CHAPTER 6

REGION- WISE ASSISTANCE B Y SIDBI

-AN ANALYSIS
 CHAPTER 6
6.1 Region-wise Assistance by SIDBI - An Analysis

In our Five Year Plans, industrial policies, and annual plans special emphasis

is laid on the regional development, equal distribution of income and resources,

rural/urban migration and employment. To meet these challenges the small scale

industrial sector can prove to be a panacea. But before this, the small scale sector

needs problem-free environment, where it can work properly. It needs financial,

promotional and developmental support. To cater to the requirements of this sector

SIDBI has been working as a nodal agency. So it becomes imperative to know how

much of assistance has been provided to small scale industries in different regions and

with-in those regions in which state and union territories availed maximum assistance

from the bank. In this chapter an attempt has been made to assess the same. For this,

data from 1990 to 2001 has been compiled and analysed. Besides this SSI per unit

disbursement to State/UT, CGR in disbursement during the same period and trends in

sanction and disbursement has also been analysed. To study the region-wise

assistance, the States/Union territory has been divided in to five different regions.

6.1.1 Eastern Region

To fulfill the financial requirement of this region the bank sanctioned and

disbursed Rs. 3829.9 crores and Rs.2908.06 crores respectively during the period

1990 to 2001. This was 7.4 percent and 7.6 percent respecfively of the total sanction

and disbursement to all states and union territories. West Bengal has highest share in

sanction and disbursement in this region followed by Orissa, Bihar, Sikkim and A &

N Island. West Bengal has 53.1 percent and 50.4 percent share in sanction and

141
disbursement respectively in that period. However, the share of West Bengal in Grand

total was 3.9 percent and 3.8 percent respectively in sanction and disbursement.

Percent Share in Sanction and Disbursement from the Total Assistance

to Eastern Region(1990-2001)

A&Nislandg

West Bengal

Sikkim

^^flood ^^^fjggjg^^^g • gjjj

Bihar C ^

0 20 40 60 80 100 120

• sanction • disbursement

higure 6 1 Source - IDBI report on development banking (1991-99) and SIDBI Development Report 2001

In states like Orissa, Bihar. Sikkim and A & N Island it was 2.2, 1.3, 0.04 and

0 01 percent respectively in sanction and 2.2, 1.5, 0.05 and 0.001 percent respectively

in disbursement. If we see the utilization ratio in this region it was good in case of A

& N Island, Sikkim and Bihar (appendix 6.1). In case of West Bengal and Orissa it

was below 76 percent.

6.1.2 North Eastern Region

In the North Eastern region the total amount sanctioned and disbursed were

Rs. 280.29 crores and Rs. 244 04 crores respectively during the period 1990 to 2001.

It was 0.5 percent and 0.6 percent respectively of the total amount sanctioned and

disbursed to all states/union territories. Assam has got the maximum assistance.

Assam got 48.3 percent and 46 2 percent respectively of sub total (appendix 6.2). The

least support was given to Mizoram, Arunachal Pradesh, and Nagaland. Put together.

142
these availed nearly 14 percent of SIDBI assistance to this region. Manipur,

Meghalaya and Tripura have got more than 10 percent individually of sub total.

P e r c e n t Share in Sanction and Disbursement f r o m t h e Total

Assistance to North Eastern R e g i o n (1990-2001)

Tripura C f**
CD
Nagaland g ^

Mizoram ^^M

Meghalaya glT! fi
^ "*
Manipur C P

Assam Z

A. P r a d e s h ^1

20 40 60 80 100
• sanction • disbursement

Tigure 6 2 Souicc IDBI report on development banking (1991-99) and SlDBl Development Report 2001

The utilization ratio was quite good in this region. Only in two states it was

below 90 percent. Overall utilization ratio in this region was 87.1 percent. However if

we see the overall assistance to this region it was less than 1 percent. This is very low.

