Q. Distinguish between
small scale unit and large scale unit.
It uses big
machines and modern technology
is up to one Crore
increases more than one Crore
Q. Describe the role of
small scale industries in rural India.
Ans. Small scale industry
has played crucial role in rural India :
Small scale industries
provide employment opportunities for the weaker sections of the societies.
Development of small scale
industries in rural areas prevents migration of the rural people to urban
Small business mobilises
unutilised savings of people in villages and uses them in productive
iv. Small business in rural areas reduces the
inequality of income between rural and urban areas.
Small scale industries
improve the standard of living.
business utilises local resources.
provides multiple income resources.
Q. How do small scale
industries contribute to socio economic development of India?
Ans. Indian society has
various problems like unemployment, scarcity of capital, unbalanced regional
development, economic inequality etc. Small scale industries help in solving
these problems and help in the socio- economic development.
Small scale industries are labour intensive and provide employment
to large number of people in rural areas where large industries cannot be set
Small scale industries prevent concentration of economic power and
lead to wide dispersal of income.
Small scale industries facilitate regional balanced development by
setting up industries in rural areas.
Small scale industries use entrepreneurial abilities and
unutilised savings of people in remote areas.
Small scale industries provide valuable support to large scale
industries by supplying them necessary inputs or distributing the final output.
Q. Describe briefly the
various institutions setup for the promotion of small and rural industries.
Ans. The various institutions
setup for the promotion of small and rural industry :
National Bank of Agriculture and
rural development (NABARD)-It supports small and rural
industries by offering credit facilities, counseling and consultancy services
and organising training programs.
Rural Small Business Development
(RSBDC)-It provides management and technical support to small
entrepreneurs in rural areas.
Small Industries Development bank
of India (SIDBI) -It provides direct and indirect assistance to meet credit needs
of small business organisations.
National Commission for
enterprises in the unorganized sector (NCEUS) -
It helps in improving the productivity of small enterprises, to enhance the
competitiveness and to provide facilities in the areas of credit technology and
Rural and Women Entrepreneurship
Development (RWED) - It creates a business environment
to encourage initiatives of rural people. Women entrepreneurs provide training
and advisory services.
District industry Centers (DICs)-
It provides integrated administrative framework at district level. It provides
all the services and support facilities to the entrepreneurs for setting up
Discuss the problems of small scale industries.
Ans. These are
the problems faced by small scale industries:
Small scale industries do not get the raw materials at reasonable price. They
cannot afford to store the material.
Small scale industries are generally sole proprietary concerns hence their
capacity to raise finance is limited. They do not get cheaper credit facilities
so they depend upon their private resources.
The owners of small business do not possess managerial skills. They cannot
afford to hire professionals.
The techniques for production used by small scale industries are outdated which
result in higher unit cost of production and lower quality.
Small scale industries do not have marketing skills to sell their product.
Their capacity to spend on advertisement is very low.
Small scale industries don’t have capacity to hire employees and skilled people
because they cannot afford to pay. There is lack of specialisation.
Small business cannot invest in research so generally their quality is poor due
to indigenous technology.
Generally half of the capacity is not utilised due to inadequate supply of raw
material power labour and shortage of demand.
The products of small business cannot withstand in front of productsof large