NCERT MOST IMPORTANT QUESTIONS CLASS – 11 | Business Studies IMPORTANT QUESTIONS | CHAPTER – 9 Small Business| EDUGROWN |

NCERT Most important question:

Question 1.
Write the full form of the following:
SIDO, KVIC, DIC, LPG, NABARD, RSBDC, NSIC, StDBI, NCEUS, RWED, WASME, SFURTI, DWCRA, TRYSEM, WTO.
Answer:

(i) SIDO	Small Industries Development Organisation
(ii) KVIC	Khadi and Village Industries Commission
(iii) DIC	District Industries Centers Liberalisation, Privatisation and Globalisation
(iv) LPG	Liberal isation. Privatisation and Globalisation
(v) NABARD	National Bank for Agriculture and Rural Development
(vi) RSBOC	Rural Small Business Development Centre
(vii) NSIC	National Small Industries Corporation
(viii) STDBI	Small Industries Development Bank of hid la
(ix) NCEUS	The National Commission for Enterprises in the IJnorganised Sector.
(x) RWED	Rural and Women Entrepreneurship Development
(xi) WASME	World Association for Small and Medium Enterprises
(xii) SFURTI	Scheme of Fund for Regeneration of Traditional Industries
(xiii) DWCRA	Development of Women and Children in Rural Areas
(xiv) TRYSEM	Training of Rural Youth for Self-Employment
(xv) WHO	World Health Organization

Question 2.
Compare different small scale business on the basis of the investment.
Answer:

Types of Industries	Investment Unit	Remarks
Small Scale Industry	One crore	Up to 5 crores in export
Ancillary Industry	One crore	50% of output should be supplied to a parent unit
Tiny Enterprise	25 lakh	—
Service and Business enterprise	10 lakh	—
Women Enterprise	Any of the above	51% equity holding by women and managed by women.
Export Oriented Unit	One crore	100% EOU can sell 25% in the domestic market.

Question 3.
Name the major industry groups that come in the small scale sectors.
Answer:
The following major industry group comes in the small scale sectors:

1. Food Products
2. Paper Products and Printing
3. Chemical and Chemical Products
4. Basic Metal Industries
5. Electrical Machinery and Parts
6. Rubber and Plastic Products
7. Machinery and Parts expect Electrical Goods
8. Hosiery and Garments – wool product
9. Non-metal lie Mineral Products
10. Transport Equipment and Parts
11. Leather and leather products
12. Miscellaneous Manufacturing Industries
13. Beverages, Tabacco and Tobacco products
14. Repair Services
15. Cotton Textiles
16. Wool. Silk, Synthetic Fibre, and Textile
17. Jute, Hemp, and Mesta Textiles
18. Other Services.

Question 4.
What are the different forms of support offers to small industries by the Government?
Answer:
The Government provides support to anal industries in the following forms:

1. Institutional support in respect of credit facilities.
2. Provision of developed sites for the construction of sheds.
3. Provision of trading facilities.
4. Supply of machinery on hire purchase terms.
5. Assistance for domestic and export marketing.
6. Technical and financial assistance for technological Upgradation.
7. Special incentives for setting up enterprises in backward areas.

Question 5.
What are the main characteristics of a small business?
Answer:
Any small business is characterized by at least two of the following key features:

1. Management is independent. Usually, the managers are also owners.
2. Capital is supplied and ownership is held by an individual or a small group.
3. The area of operations is mainly local. Workers and owners are of one home community. Markets need not be local.
4. Relative size within the industry the business is small when compared to the biggest units in its field. The size of the top bracket varies greatly so that what might seem large in one field would be definitely small in another.

Question 6.
Distinguish between cottage and small scale industries.
Answer:
The basis of classification between the cottage and small-scale business is that the cottage industry embraces a predominantly manual process of work.

The difference between the small-scale and cottage industries are basically two:

1. Small-scale industries are mainly located in urban centers as separates establishments, the cottage industries are generally associated with agriculture and provide subsidiary employment in rural areas.
2. Small-scale industries produce goods with partially or wholly mechanized equipment employing outside labor, while cottage industries involve operations mostly by hand which is carried on primarily with the help of members of the family.

Question 7.
What are the main objectives/features of small scale business?
Answer:
Objectives of small-scale business:

1. To provide an opportunity for large-scale employment at a minimum cost.
2. To provide a steady source of income to the low-income groups living in rural and urban areas of the country.
3. To meet the growing demands of the consumer’s goods and simple producers goods.
4. To mobilize resources of capital and skill and their optimum utilization.
5. To eliminate the economic backwardness of rural and underdeveloped regions in the country.
6. To attain self-reliance.
7. To reduce regional imbalances.
8. To effect an integration of the activities of a small business with the rural economy on the one hand and with the large scale business on the other.
9. To reduce disparities in income, wealth, and consumption.
10. To provide substitutes for various industrial products now being imported into the country.
11. To improve the quality of industrial products manufactured in the cottage industry sector and to enhance both production and exports.
12. To remove the problems created by urbanization and the consequent growth of big towns and cities.

Question 8.
Discuss the role and importance of small-scale enterprises in the economic development of India?
Answer:
The small-scale sector promotes entrepreneurship and helps to earn foreign exchange and is very important to the Indian economy.

The following points will highlight the importance of small scale enterprises.

1. Innovation and productivity: It is the small-scale enterprises that lead to innovation and productivity although they do not maintain their own research and development wings.
2. Individual tastes, fashion, and personalized service: Small- scale firms are receptive to change in taste and fashions of consumers and in adjusting the production process accordingly.
3. Symbols of national identity: They are locally owned and controlled. They can strengthen the social system and cultural traditions of India. They are perceived as valuable symbols of national identity.
4. The tendency of dispersal over wide-area: Small-scale enterprises have a tendency to disperse over wide areas. More than 62.19% of the units are located in the backward areas.

Question 9.
What type of problems faced by small scale sector in the field of marketing?
Answer:
Problems faced by the small scale sector in marketing their products are briefly enumerated below:

• Lack of standardization.
• Financial weakness.
• Unfamiliarity with expert activities-procedures and market know-how.
• Poor designing.
• Poor quality.
• Ignorance of potential markets.
• Competition.
• Lack of quality control.
• Lack of precision.
• Lack of knowledge of marketing.
• Distribution contacts.
• Poor finish.
• Poor bargaining power.
• Brand preferences.
• The scale of production.
• Lack of service after-sales.