Growth And Structure Of Small Scale Industries In India

The small scale sector plays a very important role in the socio- economic development of the country. It has significantly contributed to the overall growth in terms of the Gross Domestic Product (GDP) employment generation and exports. It contributes almost 40% of the gross industrial value added in the Indian economy and has been recognized as one of the most appropriate means of developing the industrial economy of the backward countries. Small scale industries facilitate the tapping of resources including entrepreneurship, capital, labour and raw materials. They can mobilize rural savings which may otherwise remain idle or may be spent on luxuries or channeled into non productive ventures. The development of small scale sector has been important in India because the small scale units requires less capital outlay and at the same time provides more employment than the large scale sector. A small unit does not require highly sophisticated technology. It can therefore, be useful in backward areas where the people have yet to be trained to meet the challenge of sophisticated technology.The small scale industry has been given priority to generate more employment opportunities and to increase the income generation for bringing a transition in the development of the economy. It has also been pursued to promote the entrepreneurial talents to utilize local resources and factor endowments for increasing the output to meet the requirements for proving the quality of life of the people. The pursuit of economic liberalization and that of the industrial policy reforms envisages the technological capabilities and competitiveness. Institutional agencies have been setup for providing technical, infra-structural, financial and other services, and promotional measures providing the fiscal and financial concessions, subsidies, reservation of the products and priority in credit allocation have been adopted to augment the development of the small scale industrial units. For establishing small scale industries the known new capital structure, employment generation, location the industrial belt and other aspects of Industrial establishment are a must for any prospective entrepreneurs. There seems to be no other go except establishing small scale industries where attempt would necessarily provide the opportunity for the optimum utilization of local resources to serve the local needs.The large scale industry is urban based. It has resulted in the neglect of agriculture and industry in the rural areas Small Scale Industrial development is a means of reducing the prevailing imbalances. It helps in accelerating process of overall development of the state.