Role of cottage and small scale industries

1.

Employment opportunities

Cottage and small industries provide employment to every sort to skilled people
(skilled, semi-skilled and unskilled). It provides alternative job opportunities.
2.

Utilization of local resources

Cottage and small scale industries are established in rural area by some local
people. So, this type of industry uses the local resource available in that area.
3.

Source of foreign currency

Cottage and small scale industry produce handicrafts, painting etc which attracts
tourist. About 37% of total export is enveloped by the product of these industries.
So, it is the source of foreign currency.
4.

Government revenue

Since, 37% of total export is enveloped by cottage and small scale industries,
government can even revenue through scales tax, income tax, export tax, vat etc.
So, there is the ultimate increase in Government revenue.
5.

Living standard

Cottage and small scale industries are simple and are operated with limited capital
but also increases/upgrades living standard people can earn sufficient amount to
sustain their life and fulfillment of their needs.
Addition as suggested by Abishek

Small Scale Industry :-In the small scale industry the male members of the family
along with hired labour work together. In small industries, electric power and
improved machines are mostly used in subcontinental the firm employing less than
10 person are classified as small. In subcontinental Carpet industry , poultry
farming, bee keeping, tailoring and furniture making is included in the cottage and
small industry.
Importance :-There is a shortage of capital and technical skill in subcontinental. It is
not possible to establish the heavy industries. While it is very easy to increase the
number of small scale industries. The examples of Japan, Hong Kong and Taiwan are
before us.

Following are the main advantages of small scale industry in subcontinental :

1. Increase in Industrial Product :-There is a shortage of manufactured goods in our

area. We spend a lot of foreign exchange on the import of these goods every year.
So we should increase the small scale and cottage industry to remove the shortage
of these goods.

2. Increase in Employment :The rate of unemployment is increasing day by day. To control unemployment it is
necessary that we should increase the small scale industries because these are
labour intensive. Our farmer can also easily work in small scale scale industry. It is
not possible to provide Govt. jobs to all the unemployed people. It may also increase
the self employment.

3. Increase in Foreign Exchange Earnings :the various kinds of goods like carpets and sports sold in the international market.
We earn a lot of foreign exchange by exporting these goods.

4. Use of Industrial waste :The waste of large scale industries like cotton and steel can be used by the small
scale industry. In this way we can save a lot of capital.

5. Provides Employment to Women :Our women is engaged in the cottage and small scale industry and increasing the
production. Because in our society women can not work with other men in the
factories. We should increase the number of cottage industries to make the female
sector a real asset of the nation.

6. Increase in The Income :Increase in the production of goods on small scale increase the income of the
people. The rise in income improves the standard of living. In rural areas there is
great need of small scale industry.

7. Cheaper Production :The small scale industry is labour intensive while labour is cheap in subcontinental,
so the production of small scale industry is cheaper. Due to low prices people
purchase more goods and market expands.

8. Proper Distribution of Wealth :The small scale industry increases the income of the people and reduces the gap
between rich and poor. We can reduce the poverty by expanding the small scale
industry.

9. establishment With Small Capital :We can establish these industries with small capital. In subcontinental most of the
people are poor, so they can start the production with small capital.

10. Development of Backward Areas :We can develop backward areas by establishing the small scale industry in these
areas. It will remove poverty from backward areas.

Role of Medium and Large Scale Industries

1. Development of medium and large scale industries help to remove the problem
of unemployment by creating wide range of unemployment by creating wide range
of employment opportunities to unskilled, semi-skilled and skilled human resource.
2.

Proper utilization of resources

Medium and large scale industries are necessary for the scientific utilization of
available natural resources such as forest resources, mineral resources, human
resources and water resources.
3.

Sources of Government Revenue

These industries produce huge amount of goods, generally expensive one. They are
exported to foreign land and Government earns tax, VAT, Sales tax, etc. which
increases Government Revenue.
4.

Development of basic infrastructure

Medium and large scale industries cannot be operated without proper infrastructure.
So, along with the development of industries, infrastructure of development also
increases simultaneously.
5.

Development in agricultural sector

Modem tools and equipments are produced by medium and large scale industries.
Implementation of modern tools in agricultural sector can be done. Finally, there will
be development in the sector of agriculture.

Problems of Medium and Large scale Industries

1.

Lack of capital

For the establishment of medium and large scale industries huge amount of capital
is required which is very difficult to be formed in the context of Nepal. So, lack of
capital is the problem of medium and large scale industries.
2.

Lack of infrastructure

Infrastructures such as transportation, communication and electricity are the most

essential elements for a industry to be operated. In our country all there mentioned
infrastructure are not available in adequate number or are not sufficient.
3.

Lack of skilledmanpower

Generally, medium and large scale industries need skilled manpower for handling
the delicate task but there is a situation of Brain Drain in our country. So, there is
scarcity of skilled manpower.
4.

Lack of competitiveness

Most of the Nepalese industrial products are of low quality. Such low quality
products pose a formulate difficulty to complete in both domestic and international
market. Car telling is the major problem of Nepalese market.

5.

Limited Market

The domestic market for Nepalese industrial products is very limited due to low
purchasing power of the people. There is lack of transport and communication
facilities to sell the commodity throughout the country.