Class 11 Business Studies Chapter 9 Small Business

Class 11 Business Studies Chapter 9 Small Business Question answers to each chapter are provided in the list so that you can easily browse through different chapters HS 1st Year Business Studies Notes, AHSEC Class 11 Business Studies Chapter 9 Small Business, AHSEC Class 11 Business Studies Question Answer In English and select needs one.

Class 11 Business Studies Chapter 9 Small Business

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Also, you can read the NCERT book Notes Class 11 Business Studies Chapter 9 Small Business online in these sections Solutions by Expert Teachers as per SCERT Class 11 Business Studies Chapter 9 Small Business (CBSE) Book guidelines. These solutions are part of SCERT All Subject Solutions. Here we have given Assam Board Class 11 Business Studies Chapter 9 Small Business Solutions for All Subjects, You can practice these here NCERT Class 11 Business Studies Chapter 9 Small Business.

Small Business

Chapter: 9


A. Short and Long Answers:

1. What are the difference parameters used to measure the size of business? 

Ans: Following are the parameters used to measure the size of business-

(a) Amount of capital.

(b) Nos. of employees. 

(c) Level of production.

(d) Amount of power consumption.

(e) Amount of scales.

2. What is the definition used by Government of India for small scale industries. 

Ans: The definition of small scale industries used by Government of India describe small industries on the investment in plant and machinery. This measure seeks to keep in view the socio-economic environment in India where capital is scarce and labour is abundant. 

3. How would you differentiate between an auxiliary unit and a tiny unit.

Ans: The auxiliary unit are those small scale industry, which supplies not less than 50 percent of its to another industry.

But, a tiny unit is defined as an Industrial as business enterprise whose investment in plant and machinery is not more than Rs. 25 lakhs.

4. State the features of cottage industries.

Ans: Following are the features of cottage industries:

(i) Cottage industries are organised by individuals with private resources.

(ii) Cottage industries use family labour and labour from locally available.

(iii) Cottage industries use simple equipments.

(iv) Cottage industries invest small amount of capital. 

(v) Cottage industries produce simple products generally in their own premises. 

(vi) Cottage industries use indigenous technology.

5. How do small scale industries contribute to the Socio-economic development of India

Ans: By the following ways the small scale industries can contribute to the socio-economic development of India-

(i) Increasing output: By increasing output, the small scale industries can contribute to the socio-economic development of India. Because, the products of small scale Industries can meet a significant part of demand of commodities of Indian market.

(ii) Employment Generation: By the small scale industries, India can provide a great employment opportunities. Next to agriculture, the small Industries can provide the employment generation. Even as compared to large industries the small scale industries have been generating more employment opportunities.

(iii) Standard of living: Various small scale industries produce multifarious products such as garments, hosiery goods, stationery items, soaps and detergents, domestic utensils, leather, plastic and rubber goods, processed foods and vegetables, wood and steel furnitures paints, varnishes, safety matches etc., which increase the standard of living of Indian people.

(iv) Regional balance: The small scale industries can minimise the regional imbalance. Because, the nomic position of backward and rural areas can be improved by the business.

(v) Entrepreneurship: Small scale industries provides ample opportunities to the entrepreneurship development. The person having interest and efficiency can create new idea and increase business activities by establishing small scale industries.

(vi) Low cost: Due to low cost of production the smalls scale business can provide their goods and services at lower price to the consumers. It is possible because of the fact that the small scale business can use most of locally available raw material in their production process.

(vii) Quick Decision: Small business can take quick and timely decisions because of its small size. So many people are interested for small business, which so provide ample employment opportunities.

(vii) Consumer satisfaction and Adaptability: Another contribution of small scale business to the socio-economic as its adaptability. The small scale business are flexible and so these can be changed at any time according to the changing of environment. Moreover, the design, size, color of the product of small scale business can be changed according to changing of consumer taste, fashion and human.

6. Describe the role of small business in rural India? 

Ans: Following are the role of small business in rural India:

(i) Increase income: The per capital income of rural people can be increased by the expanding small scale business.

(ii) Employment: The small scale business provide ample opportunities for employment to the people of rural areas.

(iii) Traditional Activities: Only by virtue of small scale industries, the traditional rural activities can be survived.

(iv) Government plan: On the basis of small business, the state as well as central Govt, can formulate various economic planning and schemes for rural development.

(v) Reduce income inequalities: Another role played by the small business is the reduction of inequalities. By the help of small business both the income inequalities among rural and urban people can be reduced.

(vi) Rural industrialization: Rural industrializations is possible only by small business. Various types of small business can uplift of rural economics.

7. Discuss the problems faced by small scale industries. 

Ans: Following are the various problems faced by small scale industries.

(i) Finance and credit: The scarcity of finance and credit is the main obstacle in the development of small scale units. The position of small scale Industries in this regard is even worse. The capital base of the small industries unit is usually very weak since they generally have partnership or single ownership.

