K Sharma [1983] in his empirical work Industrial Development of Andhra Pradesh covers various aspects of industrial growth, region

wise and district wise for the period 1960-1976. He examined the large and small-scale sectors and the public and corporate sectors. The study also evaluates the role of different state level promotional agencies in the Industrial Development. The study also analyses the impact of incentive schemes on the development of the back ward areas of the state and offers some valuable suggestions. Mehta (1994) in his work on Size and Capital Industry In Indian Industry has argued in favour of Small-Scale industries with Capital intensive techniques. He feels it is better to consider an industry not with reference to small or large scale but with reference to various size groups. Vepa (1995) in his work on Restructuring The Industrial Framework For Promoting Small Sector Industries In India argues that the growth of small industries has been largely confined to the metropolitan and urban areas, which account for more than 75 per cent of the production of Small Scale units. He also feels that the industrial network established for the promotion and growth of Small Scale Units. He also feels that the institutional network established for the promotion and growth of small industries is conceptually comprehensive but weak in the field. Ashk Mitra (1965) conducted pioneering study on the Level of Regional Development in India. He had taken 1961 Census data. His study was based on a simple method of assigning and adding up of ranks to explain regional disparities. He divided the indicators used by him into six blocks namely. Block-I : Geology, Topography, Rainfall, House Type, Language, S.Cs, S.Ts, Soils Crops & Yields

Block-2 :

Agriculture infrastructure percent of net area sown percent of cultivating, Household

Block-3 : Participation rates i.e. make working in agriculture and non agricultural workers Block-4: Sex ratio i.e. number of females for 1000 males

Block-5:

Distributive trade i.e. workers in retail trade, workers in manufacturing

Block 6: Organized industry in the modern sector

And information collected on them for each district in India. In short he has used the indicators such as Geology, Topography, Rainfall, House type, Language Schedule Tribes and castes, soils crops yields of rice, area under double crop percent of net area sown participation rates in various occupations, distributive trade organized industry etc.

His study reveals that out of a total of 327 districts in India 24 percent or 79 districts are at the lowest level of development and 88 or 27 percent districts are at the second lower level of development, 84 (20 percent) of the districts are at the highest level of development. He says 30 per cent of population is in the highest level of development.

Naths Study (1970) He has taken five indicators for 14 states and followed Ashok Mitras methodology. Nath has ranked states according to the value of each indicator. For example

Kerala having high literacy, rate was given the first rank and Rajasthan having lowest literacy was awarded the last rank similarly. Madras was given first rank and Assam was given last rank in so far urban population as proportion of total population of the State was concerned. According to 1961 census, ranks were awarded to all States for give indicators. Ranks added to each State for five indicators to obtain the total ranks of the State. The States were then arranged in ascending order of total rank score. The State having the lowest rank score being the most developed state and the state having the highest rank score being the least developed one in Naths study Maharastra and Tamil Nadu have total rank score of 14 each, which is the lowest rank, and were considered as the most developed states. Gujarat with a rank score of 16 comes next then follow West Bengal, Punjab and Kerala. He considered these six states are relatively developed and remaining eight states viz. Orissa, Uttar Pradesh, Andhra Pradesh, Bihar, Rajasthan, Madhya Pradesh, Assam, and Jammu Kashmir he was considered as less developed. Hemalathraos Study (1977): She was employed Principal component Analysis. She took 3 periods i.e. 1956, 1961 and 1965 she has selected 24 indicators with 4 sectors these sectors are agriculture, industry banking and education. She has combined the induces taken from these four sectors to obtain a composite index of development . Her results show that West Bengal is the most developed State in 1956, 1961 and 1965. Second Place goes to Maharashtra in all the three periods. Tamil Nadu is in 3rd position in early periods i.e. in 1956 and 1961 and Gujarat was in fourth place during those two periods. In 1956 Gujarat got 3rd place and Tamil Nadu got 4th place. In all these three periods Punjab is in fifth place. The index values for the States of Orissa, Rajasthan, Madhya Pradesh, Assam, and Bihar were below the national average in all the three periods. She concludes that regional disparities declined over the period of her study.

