SSI units trip on Northern fault

 While small-scale units typically blame inadequate marketing and finance for their decline, a more important reason is location.

 For, while an All-India Management Association (AIMA) survey shows a 5.2 per cent fall in sales growth of SSI units in 1998-2002, this was primarily concentrated in north India where sales declined 18.6 per cent. By contrast, SSI sales in south India grew 25.8 per cent.

 A parallel survey by the Confederation of Indian Industry (CII), of primarily non-SSI units, shows a fairly dramatic decline in the economy of northern states in the last decade.

 While the average GDP growth for both southern and northern states was 6 per cent a year in the pre-liberalisation decade of the 1980s, post-reforms growth in the north fell to 5 per cent in 1993-99 while it went up to 7.2 in the south.

 With overall growth falling, it is natural that demand for, and therefore supply of, sales by SSI units would go the same way in north India.

 While units in north India, according to the CII survey, are hamstrung by rigid labour laws