how globalization help small scale industries to grow and development of the country
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Globalisation signifies a process of internationalisation plus liberalisation. It is the process of integrating various economies of the world without creating any hindrances in the free flow of goods and services, technology, capital and even labour or human capital. Globalisation has led to an "unequal competition" - a competition between giant MNC and dwarf Indian enterprises. The small scale sector is a vital constituent of overall industrial sector of the country. The small scale sector forms a dominant part of Indian industry and contributing to a significant proportion of production, exports and employment. This paper intends to present the impact of globalisation on Indian Small Scale Industries and also focuses on the performance of SSI, before and after globalisation. ABSTRACT INTRODUCTION- Small Scale Industries occupy a strategic place in Indian economic structure due to its considerable contribution in terms of output, pro- motion of exports, creation of employment and alleviation of poverty. This is a fact that small scale industries have been accepted as the en- gine of economic growth and equitable development at global level. SSI contributes almost 40 percent of the gross industrial value added in the Indian economy. It has been estimated that a million rupees of investment in fixed assets in the small scale sector produces 4.62 million worth of goods or services with an appropriate value addition 10 percent points. The small scale sector has increased vastly over the years. During various five year plans the growth rates in SSI has been very impressive. The number of SSI has also risen at a reasonable rate. The SSI sector has emerged during the last five decades as a highly vi- brant and dynamic sector of the Indian economy. This sector now ac- counts for about 95 percent of industrial units and this is contributing about 40 percent of value addition in the manufacturing sector nearly 80 percent of manufacturing employment and around 35 percent of total exports. The SSI sector is having 32 lakhs units which are spread all over the country producing nearly 7500 items, and providing em- ployment more than 178 lakhs persons. The small enterprises not only play a crucial role in providing large scale employment opportu- nities at lower capital costs than large scale industries but also helps in industrialisation of rural and backward areas thereby reducing not only regional imbalances but assuring more equitable distribution of nation income and wealth SSI units are complementary to large and medium scale units as ancillary units. Before the process of reform began in 1991, the government attempt- ed to close the Indian economy to the outside world. The bureaucracy often led to absurd restriction up to 80 agencies had to be satisfied before a firm could be granted a license to produce and the state would decide what was produced, how much, at what price and what source of capital were used. Planning and the state, rather than mar- kets, would determine how much investment was needed in which sectors.
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