All questions of Small Business for Commerce Exam

Export oriented units: The small scale industry can enjoy the status of an export oriented unit if it exports more than 50 per cent of its production. It can avail the incentives like export subsidies and other concessions offered by the government for exporting units.

Explanation:

Introduction:
Small scale industries owned and managed by women entrepreneurs play a significant role in promoting women empowerment and economic growth. To encourage and support women entrepreneurs, various government schemes and policies have been introduced. One such requirement for small scale industries owned and managed by women entrepreneurs is the minimum share capital.

Definition of Share Capital:
Share capital refers to the total amount of capital raised by a company through the issue of shares. It represents the ownership interest of the shareholders in the company.

Minimum Share Capital Requirement:
According to the question, small scale industries owned and managed by women entrepreneurs need to have a share capital of not less than 51 percent. This means that at least 51 percent of the total share capital should be owned by women entrepreneurs.

Importance of Minimum Share Capital Requirement:
The minimum share capital requirement ensures that women entrepreneurs have a significant stake in the company they own and manage. This helps in promoting women's economic empowerment and provides them with a stronger voice in decision-making processes.

Benefits of Women-Owned Small Scale Industries:
There are several benefits of promoting women-owned small scale industries, including:

1. Women Empowerment: Women-owned small scale industries contribute to the economic empowerment of women by providing them with opportunities for financial independence and socio-economic mobility.

2. Job Creation: Small scale industries owned and managed by women entrepreneurs create employment opportunities, not only for themselves but also for others in the community.

3. Innovation and Diversity: Women entrepreneurs bring new perspectives, ideas, and innovations to the business world, leading to greater diversity and inclusivity.

4. Economic Growth: Women-owned businesses contribute to the overall economic growth of a country by generating income, paying taxes, and contributing to the GDP.

Conclusion:
In conclusion, small scale industries owned and managed by women entrepreneurs are required to have a share capital of not less than 51 percent. This requirement ensures that women have a significant stake in their businesses and promotes women's economic empowerment. Supporting women-owned businesses has numerous benefits, including job creation, innovation, and economic growth.

Definition of Small Scale Service and Business Enterprise

A small scale service and business enterprise is a type of business whose investment in fixed assets of plant and machinery, excluding land and building, does not exceed Rs. 10 Lakhs.

Explanation

Small scale service and business enterprises are considered as the backbone of the Indian economy. These enterprises play a vital role in generating employment opportunities and contributing to the overall growth of the economy. The Government of India has implemented various policies and schemes to promote and support the growth of small scale service and business enterprises.

To be classified as a small scale service and business enterprise, the investment in fixed assets of plant and machinery, excluding land and building, should not exceed Rs. 10 Lakhs. This means that the total investment in machinery, equipment, and other fixed assets should not exceed Rs. 10 Lakhs.

Conclusion

In conclusion, a small scale service and business enterprise is a type of business whose investment in fixed assets of plant and machinery, excluding land and building, does not exceed Rs. 10 Lakhs. These enterprises play a crucial role in the growth of the Indian economy, and the government has implemented various policies and schemes to support their growth.

Yes' NABARD IS setup in 1982
option no. (C) is correct

Tax holiday is the term given to the period for which some category of business or industries are exempted from tax for the said period like said 5-10yrs. This is done by Government to encourage promotion of some trade or to perform such acts in particular areas in order to promote those areas. Start-ups are also enjoying tax holiday.

The Export Oriented Units (EOUs) scheme, introduced in early 1981, is complementary to the SEZ scheme. It adopts the same production regime but offers a wide option in locations with reference to factors like source of raw materials, ports of export, hinterland facilities, availability of technological skills, existence of an industrial base and the need for a larger area of land for the project. As on 31st December 2005, 1924 units are in operation under the EOU scheme.

Main problem for small businesses

Small businesses face several challenges that can hinder their growth and success. The following are the main problems for small businesses:

Raw material

Small businesses often struggle to secure the necessary raw materials at an affordable price. This can be due to a lack of bargaining power, limited access to suppliers, or fluctuations in the market. As a result, small businesses may not be able to produce high-quality products or compete with larger businesses that have more resources.

