capital expenditure and infusion of need based working
capital by commercial banks. All the subsidiaries are expected to
turn round the corner within a period of five to seven years,
provided to rehabilitation schemes drawn up for them are implemented
expeditiously and efficiently.
The Air Cargo operation of the KSIE were substatially higher during
1988-89. The cargo complexes at Trivan-drum and Cochin handled 6638
MT of cargo as against 5427 MT in 87-88. The C & F value of Cargo
exported during 1988-89 works out to Rs.2175 lakh. The earnings of
the company through these operations amounted to Rs. 67.18 lakhs
compared to Rs.63.90 lakh in 1987-88. But the value of goods
disposed off through the sales emporium run by the Company at Trivan-drum
declined to Rs. 14.31 lakh in the previous year. This was mainly due
to reduced supply of products by the subsidiary companies for
disposal. The operations of the company ' during 1988-89 resulted in
a net profit of Rs. 22,872 as against Rs.36,128 in 1987-88.
Kerala State Textile Corporation Ltd.,
The Corporation had the following units under its fold during
1988-89 :
1) Malabar Spinning and Weaving Mills, Calicut.
2) Kottayam Textiles, Ettumanoor.
3) Prabhuram Mills, Chengannoor.
4) Edarikode Textiles, Malappu-ram.
5) Kelnit Division, Trivandrum.
6) Plastic Tape Unit, Trivandrum.
7) Central Testing Laboratory, Trivandrum.
8) Yarn Banks at Cannanore and Trivandrum.
The first three units, mentioned above, the management of which was
vested with this corporation as per the Kerala Sick Textiles
Undertakings (Acquisition and Transfer of undertakings) Act of 1985,
could not attain the rated capacity utilisation and productivity
comparable to industry norms. The heavy underutilisation of
installed capacity, poor quality of yarn produced, low productivity
of labour and machinery etc. have contributed to the poor working
results of these mills in 1988-89. The Edarikode Textiles is a new
unit where the normal levels of capacity utilisation and
productivity are yet to be achieved. The Kelnit Division and Plastic
Tape Unit have not so far been able to attain normal levels of
productivity due to poor demand for the products. Profitable working
of the Corporation thus depends upon redeeming the units under its
management from their industrial sickness. Therefore the Corporation
has drawn up modernisation schemes for the free sick textile mills
under its management with a view to retriving them from chronic
sickness. The scheme for the Kottayam Textiles and Prabhuram Mills
are in an advanced stage of implementation. The IDBI has completed
the appraisal of the modernisation scheme prepared for the Malabar
Spinning and Weaving Mills.
The total value of yarn and cloth produced by the Mills under the
management of the Corporation during 1988-89 amounted to Rs.963 lakh
as against Rs.572.09 lakh in the previous year. These mills incurred
loss of Rs. 182 lakhs in 1988-89. The working of the Corporation is
expected to result in a net loss of Rs.203.57 lakh.
Kerala State Industrial Products Trading Corporation Limited
The corporation was formed in 1976 in pursuance of the
recommendations of the Resource Mobilisation Policy Committee
appointed by the state government. The objective of the Corporation
is trading of the products of government companies and industrial
concerns for augmenting the revenue of the State through collection
of multipoint sales tax in the place of single point sales tax
levied on the sale of products outside the state. During 1988-89,
the Corporation sold the products of the Travancore Titanium
Products Ltd. and Travancore Cements Ltd. The total sales during
this period amounted to Rs.51.43 crores of which itanium dioxide
accounted for Rs. 50.27 crore and with cement for Rs.1.16 crore.
This Corporation earned a profit of Rs.11.30 lakhs after providing
Rs.12.58 lakhs for income tax. The Corporation paid Rs. 21.62 lakhs
as service charges and another amount of Rs. 4.09 lakhs as turnover
tax to the State Government during this period. The additional
revenue gained by the State by way of sales tax as a result of
canalisation of sales of monopoly products of Government companies
through the Corporation during 1988-89 is estimated at Rs.862.10
lakh. In addition to this, the Corporation collected and remitted a
sum of Rs. 193.69 lakh towards Central Sales Tax during 1988-89.
