Small Scale enterprises provide the numerous benefits in rural area.
The role of small business in rural India is explained in the following points.
(i) Non-farm Employment Traditionally, rural households in India were exclusively engaged in agriculture. But now rural households have varied and multiple sources of income and participate in a wide range of non-agricultural activities such as wage employment and self-employment in commerce, manufacturing and services, along with the traditional rural activities of farming and agricultural labour. This can be largely attributed to the setting up of agro-based rural small industries.
(ii) Employment for Artisans Cottage and rural industries play an important role in providing employment opportunities in the rural areas, especially for the traditional artisans and the weaker sections of society.
(iii) Prevention of Migration Development of rural and village industries can also prevent migration of rural population to urban areas in search of employment.
(iv) Poverty Alleviation Village and small industries are significant as producers of consumer goods and absorbers of surplus labour, thereby addressing the problems of poverty and unemployment. Promotion of small scale industries and rural industrialization has been considered by the Government of India as a powerful instrument for realizing the twin objective; of accelerated industrial growth and creating additional productive employment potential in rural and backward areas.’
(v) Socio-economic Aspects These industries contribute amply to other socio-economic aspects, such as reduction inequalities, dispersed development of other sectors of the economy.