Finance

Small businesses often face financial constraints due to limited access to capital. They may struggle to secure loans from banks or investors, and may have to rely on personal savings or credit cards to finance their operations. This can lead to cash flow problems, which can hamper their ability to pay suppliers, employees, or invest in growth opportunities.

Managerial skill

Small businesses may lack the necessary managerial skills to effectively run their operations. This can lead to poor decision-making, mismanagement of resources, and ineffective marketing strategies. As a result, small businesses may struggle to grow and compete with larger businesses that have more experienced managers.

All of these

The main problem for small businesses is that they often face all of these challenges simultaneously. This can create a difficult operating environment that requires careful planning, resourcefulness, and resilience. Small businesses must be able to manage their finances, secure raw materials, and develop effective managerial skills to succeed in today's competitive marketplace.

In conclusion, small businesses face several challenges that can hinder their growth and success. To overcome these challenges, small businesses must be able to secure raw materials, manage their finances, and develop effective managerial skills. With careful planning and perseverance, small businesses can succeed in today's competitive marketplace.

Organisation of Cottage Industries

Cottage industries are small-scale industries that are usually carried out by individuals or families in their homes using local raw materials and simple tools. They are usually organised by individuals or groups of individuals who are involved in the production process. The organisation of cottage industries can be explained as follows:

1. Deciding on the product: The first step in organising a cottage industry is to decide on the product that will be produced. This decision is usually based on the availability of raw materials and the skills of the individuals involved.

2. Procuring raw materials: Once the product has been decided, the next step is to procure the raw materials. This is usually done locally, and the quality of the raw materials can have a significant impact on the final product.

3. Setting up the workspace: Cottage industries are usually carried out in the homes of the individuals involved. The workspace needs to be set up with the necessary tools and equipment.

4. Production process: The production process is usually carried out by the individuals themselves, with the help of family members or other individuals from the local community.

5. Marketing and Selling: Once the product has been produced, it needs to be marketed and sold. This can be done through local markets, word of mouth, or online platforms.

Conclusion

In conclusion, cottage industries are organised by individuals or groups of individuals who are involved in the production process. They are small-scale industries that are usually carried out in the homes of the individuals involved using simple tools and local raw materials. The organisation of cottage industries involves deciding on the product, procuring raw materials, setting up the workspace, carrying out the production process, and marketing and selling the final product.

C is the correct answer as cottage industries are not defined as capital investment criteria as in the case of other small scale industries

RSBDC stands for Rural Small Business Development Centre.
Here is a detailed explanation of the expansion of RSBDC:
1. Rural: This term refers to areas located outside of urban or metropolitan regions. It typically includes countryside or remote areas with lower population densities.
2. Small Business: Small businesses are privately-owned enterprises that have a limited number of employees and generate a relatively low level of revenue compared to larger corporations. These businesses play a significant role in local economies and often have a more personalized approach to customer service.
3. Development: Development refers to the process of improving or growing something. In the context of RSBDC, it pertains to the enhancement and growth of small businesses in rural areas.
4. Centre: A center, in this context, is an organization or institution that provides resources, support, and services to small businesses. It serves as a hub for entrepreneurs and offers guidance and assistance in various areas of business development.
Therefore, the expansion "Rural Small Business Development Centre" (RSBDC) refers to an organization or institution that focuses on supporting and promoting the growth of small businesses in rural areas. It aims to provide resources, training, and assistance to entrepreneurs in order to enhance their business operations, increase profitability, and contribute to the economic development of rural communities.

Expanded form of NABARD:
- NABARD: National Bank for Agriculture and Rural Development
Explanation:
NABARD stands for National Bank for Agriculture and Rural Development. It is an apex development bank in India that focuses on providing financial and developmental support to the agriculture sector and rural areas. Here is a detailed explanation of the expanded form:
- National: NABARD is a national-level institution that operates across India, providing its services to all states and union territories.
- Bank: NABARD functions as a bank, offering various financial services to individuals, organizations, and other banks. It provides loans, grants, and other financial assistance to promote agricultural and rural development.
- for Agriculture: NABARD specifically targets the agriculture sector and aims to strengthen it by providing financial aid, implementing policies, and supporting agricultural research and development.
- and Rural Development: NABARD's primary focus is on rural development. It works towards improving the quality of life in rural areas by offering financial assistance for various activities such as infrastructure development, rural entrepreneurship, and capacity building.
NABARD plays a crucial role in fostering rural prosperity and sustainable agriculture in India. It collaborates with state governments, regional rural banks, and other financial institutions to ensure the effective implementation of its programs and initiatives.

