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Abstract
The economic development of any country demands industrialization. Though ithas got recognition in our country, it is high time we thought about balanced regionaldevelopment, an important component of industrialization. Rural development forms akey component in a nation’s progress towards economic freedom and equality. But themigration of rural people to cities and the ineffective utilization of rural resources standas hurdles to rural development. Hence it is very important to develop and to encouragerural industry by considering its significance on the socio-economic front of the country.Rural or traditional industry, one of the sub-sectors of small-scale industry, has adirect and important influence on sustainable economic development. “Encouragingsetting up of rural industries in the small area is an instrument for not merely attainingpolitical freedom, but an instrument for economic freedom and a foundation of a newsocial order” It is a matter of common knowledge that India is a land of villages andtwo-thirds of its population live in rural areas. The future of India lies in these teemingrural million. It is only from a progressive, growing and dynamic rural society that Indiacould put herself on the desired developmental path. Rural small-scale industries play animportant role under the peculiar Indian conditions. They contribute about half the grossvalue of output originating in the manufacturing sector. At present it contributes 40 percent to exports in the country and provides employment to 13 million.