There are numerous arguments in favour of the small-scale industries which justify the rationale of small-scale industry development.

The Industrial Policy Resolution 1956 has put forward four arguments in favour of small-scale industries which emphasise the very rationale of small-scale industry in the Indian economy. The arguments are: 1. Employment Argument: Small-scale industries have a great potential to create immediate large-scale employment opportunities which is essential for solving widespread unemployment problems of underdeveloped nations. Small-scale industries are labour intensive i.e. they use more of labour per unit of output than investment. As India is a capital scarce and labour abundant country and the major problem of the economy refers to unemployment, it could have been addressed by small-scale units which sometimes even provide 15 to 20 times greater employment than corresponding large industries with any given investment. Because of this huge employment potential small industry are preferred over large ones. 2. Equality Argument: Another argument supporting the rationale of small-scale units refers to equality argument for even distribution of income and wealth. Small-scale units, because of its ownership pattern which is widespread and labour intensive in character provide millions of employment to the unemployed more particularly the rural poor who are in search of employment to eke-out their livelihood. 3. Decentralisation Argument: Decentralisation argument also supports the rational of small-scale units because it aims at regional dispersal of industries in the country. Decentralisation of industries help tap local resources like raw materials, idle savings local talents etc. and make provision for self-employment and capital formation. This helps in increase in income of the people which ultimately improves the standard of living of the people. 4. Latent Resource Argument: The latent resource argument for tapping hoarded and unutilized wealth strongly supports the case for small industries. Small enterprises provide an environment in which the latent talents of entrepreneurs find self-expression. Besides the above, small industries are also supporting large-scale industries overcoming territorial mobility, reducing pressure on land relieving congestion in urban areas, and sustaining green revolution by developing agrobased industries in the country. Objective of Small Scale Industries sector can stimulate economic activity and is entrusted with the responsibility of realizing the following objectives: To create more employment opportunities with less investment. To remove economic backwardness of rural and less developed regions of the economy. To reduce regional imbalance. To mobilize and ensure optimum utilization of unexploited resources of the country. To improve standard of living of people. To ensure equitable distribution of income and wealth. To solve unemployment problem. To attain self reliance. To adopt latest technology aimed at producing better quality products at lower costs. NETWORK ANALYSIS What is a network? A network is a set of symbols connected with each other with a sequential relationship with each step making the completion of a project/event. As discussed earlier, a business plan or project involves various activities to be undertaken to convert it into an enterprise. Delays in the completion of activities cause, among other things, cost overruns.Hence, there is a need for deciding the sequential order' of all activities of the project so as to accomplish the project economically in the minimum available time with the limited resources. This is also called I I p r o j e c t scheduling". A number of network techniques have been developed for project scheduling. Some of them are:1: Programme Evaluation and Review Technique (PERT).2. Critical Path Method (CPM).3. Graphical Evaluation and Review Technique (GERT).4. Workshop Analysis Scheduling Programme (WASP).5. Line of Balance (LOB).

Programme Evaluation and Review Technique (PERT) PERT was first developed as a Management Aid for completing Polaris Ballistic Missile Project in USA in October 1958. It worked well in expediting the completion of the project from 7 years to 5 years. Since then, PERT has become very popular technique used for project planning a n d c o n t r o l . In n u t s h e l l , i t s c h e d u l e s t h e s e q u e n c e o f a c t i v i t i e s t o b e completed in order to accomplish the project within a short period of time. It helps reduce both the time and cost of the project. Steps Involved in PERT T h e f o l l o w i n g s t e p s a r e i n v o l v e d i n P E R T technique: 1. The activities involved in the project are drawn up in a sequential r e l a t i o n s h i p t o s h o w what activity follows what.' 2. The time required for completing each activity of the project is estimated and noted on network. 3. The critical activities of the project are determined. 4. The variability of the project duration and probability of the project completion in a given time period are calculated. Advantages of PERT: PERT technique bears the following advantages:1. It determines the expected time required for completing activity.2. It helps complete the project within a given period of time.3. It helps management handle uncertainties involved in the project and thus, reduce the 'risk element in the project.4. It enables management to make optimum allocation of limited resources. 5. It presses for the right action, at the right point and at the right time in the organization. Limitations of PERT: PERT suffers from the following limitations:1. PERT network is mainly based on time estimates required for each activity. On account of wrong time estimates, the network is bound to become highly unrealistic.2. This technique also does not consider the resources required at different stages of the project.3. For effective control of a project by using PERT technique requires frequent updating and revising the PERT calculations. But, this proves quite a costly affair for the organization. Critical Path Method (CPM) T h e C r i t i c a l P a t h M e t h o d ( C P M ) w a s f i r s t d e v e l o p e d i n U S A b y t h e E.I.Dupont Nemours & Co. in 1956 for doing periodic overhauling and maintenance of a chemical plant. It resulted in reducing the shut down period from 130 hours to 90 hours and saving the company $ 1 million. The CPM differentiates between planning and scheduling of the project. While p l a n n i n g r e f e r s t o d e t e r m i n a t i o n o f a c t i v i t i e s t o b e a c c o m p l i s h e d , scheduling refers to the introduction of time schedule for each activity of the project. The duration of different activities in CPM is deterministic. There is a precise known time that each activity in the project will take. Advantages of CPM: The important advantages of CPM technique are 1. It helps in ascertaining the time schedule of activities having sequential relationship. 2. It makes control easier for the management. 3 . I t i d e n t i f i e s t h e m o s t c r i t i c a l e l e m e n t s i n t h e p r o j e c t . T h u s , t h e management is kept alert and prepared to pay due attention to the critical activities of the project. 4. It makes better and detailed planning possible. Limitations of CPM: The main limitations of the CPM are:1. CPM operates on the assumption that there is a precise known time that each activity in the project will take. But, it may not be true in real practice.2. CPM time estimates are not based on statistical analysis.3.It cannot be used, as a controlling device for the simple reason that any change introduced will change the entire structure of network. In other words, CPM cannot be used as a dynamic controlling device.

In projects that allow for a longer period of time for completion and which are difficult to estimate like in research, PERT is suitable; while in conventional projects with predictable activities and tasks, CPM is suitable. Summary: 1.The Program Evaluation and Review Technique (PERT) is a project management technique or tool which is suitable for projects that have unpredictable activities while the Critical Path Method (CPM) is a project management tool which is suitable for projects that have three estimates for the predictable time that it can be activities. completed. tool. 2.CPM uses a single estimate for the time that a project can be completed while PERT uses 3.CPM is a deterministic project management tool while PERT is a probabilistic project management 4.CPM allows project management planners to determine which aspect of the project to sacrifice when a trade-off is needed in order to complete the project while PERT does not.

A. PERT is measured in days whereas CPM uses weeks or months. B. PERT addresses only time whereas CPM also includes cost and resource availability. C. PERT requires three time estimates whereas CPM requires one time estimate. D. PERT is used for construction projects whereas CPM is used for R & D. E. PERT requires computer solutions whereas CPM is a manual technique.