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Small-scale sector asked to modernise to meet challenges

P Jayaram in New Delhi

India's vibrant small-scale industries, which account for 40 per cent of the country's industrial production and are seen by developing countries as a model, need to restructure themselves to face the new challenges.

Stating this at a function organised to present national awards to outstanding entrepreneurs in the sector here Thursday, Home Minister Lal Krishna Advani said it might be necessary to create alliances between big business and conglomerates of small units to harness the opportunities provided by globalisation.

For this, he pointed out, it might be necessary to remove reservation of certain sectors like toy manufacturing, leather products and processed food for small scale industries and relax labour laws.

"These businesses can compete on cost, quality and range of products with their foreign counterparts only if they make large investments in technology, manufacturing process and marketing," he said and referred to China, whose small-scale sector has emerged as a powerful engine for its phenomenal economic growth.

"It is truly a tribute to the tremendous inherent strength of our small-scale industry that despite all these difficulties, it still contributes 40 per cent of our industrial production and 35 per cent of our exports," Advani said, and added that the challenges faced by the sector had become acute with the advent of the Word Trade Organisation.

Advani presented national awards to 15 outstanding entrepreneurs and those who had excelled in research and developments efforts and manufacturing quality products.

Minister of State for Small Scale Industries Vasundhara Raje said for the small-scale sector, whose 3.2 million units employed 18.6 million people as against 6.75 million by the organised sector, WTO implied challenges and opportunities.

She said large American superstores outsourced from these units products worth $1 billion annually because 'these large corporations have faith in our products, quality and our ability to deliver'.

She, however, said the small-scale sector still had a long way to go as it faced various problems, like non-availability of credit, electricity and rising costs. She said her ministry was supporting small-scale industries' associations to develop a permanent monitoring mechanism to keep a watch on the impact of globalisation in certain areas and encourage participation in international fairs, besides providing assistance to fight anti-dumping cases.

Indo-Asian news Service

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