Question

Consider the following statements: 

Small-scale industries are, in most cases, not as efficient and competitive as the large-scale ones. Yet the Government provides preferential treatment and reservations in a range of products to the small firms because small-scale industries: 

1. provide higher employment on a per unit capital deployment basis 

2. promote a regional dispersion of industries and economical activities 

3. have performed better in export of manufactured products than the large scale ones

4. provide jobs to low-skill workers, who otherwise may not find employment avenues elsewhere

Which of the above statements are correct?

(a) 1 and 4 (b) 1 and 2 (c) 2 and 3 (d) 3 and 4

Answer 1

(b) SSI contribution to Indian exports is 35% and in the total manufacturing turnover contribute approximately 40%. Small scale, industries have a low capital output ratio and give employment to larger number of workers. As they use raw material they can be dispersed over a wider area.