Cottage and Small Scale Industries in which investment doesn’t exceed rupees 5 lacs (in 1957) (5 crores today)
Role of cottage and small scale industry
- Labour intensive, provides employment
- Promotes balanced regional growth
- Promotes equity
- Source of raw materials
- Decreases rural to urban migration
- Non-polluting
- Livelihood for millions
- Increase in production
- Facilitates entrepreneurial development
- Improves economic condition
- Facilitates women’s growth
Problems
- Lack of raw materials
- Lack of finance
- Poor marketing facilities
- Competition form large scale industries
- Lack of power
- Old method of production
- Lack of standardization
- Sick units
- Imperfect organisation setup
- Personal problems
Features
- Organised by individuals
- Private resources
- Equipment used is simple
- Capital investment is small
- Uses family labour or locally available workers
- Produces simple products
- Production of goods using indigenous technology
- Use of simple power driven machines
- Semi-skilled labours
- The living house is the economic space
- Dominance of labour
- Limited area of operation
- Engaged in light consumer goods
- Limited investment
Significance
- Employment potential
- Capital formation
- Less skills required
- Decreases imports
- Regional development
- Output after short duration
- Equal distribution of wealth
- Safety (unaffected even in severe times)
- Increase in production (55% in large scale and 45% in small scale)
- Complementary to large scale industries
- Needs less capital, Role in export
- Use of local resources
- Social advantage
Suggestions for improvement
- Industrial cooperative societies
- Supply of raw materials
- Marketing facilities
- Credit facility
- Training
- Government help
- Modernization
- Publicity by exhibitions
Refer Economics Important Topics for more other such topics