Question

What are the differences between a cottage industry and a small-scale industry?

Answer 1

The differences between a cottage industry and a small- scale industry are:

1. The location of cottage industries is restricted in villages whereas the small-scale industries are mostly located in urban and semi-urban areas.
2. Cottage industry being a household industry is mostly run by the members of the family and therefore do not maintain hired labourers. But the small-scale industries are mostly run by hired labourers.
3. Cottage industries are producing goods for meeting local requirements whereas small-scale industries are producing goods to meet the demand for the people living in a wider area.
4. Cottage industries are investing a very little amount of capital and are working with simple tools. But the small industries are investing a comparatively higher amount of capital (presently the limit has been raised from Rs. 60 lakh to Rs. 3 crores) and are working with machines run by power.