The small scale sector has emerged as a dynamic and vibrant sector of the Indian economy. It has contributed significantly to the realisation of the socio-economic objectives of growth in employment and exports, fostering entrepreneurship and ensuring industrial dispersal.
During 1999-2000, the production from SSIs was estimated at Rs. 5,78,470 crores and provided employment to more than 177 lakh persons in the 32 lakh SSI units spread throughout the country.
Exports from SSIs have been estimated at Rs. 48,979 crores in 1998-99. The Small Scale Sector has been contributing about 40% of industrial production and 35% of total direct exports. This sector has been maintaining, by and large, a higher growth than the industrial sector as a whole. The share of this sector in employment generation is next only to agriculture.

The ongoing process of liberalisation warrants due attention to be given to the medium and long term interests of the small scale sector. This sector, nurtured hitherto in a protective framework, needs to be enabled to take on the challenges posed to it by the process of liberalisation and globalisation.

The Government is conscious of the role and importance of Small Scale Industries in strengthening our economic performance and is therefore committed to putting in place a policy framework that would address the problems of this sector and help it become internationally competitive.
In recognition of the importance of the SSI sector and to give focused attention Government has created a separate Ministry for Small Scale Industries and Agro & Rural Industries in October 1999.