**Explanation:**

The correct answer is option A, which stands for the National Small Industries Corporation (NSIC).

The National Small Industries Corporation is a government-owned enterprise in India that provides support and assistance to small and medium enterprises (SMEs). It was established in 1955 with the objective of promoting, aiding, and fostering the growth of small industries in the country.

The NSIC offers a wide range of services to SMEs, including:

1. **Marketing Support:** The NSIC helps SMEs in marketing their products both domestically and internationally. It provides assistance in identifying potential markets, organizing exhibitions and trade fairs, and promoting SME products.

2. **Technology Support:** The NSIC facilitates the adoption of modern technology and techniques by SMEs. It offers technical consultancy services, conducts skill development programs, and provides access to testing and calibration facilities.

3. **Finance Support:** The NSIC assists SMEs in obtaining financial resources for their business operations. It provides various credit schemes, including the Single Point Registration Scheme (SPRS), which enables SMEs to avail credit facilities from banks and financial institutions.

4. **Raw Material Support:** The NSIC helps SMEs in procuring raw materials at competitive prices. It has tie-ups with various raw material suppliers and facilitates bulk purchase of materials by SMEs.

5. **Export Support:** The NSIC promotes the export of products manufactured by SMEs. It provides assistance in obtaining export orders, facilitates export financing, and offers guidance on export procedures and documentation.

6. **Infrastructure Support:** The NSIC develops and manages industrial estates and technology parks for SMEs. It provides infrastructure facilities such as factory sheds, workshops, and office spaces at affordable rates.

In summary, the National Small Industries Corporation (NSIC) plays a crucial role in the development and growth of small and medium enterprises in India. It provides a comprehensive range of support services to SMEs, including marketing, technology, finance, raw material, export, and infrastructure support.

The District Industries Centers Programme was launched on May 1, 1978.
The District Industries Centers (DIC) Programme was launched in India with the aim of promoting and developing micro, small, and medium enterprises (MSMEs) at the district level. Here is a detailed explanation of the launch of the programme:
Background:
- The Indian government recognized the importance of MSMEs in generating employment, promoting entrepreneurship, and contributing to economic growth.
- In order to provide a conducive environment for the growth of MSMEs, the District Industries Centers Programme was initiated.
Launch:
- The programme was officially launched on May 1, 1978.
- The launch date signifies the government's commitment to empowering and supporting MSMEs.
- The announcement was made by the Ministry of Small Scale Industries and Agro & Rural Industries.
Objectives:
- The main objective of the DIC Programme was to promote the development of MSMEs in each district of India.
- It aimed to provide a single point of contact for all services and support required by MSMEs, including information, training, finance, and marketing assistance.
- The programme aimed to facilitate the establishment, growth, and modernization of MSMEs in a decentralized manner.
Implementation:
- The programme was implemented through the establishment of District Industries Centers in each district across India.
- These centers acted as the nodal agency for coordinating and implementing various schemes and programs for MSMEs at the district level.
- The centers provided a range of services, including the identification of potential entrepreneurs, training programs, assistance in obtaining finance, and marketing support.
Impact:
- The DIC Programme played a crucial role in promoting the growth of MSMEs in India.
- It helped in the creation of employment opportunities, especially in rural areas, leading to inclusive economic development.
- The program also contributed to the overall industrialization and economic progress of the country.
In conclusion, the District Industries Centers Programme was launched on May 1, 1978, with the aim of promoting and developing MSMEs at the district level. The program proved to be instrumental in providing support and services to entrepreneurs, fostering economic growth, and generating employment opportunities in India.

