Question

What is meant by small scale industries? Explain the three typical characteristics of small scale industries.

Answer 1

A small scale industry is presently defined as the one whose investment does not exceed Rs 5 Cr. Three typical characteristics of SSI are:

1) SSI is labour intensive and therefore employment oriented: To produce a given output, SSI is expected to use more of labour than capital.

2) SSI shows locational flexibility and is, therefore, equality oriented: It contributes to the equality of growth and development across different regions of the country.

3) SSI needs small investment and is, therefore, equity-oriented: SSI needs much smaller investment. It does not cause the concentration of economic power. It promotes interpersonal equality.