Question

Long answer type questions.

Explain how employment generation created by small business solves other problems in rural economy.

Answer 1

Small-scale industries employ labour-intensive techniques of production. In other words, they use those technologies and machinery that require the employment of labourers rather than capital-intensive techniques. In this way, they provide employment to excess or surplus rural labourers of the country. By absorbing the surplus labour, the small-scale industries, thus, eliminate the problem of disguised unemployment, which has been prevalent in the Indian agricultural sector since a very long time. Moreover, these small industries provide income and livelihood to the rural people and help by improving their standard of living. In this manner, they contribute in alleviating rural poverty from the country. Besides this, employment generated by small-scale businesses facilitates rural development and mitigates rural-urban migration, thereby adding to the overall growth and development. Hence, we can say that employment generation created by small businesses solves many problems in a rural economy.