ROLE OF SMALL BUSINESS

ROLE OF SMALL BUSINESS IN INDIA

ROLE OF SMALL BUSINESS IN INDIA

India has traditionally always had a very vibrant and competitive SSI. Even after the industrialization, British producers of textiles found handmade Indian textiles such a threat that they lobbied hard to have its import banned, succeeding in the late eighteenth century (Gupta & Sharma, 1996).

During pre-economic liberalization period a wide variety of incentives, concessions and institutional facilities were extended for the development of SSIs. But these socialistic promotional policy measures, in many cases resulted in protection of weak units rather than the independent growth of units under competitive business environment (Nyati, 1988).

Such situation was continued up to the mid of 1991. Under the regime of economic liberalization, the focus was shifted from "protection" to "competitive promotion" (Raja & Rajashekar, 2002).

India has traditionally always had a very vibrant and competitive SSI. Even after the industrialization, British producers of textiles found handmade Indian textiles such a threat that they lobbied hard to have its import banned, succeeding in the late eighteenth century (Gupta & Sharma, 1996).

During pre-economic liberalization period a wide variety of incentives, concessions and institutional facilities were extended for the development of SSIs. But these socialistic promotional policy measures, in many cases resulted in protection of weak units rather than the independent growth of units under competitive business environment (Nyati, 1988).

Such situation was continued up to the mid of 1991. Under the regime of economic liberalization, the focus was shifted from "protection" to "competitive promotion" (Raja & Rajashekar, 2002).

The public policy in India had been attaching lot of importance to village and SSI on many grounds such as, SSI being labor-intensive, helped to increase the volume of employment, particularly in rural areas, it is estimated that about 2 crore persons are engaged in India in these industries. The handloom industry alone employs 50 lakh people. They account for 6% of GDP, 95 % of all industrial units, and 34% of total exports. Around 39 lakh SSIs in India has emerged versatile producing over 8000 products, from traditional handicrafts to high-end technical instruments.

The public policy in India had been attaching lot of importance to village and SSI on many grounds such as, SSI being labor-intensive, helped to increase the volume of employment, particularly in rural areas, it is estimated that about 2 crore persons are engaged in India in these industries. The handloom industry alone employs 50 lakh people. They account for 6% of GDP, 95 % of all industrial units, and 34% of total exports. Around 39 lakh SSIs in India has emerged versatile producing over 8000 products, from traditional handicrafts to high-end technical instruments.

Generalizations are also difficult because though there are firms which are growing rapidly, there also exists 138,000 sick units within the sector in India. The contribution of SSI in India to national development was too little as compared to the contribution of SSI in other countries of the world. India's SSI shared 95 % of all establishments, 40 % of output, 45% of employment and 35 % of exports. But Taiwan ranked first with a share of 97% of establishments, 81 % of output, 7% of employment, 48 % of exports followed by Japan contributing highly with 99 % of establishments, 52 % of output, 72 % of employment and 13 % of exports (SIDBI Report, 2000).

ROLE

OFSMALL

BUSINESS

IN

RURAL

INDIA

ROLE OF SMALL BUSINESSIN RURAL INDIA

ROLE OF SMALL BUSINESSIN RURAL INDIA

Small business units provide multiple source of income, in wide range of non agricultural activities.

It provide employment opportunities in rural areas, especially for the traditional artisan and weaker sections of the society.

Small business units provide multiple source of income, in wide range of non agricultural activities.

It provide employment opportunities in rural areas, especially for the traditional artisan and weaker sections of the society.

ITC WORKS WITH SMALL SCALE INDUSTRIESITC WORKS WITH SMALL SCALE INDUSTRIESITC WORKS WITH SMALL SCALE INDUSTRIESITC WORKS WITH SMALL SCALE INDUSTRIES

ROLE OF SMALL SCALE BUSINESSROLE OF SMALL SCALE BUSINESS

OPTIMISATION OF CAPITALOPTIMISATION OF CAPITAL

EMPLOYMENTEMPLOYMENT REGIONAL DEVELOPMENTREGIONAL DEVELOPMENT

EXCHANGE OF EARNINGSEXCHANGE OF EARNINGS

EGALITARIAN SOCIETYEGALITARIAN SOCIETYSOCIAL ADVANTAGESOCIAL ADVANTAGE

FEEDER TO OTHER INDUSTRIESFEEDER TO OTHER INDUSTRIES

MOBILIZATION OF RESOURCESMOBILIZATION OF RESOURCES

SMALL SCALE INDUSTRY BY SELF-

HELP GROUP

SMALL SCALE INDUSTRY BY SELF-

HELP GROUP

E M P L O Y M E N T

EMPLOYMENT LEADS TO HAPPY, LAVISH AND PROSPEROUS

LIFE.

