Unit 4
Entrepreneurship
Q1) Define entrepreneurship. State the characteristics of entrepreneurship. 8
A1) Entrepreneurship refers to the process of creating a new enterprise with an innovative idea and bearing any of its risks, with the view of making the profit. It is an act of seeking investment and production opportunity, developing and managing a business venture, so as to undertake production function, arranging inputs like land, labour, material and capital, introducing new techniques and products, identifying new sources for the enterprise.
Entrepreneurship is a process of actions of an entrepreneur who is a person always in search of something new and exploits such ideas into gainful opportunities by accepting the risk and uncertainty with the enterprise. Entrepreneurship involves three aspects-
- Entrepreneur: The person who innovate the idea and take risk of promoting the business idea.
- Entrepreneurship: It is the process of initiating the business idea or promoting the business venture. He undertakes all the risk attached with the new venture like risk of loss, risk of rejection in the market other related risks.
- Enterprise: It is the business venture started by the entrepreneur to undertake business activities.
Some examples of entrepreneur are Bill Gates (Microsoft), Warren Buffet (Hathaway), Gordon Moore (Intel) Steve Jobs (Apple Computers), Jack Welch (GE) GD Birla, Jamshedji Tata (TATA), Dhirubhai Ambani (Reliance), Ritesh Agarwal (OYO) etc.
The figure shows the concept of entrepreneurship-
Figure: Concept of Entrepreneurship
Some of the essential characteristics of entrepreneurship are-
- The entrepreneur must have the ability to take risk during the process of promotion of new business idea into a nosiness venture.
- The entrepreneur should be characterised by innovativeness because he has to innovate new & unique ideas to start its own business venture.
- The entrepreneur should have the leadership quality to lead the project/venture initiated by him where the numbers of employees are working in the project/venture.
- The entrepreneur should be open minded who is able to grab the opportunity in the market
An entrepreneur should be flexible enough to adopt changes according to the situations in the business environment.
Q2) Discuss the significance of entrepreneurship. 5
A2) Entrepreneurship has many societal and economic benefits. Some of the significance of entrepreneurship is –
Figure: significance of entrepreneurship
- Create jobs: Entrepreneurship create jobs and provide livelihood in the economy by starting new business ventures. It employs people to work for the achievement of the goal.
- Entrepreneurs innovate: Some of the greatest technologies in today’s society have come from businesses. The technological advances come out of a need to solve a problem, create efficiencies, or improve the world. In periods where there’s more advancement in technology, there’s usually an entrepreneur to thank for it.
- Entrepreneurs create change: Entrepreneurs create better changes in the existing product or service with its innovative ideas. From black n white TV to LED TV, from keypad phone to smart phone, from traditional shopping to online shopping, from traditional banking to online banking etc. all these changes are due to innovative ideas of entrepreneurs.
- Entrepreneurs contributes to society: Entrepreneurs contributes to the society by providing livelihood to the people, paying taxes, donating to charities and non-profits for various causes and creating solutions to help poorer communities for education, clean drinking water and good health care.
- Entrepreneurs add to national income: Entrepreneurship generates new wealth in an economy. New ideas and improved products or services from entrepreneurs allow for the growth of new markets and new wealth. Their income is contributed to the GDP of the economy.
- Alternate livelihood: In developing countries like India where there is lack of job as per demand due to excess population, the educated and skilled unemployed youths can start business ventures with innovative ideas. Thus it provides an alternative source of livelihood and also provides solution to the unemployment problem.
- Preserve culture: The entrepreneurs based on handloom, handicraft, local food processing industries preserves the local culture and heritage of their locality and also able to establish in the national and international scale.
- Utilisation of natural resources: The local entrepreneurs also utilises natural resources of the locality for commercial production.
Q3) Discuss the factors determining growth of business. 8
A3) The determinants of entrepreneurship are-
- Entrepreneurship promotion schemes of Govt.
Central Govt. Initiated different schemes like start up India, Made in India, Skill India, Mudra loan etc. for the promotion of entrepreneurship from time to time. Such schemes encourages youths for entrepreneurship by utilizing their skills and available natural resources.