Ganguly and Gupta (1976): have constructed levels of living indices for 15 states of India. They have taken three time periods viz. 1955, 1960 and 1965 they have taken three components of levels of living Nutrition, Housing, medical care, Education and Clothing as primary component leisure Security and environment were taken in secondary component. In third component it is over all levels of living. They have also employed the technique of Principal Component Analysis. In all three periods, as per the primary component index Punjab, Tamil Nadu, Maharashtra, Kerala and West Bengal showed the highest levels of development where as Bihar, Orissa, Madhya Pradesh and Utter Pradesh, and Andhra Pradesh showed the lowest levels of development. So far as the Second component is concerned West Bengal, Kerala, Tamil Nadu and Punjab are in the lead position where as Bihar, Orissa, Assam, Madhya Pradesh and Utter Pradesh were in low position. By combining Primary components they have arrived at composite index. According to this, in the year 1955 Tamil Nadu, West Bengal, Punjab, Maharashtra and Kerala had the highest level of living while Bihar, Orissa, Uttar Pradesh and Assam were at low level of living. The same position continued in 1960 and 1965. They have concluded that disparities have declined in the over all levels of living between the states during the period 1955 1965. Sandesara (1993) using SMI data for 28 industries found that for a given volume of investment, small-scale units neither generated more employment nor produced more output compared to large-scale units. Nagaraj R (1998) In his study Some Aspects of small scale Industries in India findings Based on Two All India sample surveys

The number of registered small scale units after the mid-sixties total number of registered small units receiving assistance from the commercial Banks is estimated to be Rs.2,33,221 and the net value added by them in the year 1976-77 was Rs.1,395 crore. Though textiles, food product, leather and furniture industries are numerically dominant, their significance in terms of the proportion of the total value added is relatively much less. Engineering and chemical Industries contribute over half of the total value added by this sector. Wages in small-scale sector are generally low. Workers in the higher productivity industries do not seem to get relatively higher wages. However, the level of employment doesnt seem to get reduced on this account. Therefore to this extent the workers are benefited in the high

productivity industries profitability and the share in the total value added is high in these industries. The distribution of units with a highly skewed. Bigger units own a greater share of the

productive capacity. Their net fixed capital formation is also higher. But interestingly the size of firms and rate of profitability are inversely related. The reasons for this seem to be that the smaller firms use their productive capital more intensive and they pay relatively much lower wages. More interestingly the profitability is much higher than that of the corporate sector. The modern or organized small scale industries too needed protective support in terms of fiscal incentives . Concession, reservations of items to be produced trade restrictions, provision of facilities such as water, electricity under the frame work of Industrial estates and provision of inputs at predetermined policies. The rationale for such a policy determined support is similar to the one

advanced in favour of village Industries. Modern small scale Industries, it was contended have to be rendered viable and competitive. Fiscal concessions, trade restrictions, barrier to entry, pricing of oproducts and licensing of operations, to name a few. Anuradha Seth (1995): Efficiency of Small manufacturing Enterprises implications for

Employment policy according to her the viability of small firms depends in large part on the nature of their linkages with the market. To the degrees small firms act as sub contracts to large firms, their viability depends in part on the performance of the parent company. In other instances small firms can well be insulated from competition with other firms. For instance, government policies such as reservation of products for exclusive manufacture by small firms that insulated the later from competition by which determinately of viabilities might depend on the effectiveness of state policies. Government policies, that insulated small firms from competition. However, government cash subsidies can directly affect the firms profitability either by diminishing losses or increasing profits. Therefore, it is important to note that the degree to which government cash subsidies affect the viability of small firms. Several authors have Indian Industrial development. Usually, a distinction is made between small firms in the Khadi and Village Industries and small, modern firms. Modern small, scale units are distinguished from traditional, home based examined the list of small firms to

production units (also known as Cottage Industry Units) on the basis of technology forms of labour, recruitment and markets supplies.

The distinction between these two types of small firms is reinforced by Government policy, which generally insulates traditional units from completion with large firms. It is by now officially recognized that small, traditional units are on the wane because they are unable to with stand the pressure of competition (1988, 667) on the other hand, modern small manufacturing firms are the fastest growing set of small firms in Indian Industry. The fundamental weakness of small scale production stems from its small size, which prevents small firms from benefiting fully from economies of scale technological and pecuniary. They are therefore, cost inefficient relative to large units. Further, the later passion at least apart of the form of cheaper price, so that in the market small units such as handicapped especially where they have to compete with large units. The relative cost efficiency of small firms also dependable in part on their ability to trade productivity differentials with wage differentials. Small firms were not even half as productive as large firms. Their technical inefficiency steps in large part from their inability to capture economics of scale. Homi J.H. Taleyarkhan (1993) in his article Problem of Small Scale Industries states that SSIs are the crux of Indians industrial development. One of the biggest contributions of the SSIs is assisting to solve our big problem of unemployment in the country. SSI units provide

employment to more than 130 lakh worker, many of them skilled workers. The difficulties of SSIs are the big brother doesnt pay the small one intimate as a result of this the cash flow of later dries up. Simplification of procedures is most necessary. Marketing surveys must be much more developed. The most important need is to provide more facilities to proper change.

