Small-Scale Manufacturing Industries-Some Aspects of Size, Growth and Structure

Some Aspects of Size, Growth and Structure K V Ramaswamy In this paper the author approximates the small-scale sector in India by the non-factory non-household segment of the manufacturing sector. It is found to be a significant source of manufacturing employment. Particularly, during the period 1981 to 1991, most of the addition to the manufacturing employment has come from non-household non-factory segment. Registered small-scale (SIDO) units are found to be a small but growing segment of manufacturing. It is observed that wages in small-scale units are lower relative to the large-scale sector but labour productivity is not proportionately lower in 1987-88. This suggests that the shift to non-factory employment may be due to labour cost advantages of small-scale production. The production of reserved items is not found to be a dominant activity of SSI units. The estimated output share of reserved items in industries with larger share of the number of reserved items is not found to have increased. This questions the policy of product reservation for the small-scale sector.