2. The Rise of Technology
The advancement of information technology provides facility for worldwide communication and easy accessibility of information. The potential entrepreneurs can collect information about potential market, competition, availability of raw materials etc. It promotes virtual businesses in the areas like e-commerce shopping sites, e-education, development of application software etc. For example, Byju, unacademy, facebook, flipkart etc.
3 Female Entrepreneurs
The entrepreneurial wave is also being driven by women entrepreneurs who are carving a niche for themselves. Start-ups like Zivame, Kaaryah, Your Story and POPxo have become successful ventures.
4. Availability of resources
Availability of resources in a locality also encourages local enthusiastic people to utilize the same for starting business venture. Different types of village and home based industries like handloom, handicraft, food processing industry etc. provides livelihood to a significant number of families in rural and semi urban areas of the country.
5. Attitude of self-independency
Some people always interest to become self-independent rather than serving any private or public company or Government. Such people start their own business with innovative ideas and become boss of their own.
6. Education
Educational institutions also play a significant role in promotion of entrepreneurship by making them aware and skilled to start a business venture. In educational institutions knowledge is provided about the entrepreneurship process, its pros and cons in different undergraduate and post graduate courses like B.com, M.com, BBA, MBA etc.
7. Availability of information
The easy accessibility of information helps the entrepreneurs to get information about market accessibility, competition in the market, sources of funds, raw materials, cheap labour and other material information.
8. Accessibility to credit
Accessibility to finance/credit is important to implement the plan into business venture. Banks and financial institutions extends credit under different schemes of Government like MUDRA loan, start-up India, Credit Guarantee Fund Scheme for Micro and Small Enterprises etc.
Q4) Distinguish between entrepreneur and manager. 5
A4) Entrepreneur is the owner of the company and manager is employee of the company. Some of the significant differences between entrepreneur and manager are-
Basis of difference | Entrepreneur | Manager |
a) Role | They are owner of business. | They are employee of business. |
b) Behaviour | They have desire for control. | They involve in delegation of authority. |
c) Driving force | Creative and innovative approach of business. | They preserve and establish the organisational structure. |
d) Decision making | They make intuitive decisions. | They belives in collective decision making. |
e) Objectives | It is expressed as vision. | It is expressed in commercial terms. |
f) Risk | They take all the risk of business. | They avoid the risk. |
g) Focus | Their focus is on start up. | Their focus is on ongoing business. |
h)Reward | Their reward is profit. | Their reward is salary. |
i) Primary motivation | Primary motivation is achievement | Primary motivation is powers |
j) Approach of task | Approach of task is informal. | Approach of task is formal. |
Q5) Distinguish between entrepreneur and intrapreneur. 5
A5) Entrepreneur refers to a person who set up his own business with a new idea or concept and intrapreneur is an employee of the organization who is in charge of undertaking innovations in product, service, process etc.
Some of the basic differences between entrepreneur and intrapreneur are-
Basis of difference | Entrepreneur | Intrapreneur |
1.Meaning | Entrepreneur refers to a person who set up his own business with a new idea or concept. | Intrapreneur is an employee of the organization who is in charge of undertaking innovations in product, service, process etc. |
2. Dependency | He is fully independent. | An intrapreneur is dependent on the entrepreneur, i.e., the owner. |
3. Core objective | They innovate something new of socio economic value. | To increase competitive strength and market sustainability of the organization. |
4. Capital/ Investment | He raises fund for new business. | He does not need to manage required fund because corporation raises capital for the business. |
5. Approach | His approach is intuitive. | His approach is restorative. |
6. Resources | He uses own resources. | He use resources provided by the company. |
7. Risk | Borne by the entrepreneur himself. | He takes moderate risk. |
8. Works for | Creating a leading position in the market. | Change and renew the existing organizational system and culture. |
Q6) Discuss the types of entrepreneurs. 6
A6) Entrepreneurship is classified depending on their nature of work, physical existence, size etc. Different types of entrepreneurs are discuss below-
Figure 4: Types of entrepreneur
a) Intrapreneurship: The term intrapreneurship refers to a system that allows an employee to act like an entrepreneur within a company or other organization. Intrapreneurs are self-motivated, proactive, and action-oriented people who take the initiative to pursue an innovative product or service. An intrapreneurship creates an entrepreneurial environment by allowing employees to use their entrepreneurial skills for the benefit of both the company and the employee. For example, Ramzi Haidamus, the president of Nokia Technologies, is often considered an intrapreneur because of his initiatives with the company. It has the following characteristics-
- Intrapreneurs are able to resolve specific issues such as increasing productivity or cutting costs.
