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Small and Medium Scale Industries play a pivotal role in the growth and development of Indias economy. There are more than 3.6 million SSI units in our country and these employ more than 19.3 million people, which is second highest next to agriculture. This sector constitutes 95% of the industrial units and contributes 40% to the total industrial output of the country and 35% of the direct export.

However, the growth of Small-Scale Industries in the Northeastern Region is slow in comparison to the other parts of the country. There was practically no planned and systematic effort for industrial development in the region during the first three five year plans. It was during the fourth five-year plan period that plans were made to set up industries in different parts of the region. Since then efforts are on for developing industries in different parts of the region.

But the development pattern of the Small-Scale Industries of the Region is far from encouraging and these are plagued by myriad of problems. The level of sickness of the sector is quite high and this is being aggravated by the basic structure of the SSI sector. Considering these aspects, the Ministry of Small Scale Industry, Government of India entrusted the Indian Institute of Entrepreneurship to undertake the study on the status of SSI of the region recently. The findings of the study as carried out by IIE are as follows.

The study found out that there are more than 71,395 SSI units in the NE Region as on March 2003, which is only 2% of the total SSI units in the country. The study found that the SSI units face problems in four areas, Project identification, Implementation, Production/Operation and Marketing. The study has identified specific problems in four areas and suggestions regarding the type of support required have been recommended. The role-played by various existing promotional and support organization in NE for promotion of SSI was looked into. Gaps in the support structure have been identified and suggestions for plugging the gaps have been given.

The study also attempted to look into the prospects of SSI growth by taking up the following areas, the rich and natural resources and diverse agro-horticultural products, the existing and prospective clusters of the Region and the traditional skill of the people of the region.

A positive scenario for the Small-Scale sector can emerge only if a continuous and comprehensive backup operational support is provided to the existing SSIs and the emerging ones. Given the backdrop of the status of Small Scale industries and taking into consideration the challenges that they face, various interventions are needed for growth of Small Scale Industries. The study has come with a number of recommendations with specific roles suggested for the state governments, central government and financial institutions.