Small Scale Industries

Small scale industries are referred to as those industries in which the process of manufacturing, production and servicing are done on a small scale.

The investment on such industries is one time and these investments are mostly done on plant and machinery, the total investment on such industries do not exceed 1 crore.

In small scale industries, the manufacturing of goods and rendering of services are done with the help of smaller machines and very limited manpower.

Small scale industries or SSIs are known as the lifeline of an economy, which is very important for a country like India. Being a labor intensive industry, it is very helpful in creating employment opportunities for the population of the country.

They are also a crucial part of an economy from a financial standpoint, as they help in stabilising the per capita income of the country.

Characteristics of Small Scale Industries

Following are the characteristics of Small scale industries in India:

  1. Small scale industries generally have a single ownership, which means it either has a sole proprietorship structure or a partnership.
  2. The management of the small scale industries rests with the owners and therefore, the owner plays an active role in the day to day functions of the business.
  3. Small scale industries are very much labor intensive, hence there is limited use of technology.
  4. Small scale industries are flexible and adaptable to a changing business environment, unlike the large industries.
  5. Small scale industries work in a restricted area which makes them able to meet local and regional requirements.
  6. Small scale industries use resources that are local and readily available, which helps the economy fully utilise the natural resources and bear minimum wastage.

Objectives of Small Scale Industries

The objectives of small scale industries are as follows:

  1. To create job opportunities for the population.
  2. To help in the development of the rural areas of the economy.
  3. To play an active role in reducing the regional imbalances in the nation.
  4. To help in improving the standard of living for people in rural areas.
  5. To ensure there is equal distribution of wealth and income

Role of Small Scale Industries in the Indian Economy

Following are the roles of small scale industries in the Indian Economy

  1. They are the major sources of employment for the people living in rural areas and therefore, play a vital role in generating employment in an economy.
  2. Small scale industries account for almost 40% of the total goods and services in India hence, is a very important contributor to the economy.
  3. Small scale industries help in promoting the Make in India initiative which helps in increasing demand for local made products.
  4. Majority of the export materials are provided to the Indian companies from the small scale industries. It is estimated that around 50% of all the material exported are produced from such industries.

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Examples of Small Scale Industries

Some examples of small scale industries are:

1.Paper Bags industries

2.Leather belt manufacturing industries

3.Small toys manufacturing industries


5.School stationeries

6.Water bottles manufacturing industries

7.Beauty parlours

8.Pickle manufacturing industries

9. Incense stick manufacturing industries

10. Paper plate manufacturing industries

This completes the concept of Small scale industries, which is one of the important contributors to the growth and development of a nation. To read about more such interesting concepts on Commerce, stay tuned to BYJU’S.

Frequently Asked Questions on Small Scale Industries

What are the examples of small scale industries in India?

Some of the small scale industries in India are:

  1. Paper Plates manufacturing
  2. Tissue paper manufacturing
  3. Pickle manufacturing
  4. Chocolate manufacturing
  5. Candle manufacturing
  6. Toothpick manufacturing

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