- It requires a high level of skill—namely leadership skills and thinking outside the box—directly applicable to the assignment.
- An intrapreneur also takes risks and drives innovation within a business to better serve the market through increased goods and services.
- They are able to interpret trends in the marketplace and visualize how the company needs to evolve to stay ahead of its competition.
b) Technopreneurship:
Technopreneurship allows the entrepreneurs to innvate and implement idea by using technology. The process of technopreneurship is a combination of technological advancements and entrepreneurial skills. A person who is engaged in technopreneurship creates a product or solution that uses technological solutions to change the way of doing something in an orthodox way. It improves how we have done something before and how it has to be done in the coming future. Some examples of successful technopreneurs are Bill Gates (Microsoft), Sergey Brin and Larry Page (Google), Jack Dorsey (Twitter), Steve Jobs (Apple), Kevin Systrom (Instagram), and so on.
c) Cultural entrepreneurship
Cultural entrepreneurship is an emerging discipline that examines how cultural products (such as art, theater, and literature) and cultural activities (like sports, music, food, and film events) have an impact on the growth of local, national, and global economies. Cultural Entrepreneurs are cultural change agents and resourceful visionaries who organize cultural, financial, social and human capital, to generate revenue from a cultural activity. Their innovative solutions result in economically sustainable cultural enterprises that enhance livelihoods and create cultural value and wealth for both creative producers and consumers of cultural services and products.
d) International entrepreneurship
International entrepreneurship is the process of entrepreneurship that engaged in doing business with cross border countries like import-export, international service like banking, insurance, telecommunication etc.
e) Netpreneurship
It refers to the process of entrepreneurship that start business venture with new ideas by using internet. For example, youtuber, unacademy etc.
f) Ecopreneurship
Ecopreneurship is a term coined to represent the process of principles of entrepreneurship being applied to create businesses that solve environmental problems or operate sustainably. Such entrepreneurs generally started business venture to sustain ecology and environment. For example, establishment of resort, eco camp, eco part, local artisans producing furniture from bamboo, cane, decorative items from clay, stone etc.
g) Social entrepreneurship
Social entrepreneurship uses business to offer new ideas for wide-scale social and environmental impact. Social entrepreneurship unites the passion of a social mission with an image of business-like discipline, innovation, and determination. Many social entrepreneurs launch whole new ventures applying innovative and often risk-taking approaches to create scalable solutions, which includes inventing new products and services. Others join existing social enterprises aligned with their interests and passions. For example, AMUL (Anand Milk Union Limited) Social Entrepreneur: Dr. Verghese Kurien Grameen Bank Social Entrepreneur: Muhammad Yunus.
h) Small business entrepreneurship
A majority of businesses are small businesses. People interested in small business entrepreneurship are most likely to make a profit that supports their family and a modest lifestyle. They aren't seeking large-scale profits or venture capital funding. Small business entrepreneurship is often when a person owns and runs their own business. They typically hire local employees and family members. Local grocery stores, hairdressers, small boutiques, consultants and plumbers are a part of this category of entrepreneurship.
i) Large company entrepreneurship
Large company entrepreneurship is when a company has a finite amount of life cycles. This type of entrepreneurship is for an advanced professional who knows how to sustain innovation. They are often a part of a large team of C-level executives. Large companies often create new services and products based on consumer preferences to meet market demand. Small business entrepreneurship can turn into large company entrepreneurship when the company rapidly grows. This can also happen when a large company acquires them. Companies such as Microsoft, Google and Disney are examples of this kind of entrepreneurship.
Q7) What are the qualities of a successful entrepreneur. 8
A7) The entrepreneur needs to possess some qualities to become successful and to achieve its goal. The competencies of entrepreneur are-
Figure: Competencies of entrepreneur
- Initiative: The entrepreneur is the idea generator and he is the owner of the business. Thus the entrepreneur must take the initiative in planning, decision making, and implementation of plan etc. without his initiative the plan will not become an action.
