Journal of Global Resources

Volume 4 (01)January 2018
ISSN: 2395-3160 (Print), 2455-2445 (Online)

Page 66-74

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ASSESSMENT OF INDUSTRIAL DEVELOPMENT IN SANT KABIR NAGAR DISTRICT OFUTTAR PRADESH: AN ISSUE OF REGIONAL IMBALANCE
Mumtaj Ahmad1 and Pasarul Islam2
1Assistant Professor, Department of Geography, AMU, Aligarh, India

Email: makhan2008@rediffmail.com
2Research Scholar, Department of Geography, AMU, Aligarh, India

Email: islam.pasarul@rediffmail.com
Abstract: Industry has been considered as the engine of economic growth, while Micro, Smalland Medium Enterprises (MSME) constitute the backbone of Indian economy by maintaining
substantial growth rate and employment opportunities. But regional imbalance is often
phenomenal in terms of industrial establishment, investment and employment generation acrossIndia. The present paper tries to focus on the present scenario and trends of industrialization andinvestment, and to analyze the regional distribution of industries and employment in terms ofMicro, Small and Medium Enterprises (MSME) for the state of Uttar Pradesh in general and Sant
Kabir Nagar district in particular. It also focuses on the potential in Sant Kabir Nagar district forthe development of MSME sector, and identifies major issues and challenges to provide suitablesuggestions. The data are collected from secondary sources by way of access to various
government policies and programs including published annual reports, journals, books and official
websites. The paper reveals that Uttar Pradesh is relatively better placed in both MSME units andemployment compared to other states of India. Micro analysis of Sant Kabir Nagar district shows
the block level variation for the same.
Keywords: Industry, MSMEs, GDP, Regional Imbalance, Micro Analysis, Industries
Introduction
Industry plays a significant role for economic progress and development of a nation throughindustrial productivity, generation of employment and revenue contribution through exports. The
MSME (Micro, Small and Medium Enterprise) sector has appeared to be highly vibrant anddynamic sector, which becomes basis for large industries. It forms the backbone of Indian
economy. This sector is not only crucial to provide large number of employments but it also helps
to setup industries in rural as well as backward regions of the country. MSMEs supplement thelarge-scale industries and hence are considered as ancillary units (Muthu, 2015). MSMEs havethe opportunity of generating relatively large amount of income with lower amount of investment(Sen and Selim, 2015). The share of industry in country’s gross domestic product (GDP) was
27.27 percent during 2012-13, while manufacturing and service sectors contributes 7.04 percent
and 30.50 percent respectively.
This scenario is not equal in all states. It differs from one state to another state, one district
to another district and, more importantly, one block to another block, which becomes the major
concern to the government as well as the policy makers. In India, regional imbalances are
inherited since the colonial period. Before independence, British government made policies toenhance their own economy rather than developing Indian people and industries. They
established industries in few pockets of the country, especially in port town of Bombay, Madras
and Calcutta, which now have grown as most industrially developed states in India. On the otherside, due to inappropriate exploitation of natural resources, the states like Bihar, Jharkhand,Orissa and Madhya Pradesh, which otherwise have plenty of mineral resources, still remain
backward (Manoj and Rajiv, 2013). A balanced development approach was adopted during Third
Five Year Plan (1961-1965) to establish industries in backward regions of India by introducing
special package programs. These package programs assisted more the development of urban
66areas rather than reducing regional imbalances (Lipton, 1977). MSMEs constitute an importantsegment of the economy of Uttar Pradesh in terms of employment generation and foreignexchange earnings through exports. The sector is also strategically important for attracting capital
investment, increasing industrial output and enhancing the GDP of the state. Uttar Pradesh today
is a leading exporter of MSME products in the categories like handicrafts, engineering goods,
carpets, readymade garments, leather products, etc. There are two types of enterprises in MSME,
viz. manufacturing sector and service sector and the subdivision of micro, small and medium
enterprises are based on the following criteria (Table 1).
Table 1: MSME Definition in India (Micro Small Medium Enterprise Development Act, 2006)
TypeEnterprises
Manufacturing Sector
Service Sector(Investment in Plants and Machinery)(Investment in Equipment)
Micro
Up-to Rs. 25 lakhs
Up-to Rs. 10 lakhs
Small
More than Rs. 25 lakhs up-to Rs. 5 crores
More than Rs. 10 lakhs up-to Rs. 2
croresMediumMore than Rs. 5 crores up-to Rs. 5 crores
More than Rs. 2 crores up-to Rs. 5
crores
Source: The Gazette of India, 16th June, 2006

