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SMALL BUSINESS IN INDIA






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District industries Centres

The scheme of District industries Centres (DICs) was started on May, 1978. It is a centrally-sponsored scheme. The objective of the scheme is to set up a focal point at the district level which would provide the required input support to small scale units.

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Policy Guidelines

Right since independence, the Government of India has recognised the strategic importance of small scale and cottage industries in the Indian economy. The Government has followed a policy of promoting and assisting the growth of such industries.

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Government Policy Towards Small Business: Need for a National Policy

In a developing country like India, national policy for the development of small scale industries is required due to the following reasons

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Measures taken by the Government

The Government of India has taken several measures to solve the problems of small scale industries and to enable them to play an effective role in the country's economy.

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Management Problems of Small Business

The managerial skills required for the management of small firms are not very much different from those necessary in large scale business. The managerial functions of planning, organisation, staffing, directing and controlling are common to both.

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Role of Small Business in Indian Economy

Small scale industries are small in size but play a big role in the economic development of a developing country like India. India has adopted the ideal of a socialistic pattern of society with full employment balanced regional development and self-reliance as the major objectives.

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Reasons for Survival of Small Business

Despite the growth of large scale industry, small business has survived and progressed because it has its won area of operations. Several factors make the establishment and growth of small business necessary.

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Activities of Small Business

The scope of small business is very wide and the small scale sector covers a wide spectrum of business activities. Today, small scale units are found virtually in every field of economic activity.

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Characteristics of Small Business

The foregoing description reveals the following features of small scale enterprises

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Present Position of Small Business

The Industrial Policy Resolution announced on July 23, 1980 gave a new definition of small scale enterprises consisting of three types of enterprises

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Definition of Small business in India

Small scale enterprises were defined for the first time after independence under the industries (Development and Regulation) Act, 1951. Under the Act a small scale unit was that which employed not more than 50 persons when using power and 100 when not using power and with capital assets not exceeding Rs. 5 lakhs.

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Qualitative Criteria of Small Business

Size is not a very good criterion of small business because the employment and investment vary widely with nature of industry. Complexity of management may be a better measure.

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Managing of small Business

There is no specific criterion to differentiate between Small and Big Businesses. What is small business depends on the character of economic activity.

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