Q.Discuss the problems faced by small scale industries.

Small-scale industries are disadvantaged compared with large industries in scale, finance, technology and raw-material procurement, and these disadvantages show up as several distinct, recurring problems. …

The full potential of small-scale industries is often unrealised because of problems tied to their size and scale. Compared with large industries they are disadvantaged in scale, finance, technology and raw-material procurement. The major problems are:

• Finance — A small capital base and low creditworthiness; heavy dependence on local moneylenders who may exploit them; shortage of working capital (delayed payments, unsold stock); banks demand collateral, guarantees or margin money they cannot provide.
• Raw materials — Scarcity forces a choice between poor quality or high prices; low bargaining power because they buy in small quantities and cannot store bulk stock; general scarcity of metals, chemicals and extractive materials hits them hardest.
• Managerial skills — Usually run by a single person who lacks the full range of managerial skills; often technically sound but weak in marketing, unable to attend to every function or afford professional managers.
• Marketing — A weak area; excessive dependence on middlemen who pay low prices and delay payments; little infrastructure for direct marketing.
• Quality — Focus on cutting cost keeps quality low; they lack resources for quality research and the expertise to upgrade technology — the weakest point in global markets. …