business studies - small business

Class 11 - Business Studies

Small Business

Q&A
Question:

Describe the scope of small business in India.

Answer:

In most of the developing countries like India, Small Scale Industries (SSI) constitute an important and crucial segment of the industrial sector. They play an important role in employment creation, resource utilisation and income generation and helping to promote changes in a gradual and phased manner. They have been given an important place in the framework of Indian planning since beginning both for economic and ideological reasons. The reasons are obvious.
The scarcity of capital in India severely limits the number of non-farm jobs that can be created because investment costs per job are high in large and medium industries. An effective development policy has to attempt to increase the use of labour, relative to capital to the extent that it is economically efficient.
Small Scale Enterprises are generally more labour intensive than larger organisations. As a matter of fact, small scale sector has now emerged as a dynamic and vibrant sector for the Indian economy in recent years. It has attracted so much attention not only from industrial planners and economists but also from sociologists, administrators and politicians.
Scope of Small Scale Industry:
Defining small scale industry is a difficult task because the definition of small scale industry varies from country to country and from one time to the another in the same country depending upon the pattern and stage of development, government policy and administrative set up of the particular country.
Every country has set its own parameters in defining small scale sector. Generally, small scale sector is defined in terms of investment ceilings on the original value of the installed plant and machinery. But in the earlier times the definition was based on employment. In the Indian context, the parameter are as follows.
The Fiscal Commission, Government of India, New Delhi, 1950, for the first time defined a small-scale industry as, one which is operated mainly with hired labour usually 10 to 50 hands.
Fixed capital investment in a unit has also been adopted as the other criteria to make a distinction between small scale and large-scale industries. This limit is being continuously raised upwards by Government.
The Small Scale Industries Board in 1955 defined, "Small-scale industry as a unit employing less than 50 employees if using power and less than 100 employees if not using power and with a capital asset not exceeding Rs 5 lakhs".
‘The initial capital investment of Rs 5 lakhs has been changed to Rs 10 lakhs for small industries and Rs 15 lakhs for ancillaries in 1975. Again this fixed capital investment limit was raised to Rs 15 lakhs for small units and Rs 20 lakhs for ancillary units in 1980. The Government of India in 1985, has further increased the investment limit to Rs 35 lakhs for small-scale units and 45 lakhs for ancillary units.
Again the new Industrial Policy in 1991, raised the investment ceilings in plant an machinery to ? 60 lakhs for small-scale units and Rs 75 lakhs for ancillary units.
As per the Abid Hussain Committee's recommendations on small scale industry, the Government of India has, in March 1997 further raised investment ceilings to Rs 3 crores for small-scale and ancillary industries and to Rs 50 lakhs for tiny industry. The new policy initiatives in 1999-2000 defined small-scale industry as a unit engaged in manufacturing, repairing, processing and preservation of goods having investment in plant and machinery at an original cost not exceeding Rs 100 lakhs.
In case of tiny units, the cost limitation is up to Rs 5 lakhs. Again, the Government of India in its budget for 2007-08 has raised the investment limit in plant and machinery of small-scale industries to Rs 1.5 crores. An ancillary unit is one which is engaged or proposed to be engaged in the manufacture of production of parts, components, sub-assemblies, tooling or intermediaries or rendering services and the undertaking supplies or renders or proposes to supply or render not less than 50% of its production or services, as the case may be, to one or more other industries undertakings and whose investment in fixed assets in plant and machinery whether held on ownership terms or lease or on hire purchase does not exceed Rs 75 lakhs.
For small-scale industries, the Planning Commission of India uses terms ‘village and small scale industries'. These include modern small-scale industry and the traditional cottage and household industry.



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Questions and Answers


Small Business - Questions
1.

What is the definition used by government of India for Small Scale Industries?


Answer
2.

What are the different parameters used to measure the size of business?


Answer
3.

How would you differentiate between an ancillary unit and a tiny unit?


Answer
4.

State the features of cottage industries.


Answer
5.

How do small scale industries contribute to the socio-economic development of India?


Answer
6.

Describe the role of small business in rural India?


Answer
7.

Discuss the problems faced by small scale industries.


Answer
8.

What measures have the Government taken to solve the problem of finance and marketing in the small scale sector?


Answer
9.

Name any two institutions specially set up to promote small scale enterprises.


Answer
10.

Give full from of SIDBI .


Answer
11.

Give full from of NABARD.


Answer
12.

Give one feature of Cottage Industries.


Answer
13.

What is the investment limit for SSI?


Answer
14.

Give any two problems faced by SSI.


Answer
15.

Name any two units included in SSI category.


Answer
16.

Name the apex bank set up to provide direct and indirect financial assistance to small scale sector.


Answer
17.

What is the role of District Industries Centre for the growth of small business in India?


Answer
18.

What is the parameter used by the government to identify service enterprise?


Answer
19.

Write a short note on village and small industries sector.


Answer
20.

What is the purpose of NABARD?


Answer
21.

What are the causes of sickness in small industries?


Answer
22.

What is the difference between small scale enterprise and cottage industry?


Answer
23.

Explain the areas where small businesses feel threatened from global competition.


Answer
24.

List out major industry groups in the small sector in India.


Answer
25.

State the objectives of small business in rural India.


Answer
26.

What are the measures taken by the Government to solve the problem of finance in the small scale sector?


Answer
27.

Write a short note on SIDO.


Answer
28.

What forms of support is offered to small industries by the government?


Answer
29.

What do you mean by small business? Describe the feature of small scale enterprise.


Answer
30.

Describe briefly the problems of small scale enterprises.


Answer
31.

Highlight the role of the small business in promoting economic growth and solving other socio-economic problems.


Answer
32.

Give any two incentives offered by the Government to small scale industries.


Answer
33.

Discuss any two characteristics of SSI.


Answer
34.

What is the role of National Small Industries Corporation for the growth of small business units in India?


Answer
35.

How much do small industries in India account for the total industrial units?


Answer
36.

Explain the role of SIDBI in promoting small scale enterprises.


Answer
37.

Explain the meaning of small scale industry with its different categories.


Answer
38.

Write a short note on WASME.


Answer
39.

Describe the scope of small business in India.


Answer
40.

Name the institution which was set up in 1982 to promote integrated rural development.


Answer
41.

Small business is business at small scale. Do you agree? Explain.


Answer
42.

What incentives have been taken by government to promote small scale industries?


Answer
43.

What are the incentives provided by the government for industries in backward and hilly areas?


Answer
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