 Welcome learners. In this video lecture I will be discussing about small enterprises and village industries. So, this will be the first video lecture and I am Dr. Smitishika Sothri from Krishna Kanta Handy State Open University. So, this unit is explained in two video lectures. After completion of each part of the video lecture, you need to self check your progress at the end of the lecture. You need to participate in the discussion forum so that you can communicate with us about your level of understanding. So, part one of this video lecture will deal with small enterprises, its definition, characteristics, relationship between small and large enterprises and the second part of the video lecture will deal with objectives and scope of small enterprises, role of small enterprises, prices in economic development and problems of small-scale earnings. So, first we will discuss about the definition of small-scale industries. There was no such definition for small-scale industries earlier. The first official definition of small-scale industry in India was conjoined in 1950 in terms of the size of gross investment in fixed assets that is plant and machinery or land building as well as on the strength of the workforce concerned. The criteria underwent a number of modifications over the years. In the later part of the 50s, there was a change in definition of small-scale industries. There was a shift from workforce criteria to investment criteria. The micro, small and medium enterprises development act 2006 have provided the definitional framework. So, under the act, enterprises have been categorized broadly into those engaged in manufacturing and services. Both categories have been further classified into micro, small and medium enterprises based on their investment in the plant and machinery. In case of manufacturing enterprises and equipment in case of service enterprises. So, now let us discuss those in detail. So, first about manufacturing enterprises. The investment limit of various categories of manufacturing enterprises are first micro enterprise the investment limit should be up to Rs. 25 lakhs. So, those enterprises where the investment limit is maximum up to 25 lakhs those were considered as micro enterprise. Then those enterprise where investment limit is above 25 lakhs and up to Rs. 5 crore those were considered as small enterprise and medium enterprise where those where investment is above Rs. 5 crore and up to maximum of Rs. 10 crore. Then for service enterprises the investment limit of various categories are first one is for micro enterprise investment limit is up to Rs. 10 lakhs. Then for small enterprises the investment limit is above 10 lakhs and up to Rs. 2 crore and for medium enterprises the investment limit is from Rs. 2 crore to up to Rs. 5 crore. The village and small industries sector and compasses are continuum of artisans handicrafts units at one end and modern production units with significant investment in other end. So, the various sectors of village and small industries are consist of one is traditional cottage and household industries like khadi village industries hand loom industries city culture industries handicrafts coir etc and when we considered about modern scale industries it includes tiny units power looms etc there has been an increase in the variety of products manufactured by small scale sectors they have ventured into the manufacture of many new and sophisticated items. Now we will discuss about the characteristics of small scale industries. So, first is one person show in case of small scale industries generally it is considered as one person show because the sole person who runs the organization he or she monitors the every activities of the organization then the second thing is managed in personalized fashion as the entrepreneur okay the sole person he managed he or she managed the activities of the organization in their personalized fashion like whatever they feels they likes based on that they runs the organization. Then third characteristic is about gestation period as small industries they runs quickly there is lesser red tech easy man all so because of that the gestation period for small industry is shorter that means they gets the return on investment more quickly compared to the large organization. Then another characteristic is scope of operation the scope of operation of small industry undertakings is generally localized catering to the local and regional demands. Our next characteristic is availability of resources small units use indigenous resources and therefore they can be located anywhere subject to the availability of those raw materials and flavors so wherever the resources were available for them they runs their industry in that area and another characteristic is labor intensified small industries are fairly labor intensive with comparatively smaller capital investment than larger units because small industries they don't have much fun so instead of going for everything mechanized they prefer to be labor intensive. Then balance region and development small units are dispersed to rural areas they use local resources thus the growth of small scale industries in rural areas promotes more balanced regional development it helps in the development of that particular area and then last characteristics which I will be going to discuss is about adaptable to changes they are highly reactive to changes in environment and receptive to socio economic conditions they are more flexible to adapt changes like introduction to new products new methods of production new materials etc so they are also adaptable to changes now we will discuss about the relationship between small and large units first I will be discussing about the competition small scale industry cannot compete with large industry in certain circumstances in selected products as like small scale industries have lesser resources they have lesser fun so they cannot compete in all sectors in with large scale industries then second point is about supplementary small scale industry can fill in the gaps in case of excess demand the large industries has got their fixed production capacity installed in case of excess demands the small industries can supplement their activities so as to meet the excess demand suppose some large industry they were operating as their production unit is very huge they have some fixed kind of production setup so even if demand increases like those demands can be met by these small scale industries then complementary apart from the supplementary relationship with large scale industries small industry has been complementary to its large counterparts in the real world many small units produce intermediate products for large units so sometimes it will be more helpful for some customers if they gets the products locally so these small scale industries they were also like working as complementary services they were providing to the large scale industries then about initiatives accepted by the high profits of large units small units can also take initiative to produce the particular product if it succeeds the small unit grows to a large one over a period of time so suppose if any small small scale industry if they were producing something and it's growing after certain period of time they can become a large large scale production unit servicing small industries also do install servicing and repairing shops for the plants of large units suppose for example car so these four wheelers production units were large scale industries but repairing of those four wheelers or maybe servicing of those four wheelers then there are some small scale industries which helps in running those organizations such small services units can be seen proliferating in respect to our large industries like refrigerators radio television set watch and clocks cycle and motorcycle etc so we will see plenty of such small scale industries where who are offering these services for the large industries hope you have understood so far so here i have put one question for you like what are the characteristics of small scale enterprise please write it down in your notebook and if you have any queries any doubts regarding this video lecture you can mail to us thank you