Introduction:

Industries are broadly divided as large scale and small scale industries on the basis of sizes, capital resources and labor force of individual unit. The small scale industries include the cottage or village industries. The fiscal commission in 1950 defined the cottage and small scale industries as follows “a small scale industry is one which is carried on wholly or primary the help of member of the family either as whole or part time occupation”. The importance of small scale industries are

Importance of small scale industries:

• Employment generation: A small scale industry are labor intensive, they reduce the incidence of unemployment and under employment. This industries provide some maximum employment per unit of capital invested, it is estimated that there are above 2 crores person engage in cottage industry the handlooms industries alone employee 60 lakhs people or nearly as many as or employed in all organized industries including mines and plantation.
• Capital saving: Small scale industries needs smaller amount of capital as the required tools and small machinery. In other words small scale industries can run, manage, and can do production with the help of light capital.
• Decentralization: The small scale industries can be dispersed all over the country very easily and bring about dispersal or decentralization of industries. This promotes the object of balance regional development.
• Better distribution of income and wealth: They enable people living in different parts of the country to increase their income and standard of living; they check the evil of urbanization and localization. They conform to ideal society, equal distribution of income amount all people and absence of exploitation of man by man.
• Mobilization of entrepreneur skill: A number of entrepreneurs are spread over small towns and villages of the country. Small scale industry provides industrial experience and serves as a training ground for a large number of small scale managers.
• Harmonious social relatives: The relation between the employees and employees in a small scale unit seems to be harmonious, in the case of small scale industries the question of dispute does not arise at all since the main form of labor in those industries is family labor.
• Overcoming territorial immobility: By conveying the job to the workers small industry can overcome the difficulties of territorial mobility.
• Relieving Congestion in urban areas: By providing remuneration employment in the rural area, these industries relieve congestion in overcrowded urban centers. They do not create problem of slum housing health and sanitation Etc.
• Reduction of pressure on land: The development of small scale industries divert surplus labor from our over burdened agriculture and thus bring about a more desirable occupational distribution.
• Sustaining green revolution: Small scale industries can help sustain green revolution in the countryside mainly through the development of agro based industries and services such as the production of farm implement and equipment for food processing industries and agriculture machinery paid.

also read: explain the Industrial policy of 1991