Objectives of Ancillary Development:
- Employment Opportunities –
Development of employment opportunities must be coupled (along) with the growth of entrepreneurship in different fields & different parts of the country.
- Equitable Distribution –
Dispersal of industrial activities in various regions are bringing out the desired equitable distribution of economic power.
- Economies of Scale –
There should be development of single or a multiple discipline expertise in different field in order to bring about economic of scale.
- Increasing Productivity –
There should be an increase in the productivity of the small scale units.
- Effective Solution –
Its aim is to provide an effective solution to the marketing problems of small enterprises in the initial period or before they reach the break even point.
- Provide Choice –
A firm producing final products has a choice either to manufacture components & use specialized equipment from other units.
- Other –
The rise in the cost of capital has also been another reason for the growth of ancilliaries.
If the demand for component is small, the scale of economies & saving would not be realized. In such a case, it would be advantageous to buy such inputs from specialized sub contractor firms.