UNIT – 5
Role of Entrepreneur
INTRODUCTION:
Entrepreneurs play a vital role in economic growth of a country. Economic growth is a process by which the per capita income and total income of a country increases during a given period. Entrepreneurs serve as the catalysts in the process of rapid industrialisation and economic growth. In the process of economic growth of a country, the entrepreneur plays a motivator role. The process of economic growth cannot proceed onwards without the active support of the entrepreneur. It is the entrepreneur who collects the natural, economic, human and technical resources of a county and exploits them in the economic growth of a country. An entrepreneur is more a true leader of economic progress. He is by nature a visionary. He has innovative attitude. He loves risk-taking behaviour. He contributes to economic development in many ways, viz., capital formation, technological breakthrough, innovating skill, market expansion and organization of productive resources. He scents new market opportunities and takes the creative decisions to exploit them.
ROLE OF AN ENTREPRENEUR IN ECONOMIC DEVELOPMENT
One of the most important and basic role of an entrepreneur is to innovate. India would not have been discovered to western world if Vasco da Gama would not have sailed to India. The natural resources of Africa would not have been exploited if Britishers, French and Portuguese would not have ventured there. Most of discoveries would not have been translated and implemented if entrepreneurs were not willing to establish units for setting up industries. The development of railways, telecommunications, agriculture and industry has been possible due to innovations. Entrepreneurship essentially means doing things that are not generally done in ordinary course of business. An entrepreneur discovers and develops new ideas, new product, new methods of production, opening new markets, new sources of supply of raw-material, new type of industry, new enterprises, and new methods of solving business problems, new organisations, new combinations, and new opportunities. Innovation is the process of putting new ideas into action. The higher the rate of innovation, the higher will be the rate of economic growth. He is a catalyst of chance. According to W.T. Esterbook, “Entrepreneur is an innovating giant who encourages production of new products in the industry, new techniques of production, new machinery, use of new raw- material, use of new technology and establishment of new industries.” According to Edmunds Bark, “Entrepreneur, in the true sense, is a greedy for new things.” According to Peter F. Drucker,“Innovator is always in search of changes and exploits it as and when the opportunity arises. “Innovation is the creative endeavour that creates wealth. Entrepreneurs develop new ideas and, from their ideas, establish new enterprises that add value to society. In fact, entrepreneurs create wealth by creating something new or different or by searching for new opportunities as they arise to inspire new ventures. Indian entrepreneurs have set up those industries which had opportunity. There has been fast growth of food processing, beverages, petroleum, rubber, plastics, fertilizers, caustic soda, steel, etc. Many sophisticated industries have also been set up but most of knowledge based industries have not been innovated by Indian entrepreneurs because of limited interest in R & D; they have been based largely on with foreign technical and financial collaborations.
The role of entrepreneur as innovator is as follows-
1. To Create Novelty in Society:
The basic function of the entrepreneur is to create something new. He develops new products, brings out product diversifications, carries out of business technical innovations by Research and studies.
2. Production of Commodities and Services:
Since the entrepreneur is an innovator also, he is not only carrying out new inventions in his business activities but also makes the production of the products and services according to the needs of society. He perceives changes in economic and social life and takes initiations required in the changed atmosphere, by perceiving various economic, social circumstances. As a result, the wheel of economic progress goes on moving consistently.
3. To Use National Resources for Productive Activities:
As an innovator, the entrepreneur has an important contribution to the economic progress of the nation by the establishment of new industries and the generation of employment and use of national resources for productive activities to satisfy social and economic needs of the country.
4. Organizing and Coordinating the Resources of Production:
As an innovator, the entrepreneur organizes and coordinates the resources of production, to maximize output, at the minimum cost.Entrepreneurs also contribute to increasing National Productivity, by their managerial capabilities and efficient utilization of unutilized resources.
5. Base of Industrial Development:
The innovating entrepreneurs have the readership quality to develop the resources of the enterprise, human capabilities, and generation of new ideas. New ideas emerge due to creativity but due to lack of leadership abilities, these do not become the base of industrial progress. The entrepreneur can build up the enterprising organization only by leadership, administrative capacities, and creativity.
