A recent report has revealed that due to large and medium industries, which have started sourcing their inputs through cheaper imports, the contribution of small scale industries to manufacturing and employment generation fell down to ten and seven percent respectively.

SSIs have not been able to assure their vendors supplies at affordable rates due to ongoing economic slowdown. The ‘Latest Prospects of SSIs vis-a-vis other Booming Sector’ report revealed by the industry chamber reported that the large and medium industries have resorted to imports to overcome the scenario due to the result of economic slowdown.

Due to high cost of borrowings majority of the SSI units could not upgrade their machinery and equipment.

According to the Assocham President Sajjan Jindal, “The SSI's contribution to manufacturing in the first quarter of current fiscal has come down to 35 percent as compared to around 45 percent a few months ago.”

The government was advised by Jindle to adopt a multi-pronged strategy for the sector, which may include reduction of inspectors that should be less than 15 and concessional credit should be extended not more that six to seven percent.