hi i am nikhil. i want a ppt about cottage industries for my school seminar and for my proper knowladge and i want to write my biography by representing it on pwer point presentation and i want it in about 5 slides including its history, threads, importances steps

Next to agriculture, small-scale and cottage industries is the most important employment providing sector of the economy. It also contributes a substantial part of manufacturing output.


We can discuss the role and performance of small-scale and cottage industries under the following headings:

1. Expansion of small-scale sector and its share in industrial output.

2. Employment generation.

3. Relative efficiency as compared with large-scale sector.

4. Equitable distribution of national income.

5. Mobilisation of capital and entrepreneurial skills.

6. Regional dispersal of industries.

7. Less industrial disputes.

8. Contribution to export earnings.

(1) Expansion of Small-Scale Sector and Contribution to Industrial Output:

As is clear from the discussion above, the definition of small-scale undertakings has changed over time. Therefore, study of the expansion of small-scale sector over a long period of time is not possible. However, a study of the data contained in Economic Survey 2001-02 gives the following results for the period 1993-94 to 2000- 01.

(a) The number of small-scale units stood at 23.9 lakh in 1993-94 and this rose to 33.7 lakh in 2000-01. This shows that during the period eight years, the number of industrial units rose by as much as 41 percent.

(b) The output of small-scale units was Rs. 2, 41,648 crore in 1993-94 and this rose to Rs. 4, 50,450 crore in 2000-01 (at 1993-94 prices). This shows that the output of the small-scale industries increased by as much as 86.4 percent over the period 1993-94 to 2001-02.

(2) Relative Efficiency as Compared with Large-Scale Sector:

(i) Whether large-scale industries are more efficient or small-scale industries are more efficient, is a matter of debate. The problem arises because of the fact that efficiency can be defined in many different ways. The study on this issue was conducted by SIDBI (Small Industries Development Bank of India) Team in 1999 in association with NCAER (National Council of Applied Economic Research).

The study covers the period 1980-1994. The study reveals that the small-scale industries, by investing only 7 percent to 15 percent of the total manufacturing sector’s capital, contribute to nearly one-fifth of industrial output and 35 to 40 percent of total employment in the industrial sector.

Moreover, both labour productivity and capital productivity in small-scale sector grew at a faster rate than large-scale sector during 1980-94. Thus, the small-scale sector has proved to be more efficient.

(3) Employment Generations:

The small-scale units employed 129.80 lakh people in 1991-92 and this number has consistently risen to 185.6 lakh people in 2000-01. Given the acute problem of unemployment in India, creation of employment opportunities depend crucially on the development of small-scale and cottage industries.

There is already surplus labour in agriculture while the large-scale industrial sector, being capital-intensive in nature, has limited employment opportunities. In fact, the employment argument is the strongest argument that can be put forward in favour of small-scale and cottage, industries in India.

(4) Equitable Distribution of National Income:

The main arguments put forward in support of the small-scale and cottage industries is that they ensure a more equitable distribution of national income and wealth. This happens because of the following two considerations:

(a) The ownership of small-scale industries is more widespread than the ownership of large- scale industries, and

(b) They possess a much larger employment potential as compared to the large industries.

(5) Regional Dispersal of Industries:

There has been massive concentration of large-scale industries in the states of Maharashtra, West Bengal, Gujarat and Tamil Nadu. As a result, disparity in industrial development have increased. Even within these industrialized states, industries have tended to get concentrated in a few large cities like Mumbai and Chennai.

People migrate in large numbers from villages and lower order urban centres to these centres of industrial development. This swells the population of slums and create various social and personal problems. The whole urban environment gets polluted.

As against this, the small-scale industries are ostly set up to satisfy local demand and they can be dispersed overall the state very easily. They can also effect a qualitative change in the economy of a state. The most glaring example of this phenomenon is the economy of Punjab which has more small- scale industrial units than even the industrially developed state of Maharashtra.

(6) Mobilisation of Capital and Entrepreneurial Skill:

Small-scale industries are at a distinct advantage as far as mobilisation of capital and entrepreneurial skill is concerned. A number of entrepreneurs are spread over small towns and village industries are distributed over the entire length and breadth of the country.

Similarly, large-scale industries cannot mobilise the savings done by people in areas far flung from the urban centres. But this task can be effectively accomplished by getting up a network of small-scale and cottage industries. In addition, a large number of other resources spread over the country can be put to an effective use by the small-scale and cottage industries.

The rapid development of small-scale industries in the post-Independence period is a proof that given the necessary credit, power and technical knowledge a large quantity of latent resources of the economy can be mobilised for purposes of industrial development.

(7) Less Industrial Disputes:

A number of supporter of small-scale and cottage industries have argued that as compared with large-scale units, these industries have less industrial disputes. While these are frequent strikes and lock-outs in large industries, small-scale and cottage industries do not face such problem.

Therefore, there is no loss of output in small-scale and cottage industries. However, this point of view is not totally correct. The fact is that workers in large scale units are organised and thus the strikes are well reported in media.

As against this workers in small scale units are unorganised and cannot resort to strike. Any worker who shows his resentment is immediately thrown out. Therefore, while in a small-scale unit relations between the employer and employees appear to be normal on the surface but in fact they may be not.

In the case of cottage industries, the question of dispute does not arise at all since the main form of labour in these industries is family labour.

(8) Contribution to Exports:

With the establishment of a large number of modem small-scale industries in the post-independence period, the contribution of the small-scale sector in export earnings has increased by leaps and bounds.

What is heartening to observe is that the bulk of the exports of the small-scale industries (in fact, around 93 percent) consists of such non-traditional items like readymade garments sports-goods, finished leather, leather products, woollen garments and knitwear, processed foods, chemicals and allied products, and a large number of engineering; goods.

The total export of the small-sector industry products increased from Rs. 150 crore during 1971-72 to Rs. 48,979 crore in 1998-99. This implies, an increase in the share of small-scale industries in the total exports of the country from 9.6 percent in 1971-72 to 34.9 percent in 1998-99. The share of the small-scale sector in manufacturing exports is about 45 percent. Exports of the small scale sector are estimated at $ 13 billion in 2000-01 which was about 30 percent of total exports in that year.