The aim of the paper is to study the performance of the small-scale sector of Punjab. Small-Scale Industries (SSIs) are significantly contributing to the economy of Punjab. In the liberalized era, the SSI sector is facing stiff competition from domestic as well as foreign companies. The paper outlines the year-wise growth trends in SSIs in terms of the number of units, employment generation, fixed investment, production and exports. The paper also shows a comparison of the SSI sector with the total industrial sector of Punjab. The new SSI units registration trends and district-wise distribution of units have also been highlighted here. The paper concludes that the position of the SSI sector is not very encouraging in the state. The main government institutions in the state are in a bad shape and are facing closure. Therefore, it is necessary for the government to provide infrastructure and incentives for the survival and growth of the SSIs.

Indian economy is one of the fastest growing economies in the world. The government of the country has been pushing for achieving economic growth and development in all the sectors. Small-Scale Industries (SSIs) have been one of the major planks of India's economic development strategy since independence. Today, the SSI sector occupies a position of strategic importance in the Indian economic structure due to its significant contribution in terms of output, exports and employment (Subrahmanya, 2004). Small and Medium Enterprises (SMEs) in India have always remained high on the priority of the government. The basic policy towards SSIs in India has been protective (Nag, 2000). After agriculture, the SSI sector is the largest employment generator. There are 11.4 million SSI units, employing 27.1 million people today. The share of employment provided by this sector is 45 percent of the total employment in the country, and 80 percent in the industrial sector (Veenapani, 2005).

The micro and small enterprises are contributing around 39 percent of the country's manufacturing output and 34 percent of its exports. This sector is employing about 29.5 million people in the rural and urban areas. In the year 2005-06, the total registered and unregistered units were 18.71 and 104.71 lakhs, respectively, producing Rs. 476,201 cr at current prices, and employing 294.91 lakhs of people (Government of India, 2007-2008).

Small-Scale Industries of Punjab, Small and Medium Enterprises, SMEs, entrepreneurial base, natural resources, minerals, energy resources, geographical location, knowledge-based, basic metal products, machinery parts, untapped markets.