1) State giving reasons whether the following statement are True or False 1.

Small-Scale Industry does not allow dispersal of manufacturing activities. A. False Reason: Small-Scale Industries make it possible transfer of manufacturing activity from congested cities to rural and semi urban areas. This helps in bringing about a balanced regional growth. 2. Small-Scale Industry generates employment opportunities. A. True. Reason: Small-Scale Industries are generally labour intensive. Hence they create employment opportunities. But creation of employment opportunities depends on the development of Small-Scale and Cottage industries given the acute problem of unemployment in India. opportunities. A. True. Reason: Small-Scale Industries are labour intensive and can provide employment to large number of people. They do not require huge capital. Hence the energy of the unemployed and under-employed can be utilised for productive purpose in the economy.
3. Small-Scale Industry is small in name but generates large-scale employment

4. A de-registration is revoked automatically. A. False. Reason: A show cause notice of deregistration is sent to the party by registered post at the address given in the application form and given 30 days time to appeal. If the party refuses to accept the notice or the unit is reported to be closed the notice be duly pasted on the premises. Action to de-register may be taken only after the expiry of the 30 days from the date of notice. Hence de-registration is not revoked.
5. Certain Small-Scale Industries can become competitive. A. True. Reason: Certain Industries like tiles and bricks, preserved fruits, perishable edibles and fresh baked goods require small engineering skill and demands craftsmanship and artistry. The Small-Scale Industry can compete in these sleeted products with the large-scale sector.

6. Exploitation of human resources takes place in Small-Scale Industry. A. True. Reason: Child and women labour in particular are exploited by Small-Scale Industries. Majority of buffing steel industries and balloon industries employ child and women labour with lower wages. 7. Small-Scale Industry has a good export potential. A. True. Reason: Nearly 20% of the total value of reports comes from Small Scale Industry. The main item of exports of Small-Scale sector include engineering goods, pharmaceuticals, Sports goods, finished leather, readymade, cotton garments processed goods etc. 8. Registration of Small-Scale Industry is not compulsory. A. True. Reason: It is not compulsory for Small Scale Industry to get itself, registered, but it is in the interest of the entrepreneur to register the unit with the State Directorate of Industries. This enables him in getting assistance from the Government. 9. As per the norms of SSI definition on capital investment includes all the fixed assets of the firm. A. False. Reason: As per the norms of SSI definition on capital investment does not include all the fixed assets but only the cost of plant and machinery (excluding land and building).

10. Policies and programmes from the crux of development process. A. True. Reason: Policies constitute the framework or guidelines for appropriate decision at various level. They generally constitute the statement that affects the working of a sector of the economy. For a developing country like India the growth of Industries is of great significance. Hence Industrial policies and programmes form the crux of development process.

11. The Industrial Policy Resolution 1977 did not classify Small-Scale Industry. A. False. Reason: Small-Scale Industries are widely dispersed in rural areas and small town. Hence the policy classified small-scale sector into three categories viz. Small Scale Industries, Cottage and household Industries, Tiny Sector. 12. The Industrial Policy Resolution 1980 replaced District Industries centers. A. True. Reason: The District Industries centers were replaced by Nucleus plants in each industry backward district in order to promote as many ancillaries, small and cottage industries as possible. The nucleus plants were to concentrate on producing inputs needed by large number of small unit and assembling the product of ancillary units. 13. Technology Development Cell was founded on per new policy of 1981. A. True. Reason: In order to increase the production a technology cell was established by Small Scale Industries Development Organisation. This cell will bring systematic co-ordination between the tools room and production development centers started at the instance of Small-Scale Industries Development Organisation. 14. State Industrial parts were set up as per 1997 policy. A. True. Reason: As per the 1997 policy resolution the State government would setup State Industrial Parks which would regulate, assist and negotiate with the private sector for their participation. Private Sector would be encouraged in development of Industrial parks in up gradation and management of existing industrial parts. 15. According to the factories Act of 1948 children and women can be employed by Small-Scale Industry A. False. Reason: The Act prohibits employment of children below 14 years and employment of female worker between 6.00 p.m. to 7.00 a.m. in prohibited. A female worker is not allowed to work for more than 54 per week.
16. The employee Provident Fund Act is applicable only to Joint Stock Company. A. False. Reason: The Act is applicable to every establishment. Which is a factory engaged in any industry specified in schedule I in which twenty or more person are employed and any other establishment, which the government may specify by notification in the Gazette. All the employees drawing a pay not exceeding Rs. 5000 per month are eligible to joint provident fund scheme under the act.

