Explain main advantages of small scale industry.

Main advantages of small scale industry:

1. Formation with small capital and simple machines : Cottage and small scale industries can be started with small capital and simple machines, tools and equipments. In this way, these industries can be owned and managed by middle income people also.

2. Lower degree of skill required : These industries have simple technology. They do not require higher degree of technical skill. These industries can be operated by persons of ordinary skill also.

3. Quick yielding : The formation of industries is simple and does not take long period

for establishment. The owner has not to wait for longer period for income. The industry starts paying rich returns quickly.

4. Mobilisation of savings : These industries can be started with small capital even on co-operative basis. It can be a proprietorship or partnership. Persons desirous of establishing these industries save their income and also mobilise saving from other members. These industries provide an incentive to the weaker sections of the society to form these industries with their small savings.

5. More equality in income distribution : In case of large scale industries, the income concentrates in the hands of industrialists. In case of small scale industries, there remains lesser amount with the owner after paying rent of land, wage to workers and interest on capital. Income is more equitably distributed.

6. Balanced regional development : Cottage and small scale industries can be started in every region. Even remotest villages can have these industries. The establishment of these industries in every regional rural sector will result in balanced regional development.

7. Creating more employment opportunities : Small scale industries are labour intensive. They require more workers and lesser machines and equipments. In this way, they will absorb more workers and will be suitable for the Indian economy, where unempolyment is widespread.