The main argument advanced in favour of small scale and cottage industries in India is that:

a) Cost of Production is low
b) They require small capital investment
c) They advance the goal of equitable distribution of wealth
d) They generate a large volume of employment

Ans- d

Explanation- They are labour intensive industries and in a country where we have labour surplus, they act as an important area to absorb big portion of people looking for employment. The employment generating capacity of small scale cottage industries could be noted from the fact that in India, rupees one lakh of investment in plant and machinery in this sector provides employment to 21-25 persons, while in large scale units, the same amount of investment provides employment to only 4 persons. It provides both self employement and wage employment. It accounts for 80% of the total employment in industrial seector.

With little capital investment they can be set up anywhere in rural or semi urban places easily. They also provide part time employment to women and unskilled labourers.