6.1.3 Northern Region

To cater to the financial needs of SSI in this region, SIDBI sanctioned Rs.

14025.96 crores and disbursed Rs. 10263.95 crores during the period 1990 to 2001. It

was 27.2 percent and 26.7 percent respectively of the total sanction and disbursement

to all regions. Uttar Pradesh, Delhi and Haryana have got maximum assistance. Their

share from sub total were 23.3 percent, 20.8 percent and 20.5 percent in sanction and

25.2 percent. 20.2 percent, and 19.9 percent share in disbursement (Figure 6.3). These

stales have 17.5 percent and 17 4 percent share respectively in grand sanction and

disbursement. Least assistance was given to Jammu & Kashmir, Chandigarh, and

Himachal Pradesh respectively.

143
 Percent Share in Sanction and Disbursement from tlie Total
Assistance to North Eastern Region (1990-2001)

Tripura C x N
Nagaland tWt
IVIizoram f | 3 9
IVIeghalaya ^Z. P*
IVIanipur E |
Assam I^S
A. Pradesh ^

20 40 60 80 100
sanction • disbursement

Figure 6 3 Source IDBI report on development banking (1991 -99) and SIDBI Development Report 2001

These states/union territories have got below 1.6 percent of total assistance to

this region. Punjab and Rajasthan have got 13.9 percent and 15.9 percent share

respectively in sanction and 15.1 percent, 14.9 percent share respectively in

disbursement from the sub total. The utilization ratio in this region was not good.

Only in Jammu and Kashmir and Himachal Pradesh it was more than 80 percent.

Chandigarh was the worse in utilizing the sanctioned money. In the rest of the

states/union territories in this region utilization ratio was less than 80 percent

(appendix 6.3).

6.1.4 Western Region

To meet the financial requirement of SSI in this region, SIDBI sanctioned 33.7

percent and disbursed 33.3 percent of the total assistance to all regions during the

period 1990 to 2001. The total amount sanctioned and disbursed were Rs. 17393.7

crores and Rs. 12798.5 crores respectively to this region. Maharashtra was the highest

recipient of SIDBI assistance m this region. It got 47.8 percent of total sanction and

50.4 percent of total disbursement.

144
 Pe rcent Share in Sanction and Disbursement from the Total
Assisatar ice to Wlestern Region (1990-2001)

Daman & D i u | | 1
D&N h a v e l i l

Maharashtra
•
Madhya P.
„ CJ
Gujarat

Goa

0 20 40 60 80 100 120

B Sane. • DisbT]

I igurc 6 4 Source: IDBI report on development banking (1991-99) and SIDBl Development Report 2001

Gujarat followed Maharashtra by getting 37.4 percent share in sanction and

33.5 percent share in disbursement. It means that 85.2 percent of sanction and 83.9

percent of disbursement was given to these two states only. Daman & Diu, Dadra &

Nagar Haveli and Goa altogether got below 5 percent assistance. If we see the share

from the grand total Maharashtra and Gujarat have got 16.1 percent and 12.6 percent

share respectively in sanction and 16.8 percent and 11.1 percent share respectively in

disbursement (appendix 6.4). The utilization ratio in this region was below 80 percent

except in Goa and Madhya Pradesh where it was little above than 80 percent. In the

rest of the states and union territories it was below 75 percent. In Daman and Diu it

was even lower.

6.1.5 Southern Region

Sanction and disbursement in this region was Rs. 16037.91 crores and

Rs. 12250.46 crores respectively, which was 31.1 percent of total sanction and 31.8

percent of total disbursement 1 amil Nadu got the maximum share. It got 38.7 percent

145
and 37.6 percent share respectively of total sanction and disbursement to this region.

Karnataka, Andhra Pradesh and Kerala followed Tamil Nadu respectively.

Percent Share in Sanction and Disbursement from the Total Assistance

to Southern Region (1990-2001)

10 20 30 40 50 60 70 80 90
B Sane. • Disb.

