A small scale industry is defined with reference to the maximum investment allowed on the assets of a production unit. A small scale industry is one where the investment is less than one crore rupees.
Small scale industries play a very important role in the economic development of India. It is a known fact that small scale industries are more labour intensive i.e., they use more labour than the large scale industries and therefore, generate more employment.
Apart from the above, the small scale industries require less capital as they are small units. They are free from industrial unrest. They also depend on indigenous resources and need not depend on foreign resources. Small scale industries were also given concessions like lower excise duty and bank loans at lower interest rates.