- Systematic planning: The entrepreneur should able to plan systematically for implementation of the idea into action. The planning involves a major plan and other auxiliary plans to support the main plan. The planning process involves screening of information, consider the objective, determine the feasibility of plan, determine the standards, review of plan etc.
- Creativity and innovation: The entrepreneur should able to bring something new in the existing business idea, process or product to make the existing business more creative. The entrepreneur may also bring new ideas, new process, develop new product to make customer satisfied.
- Risk management: The entrepreneur should able to take the risk and adopt appropriate measures to manage the risk. To manage the risk of business, he should be dynamic and creative/innovative in the areas of product design and development, marketing, attends consumer expectation, market competition, sources and application of fund, financial management, inventory management, human resource management etc.
- Problem solving: An enterprise may face crisis or problem for fund, poor management, dispute with employees, competition etc. The entrepreneur should have the mindset for understanding the reasons of such problem and solve the disputes, problems and overcome the crisis by adopting the proper measures.
- Persistence: The entrepreneur may face failures/roadblocks during his journey of promoting the business venture. To become successful, he must persistently give his effort and dedication with confidence in his idea and capability to achieve his desired goal.
- Quality performance: The entrepreneur must give quality effort, dedication and time to the business venture. He must develop his product/service that meets customer expectation, maintain good relation with the stakeholders, and follow fair trade practices and optimum utilisation of resources.
- Information: Reliable and valid information is necessary to formulate an effective plan and decision making process. It is the duty of entrepreneur to collect material information to grab the business opportunity.
- Persuation and Influencing abilities: The entrepreneur should possess the capability of leadership to influence the team members, customers, creditors, suppliers etc.
- Independence and self-confidence: Entrepreneurs have a quiet self-assurance in their capability or potential to do something.
Q8) Discuss about the entrepreneurship training and development institute. 12
A8) Entrepreneurship Development Institute of India (EDII)
Entrepreneurship Development Institute of India (EDII), an autonomous and not-for-profit institute, set up in 1983, is sponsored by apex financial institutions - the IDBI Bank Ltd., IFCI Ltd., ICICI Bank Ltd. And the State Bank of India (SBI). The Government of Gujarat pledged 23 acres of land on which stands the majestic and sprawling EDII campus. To pursue its mission, EDII has helped set up 12 state-level exclusive Entrepreneurship Development Centres and Institutes. One of the satisfying achievements, however, was taking entrepreneurship to a large number of schools, colleges, science and technology institutions and management schools in several states by including entrepreneurship inputs in their curricula. In view of EDII’s expertise in entrepreneurship, the University Grants Commission had also assigned EDII the task of developing curriculum on entrepreneurship and the Gujarat Textbook Board assigned to it the task of developing textbooks on entrepreneurship for 11th and 12th standards. In order to broaden the frontiers of Entrepreneurship Research, EDII has established a Centre for Research in Entrepreneurship Education and Development (CREED), to investigate into a range of issues surrounding small and medium enterprise sector, and establish a network of researchers and trainers by conducting a biennial seminar on entrepreneurship education and research. In the international arena, efforts to develop entrepreneurship by way of sharing resources and organising training programmes, have helped EDII earn accolades and support from the World Bank, Commonwealth Secretariat, UNIDO, ILO, FNSt, British Council, Ford Foundation, European Union, ASEAN Secretariat and several other renowned agencies. The Ministry of External Affairs, Govt. Of India assigned to EDII the task of setting up Entrepreneurship Development Centers in Cambodia, Lao PDR, Myanmar and Vietnam and Uzbekistan. Five such centres in African region will be established very soon.