6. Expansion of Organizations:
The entrepreneurs incur substantial expenditure on research and studies to encourage innovations. As a result, scientific and business ideas are encouraged among people and their technical know-how is upgraded. Innovations emerge as a result of such research activities and creative ideas.The adoption of new techniques of production, in place of obsolete techniques, also become easier and production of new products and diversification is introduced to expand the small organization.
7. Accomplishment of Business Activities:
In a small business, the liability, innovations, and risks is on a single person. But in a large scale business at National and International levels total risks is borne by a group of persons, not by any individual. Hence, business activities are accomplished by the group of persons, by organizing in the form of establishment of companies, partnership firms or co-operative societies, etc.
8. Consumption of New Products and Services to Society:
The entrepreneur is the creator and the innovator, so he introduces the new products, new ideas, new markets and new production techniques to the society and living standard is raised, but also executes the research and development activities, for that. As the outcome of all these, society gets the opportunity to consume a series of new commodities and services and consequently, the standards of living of the society rise substantially.
9. Economic Prosperity of the Nation:
Innovative entrepreneurs start new enterprises to go ahead by removing the hurdles and disturbances arising in their ventures. Besides, they also accept the challenges and as well as improve their own performance by introducing innovations. They also contribute to the overall prosperity of the nation. The innovator entrepreneur has significant importance in the industrial progress of the nation.
Key takeaways –
An entrepreneur generates employment not only for himself and members of his family but also for others who work with him. However, the number will depend upon the size and requirement of the enterprise concerned. Indirectly, by setting up large, medium and small scale sized business units they offer jobs to millions. For example, if one hundred people become entrepreneurs, they not only create a hundred jobs for themselves but also provide employment to an army of unemployed youth. As the time passes, these entrepreneurs grow providing direct and indirect employment. Thus, entrepreneurship is the best way to fight the evil of unemployment and generate employment opportunities in the country. National Alliances of Young Entrepreneur (NAYE) is rendering assistance to young entrepreneur in collaboration with public sector banks in the country. It helps in identifying potential projects, conducting project feasibility report and providing financial assistance and other logistic support to the young entrepreneurs.
Thus, the role of entrepreneur and its significance in generation of employment opportunities can be depicted under the following heads.
1) Establishing tiny, micro and small scale enterprises:
Role of entrepreneur in establishment the above types of enterprises are perceived as a powerful medium to address several socio-economic issues and the chief among them is generation of employment opportunities for millions. In a developing economy like India, where population pressure is quite high and job employment is limited, the role of entrepreneur is very much significant. Entrepreneurial development gives rise to economic independence through self-employment. Creation of tiny, micro and small enterprises by the entrepreneurs can lead to creation of both self- employment and wage- employment opportunities, thereby solving the problem of unemployment in the economy.
2) Giving emphasis upon village and cottage industries :
Upliftment of economically backward sections of the society can be possible if self- employment opportunities can be provided at the grass root level. To enable these people in backward regions of the state to set up village and cottage industries, government has implemented several antipoverty programmes like PMRY, TRYSEM, SGSY, REGP etc, and the importance of entrepreneurs in cottage and village industries sector has been clearly acknowledged by Mahatma Gandhi by his policy priorities in village upliftment including khadi and village industries in his famous constructive programme in 1922. Prior to independence, cottage industries and handicraft production located in rural areas had occupied a distinct place in Indian economy because of their high potential in employment generation and income creation especially in rural and backward areas. As such, entrepreneur can play a significant role in setting up and reviving the cottage and village industries, thereby creating employment opportunities to a large number of people living in rural and backward pockets of the country.
3) Utilizing the surplus labour force in industrial activities:
India is a primary producing country. This characteristics feature is further accentuated by seasonality feature of the agriculture. Therefore, for a large part of the year, people remain, more unemployed. Disguised unemployment is a chronic phenomenon in agriculture where in more people work in a field than actually required. So the surplus labour force is transferred and utilized by the entrepreneur in non-farm sector activities like small tiny, cottage and village industries which are labour intensive in nature.
