Question

Explain the role of SSIs in economic development?

Answer 1

1. SSIs provide employment:
   a. SSIs use labour intensive techniques thus reduce the problem of unemployment to a great extent.
   b. They provide employment to people in villages and unorganized sectors.
   c. The employment–capital ratio is high for the SSIs.
2. SSIs bring balanced regional development: SSIs remove regional disparities by industrializing rural and backward areas and bring balanced regional development.
3. Help in the mobilization of local resources: SSIs help to mobilize and utilize local resources like small savings, entrepreneurial talent etc.,

4. Pave for optimization of capital: SSIs require less capital per unit of output. They function as a stabilizing force by providing output-capital ratio as well as high employment capital ratio.

    

5. Promote exports: SSIs earn valuable foreign exchange through exports from India.

    

6. Complement large scale industries: SSIs serve as ancillaries to large scale units.

    

7. Meet consumer demands: SSIs serves as an anti-inflationary force by providing goods of daily use.

    

8. Develop entrepreneurship: They promote self-employment and a spirit of self-reliance in society. They help to increase the per capita income. They help in distributing national income in a more efficient and equitable manner.