17. The payment of wages Act 1936 is applicable only to Tiny and Cottage sector. A. False.

Reason: The act covers persons employed in a factory or industries or other establishment or in railway whether directly or indirectly through a sub-contractor. The act does not apply to worker drawing wages in excess of Rs. 1600 per month. 18. Trade unions are formed in order to promote welfare of workers. A. True. Reason: Trade Union is defined by Trade Unions Act, 1926 as any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employees or between workmen and workmen or between employers and employers or for improving restrictive conditions on conduct of any trade or business and includes any federation of two or more trade unions. 19. The future of small-scale industries depends upon the industry policy of the government. A. True. Reason: Policies constitutes the framework or guidelines for appropriate decisions at various levels. They generally constitute the statement that affects the working of a sector of the economy. Industrial policies lay stress on the strategy of development. The working of the small-scale industries too, is moulded by a number of policies, which are the base for effective development 2) State giving reasons whether the following statements are True or False 1. Partnership form is not suitable for SSI. A. False. Reason: Small and medium sized trading concern like wholesaler, hotels, transporters, confectioners and professionals like chartered accountants, Architects etc. can be in this form of organisations. 2. Co-operative form is a failure in SSI Sector. A. False. Reason: The co-operative organisation grew as a means of protecting the interest of the relatively weaker section of the society, against exploitation of big business operating for profit maximisation. It is not only a form of ownership but a movement for the upliftment of the people with small means. 3. Organisation and organisational Structural means the same. A. False. Reason: Organisation means a group of individuals working together, placed in different positions in the levels of management to achieve business goals and held together by authority responsibility relationship. Organisation structure is the foundation on which the whole structure of management is built. 4. Delegation of Authority is concerned with the organisations. A. True. Reason: Every manger in the organisation must have authority in order to decide, organise and direct the use of resources to attain the objectives if an organisation Delegations is useful in getting the things done through others. 5. Formal and Informal organisation exist within an organisation. A. True. Reason: An organisation is formal when the activities of two or more person are consciously coordinated towards a common objective. The informal organisation exists within the formal organisation. It consists of group of people who associate themselves spontaneously for various purposes. 6. A person who desires direct control of business prefers company form of organisation. A. False.

Reason: A person who desires direct contract of business prefers sole proprietary form of organisation. It is that form of organisation which is owned and controlled by a single person. 7. In Line organisation the line of authority moves from the lowest level to the top level. A. False. Reason: Line authority is represented by the standard chain of command starting with the Board of directors and extending down through the various levels in the hierarchy. There is direct downward flow of authority from the top management to the lowest level. 8. The functional Organisation is based on the principle of Centralisation. A. False. Reason: The functional organisation is based on the principle of separation of planning from execution. In this there are eight special foremen who are required to guide direct and control the work. 9. Sole proprietorship is highly suitable for SSI. A. True. Reason: It is the simplest and the oldest form of ownership organisation. About 79% of the units are in the form of sole proprietorship. It is the business owned and controlled by one person. The success or the failure depends upon the owner and he alone bears the entire risks, gets all the profits and takes all the business decisions. 10. Secrecy can be maintained in a partnership Form of organisation. A. True. Reason: It is not compulsory for the partnership firm to publish and file account reports. Important secrets of business remains confined to the partners and are not known to the outside world.

3) State giving reasons whether the following statements are True or False 1. The Government has established District Industries Centres for entrepreneurial training. A. False. Reason: With a view to give all types of assistance to entrepreneurs at one place the government has established District Industries Centres at all District headquarters. 2. Zilla Udyog Mitra is managed by DIC. A. False. Reason: Under the Presidentship of collector of the District, a committee known as Zilla Udyog Mitra is established. The general manager of DIC is an Ex-officio member on this committee. He looks after the disposal of delayed proposal of entrepreneurship. 3. The main objective of Industrial Estate is dispersal growth of industries. A. False. Reason: The main objective is to encourage the growth of ancillary industries in the townships, surrounding major industrial undertaking both in Private and Public sector and encourage the growth of SSI. 4. Rural Industiralisation heads to rural development. A. True. Reason: Rural Industirialisations leads to the development of rural areas thereby reducing the growth of social tension, exploitations and pollution in large cities. It provides ample scope for the promotion of creativity. 5. Food Processing Technologies is failure in India.

A. False. Reason: Today India has become the largest producer of milk in the world. It has also emerged as the second largest producer of fruits as well as vegetables. A few important technologies have been developed for Small-Scale & Cottage Sector. 6. Rural Industiralisation helps in reducing overhead cost. A. True. Reason: Decentralized Production through net-work of well knit rural industries solves the problems of complicated managerial and competitive marketing techniques and thus reducing the cost on account of overheads. 7. Under the Special Employment Programmes Raw material is supplied to village artisans. A. False. Reason: SEP has been announced in industrially backward district in order to provide employment to 10,000 people in every district. The main feature of this scheme is to develop skills among village artisans and improve their standard of living. 8. SSI do not operate in rural area. A. False. Reason: Development of SSI is a key to rural development and rural prosperity. It contributes to a significant link in the process of socio-economic transformation of rural areas. It provides ample scope for promotion of creativity.

