A Study on Satifactory Level of Powerloom Entrepreneurs in Utilizing Government Funds

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The global market has become an overwhelming incentive for new investments and there occurred a veritable explosion of capacity in cotton based complexes, the most importantly in the Tamilnadu clusters. This has been much silent revolution: The phenomenal growth of the 1990s in cotton spinning in Tamilnadu has been the forefront in the Indian power loom industry. The state ranked third, only after Maharashtra and Gujarat as regards the number of textile manufacturing units in organized and decentralized sector of the textile industry.

The power loom industry in Tamilnadu provides direct and indirect employment to over 7 lakh workers and is reputable for its power loom weaving. The state produces large volumes of power loom items that find a market in every nook and corner of the country and also caters the fabric needs of the export manufacturing units located in Delhi, Mumbai, Chennai, Bangalore and other centers.

Further, the performance of the power loom sector in Tamilnadu presents a better picture as there is concentration of industrial enterprise specializing on various stages of textiles manufacturer, right from ginning of cotton to spinning and garmenting of the end product. Keeping the interest of the power loom industry as a whole, an effort has been made to explain briefly about the utilization of Government funds among Power loom entrepreneurs. Keyterms: Powerloom entrepreneurs, Utilization of Government Funds, Economic profile of Powerloom entrepreneurs 1. Introduction

Rural Development has now come to occupy fairly an important place in the economic development of the country. Especially power loom industries are playing a major role in the development of Kangayam Taluk which is located western part of Tamilnadu. Powerloom industry provides direct and *This article was presented at the 4th North American Productivity Workshop, in Texas-USA organized by Rice University on June the 3rd-5th, 2010. 201 European Journal of Economics, Finance And Administrative Sciences – Issue 33 (2011) indirect employment opportunity in many ways.

Hence, the Government of Tamilnadu and Central Government of India are announcing different funding schemes to the power loom entrepreneurs to uplift the rural poor. In this study an attempt has been made to evaluate the utilization of Government funds among power loom entrepreneurs in the study area. It also focuses on the main drawbacks encountered from different angles at various stages to the power loom entrepreneurs in their business. Against these backdrops it will be worth knowing to study the performance of Government funding schemes and the level of satisfaction at the potential entrepreneurs.

Based on the above issues the following questions are raised: (i) Have the power loom entrepreneurs for whom government funding schemes is meant and to whom subsidy has been disbursed, been really benefited? and (ii) Whether the entrepreneurs properly utilized the government fund? 2. Review of Literature Like all theories, the understanding of the theory of entrepreneurship depends upon a set of definition which provides a base for analytical study. Nevertheless, definition of entrepreneurship, as of many other concepts does not lead itself to uniformity.

Many historians, economists, sociologists, psychologists and behavioral scientists have made attempts to define this concept in their respective fields; however, to understand distinctively one must comprehend entrepreneurs as an individual and entrepreneurship as a function. Cantillon (1959) was probably the first to introduce the term entrepreneurs and applied it to the individuals engaged in production (with inputs of land, labour and capital) of goods for the market place. Schumpeter (1961) a new idea had later emerged which defines entrepreneurship and entrepreneurs.

As the means (or) instruments by which the economy and society are transformed and improved. He clarified entrepreneur as an innovator with potentialities of doing new things as an economic leader, and a chief conductive function in the process of economic development. Robinson (1966) finds “entrepreneurs were not found to be the simple innovators rather they were the persons with the will to act, to assume risks and to bring about change through the organization of human efforts.

The definition of entrepreneurs had passed through a great development age and was improved upon by incorporating the terms like ambition, energy and mitigation. ” Ramamurthy and Krishnakumar (1990) conclude that youngsters are generally more energetic, change prone progressive and innovative that the older ones. However, there are inconsistent evidence in the literature us regards the influence of age on entrepreneurial behaviour in general and women entrepreneurs in particular. The best age for entry into such innovative establishments was observed to be between 20 to 40 years.

Bharadwaj (1982) Takshak (1990) and Vidyulatha (1990) say that reverse trend was observed in rural areas with small entrepreneurs where majority of the respondents were illiterate followed by those having low level of education. ” Jayashree (2005) is aimed to classify the handloom and powerloom weaved fabric using statistical feature analysis of fabric image and neural network. The aim here is automate the classification of powerloom classification of powerloom weaved fabric and handloom weaved fabric to decide the subsidy permission which the government provides on handloom weaved fabric, to protect the interest of small scale industries.

There is every possibility of the decision being influenced by an expert and also the customer, which may result in lack of revenue to the Government. To overcome this drawback and malfunctioning the system, it is a first-ever attempt to classify handloom and powerloom weaved fabric using artificial neural network supplies with feature inputs obtained from image analysis and thus to avoid human intervention. Viswarajasekaran (2002) says that weaving is a system for producing fabrics, which is one of the basic needs of human beings. It is found that Egyptians made woven fabrics over 6,000 years ago, 202

European Journal of Economics, Finance And Administrative Sciences – Issue 33 (2011) and it is believed that lake dwellers made nets from twisted threads in Europe in the pre-historic period. In the weaving industry in India today, powerlooms, autolooms and shuttleless looms play a major role for producing quality fabrics. There are several mills working with shuttle and shuttleless weaving machines. But, unfortunately, few of them are making profit. The main reason behind this is lack of modernization. In the textile industry, it is necessary to increase the quality of fabrics and productivity of the loom to cope with overseas competition.

