Contribution of Small Scale Industry in Indian Economy
India is an emerging force in the economy. It has a population of more than one billion and nearly 40% of the population live below the poverty line and 70% of the population hang on agriculture for sustenance. India depends on the balanced economy in the field of agriculture and industries. Capital and finance from Indian government has been scarce, but the government has spurred alternatives in small scale industries and agriculture.
Indian economy is under developed economy and majority of its resources are either under-utilized or unutilized. There is a lot of labor in the country lying idle and the per capita income is low. When it comes to production, Indians rely on traditional methods and most of the techniques in agriculture and industries are outdated. Small scale industry is the only answer to the present economic state of India. Small Scale Industry [SSI] is an undertaking whereby the investment in fixed assets in machinery and plant whether on ownership basis, as a lease or hire purchase and does not go beyond one Crore.
Many times, entrepreneurs in the small scale industry are not required to acquire license from government to establish their firm in any part of a country. SSI has been the best way of sustenance as it contributes 40% of the gross value output. The small-scale sector has gone through rapid growth over the years and the number of units has increased tremendously nationwide. Besides contributing to the progress of the Indian economy, there other great contributions of the industry include the following;
- Large scale generation of employment
Small scale industries are labor demanding in nature and the have generated immeasurable employment opportunities in the nation. It was estimated that 100,000 rupees of investment in fixed assets in the SSI were capable of generating jobs for four people and this number has increased over the years. Small scale sector accounts for about 80% of the total employment in the industrial sector.
- Utilization of local resources
Small scale enterprises utilize local resources like raw materials, entrepreneurial skills, savings and much more effectively. Without small scale industries, most of the local resources remain unutilized. SSI has also helped improve social well-being of many india communities by harnessing the unnoticed talents.
- Facilitates entrepreneurial development
Small scale industry has contributed greatly in entrepreneurial development. Majority of SSI units provide self-employment to reduce overdependence on government and to educate the unemployed. Majority of the undertakings of small scale sector spur a feeling of self-reliance on other people.
- Guarantees balanced regional development
Small scale industry utilizes local resources and promotes decentralized development in rural areas and this makes it easy to achieve regional development. More so, SSI promotes equitable distribution of income with a nation regardless of the status of the picked out areas.
- Provides opportunity for development and growth of technology
Small scale industry in India has become a great platform for generating innovations. The industry provides ample opportunities for development of substantial technology that helps in growth of small units within the nation.
- Facilitate growth of large scale industries
Small scale industries support and spur growth of large scale industries in India. SSI provides resources to large scale companies as they play a complementary role.
Small scale industries have always played great roles in growth and development of economy in India. They provide wide range of products for mass consumption, conserve foreign exchange, and spur export and much more. The India government has contributed greatly to the growth of small scale industry. Besides offering loans, subsidiaries, it has pushed for skills development and better ways of rising productivity in these industries. Hence, the small scale industry in India has a dazzling future.
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