4) State Giving reasons whether the following statements are True or False 1. SSM units cannot issue shares and debentures. A. True. Reason: In order to issue shares and debentures i.e. raise capital from public, it has to seek permission from the chief controller of capital issue & register itself with the registrar of Joint Stock companies under the Indian Companies Act 1956. 2. Medium term loan are advance for working capital. A. False. Reason: Medium term loans are advanced for (a) Purchase of fixed assets like land, building, plant and machinery and also for (b) Modernisation, renovation and expansion. 3. Installment Credit is given to obtain moveable machinery. A. True. Reason: The bank operates a scheme for grant of installment credit to enable the small entrepreneurs to obtain moveable machinery and equipment, new or second hand. Normally a margin of 25 percent of 33 1/3 percent is allowed. 4. State Bank of India Provides Finance of technical persons. A. True. Reason: Under the special schemes of Assistance to Engineers and Technicians the State Bank of India and other banks provide finance to technical entrepreneurs including engineers and craftsman for setting up their own small-Scale Industry. 5. Technically qualified persons are financed by State Government. A. True. Reason: Some State Government under their own schemes also give financial assistance to engineers and other technically qualified persons who want to set up their own Industries but are unable to do so for lack of financial resources of their own. 6. Financial Institutions provide finance to new industries. A. True. Reason: Credit assistance from financial institution on concessional term is provided to Industries located in backward districts. A subsidy of 15 percent of fixed Capital Investment

is given to new Industries & Substantial expansion of existing ones located on some selected backward district. 7. SISI Supplies Machinery on Hire Purchases. A. False. Reason: National Small Industries Corporation Supplies indigenous and imported machine to small entrepreneurs on hire purchase. State Small Industries Corporation also supply machines on hire purchase. 8. SBI provides only long-term loan to SSI. A. False. Reason: State Bank of India provides short term and medium term loans to small-scale industry against pledge of raw-material and processed goods either on lock and key basis or a factory type accommodation. 5) State giving reasons whether the following statements are True or False 1. Working capital is required to procure machinery. A. False. Reason: Working capital is necessary to meet the current needs of the business. It is used for the purchase of current assets, raw material, spare parts, payment of wages etc. Fixed capital is required to procure machinery. 2. Development capital is used for modernisation and diversification. A. True. Reason: Development capital is required for expansion, diversification and modernisation of business activities. It is normally used for purchasing new machinery, replacement of old assets, construction of new factory building etc. 3. Trading on equity is one of the important factors governing the capital structure. A. False. Reason: Trading on equity means taking advantage of other securities in giving a fair return to equity. Generally public utility establishment with a stable earning go for this policy. 4. Over-capitalised firm employ less capital. A. False. Reason: When a firm employs more capital than is actually required, the firm is said to be over-capitalised. Over-capitalisation results when the assets of the company are overpriced at the time of promotion. 5. Under capitalisation leads to exceptionally high profit. A. True. Reason: Company is said to be under-capitalised, when the rate of profit it is making on the total capital is exceptionally high in relation to the returns enjoyed. Under capitalisation results when the promoters purchase the properties which later on appreciate in value. 6. In order to retain control more preference shares and debentures are issued. A. False. Reason: Preference shareholders and debenture holders do not have voting rights, only equity shareholders have voting rights. Hence in order to retain control more equity shares should be issued. 7. According to the cost theory of capitalisation only the cost of fixed assets is considered. A. False. Reason: According to the cost theory of capitalisation the capital value of a company is arrived at by adding the cost of fixed assets the cost of establishing and promoting the company and the amount of working capital required by the firm.

8. Fixed capital is a long-term capital. A. True. Reason: Fixed capital is that amount of capital which is required to purchase fixed assets like land, building, plant and machinery etc. The capital invested in fixed assets is known as long term capital. 6) State giving reasons whether the following statement are True or False: 1. The purchase day book records all cash purchases. A. False. Reason: The purchase day book records the purchases of goods made on credit only. 2. In the sales day book all the credit sales are recorded. A. True. Reason: In this book a daily record is made of all the sales of good on credit only. 3. Petty cash book is a subsidiary cash book. A. True. Reason: Petty cash book is a subsidiary cash book used for the purpose of recording small incidental expenses such as postage, stationery and sundry expenses. 4. Ledger is a prime book of entry. A. False. Reason: Journal is the prime book of entry. A ledger contains the entries from the journal in an account format. 5. The stock register records only the quantity ordered and used. A. False. Reason: The stock register records the following information: a) Quantity ordered. b) Quantity received. c) Quantity used. d) Balance. e) Specification of material. f) Reorder of quantity. g) Unit value. 6. Register for raw material is maintained by the store-keeper. A. True. Reason: All the incoming and outgoing stores are recorded in this register. It is maintained by the storekeeper. When the goods are received in the organisation and approved by the purchase department, the storekeeper checks and acknowledges the receipt of the goods. 7. Wage registers records only the wages given. A. False. Reason: In this register, data regarding the number of employees and their wages are recorded. The wage cost of each section is computed separately 7) State giving reasons whether the following statement are True or False 1. The central government provides various benefits in terms of sales-tax, octroi duty, royalty etc. to SSI. A. False. Reason: The central government levies direct taxes and indirect taxes are levied by state government. As such the state government provides various benefits to SSI in the matter of sales-tax, water royalty, octroi duty electricity tariff etc. 2. SSI in backward areas are allotted factory sheds on easy terms only. A. True.

