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A small scale industry or business has various definitions based on the country that we define it in. A small scale business is a privately owned company/enterprise or a partnership corporation that constitutes in small terms in matters related to government tax payment, policies, support and other attributes depending on the city, country, or area the small scale industry strives in.
Each emerging country requires a different sort of industrialization. Large, medium, and small industries make up a country’s industrial structure. Small scale industries play the most important role in a country’s industrial growth of these three types of industrializations.
A small scale organisation, or simply a tiny business, has a small number of employees and a restricted flow of funds and resources. Companies like Google, General Motors, and Wal-Mart are not tiny businesses.
Advantages of a Small Scale Business
The advantages of a small scale business are as follows:
Close supervision.
Greater employment.
Only a small amount of capital is needed.
Direct relation between the customers and employees.
Easy management.
Freedom of work.
Fewer possibilities of lockouts and strikes.
External Economies.
The disadvantages of a small scale business are as follows:
Cost of production is high.
By-Product is wasted.
Machinery use is less.
Labour division is highly reduced.
Facing an economic crisis becomes difficult.
Lack of research.
Raw materials are costly.
Lack of standardised goods.
Poor transportation facilities for the distribution of customised products from small scale businesses.
Small Scale Business Types
Manufacturing small scale business
Service providing small scale business
Feeder small scale business
Ancillary small scale business
Institutions Supporting Small Business Enterprises in India
Small Industries Development Bank of India (SIDBI)
A special act of the Parliament helped introduce this small scale supporting enterprise to strive in India. The main function of this body is to introduce new methods to upgrade and modernise existing units.
Its functions are:
To expand the ways of marketing the products made by small scale industries in international and domestic markets.
To promote employment in semi-urban areas to open up ways for higher employment chances, and thus, keep a check on the migration of people from villages to towns.
Small Industries Service Institutes (SISI)
The Indian Government developed this institute in 1956 to educate and ensure that new and useful services reach small scale industries. The Small Industries Service Industry gives advisory and technical consultancy services to small scale industries in India.
They also provide various training facilities and management training courses. They help demonstrate the use of modern technical processes on machines and newly introduced types of equipment.
State Financial Corporations (SFC)
An act of the Parliament developed the State Financial Corporations in 1951 to provide small and big loans to the small scale industries and businesses and other industries. It also gives financial assistance to small scale industries.
They provide various finance-based schemes such as the following:
Financial schemes for technical companies
Composite loan schemes
Schemes for Physically Disabled People.
Schemes for scheduled tribes and backward classes.
Schemes for ex-Servicemen.
District Industry Centres {DIC}
Governments, both central and state, have taken several measures to promote the development of small and village industries. Still, the results have fallen far short of expectations because the attention for industrial development was primarily on large cities and state capitals.
The District Industry Centres provide a permanent verification to new growing entrepreneurs. They offer technical advice to fresh entrepreneurs in the market. The DIC also registers units permanently. The DIC takes the initiative to get clearances for projects from various departments.
They also assist the small scale based industries in hiring or purchasing new types of machinery based on loans, leases, etc.
Small Scale Industries Board (SSIB)
The Government of India sanctioned the Small Scale Industries Board in 1954 to provide advice on the programmes and policies related to the development of small scale businesses and industries. This body is also called the Central Small Industries Board {CSIB}.
The main purpose of this body was to make sure the artisan’s villagers working in small scale industries get some bank credits along with the reduction of interest percentage in the loan.
Small Industries Development Organisation (SIDO)
The Small Industries Development Organisation (SIDO) is at the top of the leadership board of small scale industry-related organisations in charge of making rules, coordinating, and observing small scale industry development.
It has collaborated with the government, various finance-based institutions, and other organisations that promote and help in the growth of small scale business units.
It helps to upgrade and renew national policies related to the development of small scale industries.
Conclusion
The rise of small scale industries and businesses is not under control. Small scale businesses have shown a drastic rise and growth in the last two years since the pandemic hit the world.
Three out of every ten people now own one small business, whether that is making and selling accessories from home to baking cakes and personalising various clothing items.
One must promote small scale industries and motivate them, so the hard work to provide us with products grows and does not stop.
The role of small scale industries in the economic development of India in recent years is being critically analysed. Various factors affecting the growth and development of small scale industries and the problem faced by this vital sector of the Indian economy are being examined by experts.
