Question

Discuss briefly the role of small scale industries in generating employment and equity in India under the planning period.

Hint:

Small-scale industries are crucial for employment generation and regional equity, as they create jobs in rural areas and promote inclusive economic development.

Answer 1

Small-scale industries (SSIs) have played a crucial role in generating employment and promoting equity in India, especially during the planning period. Their role is as follows:
1. Employment Generation:
SSIs have been a major source of employment in India, particularly for rural and semi-urban populations. They provide jobs for a wide range of people, including those with limited education or skill levels. This is particularly important in a country with a large rural population and limited formal sector employment opportunities. SSIs absorb a large number of workers and contribute significantly to reducing unemployment in the economy.
2. Equity and Regional Development:
Small-scale industries have been instrumental in promoting regional equity by setting up in less developed or backward regions of the country. These industries have encouraged industrialization in rural and remote areas, preventing rural-urban migration and helping reduce regional disparities. By providing employment in these areas, SSIs help improve the standard of living and economic opportunities for marginalized communities.
3. Entrepreneurship and Self-Employment:
SSIs encourage entrepreneurship by providing opportunities for individuals to start their own businesses with lower capital investment compared to large industries. This fosters self-employment and helps reduce dependence on the formal job market.
4. Contribution to GDP and Exports:
SSIs contribute to the national economy by producing goods for both domestic consumption and export. They contribute to industrial output, agricultural processing, and the manufacturing of a wide variety of products. This helps boost India’s GDP and promotes economic growth while ensuring the diversification of the industrial base.
In conclusion, small-scale industries have been critical in generating employment, promoting equity, and contributing to balanced regional development in India. They have helped reduce disparities in wealth and income, making them a key component of India’s economic growth during the planning period.