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Differentiate between Cottage and Small Scale Industries

Last Updated : 15 Jan, 2024
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The expression “cottage industry” alludes to assembling organizations that do the greater part of their work the hard way. India is perceived and known for its enhanced culture, painstaking work from conventional cabin ventures, and an extensive variety of cooking things, in addition to other things. Cotton winding around, cover winding around, silk winding around, calfskin industry, metal handiworks, and minor food handling are the vital bungalow enterprises in India.

  • In India, cotton winding around is a vital house industry. Cotton clothing is regularly worn the nation over, in this way the mastery traces all the way back to antiquated times. Cotton clothing is noted for its exemplary plan, rich tone, and examples made by talented weavers utilizing handlooms. Maharashtra, Tamil Nadu, and Gujarat are the three states with the most cotton creation.
  • Silk winding around is another notable house industry in India. Silk is a critical maker and exporter in our country, both locally and globally. Karnataka is the main silk maker, representing practically 70% of the all out silk winding around industry. Inside our count, Mulberry, Tassore, Muga, and Eri silks are created.
  • Carpet-winding was first acquainted with India during the Mughal time frame. The Kashmiri floor covering is popular for its extraordinary quality and surface, however so are the durries and coir rugs.
  • In India, metal has customarily been used to make puppets, gems, utensils, and different things. India’s metal crafted works are popular all over the planet and contribute fundamentally to the nation’s economy. Metal-crafted works are utilized super-advanced gear and are made with hand-worked devices.

Small scale industries

Small scale industries (SSI) are those businesses wherein fabricating, offering types of assistance, creations are finished on a limited scale or small size. For instance, these are the thoughts of Small scope businesses: Napkins, tissues, chocolates, toothpick, water bottles, little toys, papers, pens. Limited scope businesses assume a significant part in friendly and monetary advancement of India. These businesses do a one-time interestin hardware, plants, and enterprises which could be on a proprietorship premise, recruit buy or rent premise. Be that as it may, it doesn’t surpass Rs. 1 Crore.

Basically limited scale businesses include little ventures who make labor and products with the assistance of generally more modest machines and a couple of laborers and workers. Essentially, the venture should fall under the rules set by the Government of India. At the time being such cutoff points are as per the following,

  • For Manufacturing Units for Goods: Investment in plant and apparatus should be between 25 lakhs and five crores.
  • For Service Providers: Investment in apparatus should be between 10 lakhs and two crores. 

In emerging nations like India, these limited-scale ventures are a lifesaver for the economy. These are by and large work concentrated ventures, so they make a lot of business. They likewise assist with per capita pay and asset usage in the economy. They are a vital area of the economy from a monetary and social perspective.

Attributes of Small Scale Industries

  1. Proprietorship: Such units are by and large under single possession. So it is a sole ownership or at times an organization.
  2. The board: Both the administration and the control by and large is with the proprietor/proprietors. So the proprietor is effectively engaged with the everyday running of the business.
  3. Restricted Reach: Small scope businesses have a limited area of tasks. So they satisfy a nearby and provincial need.
  4. Work Intensive: These limited scale businesses will generally involve work and labor supply for their creation exercises. So their reliance on innovation is restricted.
  5. Adaptability: These units are more versatile to their changing business climate. So if there should be an occurrence of abrupt changes or surprising turns of events, they are sufficiently adaptable to adjust and continue to continue. Enormous businesses don’t enjoy this benefit.
  6. Assets: They utilize nearby and promptly accessible assets. This additionally assists the economy with better usage of normal assets and less wastage.

Differences between Cottage and Small Scale Industries

Cottage industries  Small scale industries 
The area of cottage industries is confined in towns. Small scale enterprises are generally situated in metropolitan and semi-metropolitan regions.
Cottage industry being a family industry is generally shown to the individuals from the family and thus don’t keep up with recruited workers.  In any case, the small scale industries are generally shown to recruited workers.
Cottage industries are delivering merchandise for meeting neighborhood necessities.  Small industries are creating products to satisfy the need for individuals residing in a more extensive region.
Cottage industries are effective money management a tiny measure of capital and are working with basic devices. However, the small industries are financial planning a nearly higher measure of capital (as of now the cutoff has been raised from Rs. 60 lakh to Rs. 3 crore) and are working with machines run by power.
Cottage enterprises are generally situated in the place of the craftsman itself. The small scale modern units are situated in the modern business complex.
Cottage businesses are being worked both as a part-time and full-time occupation. The small-scale ventures are for the most part worked as all-day occupations.
Cottage industries are for the most part worked in disorderly way while the small industries are kept up with somewhat in a coordinated way.
Cottage ventures are taken part in the creation of customary merchandise like earthen vessels, khadi products, cotton and coir bedding, handcrafted shoes and so on  Though the small industries are taken part in refined merchandise like electric fan and bulbs, radio, recording devices, TV, blenders cum-processor and so on.

FAQs on Cottage and Small Scale Industries

Question 1: What is going on with Small Scale Industry?


Small scale industries are alluded to as those enterprises where the method involved with assembling, creation and overhauling are finished on a limited scale. The venture on such enterprises is one time and these speculations are generally finished on plant and apparatus, the all-out speculation on such businesses don’t surpass 1 crore.

Question 2: What is the significance of small-scale industries?


Small scale industries are significant in light of the fact that it helps in expanding work and monetary improvement of India. It works on the development of the nation by expanding metropolitan and provincial development.

Question 3: For what reason is it called cottage industry?


The term initially alluded to home laborers who were participated in an undertaking, for example, sewing, ribbon making, wall decorations, gadgets, or family producing. A few enterprises which are normally worked from enormous, brought-together processing plants were cabin ventures before the Industrial Revolution.

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