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Role Of Small Scale Business In India

The small scale industry in India enjoys a special position due to its contribution towards socio-economic development in the country. The highlight of their contribution is:
  1. Small industries contribute 40 percent of gross industrial value added and total exports (from direct and indirect) contribute 45% total accounting to 95% of industrial unit in the country.
  2. Small industries are more labour intensive and less capital intensive. They generate more employment per unit of capital invested than large industries hence they become the second largest employer next to agriculture.
  3. Mass consumption goods like garments, stationery items, domestic utensils, household goods, food products, furniture etc, are all supplied by the small scale industry in our country. Other sophisticated goods include calculators, electronic goods, television, pharmaceuticals, agricultural tools and several other engineering products. Apart from these handicrafts, handlooms and other products from village industry also should be considered for their export value.
  4. Small scale industries develop a balanced regional development. Small industry unit can be set up anywhere in the country as local labour, local resources and simple technologies are used in these industries. Since there is no location constraint industrialization can be reaped by every region. Thus contribute balanced development of the country.
  5. Ample amount of entrepreneurship is provided here in this industry. Business ideas of people can be converted into small investments and can start small business will almost nil formalities.
  6. An advantage of low cost of production, low overhead expenses and locally available resources are all enjoyed by this industry.
  7. Quick and timely decision allow these small units to seize new business opportunity unlike large size business organizations were consulting with many people is required.
  8. Products are customized as per the needs of the customer here. This customized production is possible as the small scale units use simple and flexible production techniques.
  9. Finally the small scale industry has strength of adaptability and sense of personal touch which allows having a smooth relationship with customers and employees. Since the size is small there is no government intervention. New business opportunity is captured at the right time in small units providing healthy competition to big business which is good for the country's economy.

Major industries in Small Scale Sector



Food products


Chemical products


Basic metal industry


Metal products


Electrical parts and machinery


Rubber and plastic products


Machinery and parts


Hosiery and garment-wool


Non-metallic mineral products


Paper products and printing


Transport equipments and parts


Leather products


Miscellaneous manufacturing industries


Beverages, tobacco and tobacco products


Repair services


Cotton textiles


Wool. Silk, synthetic fibre and textile


Jute hemp and mesta textile


Other services

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