Question

State four problems of small scale and cottage industries.

Answer 1

Four problems of small scale and cottage industries are : 

• Problem of raw material : On one hand, traders supply them raw materials at higher prices, while on the other hand, they buy the cloth, thread made by them at lower prices. They have to import raw materials from abroad, which causes a decline in our foreign exchange reserves. 
• Lack of capital : They need long term capital loans to buy machinery and tools, while they also need short term loans to buy raw materials. They have to approach the moneylenders for loans, which they easily get but they have to pay a high interest rate on them.
• Lack of modern technology : Small and cottage industries are using old and traditional technology. The quality of products made by them has not improved due to use of obsolete and old machines. 
• Problem of marketing and standardization : Small and cottage industries have to face too many difficulties in selling their goods. The number of such reserved goods has been increased from 77 to 836. The government established National Small Industries Corporation in 1955 to search for market for minor goods.