Opportunities and Challenges faced by Small Scale Industries

Business

Opportunities and Challenges faced by Small Scale Industries

read
Komal Mule

Story By: Writer, Blogger

"The undertaking of a new action brings new strength. "

- Richard Evans

 

Demosthenes has said that Small opportunities are often the beginning of great enterprise.

 

Small scale industries i.e SSI are those industries who produce or manufacture on small scale. These industries are classified into two types Viz manufacturing enterprise and service enterprise. Before independence India was only raw material provider and importer of finished goods. But this scenario has now changed. Many freedom fighters such as Gandhiji, Lal Bahadur Shastri ji have stressed the importance of small scale industries. SSI constitute the backbone of a developing Economy with its effective, efficient, flexible and innovative entrepreneurial mindset. With the change in India’s foreign trade policy small scale industries are getting a lot of boost.

 

Government of India has imposed tariffs on foreign goods, quota system is made, and import substitution is there. Import substitution means whatever we used to export is manufactured in India itself. Make in India was launched by the Government of India on 25 September 2014 to encourage companies to manufacture their products in India and incentivize with dedicated investments into manufacturing. SSI proves to be employment provider to a large scale of rural as well as urban population. SSI imparts new skillset to rural population bridging the gap between urban and rural population. SSI are labour intensive i.e more work is done by labors than by machines. SSI helps in distribution of income in society thus increasing the purchase power parity i.e PPP. This helps weaker section of society to grow.

 

Read:-Top 6 Emerging States For Small Scale Business in India

 

Public welfare is achieved through SSI. For example a single mother can send her child to crèche facility in company and simultaneously she can work. Both women employment and child care responsibility is taken by employer. Women empowerment is provided by small scale industries. There are many examples of small scale industries that are fully owned and employed by women. For example lijjat papad, etc. SSI provide goods and services to various types of our population this making their life easy.

 

 

Small scale industries

 

Small scale industries provide support to large scale industries for example a car manufacturing company buys it’s spare parts like rubbers , chassis etc from small scale industries. That is why small scale industries are called backbone of country.

 

Earlier small scale industries were concentrated in few areas but now there is regional dispersion of Industries resulting in equity. India’s exports have increased.in 1771 -72 exports were 155 cr. In 2018 India exported a total of dollar 326B, making it the number 16 exporter in the world. Contribution of SSI is 40% in overall exports. Small scale industries are not only increasing India’s GDP but are also increasing country’s foreign reserves. This contributes to reduce pressure in country’s balance of payments (BOP). SSI help us being self-reliant. India has got Huge market to serve customer needs.

 

 

Robust infrastructure

 

Along with opportunities small scale industries also have few challenges. SSI have lack of infrastructure. Robust infrastructure plays an important role in growth of SSI. Lack of credit assistance is also one of the reasons for lack of infrastructure. Credit assistance usually have high rate of interest. SSI are hesitant to go for credit assistance and land up using local money lenders assistance. Government of India has various schemes to support small scale industries. But people are unaware of many schemes. So a proper channel must be set so that gap between government schemes and SSI is reduced.

 

Next challenge for SSI is skillset. Due to globalization SSI must be acquainted with new upgraded technology to grow with global community. SSI must get in touch with global community and make sure they are not lagging behind in terms of technology, skillset, human resources, etc. Lack of knowledge about latest happenings i.e competitive edge is lacking. Another challenge is use of marketing strategies. Marketing is the key to sell the products that are produced by a Small scale industry. So various platforms for marketing can be used to so. Limited knowledge of market forces is there – demand and supply. Poor organization of resources is seen in SSI. Not well versed with Business plan. A good business plan can help in organization of resources. Resource optimization can be done to efficiently grow the business.

 

Read:-6 Useful Ways To Raise Funds For Your Business

 

Covid - 19

 

Current scenario post Covid – 19 has brought a lot of opportunities and challenges for small scale industries. Covid – 19 is a disaster for which world was not prepared. Bit this is the time to face the reality of living with this kind of Covid -19 situation. Many opportunities are opened up in sanitation facilities, health and medical care facilities, agriculture, green economy, Climate-friendly economy, remote working.

 

Small scale industries must be updated with current scenario and work accordingly towards betterment of India. With built in good leadership qualities and Managerial skills small scale industries can achieve a new milestone. Jack Welch has said “Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.”

 

Read:-What Is The Gig Economy, And Why Is It So Controversial

Komal Mule

Story By: