Employment through Small Scale Industries

Small Scale Industries are those industries in which the manufacturing production and rendering of services are done on a small or micro scale. The SSIs(Small Scale Industries) are the lifeline of the economy, especially in developing countries where the employment rate is very bad. These industries are generally labor-intensive and hence they play important role in the creation of employment. SSIs are a crucial sector of the economy both from a financial and social point of view as they help with the per capita income and resource utilization in the economy. It can help in:-

– Creating more employment opportunities.

– Developing the rural and less developed regions of the economy.

– Reducing regional imbalances.

– To ensure optimum utilization of unexploited resources of the country.

– Improving the standard of living people.

– To ensure equal distribution of income and wealth.

– To adopt the latest technology aimed at producing better quality products at lower costs.

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                                                      SCOPE IN SSI

(i). Trading which involves buying and selling of goods and services requires less capital and time to start. This area of economic activity is dominated by small-scale entrepreneurs.

(ii). The activities which require personalized service like motor repairing, tailoring, carpentry, beauty parlor, etc. are run by establishing a small business.

(iii). It is the best option for those who do not like to be an employee but want to become self-employed. People can work independently by running a small enterprise of their own.

(iv). For products and services which are of less demand or their demand is limited to any specific area, a small-scale is best suitable for them.

(v). A large industrial unit cannot run smoothly without the support of small units. These industrial units often depend upon small units to get some parts that cannot be profitably produced by them.

(vi). In the area of business process outsourcing(BPO), many new areas have opened up for small business enterprises.

As we all know in any business we have to look at both aspects i.e. scope and challenges. There are also some challenges in SSIs.

(i). LACK OF FINANCE:- This including a weak equity base, poor utilization of assets inefficient working capital management, an absence of costing and pricing, and inappropriate utilization or diversion of funds.

(ii). MARKETING AND SICKNESS:- The another part which always affects the health of any sector as well as SSI. This including wrong demand forecasting, selection of appropriate product mix the absence of product planning.

(iii). BAD PRODUCTION  POLICIES:- The important reason for sickness is a wrong selection of site which is related to production, inappropriate plant and machinery lack of quality control and so on.

(iv). INAPPROPRIATE PERSONAL MANAGEMENT:- Another internal reason for the sickness of SSI is inappropriate personal management policies which include bad wages and salary administration.

(v). INEFFECTIVE CORPORATE MANAGEMENT:- Ineffective corporate which includes improper corporate planning, lack of integrity in for management, lack of coordination and control, etc.


But in spite of these challenegs many small-scale industries are doing very well because government is supporting them, providing loan at very less interest, giving subsidy, etc.

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