Small industries contribute _______ of gross industrial value:
To determine the percentage of gross industrial value contributed by small industries, we can use the given options and eliminate the incorrect ones.
- Option A: 49 percent
- Option B: 45 percent
- Option C: 48 percent
- Option D: 40 percent (Answer)
Since we are looking for the percentage of gross industrial value contributed by small industries, we want the lowest percentage. We can eliminate options A, B, and C because they are higher percentages.
Therefore, the correct answer is option D: 40 percent. Small industries contribute 40 percent of the gross industrial value.

NSIC (National Small Industries Corporation Ltd) was established in 1955. It is a Government of India enterprise under the Ministry of Micro, Small and Medium Enterprises (MSME). NSIC was established with the aim of promoting, aiding, and fostering the growth of small-scale industries in the country. Let's delve into the details of its establishment and objectives.

Establishment of NSIC
NSIC was set up in the year 1955 with the objective of supporting and promoting the growth of small-scale industries in India. It was established as an apex body to coordinate and facilitate the functions of various institutions and agencies engaged in the promotion and development of small-scale industries.

Objectives of NSIC
The main objectives of NSIC are as follows:

1. Promoting and assisting the growth of small-scale industries: NSIC aims to promote and assist the growth of small-scale industries by providing them with various support services and schemes.

2. Facilitating marketing support: NSIC provides marketing support to small-scale industries by assisting them in the marketing of their products and services. It undertakes various marketing activities such as participating in trade fairs, organizing exhibitions, and providing assistance in export promotion.

3. Providing financial assistance: NSIC provides financial assistance to small-scale industries through various schemes such as the Single Point Registration Scheme (SPRS) and the Performance and Credit Rating Scheme (PCRS). These schemes help small-scale industries in accessing credit and financial support.

4. Facilitating technology support: NSIC facilitates the adoption of modern technology and techniques by small-scale industries. It provides technical support and assistance to small-scale industries through its Technical Services Centres (TSCs) and Common Facility Centres (CFCs).

5. Enhancing competitiveness: NSIC aims to enhance the competitiveness of small-scale industries by providing them with various support services such as access to raw materials, training and skill development, and quality improvement initiatives.

6. Promoting entrepreneurship: NSIC plays a crucial role in promoting entrepreneurship by providing training and skill development programs to aspiring entrepreneurs. It also assists in the establishment of new enterprises and provides handholding support during their initial stages.

In conclusion, NSIC was established in 1955 with the objective of promoting and supporting the growth of small-scale industries in India. It provides various support services and schemes to enhance the competitiveness of small-scale industries and facilitate their growth and development.

Definition of Village Industry:

A village industry refers to any industry located in a rural area which produces goods or renders services, with or without the use of power. These industries are typically found in villages or small towns and play a vital role in the economic development of rural areas.

Characteristics of Village Industry:

- Location: These industries are primarily located in rural areas, away from urban centers and cities.
- Size: Village industries are usually small-scale enterprises, employing a limited number of workers.
- Production: They produce a wide range of goods or provide various services, catering to the local demands of the rural population.
- Power Usage: Village industries may or may not rely on power sources for their operations. Some industries may use traditional tools and techniques, while others may utilize modern machinery and technology.
- Labor Intensive: These industries often rely on manual labor and employ local villagers, contributing to employment generation in rural areas.
- Local Market: Village industries primarily cater to the local market and fulfill the needs and demands of the nearby rural population.
- Low Investment: The capital investment required for setting up and operating village industries is relatively low compared to large-scale industries located in urban areas.

Importance of Village Industry:

- Employment Generation: Village industries provide employment opportunities for the local population, reducing migration and unemployment in rural areas.
- Rural Development: These industries contribute to the overall development of rural areas by improving the standard of living and providing income-generating opportunities.
- Utilization of Local Resources: Village industries utilize locally available resources and raw materials, promoting sustainable development and reducing dependency on external sources.
- Preservation of Traditional Skills: Many village industries are based on traditional skills and techniques, which are passed down through generations, preserving cultural heritage and craftsmanship.
- Economic Stability: The presence of village industries diversifies the local economy, reducing dependence on agriculture alone and creating a more stable economic base.