Figure 6 5 Source - IDBl report on dtvelopmenl banking (1991-99) and SlDBl Development Report 2001
%

Lakshadweep and Pondicherry have got least benefit (Figure 6.5). If we see

the share of Tamil Nadu from the Grand Total it was 12 percent both in sanction and

disbursement. Karnataka got 8.8 percent in sanction and 9.3 percent in disbursement

of the total sanction and disbursement to all regions (appendix 6.5). Utilization ratio

in the region was below 80 percent in all state except Lakshadweep where it was 80.8

percent. The sanctioned amount m this union territory was very low.

6.2 Small Scale Industry Per Unit Sanction and Disbursement in Different States
and Union Territories (1990 -2001) - An Analysis

The Figure 6.6 depicts that Goa has got maximum per unit assistance. It got

Rs. 1067.2 thousand as sanction and Rs. 856.2 thousand as disbursement. However it

had 0.2 percent of total SSI units working in the country. Lowest per unit assistance

was given to Lakshadweep which got only Rs. 8.5 thousand as sanction and Rs. 0.9

thousand as disbursement. Atunachal Pradesh, Assam, Bihar, Jammu & Kashmir,

 Madhya Pradesh, Manipur, Mizoram, A & N Island, and Lakshadweep have got less

than Rs 50000 per unit disbursement for the period 1990 to 2001 as whole (appendix

6 6). If we find out per unit per year average assistance it was below Rs 500 per unit

per year The states/union territories like Dadra Nagar Haveli, Sikkim, Orissa,

Maharashtra, Haryana, Gujarat, and Goa have more than 2 lakh per unit disbursement.

The rest of the states /union territories have less than 2 lakh per unit assistance If we

average the 2 lakh per unit per year for the period 1990 to 2001 it stands below Rs

20000 per unit per year, which is quite low.

^ 5,

»Mf-

147
o
o
CM
I
o
0)
0)

I
S.

a
m
Q
>
n
c
0)
E

c
^g
•D
C o^
n c
c
0 tf
c
31
(0

Q.
55
w
The Compound Growth Rate in Disbursement and Trends in Sanction
and Disbursement
The small scale industries have been facing financing problems for a long time. It

is essential that there should be escalation in growth of SIDBI disbursement with the

passage of time. The compound growth rate in disbursement was above 10 percent in

states like Arunachal Pradesh, Bihar, Goa, Haryana, Jammu and Kashmir, Kerala,

Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Orissa, Punjab, Sikkim,

Tripura, West Bengal and Dadra and Nagar Haveli. The rest of states/union territories

have below ten percent CGR.

CGR in Disbursement for the period 1990-2001

60

ro ^ < O ^ Q j^ Q-
3 >
CGR in Disbursementl

Figure 6 7 Source. IDBI report on development banking (1991-99) and SIDBI Development Report 2001

Pondicherry and Uttar Pradesh have negative CGR in disbursement. If we see the

trend in disbursement, Assam, Jammu & Kashmir, Mizoram, A & N Island, Chandigarh

have downward trend (Figure 6.2). Rest all the states/union territories have upward trend

with some variation.

149
Table 6.1 State wise Trends in Sanction

Years 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000-
States 92 93 94 95 96 97 98 99 00 01

Andhra P. 100 71.6 71 9 95.7 147.6 151.1 161.2 90.5 138.1 136.6

Arunachal P. 100 250 150 50 450 200 250 375 375 425

Assam 100 57.7 102.2 28.5 136.5 73.7 126.3 59.9 97.1 83.9

Bihar 100 45.4 35 9 21.9 122.4 198.9 233.7 208.5 224.1 126.5

Goa 100 75.2 106.6 125.5 154.5 209.7 258.2 297.2 259.7 237.2

Gujarat 100 102.7 108.9 162.5 141.3 92.8 170.4 114.1 174.1 117.9

Haryana 100 169.6 135 6 187.2 288.9 236.8 389.2 276.9 224.1 163.3
Himachal 100 91.6 68.9 48.5 143.7 110 170.9 125.2 123.6 94.4
Jammu K. 100 16.5 11.2 17.8 47.1 44.6 69.4 83.1 73.9 63.6