Government Owned Companies
There were 26 Government owned comapnies in the
manufacturing industries sector of Kerala as on 31-3-1989. Of these,
seven companies were under the fold of the Kerala State Industrial
Enterprises Limited (KSUE). The Kerala State Engineering Works
Limited was under orders of liquidation and the Foam Matings (India)
Limited under lock out. The steel and Industrial Forgings Limited
and the Autokast Limited were being managed by the Steel Industrials
Kerala Limited. Commercial production was not started in the two
com'-panies, viz., the Kerala Special Refractories Limited and the
Kerala Salicyl-ates and Chemicals Limited during 1988-89. However,
an attempt is made in the following paragraphs to analyse the
performance of these companies.
The total capital invested by 19 companies in this group has
increased to Rs.361.56 crore by the end of March, 1989 from
Rs.341.52 crore in March, 1988 registering a growth of 5.87 per cent
over the previous year. The Kerala Minerals and Metals Limited alone
accounted for 37.48 per cent of the total capital invested by these
companies in 1988-89. The total number of persons employed by these
companies has also increased from 9206 to 9576 during this period
showing a growth of 4.02 per cent.
The value of production and sales turnover of 17 companies in this
group have improved substantially during 1988-89 as compared to that
of the previous year. They manufactured goods worth Rs. 174.02 crore
during 1988-89. The Kerala Minerals and Metals Limited and Malabar
Cements Limited accounted for 58.19 per cent of the total value of
goods produced by these 17 companies in 1988-89. The total value of
production of these 17 companies registered a growth of 46.40 per
cent over the previous year's level of Rs.118,87 crore. Similarly
the sales turnover has increased to Rs.175.71 crore in 1987-88, a
growth rate of 28.72 per cent.
The Kerala Electrical and Allied Engineering Company Limited,
Malabar Cements Limited, Kerala Agro Machinery Corporation Limited
and Kerala Clays and Ceramic Products Limited were working on profit
during 1988-89. All other companies in this group were incurring
loss during this period. As mentioned earlier, the major reasons for
the poor perforamance of the subsidiary companies of KSIE Limited
were shortage of working capital and essential raw materials,
marketing constraints, obsolescence of machinery etc. The working of
the Steel Industries Kerala Limited was affected by low capacity
utilisation in their ship breaking units due to non-availability of
ships for breaking. However, the company could revive the operations
of the F6undry unit at Ottappalam and the General Engineering
Workship at Thuravoor which are showing steady progress. The
performace of the Steel and Industrial Forgings Limited was also
affected by shortage of raw materials and working capital during
1988-89.
Non availability of good quality raw sand from the existing mining
area continued to affect the operations of the minerals separation
plant of the Kerala Minerals and Metals Limited. The company could,
however, bring down the net loss to Rs.96.35 lakh in 1988-89 from
Rs.147.06 lakh in 1987-88. This was achieved through a higher
tunrover to the extent of 76 per cent over the previous year and an
increase of 34.8 per cent in the production of titanium dioxide
pigment during this period. In spite of the problems with regard to
availability of raw materials being confronted by it, the Mal-bar
Cements Limited could earn a profit of Rs.250 lakh during 1988-89.
The Sitarm Textiles limited have already scrapped their weaving
operations as suggested by the South India Textiles Research
Association who have conducted a study on the operations of this
unit. The company is getting the cloth woven through pow-erloom
centres in and around Trichur District. The company has produced
6.12 lakhs kg. of yarn during 1988-89 as compared to 3.37 lakhe kg.
of yarn in 1987-88. Though the value of production and sales
turnover of the Tri-vandrum Spinning Mills Limited have improved
during 1988-89, it could not earn profit during this period due to
various reasons. Problems like power failure and frequent repairs to
the outmoded machinery adversely affected the working of the
company. Moreover, the raw material cost was on teh higher side at
64 per cent against the standard of 55 per cent. The unremunerative
price for yarn produced has added to their unsatisfactory working
results.
