What is the significance of small scale industry

Updated on : Oct 12, - PM. Small Scale Industries SSI are those industries in which the manufacturing, production and rendering of services are done on a small or micro scale. These industries make a one-time investment in machinery, plant, and equipment, but it does not exceed Rs. Essentially the small scale industries are generally comprised of those industries which manufacture, produce and render services with the help of small machines and less manpower. These enterprises must fall under the guidelines, set by the Government of India.

These industries are generally labour-intensive, and hence they play an important role in the creation of employment. So it can either be a sole proprietorship or sometimes a partnership. Hence the owner is actively involved in the day-to-day activities of the business. Hence they tend to use labour and manpower for their production activities.

People migrate from rural and semi urban areas to these highly developed centres in search of employment and sometimes to earn a better living which ultimately leads to many evil consequences of over-crowding, pollution, creation of slums, etc. This problem of Indian economy is better solved by small- scale industries which utilise local resources and brings about dispersion of industries in the various parts of the country thus promotes balanced regional development.

Provides opportunities for development of technology:. Small-scale industries have tremendous capacity to generate or absorb innovations. They provide ample opportunities for the development of technology and technology in return, creates an environment conducive to the development of small units. The entrepreneurs of small units play a strategic role in commercialising new inventions and products.

It also facilitates the transfer of technology from one to the other. As a result, the economy reaps the benefit of improved technology. Small-scale industries make better use of indigenous organisational and management capabilities by drawing on a pool of entrepreneurial talent that is limited in the early stages of economic development.

They provide productive outlets for the enterprising independent people. They also provide a seed bed for entrepreneurial talent and a testing round for new ventures. Small-scale industries have registered a phenomenal growth in export over the years.

The value of exports of products of small-scale industries has increased to Rs. The small-scale industries play an important role in assisting bigger industries and projects so that the planned activity of development work is timely attended. They support the growth of large industries by providing, components, accessories and semi finished goods required by them.

In fact, small industries can breath vitality into the life of large industries. Better industrial relations between the employer and employees helps in increasing the efficiency of employees and reducing the frequency of industrial disputes.

These industries are exporting traditional as well as non-traditional items. Small-scale industries, predominantly producers of consumer goods, have a key place in the process of development.

The industrialization of the country, with emphasis on heavy industries, requires large capital investment, living little for large and consumer goods industries. In the process of industrialization , when the income increases the demand for consumer goods also increases. If the supply of consumer goods does not exist as it leads to price rise, which will thus not only lower the standard of living of the poor workers but will also jeopardize the very process of growth.

Small-scale industries can help in awakening the powerful dormant forces among masses for use in constructive activities. The freedom of work, self-reliance, self-confidence, enthusiasm to achieve, and all such traits of a healthy Nation can be built around the material activities performed in these industries. Small-scale industries were helpful in the preservation of the inherited skill of our artisans which would otherwise languish and disappear. A great many people in villages and small towns will be saved from the mechanical, monotonous and robot-like life associated with big industrial cities.

These non-economic factors cannot be concretized into cold statistics. In fact, these are the essence of life. Thus, Small-scale industries have a crucial role to play in the economy:. Thus, now you know the role and importance of small scale industries in an economy. Your email address will not be published. Following is the role and importance of small scale industries: 1. Employment Potential Small-scale industries are labour intensive.

Less Capital Requirement Small-scale industries are the capital-light example they need a relatively smaller amount of capital than that required by large-scale industries. Latent Resources Small-scale industries will fall into being capital that would not otherwise have come into existence. Skill Light Another attraction of small-scale industries lies in their being skill light a large scale industry calls for a great deal of Management and supervisory skill foremen, engineers, accountants, and so on.

Use of Local Resources Small-scale industries are importing light like they used a relatively low proportion of imported equipment and materials as compared with the total amount of capital used in them. Decentralization The development of small-scale industries will being about the decentralization of industries and will thus, promote the object of Balanced regional development.

Small-scale industry improves the growth of the country by increasing urban and rural growth. If any amount of capital is invested in small scale industries it will help in reducing unemployment and increasing self-employment. Major importance is: Increases production, Increases total exports, Improves the employment rate, Opens new opportunities, Advances welfare etc.