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The differences between the small-scale and cottage industries are basically two:(a) While small-scale industries are mainly located in urban centres as separate establishments, the cottage industries are generally associated with agriculture and provide subsidiary employment in rural areas and(b) While small-scale industries produce goods with mechanised equipment employing outside labour, the cottage industries involve operations mostly by hand which are carried on primarily with the help of the members of the family. ADVERTISEMENTS: The Fiscal Commission (1949) also made a distinction between small-scale and cottage industries in this manner:A cottage industry is one which is carried on wholly or primarily with the help of members of the family either, as a whole or part- time occupation. Image Source: cdn.shareyouressays.comA small-scale industry, on the other hand, is one which is operated…

External Causes: 1. Power Cuts: A large number of industrial units, particularly in West Bengal and Bihar, face power cuts from time to time. Power cuts are necessitated by the fact that generation of power is much below its actual requirements. Image Source: i.vimeocdn.com 2. Erratic Supply of Inputs: Lack of regular supply of raw materials and other inputs disturb the production schedule causing losses to the unit. This is particularly the case of units depending upon the supply of imported inputs. Also transport bottlenecks sometimes affect the supply of inputs. 3. Recession: General recessionary trends in the market adversely affect the demand for most of the goods resulting in unsold stocks and losses to individual units. Products with high prices like cars, tractors, VCR etc. depend for their sustained…

An important case of imperfect competition is that of oligopoly. While monopolistic competition is more frequently found than pure competition in modern industry, however, it is not the typical market form. Oligopoly is the typical market form, many of the markets being oligopolistic.A large proportion of output in a modern industrial economy is accounted for by industries where all or most of the output is produced by a small number of large firms.Here, competition is much less impersonal than in monopolistic competition because the number of producers is fewer. If any firm cuts its price, the other firms will know who the price cutter was. Image Source: financialtribune.com ADVERTISEMENTS: Each firm, therefore, has to watch closely what its competitors are doing because any action by one of the competitors is…

Government is a very powerful institution which can create a favourable business environment. We can study its role under the following heads: Role 1. Government: Regulator of Business: The entire regulatory legislations and policies stand covered under this segment. On the one hand, there is a very large indirect area of government control over the functioning of private sector business through budgetary and monetary policies.But against this there is also a fast expanding area of direct administrative or physical controls through which the government seeks to ensure that private investment and production in industry and the use of scarce resources conform to government’s basic socio-economic objectives. Image Source: frozenfoodeurope.com ADVERTISEMENTS: They have become necessary tools in a system which seeks to avoid total nationalisation of resources.Government’s regulatory functions with regard…