Though the cost of production has gone up mainly due to the increase
in the material cost, the Kerala Agro Machinery Corporation could
earn a net profit of Rs.129.05 lakh during 1988-89 as against
Rs.99.19 lakh in the previous year. The capacity utilisation of this
company reached a level of 84.17 per cent in 1988.89 as against 70
per cent in the previous year. The company has been awarded, in
August, 1989, the second position among medium scale industries in
the Productivity Award Competition for the year 1987-88 conducted by
the Kerala State Productivity Council. The Scooters Kerala achieved
in all time high turnover of Rs. 66 lakh in 1988-89 against the
previous highest of Rs.39 lakh in 1986-87. The delay in the
realisation of dues from Government Departments has adversely
affected the working capital position of the company. However, it
could bring down its loss, through higher turnover. The
non-availability of raw material (timber species of rosewood and
teak) has badly affected the performance of the Kerala State Wood
Industries Limited.
Government Majority Companies
The state government was holding the majority shares
in the paid up capital of 22 manufacturing industrial undertakings
in 1988-89. They included ten subsidiary comapanies of three
Government owned corporations. The Kerala State Electronics
Development Corporation Limited was managing eight Government
majority companies viz. Keltron-Counters Limited, Keltron Electro
Ceramics Limited, Keltron Crystals Limited, Keltron Magnetics
Limited, Keltron Power Devices Limited, Keltron Resistors Limited,
Keltron Rectifiers Limited and Keltron Component Complex Limited.
The other two subsidiary companies are the Steel Complex Limited and
Sidkel Televisions Limited managed by the Kerala State Industrial
Development Corpo- . ration Limited and Kerala State Small
Industries Development Corporation respectively. However, an
analysis of the performance of this group of companies has been
attempted in the following paragraphs.
The total capital invested by the 22 companies in this group rose to
Rs.135.90 crore by the end of March 1989 registering a growth of
24.37 per : cent over the previous year's level of Rs.l09.27 crore.
The Transformers and Electricals Kerala and Traco Cable Company
accunted for over 50 per cent of the total capital invested by thsi
group as on 31-3-1989. The total number of persons employed by these
companies as on 31-3-1989 showed a marginal decrease over the
previous year's level. It has come down to 8710 in March 1989 from
8799 in the previous year. Both the value of production and sales
turnover of 20 companies, details mkiof which are available, have
improved during 1988-89 as compared to those in 1987-88. The value
of production increased to Rs.136.15 crore during 1988-89 from
Rs.l30.80 croe in 1987-88 registering a growth of 4.09 per cent over
the previous year. Similarly the sales turnover rose to Rs.l64.49
crore in 1988-89, marking a growth of 21.72 per cent over the
previous year's level of Rs.l 35.13 crore. The Transformers and
Electricals Kerala, Steel Complex, Tra-vancore Cochin Chemicals
Limited and Travancore Titanium Products whose sales income
increased substantially during 1988-89, shared more than 75 per cent
of the total turnover of the 20 companies in this group during the
year.
Among the twenty government majority companies ten companies, viz.,
the Keltron Counters, Ltmited,Keltrbn Electro Ceramics Ltd., Keltron
Crystals Limited, Keltron Magnetics Limited, Keltron Component
Complex Limited, Travancore Titanium Products Limited, Travancore
Cochin Chermicals Limited, Metal Industries Limited, Travancore
Sugars and Chemicals Limtied and Forest Industries (Travancore)
Limited were working on profit during 1988-89. The production
activities of some of the subsidiaries of the Kerala State
Electronics Development Corporation were badly affected by shortfall
in the supply of raw materials and components by the sub-contractors
and an-cilliary units, lack of dies and tools, glut in markets etc.
