The differences between a cottage industry and a smale- scale industry are:
The location of cottage industries is restricted in villages whereas the small-scale industries are mostly located in urban and semi- urban areas.
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-scale industries are mostly run by hired labourers.
Cottage industries are producing goods for meeting local requirements whereas small-scale industries are producing goods to meet the demand for the people living in a wider area.
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.
