Small and Cottage Industries
Tags: Problems, Cottage Industries, Solutions, Importance, Type

INTRODUCTION:

Small and medium enterprises are very important for any developing economy. These businesses do not need any major financial support to run their business and the owners can easily manage it. Small and medium-sized businesses are non-subsidiaries, independent firms that employ less than a certain number of employees. This number varies from country to country. Like the European Union, the upper limit for setting up an SME is often 250 employees.

SMALL AND COTTAGE INDUSTRIES:

The second most important sector for any growing economy is the cottage industry, which is relatively larger than SMEs. Is small This small-scale, decentralized manufacturing business often runs out of convenience rather than purpose. The amount of investment required to start a cottage industry is determined, as well as the number of people employed and even the occupants of the home can do everything to end the business.

In Pakistan, cottage or home industries have an important place in rural areas. Most villages are self-sufficient in the necessities of life. They have their own carpenters, cobblers, potters, artisans, and cotton weavers. Many families depend on the cottage industries for income. Cottage industries have also gained immense importance in cities and towns. Handmade carpets, embroidery, brassware, carpets, and traditional bangles are in high demand. They are also considered important export goods and are in great demand in international markets.

The cottage industry often focuses on the manufacture of labor-intensive equipment but faces a significant disadvantage when competing with factory-based manufacturers that manufacture large-scale equipment. SMEs and the cottage industry are interconnected because, in some products, SMEs outsource their production to small-scale manufacturers. The purpose of this outsourcing is to reduce the cost of production and reduce the production burden from SME facility units.

TYPES OF COTTAGE AND SMALL-SCALE INDUSTRIES IN PAKISTAN:

There is a network of cottage and book industries. In almost every village, there are several such industries depending on the size of the village and the demand for the product. The establishment of such an industry is closely related to the traditional expertise of raw materials, climatic conditions, and, in many cases, local expertise in the field of the organized factory.

A large variety of handicrafts is available in Pakistan. Not only are they aesthetically pleasing but they also cater to the needs of the locals.

CARPETS

In small industries, the most important is carpet weaving and its center is located almost all over Pakistan. It is also economically significant and contributes significantly to exports. Cotton is the raw material required for this industry. They also employ women to make handmade carpets and to make wool silk or a blend of both, as carpets are of great importance which creates equal economic opportunities. It is valuable for the country’s gross domestic product.

TEXTILES

Textiles are found all over the country with a variety of designs and techniques. The most famous of these are Khaddar, Susi, Khes, Chunri, Boski, Karandi, Shawl, and Ajrak. Designs are always bright colors with the traditional emphasis of blue and red.

EMBROIDERY

Embroidery is made in the form of fine art with specific regional designs and patterns.

JEWELRY

There is a large group of gold and silver craftsmen. Most jewelry made and sold in cities is complex and delicate.

CERAMICS

The practical significance of clay and terracotta pots and pans remains. Many of the designs of pots, pots, bowls, jugs, plates, and utensils that are seen today are almost identical to those found in archeological sites across the country. Many large mosques in Pakistan are decorated with different colored blue tiles with glass.

CUTLERY

Wazirabad is a city of the cutlery industry in Pakistan. The industry is growing day by day and accounts for US 65 65 million in 2010 exports. The Damascus Steel of the High City is manufactured in this city and meets 95% of the world’s needs.

WOODWORK

The Swat Valley is perhaps best known for the fine wood art and furniture it has built, although wood carvings are common in the northern mountains.

SPORTS GOODS

Sporting goods make up about 3.3% of our total exports. The main raw materials for the sporting goods industry are leather and mulberry wood which are available in Punjab but are also imported PVC. Football, hockey balls, hockey sticks, cricket bats, and rackets are mostly handmade. Skilled workers are available in Sialkot and Lahore. Large and medium-sized factories in the industry contract small and cottage concerns.

IMPORTANCE OF SMALL AND COTTAGE INDUSTRIES:

There are meager resources for the development of large-scale industries. However, a program for the development and promotion of small industries is more feasible in both rural and urban areas

I. Cottage and small industries are labor-intensive and employ 80% of the industrial workforce. It reduces unemployment and creates self-employment opportunities.

II. Traditionally, women are not encouraged to work outside the home. Cottage or small-scale industries such as carpet weaving, candle making, and handicrafts can be set up at home and women can be brought into lucrative employment. This increases the active force of the workers.

III. These industries also meet the local demand for industrial goods and save on foreign exchange spent on imports.

IV. The international market is in demand for carpets, rugs, brassware, handicrafts, and embroidery. These goods provide 30 receipts for the manufacturing sector.

V. When people in rural areas are employed in lucrative jobs, the migration of people from rural to urban areas will decrease. Severe housing, sanitation, education, transport, and health problems in urban areas will be reduced.

VI. Many districts are less developed. With the expansion of such industries, the regional disparity in income can be reduced.

VII. These industries make efficient use of local raw materials that also promote basic industries such as agriculture and mining.

VIII. A small industry does not require much capital and high technology. I.T is suitable for traditional economic setup.

IX. Cottage and small industries do not use more imported materials or equipment.

X. Waste from large-scale industries, especially cotton, sugar, and steel, can be used to make synthetic products.

XI. Home Decoration

PROBLEM OF COTTAGE AND SMALL-SCALE INDUSTRIES

The contribution of the cottage and small-scale industries to the GDP is only 5%. There are some issues related to these industries which are mentioned below.

Profits are limited and they are mostly spent on the daily expenses of the owners. They do not have the extra capital to expand these industrial units.

Economies are not widely available, so production costs are high. If the same goods are manufactured on a large scale, the goods manufactured in small industries cannot compete in the open market.

The wholesaler, who makes the most profit, exploits small business owners. In some cases, the goods are sold to wholesalers at exorbitant prices, which discourages owners and reduces the quality and quantity they produce.

In rural areas, where electricity is not provided, it is difficult to set up small-scale industries. Even strong fluctuations in voltage and power intervals can damage electric motors. There has also been a significant increase in commercial electricity rates, which is an obstacle to growth.

Craftsmen and artisans learn their skills and production methods from their elders. Provision of technical advice and further training is limited.

STEPS GOVERNMENT SHOULD TAKE:

The government and relevant departments should encourage these cottage industries and facilitate them to improve their registration and production with quality and international standards. SMEA is playing a very important role for SMEs but very small-scale unregistered production units have been completely ignored by the concerned authorities.

PMIC should also give priority to supporting these cottage industry type production units at the grassroots level. The government should help the cottage industries to enhance their capabilities in terms of how they can approach the international market and compete with the competitors in the international market.

SMEDA should provide them some funds for exploring the international market including overseas exhibitions, certificates of the business management system, certification of various products, overseas patent applications, international market promotion, e-commerce, overseas. Includes nationwide advertising and trademark registration, international market research, business. Training, overseas acquisition technology, and brand.

Relevant departments should reduce electricity rates and taxes for their production units. This will make them work harder and produce better quality products at the micro-level. Since these units are run by the lower middle class, by giving them some leeway and facilities, these production units can play an important role in increasing the GDP and help in improving their economic condition.

Effective use of technology and innovation is also essential to reduce costs and make products attractive with good quality. Standard packing, marketing, and sales techniques can also help small-scale production units.

The government sector should take the following measures:

Establishment of industrial estates.

Providing marketing facilities.

Setting up of technical service centers.

Establishing handicraft development centers and carpet centers.

Providing per-investment counseling and guidance to newcomers.

Providing local and foreign loans to small industry owners on easy installments.