Examples of Village Industries:

- Handloom and Handicrafts: Weaving, pottery, carpentry, embroidery, basket making, etc.
- Agro-based Industries: Food processing, dairy farming, beekeeping, organic farming, etc.
- Cottage Industries: Candle making, soap making, incense stick production, paper making, etc.
- Village Tourism: Homestays, local handicrafts and cuisine, eco-tourism, etc.
- Renewable Energy: Solar panel manufacturing, biogas production, small-scale wind turbines, etc.

Village industries play a crucial role in providing livelihood opportunities, preserving traditional skills, and contributing to the overall development of rural areas. They are an essential part of the rural economy and contribute to sustainable and inclusive growth.

Definition: DIC stands for District Industries Centers.
Explanation:
District Industries Centers (DIC) are government organizations that are responsible for promoting and supporting industrial development at the district level. They play a crucial role in providing assistance, guidance, and support to entrepreneurs and industries in their respective districts.
Functions of DIC:
DICs have various functions and responsibilities, including:
1. Promotion of industries: DICs work towards the promotion of industries in their district by identifying potential sectors and encouraging entrepreneurs to set up new ventures.
2. Entrepreneurship development: They provide training and skill development programs to aspiring entrepreneurs, helping them in starting and managing their businesses successfully.
3. Project identification and appraisal: DICs evaluate project proposals and provide technical and financial assistance for viable projects. They also help in project formulation and preparation of feasibility reports.
4. Financial assistance: DICs facilitate access to financial assistance schemes and subsidies offered by the government for industrial development. They help entrepreneurs in availing loans and grants for their projects.
5. Infrastructure development: DICs play a role in developing industrial infrastructure in their districts by identifying suitable land, setting up industrial estates, and providing basic amenities like power, water, and transportation.
6. Marketing and export promotion: They assist industries in marketing their products and exploring export opportunities by organizing trade fairs, exhibitions, and buyer-seller meets.
7. Entrepreneurial counseling and guidance: DICs provide counseling and guidance to entrepreneurs regarding various aspects of business management, including finance, marketing, production, and legal compliance.
8. Monitoring and evaluation: DICs monitor the performance of industries in their district and evaluate their progress. They provide necessary support and interventions for the growth and sustainability of industries.
Conclusion:
District Industries Centers (DIC) are instrumental in promoting and supporting industrial development at the district level. They provide a range of services and assistance to entrepreneurs and industries, contributing to the overall economic growth and development of the region.

• What is KVIC?


KVIC stands for Khadi and Village Industries Commission. It is an apex organization under the Ministry of Micro, Small, and Medium Enterprises (MSME) in India.



• Role of KVIC:




• Promotes the development of Khadi and village industries in rural areas.


• Provides financial assistance and support to artisans, weavers, and entrepreneurs involved in these industries.


• Implements various schemes and programs to enhance the productivity and competitiveness of Khadi and village industries.


• Creates employment opportunities, especially in rural and semi-urban areas.


• Preserves and promotes the traditional art and craft heritage of India.


• Markets and promotes Khadi products through its network of Khadi institutions and retail outlets.


• Organizes training programs and workshops to skill artisans and entrepreneurs.





• Importance of Khadi and Village Industries:




• Khadi represents the freedom movement of India and is a symbol of self-reliance.


• Village industries utilize local resources, provide sustainable livelihoods, and contribute to rural development.


• They promote eco-friendly and sustainable production practices.


• They play a crucial role in preserving traditional skills and crafts.


• Khadi and village industries contribute to the national economy and promote inclusive growth.





• Key Initiatives by KVIC:




• Prime Minister's Employment Generation Programme (PMEGP): Provides financial assistance for setting up new ventures in Khadi and village industries.


• Honey Mission: Promotes beekeeping and honey production as a means of livelihood.


• Khadi Reform and Development Program (KRDP): Aims to modernize and upgrade Khadi institutions.


• Marketing Assistance Scheme: Supports marketing and promotion of Khadi products.


• Rozgar Yukta Gaon (RYG): Aims to create model villages with sustainable employment opportunities.

By implementing various schemes and programs, KVIC plays a vital role in empowering rural artisans, promoting self-employment, and preserving the cultural heritage of India.