EMPLOYMENT LEADS TO HAPPY, LAVISH AND PROSPEROUS

LIFE.

EMPLOYMENTEMPLOYMENT Small scale firms use labour-intensive techniques

and, therefore, they have high potential to provide employment to a larger number of people. For every worker employed in large scale industries about three workers are engaged in small scale industries. \

Next to agriculture small business constitutes the most popular occupation of people in India. Small firms promote self-employment among the educated and professional class. They also provide employment to agriculturists who remain idle during a part of the year.

In fact, the healthy growth of small scale industries can be an effective approach to the problem of unemployment in the country. The employment generating capacity of small scale industries is more than that of the large scale industries.

Small scale firms use labour-intensive techniques and, therefore, they have high potential to provide employment to a larger number of people. For every worker employed in large scale industries about three workers are engaged in small scale industries. \

Next to agriculture small business constitutes the most popular occupation of people in India. Small firms promote self-employment among the educated and professional class. They also provide employment to agriculturists who remain idle during a part of the year.

In fact, the healthy growth of small scale industries can be an effective approach to the problem of unemployment in the country. The employment generating capacity of small scale industries is more than that of the large scale industries.

BALANCED REGIONAL

DEVELOPMENT

BALANCED REGIONAL

DEVELOPMENT

BALANCED REGIONAL DEVELOPMENT AVOIDS

CONCENTRATION OF INDUSTRIES IN HANDFUL AND PARTICULAR AREAS.

BALANCED REGIONAL DEVELOPMENT AVOIDS

CONCENTRATION OF INDUSTRIES IN HANDFUL AND PARTICULAR AREAS.

REGIONAL DEVELOPMENT

SSIs promote decentralized development and help to remove regional disparities in industrialization. Decentralized development contributes to the process of self-sustained growth.

By providing employment in rural areas they help to check migration and overcrowding in urban areas. Small scale firms can be a useful means of rural reconstruction and development. Development of decentralized sector also improves the standard of living of people in backward regions.

SMALL SCALE INDUSTRIES PRODUCES PRODUCTS THAT ARE USEFUL FOR COMMON PEOPLE.

SMALL SCALE INDUSTRIES PRODUCES PRODUCTS THAT ARE USEFUL FOR COMMON PEOPLE.

OPTIMIZATION OF CAPITAL

OPTIMIZATION OF CAPITAL

THE ANNUAL SURVEYS OF INDUSTRIES REVEAL THAT

FIXED CAPITAL PER EMPLOYEE IN CASE OF SMALL SCALE

INDUSTRY WAS Rs. 3,706 AS COMPARED TO Rs. 27,757 IN

CASE OF LARGE SCALE INDUSTRIES.

OPTIMIZATION OF CAPITAL

OPTIMIZATION OF CAPITAL

Small scale firms require less capital per unit of output and, therefore, greater output can be obtained with small investment.

Small firms also provide quick returns after their establishment on account of short gestation period. In India where the rate of capital formation is low, small scale industries are very suitable.

Small scale firms require less capital per unit of output and, therefore, greater output can be obtained with small investment.

Small firms also provide quick returns after their establishment on account of short gestation period. In India where the rate of capital formation is low, small scale industries are very suitable.

MOBILISATION OF RESOURCES

MOBILISATION OF RESOURCES

SMALL SCALE INDUSTRIES HELP IN TAPPING TALENT

RESOURCES.

SMALL SCALE INDUSTRIES HELP IN TAPPING TALENT

RESOURCES.

SMALL SCALE INDUSTRY PROTECT TECHNICAL SKILLS.

SMALL SCALE INDUSTRY PROTECT TECHNICAL SKILLS.

MOBILIZATION OF RESOURCES

MOBILIZATION OF RESOURCES

Small scale industries facilitate Mobilization and utilization of local resources and family skills which might otherwise remain talent or utilized. Small business promotes a new cadre of small entrepreneurs and self-employed and encourages local talent. The growth of small enterprises helps in tapping talent resources like entrepreneurial skills and small savings specially in rural areas. Small business helps to protect handicrafts.

Small scale industries facilitate Mobilization and utilization of local resources and family skills which might otherwise remain talent or utilized. Small business promotes a new cadre of small entrepreneurs and self-employed and encourages local talent. The growth of small enterprises helps in tapping talent resources like entrepreneurial skills and small savings specially in rural areas. Small business helps to protect handicrafts.