Frequent changes in the Fiscal policy. Fiscal levy are not preferable and also frequent breakdown or shortage of power water and required material supply. Susheela Subrahmanyan (1995) Editor of Sothern Economist in her editorial on Strategic moves needed for SSI growth states that the Government is reviewing its policy with a view to pruning the number of items reserved for small scale sector. It has been felt that considerations of technology upgradation, efficiency, productivity and improvement in quality require the product reservation for the small scale sector for not continued indefinitely. At present 836 items are reserved for small scale sector. However, 80% of the units in the reserved category manufacture only 39 items, while the real beneficiaries of the reservation policy are those who produce 68 items only. The policy aims a only to reserve manufacturing activity for the small sector and it doesnt prohibit SSIs from arrange marketing tie-ups with large scale industries. In the wake of the policy of deregulation big units of the organized sector have been reaping benefits meant for the small scale sector. If exports of the small industrial sector which cover around 42% of countrys total exporters, can be improved by jacking up the ceiling limit for the investment. India could usefully emulate. The examples of Japan & Korea in the matter of trading corporation for promoting exports of products of small units. The SSI sector that currently contributes 40% of the total manufacturing output and 60% of total exports can still go along way if its twin constraints paucity of resources and technological obsolescence or removed. A series of reforms needs to be devised in respect of credit facilities. Marketing and modern technologies. With the growing trend of greater ancillarisation and subcontracting by SSIs the policy of reservations has lost much of its efficacy as an instrument of protection. The new

economic policy has provided a leeway for this sector to graduate and be a player on its own so as to integrate itself fully with an economy as a whole. Desai and Taneja (1990) commenting on the system built up by the Government of India to assist small firms feel that it helped the wrong firms, benefited others at the expense of the consumers, and created a bureaucracy with no essential function. Myrdal (1968) Sumachar (1973 , Jha (1980) Tandon (1977), Datt and Sundaram (1977) hold the view that small industries have vast employment potentialities. They urge that small industries are labour intensive in nature and posses much more employment generation capacityvis-a-vis large and medium scale industries. They emphasize on Intermediate technology of production for small enterprises, which on the one hand, employs a low capital investment a far as possible and maximize the employment as possible. On the contrary, the other scholars, for instance. Dhar and Lydall, conclude that modern small scale industry is fairly capital intensive, and do not generate more employment per unit of capital than large scale industry. Ramaswamy (1994) examined four industries, motor vehicles, agricultural, machinery, machine tools and plastics and found that there was no systematic link between the capital labour ratio and employment. He finds no systematic or substantial difference between employment size classes or between investment size class of establishment. He concluded that technical

efficiency in the modern small scale industry is high and intra-industry variation in technical efficiency is low. Goldar (1988) discussing on relative efficiency of modern small scale industries in India concludes that concessional credit has induced inefficiency in small firms. He studied 37 industries at the three digit level to analyse the technical efficiency of small scale and large scale

industries for the year 1976-77. He finds that the SSI (Compared to the large scale industries) generally, has low labour productivity, high capital productivity, low capital intensity (measured as capital per employee) and low total factor productivity. He inferred that the modern small sector is inefficient relative to the large sector in a large number of industries. He also concludes that the relative efficiency of the SSIs cannot be relied upon as a source of efficient employment generation. Nanjundan (1994) emphasizes that the use of microprocessors has brought abut a technological revolution and affected manufacturing methods and entrepreneurial organization in developed countries in a significant way, which tends to favour small scale production. This technological revolution known as feasible manufacturing system will be the most important development affecting small industry development in developing countries in the coming decade. He feels that the quality of infrastructure and services provided for small scale industry in India leaves much to be desired and undoubtedly affects adversely the operation of small scale enterprises. Kashyap (1988) found that the high growth of the SSI sector was hardly accompanied with efficiency and innovativeness. According to him the assistance arrangements were wasteful, ineffective and even counter productive. He attributed the growth of the sector to the policy bias against largeness. Subrahmanian (1995) dealing with technology dimension in small scale sector calls for a change in the direction of policy and targeted efforts away from the present one saddled with product, price reservation towards technology development. According to Laghu Udyog Samachar Credit Support To the SSI sector (2000) a Small Scale or Cottage Industry may be defined to be an enterprise or Series of operations carried on by a

workman skilled in the craft on his own responsibility, the finished product of which he markets himself. He works in his own home with his own tools and materials and provides his own labour or at most the labour of such members of his family as are able to assist. These workers work mostly by hand labour and personal skill, with little or no aid from modem power driven machinery, and in accordance with traditional techniques. Such supplementary energy as is provided by animal power may add to the economy and efficiency of the industry. He works, finally for a market in the immediate neighborhood that is to say in response to known demand with reference to quality as well as quantity.