The National Institute for Entrepreneurship and Small Business Development (NIESBD)
The National Institute for Entrepreneurship and Small Business Development is a premier organization of the Ministry of Skill Development and Entrepreneurship, engaged in training, consultancy, research, etc. in order to promote entrepreneurship and Skill Development. The major activities of the Institute include Training of Trainers, Management Development Programmes, Entrepreneurship-cum-Skill Development Programmes, Entrepreneurship Development Programmes and Cluster Intervention. NIESBUD has provided training to 12,37,307 persons till date through 46,837 different training programmes since inception. This includes 5,011 international participants hailing from more than 145 countries throughout the globe. The policy, direction and guidance to the Institute is provided by its Governing Council whose Chairman is the Minister of MSDE.The Executive Committee consisting of Secretary as its Chairman and Director General of the Institute as its Member-Secretary, executes the policies and decisions of the Governing Council through its whole-time Director General.
Major activities are discussed under three heads
Training:
- Assessing the training programmes and identifying the gaps to systematically conduct training programmes, orienting them as well as motivating youth towards entrepreneurship.
- Developing and Designing various communication media tools for promoting the culture of entrepreneurship among different strata of society in the country.
- Supporting and playing a catalytic role towards organizations engaged directly or indirectly in developing and promoting entrepreneurship and self-employment in the Country.
- Providing consultancy services in the area of entrepreneurship and Skill Development especially for MSDEs.
- In addition to above, Also Providing consultancy services to other Institutions engaged in entrepreneurial training either in the Government or in the Private Sector.
- Designing, Conceptualizing and standardizing course curriculum for entrepreneurship and skill development programmes.
Research & Development:
- Promoting research and development activities in the area of entrepreneurship, particularly in MSDE sector. Undertaking documentation and disseminating information related to entrepreneurship/ enterprise development.
- Developing and publishing literatures, articles, journals and information material related to entrepreneurship/enterprise development/ Skill Development/MSDEs
- Providing an interactive platform for exchange of ideas and experiences for various targets groups mainly through seminars, workshops, conferences as well as through training programs.
- Identifying the Problem and developing feasible solutions by conducting research studies for generating knowledge and accelerating the development of entrepreneurship.
Major Focus Areas:
- Creating a holistic environment to support entrepreneurship and skill development within the Institute.
- Evaluating and revising the training programmes sponsored by NIESBUD so as to fit in with the internal and external environmental changes with respect to entrepreneurship and small business Development
- The institute is actively engaged in creating a positive image among the general public on entrepreneurship and eliminating the misconception related to it. This helps in disseminating the information on entrepreneurship and skill Development fruitfully.
NewGen Innovation and Entrepreneurship Development Centre
The NewGen Innovation and Entrepreneurship Development Centre (NewGen IEDC) is being promoted in educational institutions to develop institutional mechanism to create entrepreneurial culture in S&T academic institutions and to foster techno-entrepreneurship for generation of wealth and employment by S&T persons. The NewGen IEDCs are established in academic institutions (science colleges, engineering colleges, universities, management institutes) having requisite expertise and infrastructure. It is established with thefollowing objectives-
- To channelize the knowledge and the energy of youth towards becoming active partners in the economic development process.
- To catalyze and promote development of knowledge-based and innovation-driven enterprises and promote employment opportunities amongst youth specially students.
- To inculcate a culture of innovation driven entrepreneurship.
- To act as an institutional mechanism for providing various services including information on all aspects of enterprise building to budding S&T entrepreneurs.
Entrepreneurship Development Centre
Entrepreneurship Development Centre at MIT School of Management is committed to develop entrepreneurial spirit among students under the able guidance of our Director, Prof. Dr. Sayalee Gankar. We strive to inspire students to create new and innovative business ventures compliant to global market and standards. Entrepreneurship Centre provides mentoring and regular guidance to the students from industry experts and successful entrepreneurs from various areas of business. Entrepreneurship is nurtured from the very beginning of student’s academic journey at MIT-SOM- through various student driven committees, events, programs held on the campus. It objectives are-
- To disseminate knowledge and insights in entrepreneurial theory and practice through lectures activities and workshops.
- To collaborate with similar bodies in other B-schools & technology institutes to accomplish the objectives.
- To seek tie-ups with non-profit entrepreneurial organizations connecting the ED and FMB Cell to global network of entrepreneurs.
- To create a strong network of successful entrepreneurs who would like to guide budding entrepreneurs.
- Starting an Innovation Incubation Center.
- Starting Campus Companies.
