Role of SSI sector in the Economy

Small Scale Industries:Definition

“ A small scale or cottage industry may be defined as an enterprise or series of operations carried on by a workman skilled in the craft on his responsibility , the finished product of which , he markets himself ” -Prof. K . T . Sash

Since the time of independence, the small scale industries in India has been a major contributor to country’s Gross Domestic Product (GDP)

With 40 % share in the total industrial output and 35 % share in exports , the small scale industrial sector in India is acting as engine of growth in the new millennium

Nature of SSI in India In India village & small industries sector consists

of both the traditional & modern small industries . This sector has 8 sub group which are

1. Handlooms

2. Handcraft

3. Coir

4. Sericulture

5. Khadi

6. Small scale industries

7. Village Industries

8. Power looms

Role of SSI in the economy They are the Back Bone of the Industrial Activity

in the Country & are playing a very important role in improving the Socio – Economic Conditions of the people. Advantages of these Enterprises are as follows

Small scale industries contribute 40% of gross industrial value & provide foreign exchange.

Small industries lead to balanced regional balance

It is also provide a space for entrepreneurship ,low cost of production.

Due to small size of industries , quick & timely decision can be taken

Small scale industries have an ability adopting to situation

They create greater Employment Opportunities through Labor Intensive processes & thereby help in tackling the Unemployment Problem

They have Low Gestation Period & thereby Expensive Financial Resources are not idled unproductively for long periods.

They can be set up easily in Rural & Backward Areas.

They need Small / Local / Regional Market They encourage growth of Local

Entrepreneurship They create Decentralized pattern of Ownership They foster Diversification of Economic Activities They Innovate & Introduce New Products

particularly to cater to Local Needs They influence & improve Standard of Living of

Local People They provide equitable dispersal of enterprises

throughout Rural & Backward Areas

They earn Vital Foreign Exchange for the Country through their Exports of Goods / Services

They Increase Revenue to Central & State Govts by way of Taxes Paid by them

Conclusions Economic Development of a Country can be defined

in terms of Increase in Real Per Capita Income of Persons resulting in Improvement in Standard of Living. The Development of Small Enterprises contributes to the Increase in Per Capita Income & leads to Overall Economic Development

It generates Vast Employment Opportunities quickly with relatively Low Investment

Promotes more equitable distribution of National Income

Makes effective mobilization of Unutilized Capital & Skilled Manpower & leads to dispersal of Manufacturing Activities all over the Country

Leading to Growth of Villages ,Small Towns & Economically Backward Regions

This leads to Balanced Regional Development throughout the Country

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