SSIs play an important role in the economy of our country. Discuss.
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SSIs play an important role in the economy of our country, as explained below:
- Generate employment opportunities: SSIs are labour intensive, therefore, they have generated huge employment opportunities in the country.
- Favourable employment capital ratio: The SSIs have a favourable employment capital ratio. According to all India Census of small scale industries, an investment of ₹ 10 lakh generated employment for 14 persons in small scale sector and for only 2 persons in large scale sector.
- Self-employment: SSIs are a suitable source of self-employment for millions of unemployed in the country.
- Less capital is required: SSIs are generally less capital intensive, implying that these can be established with a limited amount of capital.
- Promotes export: SSIs produce goods which are in great demand in the foreign countries, thus contributing towards the export of the country.
- Promotes the handicraft industry: The traditional village and cottage industries are clubbed with modern small scale industries, thereby providing the artisans and handicraftsmen with a means of living and also preserving and promoting the handicraft industry of our country.
- Fulfilling the needs of medium and large industries: SSIs work as ancillary units to fulfil the requirements of medium and large industrial units for materials, components, consumables, etc.
- Investment output ratio at par with large industries: The investment output ratio of SSIs is almost at par with the large scale units. It is estimated that a small scale unit needs ₹ 48,000 to produce ₹ 1 lakh worth of output, while large scale units need only ₹ 43,000 to produce the same output.
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