Economic Behavior of Small Scale Industries in Meghalaya : An Econometric Analysis

This paper makes an in-depth analysis of the major characteristics and development of small scale industries in Meghalaya, a state located in the north-eastern part of India. Efforts have been made to identify the determinants of output and to evaluate its relationships with inputs like labor and capital. The process of industrialization in the state is still in its infant stage where majority of industries are SSIs and medium and large scale industries are yet to fully develop. Econometric analysis reveals that SSIs are depicting decreasing returns to scale. This implies that the state economy is passing through a preliminary stage of industrialization, where the full advantages of economies of scale and technology are not being utilized by the existing SSIs