Small scale manufacturing sector industries very much suited for Indian economy due to the fact that it is a low capital intensive generate high employment and remove regional imbalance due to large geographical coverage and checks concentration of economic power in few hands. Due to its importance in economic development Government has launched many schemes for development of the small scale industries. The scheme encompasses financial incentive, fiscal incentive and general incentive. But in spite of all these incentive, the desire results have not been achieved. A number of small scale manufacturing units are becoming sick year after year. The situation is becoming critical in the era of liberalization and competition. The reasons for sickness have been probed time and again yet no standard solution could be found to save there units, which are important for the country. Looking to the above facts and importance of small scale manufacturing sector in economic development and their problems these emerged the need of the present research paper is undertaken to comprehensively probe into the problem and critically analysis the growth rate of small scale manufacturing sector in India. Keywords: Small Scale Manufacturing sector, Development, Indian Economy.