Explain the role of small business in India

The role of small business in India are as follows:

  1. Major portion in industrial units : About 95% of the industrial units in the country consists of small industries and 40% of the total industrial output is contributed by these industries. 45% of the total exports (direct and indirect) from India are contributed by them.
  2. Low cost of production : The cost of production in these industries is very low. Because of low overhead expenses, both -establishment and running costs are low.
  3. Quick decisions : Small size of the organisations enables the business firms to take quick and timely decisions and to capture new business opportunities at the right time.
  4. Good personal relations : Inherent strengths like adaptability and personal touch enables the small scale industries to maintain good personal relations with both the customers and the employees.
  5. Simple and flexible production techniques : Simple and flexible production techniques are used by these enterprises which make them very much suitable for customized production, which means designing a product according to the tastes, preferences and requirements of the customers.
  6. Second largest employment provider : After agriculture, these industries are the second largest provider of employment in India. As compared to large industries, they generate more number of employment opportunities per unit of capital invested. Hence, these industries are a boon for an overpopulated country like India.