Small
Scale Industries
Small scale industries play an important role for the development of Indian economy in many ways. About 60 to 70 percent of the total innovations in India comes from the SSIs. Many of the big businesses today were all started small and then nurtured into big businesses. The role of SSIs in economic development of the country is briefly explained in forthcoming paragraphs.
·
SSIs uselabour intensive techniques. Hence,
they provide employment opportunities to a large number of people. Thus, they
reduce the unemployment problem to a great extent.
·
SSIs provide employment to artisans,
technically qualified persons and professionals, people engaged in traditional
arts, people in villages and unorganized sectors.
·
The employment-capital ratio is high for
the SSIs.
·
SSIs promote decentralized development
of industries as most of the SSIs are set up in backward and rural areas.
·
They remove regional disparities by industrializing
rural and backward areas and bring balanced regional development.
·
They help to reduce the problems of
congestion, slums, sanitation and pollution in cities. They are mostly found in
outside city limits.
·
They help in improving the standard of living of
people residing in suburban and rural areas in India.
·
The entrepreneurial talent is tapped in different
regions and the income is also distributed instead of being concentrated in the
hands of a few individuals or business families.
·
SSIs help to mobilize and utilize local resources
like small savings, entrepreneurial talent etc., of the entrepreneurs, which might
otherwise remain idle and unutilized.
·
They pave way for promoting traditional family
skills and handicrafts. There is a great demand for handicraft goods in
developed countries.
·
They help to improve the growth of local
entrepreneurs and self-employed professionals in small towns and villages in
India.
·
SSIs require less capital per unit of output. They
provide quick return on investment due to shorter gestation period. The payback
period is quite short in SSIs. SSIs require less capital per unit of output.
They provide quick return on investment due to shorter gestation period. The
payback period is quite short in SSIs.
·
SSIs function as a stabilizing force by providing
high output-capital ratio as well as high employment-capital ratio.
·
They encourage the people living in rural areas and
small towns to mobilize savings and channelize them into industrial activities.
·
SSIs do not require sophisticated machinery.
Hence, import the machines from abroad is not necessary. On the other hand,
there is a great demand for goods produced by SSIs.Thus they reduce the
pressure on the country’s balance of payments. However, with recent past large
scale industries are able to borrow large funds with low interest rate and
spend large sums on advertisements. Hence SSSs are gradually vanishing.
·
SSIs earn valuable foreign exchange through
exports from India.
·
SSIs play a complementary role to large
scale sector and support the large scale industries.
·
SSIs provide parts, components, accessories
to large scale industries and meet the requirements of large scale industries
through setting up units near the large scale units.
·
SSIs serve as ancillaries to large scale
units.
·
SSIs produce wide range of products required
by consumers in India. SSIs produce wide range of products required
by consumers in India.
·
Hence, they serves as an anti-inflationary force by
providing goods of daily use.
·
SSIs help to develop a class of entrepreneurs
in the society. They help the job seekers to become job givers.
·
They promote self-employment and spirit of
self-reliance in the society.
·
SSIs help to increase the per capita income of
India in various ways.
·
They facilitate development of backward areas and
weaker sections of the society.
·
SSIs are adept in distributing national income in
more efficient and equitable manner among the various participants of the
society.
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