The contributions of manufacturing units have gradually declined over the years. But
service sector depicts on an average an upward movement. It may be attributed to people whohave invested in service sector rather than manufacturing units (Table 2).
Table 2: Contribution of MSME in Total GDP (at 2004-2005 prices) in India
Share of MSME Sector in total GDP (in percentage)
Manufacturing
Services
Total
2006-07
7.73
27.73
35.13
2007-08
7.81
27.81
35.41
2008-09
7.52
28.60
36.12
2009-10
7.45
28.60
36.05
2010-11
7.39
29.30
36.97
2011-12
7.27
30.70
37.54
2012-13
7.04
30.50
37.54
Year

Source: 1. Fourth All India Census of MSME (2006-07) 2. National Accounts Statistics (2014),
CSO, MOSPI 3. Annual Survey of Industries, CSO MOSPIStudy Area
Uttar Pradesh, often described as the heartland of India, is spread across 2,40,928 sq. km (7.3
percent of the India’s land) with 19.98 population (India’s 16.5 percent). It has 18 divisions, 75
districts and 821 community development blocks. Uttar Pradesh is the third largest economy ofIndia contributing 8.4 percent to the country’s economy. The economy of Uttar Pradesh is
primarily dominated by the tertiary sector, followed by primary and secondary sectors. The stateis known as the food basket of India as it is the leading producer of sugarcane, pointed gourd,peas, potato, musk melon, watermelon, pumpkin, milk and milk products. The state has thehighest number of Micro, Medium and Small enterprises (MSMEs) in India. Sant Kabir Nagar, anewly created district (1997) of Uttar Pradesh, was carved out from Basti and Siddharth Nagar
districts. It is located in the eastern part of the state. The district is located between 26020’N and
27010’N latitude and 82040’E and 83020’E longitude (Figure 1). The total geographical area of the
district is 1649 sq. km and is surrounded by the district of Gorakhpur (east), Basti (west), Siddhart
Nagar (north) and Ambedkar Nagar (south). For the purpose of smooth administration, the district
has been divided into 3 Sub-Divisions, 3 Tehsils, 9 Blocks, 9 Panchayat Samities, 648 Gram
Panchayats and 1576 Revenue Villages. The total population of the district is 1,715,183 of whichlargest portion (92.5 percent) live in rural areas and 7.5 percent in urban area. Literacy of the
district is equal to the state average of 66.7 percent. Although, agriculture is the major earningsource for the rural people, but industry especially small agro-based industry and khadi industry
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offered the farmers for extra production. The district accounts 655 industrial units (out of 13798 in
the state) which have generated on an average 2870 daily employment as compared to 60,500 in
the state of Uttar Pradesh. Khalilabad block is the administrative as well as industrial hub of the
district.
Figure 1: Locational Map of Sant Kabir Nagar District 2011

Methodology
The present paper is based on secondary sources of data obtained from Sankhyakiya Patrika(SP), Fourth All India Census of MSME 2006-07 (published in 2011-12), National AccountStatistics and Annual Survey of Industries conducted by Central Statistical Office and Ministry of
Statistics and Program Implementation, Government of India, District Census Handbook andvarious published and unpublished works. Political divisions of state and district have been
considered as region to find out regional imbalances in terms of industrial development,
investment and employment. Numbers as well as simple percentage method have been applied
to represent the statistical data through bar diagrams, pie diagrams and maps.
RESULT AND DISCUSSION
Regional Imbalance at National Level
India has been facing the problems of regional imbalances especially in the case of industrial
development. The overall share of MSME sector in national GDP was 37.54 percent bycontributing 37.33 percent of the total manufacturing output of the industry. It accounted a sum of
214.38 lakh registered and unregistered units, which employed more than 501.93 lakh people
with 6,89,95,486 lakh investment of India during 2012-13. But the scenario of industrial
development in the light of industrial units, employment and investments is differing from one
region to another region depending on various factors like colonization, unequal distribution of
resources, lack of investment and, above all, faulty governmental policies and programs. In Uttar
Pradesh, MSME industries hold a central position in terms of employment generation and as asource of foreign exchange earnings. It has contributed almost 60 percent of the total industrial
output of the state. There are 44.03 lakh MSME units in Uttar Pradesh, followed by West Bengal(36.64), Tamil Nadu (33.13), Maharashtra (30.63) and Andhra Pradesh (25.96) (Fig. 2).
Uttar Pradesh remains on the top position in terms of employment generation (after
agriculture sector) accounts 92.36 lakh people and one of the leading state in terms of employed
in industrial sector in India followed by West Bengal (85.78), Tamil Nadu (80.98), Andhra Pradesh(70.69) and Maharashtra (70.04) (Fig. 2). MSME of Uttar Pradesh report (2014-15) reveals thatthe objective of the 11th Five Year Plan was to generate 6.50 lakh employment opportunities by68establishing 1.65 lakh MSME units in Uttar Pradesh. The government has exceeded these targets
and established 1.66 units with an investment of 13,433.11 crore and employed 8.57 lakh people.

