Globalization and Its Impact on Small Scale Industries in India Vol. 1, No. 2 (June, 2009) pp. 135-146 ISSN 0974-9977
Sonia, Research Fellow, Department of Commerce, Punjabi University, Patiala(Punjab). Dr. Rajeev Kansal, Reader, Department of Commerce, Punjabi University, Patiala(Punjab).
ABSTRACT Globalization refers to the process of integration of the world into one huge market. It provides several things to several people with removal of all trade barriers among countries. Globalization happens through three channels: trade in goods & services, movement of capital and flow of finance. Globalization in India is generally taken to mean ‘integrating’ the economy of the country with the world economy. The real thrust to the globalization process was provided by the new economic policy introduced by the Government of India in July 1991 at the behest of the IMF and the World Bank. Globalization has led to an ‘Unequal Competition’- a competition between ‘giant MNC’s 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. Therefore, the present study analyzes the impact of globalization on Indian Small Scale Industries. The main theme of the paper is to evaluate the performance of SSI, before and after liberalization and compare them with average annual growth rates, to know the impact of Globalization on the performance of SSI. The period of the study is 1973- 2007 and based on secondary information. Keywords:- Globalization, Small Scale Industries, Exponential Growth, Production, No. of Units, Export and Employment.
INTRODUCTION Globalization signifies a process of internationalization plus liberalization, in which the world has become a small village due to the concept of globalization. The competition has become intense in every field. Nations fight with game plan to sustain their economy, by introducing .
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PCMA Journal of Business
new policies and announcing incentives to support mainly their economic- indicators. After the world economy was open to attack, the Indian economy has initiate to concentrate on the development of small industrial base, which had contribute positively to the India’s GDP; India’s GDP growth is better than other developing countries with the developed small industrial sector. In order to impart more vitality and growth to small scale sector, a separate policy statement has been announced for small, tiny and village enterprises on 6th August, 1991. This policy statement was a leap-forward because it was the first time that Government had issued a separate policy statement for the small and decentralized sector. In the past, small scale sector merited only two or three paragraphs in the more general industrial policy statements. The fact that Government considered it necessary to make a separate policy statement for small enterprises was a welcome recognition to the dynamic and vibrant nature of the sector. This policy statement proposed some path- breaking measures to mitigate the handicaps that were faced up by small enterprises in respect. Government of India introduced a large number of innovative promotional measures to uplift the growth of small scale sector. Major features of the Small Industrial policy of 1991: 1. Emphasis to shift from cheap credit to adequate credit. 2. Equity participation by other undertakings (both domestic and foreign) upto 24 percent. 3. Introducing of factoring services by banks. 4. Marketing of mass consumption goods under common brand name. 5. Setting up of sub- contracting exchanges. 6. Establishment of technology development cell. 7. Opening of quality counselling and technology information centres. 8. New...