Total loss incurred by the three subsidiary companies of this
Corporation, viz., Keltron Power Devices Limited, Keltron Resistors
Limited and Keltron Rectifiers Limited during 1988-89 has been
estimated at Rs. 146.40 lakh.
The Travan'core Titanium products Limited has produced 10,702 MT of
titanium dioxide against the target of 11,000 MT during 1988-89, as
compared to 11,283 MT against a target of 10,000 MT in 1987-88. The
shortfall in production during the year was due to the accident that
took place in the factory premises in February, 1989 and
partial strike by a section of the employees from 10th March, 1989.
However, the company could earn a profit of Rs.l 185.13 lakh before
tax against Rs.902.32 lakh in 1987-88. The drastic powercut ranging
from 60 to 95 per cent and the erratic offtake of chlorine by the
major customers during the first four months of the financial year
1988-89 have affected adversely the operations of the Travan-core
Cochin Chemicals Limited. However, the company earned a profit of
Rs.256.12 lakh during the period, before tax, as compared to
Rs.182,43 lakh in 1987-88. The inadequacy of working capital and
increase in operation cost continued to affect the working of the
United Electrical Industries adversely during 1988-89. Raw
materials-shortage, power cut etc. have affected the profitability
of the Forest Industries (Travancore) Ltd during 1988-89. Though the
Steel complex Limited could achieve a higher level of production on
1988-89 compared to that in the previous years, its operational
results were not satisfactory in view of the disproporationate
increase in the cost of inputs particuarly that of steel scrap and
steep increase in the power tariff. The working of this company
during 1988-89 resulted in a net loss of Rs.170.88 lakh.
SUMMARY OF PERFORMANCE OF STATE PUBLIC SECTOR INDUSTRIAL
UNDERTAKINGS
Among the 38 state public sector industrial undertakings, the
working results of which are available for 1988-89, fifteen were
working on profit during this period. The total profit earned by
these fifteen companies amounted to Rs.20.97 crore. The major
contributors to this were the three units in the chemical industries
group viz. the Travancore Titanium Products Limited,Travancore
Cochin Chemicals Limited and Malabar Cements Limited, which together
earned a profit of Rs.16.92 crore during 1988.89. Five out of ten
units in the electronics industries group have earned profits during
this period. Twenty three companies incurred loss, during 1988-89,
amounting to Rs.26.74 crore. The total accumulated loss of 29
companies among these 38 units reported, stood at Rs.248,02 crore at
the end of March, 1989. The total paid up capital, investment in
terms of gross block and borrowings of these 38 companies have
increased during 1988-89 as compared to those in the previous year.
Five units in the chemical industries group accounted for more than
58 per cent of the total investment of these companies.
Certain public sector manufacturing have been incurring loss
continuously for the last few years. The Kerala Soaps and Oils
Limited, Kerala State Drugs and Pharmaceuticals Limited, Travancore
Plywood Industries Limited and the Kerala Ceramics Limited, the
subsidiaries of the Kerala State Industrial Enterprises Limited are
some of the companies which have incurred loss during 1988-89 also.
The details available, show that the accumulated loss of 23 state
public sector industrial units has exceeded their total paid up
capital by the end of March, 1989. The Total ac-cumulated loss of
there 23 companies amounted to Rs.245.67 crore as on 31-3-1989
against their total paid up capital of Rs.l05.28 crore on that date.
The Kearala Minerals and Metals Limited accounted for about 25 per
cent of the total accumulated loss of Rs.245.67 crore at the end of
March, 1989. The details of companies the accumulated loss of which
as at the end of March, 1989, exceeded their paid up capital.
Production loss in State Public Sector Industries
Problems related with power cut, shortage of raw materials and
absenteeism in certain state public sector industries during 1988-89
led to loss of employment and production. Eleven companies among
those reported, have lost employment amounting to 85,317 mandays
resulting in a loss of production estimated at Rs. 16.72 crore
durign this period. The total number of mandays lost by 14 companies
in this category in 1987-88 was 88,332. The production loss during
this period had been estimated at Rs.22.33 crore.
