Test: Small Business - 1 - Commerce MCQ

In India, the ‘village and small industries sector’ consists of both ‘traditional’ and ‘modern’ small industries. This sector has eight subgroups. They are handlooms, handicrafts, coir, sericulture, khadi and village industries, small scale industries and powerlooms.  The last two come under the modern small industries, while the others come under traditional industries. Village and small industries together provide the largest employment opportunities in India.

 A tiny industrial unit is defined as an industrial or business enterprise whose investment in plant and machinery is not more than Rs. 25 lakh.

The correct option is Option C.

In 2009, the government claimed that India has become the seventh largest vehicle producing nation in the world, six years ahead of the set target. "When we were making the Auto Mission Plan (AMP) in 2006, we had projected India to become the seventh largest vehicle producing country in the world by 2016.

Modern small scale industries comprise of units using power driven machinery possessing better production techniques and located mostly in urban areas. They include powerlooms, ancillaries, export oriented units, etc. Modern small industrial units manufacture some of the high value added and sophisticated products like electronic type writers, survey equipments, television sets and other consumer durables.

Small scale industries are those industries in which the manufacturing, production and rendering of services are done on a small or micro scale. These industries make a one-time investment in machinery, plants, and industries, but it does not exceed Rs 1 Crore.

The small scale industry can enjoy the status of an ancillary small industry if it supplies not less than 50 per cent of its production to another industry, referred to as the parent unit

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.

Small scale industries owned and managed by women entrepreneurs have share capital of not less than 51 percent.

The correct answer is D: Rs.10 Lakhs.
Explanation:
To determine the correct answer, we need to understand the concept of a small-scale service and business enterprise and the investment limit for fixed assets.
1. Small Scale Service and Business Enterprise:
- A small scale service and business enterprise refers to a business or service that operates on a small scale with limited investment in fixed assets.
- These enterprises are typically small in size, have fewer employees, and operate in sectors such as manufacturing, trading, services, etc.
2. Investment in Fixed Assets:
- Fixed assets include plant and machinery, excluding land and building.
- The investment limit for fixed assets is used as a criterion to classify businesses as small-scale enterprises.

3. Investment Limit for Small Scale Enterprises:
- The investment limit for small-scale service and business enterprises varies from country to country and may also depend on the sector.
- In this case, the correct answer is D: Rs.10 Lakhs, as it is the option that falls within the investment limit for a small-scale enterprise.
In conclusion, a small-scale service and business enterprise is one whose investment in fixed assets of plant and machinery, excluding land and building, does not exceed Rs.10 Lakhs.

Micro enterprise: Any entity wherein the investment in plant and machinery does not exceed rupees twenty-five lakhs. Small enterprise: Any entity wherein the investment in plant and machinery does not exceed rupees five crores but also more than rupees twenty-five lakhs.