The small scale industry which plays a key role in the Indian economy in terms of employment and growth has recorded a high rate of growth since independence. Till 1956, the number of small scale units was 6195. Today it stands at 35.72 lakhs. The inherent advantages of small-scale units are reduction of regional imbalances, low investment, greater operational flexibility, low costs of production, high capacity to innovate and export, greater geographical dispersal, utilization of local material and human resources.
In terms of employment, it employs 199.65 lakh persons and is the second largest employer of India's workforce after agriculture. Today, there is a global recognition for the small enterprises as they could very well be or become the backbone of the economy. The central discussion of this paper highlights the role and performance of small-scale industries in the economy with the parameters of number of units, production, employment and exports. The importance of industrialization in economic development is crucial for a growing
economy with a large population like India, so prosperity through industrialization has
been a long-term strategy for the Indian government. Communities, businesses, and
governments have debated the results of industrialization, a debate that has continued
to grow unabated. Reliance on agriculture and having a large population base have made
India impoverished, and hence industrialization is roughly a synonym for economic
development as a means to conquer poverty and provide employment.
Industrialization
enables India to utilize its resources optimally, diversify the economic base, raise the
living standard of people, and attain balanced regional development through fiscal
incentives and concessional finance for backward regions. Small industries have
contributed significantly in the area of urban as well as rural establishments.The concept and definition of small-scale industry has changed over years with the
changing circumstances and pressing problems of the Indian economy. Public policies
have to be administered by the governmental system; for this to happen there have to be
operational guidelines. To begin with, one should have clarity of the concepts and
definitions. If the small-scale sector has to be assisted, the system must have a precise
definition of a small-scale unit. For a long time, attempts were made to define a
small-scale unit in terms of the entrepreneurial characteristics, size of investment, number
of persons employed, source of energy, the size of turnover and so on. |
