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Cottage/ Small Scale Industries: Chapter - 4 Industrial Development

Small and Medium Enterprises (SMEs) include cottage and small-scale industries located in homes and operated by families using handmade tools, with less than 20 workers and fixed assets costing less than Rs. 10 million. Important cottage industries are sports goods, leather goods, handloom products, silver/gold ornaments, and carpets. Small industries provide employment, increase standards of living, and help reduce income disparity. They also act as by-product and subsidiary industries to large industries by using wasted raw materials and manufacturing spare parts.

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Ghalib Hussain
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165 views2 pages

Cottage/ Small Scale Industries: Chapter - 4 Industrial Development

Small and Medium Enterprises (SMEs) include cottage and small-scale industries located in homes and operated by families using handmade tools, with less than 20 workers and fixed assets costing less than Rs. 10 million. Important cottage industries are sports goods, leather goods, handloom products, silver/gold ornaments, and carpets. Small industries provide employment, increase standards of living, and help reduce income disparity. They also act as by-product and subsidiary industries to large industries by using wasted raw materials and manufacturing spare parts.

Uploaded by

Ghalib Hussain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter – 4 Industrial Development

Cottage/ Small Scale Industries


Small and Medium Enterprises (SMEs) is a new name given to cottage and small- scale
industries. Small-scale industry is an industrial project whose fixed assets cost (excluding
land and buildings), does not exceed Rs.10 million and which have less than 20 workers.
Cottage industries are located in homes, operated by family members and in which hand-
made tools and equipment are used.
Important cottage and small- scale industries are sports goods, surgical instruments, leather
goods, handloom products, silver and gold ornaments, handicrafts, carpets, furniture making,
embroidery and tailoring, bangles making etc. In rural areas the most important ones are
poultry farming, sericulture, and bee keeping.

Importance of Small-Scale Industries


1. Use Of Local Machinery & Local Raw Material
Small industries can be set up easily because no technical and administrative expertise and
training is required. Since in it local machinery and local raw material is used therefore no
foreign exchange is required.

2. Employment Opportunities
These industries provide greater employment opportunities to the local people. The disguised
unemployment is reduced and migration of people towards cities for search of jobs is
reduced. Since unemployed person can easily get jobs in small industries, the rate of
dependent persons is reduced.

3. Increase In Standard Of Living


These industries provide job opportunities, income of the people increases, which result in
the increase in standard of living of the people. These also reduce income disparity between
the rich and the poor.

4. Increase In Export Earnings


Foreigners heavily demand goods produced by small industries, which results in the increase
in foreign exchange earnings of Pakistan. These enterprises increase name and fame of
Pakistan in international market.

5. Act As By-Product & Subsidiary Industries


Small industries purchase wasted raw material of large industries to be used in their own
production process, thus they increase income of large-scale industries. These industries
manufacture nuts, bolts and spare parts required by large industries at a very low price, hence
both of them are benefited with each other.

6. Expansion In Home Market


SMEs produce goods keeping in view needs and requirement of local market therefore home
market is expanded. Increased supply of goods increases business activity and national
income. With increase in output the prevailing high rate of inflation can be controlled.

7. Diversification In Industrial Products


Goods using different types of material, result in diversification of products. Different
varieties of goods are produced according to the demand of different customers’ purchasing
power.

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