Reason: Certain specified facilities and incentives have been provided to backward areas. Additional incentives like capital subsidy, special import facilities, etc. 3. SSI is granted special concessions in stamp duty. A. True. Reason: On availing of loans from financial institutions small-scale units are required to mortgage their immovable properties with the government. The government of Maharashtra has granted concessions on stamp duty on mortgage deeds to be executed for the purpose. 4. SSI are not exempted from central excise duty. A. False. Reason: Small-scale units are exempted from paying any excise duty till their sale does not exceed Rs. 30 lacs. There are many other concessions in central excise for SSI. 5. The government encourages SSI in National and International Exhibition. A. True. Reason: In order to propagate and to get good prices to the products manufactured by SSI sector the government encourages for display of the products in the exhibitions held at National and International Level. The small-scale sector is given concessions in rent for space in exhibitions. 8) State giving reasons whether the following statement are True or False 1. Government provides little marketing support to SSI. A. False. Reason: The government makes bulk of its purchases from the small-scale unit. It has reserved 409 items for exclusive purchase from small-scale manufacturers. 2. The demand and supply are the two variables which influences the price in the market. A. True. Reason: Greater the demand, lesser the supply, the price is bound to increase. Here if the supply matches the demand, the prices may not increase. If the demand remains constant and the supply increases the prices will fall. 3. Marketing research is concerned with the study of market-share analysis. A. False. Reason: Marketing research is the systematic gathering, recording and analysing of data about problems relating to marketing of goods and services. 4. Marketing mix plays an important role to bring about a proper balance between the demand and the supply. A. True. Reason: Each element of marketing mix is inter-related. There are four variables of the marketing mix product, price, promotion and place. A change in one variable may necessitate a change in the other variables. Hence marketing mix plays an important role to bring about a proper balance between the demand and the supply. 5. SSI gets preferential treatment in the supply of raw material. A. True. Reason: Small-scale entrepreneurs are assisted in many ways in the execution of government order in the DGS&D programme. He gets preferential treatment from the State Directorate of Industries in the supply of raw material as well as necessary technical guidance. 6. In order to take part in the DGS&D programme registration is not compulsory. A. False.

Reason: Entrepreneur who intends to take part in the DGS&D programme has to enclose a certificate from NSIC or the Directorate of Industries of the State where the firm is located in support of the fact that the firm is a registered bonafied small-scale unit. 7. In demographic segmentation the market is sub-divided on the basis of area. A. False. Reason: In demographic segmentation the market is divided on demographic factors like age, sex, education, etc. and not on the basis of area. 8. Government has reserved certain items for exclusive purchase from SSI. A. True. Reason: The government has reserved 409 items for exclusive purchase from small-scale manufacturer. The DGS&D keeps a register of all the approved suppliers. 9) Sate giving reasons whether the following statement are True or False 1. SSI does not have potential of earning foreign exchange. A. False. Reason: There is a favourable climate for SSI exports in foreign market because of frequent wage hikes and pollution hazards in industrially developed nations. These nation tend to favour imports of SSI products. Hence SSI has potential of earning foreign exchange. 2. Trade fair authority of India provides assistance in export of SSI. A. True. Reason: Trade fair authority of India assist SSI in development of new products for expanding and diversifying Indian exports. They promote, organise and also participate in trade fair and exhibitions on behalf of SSI. 3. SSI is entitled for deemed export benefits. A. True. Reason: Certain supplies which are effective for import substitution are termed as deemed exports. They qualify grant of Import Replenishment License. 4. SSI is not exempted from excise duty. A. False. Reason: Finished goods of SSI are exempted from payment of excise duty when they are exported out of India. Exemption can be obtained either by way of rebate of duty or by export under bond. 5. SBI provides export marketing assistance to SSI. A. False. Reason: SBI provides post-shipment finance, supply machinery for manufacture of export quality goods and also give performance guarantee needed by the government authorities for issue of import licenses for importing raw material. 6. SSI carries out trading activities only within India. A. False. Reason: The small-scale sector in India produces a wide range of products from simple consumer goods to sophisticated products like hearing aids electronic components, tape recorders, etc. With lower level of labour cost, India enjoys an advantage in exporting traditional products. There is a favourable climate for SSI exports because frequent wage hikes and pollution hazards in industrialised country tend to favour imports from developing countries particularly import of SSI products. 10) State giving reasons whether the following statement are True or False 1. There are no government organisations to solve SSI problems. A. False.