Dr. K. Prasad and Dr. T.V.S. Rama Rao in their recent study on Employment Potentiality of Manufacturing Industries in Uttar Pradesh have observed that the large scale firms turned out to be more capital intensive than the small scale ones. For example considering the total number of workers as a measure of employment, it was found that investment in machinery per worker amounted to Rs.10,643 in large scale, whereas it was only about Rs.2,809 in small scale, giving an investment labour ratio of 10.64 for the large scale and 2.81 for the small scale. The data indicated that on an average ten lakh rupees worth of production enable a large scale firm to employ 34.5 workers in contrast to 114.3 employed by a small scale unit. In view of higher capital intensity, we expect that a large scale firm using sophisticated machinery would required a minimum number of workers on the job. Prof. Shah also admitted that there couldnt be a rational demarcation of fields without

overlapping between large scale and small and cottage Industries. It was said that this should be made after duly considering appropriate economic and social conditions in each group. Broadly

speaking, industries which are more in the nature of services than of material production of specific commodities would be found to be more suitable for small scale operations. The report on Census of Small Scale Industries units (1977) reveals that many studies have exposed that industries are mostly concentrated in big towns in order to avail greater economic advantages. Concentration of industries only in urban areas and clustering of wealth in few hands deprive other people from their genuine socio-economic rights leading to the emergence of many socio economic problems, like regional disparities imbalances, in equal distribution of incomes, growing tendency to migrate from rural areas to the already congested and over crowded cities, formation of slums and pollution of the atmosphere. It is commonly believed that dispersal of industries can go a long way in checking these problems on the one hand and development of backward areas on the other. When large Industries cannot be attracted and developed in backward regions, there arises a strong

argument in favour of the promotion of entrepreneurship in small sector, which would provide industrial and business leadership at the lowest level. Decentralization through dispersal of small scale industries is also favoured to till the Cracks and gaps in the industrial structure created by the indiscriminate development of large scale industries. There is,. Therefore, a need of

spreading a network of small industries over as wide range in undeveloped areas for as possible so that they may function as catalystic agents for further development and equitable distribution of national income. Because these industries do not require huge capital and sophisticated technology, they are labour oriented and can be established in the remote rural areas. According to development Commissioner (SSI ) (1975) it was found that manufacturing of many items in small ancillaries involves comparatively lesser cost than in big enterprises because of

fewer overheads in s mall units. In case where close management-cum labour relations are essential , ancillary purchases prove to be beneficial for the large scale units. ancillarisation results is as following: i) Reduction in Capital investment in machinery and equipment in the parent industry Besides it,

ii) Optimum utilization of manufacturing / servicing facilities available with ancillary units; iii) Greater employment opportunities with lesser capital investment iv) Opportunities for large and medium undertaking to concentrate on sophisticated and technologically intricate items, by virtue of off-loading items of simpler technology to ancillaries. v) Reduction in inventory of large undertakings due to ready availability of components of desired quality according to planned delivery schedule. According to Development Commissioner SSI (1983-84) As a result of various promotional measures the value of the purchases from the small scale ancillary units made by the public sector undertakings, railways and defense establishments. There is still much to be achieved as these purchases represent only a small percentage of the total turnover made by the public sector undertakings in the said year. There is need to enforce the guidelines of the B.P.E. at the operatonal levels in the public sector enterprises. According to Sixth Five Year Plan (1980-85) various nucleus plants are proposed to be set up in each district identified a backward. It has also been provided that efforts would be made to establish as many ancillaries as possible around these plants. The main work entrusted to nucleus plants would be to concentrate on assembling the products of the

ancillary units producing the inputs needed by the small units and making adequate marketing arrangements. Dr. S.P. Mukherjee (1948) at Cuttak, the then Minister of Industry and supply Dr. S.P. Mukherjee, emphasized the role of village and small industries, which uphold the dignity, and self respect of the common man. He felt that there was a psychological and moral side to their development besides the economic side which no doubt was important. Referring to the utilization of power by Cottage Industries and small-scale industries, he said when we speak of cottage industries and large scale industries we must not emphasize the difference in technique so far as the production is concerned. Cottage Industries and small scale industries derive their special character not so much from the difference in technique is concerned, the more cottage and small industries adopt and follow the modern technique of production, the better for them an for the country.