Page 221 - DECO303_INDIAN_ECONOMY_ENGLISH

Indian Economy Ashwani Panesar, Lovely Professional University

Notes Unit 13: Small Scale Industrial Sector in India

CONTENTS
Objectives
Introduction
13.1 Role of Small Scale Industry

13.2 Problems and Future Prospects
13.2.1 Challenges of Small Scale Industry
13.3 State and Industrial Development
13.4 Summary
13.5 Keywords
13.6 Review Questions
13.7 Further Readings

Objectives

After studying this unit, you will be able to:

Describe the role of small-scale industries
Define the problems and future prospects of small-scale industries
Interpret the state and industrial development

Introduction

In this unit, you will study about the role of small scale industry, problems and future prospects
of small scale industries, and the state and industrial development.
The small scale industrial sector has appeared as a dynamic and vibrant sector of the Indian
economy due to its contribution to attaining the socio-economic objectives of employment,
exports, production, fostering entrepreneurship, contribution to Gross Domestic Product (GDP)
and ensuring industrial dispersal. The small scale industrial sector (SSI’s) contributes 8% of the
country’s GDP, 45% of manufactured output, and 40% of exports. The labour-capital ratio in SSI
is much higher than in larger industries. Further, SSIs are better dispersed, and are the second
largest employer of human resources after the agriculture sector. The employment in this sector
has grown to 29.81 million in 2009-2010 from 3.97 million in 1973-1974. Consequently, this
sector was accepted as an engine of economic growth in the early years of planning and the
Indian government has initiated several support measures in terms of policies on reservation,
revision of investment ceilings, modernization, technological up-gradation, marketing assistance,
fiscal incentives, etc., to uplift this sector to enable it to play a crucial role in the process of
achieving sustained and inclusive growth.
Small scale industry manufactures a wide variety of commodities from ordinary consumer
goods to sophisticated goods based on modern technology such as electronic goods, television
sets, engineering products, etc. Several steps have been taken by the government from time to
time, for instance, establishing the Handloom board, Cottage industry board, Handicraft board,
Khadi and Village industry board, etc. to supplement the performance of the small scale industrial
sector in India.

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