In spite of the disadvantages, the small-scale producer has not disappeared from the scene.

Competition from large businesses has failed to crush him. The small-scale producer still survives even in highly industrialized countries like England, Germany, France and Belgium.

There are several factors which are responsible for the survival of the small-scale producer:

1. Economies:

The small-scale producer has certain advantages over the large business. He can give personal attention to every detail. He can look after his customers and employees personally. His management is much more economical.

2. Nature of Demand:


In some cases, the nature of the demand is such that competition from large-scale business is ruled out; especially if the demand is limited, local or fluctuating. In such cases, it is not worth-while to have large-scale production. The field is free for the small producer.

3. Nature of Industry:

Some industries are such that they must produce on a small scale. Here the personal factor is important and sometimes, even indispensable, e.g., in tailoring and jewellery-making. In some cases, there is little scope for the use of machinery and division of labour, e.g., in agriculture, horticulture, poultry-rearing, dairying, etc. These industries furnish an ample field for small-scale enterprise.

4. Help from Big Business:

Sometimes the very existence of the large-scale business creates work for small-scale enterprises, e.g., repairing of motor-cars, trucks and cycles. Small industries act as subsidiary industries or industries supplementary to a large-scale industry. As such they have- ample chance to survive.

5. Recent Developments:

There are some recent developments which-have proved very helpful to the small producer:


(a) Advent of electricity is one such factor. It is not necessary now to generate power in each factory. Cheap electricity has become available and payment is made for the current actually consumed. In this respect, the large business has no special advantage,

(b) Technical journals have spread scientific knowledge all round so that it is no longer a monopoly of big business,

(c) Co-operation also helps the small-scale producer. By working together in a group, the small-scale producers can have all the economic advantages open to a big business.

6. Congenial Environment:

In the case of cottage industries, there is the further advantage of working in very congenial environment of the home and receiving unpaid assistance from the members of the family. The work is pleasant and is cared on even though it is less profitable.


There are additional reasons why Indian cottage industries have survived. They are hereditary occupations and are followed as a matter of course irrespective of their profitability. The standard of living of those engaged in these industries is very low, and can be maintained by the small earnings made in these industries.

In India, there is a wide field for small-scale industries. Even now cottage industries support millions of people. India is an agricultural country and the peasant is in a state of enforced idleness for several months in a year. Agriculture must, therefore, be supplemented by suitable cottage industries. Besides, labour is cheap and machinery is dear. The All-India Village Industries Association has been doing a lot to popularize small-size industries.

The ruling Janata Party, the Government of India, and State Governments render enthusiastic support to small and cottage industries in every possible way. In the Five-Year Plans, great deal of attention has been paid to the development of small-scale and cottage industries. Large sums of money have been provided for the purpose. This will not only make our farmers and countryside people more prosperous but also help unemployed people to get jobs. The Indian economy will become a little more balanced.