The Small Scale Industries play an important role in Indian economy in spite of facing numerous difficulties. The Government of India has taken certain measures for the development of cottage and small scale industries. We will discuss those measures in brief in the following:
1. We know that the small scale industries are handicapped by inadequate supply of finance. The State Finance Corporation, The National Small Industries Corporation and the nationalized Commercial Banks are taking measures to provide long term finance for the development of such industries. The Central Government has now given loans to the State Government for the institution of industrial estates.
2. In the rural areas, the Industrial Training Centers have been set up for the proper education and training of cottage workers and artisans. Moreover, the Government has made arrangement for the supply of good raw materials to the cottage and small industries. In recent years, the Government has provided technical training to the artisans and craftsmen.
3. The Indian Government has set up the Cottage Industries Board, the Khadi and village Industries Board, Inventions Promotions Board, Small Industries Development Board etc. for the development of small scale industries. The Boards are endowed with adequate finance and large power in their hands. The Government has imposed excise duties on factory good with a view to enabling the small industries to compete with them.
4. The Indian Government has also made provision for cheap electricity and small machine tools in order to raise the labor productivity of small scale cottage industries. Suitable steps have been taken for effective marketing organization. In this connection, we may say that the Government has started sales depot in all important cities of the country and made arrangements for the exhibition of products of small and cottage industries.
5. With the help of the Reserve Bank of India, the nationalized Commercial Banks have been taking suitable measures for the modernization of machines and production techniques of small scale and cottage industries as a complementary to large scale units. We get quality products from the cottage industries.
6. In accordance with the suggestion of the Planning Commission, the Government of India has made provision for the reservation of spheres of production of cottage and small scale industries. The Government of India has also set up the Regional Industries of Technology and the Small Scale Industries Service Institute for improving the management of cottage, industries and also for rendering technical advice to such industries. Besides, in order to carry out the research work in techniques of production of industries a Village Industries Research institute has been established in the country. The National Small Industries Corporation was set up in 1956 which established close link with the Government for the supply of machines and equipment of small industries on hire purchase scheme.
7. The Government of India has launched an ambitious industrial estates programme, the objectives of which are to shift small scale industries from congested areas to estate premises, achieve decentralized industrial developments in small towns, and provide well planned accommodation to small scale units at suitable sites with facilities for water, electricity, transport, bank etc. It also seeks to bring a number of units together and thereby facilitate the establishment of common facility centers.
All these schemes taken by the Government have made the small scale industries a real source of strength to the entire economy of the country. In 1999-2000 they accounted for the total production of goods valued about Rs. 578,470 crores and offered direct employment to 17.85 million workers. Their output has been increasing at the rate of 10% per year. In fact, the small industries have grown in size and acquired sophistication and modernity to such an extent that it is a misnomer to call them small.