Small Scale Industries (SSI) are those industries in which manufacturing, providing services, productions are done on a micro scale. Small scale industries play an important role in the social and economic development of India. These industries do a one-time investment in machinery, plants, and industries which could be on an ownership basis, hire purchase or lease basis.
The SSI sector produces a wide range of industrial products such as food products, beverage, tobacco and tobacco products, cotton textiles, wool, silk, synthetic products, jute, hemp & jute products, wood & wood products, furniture and fixtures, paper & paper products, printing publishing and allied industries, machinery, machines, appliances and electrical machinery. The SSI sector also has a large number of service industries. The small-scale sector in India embracing of a diverse range of units from traditional crafts to high- tech industries. The number of SSI working units (registered & unregistered) in India totalled 11.4 million in 2003-04-80.5 percent of which are proprietary concerns and 16.8 percent are partnership firms and private limited companies. They have always played an important role in the economies of all major industrial countries. The Report of the Working Group on Micro, Small and Medium Enterprises (MSMEs) growth for 12th 5-year Plan (2012–17), unveils that the sector accounts for 45% of the manufacturing output and 40% of the total exports of the country. Further the Ministry of MSME’s (2017) highlights that the MSMEs accounted for 30.74% of GDP in the year 2014–15. Current economic forecast or survey interprets that with the Indian Economy growing at an average of 7% per annum, it is likely to become a $5 trillion economy by the year 2025. Hence, the development of the MSME sector is essential and it is considered to be the backbone of the Indian economy. Small-scale industry is playing a paramount role in the industrial landscape of our country.
The growth in employment in this sector over years has been noteworthy. The small-scale industries have shown splendid progression in their quantity, production, employment and exports. The cumulative number of units has increased from 105.21 lakhs in 2001-02 to 115.22 Lakhs in 2003-04 to 630 lakhs as of 2020. The number of individuals employed in small scale units too, has gone up from 249.09 lakhs in 2001- 02 to 273.97 lakhs in 2003-04 to 11 crores in 2020. Exports from small scale sector account for nearly 35 percent of the gross value of exports from our country. Total value of exports of this sector has increased from Rs. 71,244 crores in 2001-02 to Rs. 86,013 crores in 2002-03 to a value of $14740 crore and by 2022 it is expected that MSMEs will contribute 60% to India’s total exports. The total value of production of small-scale units comes to nearly 40 percent of the total value of industrial output of the country. Over the years an inspiring trend in exports has been observed in the dimension of increase in exports of unconventional products from this sector.
The SSI has emerged as an ever-changing phenomenon of the Indian economy. At the national level, this sector has performed extremely well and enabled our country to attain industrial diversification. SSIs have made a portentous endeavour to increase in employment fortunes and productivity prospects. If its potential is properly harnessed, it can help in accentuating the pace of balanced regional progress apart from creating employment opportunities.