Before the industrial revolution life for the most of the people was a forming and rural

life style. Communication and travel were limited. Manufactures was done by natural means,
such as windmills life was hard and people worked hard to pay the rent and put food. The
industrial revolution began in the middle of the 18 th century. This era changed the way people
worked and lived. New machines were invented and a large part of the population moved from
the country side to urban areas.
Economic development of any nation is totally depends on industries. A growing
industrial sector is crucial to greater economic development and takes in a number of areas as a
country develops. Ensuring steady industrial growth helps to compliment and sustain continued
economic development. In a developing economy like India industries are indispensable
development of industries is not only indispensable for India, but there is also good scope for the
development of industries in India.
India after independence, on a way of industrialization to achieve the much-needed
economic growth for development. India is the 2nd largest populated country in the world next to
china. Earlier more than 60 percent of the populations are dependent on agriculture. Later, due to
economic growth some of them were started agro based small scale industries with their family
members, friends and unskilled persons. With the help of government policies the numbers of
small scale industries are gradually increased. The government viewed industrial growth as a
mode of achieving equitable growth in the country. Small and large scale industries are two legs
of industrialization process of a country. Hence small scale industries are found in existence in
every country.
A significant features of the Indian economy since independence is the rapid growth of
the small scale industrial sector over the past 5 decades, successive government have framed
policies to protect the interests of the small scale sector and facilitate its rapid development. In
pursuance of their policies, government have initiated various support measures from time to
time which include reservation, revision of investment, modernization of technology, marketing
assistance, fiscal incentives etc.
The small scale industries sector contributes significantly to the manufacturing output,
generation of employment and exports of the country and it provide the raw material to the large

scale industries and also contribute more to the rural development. It is estimated that in terms of
value, the sector accounts for about 45 percent of the manufacturing output and 40 percent of the
total exports of the country. The sector is estimated to employ about 59 million persons is over
26 million units throughout the country. Small scale industries sector plays a major role in Indias
present export performance 45 to 50 percent of the Indian exports are contributed by small scale
industries sector.
For the healthy expansion of small scale industries depends upon a number of factors like
the provision of raw material, power, technological advancement and organized marketing of
products. In this connection, it may refer that the small scale industries facing a many problems
for their existence. In the chamarajanagar district there are several types of small scale industries
playing a vital role in the generation of employment and exports.

1.2 STATEMENT OF THE PROBLEM

The progress of a countrys is to a great extent is measured by its industrial development.
Even to modernize and improve agriculture industrialization is necessary. Small scale industries
contribute a great percentage to gross domestic product in ensuring growth employment and
income stability of a country. Small scale industries are more likely to succeed in small urban
centres and rural areas, where they can contribute to a more even distribution of economic
activity in a country.
Small scale industries are playing very important role in the Indian economy. Many
incentives are provided both by the Central and State Governments to promote the growth of
small-scale industries and also to protect them from the onslaught of the large-scale sector. for
the survival of their business they come across some of the problems like lack of supply of raw
material, unskilled labour, inadequate credit assistance, absence of adequate infrastructure etc. In
chamarajanagar district the small scale industries exposed too many challenges for their survival.
So my study focuses on the small scale industries of chamarajanagar district.

1.3 NEED FOR THE STUDY

In present context the small scale industries are playing vital role in the development of
Indian economy. Small scale industries have been given an important place in the economy of
both developing and developed countries. The economic development achieved by many
developed countries can be linked directly to the growth of this sector.
In India the small scale industries has registered rapid growth. In the view of the
importance of small scale industrial sector, the growth and development has attracted a good deal
of academic attention. Back ward district like chamarajanagar small scale industries are
struggling to maintain sustainability for their growth. To achieve more development it is
necessary to support the growth of small scale industries and to protect them from the
competition of large scale industries to sustain the market.

1.4 OBJECTIVES OF THE STUDY

To know the structure of small scale industries in Indian economy

To study about the government policies towards small scale industries
To study about the nature and types of small scale industries in chamarajanagar
To study the problems faced by small scale industries in chamarajanagar and to know

how the government support is utilized by them

To suggest the small scale industries of chamarajanagar to overcome the problems

1.5 RESEARCH METHODOLOGY

The method adopted for the study is a convenience sampling method. Data will be
collected from both the primary and secondary sources

Primary data

The data is collected through administering the structural questionnaire to the owners of
the small scale industries.
Secondary data
The data was collected through various research articles, books, magazines, journals,
website etc.

1.6 LIMITATIONS OF THE STUDY

My study is confined to the industries of chamarajanagar district.
The sample size is small so, collected Information may not be reliable at all the time
While responding to the questions the respondents may be biased. The analysis and
interpretation is mainly based on the responses will major drawback.

1.7 CHAPTER LAYOUT

The project would be presented in 5 chapters.
1st chapter contains with the introduction of the study, statement of the problem,
objectives of the study, research methodology, and limitations of the study and chapter
layout.
2nd chapter consists of conceptual frame work of small scale industries.
3rd chapter will give a profile of the small scale industries in chamarajanagar.
4th chapter deals with analysis and interpretation of collected data.
5th chapter will provide findings, suggestions and conclusion.

