Small-scale industries, or SSIs, are small employers a step above cottage industries, which are run within the household. SSIs are concentrated in urban areas and villages. They are more efficient than cottage industry but less efficient than large-scale businesses.
SSIs exist in the manufacturing, services and retail industries. According to “Entrepreneurship Development in Small Scale Industries” by Shiba Charan Panda, as of 2003, SSIs produced 50 percent of the industrial manufacturing product made in India while employing 80 percent of its industrial workers. The book “Employment Generation in Industrial Sector” by M.L. Narasaiah states that SSIs in India produce consumer goods and simple producer goods like hand tools.
Economies of Scale
SSIs have greater access to consumer markets and financial resources than cottage industries. SSIs also sell goods and services to large-scale industrial businesses. SSIs can offer mass-produced regional goods.
Preferences for SSI in Indian Policy
According to the book “Indian Economy” by T.R. Jain, Mukesh Trehan and Ranju Trehan, India’s government values SSIs for their ability to employee many people with minimal investment. SSIs are also preferred over large businesses because they prevent a concentration of wealth by a few owners.
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