EXERCISES
Short Answer Questions
1. What are the different parameters used to measure the size of business?
2. What is the definition used by Government of India for Small Scale Industries?
3. How would you differentiate between an ancillary unit and a tiny unit?
4. State the features of cottage industries.
Long Answer Questions
1. How do small scale industries contribute to the socio-economic development of india?
2. Describe the role of small business in rural India.
3. Discuss the problems faced by small scale industries.
4. What measures has the government taken to solve the problem of finance and marketing in the small scale sector?
5. What are the incentives provided by the Government for industries in backward and hilly areas?
Answers
Answer:
Short Answer type
(1) Several parameters can be used to measure the size of business units. These include the number of persons employed in business, capital invested in business, volume of output or value of output of business and power consumed for business activities.
(2) The Government of India defines small industries on the basis of their investment in plant and machinery. Industries where the amount invested in the fixed assets (particularly plant and machinery) is less than Rs. 1 crore are regarded as small-scale industries.
(3) An ancillary unit is the unit which supplies not less than 50% of its production to the parent unit. A tiny unit is the business enterprise whose investment in plant and machinery is not more than Rs. 25 lakh.
(4) The features of cottage industries are:
• They're set up or organised by people with private resources and raw materials.
• They usually use locally available members to get the work done. ...
• They make use of simple types of equipment.
• The capital investment is minimal.
Long answer type
(1) The small scale industries are an important part of the economy as they help to increase employment and the economic development by increasing the urban and rural growth and the role is to help increase the government infrastructure and reduce the issues like the pollution and poverty and slums etc.
(2) Small Scale enterprises provide the numerous benefits in rural area. ... (ii) Employment for Artisans Cottage and rural industries play an important role in providing employment opportunities in the rural areas, especially for the traditional artisans and the weaker sections of society.
(3) Major problems faced by the small scale industries are : (1) Finance (2) Raw Material (3) Idle Capacity (4) Technology (5) Marketing (6) Infrastructure (7) Under Utilisation of Capacity (8) Project Planning! ... Small scale industries are not in a position to play their role effectively due to various constraints.
(4) Among the important programmes are the Prime Minister's Rozgar Yojana (PMRY), Integrated Rural Development Programme (IRDP) and Training of Rural Youth for Self-Employment (TRYSEM).
(5) The incentives provided by the Government for industries in backward and hilly areas are:
• The government provides land for the setting up of industries. ...
• Power is supplied at a concessional rate of 50% then the original price. ...
• Industries are exempted from sales tax in all the union territories.