Small Scale Industries: Threats And Challenges Aarti Deveshwar

Abstract

The Small Scale Industries sector has emerged as a vibrant and dynamic sector of Indian economy which contributes nearly 40% of the total industrial production and over 34% of the national exports. At present this sector is providing employment to over 250 lakh people. It also acts as a nursery for promoting entrepreneurial talent and as a catalyzer of industrial growth through a wide network of more than three million units in the country, accounting for about 95% of the total industrial units in the country. The world trading system is constantly offering new challenges as well as creating new threats; as tariffs and quotas are removed, new technical norms, sanitary and phyto-sanitary measures and anti-dumping actions are rendering more challenges for businesses in emerging economies. The WTO is bound to impact every economic activity- the small- scale-sector is no exception. WTO Agreements have thrown up a variety of threats and challenges. In its wake the SSIs lost the shield of protective policies and have been exposed to the onslaught of large organizations and international competition. The strategy to survive and flourish will have to begin with a clear understanding of the nuances of the changes that are taking place, not only domestically but globally. An attempt has been made in this paper to study the performance of SSIs since 1995 when WTO came into existence and to identify the various problems which the SSIs are facing in the changing environment and to suggest strategic imperatives to make them competitive in present scenario.