Indian Institute of Entrepreneurship (IIE)
The Indian Institute of Entrepreneurship (IIE) was established in the year 1993 in Guwahati by the erstwhile Ministry of Industry (now the Ministry of Micro, Small and Medium Enterprises), Government of India as an autonomous National Institute to undertake training, research and consultancy activities in small and micro enterprises focusing on entrepreneurship development. The institute began operating from April 1994 with the North East Council (NEC), Governments of Assam, Arunachal Pradesh and Nagaland and SIDBI as its other stakeholders. It is also An ISO 9001:2015 Certified Organisation.
Objectives of IIE are-
- To promote and develop entrepreneurship.
- To conduct research and provide consultancy for entrepreneurship development.
- To coordinate and collaborate with other organizations in undertaking training, research and other activities to increase outreach of the institute.
- To provide consultancy and monitoring service to MSMEs/ potential entrepreneurs and enhancing employability of participants.
- To promote greater use of information technology in the activities/ functions of the IIE.
- To comply with statutory responsibility.
Functions of IIE are-
- Designing and organising training activities for different target groups and undertaking research in areas relevant to entrepreneurship.
- Improving the efficiency, effectiveness and delivery of change agents and development practitioners i.e. trainers, support organizations engaged in enterprise building. Etc.
- Provide consultancy services to prospective and existing entrepreneurs.
- Increasing the outreach of activities of the institute through collaborative activities and increasing their effectiveness through use of different tools of information technology.
The major activities of the Institute includes:
- Training: The institute organizes training programmes for different target groups, including Trainers’ Training Programme (TTP), Management Development Programme (MDP), Faculty Development Programme for College and School Teachers, Orientation Programme for Government/Non-Government organizations, Entrepreneurship Development Programme (EDP), Entrepreneurship-cum-Skill Development Programme (ESDP) and other sponsored activities.
- Research: The Institute undertakes research and studies either on its own or on sponsored basis and provides consultancy in the field of growth and development of MSMEs across North East India and other states. The Institute also acts as a catalyst and a resource centre for providing various inputs on policy formulation for promoting entrepreneurship and development of MSMEs to Central and State governments. Other areas of focus include Action Research on development of MSMEs, Skill Gap studies, Evaluation studies, industrial potential survey etc.
- Consultancy: It offers advice and consultancy in the various areas of entrepreneurship, including, Enterprise planning; Enterprise Management; Enterprise Expansion, Diversification & Growth; Management Consultancy; Marketing consultancy with specialization on export and border trade; Technology sourcing; Technology propagation; Project and Reports.
- Seminars and Workshops: The Institute organizes Seminars and Workshops to share experiences on implementation of programmes of self-employment and entrepreneurship, on current topics and awareness generation. Besides, the institute organizes Entrepreneurs Meet to understand and appreciate their problems in launching projects and managing them successfully.
- Projects: The institute has also undertaken various projects such as, Centre for Sustainable Livelihood promotion (CSPL); Regional Resource Centre (RRC) for Cluster Development; Science and Technology Entrepreneurship Development (STED) Project; and Rural Industries Programme (RIP) ;Pilot Project on Entrepreneurship Promotion and Mentoring of Micro and Small Businesses in temple towns of Puri(Odisha), Bodh Gaya(Bihar) and Kollur(Karnataka) entrepreneurship promotion through capacity building and handholding support for beneficiaries of Jan Shikshan Sansthan & Cluster artisans of north eastern region and Prime Minister Van Dhan Yojana targeting livelihood generation for tribal population through harnessing of forest resources.
Q9) Discuss about the incentive schemes for entrepreneurship implemented in India. 12
A9) Entrepreneurship incentive schemes are implemented by Government from time to time to foster entrepreneurship environment in India. Some of the existing the incentives to entrepreneurship in India are-
1. Multiplier Grants Scheme (MGS) for IT Research and Development
It is launched by Department of Electronics and Information Technology (DeitY), MGS has been launched to ‘encourage collaborative R&D between industry and academics/ R&D institutions for development of products and packages.’ This startup scheme is valid for Startups, incubator/academia/accelerators engaged in electronics and information technology domain. The eligible industries for this scheme are Artificial Intelligence, Technology, Hardware, Internet of Things, IT Services, Enterprise Software, Analytics.