Reason: The government has taken a number of measures for the development of SSI. It gives marketing assistance, technical assistance, credit and finance in order to promote SSI. 2. Banks provide credit and finance to SSI. A. True. Reason: There has been a positive change in the outlook and approach of our financial institutions towards small scale enterprises. Banks have now entered the field of extending credit facilities to the SSI units. 3. Mismanagement is a major cause of industrial sickness. A. True. Reason: Lack of professionalisation, absence of delegation of powers, poor inventory control, family disputes, faulty management structure, dishonest attitudes, diversion of funds, etc. are examples of mismanagement. 4. Banks do not rehabilitate securance. A. False. Reason: Norms for grants of reliefs and concessions which can be extended by banks to potentially viable sick SSI units are as under: a) Working Capital. b) Fund Interest Term Loan. c) Working Capital Term Loan. d) Term Loan. e) Contingency Loan Assistance. 5. Shortage of liquid fund is a warning signal of industrial sickness. A. True. Reason: The first signal of industrial sickness is the shortage of liquid funds to meet short term financial obligations of creditors and also meet statutory obligation. 6. Production planning and control is not required for small-scale industries. A. False. Reason: Small-scale industries face problems in quality production and cost control. There is high material wastage, high inventory cost, poor quality and so on. In order to overcome these problems production planning and control is the basic requirement. 7. Political environment plays problems for small-scale industries. A. True. Reason: Delay in implementation of the project on account of changes in the government policy and delay in disbursement of sanctioned loans creates problems for small-scale industries. 11) State giving reasons whether the following statement are True or False 1. Entrepreneurs do not require external motivation. A. False. Reason: There are internal as well as external factors for entrepreneur motivation. The most important factor of external motivation is assistance from the government and financial assistance from banks and financial institutions. 2. Entrepreneurs are agents of economic development. A. True. Reason: Economic development is a highly dynamic process characterised by continual and often changes. A developing economy needs entrepreneurs who are competent to perceive new opportunities and are willing to incur the necessary risks in exploiting them. Entrepreneurs are the architects of every conceivable material projects. 3. Entrepreneurs are born and not made. A. True.

Reason: A person can become professional manager by acquiring knowledge. Many great entrepreneurs are self-made, as they are not handicapped by their lack of formal education but they come out successfully due to their skills and intelligence. An example was Dhirubhai Ambani. 4. Entrepreneurial functions are not more than managerial functions. A. False. Reason: According to Schumpeter and entrepreneur is basically an innovator who introduces new combinations of means of production. Entrepreneurship is a creative activity and entrepreneur introduces something new in any branch of economic activity. The managerial function of an entrepreneur includes arranging finance, purchasing raw material, etc. he also assumes the role of personnel manager. 5. The term entrepreneurship is often used synonymously with entrepreneur. A. True. Reason: Both the terms are used synonymously. Though they are two sides of the same coin conceptually they are different. The term entrepreneur is a business leader and the function performed by him is entrepreneurship. 6. Entrepreneurial skills are very important for success of business. A. True. Reason: The skills which entrepreneur possesses include his ability to deal with new situations, organisation, social and economic forces as they arise from time to time. The skill to deal with a situation which suddenly arises must be essential characteristics of an entrepreneur. The small entrepreneur must have the skill to get positive response from bankers, administrators, infrastructure institutions, employee and clients. 7. Economic factors affect the growth of entrepreneurship. A. True. Reason: The government should provide necessary technical and managerial support as well as financial market support to the existing small and tiny enterprises specially the sick units and thereby encourage the prospective entrepreneur to enter into business.

(12) State giving reasons whether the following statements are True or False 1. The Directorate of Industries only issues NOC for starting industry only. A. False. Reason: The Directorate of Industries is principally responsible for the establishment and growth of SSI. It not only issues NOC for starting industry but also helps quality control, registration export promotion, etc. 2. MSFC provides seed capital assistance. A. True. Reason: The seed capital assistance is given mainly to the new/first generation entrepreneurs who possess necessary skill or practical experience but lack requisite funds to meet the gap in the debt-equity ratio of promoters contribution. 3. SIETI conducts only management training programmes. A. False. Reason: SIETI conduct various management training programmes along with motivation and planning for development and also covers the areas of listening and responding to personal and group contacts. 4. SISI conducts economic advisory services only. A. False. Reason: Along with economic advisory services SISI also conducts management consultancy services, economic advisory services and managerial services. 5. MIDC allots built-up sheds to SSI.

A. True. Reason: Built-up sheds are constructed in different industrial areas by MIDC with a view to enable the technocrats and small-scale industries to set up their units expeditiously. 6. Maharashtra State Finance Corporation provides financial assistance to small nursing homes. A. True. Reason: Financial assistance is provided to small nursing houses/polyclinics especially clinics which have facilities for diagnostic and treatment of indoor as well as outdoor patients. These clinics should be willing to provide medical service at concessional rates to patients from low income group. 7. Under the National Equity Fund type of assistance in the form of soft loan is provided to existing old units. A. False. Reason: New entrepreneurs are eligible for setting up projects in the tiny and small sector for manufacture, preservation or processing of goods and also existing sicks units undertaking rehabilitation if they are found to be potentially viable. 8. SDIs primary responsibility is the growth of SSI in the respective area. A. True. Reason: The District Industries officer looks after the development of SSI in his area. It provides raw material, training and also develops industrial estates. 9. NSIC provides marketing on hire purchase to SSI. A. True. Reason: The NSIC undertakes hire purchase of machinery for SSI, pilot scheme for marketing SSI products, etc. It also has industrial estates and assists SSI for production on commercial basis. The corporation participates in various trade fairs and exhibition and production cum training programme. 10. National Small Industries Corporation manages marketing through its mobile vans. A. True. Reason: The National small industries Corporation undertakes pilot schemes for marketing the products of small-scale industries. It also manages marketing through its mobile vans. 11. State directorate of industries provides training facilities. A. False. Reason: The State directorate of industries is principally responsible for establishment and growth of small-scale industries. The small-scale entrepreneur can approach the directorate for no objection certificate, registration, guidance and clearance of schemes and are not for training. Training is provided by small industries extension training Institute.

