Small-scale industries are, in most cases, not as efficient and competitive as the large-scale ones. Yet the Government provides preferential treatment and reservations in a range of products to the small firms because small-scale industries:
1. provide higher employment on a per unit capital deployment basis.
2. promote a regional dispersion of industries and economic activities.
3. have performed better in export of manufactured products than the large scale ones.
4. provide jobs to low-skill workers, who otherwise may not find employment avenues elsewhere.
Which of the above statements are correct? avenues elsewhere.
Correct Answer: (b) 1 and 2
Solution:The Government provides preferential treatment and reservations in a range of products to the small-scale industries (S51s) because they provide higher employment on a per unit capital deployment basis. SSIs are a major source of employment for developing countries like India. Because of the limited technology and resource availability, they tend to use labour and manpower for their production activities, 551s also promote a regional dispersion of industries and economic activities. They use local and readily available resources which help the economy to fully utilize natural resources with minimum wastage. They help in developing the rural and less developed regions of the economy. Hence, option (b) is the correct answer.