2.1 Introduction
Industrial Revolution marks a major turning point in human history; almost every aspect
of daily life was eventually influenced in some way. The Industrial Revolution was a period from
the 18th to the 19th century where major changes in agriculture, manufacturing, mining,

transport, and technology had a profound effect on the socioeconomic and cultural conditions
starting in the United Kingdom, and then subsequently spreading throughout Europe, North
America, and eventually the world.
India is predominantly an agricultural country. After independence our great leaders
thought of developing our industries. Economic development of any nation is totally depends on
industries. An industry plays on important role in the Indian economy. Ensuring steady industrial
growth helps to compliment and sustain continued economic development. A well developed
industrial sector, covering various different areas is vital to the economic development of a
country. Even to modernize and improve agriculture, industrialization is necessary. The modern
equipment that is used by farmers is produced by industries. Industries in India contribute to
more than half of the national income; items of daily use. Without industries our country could
not make progress. Therefore, plans were made to set up basic industries. Steel is the base of all
heavy machinery and big steel plants were set up under the five-year plans. Now our country
stands tenth in the industrialized countries of the world.
Indian economy is an under developed economy. Its vast resources are either utilized or
underutilized. A major section of man power is lying idle. The per capita income is low.
Production is traditional and the technique is outdated. The output is insufficient and the basic
needs of the people remain unfulfilled. Industrialization is the only answer to this present state of
disrupted economy. The problem is of the approach which should be direct, utilitarian and
pragmatic. Such industries do not require huge capital and hence suitable for a country like India.
The small scale industries have a talent of dispersal. They can be accessible to the remote rural
areas of the country and do not lead to regional imbalances and concentration of industries at one
place, which is responsible for many economic resources such as entrepreneurship and capital.
Small Scale Industries help the economy in promoting balanced development of
industries across all the regions of the economy. Small Scale Industries are adept in distributing
national income in more efficient and equitable manner among the various participants in the
process of good production than their medium or larger counterparts. Small Scale Industries
plays a pivotal role in the Indian economy in terms of employment. A high rate of growth has
been recorded after independence in spite of stiff competition faced by them with large sectors.
Further, it has not received enough encouraging support from the government.

Small scale industries have emerged as a vibrant and dynamic sector of the Indian
economy that contributes around 40 per cent of the total industrial production and over 34 per
cent of the national exports. At present the Small Scale Industrial sector is providing employment
to over 250 lakh persons. The captains of our economy are more than aware of the importance of
the small scale industries in terms of employment potential, productivity, utilization of
indigenous resources, balanced regional development etc.

2.2 Origin and history of small scale industries in India

Before the Second World War, it was established as the office of superintendent of
Cottage Industries.
In 1947, it was expended into as the office of Directorate of Industries and in 1952 it
took responsibility for the development of private industries.
In 1972; it was transferred to the Ministry of Industries, bearing with the name of Cottage
Industries Corporation.
On 21-2-1974, it was shifted again to the Ministry of Co-operative. The name was also
changed into Cottage Industries Department on 30-3-1976. On 21-2-1974, it was shifted
again to the Ministry of Co-operative. The name was also changed into Cottage Industries
Department on 30-3-1976.
In 1982, 14 weaving schools were referred from the Department of Industry, Agriculture
& Vocational Training under the Ministry of Education to the Cottage Industries
Department.
In 1997, the structure of the department was promoted from Grade 3 to Grade 1.
The name of the department was changed again as the Small-Scale Industries Department
on 1-4-2011.

2.3 Meaning of small scale industry

A small scale industry (SSI) is an industrial under taking in which the investment in fixed
assets in plant and machinery, whether held on ownership term or on lease or hire purchase, does
not exceed Rs. 1 crore.

In other words, A small scale industry is that industry in which most of the work
is done by hand or very small and simple machines and the workers have lack of technical
knowhow means they have no degree for their work.
Small scale units are not defined in the central excise Act 1944 or rules made there under.
The small scale units are defined in Industries Act, 1951 for the purpose of exempting then from
registration under the Act. The definition basically taken the investment made on the plant and
machinery by any industries as the basis for determining the small scale industries.

2.4 Definition of small scale industries

Defining small-scale industry is a difficult task because the definition of small-scale
industry varies from country to country and from one time to the in the same country depending
upon the pattern and stage of development, government policy and administrative set up of the
particular country.
The Fiscal Commission, Government of India, New Delhi, 1950, for the first time
defined a small-scale industry as, one which is operated mainly with hired labor usually 10 to 50
hands. Fixed capital investment in a unit has also been adopted as the other criteria to make a
distinction between small-scale and large-scale industries. This limit is being continuously raised
up wards by government.
The Small Scale Industries Board in 1955 defined, "Small-scale industry as a unit
employing less than 50 employees if using power and less than 100 employees if not using
power and with a capital asset not exceeding Rs. 5 lakhs".
The definition for small-scale industrial undertakings has changed over time. Initially
they were classified into two categories- those using power with less than 50 employees and
those not using power with the employee strength being more than 50 but less than 100.
However the capital resources invested on plant and machinery buildings have been the primary
criteria to differentiate the small-scale industries from the large and medium scale industries. An
industrial unit can be categorized as a small- scale unit if it fulfills the capital investment limit
fixe