Karnataka 100 118.1 123 3 149.9 220.6 138.5 186.3 189.4 181.5 231.9

Kerala 100 113.9 97 9 133.4 192.1 197.5 261.5 222.6 298.5 243.3

Madhya P. 100 113.9 97.9 103.9 164.7 139.1 268.1 203.8 238.5 128.5

100 125.5 116.7 130.3 200.9 210.5 180.6 223.2 267.4 165.1
Maharashtra
Manipur 100 51.7 37.9 6.9 79.3 72.4 1006.9 127.6 165.5 213.8

Meghalaya 100 118.7 162 5 131.3 131.3 537.5 312.5 300 275 468.8

Mizoram 100 6.3 125 6.3 31.3 56.3 25 62.5 68.8 75

Nagaland 100 35.3 23.5 0 64.7 82.4 52.9 88.2 88.2 111.8

Orissa 100 72.6 51.5 58.1 112.5 154.4 250 1 245.2 341.9 368.6

Punjab 100 96.7 122.1 103.9 184.7 150.5 225.9 232.4 277.5 210.2

Rajasthan 100 96 7 103 6 112.5 157 111.6 160.2 94.5 153.3 147.9

Sikkim 100 56 16 28 156 100 80 264 100 44

Tamil Nadu 100 92.2 120 5 124.1 201.2 193.1 179.9 152.5 208.1 171.8

Tripura 100 58 3 20.8 75 162.5 195.8 166.7 162.5 208.3 270.8

Uttar Pradesh 100 108.1 72 5 106.3 166.6 145.9 179.9 129.2 94.1 35.3

West Bengal 100 83.5 77 2 99.2 128.4 138.7 214.7 260.9 182.6 202.2

Andaman &N. 100 100 100 100 0 0 0 100 0 0

Chandigarh 100 115.2 33.3 27.3 174.2 136.4 59 1 36.4 1963.6 1125.7

Daman Dieu 0 0 100 117.4 260.9 252.2 13 8.7 147.8

D&N Haveli 100 125 1167 175 183.3 533.3 1750 1308.3 1350 433.3

Delhi 100 76.3 185 3 358.7 174 320.5 247.9 178.6 250.9 200.8

Lakshadweep 100 0 0 0 0 0 0 0 0 0

Pondicherry 100 75.4 100 100 117.4 162.3 108.7 102.9 27.5 50.7

Source IDBI report on development banking (1991-99) and SIDBl Development Report 2001

150
Table 6.2 State wise trends in disbursement

1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000-
Years
92 93 94 95 96 97 98 99 00 01
States
Andhra
100 92.2 75.1 105.3 186.4 162.6 176.7 114.4 164.7 127.2
Pradesh
Arunachal
100 133.3 266 7 133.3 366.7 300 366.7 500 500 566.7
Pradesh
Assam 100 93 111 35 179 69 103 96 131 90
Bihar 100 42.3 27 7 49.1 154.5 230.7 288.7 234.2 287.8 170.8
Goa 100 85.4 86.2 72.4 125.2 158.7 192.1 286.6 308.7 255.9
Gujarat 100 108.2 133 7 127.4 171.7 105 209.2 123.3 159.3 141

Haryana 100 211.1 197 9 216.6 403.8 400.2 469.3 503.2 391.3 209.5

Himachal 100 89.4 71 40.8 131 114.3 136.7 157.9 132.2 109.4
Jammu
100 14.4 14.4 16.6 52.4 49.7 68.9 89.8 90.3 60.4
Kashmir
Karnatal<a 100 121.8 141.9 151.2 246 1 185.2 172.7 181.4 169.9 192.2

