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Small Business

Q. Define small scale industry.

Ans.  The definition used by Government of India is "A small scale industry is one in which the investment in fixed assets of plant and machinery does not exceed one crore”.

 Q. What are the measures taken by the government to support small scale industries?

Ans.  The measures taken by the government to support small scale industries are given here:

                     I.      Protective measures

                    II.      Institutional measures

                  III.      Incentives

 Q. What are the parameters to measure the size of business?

Ans.  The parameters used to measure the size of business are:

                     I.      Number of persons employed

                    II.      Capital invested in business

                  III.      Volume of Output

                  IV.      Value of Output

                   V.      Power Consumed

                  VI.      Investment in Plant & Machinery

 Q. Explain the administrative setup of small scale industry.

Ans.  The administrative set up of small scale industry consists of two ministries:

i.     Ministry of Small Scale Industry-It formulates policies and coordinates central assistance for the promotion and development of small scale industries in India.

ii.   Ministry of Agricultural and rural industry-The ministry of Agricultural and rural industry coordinates and develops village and khadi industries, tiny and micro enterprises in both rural and urban areas.

 Q. What measures government has taken to solve problem of finance & marketing?

Ans.  Problems of Finance :

The public sector banks have tried to help the small industries by involving various credit schemes at concessional rate of interest. Fiscal concessions like exemption from excise duty, subsidy, and tax holidays are made available to the small firms.

Following are the special schemes for financial assistance:

i.     Re finance assistance for development, expansion, diversification under small industries development fund.

ii.   Equity support for new projects and rehabilitating sick units under national equity fund. Working capital loans and term loans under single window schemes.

iii. Problem of Marketing: The government buys some of its products only from small firms. The National Small Industries Corporations was set up in 1955 which helps small scale units securing from director general of supplies and disposals. The activities of middleman have been regulated.

 Q. Mention the forms of support to small industries by the government.

Ans.  The support offered by the government to small industries is:

                           I.   Institution for credit facilities

                          II.   Provision for training facilities

                        III.   Supply of machinery on hire purchase

                        IV.   Technical assistance

                         V.   Financial assistance

                        VI.   Technological up gradation

                      VII.   Incentives for settingup enterprises in backward areas

 Q. Mention problems of Small Business.

Ans.  The problems of Small Business are given here :

i.      Problem of Finance

ii.    Problem of Raw-materials

iii.   Problem of Marketing

iv.  Problem of Technology

v.    Problem of Capacity utilisation

vi.  Problem of Quality

 Q. State the features of Cottage Industries.

Ans.  Following are the features of Cottage Industries:

i.      Cottage industries use family labour and locally available talent.

ii.    Cottage industries are organised by individuals with private resources.

iii.   The capital investment is small.

iv.  Cottage industries produce goods using indigenous technology.

v.     Cottage industries produce simple goods.

vi.  Cottage industries operate in owner’s premises.

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