(a) State the difference between cottage and small industries. (b) What are the problems of cottage industries?

Question

“Cottage industries are those industries which are completely or partially run by the members of a family either as a whole-time business or as a part time business.” Mostly these type of industries are run by the artisans in their homes. Machines are rarely used. Usually these industries fulfil the local requirements. These industries are run by the members of the family. Workers on labour basis are rarely used. They need very less capital. Since these industries are mainly situated in villages, so these are known as “village or rural industries.”

(a) State the difference between cottage and small industries.

(b) What are the problems of cottage industries?

Answer 1

(a) 

1. Cottage industries are normally set up in villages and they are spread throughout the country, whereas small scale industries are mostly set up in cities.
2. In cottage industries, only family members work whereas in small scale industries, work is done through hired workers.
3. Cottage industries normally fulfil the local needs where as small-scale industries produce goods for cities and semi-urban areas. So their production market is very large.
4. In cottage industries, production is done with the help of simple tools and very less capital is required. Whereas small-scale industries are run with power and more working capital is also required.
5. In cottage industries, traditional goods like khadi mats and shoes etc. are produced whereas in small scale industries modem goods like Radio, Television, Electrical and Electronics goods etc. are produced.

(b) 

1. Problem of Raw Material and Power: These industries do not get raw material in sufficient quantity and whatever material they get it is of poor quality and for it they have to play high prices.
2. Problem of Finance: In India credit is not available to these industries in sufficient quantity. They have to depend on moneylenders for finance who charge very high rate of interest.
3. Old Method of Production: In there industries mostly old methods of production are used. Old tools like oil press for oil expelling or handlooms for weaving clothes are used. As a result of it the number of production decreases and poor qualities of products are manufactured. Their demand in the market goes down.
4. Problem of Marketing: The entrepreneurs of the industries face many problems in selling their products at fair price and quantity because the outward look of the product produced by these industries is not good.