Weaving machine development related to: • Increase in performance and productivity. • Greater machine versatility. • Ecological cleanliness. • Introduction of electronics for machine control and production and quality control. • Cloth quality improvements • Decline in value loss. With modernization, an organization is able to achieve higher production and better product quality. Growing population necessitates higher production volumes. Kanagasabapathi and Rathi Shree (2006), concludes that many of the textile units in Karur are running on supplier basis.

The margins realised are very low. Exporters take the major portion of profit, while the manufacturers are not aware of the international market conditions and their opportunities. Karur has been witnessing a boom in local manufacturing as well as exports. At the same time, it is facing fundamental problems associated with growth centres. Moreover, the industry is presently witnessing serious competition in a globalised scenario. To maintain the growth and make further progress, necessary steps have to be taken jointly by the industry and the authorities concerned.

Kanagasabapathi and Menaka (2006) conclude that the decentralized powerloom sector plays a pivotal role in meeting the clothing needs of the country. Production of cloth as well as generation of employment has been rapidly increasing in the powerloom sector. This sector not only contributes significantly to the cloth production in the country but also provides employment to millions of people. Palladam lies on the outskirts of Coimbatore City. In Palladam, the powerloom industry is a major one, next only to agriculture. Due to water shortage, agriculture suffered, and as a result the powerloom industry got established.

The industry has successfully grown over the years. In 2004, there were approximately about 40,000 powerlooms, 900 shuttleless looms and 4,000 automatic looms working in this area. About 40 modern sizing units were also working there. Out of the total production of fabrics estimated at about 3,50,000 square metres per day, 40 per cent was utilized for local markets, 15 per cent for direct export and 25 per cent for merchant export. About 20 per cent was processed and then exported. One of the four high-tech weaving parks in Tamil Nadu will be operated in Palladam soon, and the construction work is in progress.

With more than one lakh looms in operation, the Palladam powerloom cluster in the Tirupur-Palladam-Avinashi belt is assuming special importance. Stephen Broadberry and Bishnupriya Gupta (2005) say that spinning was only one task in the preparation of finished cotton cloth and technological progress was much less dramatic in other parts of the Industry including preparation continually improved, there were no major technological break throughs Kay’s flying shuttle, patented in 1733, and the successful application of power to the loom, which was a long drawn-out affair from the 1770s.

The development of an economic powerloom proved a daunting technological challenge, and was only really achieved on a commercial basis by Sharp and Roberts challenge and was only really achieved on a commercial basis by Sharp and Roberts in 1822 (Timmins, 1996:46). This imbalance between spinning and weaving helped to generate the high wages of handloom weavers in the late eighteenth century. James Bessen (2002) concluded that loom was comfortably profitable when operated by high quality literate adults as in the Waltha system.

But powerlooms were at best marginal and at worst plainly unprofitable when operate illiterate adults or children, especially when these employees were 203 European Journal of Economics, Finance And Administrative Sciences – Issue 33 (2011) not in jobs that matched their skills or temperaments. Thus in 1818 the powerloom was only a sound investment when it was accompanied by a quality labor supply. The above quoted reviews describe the entrepreneurship, powerloom industry and powerloom entrepreneurs, but none of these studies covered the issues relating to effective utilization of Government funds and repayment of loans.

Hence, the research found that this gap is more appropriate to tap in the current scenario. In this present study, an attempt was made by the researcher to analyze the Satisfactory Level of Powerloom Entrepreneurs in utilizing Government funds. The following objectives have been chosen for the study.  To evaluate the socio-economic profile of the power loom entrepreneurs who borrowed fund from the government.

To study the satisfactory level of respondents in getting the loan from the Land Development Bank in the following areas: • Timely issue of applications and Processing • Speedy disposal of loans for the applicants. • Officers behavior at the time of issuing the loans. • Attitude of the banking officials at the time of issuing the loans. • Rate of Interest to the Loan. • Adequacy of required loans. • Mode of Payment.

To offer possible suggestions for the development of power loom industry and to make proper utilization of government funds. Sources of Data The study consists of both primary and secondary data. The primary data were collected from the power loom entrepreneurs who acquired loan from land development banks in kangeyam taluk. There are two branches of Land development bank operated in kangayam taluk. (Kangayam & Vellakovil). From these branches around 350 entrepreneurs have borrowed loans out of these 350 entrepreneurs 200 of them were choosen by simple random sampling method.

Interview schedule were used to collect information from the entrepreneurs. A well structured interview schedule was prepared with the help of guidance and officials in land development banks of kangayam taluk. Field survey technique was adopted to collect first hand information from the beneficiaries. The researcher personally visited and interviewed each and every respondent for this purpose. The secondary data were collected from the records maintained by land development bank at kangayam taluk.

Certain relevant information were collected from the government reports (study conducted by Sitra, Textile committee-Coimbatore), and leading journals. A number of standard text books were also referred to obtain pertinent literature. Frame Work of Analysis For analyzing the data, the researcher has used simple statistical tools like percentage, average, range, standard deviation, two-way tables and chi-square test. In addition to these tools, Henry Garrett ranking method was also employed to rank the issues of power loom entrepreneurs in the study area.

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