AGRO-RURAL INDUSTRY

AGRO-RURAL INDUSTRY

EXCHANGE OF EARNINGS

EXCHANGE OF EARNINGS

THE EXPORTS OF SMALL SCALE INDUSTRIES INCREASED FROM Rs. 637 CRORES IN 1975-76

TO Rs. 2785 CRORES IN 1985-86

THE EXPORTS OF SMALL SCALE INDUSTRIES INCREASED FROM Rs. 637 CRORES IN 1975-76

TO Rs. 2785 CRORES IN 1985-86

EXCHANGE EARNINGS

Small scale industries help in reducing pressure on the country's balance of payments in two ways. First, they do not require imports of sophisticated machinery and equipment. Secondly, they earn valuable foreign exchange through exports of their products. The exports of small scale industries increased from Rs. 637 crores in 1975-76 to Rs. 2785 crores in 1985-86. Small scale sector accounts for 40 percent of the exports of non-traditional items and about 25 per cent of the country's total exports. About 90 per cent of its exports are of non-traditional items.

EGALITARIAN SOCIETY

EGALITARIAN SOCIETY

SMALL SCALE INDUSTRIES REDUCES CONCENTRATION OF ECONOMIC POWER IN

FEW HANDS

Small scale industries help in reducing concentration of economic power in a few hands.They promote a more equitable distribution of national income and wealth.Development of small scale industries helps to reduce monopolies and exploitation of consumer.Benefits of small scale firms are derived by a wider population.A large part of the earnings is distributed among workers.

Small scale industries help in reducing concentration of economic power in a few hands.They promote a more equitable distribution of national income and wealth.Development of small scale industries helps to reduce monopolies and exploitation of consumer.Benefits of small scale firms are derived by a wider population.A large part of the earnings is distributed among workers.

EGALITARIAN SOCIETY EGALITARIAN SOCIETY

INDIAN HANDICRAFTS ARE HIGHLY DEMANDED AND ARE EXPORTED IN

LARGER QUANTITIES

FEEDER TO LARGER INDUSTRIES

SMALL SCALE INDUSTRY MANUFACTURES MANY PRODUCTS WHICH ARE USEFUL TO

LARGE INDUSTRIES.

Small scale sector is

complementary to the large scale industries. Small scale industries manufacture various types of components, spare parts, tools and accessories which are required by the large scale sector.

Small scale sector is

complementary to the large scale industries. Small scale industries manufacture various types of components, spare parts, tools and accessories which are required by the large scale sector.

FEEDER TO LARGER

INDUSTRIES

FEEDER TO LARGER

INDUSTRIES

SOCIALSOCIAL

ADVANTAGE ADVANTAGE

AT PRESENT THERE ARE ABOUT 16 LAKHS SMALL

SCALE UNITS IN INDIA PRODUCING 500 TIMES.

AT PRESENT THERE ARE ABOUT 16 LAKHS SMALL

SCALE UNITS IN INDIA PRODUCING 500 TIMES.

Small scale units offer opportunity for an independent way of life to people with small means. They offer savings in social overheads like education, housing and medical facilities by taking industry nearer to the people. They help to raise per capita income an standard of living in the country. A system of widely diffused ownership permits wider participation of people in the process of economic development. Small scale sector provides a base for self-government.

Small scale units offer opportunity for an independent way of life to people with small means. They offer savings in social overheads like education, housing and medical facilities by taking industry nearer to the people. They help to raise per capita income an standard of living in the country. A system of widely diffused ownership permits wider participation of people in the process of economic development. Small scale sector provides a base for self-government.

SOCIAL ADVANTAGE SOCIAL ADVANTAGE

At present there are about 16 lakh small scale units in India producing more than 500 times. The Seventh Fiver Year Plan envisages a growth rate of 10 per cent in the small scale sector. By the end of 1990 the production of small scale sector is expected to be Rs. 8,000 crores and employment 1.19 crore persons.

At current prices the total output of small scale sector in 198-87 amounted to Rs. 72,250 crores.

BAMBOO AND WOOD

INDUSTRY

BAMBOO AND WOOD

INDUSTRY

SSIs ARE THE SECOND LARGEST EMPLOYERS OF HUMAN RESOURCES, AFTER AGRICULTURE AND PRODUCE A VARIETY OF PRODUCTS FOR THE ECONOMY.

Small Scale Industries play a very important role in the socio economic development of the country. These industries account for 95 per cent of industrial units, contributing up to 40 per cent of the gross industrial value added and 45 per cent of the total exports.

These units contribute to the balanced regional

development of the country by using locally available material and indigenous technology.

These provide ample scope for entrepreneurship

enjoy the advantage of low cost of production quick decision making, and have quick adaptability and are best suited to customized production.

Small Scale Industries play a very important role in the socio economic development of the country. These industries account for 95 per cent of industrial units, contributing up to 40 per cent of the gross industrial value added and 45 per cent of the total exports.

These units contribute to the balanced regional

development of the country by using locally available material and indigenous technology.

These provide ample scope for entrepreneurship

enjoy the advantage of low cost of production quick decision making, and have quick adaptability and are best suited to customized production.

CONCLUSION CONCLUSION