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Economics 4

explain the measures taken by the govt towards small scale industries.

By Haseena Banu  •  September 18, 2026

Introduction:

Small-scale industries (SSIs) are businesses that operate with a relatively low investment in capital, labor, and resources, and typically produce goods and services on a smaller scale. These industries are essential to many economies, especially in developing countries, because they provide employment opportunities, support local economies, and contribute to the GDP.

Measures taken by government towards

Negative measures:

  • Imposing of cess on large scale industries: The corresponding large scale industries are subjected to a cess in order to protect the handloom industry a cess has been imposed on the mill made cloth the larging of the cess increases the competitive strength of the cottage and small scale industries as they will be better place as regard the price.
  • Protect reservation: During the period of planning certain additional production is required or a few other lines of production are to be developed these lines are sometimes reserve for small enterprises only.
  • Preference in purchases: The government required certain goods for military and civil departments while purchasing these codes the government gives preference to small enterprises.
  • Subsidies: The money collected by way of tax from the large scale industries will be spent on providing subsidies to the small scale units, subsidies natural helps the small enterprises.

Positive measures:

  •  Allocation of raw materials: In case of non availability of raw material the Government of India has given priority to small enterprises in the allocation of imported raw material in the matter of supply of raw material machinery and powers our small units get special treatment from the government the state trading corporation assist in the supply and distribution of raw material
  • Establishment of all India boards: The Government of India established various boards to provide an necessary facilities for the development of cottage and small scale industries they are all India handloom board, all India  handicraft board, the silk board, the coir board etc
  • Marketing assistant: The national small scale industry corporation has been rendering valuable services by securing government order for certain products for small industrial unit state have also set up small industry Development Corporation to assist small industrial units for marketing supplying of essential raw material, machinery on hire purchases basis establishing industrial estates.
  • Training of workers: Four regional institute of technology have been established for small industries which assist such industries in improving their techniques of production and management. Small industries service institute have been set up in all the states this institute’s render on the spot technical advice to small industries.
  • Industrial cooperative: Help as been and is being given to encourage the formation of cooperative societies among those engage in cottage and small scale industries.
  • Industrial estates: The industrial estates have been set up to help a small scale entrepreneurs in a number of ways the government acquires the land develop in construct road and put up factories building of different sizes it makes arrangements for the supply of electricity and water etc.

also read: explain the problems of small scale industries in India.

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Written by

Haseena Banu

Haseena Banu is an Editor at Study.EcoLaw.in and a Professor of Economics at Al-Ameen College of Law. She contributes to the development of structured, student-focused Economics resources for BA LL.B. students, with a focus on explaining economic concepts clearly and connecting them with their practical applications in legal education.

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