Introduction

In the earlier chapters of the NCERT Class 11 Business Studies course we looked at the basic ideas of business, trade, commerce and industry. This chapter turns to a different question — the size of a business. In particular, it deals with small industries and small business establishments: what it means for a business to be 'small', the important role that small business plays in India (especially in rural and hilly areas), the major problems that small units run into, and the many forms of assistance that the Central and State Governments provide to support them.

A short story helps to set the scene. Amar, Akbar and Anthony are three friends who finished a vocational course in entrepreneurship after school. Finding the job market tough, they thought of putting their new skills to use by starting a small business of their own — but they knew very little about business and were unsure what to make, where to set up, how to arrange machinery, materials and money, and how to sell. They then noticed a notice from the local District Industries Centre near an Industrial Estate about a seminar on government assistance for small business, aimed at young entrepreneurs. At the seminar they learnt about the financial and other help offered by the Central and State Governments to educated youth. Seeing that toys were in demand, they decided to manufacture toys, and with financial assistance arranged through the Khadi and Village Industries Commission they started a small scale industry in their village. Today they are successful toy-makers who even hope to enter the export market — a small but real illustration of how, with determination and the right support, a small business can be built from scratch.

The rest of the chapter explains the meaning and nature of small business, its role in India and in rural India, the problems it faces, and the government assistance and incentives available to it.