Question

Justify the following statement.

Small Scale Industries have problems.

Answer 1

Small scale industries have to face many problems:

1. Lack of Adequate Finance: Due to the small scale of production and sale, Banks and Financial Institutions are afraid to give loans.
2. The problem of Raw material: Due to inadequate finance they cannot purchase raw material at a time Thus, the cost of raw material increases.
3. Labour Problem: Due to inadequate finance, they cannot employ skilled labour which affects production.
4. Marketing Problem: The goods manufactured if not marketed properly can be risky as it will affect the sales.
5. The problem of Transport: Transportation cost increases the cost of the product which hampers the sale as large scale industries cost may be less.
6. Sickness: Due to financial problem industrial units are unable to sustain themselves and finally turn to sick units.
7. Thus, Small Scale Industries have problems.