(ii) Raw material availability: The majority of small scale and cottage industries depend on local source for their raw material requirements. The handloom industry depends for its requirement of cotton on local traders.

(iii) Machines and other equipment: Machinery and other equipment in many small industries has grown obsolescent. On account of this reason while their costs of production are high, the quality is inferior as compared to the large scale units. 

(iv) Under utilisation of capacity: Data presented in the second all India census point to considerable under utilisation of capacity in the small scale sector. For small scale units as a whole capacity utilisation was very low.

(v) Problems of marketing: One of the main problems faced by the small scale units is in the field of marketing. There units often do not possess any marketing organisation and consequently their products compare unforgettably with the quality of the products to the large scale industries.

(vi) Other problems: In addition to the problems enumerated above, the small scale industries face a number of other problems like efficient management, nonavailability of cheap power, unchanging and unresponsive production pattern, burden of local taxes, competition from large scale industries, etc.

8. What measures has the government taken to solve the problems of finance and marketing in the small scale sector. 

Ans: Following are the measures taken by the Government to solve the problems of finance and marketing-

Steps for development of small scale and cottage Industries were imitates immediately after independence. For this purpose, a cottage industries Boards was set up in 1947 itself. The Government announced a policy package for small, tiny and village industries more vitally and growth impetus to this sector. Both state and central Govt., have been initiating for the promotion self. employment opportunities in rural areas by providing assistance for the development of rural industries. The main purpose of these steps taken by Govt. to utilise local resources and raw material along with locally available manpower. To perform these activities smoothly Government establish various agencies departments, corporation etc. Apart from these, there are several schemes to promote the non-farm sector, mostly initiated by Government of India such as IRDP (Integrated Rural Development Programme, PMRY (Prime Minister Rojgar Yojana), TRYSEM (Training of Rural Youth for Self Employment, DWCRA (Development of women and children in Rural Areas.

NCEUS was established in September 2004 for enhancement of competitiveness of the sector in the emerging global environment. Moreover NCEUS also aims at developing linkages of the sector with other institutions in the areas of credit, raw-materials, infrastructure  technology upgradation, marketing and formulation of suitable arrangements for skill development.

NCEUS also provide finance and related service to the informal sector. 

9. What are the incentives provided by the Government for industries in backward and hilly areas? 

Ans: Government of India has been taking various incentive for industrialisation in backward and hilly areas in various five years plans. Considering the poor industrial condition of backward and hilly areas, Govt. appoints various committees to identify the criteria responsible for low Industrialising as well as suggestion schemes for removing the same. Following are the common incentive provided by the Government of India for Industries in backward and hilly areas-

(i) Land: In order to provide sufficient plot of land, every state is to offer developed plots for setting up of industries.

(ii) Power: States supply power at a concessional rate of 50%.

(iii) Water: Government supplies on a no-profit, no loss basis or with 50% concession or exemption from water charges for 5 years. 

(iv) Sales Tax: Government exempts sales tax in all union territories. Even many state Government extend the exemption of taxes for upto 5 years.

(v) Raw Materials: Government supply scarce raw material to the Industries located in backward and hilly area. Such type of raw material to the industries located in backward and hilly area. Such type of raw materials includes cement, iron and steel etc.

(vi) Finance: Loan and advance subsidy 10% to 15% along loan at concessional rates of area provided for the construction of building and capital asset.

(vi) Industrial Estates: Many state Government encourage the setting up of industrial estates in their backward and hilly areas. 

(viii) Tax Holiday: Many state Government provide exemption from paying taxes for 5 or 10 years for the industries of backward and hilly areas.


1. What is a Franking Machine?

Ans: Franking machine is used for stamping outward mail. Such machines are used under the licence and supervision of the postal authorities. The machine can print the impressions of postal stamp of various denominations. Its metre records the total amount of stamp impressed Before the use of the machine the users are to deposit money in advance and the postal authorities set it and sent the matter for the value of money deposited. The metre is adjusted every time when money is deposited.

2. What are the distinction between cottage ad small scale industries.

Ans: By cottage industries we meant those industries and crafts which are carried on generally speaking, in the home of the artisan. He is usually assisted in his work by the members of his family. It may be a whole time work as if he is not an artisan but a cultivator, he may be, carrying on this as a subsidiary occupation during his spare time. No power is used in the cottage industries and the tools and implements used are simple. Example of cottage industries are hand spinning, handloom weaving, toy making, rope-making, durrie weaving,wood work etc.

Small scale industries are somewhat different from cottage industries. They mostly use power and small machines and employ a small number of workers also. But, unlike the big factories they are small units. According to the Government of industries latest Policy, small scale industries include factory type industries whose investment in plant and machinery does not exceed Rs. 1.0 crore. They also include small auxiliary units. Auxiliary industries are those which manufactures parts, components or intermediate products or render services like repairs.

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