Q. What is the importance of small scale industries in Indian economy? What are the problems of small scale industries in India? [CCSU BA-LLB 1st Semester 2020 - 20 marks]
Q. Distinguish between cottage and small scale industries. Discuss the role of village and small scale industries in the rural economy of India. [CCSU BA-LLB 1st Semester 2021 - 20 marks]
Q. What are the main problems of small scale industries in India? [CCSU BA-LLB 1st Semester 2022 - 10 marks]
Q. Differentiate between small scale and cottage industries. [CCSU BA-LLB 1st Semester 2019 - 4 marks]
Q. What are small scale industries? [CCSU BA-LLB 1st Semester 2023 - 4 marks]
Small Scale Industries
Definition
Small scale industries are the industries engaged in manufacturing, production and services in a small scale. Usually the investment is not more than 1 crore. The small scale industries are generally run by sole proprietor or partners investing less on the plant and machinery are more labor intensive. These kind of industries are the lifeline of developing economies like India where there is an abundance of both skilled and unskilled labor.
Characteristics of Small Scale Industries
Ownership: Generally it is a sole proprietorship. Sometimes a partnership.
Management: Managed and controlled by the ownership.
Limited area of Operation: Small scale industries have a restricted area of operations to meet local and regional demand.
Labor Intensive: Investment being limited in plant and machineries, the small scale industries are labor intensive. Which is very much suitable for Indian economy.
Flexibility: Have a greater flexibility in the operations and can easily adopt to the changing socio-economic environments.
Main Problems of Small Scale Industries
Major problems faced by the Small-scale industries are:
Finance: Small Scale Industries often face a shortage of funds and inadequate credit facilities.
Raw materials: Small Scale Industries have limited access to raw materials of the right quality and quantity, or they may not be supplied regularly.
Technology: Because of minimum investment, small scale industries may use outdated technology, which can lead to low productivity and uneconomical production.
Infrastructure: Small Scale Industries lack adequate infrastructure, such as poor roads, water and drainage problems, and lack of power supply.
Competition: Small Scale Industries face competition from large-scale industries and imported goods.
Role of Village and Small Scale Industries in the Rural Economy in India
1. Play a vital role in generating employment for the semi-skilled and unskilled manpower in the rural areas.
2. Small scale industries have a very important contributor to the economy. Almost 40% of the total goods and services in the country.
3. Small scale industries promotes the Make in India initiative, thus creating a market for Indian made products.
4. The small scale industries are the major providers for the export oriented industries in the country.
Difference between Small Scale and Cottage Industries
Main points of difference between cottage industries and small-scale industries:
Location
Cottage industries are usually located in homes or cottages in rural areas, while small-scale industries are typically located in urban or semi-urban areas.
Labor
Cottage industries are usually run by family members, while small-scale industries often employ hired workers.
Production
Cottage industries typically use traditional tools and produce traditional goods by hand, while small-scale industries use mechanized equipment and produce goods for a wider audience.
Investment
Cottage industries typically invest a small amount of capital, while small-scale industries typically invest a larger amount of capital.
Products
Cottage industries typically produce goods for local needs, while small-scale industries produce goods for a wider audience