Small scale industries are small in size but play a big role in the economic development of a. developing country like India. Our country has adopted the ideal of a socialistic pattern of society with full employment, balanced regional development and self-reliance as the major objectives.
Small scale firms are helpful in the achievement of these goals in the following wags
(i) Small scale firms use labour-intensive techniques and therefore, they have high potential to provide employment to a large number of people per unit of capital.
(ii) Small scale industries promote decentralised development and help to remove regional disparities in industrialisation.
(iii) Small scale firms require less capital per unit of output and therefore, greater output can be obtained with small investment.
(iv) Small scale industries facilitate mobilisation and utilisation of local resources.
(v) Small scale units offer opportunities to raise the standard of living of poor people.