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What are Small Scale Industries?

Small-scale industries are referred as, which the process of manufacturing, production, and servicing are done on a small scale.

Characteristics of Small-Scale Industry

  1. Generally have a single ownership, which means it either has a sole proprietorship structure or a partnership.
  2. The management of these industries rests with the owners and therefore, the owner plays an active role in the day-to-day functions of the business.
  3. They are very labor intensive, hence there is limited use of technology.
  4. These are flexible and adaptable to a changing business environment, unlike large ones.
  5. They work in a restricted area which makes them able to meet local and regional requirements.
  6. Small-scale industries use resources that are local and readily available, which helps the economy fully utilize the natural resources and bear minimum wastage.

Objectives of Small-Scale Industries

  1. Create job opportunities for the population.
  2. Help in the development of the rural areas of the economy.
  3. To play an active role in reducing the regional imbalances in the nation.
  4. To help in improving the standard of living for people in rural areas.
  5. Ensure there is equal distribution of wealth and income

Role of Small-Scale Industries in the Indian Economy

  1. They are the major sources of employment for the people living in rural areas and therefore, play a vital role in generating employment in an economy.
  2. Small-scale industries account for almost 40% of the total goods and services in India hence, are a very important contributor to the economy.
  3. They are help in promoting the Make in India initiative which helps in increasing demand for locally made products.
  4. The majority of the export materials are provided to Indian companies from small-scale industries. It is estimated that around 50% of all the materials exported are produced from such industries.

Examples of Small Industries

  1. Paper Bags industries
  2. Leather belt manufacturing industries
  3. Small toys manufacturing industries
  4. Bakeries
  5. School stationeries
  6. Beauty parlors
  7. Pickle manufacturing industries
  8. 10. Paper plate manufacturing industries


Small-scale enterprises can also refer to those businesses that apply for government support or avail of preferential tax policies, depending on their area of operation. Following is an elaboration on the types, characteristics, and features of small-scale industries.