(13) State giving reasons whether the following statement are True or False 1. SSI does not have potential of earning foreign exchange. A. False. Reason: There is a favourable climate for SSI exports in foreign market because of frequent wage hikes and pollution hazards in industrially developed nations. These nation tend to favour imports of SSI products. Hence SSI has potential of earning foreign exchange. 2. Trade fair authority of India provides assistance in export of SSI. A. True.

Reason: Trade fair authority of India assist SSI in development of new products for expanding and diversifying Indian exports. They promote, organise and also participate in trade fair and exhibitions on behalf of SSI. 3. SSI is entitled for deemed export benefits. A. True. Reason: Certain supplies which are effective for import substitution are termed as deemed exports. They qualify grant of Import Replenishment License. 4. SSI is not exempted from excise duty. A. False. Reason: Finished goods of SSI are exempted from payment of excise duty when they are exported out of India. Exemption can be obtained either by way of rebate of duty or by export under bond. 5. SBI provides export marketing assistance to SSI. A. False. Reason: SBI provides post-shipment finance, supply machinery for manufacture of export quality goods and also give performance guarantee needed by the government authorities for issue of import licenses for importing raw material. 6. SSI carries out trading activities only within India. A. False. Reason: The small-scale sector in India produces a wide range of products from simple consumer goods to sophisticated products like hearing aids electronic components, tape recorders, etc. With lower level of labour cost, India enjoys an advantage in exporting traditional products. There is a favourable climate for SSI exports because frequent wage hikes and pollution hazards in industrialised country tend to favour imports from developing countries particularly import of SSI products.

(14) State giving reasons whether the following statement are True or False 1. There are no government organisations to solve SSI problems. A. False. Reason: The government has taken a number of measures for the development of SSI. It gives marketing assistance, technical assistance, credit and finance in order to promote SSI. 2. Banks provide credit and finance to SSI. A. True. Reason: There has been a positive change in the outlook and approach of our financial institutions towards small scale enterprises. Banks have now entered the field of extending credit facilities to the SSI units.

3. Mismanagement is a major cause of industrial sickness. A. True. Reason: Lack of professionalisation, absence of delegation of powers, poor inventory control, family disputes, faulty management structure, dishonest attitudes, diversion of funds, etc. are examples of mismanagement. 4. Banks do not rehabilitate securance. A. False. Reason: Norms for grants of reliefs and concessions which can be extended by banks to potentially viable sick SSI units are as under: a) Working Capital. b) Fund Interest Term Loan.

c) Working Capital Term Loan. d) Term Loan. e) Contingency Loan Assistance. 5. Shortage of liquid fund is a warning signal of industrial sickness. (March 06) A. True. Reason: The first signal of industrial sickness is the shortage of liquid funds to meet short term financial obligations of creditors and also meet statutory obligation. 6. Production planning and control is not required for small-scale industries. A. False. Reason: Small-scale industries face problems in quality production and cost control. There is high material wastage, high inventory cost, poor quality and so on. In order to overcome these problems production planning and control is the basic requirement. 7. Political environment plays problems for small-scale industries. A. True. Reason: Delay in implementation of the project on account of changes in the government policy and delay in disbursement of sanctioned loans creates problems for small-scale industries.

(15) State giving reasons whether the following statement are True or False 8. Entrepreneurs do not require external motivation. A. False. Reason: There are internal as well as external factors for entrepreneur motivation. The most important factor of external motivation is assistance from the government and financial assistance from banks and financial institutions. 9. Entrepreneurs are agents of economic development. A. True. Reason: Economic development is a highly dynamic process characterised by continual and often changes. A developing economy, needs entrepreneurs who are competent to perceive new opportunities and are willing to incur the necessary risks in exploiting them. Entrepreneurs are the architects of every conceivable material projects. 10. Entrepreneurs are born and not made. A. True. Reason: A person can become professional manager by acquiring knowledge. Many great entrepreneurs are self-made, as they are not handicapped by their lack of formal education but they come out successfully due to their skills and intelligence. An example was Dhirubhai Ambani. 11. Entrepreneurial functions are not more than managerial functions. A. False. Reason: According to Schumpeter and entrepreneur is basically an innovator who introduces new combinations of means of production. Entrepreneurship is a creative activity and entrepreneur introduces something new in any branch of economic activity. The managerial function of an entrepreneur includes arranging finance, purchasing raw material, etc. he also assumes the role of personnel manager. 12. The term entrepreneurship is often used synonymously with entrepreneur. A. True. Reason: Both the terms are used synonymously. Though they are two sides of the same coin conceptually they are different. The term entrepreneur is a business leader and the function performed by him is entrepreneurship. 13. Entrepreneurial skills are very important for success of business. A. True. Reason: The skills which entrepreneur possesses include his ability to deal with new situations, organisation, social and economic forces as they arise from time to time. The

skill to deal with a situation which suddenly arises must be essential characteristics of an entrepreneur. The small entrepreneur must have the skill to get positive response from bankers, administrators, infrastructure institutions, employee and clients. 14. Economic factors affect the growth of entrepreneurship. A. True. Reason: The government should provide necessary technical and managerial support as well as financial market support to the existing small and tiny enterprises specially the sick units and thereby encourage the prospective entrepreneur to enter into business.