2. Modified Special Incentive Package Scheme (M-SIPS)
It is launched by Department of Electronics and Information Technology (DeitY) and supported by Center for Development of Advanced Computing or CDAC, M-SIPS aims to ‘promote large-scale manufacturing in the Electronic System Design and Manufacturing (ESDM) sector.’ Besides infusing the startups with funds for expansion, M-SIPS will also provide subsidy up to 25% in establishing offices, research centers in SEZs, all over the nation. The applicable industries are IT Hardware, Medical-tech, Solar Power, Automobiles, Healthcare, Semiconductors, Processors/Electronica, LEDs, LCDs, Avionics, Industrial Electronics, Nano-Electronics, Biotech, Strategic Electronics, Telecom and more.
3. The Venture Capital Assistance Scheme
It is launched in 2012 by Small Farmers’ Agri-Business Consortium (SFAC), this special scheme aims to assist agriculture based entrepreneurs to kick start their agri-business. SFAC has tied up with 42 banks, which help them to disperse interest-free loans to farmers (individuals/groups), partnership firms, self-help groups, agriculture pass out/graduates, agri-preneurs, producer groups, and companies. It is applicable to agribased industry.
4. Credit Guarantee
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has launched this unique Government scheme to help assist retailers, educational institutes, self-help groups, farmers and SMEs. Basically, the Credit Guarantee scheme has been launched to smoothen credit delivery system, as guarantee cover up to 85% is provided to the SMEs for loans up to Rs 5 lakh. SMEs is applicable for this scheme.
5. Raw Material Assistance
National Small Industries Corporation or NSIC has launched Raw Material Assistance scheme, which aims to assist manufacturers and MSMEs with procuring raw materials, both indigenous & imported. As per the Government Schemes helps the manufacturer’s to focus on the quality of their products, as they can avail low-interest loans and financial help to get raw materials. Manufacturing industries and MSMEs are applicable for this scheme.
6. Infrastructure Development Scheme
National Small Industries Corporation (NSIC) has launched this unique scheme to help start-ups establish their own offices and infrastructure. However, only those companies which fall under the official definition of start-ups, as highlighted by the Ministry of Micro, Small and Medium Enterprises can avail this grant. Start-ups which are not registered with Software Technology Parks of India Scheme can now get office space ranging from 467 sq.ft. To 8,657 sq.ft.
7. MSME Market Development Assistance
Office of the Development Commissioner (MSME) has launched this scheme to help SMEs and small retailers get more attention at international trade fairs and exhibitions. Companies registered with Directorate of Industries/District Industries Centre can get up to 100% reimbursement on air-fares and cost of placing their stalls in such fairs/exhibitions, all over the world. This scheme is not specific to any industry and applicable to SMEs, retailers, and start-ups.
8. Credit Linked Capital Subsidy for Technology Upgradation
Office of the Development Commissioner (MSME) has launched this Government scheme to help manufacturers, SMEs, and agri start-ups to upgrade their existing machines and technologies. In case any SMEs registered with State Directorate of Industries have upgraded their machines, plants with state of the art technology, then they can apply for this grant, and receive funds to compensate their expenses. Khadi, Village or Coir industry, Manufacturing, Small Scale Industry, SMEs are eligible under this scheme.
9. Atal Incubation Centres (AIC)
It is headed by Atal Innovation Mission. AIC aims to promote innovation and entrepreneurship in India. Approved start-ups can get funding up to Rs 10 crore for a maximum period of 5 years, to cover capital and operational expenses. AI, AR/VR, Automobiles, Telecom, Healthcare, Aeronautics, Aviation, Chemicals, Nano-Tech, Pets, Animals, IT, Computers, Design, Non-Renewable Energy, Social Impact, Food etc. are eligible under this scheme.
10. Bridge Loan Against MNRE Capital Subsidy
It is launched by Indian Renewable Energy Development Agency (IREDA), Bridge Loan Against MNRE Capital Subsidy aims to promote start-ups engaged in renewable energy ideas such as biomass power and small hydropower projects. Up to 80% of the project cost will be funded by IREDA, and the minimum funding allocated shall be Rs 20 lakh. Renewable Energy start-ups and companies are eligible for this scheme.
