Fear and Challenges Faced by Small Scale Industries of India in the World of Globalisation

Abstract

The small-scale sector has emerged as an engine of growth in most of the developing and newly industrialized countries of the world. In India the SSI has played a catalytic role in socio-economic transformation of the country. This sector has exhibited tremendous capacity for employment generation, greater resource use efficiency, and technical innovation, promoting inter-sectoral linkages, raising exports and reducing regional imbalances. Small business has low capital investment and therefore the risk of the entrepreneur is limited and he can afford to be venturesome. Moreover small businesses have a small gestation period so returns are also quick. The flexibility inherent in this sector allows the entrepreneur to work aggressively if a project seems promising or change course in case things do not work out. In his manner the small business functions as a nursery for developing entrepreneurial talent. The cumulative effect of these innumerable entrepreneurs leads to economic growth and higher standards of living, which transform the society. The world trading system is constantly offering new challenges for businesses in emerging economy. The WTO is bound to impact every economic activity-the small-scale-sector is no exception.WTO Agreement have thrown up a variety of threats and challenges in the sight of WTO Agreement SSIs lost the shield of protective policy of the government and have been exposed to the onslaught of multinational organization and international competition. The strategy to survive and flourish will have begun with clear understanding of the changes that are taking place, not only domestically but globally. This paper attempts to study the performance of SSI since 1995 to 2010 when WTO came in to existence and to identify the various problem which the SSIs are facing in the changing environment and to suggest strategic imperatives to make them competitive in present scenario.