The correct option is 1 and 3 only.
Explanation
The Karve Committee, also known as the Village and Small-Scale Industries Committee, was constituted in 1955. Its primary objective was to determine the role of small-scale industries in the Second Five Year Plan, focusing on rural development and employment generation.
Statement-wise Analysis:
- Statement 1 is Correct. The committee recommended that small-scale industries be protected from competition with large-scale industries. To achieve this, it proposed the reservation of certain products to be manufactured exclusively by the small-scale sector.
- Statement 2 is Incorrect. The committee did not reject the role of small-scale industries in rural development. On the contrary, it explicitly noted the possibility of using small-scale industries for promoting rural development. It emphasized that small-scale industries are more labour-intensive (using more labour than capital), making them ideal for generating employment and distributing resources more equitably in rural areas.
- Statement 3 is Correct. The committee defined small-scale industries based on the maximum investment allowed on the assets of a unit. In 1950, a small-scale industrial unit was defined as one with a maximum investment of Rupees five lakh. This definition has evolved over time but originated from investment-based criteria.
Key Takeaway:
The Karve Committee (1955) laid the foundation for the protectionist policy towards small-scale industries in India, utilizing product reservation and investment limits to foster rural employment and equity.