Resistance to Change

Unions always resists change whether it is good or bad change. It hs become a culture to appose everything without making an appropriate evaluation of the process. It an employer wants to introduce any technological advancement in the production process. the union members will always see it as n indication of forthcoming downsizing.

Easy to Manage and Administer

Cottage and small scale industries are short in size. They are easy to manage due to the following reasons:

• Not many people are involved.
• Not a very large premise of work.
• People involved are usually trusted friends or family members.
  

Collective Bargaining

Government made it necessary that every factory must have a trade union which elects a CBA (Collective Bargaining Agent). Collective Bargaining Agent puts forward the stand and concerns of workers to the employers and it tries ti bridge the communication gap between employer and workers. The presence of CBA enables workers to have their say.

Providing Microfinance

Government is also providing micro finance facility to farmers and low income group so that can earn their livelihood respectably. Micro finance schemes are very popular around the world and it is hoped it will prove useful in poor countries is well.

Low Efficiency Level

Efficiency levels in nationalized industries is very low. it is a repeatedly proven fact that we take less interest in any activity in which we have no stake than in activities in which we have a stake. The employees in the public sector units have no stake in the affairs of the business and hence their efficiency level is very low. Privatization promises to increase the efficiency level automatically because the management will have a stake in the business.

Lack of Communication

Farmers living in the villages and less privileged areas have very little knowledge of the level of demand in the market for a particular product at a given time. Therefore, if they bring in more quantity of a good than what is demanded, they will have to sell at a lower price because of the perishable nature of agriculture goods.

Reduces Inequality of Income

In a developing economy, even the government has insufficient resources. Therefore, any change in the economic redistribution of resources can only be made through more production. Foreign aid facilitates a developing economy to increase its production and reduce income inequality.