Growth and Problem of Small Scale Industry

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Growth and Problem of small scale sectors

Submitted To :| DR . S. Gupta|
Submitted by : | Abdul Hamid|

Small-Scale Industries of India

Introduction

The industrial policy Resolution of 1956, while emphasizing the role of cottage and small scale industries, stated: They provide immediate large scale employment, they offer a method of ensuring a more equitable distribution of National Income, and they facilitate an effective mobilization of capital and skill, which might otherwise remain unutilized. A significant feature of the Indian economy since indecency is the rapid growth of the small industry sector, in terms of employment and growth. In spite of the stiff competition from the large sector, and not so encouraging support from the Government, the numbers of small scale units have growth from 4.2 lakh in 1973-74 to 23.84 lakh in 1993-94. During the same period, of 20 years, employment has grown 4 million to 13.9 million, and output has increased from Rs. 241,648 crores (Datt, 1997). The average annual growth rate of employment in the small scale industry for the period 1980-81 to 1993-94, worked out to be 5.3 percent, and that of production to be 18.0 percent. The growth rate of employment is commendable, but the production figures, conceal the rise in iflation as indicated by Table 1.1 The annual growth of production of the small scale industry of 10.9 percent is much higher than the growth rate of industrial production, in the large sector has been faster, both in term of output and employment (Datt, 1997).

TABE 1.1 : Employment and production in small scale sector Year production Employment Exports (Rs. In crores) (lakh) (Rs. In crores)| 1973-74 7200 39.7 393 1977-78 14,300 54.0 845 1980-81 28060 71.0 1643 1985-86 61228 96.0 2769 1987-98 87300 107.0 4373 1990-91 155340 125.3 9,100 1991-92 1,78,700 130.0 13627 1992-93 2,09,300 134.0 17785 1993-94 241,648 139.4 22,764 1994-95 122210 191.40 29068 1995-96 148290 197.93 36470 1990-00 234255 229.10 54200 2000-01 261289 239.09 69797 2001-02 282270 249.09...
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