(16) State giving reasons whether the following statement are True or False 1. Religion exercises a strong influence on attitudes towards material gains. A. True. Reason: The Protestant ethics among the Christians foster the right attitude for entrepreneurship. More than the form of religion practised the type of interpretation given to different religious values determine entrepreneurial success. 2. Before the advent of industrial revolution India was considered as undeveloped nations. A. False. Reason: Before the advent of the industrial revolution India was considered as a developed nation. India had trade relations with many nations. The Portuguese, the Dutch and the Britishers increased trade relations with India. During the ancient period India was called as a golden bird. 3. While going through the development the entrepreneur has to keep a watch on finance. A. False. Reason: While going through the development the entrepreneur has to keep an eye on the environment. The social, political and economic environment is ever changing and the entrepreneur has to be alert. He has to be ready to adjust with the changing environment. 4. The success of a business largely depends on proper planning. A. True. Reason: The future is uncertain. Hence planning is the need of the hour. Sufficient reserves are to be created to meet the future uncertainties. Hence the success of a business largely depends on proper planning. 5. The modern concept of entrepreneurship has evolved through ages. A. True. Reason: In the 16th century entrepreneurship was related to the activities of those engaged in military expeditions. In the 17th century it was extended to cover civil engineering activities. In the 18th century, the word was used to refer to economic activities and risk to bearing was identified. Hence the modern concept of entrepreneurship has evolved through ages. 6. Self-evaluation is essential for entrepreneurship development. A. True. Reason: It is observed that many of the enterprising efforts, particularly the small and tiny ones, fail because of the lack of necessary entrepreneurial and/or managerial competencies on the part of the entrepreneur. Not only have that, in todays extensively competitive business environment traditional entrepreneur and managers needed to do a proper selfevaluation for growth.

(17) State giving reasons whether the following statement are True or False 1. Women entrepreneurs face more challenges. A. True. Reason: In India the involvement of a women in the family leaves little time and energy for business. The success of married women depends upon the supporting husband and family. There arises a role conflict in many women entrepreneur. Such conflict prevents them from taking prompt decisions in business. 2. Fabian entrepreneurs are very cautious and skeptical while practising any change. A. True. Reason: Fabian entrepreneurs have neither the will to introduce new changes nor the desire to adopt new methods innovated by the most enterprising entrepreneurs. Such entrepreneurs are shy and lazy. 3. First generation entrepreneurs are not innovators. A. False. Reason: First generation entrepreneur is essentially an innovator who combines different technologies to produce a marketable product or service. 4. Entrepreneurs like to work for other people. A. False. Reason: Most of the entrepreneurs start off on their own because they do not like to work for other people. They like to be their own masters and want to be responsible for their own decisions. 5. Entrepreneurship development is greatly hindered in less developed nations. A. True. Reason: The hindrance is due to several obstacles. In the developed nations the environment is most ideal for entrepreneurship. Unfortunately in most of the less developed nations the role of entrepreneurship in the progress of the country has not been fully realised. 6. Innovation means producing a new product. A. True. Reason: Innovation is defined as the process of doing new things. It is the active translation of a creative idea into a new product, service or technology. 7. Trading entrepreneur undertakes only trading activities and is not concerned with the manufacturing work. A. False. Reason: Trading entrepreneur undertakes buying and selling as well as manufacturing work if need be.

(18) State giving reasons whether the following statement are True or False 1. In cities new opportunities are rising. A. True. Reason: In cities new opportunities are rising for an example running a creche, coaching classes, inns, reaching students to their schools, in vehicles, car cleaning, circulation library, etc. is on an increase. 2. Capital goods are directly consumed by the consumer. A. False. Reason: Capital goods are those which are in the form of plant and machinery, equipment, furniture, etc. which constitute the fixed assets of the company. 3. The entrepreneur has to prepare a list of investment opportunities. A. True. Reason: The project ideas are analysed by taking into account government regulations for finalising a set of feasible investment opportunities. Therefore the entrepreneur has to prepare a list of investment opportunities. 4. Project identification is the first step of a new venture. A. True.

Reason: Project identification is concerned with collection, compilation and analysis of economic data for the purpose of locating possible opportunities for investment and development of such opportunities. 5. In service sector quality goods are supplied: A. False. Reason: Service sector is a type of business where no goods are produced but only services are rendered to the customer, e.g. transport, communication, tourism, etc

(19) State giving reasons whether the following statement are True or False 1. Modern technology developed by industrialised nations should be used. A. False. Reason: Modern technology developed in the highly developed industrialised countries may not be suitable for adoption in the developing countries as the condition may differ from country to country. 2. Feasibility analysis is the process of evaluation. A. True. Reason: Feasibility analysis is the process of evaluating the future of a project idea within the limitation and constraints imposed on the project by the environment. 3. Techno-economic analysis is concerned with productivity. A. False. Reason: Techno-economic analysis is concerned with estimation of project demand potential and the selection of the optimal technology suitable for achieving the project objectives. 4. Project evaluation is necessary to consider the total impact. A. True. Reason: Project evaluation is necessary to consider the total impact of the project on the economy of the nation apart from looking into the financial viability of a project. 5. Operating cost are essentially those costs incurred before production. A. False. Reason: Operating costs are essentially those costs incurred after the commencement of commercial production. 6. Market analysis is very important for small-scale entrepreneurs. A. True. Reason: The success and the profit of a project largely depend on the market available for the present and in the future. Due to rival producers, substitutes available and market competition the study is extremely complicated. During the economic feasibility study market analysis or forecast must be conducted with reasonable accuracy.

