Small Scale Industry in India: An Analysis in the Context of Liberalisation

Abstract

Small and Micro producers are crucial in developing economies, and their role is even greater in the largely rural economies of South Asia. In India as well, the sector is the second largest employer, after agriculture, and accounts for nearly 6 percent of the country's GDP. India was an exception in that it gave the small scale sector large incentives, and protection, in the period 1948-1991, going to the extent of reserving certain production lines solely for the sector.In the historical context of this, this paper shall attempt to analyse the issues peculiar to a 'small scale of production' in India in an increasingly globalised scenario. It shall also look at some of the other issues plaguing the sector such as credit availability and maintaining quality standards.