In 1950, an industrial unit had invested rupees eight lakh in its assets. Going by the definition of a small-scale industrial unit in that year, which of the following is correct?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → It was not a small-scale unit, as the limit in 1950 was rupees five lakh.
A small-scale industry is defined by the maximum investment allowed on the assets of a unit. In 1950 this limit was rupees five lakh. Rupees eight lakh is above it.
Option (1) It was a small-scale unit, as the limit in 1950 was rupees ten lakh. — Incorrect. The 1950 limit was five lakh, not ten lakh.
Option (2) It was a small-scale unit, as size was judged only by the number of workers. — Incorrect. The definition uses investment in assets, not the number of workers.
Option (3) It was not a small-scale unit, as the limit in 1950 was rupees one lakh. — Incorrect. The limit was five lakh, not one lakh.
Option (4) It was not a small-scale unit, as the limit in 1950 was rupees five lakh. — Correct. Eight lakh is more than the limit of five lakh.
NCERT (2026-27): “2.4 Industry and Trade … A ‘small-scale industry’ is defined with reference to the maximum investment allowed on the assets of a unit. This limit has changed over a period of time. In 1950 a small-scale industrial unit was one which invested a maximum of rupees five lakh; at present the maximum investment allowed is rupees one crore. It is believed that small-scale industries are more ‘labour intensive’ i.e., they use more labour than the large-scale industries and, therefore, generate more employment. …” |