Entrepreneurship Development in India PDF

**4 UNIT 9 SMALL BUSINESS NOTES ON NEW TOPICS INCLUDED IN THE REVISED SYLLABUS**       [**Entrepreneurship Development**: ] [N**EED FOR ENTREPRENEUSHIP DEVELOPMEN...

**4 UNIT 9 SMALL BUSINESS NOTES ON NEW TOPICS INCLUDED IN THE REVISED SYLLABUS**       [**Entrepreneurship Development**: ] [N**EED FOR ENTREPRENEUSHIP DEVELOPMENT**] a. It is an **important instrument for employment generation** in the country through the establishment of new and small enterprises. b. It **promotes balanced economic development** since a small business can be started with low investment and can be easily carried out in rural and semi-urban areas. c. It **encourages innovations in enterprises** as they enjoy greater flexibility as compared to a large - scale enterprise and foster growth of small firms in the country. d. It has enabled the Indian industry to **compete in the international market** due to the enhanced competence of small business in the country. e. It offers **innumerable social benefits** like ensuring optimum utilization of resources, raising the standard of living of people by providing better quality products at reasonable prices and so on. **[PROCESS OF ENTREPRENEURSHIP DEVELOPMENT ]** a. **Self- discovery:** under this step, entrepreneur assesses what are his strengths and weakness, what all he enjoys doing and his work experience. b. **Identifying opportunities:** Under this step, he tries to find out the need, want and problems so that he can get an opportunity to overcome the problems and fulfil the need. c. **Generating and evaluating ideas:** through various measures such as discussion, brain storming, creativity and his own experiences, he tries to develop new ideas to overcome problems and meet the expectations of customers. d. **Planning:** Under this step, entrepreneur conduct research, makes business plan and strategies. e. **Raising start-up capital**: by using business plan entrepreneur tries to attract venture capitalist and partner. f. **Start-up:** Under this step, the entrepreneur launches his enterprise and tries to develop more customers. He also males changes as per changes in the environment. **[WAYS TO FUND STARTUP:]** a. **Bootstrapping**: The bootstrapping is the method of startup fund under which the entrepreneur invests in business his personal savings themselves. He can request his friend and relatives also for funds. It is the easiest method of startup fund. b. **Venture capital** : are professionally managed funds who invest in companies that have huge potential. They usually invest in a business against equity and exit when there is an IPO or an acquisition. c. **An angel investor**s: are individuals with surplus cash and a keen interest to invest in upcoming startsups. Angel investor have helped to startup many prominent companies, including Google, Yahoo and Alibaba. d. **Crowdfunding:** is one of the newer ways of funding a startup that has been gaining lot of popularity lately. It's like taking a loan, pre-order, contribution or investments from more than one person at the same time. This is how crowding works- An entrepreneur will put up a detailed description of his business on a crowdfunding platform. He will mention the goals of his business, plans for making a profit, how much funding he needs and for what reason, etc and then investors can read about his business and give money if they like the idea. Those giving money will make online pledges with the promise of pre-buying the product or giving a donation. Anyone can contribute towards helping a business that they really believe in. e. **Banks loans:** Normally, banks are the first place that entrepreneurs go when thinking about funding. Almost every bank in India offers finance through various programs. For instance, leading Indian Banks---SBI, HDFC, ICICI and Axis banks have more than 7-8 different options to offer collateral free business loans. f. **Government programs:** The government of India has launched 10,000 crore start-up fund in the union budget to improve startup ecosystem in India, further the government has also launched various schemes such as ( i ) **Central government schemes:**\ \* **Bank of ideas and innovations programme**\-\-- in order to boost innovative product companies. - **Pradhan Mantri Micro development and Refinance Agency Limited ( MUDRZ)---**to extent benefits to 10 lakh small and medium enterprises. - **SIDBI:** Small industries development banks of India also offer business loans to MSME sector. - Maharashtra centre for entrepreneurship development - Rajastan startup Fest - Kerela state self entrepreneurship development mission **[Role of small business in Rural India:]** 1. [**Employment:**] Small business industries are labour intensive so they provide additional employment to men and women. Next to agriculture, small business constitutes the most popular occupation of people of India. They also provide employment to agriculturists who remain idle during a part of year. 2. [**Improves economic conditions:**] By providing employment opportunities, the small- scale industries provide more income to people living in rural areas, which improves economic conditions in villages. 3. **[Promotion of Artistic and Creative sense:]** Small business set up in rural area provides scope for the promotion of artistic achievement and creativity that has been suppressed in rural areas. 