Key takeaways-
In recent decades, the role of an entrepreneur has been to supplement and accelerate the pace of growth and economic development in both the developed and developing countries When an entrepreneur sets up an industrial or service unit it helps in economic growth. Similarly, when economy grows it creates opportunities for further growth. Thus, every economic growth has a multiplier affect; one complements the other and one supplements the other. When an entrepreneur establishes a bank it complements other economic activities as it helps further growth. When any engineering and electronic unit is set up it requires components from large number of manufacturers. In most engineering, electronic and electrical industries like T. V., refrigerators, computer growth of one large unit gives birth to a number of ancillary units. This is true not only for engineering and electronic industry but also for steel, textiles, chemicals, food processing and so on. Along with complementary development there is also supplementary development. When a spinning mill is set up it leads to development of thread units and cloth weaving units. When a computer hardware industry is developed it leads to the growth of software industry. The development of software industry led to its exports from India in a big way. Thus, one leads to growth of another activity.
Key takeaways-
5.4 ROLE OF ENTREPRENEUR IN BRINGING ABOUT SOCIAL STABILITY
Economic power denotes the power and wealth owned by an individual. Economic power is the natural result of the business activities. Establishment of large enterprises leads to concentration of economic power in a few hands in the society. Such concentration has its own evils in the form of monopolies and monopolistic exploitation of the consumers and the society as a whole. Hence developing a large number of “small entrepreneurs” helps in even distribution of economic power in a wider range, ultimately bringing about social stability. Entrepreneurs bring such stability also by generating self-employment and facilitating development of rural and backward areas. Generally, entrepreneurship is taken to be synonymous with small scale enterprises. Entrepreneurs have a definite social role and responsibility towards the society. They must act in ways that enhance the community’s well-being. Socially responsible behaviour of an entrepreneur not only helps the consumers and company but it also ensures social stability and order.
Two types of people live in society. The first category is of such persons who carry out positive and constructive activities and the second category is of destructive persons. The first category people do something distinctly visible. They aspire not only for their own happiness but also wish to see happy others and prosperous. The second type of person carries out destructive activities in society. They create a disturbance, instigate people against each other and become Furious on one pretext or the other, causing bad effects for society.
The entrepreneur always desires the maintenance of social stability with good results.
For that, an entrepreneur fulfills the following roles:
1. Establishing Self Sufficient Society:
The self-sufficient society may be established by the productivity revolution in areas of production in the country. For that, the entrepreneur increases the production in the business enterprises, fulfill the requirements of the local community, encourage Savings and capital formation, contribute towards export promotion and import substitution, etc. So, the dream of the establishment of a self-sufficient society gets materialized
2. Establishing Ethical Values of Society:
The entrepreneur establishes the ethical values for the society to ensure social stability. For that, he stresses maintaining moral values, ideals, and standards in the conduct of persons associated with various business activities. The entrepreneur is a part of the whole value system of society.
3. Contribution to Social Development:
Entrepreneurs are developing in the Society and Society is developed by entrepreneurs. So, he not only works for the development of the local society but a society of the whole world. He makes the best possible utilization of physical and human resources, with the utmost economy, providing employment to local people and also fulfilling his social responsibilities towards various groups of society.
4. Changes in Social Framework:
The entrepreneurs bring out changes in the social framework through innovative activities. They lead society towards progress by the introduction of new products, new markets, new techniques, new sources, and the establishment of new industries. .
5. End of Evils:
The empty mind is the devil’s workshop. A starving person can do any bad work, like, theft, dacoity, loot, murder, abduction, etc. By the establishment of new industries and expansion of the existing industries and making the production of new products, the entrepreneurs may provide employment to such persons and may divert their attention towards creativity. It will raise the standard of living of such people, which will be helpful in removing several social evils.Employment is a path to the creation of moral values in society..
