Small industries have contributed to the development of rural areas in following way.
(i) It generates multiple sources of income for rural households by providing them wage employment and self employment in commerce, manufacturing and services in wide range of non-agricultural activities.
(ii) It prevents migration of rural people to urban areas in search of employment.
(iii) It provides employment opportunities in the rural areas especially for traditional artisans and weakness sections of society.
(iv) These industries are the producers of consumer goods and absorbers of surplus labour thereby address the problem of unemployment and poverty in rural areas.