Question

A small scale industrial undertaking is defined as one in which ______________________.

• A. the investment in fixed assets of plant and machinery does not exceed rupees one crore
• B. the investment in working capital does not exceed rupees one crore
• C. the investment in fixed assets of plant and machinery does not exceed rupees ten crores
• D. total investment in fixed assets and working capital does not exceed rupees two crores

Answer 1

The correct option is A the investment in fixed assets of plant and machinery does not exceed rupees one crore

• The definition used by the Government of India to describe small industries is based on the investment in plant and machinery. This measure seeks to keep in view the socio-economic environment in India where capital is scarce and labor is abundant.
  
• A small scale industrial undertaking is defined as one in which the investment in fixed assets of plant and machinery does not exceed rupees one crore. However, to cater to the needs of small industries whose thrust is on export promotion and modernization, investment ceiling in plant and machinery is rupees five crores.