6. Less Economic Problems:
Society still prevails many social evils existing in the big cities. Like – class conflicts, polluted environment, slum areas, and social crimes, etc.These may be reduced by the establishment of various business undertakings by the entrepreneurs. Besides, social evils like dowry and intoxication in the villages may also be curbed by the establishment of enterprises and development of entrepreneurship tendencies in the villages and the attention of people can be diverted towards savings and capital formation, etc.
7. Increase in Employment Opportunities:
The entrepreneurs increase the opportunities for employment. They help in increasing employment opportunities through the establishment of new enterprises and expanding the existing establishments.
8. Removal of Poverty
The entrepreneurs provide maximum opportunities for employment to unemployed persons, both directly and indirectly through the development of new products and expansion of new enterprises and the markets. As an effect of all these poverty gets reduced in the country. The entrepreneurs enlarge the path of economic progress, through which the country gets rid of the vicious circle of poverty.
9. High Standards of Living
The Entrepreneurs have given materialism in society through new techniques, new products, and inventions. As a result, the living standards of the people can be upgraded in society. It has contributed to a better quality of life.
10. Social Changes
Creative changes are being accepted in society always. The entrepreneur is a creative agent of social change. The traditional superstitions and misbelieves come to end and social stability is established.
Key takeaways-
Industrial development has a tendency to establish and develop industries, big or small, in metropolitan cities like Delhi, Mumbai and Chennai and in big towns. This brings to unbalanced regional development of industries. In this context also, entrepreneurs are required to play an important role in balanced regional development of dunes. They set up industries particularly in backward areas to avail the various concessions and subsidies offered by the Central and the State Governments. The Government of India and the State Governments are also trying to disperse the industries by establishing industrial estates and creating infrastructural facilities in backward areas.
An entrepreneur is a person who perceives for a new product or service and also finds out financial sources for establishing the business for production of the product and service. The entrepreneurs know, how to avail the opportunities, and to establish any viable industry in any viable area. So, Entrepreneurs in Balanced Regional Development of Industries, plays a very big role.
The role of entrepreneurs in the balanced development of the industries may be explained as follows:
1. Knowledge of Market Conditions:
An entrepreneur has full knowledge about the markets, like – where is the good market for a particular product, where particular product and services are to be produced, what will be the cost of production for a product at that place, to what extent the labour and capital will be available in the area, what is the likely demand for the commodity, what should be the price of the commodity, etc. Extend and type of competition and the measures to win the competition, etc.Entrepreneurs establish industries in those Areas, where most of the factors are favorable to him. As a result, the balanced development of industries become possible
2. Advantages of Government Policies and Facilities:
The government also committed for balanced regional development of industries. To achieve the goal, various types of policies have been formulated. Governments have also provided various types of facilities allotment of land at concessional rates, provision of basic infrastructural facilities at the allotted place, easy availability of various resources, finance facilities at reasonable rates of interest, exemptions from taxes, the supply of modern techniques and machinery on installment, good facilities for marketing, etc. The entrepreneur may come forward to avail these facilities for the establishment of new industrial units and expansion of the existing units. So, the balanced development of the industries become possible.
3. Utilization of Different Resources:
The nature has bestowed all countries and areas with one or the other resources, free of cost, of course, in varying degrees. Besides, economic and physical resources are also available in all areas. The entrepreneurs use various resources in the production of various commodities and services, since the possess entrepreneurial qualities. As a result, balanced regional development of industries takes place in the country.
4. Constructive Changes in Social Structure:
Several constructive changes have occurred in the social structure, due to the role of the entrepreneur. The society has become industry oriented, misbelieves have reduced, several obsolete traditions have come to an end. As a result, the entrepreneurs do not hesitate to bear risks and establishing industries in far flung areas.
5. Activeness in All Areas:
The efforts of the entrepreneurs cause spread of activeness in all areas of life. They provide opportunities for leading free life to people, as well as to make the society self sufficient.
6. Evolution of Multiform:
Nature has several diversities, but uniformity in its various elements may also be observed. The entrepreneurs assess these diversities and use of them for the prosperity of human being, various capabilities and qualities, like, intelligence, sharp memory, foresightedness, dedication, courage, knowledge of various new techniques, awareness towards the opportunities, knowledge of market conditions, etc .As a result, uniform development of industries become possible and regional imbalances also can be reduced.
