The past decade has seen slowdowns in measured labor productivity growth across a broad swath of developed economies. The industrial sector grew 5.02 per cent in the outgoing fiscal year as opposed to the growth rate of 5.8pc recorded a year ago, in Pakistan. The main objective of this research is to examinethe small industrial performance in Peshawar-Pakistan. KPK is the smallest province in terms of area, among the four provinces, and the third-largest in terms of population. This study is about the total units Kohat road 124 industrial estates and 71 are closed which has spawned many social evils such a phenomenal increase in smuggling, trade and macro-unemployed youths indulge in illegal commercial ventures. The results show that the contribution of small-scale industrial sector toward the socio-economic development of the province is not significant. Furthermore, the main reasons are inconvenient location (away from the seaport), non-availability of skilled labor, inconsistent government policies, the dearth of local capital, lack of infrastructure and comparatively poor law and order situation, due to Afghan War, and operation in tribal areas. Nonetheless, certain policy recommendations were suggested based on the finding.