Role of small-scale and medium scale industries in India

Small scale industries (SSI) have a significant role in the Indian economy in view of its contribution to production, employment, and export. However, since 1991 small scale industries in India find themselves in an intensely competitive environment due to globalization, domestic economic liberalization, and dilution of sector specific protective measures. Information Technology (IT) is one of the significant factors, which is, in general, not used by the small scale industries in India for their production and business process, in the growth of small scale industries in India All industrial units with a capital investment of not more than Rs. one crore are, at present, treated as small-scale units. For ancillary units i.e., those supplying components etc., to large-scale industries and the export-oriented units, the limit of capital investment is also Rs.one crore. Industrial units with an investment of up to Rs. 25 lakhs belong to the tiny sector. This paper highlights the key role played by the SMEs in India, major problems or threats faced by these industries and also analyses the various factors influencing the growth of small scale industries in India. At the end, role of entrepreneurs and their key skills are highlighted in context with the development of SMEs in India.