Business Studies · Ch 9 — Small Business
Summary
Summary
- Categories of small units. On the basis of capital invested, small business units can be grouped into categories such as Small Scale Industry, Ancillary Small Industrial Units, Export-Oriented Units, Small Scale Industries owned and managed by women entrepreneurs, Tiny Industrial Units, Small Scale Service and Business (industry-related) Enterprises, Micro Business Enterprises, Village Industries and Cottage Industries.
- Administrative setup. The administrative setup rests on two ministries — the Ministry of (Micro,) Small (and Medium) Industries, the nodal ministry for policy and coordination of central assistance for the promotion and development of SSIs, and the Ministry of Agro and Rural Industries, the nodal agency for village and khadi industries and tiny and micro enterprises in both urban and rural areas. State Governments also run promotional and developmental schemes with supporting incentives for SSIs in their states.
- Role of small business in India. SSIs play a very important part in the country's socio-economic development, accounting for about 95 per cent of industrial units, contributing up to 40 per cent of gross industrial value added and 45 per cent of total exports. They are the second largest employers after agriculture, produce a great variety of products, aid balanced regional development through the use of local materials and indigenous technology, provide scope for entrepreneurship, enjoy a low cost of production, allow quick decision-making and are well suited to customised production.
- Role of small business in rural India. Small units give rural households multiple sources of income across a wide range of non-agricultural activities and provide employment in rural areas, especially for traditional artisans and the weaker sections of society.
- Problems of small industries. Small industries suffer from problems of (i) finance, (ii) non-availability of raw materials, (iii) managerial skills, (iv) skilled labour, (v) marketing, (vi) maintaining quality standards, (vii) low capacity utilisation, (viii) use of traditional technology, (ix) prevalence of sickness and (x) global competition. …