(20) State giving reasons whether the following statement are True or False 1. For a project adhering to time frame is not compulsory. A. False. Reason: A project is a work plan to achieve certain objectives within a specific period. It may be defined as definite and complete scheme or plan of action for achieving definite objective or target. It is a scheme or plan for investing money and other resources for staring a new business enterprise or for expanding the existing one. 2. Project planning is not important for small-scale entrepreneurs.

A. False. Reason: Project planning is the result of the detailed investigation of various aspects such as technical, managerial, marketing and financial of the proposed business activity. It is essential in case of new projects as it gives the basic data required for the execution of the project. 3. Feasibility study is a lengthy process. A. True. Reason: The broad areas of feasibility study are technical feasibility, economic feasibility, commercial feasibility and managerial feasibility. Banks and financial institutions undertake such study in an impartial manner for their safety. 4. Production planning and control is not required for SSI. A. False. Reason: Production planning involves deciding advance, what to produce, when to produce, how to produce and so on. While production planning is before production, production control goes on during production and involves initiating production comparing it with standard, finding out the variations in any and taking necessary corrective measures. Therefore, production planning and control is required for SSI. 5. Location of a business unit is not very important. A. False. Reason: The location of a business unit can decide the earning capacity and cost control. It is the location which can decide whether the business will be stable or otherwise. 6. The allocation of resources at the unit level depends on the existing environment. A. True. Reason: Because it decides the framework under which the business activity is possible. Usually large firm are in a better position to allocate the resources for any project as compared to small-size firms. 7. Selection of location for small-scale industries depends on availability of infrastructural facilities. A. True. Reason: The entrepreneur while selecting the location usually considers the following aspects: a) The availability of raw material. b) The proximity to the market. c) Transport and communication facilities. d) Availability of power fuel and water and other infrastructural facilities.

(21) State giving reasons whether the following statement are True or False 1. SIDO conducts training programme for entrepreneurs. A. True. Reason: The SIDO conducts training programmes in shop floor practices such as toolroom, foundry, forging electrical shops, etc. Programmes are also conducted in trades such as footwear making, lens grinding, etc. 2. NIESBUD was established to conduct training for SSI entrepreneurs. A. False. Reason: The National Institute for Entrepreneurship and Small Business Development was established by Government of India as an apex body for co-ordinating and overseeing the activities of the various institution and agencies engaged in entrepreneurship developments. 3. SISI offers some special courses.

A. True. Reason: SISI conducts specialised courses like quality control, maintenance, organisation and methods, sales promotion, human relation and production planning, etc. 4. New special categories of entrepreneurs are emerging. A. True. Reason: Now new special categories of entrepreneurs viz. women, educated youth, retired army personnel are emerging. 5. Unemployment is moralising. A. False. Reason: Unemployment is demoralising. It is a major source of waste in the present economic system. The state of being jobless is a big problem that affects both developed as well as developing countries. 6. Training is not required to promote entrepreneurs. A. False. Reason: Training is required to: a) Broaden the vision of entrepreneurs by providing them suitable opportunities for an interchange of experience within and outside an industry. b) Expose the entrepreneur to the latest development which directly or indirectly affect them. c) Build necessary skills of new entrepreneurs and workers. d) Impart customer education. e) Impart basic knowledge about the industry product and production methods.

(22) State giving reasons whether the following statement are True or False 1. MITCON issues licenses for new units. A. False. Reason: MITCON has accepted the following principal roles: a) Education and information services to entrepreneurs. b) Nursing of new and weak industries. c) Services for industrialisation growth. d) New technological research and production. 2. Permission of MPCB is necessary for disposal of sewage water. A. True. Reason: As per Water Pollution Prevention and Control Act, 1974 permission of Maharashtra Pollution Control Board is necessary. Even it is necessary for entrepreneurs to obtain No Objection Certificate (NOC) from MPCB before starting actual production. 3. MAVIM provides financial assistance to young women entrepreneurs. A. False. Reason: The main object of Mahila Arthik Vikas Mahamandal is the economic and personality development of needy women in Maharashtra. This corporation gives necessary training and employment opportunities to enable the women to earn and become selfreliant. 4. GIC conducts Career Insurance Agent Training Programme. A. False. Reason: This programme is implemented at the instance of MAVIM along with LIC. This course is of 3 months duration and slip end is paid during the training period. 5. MAVIM provides direct employment. A. False. Reason: Any job to be given is first published in the newspapers by MAVIM. There is a selection committee for selection of candidates.