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Statement Of The Problem Essay Sample

Statement Of The Problem Pages
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With Micro (Tiny) businesses traditionally known as Village and Cottage industries as their counter part, Indian SMEs have ancient heritage. But many Handloom SME’s are facing the problems of competition from power loom and mill sector, Unskilled Labour, lack of finance etc., This paper attempts to explore the reasons of high cost of silk sarees manufactured by Small and Medium Enterprises. Certain innovative measures are suggested to reduce the cost of manufacturing a silk saree. Thus, the present study is appropriately titled as “Cost reduction innovation in SME’s – An empherical study, (With reference to Handloom silk sarees in chikballapur district)”.

SCOPE OF THE STUDY
The scope of this study is confined to Thimmasandra, Konappalli, Chokkahalli, and Nernakallu clusters of Chintamani Taluk (chikkaballapur district), Karnataka. Further, the study includes an in-depth analysis of cost of handloom silk saree manufactured by small and medium enterprises in chintamani taluk of chikkaballapur district.

OBJECTIVES OF THE STUDY
1. To Study the reasons for increase in cost of the Handloom silk sarees.
2. To offer suggestions for cost reduction.

RESEARCH METHODOLOGY
The necessary data for preparing this article is collected from both primary as well as secondary sources. The primary data has been collected from the weavers of handloom silk sarees by using pre-tested structured schedules and also through face to face interviews. The secondary data is collected from various books, journals, magazines, Newspapers, websites etc. The data are analyzed by using simple statistical measures like percentages and diagrams.

SAMPLING
Judgment sampling method has been used for data collection. 150 handloom silk saree weavers have been selected in Thimmasandra, Konappalli, Chokkahalli, and Nernakallu clusters of Chintamani Taluk

FINDINGS
It is found that 96% weavers are male weaving silk sarees and the other female members and children of the weaver family are supporting with allied activities of handloom.
55% weavers are illiterates and 45.33% weavers are having primary education. It is found that the handloom weavers are busy with the activities of handloom weaving and other allied activities to continue with their profession. In the study it is also identified that the cost of raw silk yarn and zari, labour, capital, process cost and marketing cost is very high. The financial sources for majority of the weavers are local money lenders with high rate of interest. The banks and financial institutions are not interested to lend loans to weavers, as they think that they may not return due to low profits or no profits during some seasons.

Due to lack of finance, the weavers are getting raw materials from a master weaver to avoid the investment in stock. Majority of the weavers are not aware of many benefits and schemes offered by the government to the handloom weavers. Only few of them are covered under the co-operative sector and getting some of the welfare benefits. As many schemes are not available to the weavers who are out side the organized sector. And also only the weavers of co-operative sector are enjoying the benefit of participating in trade fairs and exhibitions, general insurance, medical benefits, work shed schemes etc,

Majority (70%) of the respondents are private independent weavers. They are weavers from many years. Handloom silk saree weaving is their born profession. They do not know any other work or profession.

There is no institute to provide training to the weavers. Weavers are following traditional methods of weaving. Therefore, the cost of saree is high as the process of weaving is slow and number of sarees woven is less. Majority of the weavers are aware of new technology through newspapers, Television, friends and relatives. But they are unable to introduce the new technology because of shortage of capital, financial assistance etc., Majority (90%) of the respondents are depending on middlemen for marketing the sarees. The middlemen commission occupies major share of returns and thus reduces profit of weavers.

Majority of the weavers are labour weavers. But they were independent master weavers earlier, they became labour weavers to get raw materials, wages and continuous employment from few master weavers as the cost goes on increasing continuously. Some of the respondents are using the mixture of silk with cotton in its saree production to reduce the cost. The saree called “gadwall saree” of Andhra Pradesh where the entire warp, design part and the palloo part consist of pure silk and the remaining part of wept is woven by cotton. It can be noted that the cost has steadily risen in all respects.

The cost of raw silk yarn has been increased by 81.81% in 2011 compared to 2001. The cost of zari has been increased by 150%, wage rate is increased by 83.33%, the dyeing cost increased by 66.67%, the process cost increased by 200%, other cost increased by 73.33%. The total cost increased by 98.65% in 2011 when compared to 2001 But, the selling price has not increased proportionately. The Handloom weavers are expecting a separate handloom textile policy rather than announcing few benefits and schemes from the government. SUGGESTIONS

1. At present the government is providing many facilities to the weavers of organized sector only. Apart from these it is suggested that the government has to provide financial assistance to the handloom weavers irrespective of sectoral differences.

2. To reduce the cost of a saree, the technological changes are of immense need. The present study says that no technology is used by most of the weavers. Only when they are financially strengthened, they can afford the technology in their process. The weavers are ready to introduce the new technology. But, they need financial assistance for purchasing technology. By the help of modern technology in the process of weaving they can produce more number of sarees for given period. Then automatically the cost per saree reduces.

3. As far as competition is concerned, the powerloom is the most dominating sector in textile field to throw competition to handloom sector. The powerlooms produces more number of sarees in given period, use high technology, produce modern designs with less cost. The same should be checked by the government with certain policies like implementation of handlooms (reservation of articles of production) Act 1985.

4. It is suggested that the market for handloom silk sarees should be extended from local markets to national and international markets to increase demand parallel to cheap fabrics. Another suggestion is that the direct marketing can reduce the cost of saree to the extent of middlemen commission. Then the cost of a saree can be reduced with the increased profits. The development of marketing skills through training can be advised.

5. State and Central Government has to establish the raw material depots to supply raw silk yarn, zari and other raw materials at reasonable and stable prices continuously and providing continuous employment is suggested by bringing all the handloom weavers under organized sector. Then it is possible to produce saree at low cost at all the times.

6. The government has to establish information centers to provide information to the weavers about demand, supply, and prices, at national and international levels. The handloom weavers are to be given monetary incentive (encouragement money) to encourage the weavers it is provided to milk producers and some farmers in Karnataka.

CONCLUSION
“Industrialise or perish” is the slogan of the day. The role played by micro, small and medium enterprises is significant in over all growth of the economy. The enterprises acts as a nursery for the development of entrepreneurial talent and has been contributing significantly to the State as well as district’s gross domestic products, besides, meeting the social objectives.

Thus, there is a future for handloom sector in India even the living and working conditions for handloom weavers is likely to decline. However, one needs active government support for Handloom sector.

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