Introspection into the Working of Indian Small Scale Sector

The small scale industries (SSIs) have a crucial role in a developing economy like India. They play a strategic role in the progress of the country. These industries by and large present a stage in economic transition from traditional segment to modern segment. The transitional nature of this process is reflected in the diversity of these industries. SSI contributes 6% of GDP, 35% of exports, 30 million employments (the second largest after agriculture), nearly 40 % of our industrial output and so on. This clearly conveys the significance of this sector in Indian Economy. Despite its high contribution to Indian Economy, this sector has not done well in the post liberalized and globalize period, partly because of lack of government attention and partly because of its own characteristics which have made it vulnerable to defeat at the hands of big units in the markets. Undoubtedly the small sector has enormous potential and is a crucial sector of Indian Economy. However for the sector to fully realize its potential, it is essential that it shall wake up to the realities of a liberalized India. It needs to be away of its state-designed protective rut. The Government shall realize the need for a shift in policy towards the sector, so that it can flourish.