Indian Small Scale industry (SSI) gained popularity by accomplishing to a great extent the socio-economic objectives like employee generation, decentralization of industries, economic equality and exploitation of entrepreneurial talents. This sector played a crucial role of providing as many as 30 million jobs in the last 50 years. In the present scenario this industry accounts for about 95 percent of industrial units and about 80 percent of manufacturing employment (Gupta, 2001). This industry contributed a share of 40 percent in India's manufacturing production and a share of 35 percent in exports. Although the industry grew in numbers, they did not grow in size and scope. In spite of the favorable policy support by way of financial, fiscal and infra structural facilities extended to the small industry by the Governments for over last fifty years, it continues to be organizationally, financially and technologically weak. The liberalization and globalization policies of the major reform process in the year 1991 have exposed the small industry to fierce domestic and global competition. While declining credit flow and infrastructural inadequacies are common constraints faced by the small industry, use of obsolete technology and absence of innovative practices are likely to strangle the small industry in its long term survival and growth. This paper examines the suitability and viability of Indian SSI to upgrade themselves to modern technology and embrace innovative practices as existing in the developed nations.

Key words : Liberalization and Globalization, Indian SSI, Decentralization, EntrepreneurialTalents.