Source: Based on Data obtained from MoMSME, Gol 2014-15
Regional Imbalance at State Level
Trends of Industrial Establishment, Employment and Investment in Uttar Pradesh
The trend of industrial establishment, employment and investment shows that there wassignificant progress over the years. It is observed (Fig. 3 & 4) that the number of units andemployment grew continuously from 2007 to 2010. During 2012-13 the number of units andemployment saw a decline, but it remained stagnant in 2013-14 because of the implementation of
the Infrastructure and Industrial Investment Policy 2012. During 2007-08, more than 35,000
MSME units were established with the investment of Rs. 2497 crore and employed 1.99 lakhpeople which increased 45,000 units, with Rs. 3042 crore investment and 4.82 percent
employment during 2013-14 in the state. It is noted that the investment continuously increased till
2012; but after that it continued to decline that may be attributed to the macro-economic
slowdown as well as a shift in focus from manufacturing to the services sector requiring lower
investment.

Source: Based on Data obtained from MoMSME, Gol 2014-15

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Source: Based on Data obtained from MoMSME, Gol 2014-15

Distribution of MSME Industries and Share of Employment in Uttar Pradesh
Product wise distribution of MSME industries shows (Fig. 5) that among all the industries, therepairing and servicing industries enjoy the highest share with 27 percent of total MSME units.
They generated 21 percent employment of the total employed people in Uttar Pradesh that may
be attributed to lower investment followed by food products and miscellaneous industries (15percent), other industries (13 percent), hosiery & garments (11 percent), metal products andwood products (6 percent), leather products (3 percent), machinery and textile industries (2percent).

Source: Based on Data obtained from MoMSME, Gol 2014-15. ** Others includes Products & Printing, Cotton Textile,
Chemical & Chemical Products, Non-Metallic Mineral Products, Electrical Machinery & Apparatus, Rubber & Plastic Products, Basic
Metal Industries, Transport Equipments, Jute and other Textile, Beverage, Tobacco & Tobacco Products

Regional Distribution of MSME Industries and Employment in Uttar Pradesh
Uttar Pradesh is the highest populous as well as agriculturally developed state in India whichleads to grew industries in a very effective manner. This state is divided into four major regions
i.e., Western Region, Eastern Region, Central Region and Bundelkhand Region, based on
agricultural development, cultural behaviour and location. Out of these regions, Western Regionis highly developed in terms of industry and agriculture. It has the positive impact of green
revolution which help to make this region self-sufficient and one of the leading industrial region in
the state. The regional distribution of industries and employment shows (Fig. 6) that western70region leads in both instances as compare to other regions of eastern, central and Bundelkhand.
Various factors like lack of infrastructure, growth centres and regional factors, which cannot bealtered, have led to an imbalanced growth in the state especially in Bundelkhand and westernregions.

Source: Based on Data obtained from MoMSME, Gol 2014-15

Regional Imbalance at District Level: Sant Kabir Nagar
Industrial Profile of Sant Kabir Nagar District
The Sant Kabir Nagar district is industrially well developed which account for 655 total industrial
units as compare to 13798 in the state of Uttar Pradesh. The district has reported 4 medium scaleindustries that are as follows:
1. Harbansh Ram Bhagwan Das Auryedic Sansthan, Industrial Area, Khalilabad,
2. Hindustan Liver Ltd., Industrial Area, Khalilabad,
3. Raina Paper Board India Ltd., Khalilabad and4. Shiv Shakti Thermoacoal Pvt. Ltd., Industrial Area, Khalilabad, Sant Kabir Nagar.
It has also one large-scale industry namely Khalilabad Sugar Mills Pvt. Ltd., Khalilabad,Sant Kabir Nagar. It is revealed (Table 3) that the large and medium scale industries have been
generated about 267 employments in the district. The turnover of small scale industries is higher
as compare to large scale and medium scale industries. The total turnover of small scaleindustries is Rs. 2012.91 lakh while of large and medium scale industries is Rs. 1525.8 lakh in the
district for the year 2011-12.
Table 3: Industry at a Glance, Sant Kabir Nagar District 2011-12
Head
Unit
Particulars
Total Registered Industrial Unit
No.
650
Registered Medium and Large Industrial Unit
No.
5
Total Industrial Unit
No.
655
Average No. of Daily Worker Employed in Small Scale Industries
No.
2870
Employment in Large and Medium Scale Industries
No. of Industrial Area
Turnover of Small Scale Industries
Turnover of Medium and Large-Scale Industries
Source: District Industrial Corporation, Sant Kabir Nagar 2011-12

