The correct option is 2 only
Explanation
Industries are classified based on criteria such as capital investment, the number of employees, and the volume of production. This classification distinguishes between Cottage (Household), Small-scale, and Large-scale industries based on the intensity and source of factors of production.
Statement 1 is Incorrect:
Cottage or household industries are the smallest manufacturing units. In this setup, artisans use local raw materials and simple tools to produce everyday goods within their homes. A defining characteristic is that the work is carried out by the artisan assisted by family members. Capital investment is negligible, and hired labor is rarely utilized.
Statement 2 is Correct:
Large-scale industries are characterized by huge capital investment, advanced technology, and mass production. Unlike cottage industries, they do not rely primarily on manual labor; instead, they utilize mechanization, assembly lines, and specialized, skilled labor. Low capital investment is a feature of cottage or small-scale industries, not large-scale manufacturing.
Key Takeaway:
Cottage industries rely on family labor and minimal capital, whereas large-scale industries are capital-intensive and rely on mechanization and a large, hired workforce.