Plight of Small Scale Sector in India under Globalize Era

Abstract

THE SMALL SCALE SECTOR IN INDIA embraces various types of units, ranging from ancient household industries to modern small scale units, which are mainly located in the urban areas and produce goods using wholly or partly the mechanized equipment. This has considerably diversified its production and is manufacturing a wide variety of products and services, which include the sophisticated items, which are either export oriented or import substitution based products. The successive Industrial Policy Resolutions adopted by Union Government spelt out the expected role of small scale sector in the development of India’s national economy. Besides, the various Five Year Plans also gave importance to this sector for industrial development, employment generation and diversification of economic activities to help in equitable distribution of national income and to reduce foreign exchange outlay (Khan, 1989).

The small scale sector occupies a central place in the economy of India but the globalization process which started with high speed about one and a half decades back is only spreading capitalistic economy in another form. Human life has also been turned topsy-turvy through the liberalized economic policies implemented by the government. It is not only the capital that is being imported but also technology. When technology is coordinated with the means of production the importance of human labour is declined. As a result employment potential has decreased and many have lost their jobs and job opportunities (Rani, 2003). The present paper thus attempts to highlight the present state of small scale sector in India in the globalised era arising from the outmoded technology, inadequate marketing outlets, non - availability of timely finances, managerial deficiency, low quality standards and heavy global competition. It also offers suggestions for future development of this sector.

Keywords: Globalization, Sick Units, Performance, Economic Growth.