The correct option is (c) 1 and 3 only
Explanation
Industries are classified into various categories based on criteria such as raw materials, ownership, and size. Classification based on size is determined by the amount of capital invested, the number of employees, and the volume of production.
Statement-wise Analysis:
- Statement 1 is Correct: In the context of industrial classification, "size" is a composite measure. It refers to the amount of capital invested, the number of people employed, and the volume of production. These indicators determine whether an industry is classified as cottage, small-scale, or large-scale.
- Statement 2 is Incorrect: Cottage industries (or household industries) are the smallest manufacturing units. They are characterized by artisans working with family members using locally available raw materials and simple tools. They do not use heavy machinery, nor are they classified as large-scale industries.
- Statement 3 is Correct: Small-scale industries operate on a smaller scale regarding production volume and employment compared to large-scale industries. Consequently, they utilize less capital and relatively inferior or less complex technology than large-scale industries, which are capital-intensive and use advanced technology.
Key Takeaway:
Industrial size is defined by capital investment, labor force, and production volume. Cottage industries are household-based and labor-intensive, whereas large-scale industries are capital-intensive and technology-driven.