Why is small scale sector required in the Indian economy? How is reservation essential for their growth?
Dear Student
Small scale sector plays an important role in the growth of India . It has been estimated that this sector contributes about 40% of the gross industrial output in the Indian economy . This sector not only helps in growth but also in employment generation , eradication of poverty , proper utilization of resources and entrepreneurial skills , creating regional balances , removal of rural income disparities . Exports have also increased which helps in revenue generation and maintenance of balance of payments . Food processing , poultry , furniture making are some examples under this category .
Reservation of exclusive items to be produced in small scale sector only protects this sector from large and medium industries . Small scale sectors due to lack of foreign investors , finance , man power etc can not face rigorous competition . The aim since independence and formulation of five year plans was to decentralize industries . This aim to keep khadi , handloom , pottery alive in rural India will only be possible if these sectors are safeguarded by reservation .
Regards .
Small scale sector plays an important role in the growth of India . It has been estimated that this sector contributes about 40% of the gross industrial output in the Indian economy . This sector not only helps in growth but also in employment generation , eradication of poverty , proper utilization of resources and entrepreneurial skills , creating regional balances , removal of rural income disparities . Exports have also increased which helps in revenue generation and maintenance of balance of payments . Food processing , poultry , furniture making are some examples under this category .
Reservation of exclusive items to be produced in small scale sector only protects this sector from large and medium industries . Small scale sectors due to lack of foreign investors , finance , man power etc can not face rigorous competition . The aim since independence and formulation of five year plans was to decentralize industries . This aim to keep khadi , handloom , pottery alive in rural India will only be possible if these sectors are safeguarded by reservation .
Regards .