The small-scale sector is an effective instrument of social change and economic growth in a number of countries. In modern India the Small-scale industries have been a success story. They have emerged vibrantly in the face of rising threats from large-scale sectors inside the country and of multinational from abroad. At the micro level the small scale sector has succeeded in diffusing entrepreneurship culture and played a prominent role in converting the physical, material and human resources into productive assets. The post-liberalization business environment has turned harsh for the small scale sector due to increased internal and external competition. The far reaching impact of various WTO norms have also posed a threat to the future of small scale sector in India.