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Ch-9 - CHAPTER 9 SMALL BUSINESS LEARNING OBJECTIVES After...

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C HAPTER 9 S MALL B USINESS LEARNING OBJECTIVES After studying this chapter, you should be able to: explain the meaning and nature of small business; appreciate the role of small business in India; analyse the problems of small business; and classify the different forms of assistance provided by the government to small business, particularly in rural and hilly areas.
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208 BUSINESS STUDIES 9.1 I NTRODUCTION In the pervious chapters, the concepts of business, trade, commerce and industry were discussed. The present chapter discusses the issue of size of business, with reference to small industries and small business establishments. It also describes the role of small business and the major problems faced by the small sector units. Further, the assistance provided by the government to small business, particularly in the rural and hilly areas has been discussed. 9.2 M EANING AND N ATURE OF S MALL B USINESS 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. Before understanding the nature and meaning of small business, it is important to know how size is defined in our country, with reference to small industries and small business establishments. Several parameters can be used to measure the size of business units. These include the number of persons employed in business, capital invested in business, volume of output or value of output of business and power consumed for business activities. However, there is no parameter which is without limitations. Depending on the need the measures can vary. Amar, Akbar and Anthony are three good friends who have completed a vocational course in entrepreneurship, after their school education. Finding the job market tough, they were contemplating the idea of setting up a small business, using the skills they had learnt in their course. However, they knew very little about business. They were wondering what business to start, where to locate it, how to procure machinery and materials needed for the business, how to raise money and how to market. They came across a notification given by the District Industries Centre located near the Industrial Estate in Balanagar, Ranga Reddy district of Andhra Pradesh regarding a seminar on government’s assistance for a small business, aimed at young entrepreneurs. Excited with the news, the three friends decided to attend the seminar. They were told about the financial and other assistance offered by the Central and State Governments under the Rural Employment Generation Programme to the educated youth. They found that toys were in demand and decided to manufacture toys. They started a small scale industry in
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