Small and Medium-sized enterprises (SMEs) are labour intensive, have the advantage of low cost of production and can make good use of locally available resources pushing demand and growth. The sector offers a wide range of employment opportunities and absorbs most of the working age population.
Majorly consists of handlooms, handicrafts, coir, sericulture, khadi and village industries, small scale industries and powerlooms. SME’s offer a wide range of benefits which are as follows:
- Income equality: SMEs support industrialisation of backward areas and assure more equitable distribution of national income and wealth.
- Employment generation: Produces a wide range of products, from simple consumer goods to high-precision, sophisticated finished products.
- Has emerged a major supplier of mass consumption goods as well as a producer of electronic and electrical equipment and drugs and pharmaceuticals.
- Can generate more number of employment opportunities per unit of capital invested compared to large industries.
- Provides opportunities for entrepreneurship.
- Poverty eradication: Addresses unemployment, provides diversified income opportunities to rural masses.
- Customised production expands the range of market and ensures sustainability to production.
- Balanced regional development:
- Depends on locally available resources both material and labour and can be set up anywhere in the country.
- Absence of locational constraints ensures that the benefits of industrialisation reach every region. Thus, contributing to the balanced development of the country.