4. **[Rural Development:]** Small- scale industry set up in rural areas leads to their development which may result in rural reconstruction, sustained growth and removal of regional disparity. 5. **[Mobilisation of Local resources:]** Small- scale industries facilitate mobilisation and utilisation of local resources which might otherwise remain unutilised. This helps in tapping resources like entrepreneurship skill and small savings specially in rural areas. **[Government schemes and agencies for small scale industries:]** A. **INSTITUTIONAL SUPPORT** ( a ) **[National Small Industries Corporation (NSIC):]** This was set up in1955 with a view to promote, aid and foster the growth of small business units in the country. This focuses on the commercial aspects of these functions. - Supply indigenous and imported machines on easy hire-purchase terms. Procure, supply and distribute indigenous and imported raw materials. Export the products of small business units and develop export-worthiness. Mentoring and advisory services. Serve as technology business incubators. Creating awareness on technological upgradation. Developing software technology parks and technology transfer centres. A new scheme of 'performance and credit rating' of small businesses is implemented through National Small Industries Corporation (NSIC) with the twin objectives of i. sensitising the small industries about the need for credit rating and ( b ) **[The District Industries Centers (DICs):]** The District Industries Centre's Programme was launched on May 1, 1978, with a view to providing an integrated administrative framework at the district level, which would look at the problems of industrialisation in the district, in a composite manner. In other words District Industries Centres is the institution at the district level which provides all the services and support facilities to the entrepreneurs for setting up small and village industries. Identification of suitable schemes, preparation of feasibility reports, arranging for credit, machinery and equipment, provision of raw materials and other extension services are the main activities undertaken by these centers. Broadly DICs are trying to bring change in the attitude of the rural entrepreneurs and all other connected with economic development in the rural areas. Even within the narrow spectrum, an attempt is being made to look at some of the neglected factors such as the rural artisan, the skilled craftsman and the handloom operator and to tune up these activities with the general process of rural development being taken up through other national programmes. The DIC is thus emerging as the focal point for economic and industrial growth at the district level B. [I**ncentives offered by government for industries in Rural area:**] Special emphasis on the industrial development of backward, tribal and hilly areas has been the concern of the Government of India expressed in all the Five Year Plans and industrial policy statements. Realising that backward areas development is a long-term process, several committees were appointed to identify the criteria for identifying backward areas and also to suggest schemes to take up the Herculean task of balanced regional development. The implementation of integrated rural development programme is one such attempt made by the government to develop backward areas. The rural industries project programme initiated by the Government of India was meant to develop small business units in select rural areas. Though the backward area development programmes varied from state to state, they cumulatively represented a significant package of incentives to attract industries in backward areas. **Some of the common incentives offered are discussed as below:** **Land:** Every state offers developed plots for setting up of industries. The terms and conditions may vary. Some states don't charge rent in the initial years, while some allow payment in instalments. **Power:** Power is supplied at a concessional rate of 50 per cent, while some states exempt such units from payment in the initial years. Water: Water is supplied on a no-profit, no-loss basis or with 50 per cent concession or exemption from water charges for a period of 5 years. **Goods and service tax:** Small industries with less than 40 lakhs turnover are completely exempted, whether they are registered or not. **Octroi:** Most states have abolished octroi. **Raw materials:** Units located in backward areas get preferential treatment in the matter of allotment of scarce raw materials like cement, iron and steel etc. **Finance:** Subsidy of 10-15 per cent is given for building capital assets. Loans are also offered at concessional rates. **Industrial estates:** Some states encourage setting up of industrial estates in backward areas. **Tax holiday:** Exemption from paying taxes for 5 or 10 years is given to industries established in backward, hilly and tribal areas. To sum up, it may be stated that the small business sector in India is getting the support of government through various institutions in different forms for different purposes. Despite special attention being given to backward areas, it is observed that imbalances in development are still there. There is a need to develop infrastructural facilities in these areas, as no amount of subsidies or concessions can overcome the natural handicaps caused by a lack of such facilities.