Small Businesses Improve Indian Economic Stature

Small businesses have always been around and made their own substantial contributions towards society and the economy at large. Social and economic progress can be achieved by industrialisation. However, small and medium scale enterprises will form industrial development’s spinal cord.

In order to improve the stature of the economy people today believe a two pronged approach is required. The approach will focus on smaller businesses and creating a skilled and educated work force. The role of small businesses is being given a much deserved spot light now because:
 

  • They have a rough share in industrial production to the tune of 40% and this sector is known to account for manufactured exports by 35% of the country.

 

  • They help generate employment in good numbers due to operational techniques which are largely labour intensive. They are also known to give work to agriculturists during off season. It is also believed that 3 workers are employed in cottage and other small scale enterprises for every worker in a large scale framework.

 

  • The capital requirement for setting up a small scale industry is also lesser in comparison to the per unit output. The capital employed per employee for a large scale unit has also been found by popular surveys to be considerably higher than that in small scale units.

 

  • The growth registered by the SME sector has been higher than the manufacturing sector itself largely due to the dual impact of their output with respect to being both inputs for larger industries as well as finished goods in themselves.

 

  • The decision making process in a small scale business is fast paced since the number of approvals required are minimal. Thus, in today’s cut throat international and national scenario, they are able to take advantage of opportunities. This will give India a competitive edge over competition in various forums.

 

  • The overheads are less and the flexibility and adaptability is significant which is a little difficult for a large scale business. Thus, a great boon for economic stature enhancement.

 

  • One of the major issues with small scale units is the lack of quality and this is largely due to the lack of adequate finances. However, in the past decade a number of micro finance institutions have cropped up and they are constantly trying to work on this issue.


The advancement of small scale industries is essential since it will help bring growth to not a select few but to one and all. It will aid better utilisation of local resources and also provide an upsurge to both social and economic standards of the Indian society.

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