Question of 20
Q.Discuss the problems faced by small scale industries in India.
(OR)
What are the incentives provided by the Govt. for industries in backward and hilly areas ?
Jammu Kashmir JkboseJKBOSE Class 11 (Commerce) 2025Subjective· 6mImportance★★★★★est
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Start your 14-day free trial to unlock the full solution →SSIs chiefly face finance, raw material, technology, marketing, infrastructure and skilled-manpower problems. Government offsets the disadvantages of backward/hilly areas through capital, tax, power, land, transport and interest subsidies.
Part 1 — Problems faced by small scale industries in India
- Finance — SSIs find it difficult to raise adequate and timely finance at reasonable cost; banks often demand collateral that small units cannot provide.
- Raw material — scarcity, poor quality and high cost of raw materials, since SSIs cannot buy in bulk like large units and so lose quantity discounts.
- Technology / machinery — most SSIs use outdated technology and machinery, leading to lower productivity and higher per-unit costs.
- Marketing — weak bargaining power, lack of resources for advertising/branding, and difficulty competing with large firms and cheaper imports.
- Infrastructure — inadequate and irregular power supply, poor transport and storage facilities add to costs and delays.
- Managerial skills — many SSIs are run by a single owner with limited managerial expertise, lacking professional/specialised management.
- Skilled labour — difficulty attracting and retaining trained, skilled workers who prefer larger, better-paying organisations.
- Global competition — post-liberalisation exposure to international competition has made survival harder for many small units.
Part 2 (OR) — Government incentives for industries in backward and hilly areas
To encourage balanced regional development, the government offers special incentives to industries set up in backward, hilly and remote areas:
- Capital investment subsidy — a lump-sum subsidy on fixed capital investment (land, building, plant and machinery).
- Tax concessions — income tax holidays and concessions/exemptions in excise/GST for a specified number of years. …
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