NCERT Solutions for Class 11 Business Studies Chapter 9 Small Business and Entrepreneurship

Ans : The different parameters that are used to measure the size of a business are:
→ The number of persons employed in business
→ Capital invested in business
→ Volume of output or value of output of business
→ Power consumed for business activities. 

Ans : The Government of India defines small industries on the basis of their investment in plant and machinery. Industries where the amount invested in the fixed assets (particularly plant and machinery) is less than Rs. 1 crore are regarded as small-scale industries. However, export-oriented units that use modern production techniques are considered as small-scale industries if their investment does not exceed Rs. 5 crore. 

Ans : The features of cottage industries are:


→ These are organised by individuals, with private resources
→ It generally use family labour and locally available talent
→ The equipment used is simple
→ The capital investment is small
→ It produce simple products, normally  in  their  own premises
→ The production of goods using indigenous technology. 

Ans : Small scale industries enjoys a distinct position to in view of their contribution to the socio-economic development of the country. These are:


→  Small industries in India account for 95 per cent of the industrial units in the country. They contribute almost 40 per cent of the gross industrial value added and 45 per cent of the total exports from India.


→ Small industries are the second largest employers of human resources, after agriculture and generate more number of employment opportunities per unit of capital invested compared to large industries.


→ Small industries in our country supply an enormous variety of products which include mass consumption goods, readymade garments,  hosiery goods, stationery items, handicrafts, vegetables and processed food. etc. They also produce electric and electronic goods like televisions, calculators etc.


→ Small industries which produce simple products using simple technologies and depend on locally available resources both material and labour can be set up anywhere in the country. Since they can be widely spread without any locational constraints, the benefits of industrialisation can be reaped by every region. They, thus, contribute significantly to the balanced development of the country.


→  Small industries provide ample opportunity for entrepreneurship. This industry can be a good way to channelize the latent skills and talent of people.


→ These industries also enjoy the advantage of low cost of production. Locally available resources are less expensive also establishment and running costs of these insutries are lower. The low cost of production which small industries enjoy is their competitive strength.


→  Due to the small size of the organisations, quick and timely decisions can be taken without consulting many people as it happens in large sized organisations.


→ These industries can provide customized products and services to consumers. 

Ans : The role of small business in rural India are:


→ Cottage and rural industries play an important role in providing employment opportunities in the rural areas, especially for the traditional artisans and the weaker sections of society.


→ Village and small industries are significant as producers of consumer goods and absorbers of surplus labour, thereby addressing the problems of poverty and unemployment.


→ These industries contribute amply to other socio-economic aspects, such as reduction in income inequalities, dispersed development of industries and linkage with other sectors of the economy.


→ Small-scale businesses have been considered as a major propeller for the acceleration of economic growth and as an employment generator, particularly in the rural and backward areas of India.


→ The settlement of these industries in rural areas also help in prevention rural people to urban areas.