7. Establishing Self Sufficient Society:
The entrepreneurs have an important role in the establishment of a self sufficient society, the reason being that they fulfill the requirements of the society and also increase the Exports
8. Help in Removing Regional Disparities:
The entrepreneurs have an important role in removing the geographical disparities in the economy. Entrepreneur may available various facilities to establish industries in such areas, like, no industry districts. Besides, the government also attracts private entrepreneurs for establishing industries in backward areas. For that, land and capital provided to them at concessional rates. Exemption in taxes and various types of subsidies are also provided for the establishment of industries in the backward areas. All these efforts are helpful in the development of backward areas. Thus, in balance regional development of industries, entrepreneurs are playing a very important role.
Key takeaways-
5.6 ROLE OF ENTREPRENEUR IN EXPORT PROMOTION AND IMPORT SUBSTITUTION
EXPORT PROMOTION
An entrepreneur plays an important role in export promotion and import substitution.
Export Promotion refers to that effort which is done by an entrepreneur for removing imbalance by increasing export and decreasing import. It may be defined as the govt. policy designed to encourage the exporters to export more goods from the country than previous or it refers to policies and measures which can result into maximum increase in the exports of a country.
Role of an entrepreneur in export promotion are as follows:
1. Removing the Trade Imbalance:The entrepreneurs play an important role in case of removing the trade imbalances. More production is the right way of export promotion. If an entrepreneur wants to promote the export, he can do with the more production, standardization, brand, low production cost. “More production with low production cost with higher standard quality.” By this way, an entrepreneur helps in removing the trade imbalance.
Under trade balance only goods are included, services are not the part of trade. But in increasing production, entrepreneur can sell surplus production to other nation and adjust the due amount.
2. Reduction in Import:
An entrepreneur plays an important role in reduction of import. He imported raw material, manpower, machinery, tools, equipment, expertise and fished goods from other nations at high cost. In this situation entrepreneur should exploit natural resources by using domestic manpower and reduced cost of production. It would be reduced import in future.
3. Economic Development:
Economic independence is the symbol of economic development. Entrepreneur can produce more output and meet out the internal and external demand, and earn foreign currency. To fulfill the respective purpose both private and public sector should enhance all infrastructure facilities (energy, industry, transportation, communication and Banking) which is helpful in achieving the targets.
4. Increment in Foreign Currency Fund:
An entrepreneur plays an important role in increasing foreign currency fund. We get foreign currency from the export promotion. If govt. is promoting the export policy, in this situation, entrepreneur collect the foreign currency fund by producing more and sound products and services.
5. Introduction to Innovation:
An entrepreneur should adopt innovation by introducing new combination of goods. By adopting innovation entrepreneurs promotes new product, goods and product exchange and diversification of product in venture.
6. Advance Technology:
An entrepreneur should adopt advance technology for standardization of product with the less cost of production. By this way, entrepreneur gets improved advance technology, by adopting advanced plant, machinery, equipment etc.
7. Appreciation in Production and Productivity Level:
An entrepreneur can play a vital role in appreciating production and productivity level. To meet this purpose, entrepreneur establish project in Export Oriented Unit or Export Processing Zones or free Trade Zones (FTZ). Such units may be engaged in manufacturing, software development, horticulture, agriculture, aquaculture, animal husbandry etc.
EOU and EPZ are industrial estate where export oriented units are taken various incentive. If investment is done in 4 cases, govt. gives facility like less tax or no tax or rebate in tax 100% exemptions; and other facilities.
i. Export Oriented Units (EOU)
ii. Export Processing Zone (by Central Govt.)
iii. Special Economic Zone (SEZ)
iv. Trade Free Zone (TFZ)
Government provides the following facilities to above export oriented projects:
i. Single window system for paper formalities
ii. Raw material at cheaper price.
iii. Market and transportation facility
iv. Plant & Machinery
v. Credit facility
vi. Low rate of interest on loan
If there is an increase in production, employment and removing trade imbalances, govt. launches policies like EOU, EPZ and SEZ, then export promotion can be done.