Kerala 100 109.9 93 119.6 173.4 202.7 244.2 188.7 295.8 243.6
IVIadhya
100 77.8 97.6 110.4 168.3 150.7 226.1 215.1 252.9 192.7
Pradesh
{Maharashtra 100 125.3 121.7 146.6 223 193 237.9 260.9 291.4 222.7

Manipur 100 41.2 32.4 5.9 67.6 61.8 632.3 20.6 123.5 211.8

Meghalaya 100 88.2 141 2 117.6 117.6 258.8 388.2 164.7 235.3 317.6

Mizoram 100 7.1 14 3 7.1 28.6 64.3 21 4 71.4 71.4 85.7

Nagaland 100 45.4 36 4 0 100 109 1 81.8 127.3 136.4 172.7

Orissa 100 72 1 57 5 58.2 98.3 114.8 219.7 193.9 321.8 373.9

Punjab 100 83.7 99 7 100.9 193 155.6 207.4 179.8 257 7 273.9

Rajasthan 100 104.8 105 8 135.3 216.7 160.6 196.6 147.2 218.8 143.5

Silckim 100 60 20 20 90 125 95 305 185 55

Tamil Nadu 100 97.8 127.9 148 237.2 221.1 212.8 171.3 208.8 117.2

Tripura 100 52.6 31 6 57.9 178 9 247.4 200 194.7 268.4 305.3

Uttar Pradesh 100 105.3 117.3 126.7 239.1 188.3 226.2 175.8 127 3.1

West Bengal 100 86.5 88.7 98.8 149.4 171.5 220.3 247.8 220.7 125.4
Andaman &
100 100 100 100 0 0 0 100 0 0
Nic.
Chandigarh 100 74.5 47 1 15.7 149 90.2 76.4 23.5 339.2 84.3

Daman Dieu 0 0 100 127.3 236.4 154.5 63.6 63.6 118.2 290.9

D&N Haveii 100 100 83 3 183.3 300 333.3 2666.7 2683.3 2216.7 750

Delhi 100 75.6 192.3 379 178.5 235.8 203.4 203.2 141.9 138.6

Lakshadweep 100 0 0 0 0 0 0 0 0 0

Pondicherry 100 105.4 116.2 43.2 89.2 162.2 172.9 1189 75.7 43.2

Source: IDBl report on development banking (1991-99) and SIDBI Development Report 2001

151
 The trend in sanction has also been showing the same momentum. Besides

states/union territories mentioned above, Nagaland, Sikkim and Uttar Pradesh have also

been showing downward movement in sanction.

Conclusion

It is clear from the above study that most of its assistance has gone to Western

region, Southern region and Northern region. Eastern region and North Eastern region

have got very little assistance from the bank. Even within that specified region one or two

states/union territories have availed of the maximum benefit. The study also reveals that

Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu and Delhi who have 41

percent share in total units in the country have availed of 60 percent assistance. Even

among these Maharashtra and Gujarat who have 13.6 percent share in total units in the

country have got 28 percent of total assistance. Other states /union territories like Bihar,

MP, Punjab, Uttar Pradesh, and West Bengal who have collectively more than 50 percent

of total SSI units in India have got less than 20 percent of total disbursement. The

standard deviation and coefficient of variation has been moving 100 percent to 180

percent for the period 1991-2001 (appendix 6.7). It means that the bank has not allocated

its assistance properly region wise and also within that particular region a major chunk of

its assistance gone to only a few statesAJTs. The bank needs to focus on those regions

and states /UT who are less developed and backward instead of few industrially

developed states and Union Territories. Further, the assistance per unit is also very low. It

was mostly between 5000 per unit to 20000 per unit per year. The CGR was also not

152
good except in a few states. In case of Uttar Pradesh and Pondicherry it was negative.

Looking at these, one feels that bank needs to generate more funds to enhance the per

unit disbursement. This will consequently increase the CGR in disbursement.

153