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No.
No.
Lakh
Lakh

267
3
2012.911525.8

Trends of Industrial Development, Investment and Employment
Trends of industrial development of Sant Kabir Nagar district shows that numbers of registeredindustrial units increase gradually from 2000 to 2012. It was just only 13 units in 2000-01 thathave increased to 650 units in 2011-12. Number of employed persons increased rapidly during
2005-09, but it showed a slowdown thereafter. The investment was very low during 2000-06; butfrom 2006-07 onwards the investment gradually increased. The highest investment was reported
in 2007-08 which also had the positive effect on employment (Fig. 7 & 8).

Source: Data obtained from District Industrial Corporation, Sant Kabir Nagar 2000-2012

Source: Based on Data obtained from District Industrial Corporation, Sant Kabir Nagar 2000-12
Distribution of Major MSME Industries, Investment and Employment
Agro-based industries have occupied a dominant position among all the industries in the district. It
has share of 62 percent to the total industry, followed by readymade garments and embroidery(12.62 percent), repairing and servicing (10.15 percent), wood/wooden based industry (6.92
percent), engineering units (2.77 percent), metal based (2.31 percent), chemical/ chemical-based(1.54 percent), leather based (1.08 percent), cotton textile (0.62 percent) and paper and paper
products (0.15 percent). The largest share of agro-based industries to the total MSMEs is due tolocally available raw materials and cheap skilled or semi-skilled rural labourers. The agro-basedindustries have also the leading place in terms of employment generation and investment in the
district (Fig. 9 & 10).
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Source: Based on Data Obtained from District Industrial Corporation, Sant Kabir Nagar 2011-12

Source: Based on Data Obtained from District Industrial Corporation, Sant Kabir Nagar 2011-12
Regional Distribution of MSME Industries and Employment
There is uneven distribution of industries in the district; it varies from one block to another block. It
is because of location, raw material, labour cost and governmental policies. The highest
concentration of industry has been found in two blocks namely Baghauli (15.38 percent) andKhalilabad (14 percent). Other five blocks (Santha, Belhar, Semriyawan, Nath Nagar and Pauli)remain backward in context of industries and employment. Although, the state of Uttar Pradesh is
seems to be in a strong position and the Sant Kabir Nagar district also continue to raise the shareof industry and employment.
Conclusion and Suggestions
Overall, this paper shows that large number of industry (MSME) is concentrated in few areas
especially in Khalilabad and Baghauli blocks. This is actually the result of one city (Khalilabad)that is the place of attraction for the government as well as investors. As per district report, there
are few units of General Engineering workshop, Hotels & Restaurants, Cyber Cafes, Beauty
Parlours, Photo Copying, Tailoring shops, Automobile Repairing, Computer Based Training
Institute, etc. in most of the blocks (excluding Khalilabad and Baghauli blocks) which are only
catering to the requirements of local population. The inadequate power supply, finance problems,
lack of infrastructure, lack of skilled labour and poor market facilities are also responsible for nondevelopment of industries in these blocks. By taking the advantage of potentiality of massive
agricultural output, the government should establish industries like rice mills, flour mills, oil mills,
wooden furniture, agricultural implements, iron furniture, doors, grills windows and shutter, school
notebook and registers, etc., bakery products and building bricks industries. The district has very73

good potential for service industry like automobile repairing sector, electronics equipments
repairing, computer institute, cafeteria, mobile repairing centre, restaurant & bhaba, xerox
photocopiers, agro items repairing workshops and transport agencies. Such small-scaleindustries need less investment and generate more benefits. There is also a need to upgrade anddevelopment of existing infrastructure facilities in the district. In order to balance the regional
growth, the government should identify the vacant land and expand the existing industrial areaand set up new industries with necessary infrastructure facility. MSME industrial units suffer
through the problems of management and sickness, therefore, rehabilitation of such units can be
possible through the coordination of public and private sector banks.
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