CENTRAL SECTOR INVESTMENT IN KERALA
The central sector industrial investment in terms of gross block in
the public sector in the state has increased to Rs.l307 crore by the
end of March, 1988 accounting for 1.59 per cent of the total Central
Sector investment of Rs.82,150 crore in the country. The state
received only 1.59 per cent of the total additional investment of
Rs.14,091 crore made by the central government during 1987-88. The
percentage share of the state in the central sector investment
remained around 1.6 per cent for the last three years. The declining
trend in the percentage share of the State in the central investment
has been noticed since 1974-75. It came down to 1.59 per cent in
March, 1988 over the past 13 years.
The state-wise distribution of the central sector investment in the
country as on 31-3-1988 shows that the States like Andhra Pradesh,
Gujarat, Madhya Pradesh, Maharashtra and Tamil Nadu had been
receiving the major chunk of this investment in past few years.
These states received a total amount of Rs.8181 crore during 1987-88
accounting for more than 59 per cent of the total investment made by
the central government in the industries sector in the country
during this period. The central investment in Uttar Pradesh was
Rs.2200 crore during 1987-88, while Kerala received only Rs.233
crores during this period.
Eighteen central public sector industrial undertakings including
five textile mills managed by National Textile Corporation were
functioning in Kerala during 1988-89 they were :
1) Cochin Refineries Limited, Cochin.
2) Cochin Shipyard Limited, Cochin.
4) Fertilisers and Chemicals, Tra-vancore Limited, Ernakulam.
5) Hindustan Newsprint Limited, Kottayam.
6) Indian Rare Earths Limited, Alwaye and Chavara.
7) Indian Telephone Industries Limited, Palghat.
8) Instrumentation Limited, Palghat.
9) Hindustan Insecticides Limited, Alwaye.
10) Modern Food Industries (India) Limited, Cochin.
11) H.M.T.Limited, Kalamassery, Cochin.
12) Balmer Lawrie & Company Limited A roor.
13) Hindustan Organic Chemicals Limited, Cochin.
Units Under National Textile Corporation.
14) Cannanore Spinning & Weaving Mills, Cannanore.
15) Vijayamohini Mills, Trivan-drum.
16) Parvathy Mills, Quilon.
18)' Kerala Lakshmi Mills, Trichur.
The details regarding their performance show that the 18 cental
sector concerns working in the state have provided regular
employment to more than 26000 persons during 1988-89. The major
employer in this group was the Fertilisers and Chemicals Travan-core
Limited which employed 8483 persons during this period. According to
the details available, four companies, out of the above, lost 61,986
mandays during 1988-89 due to various reasons such as lock out,
power-cut, absenteeism etc. The loss of production on account of
this has been estimated at Rs.4.26 crore.
INDUSTRIAL DISPUTES
According to the provisional data furnished by the Department of
Economics and Statistics, there were 67 industrial disputes in the
state during 1988 as compared to 98 disputes each in 1986 and 1987.
The number of workers affected by these, has also decreased during
1988, to 23,037 in 1988 from 40,119 in 1987 and 1,32,912 in 1986.
Similarly, the number of mandays lost on account of this came down
to 13.57 lakhs in 1988 from 20.01 lakhs in 1986.
SMALL SCALE INDUSTRIES
The total number of small scale industrial units in the state at the
end of 1988-89 was 55,427. Aggregate investment made by all these
units works out to Rs.659.59 crore, while the value of goods and
services produced is estimated to be of the order of Rs.1723.78
crore. It is also estimated that these small scale units provide
employment to 3.66 lakhs persons. In the smalls scale sector it is
seen that the average value of goods and services produced per unit
per annum Rs.3.11 lakhs and the average employment provided by one
unit 6.61 persons.
