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There are numerous small scale businesses which have mushroomed all over the country and are still continuing to grow at a fast pace. The reach of these small setups has penetrated the rural areas also and they have a widespread network throughout the rural India. The rural population has started prospering to quite an extent, as an outcome of the opening up of small scale businesses in their vicinity.
A small business is very small in terms of size and its ownership rests in the hands of a few people only. These types of businesses are generally owned privately. They can be registered as a partnership firm or as a sole proprietorship firm. A limited number of people only work in such type of companies.
The Government grants them certain rights as far as tax exemption and financial aid is concerned. Small businesses require a smaller capital amount to start with. These businesses are run by a person single handedly too, and therefore they function on lesser profit margins and the annual turnover is also not that high.
They are generally started with a motive to provide a reasonable profit to the owner and also benefit the locality in which they are setup. Such businesses are prevalent in rural areas, as it assists in providing employment opportunities to the villagers and minimizes the poverty level in the country.
Small businesses have great benefits for the Indian economy and have become synonymous with the changing face of rural India.
Reduces Unemployment
These small scale setups provide employment to a huge population in the rural areas as the kind of work they do is labor intensive. Many people who are unskilled get employment due to small businesses. It serves as a source of income for many families living in that area.
Lessen Migration from Rural to Urban
Small scale business setups minimize the movement of the rural population to the urban areas in search of work which serves as a means for their livelihood. It uplifts their standard of living. A very large number of people are employed by such small businesses and hence they play an important role in the development of the rural India.
Optimum usage of localized resources
Usually the rural areas are rich in some or the other resource. The resources can be ample quantity of raw supplies which are available at a reasonable rate, cultivable land and good availability of cheap labor. Small scale industry situated in such areas can operate comfortably while earning a good profit margin. This, in turn, will make our economy better and help in alleviating poverty in the rural areas.
Promotion of development and growth in the rural sector
The rural economy gets a boost because of small business setups and also leads to the introduction of various developmental programs being initiated by the Government to further enhance productivity and reduce unemployment.
Equitable income distribution
These businesses do not require much setup and operation cost. Therefore, people are able to invest in small setups without much risk involved in it. Hence, a large number of small industries have been setup in these areas in the recent past.
There is another major advantage of small scale setups, that the money is not concentrated to a bunch of rich people. The distribution of wealth is better and then wealth is equally divided amongst a considerable number of small industrialists in small rural businesses. This way, wealth based inequality is reduced.
Better Living Standards
These small setups help to improve the standard of living of the rural diaspora. The people residing there also get the benefit of obtaining good quality products at a reasonable cost. The employment opportunity provided by these setups gives the people their means of livelihood.
Better revenue generation
As more and more small businesses are being setup in the rural India, there is a greater amount of tax collection by the Government in the form of revenue. This revenue is again reinvested in developmental programs for those areas by the Government.
Establishing these kinds of businesses in rural areas is a win-win situation for everyone and can play a pivotal role in accelerating the growth of our ever growing Indian economy in the times to come.
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