1. CLASSIFICATION OF
BUSINESS
ACTIVITIES

2. BUSINESS
INDUSTRY
COMMERCE

3. CONCEPT OF INDUSTRY

4. Industry is a group of Firms, engaged in production of similar Goods or Services. For example: Cement, Power, Automobile, Pharmaceutical Industries.

5. CHARACTERISTICS OF
INDUSTRY

6. 1. ECONOMIC ACTIVITY

7. Industrial activities are Economic activities, because they are undertaken with a motive to earn money and make economic gain.

8. 2. Creation of Form Utility

9. Industry creates Form utility by converting raw materials into useful products which can be used to satisfy human wants.

10. 3. ECONOMIC
DEVELOPMENT

11. Industrial activities generate employment, increases national income, earns foreign exchange; through the productive use of available resources.
Industries are the Engines of growth.

12. 4. CATALYTIC TO OTHER
BUSINESS ACTIVITIES

13. Industrial activities gives rise to Trade, Transportation, Banking & Finance, Warehousing, Insurance, Advertising, etc.

14. 5. CONSUMER & PRODUCER
GOODS

15. Industry involves the production of both Consumer goods and Producer goods.

16. TYPES OF INDUSTRIES

17. INDUSTRY
GENETIC
EXTRACTIVE
MANUFACTURING
CONSTRUCTION

18. MANUFACTURING
ANALYTICAL
ASSEMBLING
SYNTHETIC
PROCESSING

19. SCALE OF OPERATIONS
MICRO
MEDIUM
SMALL
LARGE

20. MICRO UNITS

21. MANUFACTURING ENTERPRISES
Investment in Plant & Machinery is up to Rs 25 lac.
SERVICE ENTERPRISES Investment in Plant & Machinery is up to Rs 10 lac.

22. SMALL UNITS

23. MANUFACTURING ENTERPRISES Investment in Plant & Machinery is more than Rs 25 lac but does not exceed Rs 5 crore.
SERVICE ENTERPRISES Investment in Plant & Machinery is more than Rs 10 lac but does not exceed Rs 2 crore.

24. MEDIUM UNITS

25. MANUFACTURING ENTERPRISES Investment in Plant & Machinery is more than Rs 5 crore but does not exceed Rs 10 crore.
SERVICE ENTERPRISES Investment in Plant & Machinery is more than Rs 2 crore but does not exceed Rs 5 core.

26. LARGE UNITS

27. MANUFACTURING ENTERPRISES Investment in Plant & Machinery exceeds Rs 10 crore.
SERVICE ENTERPRISES Investment in Plant & Machinery exceeds Rs 5 crore.

28. ROLE OF SMALL BUSINESS
IN INDIA

29. 1. OPTIMISATION OF
CAPITAL

30. Quick returns due to short gestation period
Greater output can be obtained with small investment, because Small scale units require less capital per unit of output.
Fixed capital per employee is less as compared to that in Large scale units.
Quick returns due to short gestation period
Small scale units need to be encouraged in the context of Low rate of Capital formation in India.

31. FEEDER TO LARGE
INDUSTRIES

32. Majority of Large scale units do not manufacture basic inputs for their finished products.
Small scale units manufacture various types of components, spare parts, tools, etc and supply to these Large scale units.

33. 3. MOBILISATION OF CAPITAL, ENTREPRENEURIAL SKILL, AND OTHER RESOURCES

34. A number of Entrepreneurs are spread over small towns & villages of the country.
Large scale units cannot utilize them as effectively as the small scale units distributed over the entire length & breadth of the country.

35. Large scale units cannot mobilise the savings done by people in areas far flung from the urban centres.
It can be effectively done by setting up a network of small scale units.
In addition, other resources spread over the country can be put to effective use by small scale units.

36. 4. CONTRIBUTION TO EXPORTS

37. With the establishment of large number of modern small scale units, contribution in export earnings has increased by leaps and bounds.
Bulk of the exports of small scale units (around 93%) consists of non-traditional items like readymade garments, leather products, woollen garments & knitwear, processed foods, chemical & allied products and large number of engineering goods.

38. These has added to Foreign Exchange Reserves, thereby reducing Balance of Payment Deficits.

39. 5. EQUITABLE DISTRIBUTION OF NATIONAL INCOME AND EGALITARIAN SOCIETY

40. Small scale units ensure more equitable distribution of national income & wealth.
Ownership of small scale industries is more widespread than that of large scale units.
Small scale units possess larger employmnt potential.
They help in raising the standard of living of people living in rural areas.

41. Benefits can be distributed over wider population.

42. 6. EMPLOYMENT

43. Given the acute unemployment problem in India, creation of employment opportunities will depend on the development of small scale units.
It has been estimated that labour intensity in micro and small enterprises sector is four times higher than the large enterprises.

44. Promote self-employment among the educated and professional class.
Rural non-farm sector accounting for 22% of rural employment can play a crucial role in in employment generation.

45. 7. BALANCED REGIONAL DEVELOPMENT

46. Small scale units promote decentralised development, thereby helping to remove regional disparities in industialisation.
Development of small scale units leads to industrialisation in rural areas.
Development of decentralised sector improves the standard of living in back- ward regions.

47. Ensures balanced development with Self- Sustained Growth.

48. 8. SOCIAL ADVANTAGE

49. Requires less capital investment and therfore, people with limited capital can start their business.
Through diffused ownership, there is wider participation of people in the process of economic development.
Helps in raising per capita income and standard of living in the country.