The spatial distribution of small scale industrial units in the
state reveals that Ernakulam district stands first with 13.61% of
the total number of units, followed by Trichur (10.91%), Trivandrum
(10.13%), and Cannanore (10.03%). These four districts account for
about 45% of the total number of registered small scale units in the
state.
Of the total number of 55427 small scale units, 47,983 (86.57%) are
identified to be working properly and others ae either sick or
closed down. Palghat district has the highest percentage of working
units followed by Quilon,Kozhikode and Alleppey. It is seen that
Trivandrum District has the lowest percentage of working units, as
about one fifth of the units started in the district are district
are sick or closed.
The Small Industries Development Corporation (SIDCO) is set up to
pro-' mote small scale industries in the state. Procurement and
distribution of scarce raw materials, development and administration
of industrial estates, management of production units and services
centres, marketing of small scale industrial products, etc. are the
major activities undertaken by the Corporation. The total turnover
of the Corporation during 1988-89 was Rs.2200.42 lakh as against
Rs.1800.07 lakh in the previous year, registering an increase of 22
per cent. However, the net loss incurred by the Corporation during
1988-89 increased to Rs.78.79 lakh from Rs.71.64 lakh during
1987-88.
The major items of raw materials distributed to small scale units
include-iron and steel, coal, coke, paraffin wax, titanium dioxiude.
IPCL products etc. The quantity of the above items handled during
1988-89 was 13480 tonnes as against 17606 tonnes during the previous
year. Though there was a decline of 23 per cent in terms of
quantity, the value of raw materials has gone up from Rs. 1605.00
lakh in 1987-88 to Rs.2061.00 Lakh in 1988-89, registering an
increase of 28 percent. This was mainly because of rise in unit cost
of iron and steel and increase in the quantity, of materials
distributed for bus body building. During the year, 2936 small scale
industrial units have been assisted in procurement of raw material,
whereas the number of assisted units in the previous year was 2865.
Import of foreign timber and distribution of automobile spare parts
were the two new activities taken up by the Corporation. The results
of these activities were not encouraging. The results of these
activities were not encouraging. The marketing of iron and steel is
one of the major items which cause; substantial loss to the
Corporation due to non-revision of rebate and increase
intransportation, handling and administrative expenses. But
marketing of other items such as paraffin wax, titanium dioxide and
IPCL products fetch the normal return as the selling prices are
determined keeping in view the costs involved.
The formation of a consortium for bus body builiding was another
promotional activity taken up during 1987-88. 17 small scale
industrial units including two units of the Corporation are members
of the consortium. It was able to build bus body for 161 chasis
during 1988-89, whereas, the achievement during the initial year was
96. The employment generated through the scheme is estimated to be
48,300 mandays. Besides, an amount of Rs. 61.81 lakh has been
realised by way of sales tax, puchase tax, excise duty etc. Over and
above this a substantial amount has been received by th Corporation
as service charge for chasis allotted to bus body building units
other than the units managed by the Corporation.
There are 12 production units under the management of the
Corporation. The units are engaged in the manufacture of different
goods such as tiles, survey instruments, wooden furniture, dies,
moulds, ceiling fans and bus body building ans stitching of uniforms
for defence personnel.
An analysis of the working details of the units reveals that the
annual fixed costs works out to 132 per cent of the fixed assets.
Altogehther 726 personnel comprising 552 workers and 144 staff
members are working in the units. In other words the ratio of staff
to workers works out to 1:4. This shows' that the proportion of
staff in these units is very much on the high side and seems to be
one of the major reasons or perhaps the single reaosn for the
persistent loss sustained by the Corporation. The average investment
per worker is above Rs.17,000 whereas the turnover is bout Rs.
