Globalisation Would Finish Small Scale Industries in India

Globalisation would finish small scale industries in india

INTRODUCTION

The world is changing. The change is fast enough to notice the factors acting behind. Globalization is one of them. A factor that needs no introduction. Ever since, developed countries like USA and European countries have marched to conquer the rest of the world, developing countries have no solace but to succumb to what these developed nations call for. Days have gone when these developed nations ruled by the concept of colonialism. Now, countries, whether small or big have one thing in common ie; they do not want to be under the oppression of any other mighty nation. The recent turmoils in Middle East countries like Egypt, Libya and Yemen are the forefront instances of non-conforming the dictatorship and suppression. Therefore, it is not apt to believe that dictating by ‘stick’ is no more in vogue and that a different approach or style needed to be adopted by the countries dreaming to rule the weaker ones, once again.

GLOBALIZATION AND DEVELOPING COUNTIRES

In the present era, people around the globe are well informed and updated with the developments happening across the world. Therefore, they cannot be taken for a ride by these developed nations. As a result, these developed countries came up with a mesmerizing idea of so-called ‘Globalization’ wherein they demonstrated the benefits coming on the way of developing nations including India. Constantly, advocating economic and social sustainability of developing nations, these western countries have won the hearts of developing nations to some extent. As proof, these developing countries witnessed growth and development taking place in their own poor nations. But, the policies and approaches gradually uncovered the ulterior motive of these western countries. One of the severe impacts of Globalization upon India has been a robust blow on Small Scale Industries (SSI).

We all know that Globalization has taken the shape of a revolution of business across the globe. The promoters especially, the western countries promote it by justifying that adoption of globalization by third world countries is the ‘need of the hour’ and that the developing countries cannot ignore the fact of being lagging behind in the race of progress and prosperity. The projection has been done in such a manner by the developed nations that the developing countries are going to benefit the maximum. Furthermore, it is in the interest of developing countries to welcome change by inviting MNCs of these developed nations to have their set-ups in developing nations in Africa and Asian countries including India.

It is quite obvious that the developing countries are very much inclined towards growth and development. They are even ready to do the needful. But, they are clear in their mind that it is really not possible to economically stand-up before the developed nations. In other words, these developing nations need support and collaborations to carry forward the process of development. Having considered that, these developing countries must not plunge into the bandwagon of collaborations, free trade and entry to MNCs and providing them all that they feel like while are operating in the host country. Developing countries like India must not ignore the fact of promoting and sustaining the Small Scale Industries (SSIs). It is correct to say that Globalization will turn the whole world into a global village wherein everything is accessible with the best quality and competitive price. But, it is just one flip of the coin. If globalization is fully adopted by any of the developing nation, her SSIs will perish for sure as the same will not be capable enough to withstand the stiff competition by international brands and promoters. Hence, protecting the interest of our own SSIs is also a pertinent necessity of the government.

Small Scale Industries (SSIs)

Small scale enterprises have been the part of Indian business since ages. But there was a difference. As compared to the present SSIs, they were different in their form in the olden days. The form was more of conventional knowledge and skill based products. These products were made by the local people for their own self consumption and sufficiency in rural parts of the country. But the scenario has dramatically, changed as SSIs are no more run to just self consumption but it is seen as a potential base for running business and the same to be exported in different countries. The ambit has been widened. Even the government has its own policy to protect and promote SSIs against the impact of global market. According to the government, an industrial unit having the investment in fixed cost and machinery without crossing the limit of Rs. 10 lakh may be considered under the SSIs category. Post-independence, the government had taken a number of measures to promote SSIs due to its low-cost of capital. Govt believed in its potential of generating employment and also engaging skilled workers helping them to fend for themselves and for their families. In addition, the training was minimal as it required mediocre technical knowledge and also minimal infrastructure. Therefore, the govt left no stone unturned to promote SSIs in both urban and rural upliftment. Gradually, India started becoming self-reliant as both urban and rural population got engaged with SSIs and entrepreneurship started flourishing.

But, unfortunately the trend got changed due to the external or foreign impact of industrialization. India, too became the part of it by adopting various strategies to set-up heavy industries incurring huge cost and machineries. Thus, the attention got diverted from SSIs to heavy industry. The government had the notion to find a long-term solution of employment for the common man and generating wealth by setting-up heavy industry, although having huge money involvement in the initial days. But the initiative took longer years to yield fruitful results.

By 1991, the govt decided to open up the economy thereby allowing foreign investment and promoting international trade. Govt believed that doing so will enable the local players to compete with international competitors thus, driving them to be more quality conscious and producing cost-effective products and services. Government knew that the ultimate beneficiary is going to be the customer. All this while, SSIs got completely hampered due to the negligence on the part of government. It was also because of the despair on the part of private players, responsible to push SSIs in their own local areas. Due to the invasion of foreign business players in developing countries like India, SSIs had no other choice but to struggle in the stiff competition or else to get washed out of the market. The scenario turned bad to worst, when the government approved the introduction of Special Economic Zones (SEZs) wherein the MNCs were given enough leeway to operate in the local market through umpteen positive measures benefitting them in the smooth running of their operations in India. All these measures finally endangered the existence of SSIs in India.

Globalization in India is not a negative force embraced by the Indian government. It does have its own benefits and we, as a nation have been benefitting a lot but there has to be a balance between the local players and operations of MNCs in India. Globalization has actually pushed India forward and placed among the elite countries of the world. But, in order to sustain the position and also to become a superpower in the world; economically, culturally and politically, India must not ignore the core strength of promoting and developing small entrepreneurs thus, giving impetus to Small Scale Industries to survive and flourish in its own land of opportunities ie; India.