Small-Scale Industries (SSI) play a very important role in the economic development of
any nation, particularly developing and underdeveloped nations. These industries meet the
twin needs, i.e., solution of unemployment problem and checking the economic concentration
in the hands of a few. They encourage self-sufficiency, self-reliance and coordination.
They provide beneficial reallocation of available resources and their proper utilization. They
help to eradicate poverty in rural areas. These industries entail equitable distribution of
national income and ensure a harmoniously balanced, integrated and egalitarian socioeconomic
order in the country.
The Ministry of SSI, Government of India, defines a small-scale industrial undertaking
as an industrial undertaking in which the investment in fixed assets in plant and
machinery, whether held on ownership terms on lease or on hire purchase, does not exceed
Rs. 10 mn. This limit has been raised to Rs. 20 mn recently. Today SSI sector accounts
for 20 million jobs, 6.29% of GDP, 34% of exports and 995 of all industrial units in the
country. About 2.8 million jobs have been added in the past year alone, sustaining employment
growth rate at 4%. The average growth rate of the sector stands at 7%, which is higher than
the industry despite the downturn in global economy and perceptible slowdown in the
domestic market (Ali and Tripathi, 2009). |