42,000. Almost all the units, exr cept the wood workshop at Calicut,
were running on loss. The net loss incurred per worker per annum is
estimated at Rs.10,000 The total loss of all the units during
1988-89 was Rs. 56.60 lakh which constitutes about 72 per cent of
the net loss of the Corporation. Out of the various units, only the
wood workshop at Calicut has attained the break even point of
production. Use of obsolete and outdated machinery and equipment,
inadequacy of sufficient orders, lack of liaison between the
production units and consumer agencies, lack of modernisation and
diversification of production lines etc. are the reasons attributed
for the loss. Over and above the overhead expenditure of the units
are on the high side. In short absence of efficient management is
the cause of the loss sustained by these production units.
The value of all small scale products marketed through the emporia
operated by the Corporation has increased from Rs.66.79 lakh in
1987-88 to Rs.97.89 lakh in 1988-89. However, the number of small
scale industrial units benefited by the programme was only 30, which
seems to be meagre by considering the total number of units in the
state.
17 Major industrial estates and 36 mini industrial estates were also
functioning under the management of the Corporation. Altogether 924
work-sheds ard available in the estates, of which 16 were lying
vacant during 1988-89. Among 652 small scale industrial units
accommodated in the estates 89 units (13.65 per cent) were closed
for various reasons.
The Small Industries Service Insitute, Trichur, is the field agency
of Small Industries. Development organisation, Government of India.
The institute provide technical and managerial services to small
scale enter-preneurs in the state. It undertakes promotional and
developmental activities of small scale industries, through the main
office and the extension centres at Alleppey, Shoranur, Calicut and
footwear service centre, central workshop and fruit preservation
training centre at Trichur. The institute and its extension centres
provide a wide range of technical consultancy services and organize
techno-economic surveys, prospect and feasibility studies, market
surveys etc,. Besides, programmes such as industrial manage-ment and
training, entrepreneurship development training etc. are also
arranged by the institute.
The Directorate of Production Centre at Ettumanoor is another agency
of the small Industries Development Organization. It has sub-centres
at Ettumanoor, Attingal, Thiruvalla and Muvattupuzha. These centrec
provide technical training in the fields of mechanic and hand tools,
electric motors, aluminium and stainless steel utensils, tin cans
and tin printing etc. Besides, the field testing laboratory at
Changanacherry fulfils the testing requirements of small scale units
in rubber based industries.
KERALA FINANCIAL CORPORATION
The Kerala Financial Corporation is a public sector financial
institution which provides long term loans to small and medium scale
industries in the state. The loan disbursed by the Corporation as at
the end of March 1989 aggregated to Rs.21166.82 lakh, for 9192
beneficiaries.
The industrially backward areas in the state consist of eight
district, namely, Idukki, Wayanad, (Category A), Alleppey,
Malappuram, Cannan-ore, Kasaragod (Category B.) Trivan-drum and
Trichur (Category C). Top priority has been given by the Corporation
both in sanction and disbursement of loans for industrial units
started in the above districts. Of the total amount of Rs.6676.33
lakh sanctioned for 1556 units during 1988-89, an amount of
Rs.2779.34 lakh (42 percent) for 745 units (48 per cent) was
sanctioned to industrial units in backward districts. Against the
disbursement of Rs.4147.44 lakh for 1223 units, an amount of
Rs.1889.40 lakh (46 per cent) was given for 603 units (49 per-'cent)
in the backward areas. Since its inception, the Corporation had
sanctioned 4574 loan applications (46 percent ) amounting to Rs.
13966.98 lakh (49 per cent) to industrially backward areas. The
disbursement comes to Rs.l 0597.53 lakh (50 per cent) bene-fitting
4156 units (45 per centt).
