What Contributions Do Small Businesses Make to Indian Economy?

As the independent India managed to establish large scale industries, the next well-though decision was to promote the small scale industries. As the Indian economy adopted the liberalization policy in early 1990s, the focus was shifted to the development of small scale industries. As a result, small businesses in India started growing.

Today, small businesses of the country play a significant role in the overall development of its economy. This is the reason that government of India has initiated a number of programs and has made a number of policies to ensure further development of small scale businesses and industrial units. Here are some important ways in which small businesses contribute towards the Indian economy.

Development of Backward Regions
Small scale industries and businesses are generally set up in rural areas. This helps in the development of rural and backward areas of the country. As a result, the economic condition of these areas improves that ultimately contributes towards the growth of the Indian economy.

Increase in Employment
Small businesses in India significantly contribute towards the employment for people who don’t get jobs in large scale industries. This has seriously helped to stop migration of people from rural areas and small towns to large cities. As more people get jobs due to small business setups, this results in the overall economical growth.

Foreign Exchange Earnings
Another way that makes small businesses in India important is increase in earning of foreign exchange by exporting quality goods to the foreign markets. Thanks to the production at small scale industrial units, the Indian goods have gained reputation in a number of foreign markets across different continents. Needless to say, this has supported the growth of Indian economy in a big way.

Independent social living, increase in living standard, support to large scale industries and capital optimization are some of the other important ways in which small businesses in India have gained importance. Small scale businesses have gained success due to a number of reasons, the availability of internet being an important one. The use of online business directories to find global buyers has helped these businesses to be a part of the global supply chain.