8. Low Production Cost:
If entrepreneur exploit natural and human resource efficiently, it will give their return in high production at low cost instead of import at high rate and high cost of production.
9. Enhancing Foreign Competition Capacity:
If entrepreneur use the internal resources for production with sound quality, he can sell surplus out to other country and make a challenge in front of foreign nation at international level by sound, cheaper, durable and standard products.
10. Increasing Export:
Entrepreneurs are required to play an important role in export promotion. Export promotion reduces unfavorable balance of trade (i.e., only goods are included and services which are ignored or all visible items are included). It also increases valuable foreign currency reserves.
For motivation and increasing export promotion, govt. provides specific facilities and incentive to an entrepreneur. Both Central Govt. and State Government are provided concerned facility and incentives in the field of export promotion. There should be increasing number of old and new entrepreneurs lacking benefits of incentives, concessions and subsides. In this way Govt. has launched few programmes such as EOU, EPZ, FTZ, SEZ.
EOU — Export Oriented Unit
EPZ — Export Promotion Zone
FTZ — Free Trade Zone
SEZ — Special Economic Zone
An Export Processing Zone (EPZ), free Trade Zones (FTZ), Special Economic Zone (SEZ) established by Central and State Govt. are industrial estates where export oriented units take various facilities such as tax exemptions, duty drawback, no import duties, no quantitative restrictions.
There are some important facilities provided to units in FTZ or EPZ:
i. Suitably developed plant and buildings.
ii. Single point clearance of new projects within 45-60 days.
iii. No license needed for import of capital goods etc.
iv. Duty free import of capital goods and equipment.
v. Complete exemption from income tax.
vi. Assured power supply.
vii. Export finance at confessional rate of interest.
viii. Market facilities
ix. Single window system for documentation formalities.
Export processing zones have been established at the following places:
i. Kandla free Trade Zone
ii. Santa Cruz Electronics Export Processing Zone.
iii. Export Processing Zone at Chennai.
iv. Export Processing Zone at Cochin.
v. Export Processing Zone at Noida (U.P.)
vi. Export Processing Zone at Falta (W .B.)
vii. Export Processing Zone at Vishakhapatnam (Andhra Pradesh).
IMPORT SUBSTITUTION
Entrepreneur is the most important factor in the economic development of the country. He plays a very important and catalytic role in activating the factors of production leading to the overall economic development. The entrepreneur organizes and utilizes the various factors and sets productive machinery in action. The availability of entrepreneurs, therefore, is the precondition of economic growth.
According to Prof. Schumpeter, the supply of entrepreneur depends on the rate of profit and social climate. It is profit that induces the prospective entrepreneur to get into the business and start new activities or expand the existing activities. Profit, therefore, is a factor which induces the entrepreneur to organize and utilize the factors of production for development. Entrepreneurial behaviour has a role in ensuring the change required by the development process. Entrepreneur brings innovation or technical know-how to introduce new products and new combinations of production factors. Economic system has a reservoir of unused technical inventions which can be early utilised by the entrepreneurs. According to Prof. Schumpeter, “It is no part of his function to find or to create new possibilities. They are always present, abundantly accumulated by all sorts of people.”
Entrepreneur also mobilizes capital source to have a command over factors of production. Prof. Schumpeter rightly observed that entrepreneur needs credit because credit promotes industrial development which in turn deliver new goods. So, resource mobilisation efforts of entrepreneur also ensure the better good effective utilisation of resources available in the country which further celebrates the pace of economic development.
The role of entrepreneurs in import substitution can be assessed in the following ways:
1. Saving of Foreign Exchange:Entrepreneurs are also producing goods and services which can be used for those products which are being imported from foreign country. By producing substitute products and services, entrepreneurs try to save valuable foreign exchange. At a later stage, consumer becomes habitual of substitute products.