The major share of loan assistance by th Corporation during 1988-89
as in the previous years has gone to the small scale sector. The
amount of effective sanction to the sector during the year works out
to Rs.4060.75 lakh (62 per cent), for 9,20 small scale units (61 per
cent) as against the total effective sanction of Rs.6549.27 lakh for
1519 units. Likewise the amount disbursed to the sector durign the
year was Rs.2885.62 lakh (70 per cent) for 734 small scale units (60
percent) whereas the aggregate disbursement was Rs.4147.44 lakh for
a total number of 1223 units. The cumulative amount of loan
sanctioned (net) since the beginning to small scale industries was
Rs.l9980.84 lakh at the end of March 1989, as against the total
sanction of Rs.27991.22 lakh to all units. The disbursement of loans
to small-scale industries amounted to Rs.16064.89 lakhs put of the
total dis-buresment of Rs. 21166.82 lakhs. This means 71 per cent of
the amount sanctioned and 76 per cent of the total amount disbursed
since the beginning was to small scale industries.
In order to provide relief to beneficiaries the Corporation made a
major change in the lending rate structure with effect from January
1, 1989. According to the practice followed earlier, gross rate of
interest was charged for the outstading amount of loan, with a
rebate for prompt repayment. As a result, those who promptly repaid
used to get charged at the effective rate while the defaulters used
to be charged at gross rate on the balance outstanding. As per the
changed structure, only effective rate on the balance of loan
outstanding is payable by all the parties. However, in the case of
defaulters an additional interest of 2 per cent, over the effective
rate on the defaulted amount on compounded basis have to be paid.
The scheme such as concessional rate of interest at 2.5 per cent for
loans availed of by Scheduled Caste and Scheduled Tribe
entrepreneurs for starting new industrial units and interest subsidy
at the rate of 3.5 per cent for units with loans below Rs.5 lakh,
and those who are prompt in repayment, continued during the year.
The Corporation continued its efforts to collect the overdues. The
total arrears amounted to Rs.9152 lakh including an amount of
Rs.4907 lakh that fell due during the year under review. An amount
of Rs.2501 lakh was realised as arrears during 1988-89 as against
the collection of Rs.l760 lakh during the previous year. The total
amount of arrears at the end of the year was Rs.6651 lakh which
constituted about 32 per cent of the loan disbursed by the end of
March, 1989.
The paid up share capital of the Corporation rose to Rs. 1860.415
lakh at the end of March, 1989, registering an increase of 27 per
cent over that at the end of the previous year. 49.34 per cent each
of the share value of the Corporation is held by the state
government and the Industrial Development Bank of India, while the
remaining 1.32 per cent is owned by scheduled banks, insurance
companies etc.
Kerala Industrial Technical Consultancy Organisation
The Kerala Industrial and Technical Consultancy Organization (KITCO)
is a professional body set by the Industrial Development Bank of
India, for promoting large, medium and small scale industries. The
turn over of the organisation during 1988-89 was Rs.23.14 lakh, as
against Rs.37.14 lakh in 1987-88. The operations of the Organisation
include preparation of project reports, appraisal reports,
rehabilitation and diagnostic studies, monitoring of project
implementation, modernisation of industries, engineering and other
consultancy services.
During the period under review, the Organisation completed 117
project reports involving a total investment of Rs. 10.37 crore,
prepared 7 appraisal reports involving a total investment of Rs.2.42
crore and employment potential of 150 persons, carried out 7
rehabilitation and diagnostic studies, conducted a study for
modernisation of rubber industry of Kottayam, prepared detailed
project profiles for Kerala State Industrial Development Corporation
for setting up 12 medium and small scale rubber based industrial
units, completed a technology profile study, started a utilisation
study of the units assisted by banks and refinanced by National Bank
for Agriculture and Rural Development, arranged market surveys on
ribbon and tapes, microwave ovens etc. Besides, the consultancy
services on engineering, electrical and construction works
undertaken by the organisation for agencies such as Hindustan Latex,
Marine Products Export Development Authority, Air India, Kerala
State Cooperative Coir Marketing Federation and Kerala State Coir
Coporation were in progress as planned. In addition, the
Organisation completed 15 entrepreneurship development programmes
and 6 programmes were in progress. These programmes were sponsored
by the Department of Industries and Commerce, Industrial Development
Bank of India, Kerala Financial Corporation etc.
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