Here we detail about the differences between cottage and small scale industries.
(i) The location of cottage industries is restricted in villages whereas the small scale industries are mostly located in urban and semi-urban areas.
(ii) 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 industries are mostly run by hired labourers.
(iii) Cottage industries are producing goods for meeting local requirements whereas small industries are producing goods to meet the demand for the people living in a wider area.
(iv) 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 crore) and are working with machines run by power.
(v) Cottage industries are mostly located in the house of the artisans itself whereas the small scale industrial units are located in the industrial and business complex.
(vi) Cottage industries are being operated both as part time and full time occupation but the small scale industries are mostly operated as full time occupation.
(vii) Cottage industries are mostly operated in unorganized manner whereas the small industries are maintained to some extent in an organized manner.
(viii) Cottage industries are engaged in the production of traditional goods like earthen vessels, khadi goods, cotton and coir mattress, handmade shoes etc. whereas the small industries are engaged in sophisticated goods like electric fan and bulbs, radio, tape-recorders, television, mixer-cum-grinder etc.
However, the distinction between small industries and cottage industries are not rigid and definite made on the basis of well accepted universal principle. Such distinctions are usually made on the basis of certain observed characteristics and principles.
