Emerging Trends of Small Scale Industries - Problems and Prospects

Abstract

Small-Scale Industries play a key role in the industrialisation of developing country. This is because they provide immediate large-scale employment and have a comparatively higher layout capital ratio they need a shortest gestation period and relatively smaller markets to be economic they need lower investments, offer a method of ensuring a more equitable distribution of national income and facilitate an effective mobilisation of resources of capital and skill which might otherwise remain unutilised and they stimulate the growth of industrial entrepreneurship and promote a more diffused pattern of ownership and location.This paper focuses on the role that small firms would play in the Indian economy as it transforms itself. The current policy constraints are reviewed, and the areas that need action are highlighted. It is argued that a better understanding of the process of evolution of the modern small scale sector in the late industrialising economies can help India make appropriate policy choices in the age of liberalisation and globalization.