2. Creation of Employment Opportunities:When entrepreneurs produce the goods and services in the country which can be used as a substitute of the imports, employment opportunities are generated in the country and utilisation of capital also becomes possible.
3. Increase in National Income:Import substitution efforts also help to save foreign exchange which ultimately leads to increase in national income. Any increase in national income improves the well-being of the society. It also enables the country to optimise the use of available resources in the country.
4. Self-Reliance:Import substitution reduces the dependence on imports from foreign country. Various entrepreneurial activities for increasing production and services not only reduces the dependence on imports from foreign countries, but also reduce the foreign exchange crisis. It also motivates other potential entrepreneurs to get involved in these activities.
5. Accelerating the Pace of Industrialization:Import substitution efforts accelerate the pace of industrialisation in the country. Entrepreneurs are generally encouraged by the incentives and subsidies to work for import substitution efforts. They invest more capital to enlarge the scale of production. In this way, they try to supply quality goods and services to the society and thereby restricting the imports and thus, saving the foreign exchange.
Key takeaways-
The result of export promotion and import substitution is found in the increasing trend of foreign exchange earning if an entrepreneur produce maximum quantity of products and services. It is a sign of export promotion and production of substituted goods of imported goods and services.
Forex earnings (i.e. foreign exchange earnings) have been playing a prominent role in growth and development of any economy.
Forex earnings mean arrival or introduction of foreign currency. For increasing the foreign earning the Government has launched LPG policy (Liberalization, Privatization and Globalization). Along with time to time industrial policy is also introduced and amended. To make the economy more competitive, increasing production, productivity and efficiency, an entrepreneur adopts ultra-modern technique and technologies.
The primary object of new industrial policy is to create confidence in the Indians and foreign industrialists. The main effect of our new industrial policy was the foreign currency reserves that reached at the record level of 120 billion dollars on 30th June 2004.
Sources of Forex Earnings:
The main sources of forex earning in India are as follows:
1. Rapid increase in our exports.
2. Heavy remittance of foreign currency by NRI for investment motive.
3. Entry of foreign entrepreneurs in large number in India with large foreign capital and latest technology.
4. Arrival to foreign capital in India (i.e. foreign direct investment)
5. Profit from industries which are established by Indian entrepreneurs in foreign country.
6. Indian employees who are involved in private and Govt. services in abroad
Effect on Economy of Forex Earning:
1. Balance of Payment.
2. Reduction import.
3. Increasing export.
4. Introduction to foreign technology.
5. Advance technology based productivity.
6. Rising trend of production and productivity.
7. Low cost of production and control on price level.
8. Industrial Development.
9. Control on Monopolies Restrictive Trade Practices.
10. Increasing competitive Tendency.
Key takeaways-
Entrepreneurs play a significant role in economic development of a country. He promotes the prosperity of a nation by his innovation and dynamic leadership Skills. He creates wealth, opens up employment opportunities and fosters the other segments. According to Harbison, entrepreneurs are prime movers of innovation, growth and as such, entrepreneurship is a dynamic force.
Entrepreneurs also play a significant role in augmenting local demands and meeting them satisfactorily. Towards this entrepreneurs focus their attention to manufacture service through indigenous technology, skill, resources and experiences. Entrepreneurs produce a wide range of products required by consumers. They meet the demand of the consumers without creating a shortage for goods. Small entrepreneurs have met the demand of local markets by providing the quality, design, fashion and styles required by the domestic consumers at fair and competitive price nicely. The home market rarely feels the need of foreign products because of science efforts our entrepreneurs.
Key takeaways-
REFERENCES:
1) Dr. R.K Pathak, M.C Kalwar, Business Organisation and Entrepreneurship Development, Ashok Publication.
2) Dr. S.S Khanka, Entrepreneurship, Entrepreneurship Development ,S.Chand Publication.
3) Vasant Desai, Appannaiah, Reddy, Gopalakrishna, Entrepreneurship Development, Himalaya Publishing House
4) R.K Pathak, M.C Kalwar, Entrepreneurship, Ashok Publication
