Small
Scale Industries (SSIs) have a significant role to play in
the socioeconomic upliftment of developing countries like
India. The SSIs occupy a unique position in the Indian economy
for its contribution towards value-addition, employment generation,
expansion of entrepreneurial base, and also for the diversification
of the industrial sector. After independence, the Indian government
recognized the importance of developing SSIs and incorporated
the same in its industrial policy. India initiated the economic
reforms in 1991 with the objective of faster economic growth.
Since, the liberalization process has been in vogue for the
past 16 years, it becomes essential to analyze whether the
new economic order has had a positive or negative impact on
the performance of SSIs in India. The present paper is an
attempt in this direction. The findings reveal that the growth
in the share of exports of SSIs in total exports of India
was higher in pre-liberalization period than the post-liberalization
period.
Compound Annual Growth Rate (CAGR), with reference
to the number of units, employment level, production, and
value of plant and machinery in SSIs were also comparatively
higher in the pre-liberalization period. The percentage share
of SSI sector in total bank credit and in total outlay of
various five year plans has also declined significantly. Moreover,
this sector is growing at a rate half of the total industrial
growth rate. Obviously, the SSI sector could not grow to the
desired level due to intense competition from large and medium sized domestic and multinational companies. Essentially, the objective of the policymakers as well as small industry associations should be to enable the sector to be vibrant and competitive. Now, it has become essential for the small and medium enterprises to focus on R&D not only to improve the overall quality, but also to deliver a superior product in the market.
Small Scale Industries (SSIs) have a significant role to play in the socioeconomic upliftment of developing countries like India. This sector continued to receive a special thrust from the Government of India due to its contribution towards achieving the multiple objectives of employment generation, regional dispersal of industry and developing as a seedbed for entrepreneurship. India's Small Scale Enterprises (SSEs) contribute about 39% of the gross industrial value-added and about 35% of the total exports. In India, the SSE sector is the second largest employer of human resources after agriculture (Economic Survey, 2006-07). |
