DMPQ- What are the Challenges in front of Small scale and cottage industries

Financial problems

The paucity of adequate and timely finance and credit is the main setback in the development of SSI units. It is even worse in case of cottage and village industries. The capital base of the small industrial units is usually very weak since they generally have partnership or sole proprietorship form of organization. The initial investment of these units mainly comes from their own fund or borrowed fund from unorganized sectors like friends, relatives and professional lenders. Much lesser proportion of required investment comes from organized sectors like banks, financial institutions and government channels. The artisans running cottage industries either run their units with whatever capital they posses or take loan from local moneylenders or the traders who supply raw material to them. Such types of credits are often obtained at a very high rate of interest and are thus exploitative in nature.

Marketing constraints

Market is the ultimate destination of all industrial concerns whether small or big where the produced are being bought and sold. Marketing is a broad process of linking the gap between the producer and consumer. The vital role of marketing in accelerating industrial development lies in selling the goods and services produced by these units. The goods have no value for the manufacturing units unless these are sold. Marketing is a tricky technique involving detection of what the consumers wants, then planning and developing a product or service which satisfies those demands and ultimately determining the best way to price, promote and distribute that product. The expertise of entrepreneurs in marketing their product plays a vital role in the success and growth of his enterprise.

Infrastructure bottlenecks

Infrastructural adequacies are necessary to subsist in order to aid the smooth and continuous economic growth in general and industrial growth in particular. Industrial production requires not only machinery and equipment but also skilled manpower, management, energy, banking and insurance facilities, marketing facilities, transport services which include railways, roads and waterways, communication facilities, etc. All these facilities and services which facilitate industrial and agricultural production and accelerate the overall economic development of a country constitute collectively the infrastructure or economic and social overheads of the economy.

Transport problems

Efficient, cheap and quick means of transport of wide varieties is essential for the expansion of trade and commerce. Inadequate transport system in the entire region have resulted in crippling disincentives of excessive transportation cost, undue delay in movement of materials and problems of marketing. It has been observed that the study area- Uttar Pradesh suffers from inadequate transport facilities, which is the major obstacle to the socio-economic development of this region.

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