Implicit also is the assumption that SSIs are less capital intensive and more labour absorbing. This is regarded as an important gain of promoting SSIs, given the country’s resource endowments, namely labour abundance and scarcity of capital. Among the developing countries, India was the first to display special consideration to SSIs.
As alluded to earlier, the basic focus of Indian Government has been that, employment generation is of paramount importance in a labour surplus economy. Small enterprises manufacturing labour-intensive products make economical use of capital and absorb the abundant labour supply that characterise an  BIS Review 40/2003  1  underdeveloped economy.