11. Startup India Seed Fund
On 16 January 2021, Prime Minister Narendra Modi announced the launch of the 'Start-up India Seed Fund' — worth INR 1,000 crores — to help start-ups and support ideas from aspiring entrepreneurs. PM Modi said that the government is taking important measures to ensure that start-ups in India do not face any capital shortage.
12. Startup India Initiative
The Prime Minister of India launched the Startup India Initiative in the year 2016. The idea is to increase wealth and employability by giving wings to entrepreneurial spirits. The government gives tax benefits to startups under this scheme and 798 applicants have made use of this scheme to date. The Department of Industrial Policy and Promotion is maintaining this initiative and is treating it as a long term project. Moreover, the overall age limit for startups has been increased from two years to seven years. And for biotechnology firms, the age limit is ten years from the date of incorporation. It is one of the best government-sponsored startup schemes for entrepreneurs as it is provides several concessions.
13. ASPIRE
The government has made continuous efforts to improve the social and economic aspects of life in rural areas of India. Since 56% of the Indian population lives in the rural areas, the government is promoting entrepreneurship and innovation in the rural sector. The ASPIRE scheme aims at increasing employment, reducing poverty, and encouraging innovation in rural India. However, the main idea is to promote the agro-business industry. The Ministry of Medium and Small Enterprises has tried to boost economic development at the grassroots level.
14. MUDRA Bank
Micro Units Development Refinance Agency (MUDRA) banks has been created to enhance credit facility and boost the growth of small business in rural areas. The government has introduced this scheme to support small businesses in India. In 2015, the government allocated INR 10,000 crores to promote startup culture in the country. The MUDRA banks provides startup loans of up to INR 10 lakhs to small enterprises, business which are non-corporate, and non-farm small/micro enterprises. MUDRA comes under Pradhan Mantri Mudra Yojana (PMMY) which was launched on 8 April 2015. The loans have been categorized as Tarun, Kishore, and Shishu. The assets are created through the bank’s finance and there is no collateral security.
Q10) Write note on concept of business environment. 5
A10) Entrepreneurship refers to the process of creating a new enterprise with an innovative idea and bearing any of its risks, with the view of making the profit. It is an act of seeking investment and production opportunity, developing and managing a business venture, so as to undertake production function, arranging inputs like land, labour, material and capital, introducing new techniques and products, identifying new sources for the enterprise.
Entrepreneurship is a process of actions of an entrepreneur who is a person always in search of something new and exploits such ideas into gainful opportunities by accepting the risk and uncertainty with the enterprise. Entrepreneurship involves three aspects-
- Entrepreneur: The person who innovate the idea and take risk of promoting the business idea.
- Entrepreneurship: It is the process of initiating the business idea or promoting the business venture. He undertakes all the risk attached with the new venture like risk of loss, risk of rejection in the market other related risks.
- Enterprise: It is the business venture started by the entrepreneur to undertake business activities.
Some examples of entrepreneur are Bill Gates (Microsoft), Warren Buffet (Hathaway), Gordon Moore (Intel) Steve Jobs (Apple Computers), Jack Welch (GE) GD Birla, Jamshedji Tata (TATA), Dhirubhai Ambani (Reliance), Ritesh Agarwal (OYO) etc.
Q11) Write a note on NIESBD. 8
A11) The National Institute for Entrepreneurship and Small Business Development is a premier organization of the Ministry of Skill Development and Entrepreneurship, engaged in training, consultancy, research, etc. in order to promote entrepreneurship and Skill Development. The major activities of the Institute include Training of Trainers, Management Development Programmes, Entrepreneurship-cum-Skill Development Programmes, Entrepreneurship Development Programmes and Cluster Intervention. NIESBUD has provided training to 12,37,307 persons till date through 46,837 different training programmes since inception. This includes 5,011 international participants hailing from more than 145 countries throughout the globe. The policy, direction and guidance to the Institute is provided by its Governing Council whose Chairman is the Minister of MSDE.The Executive Committee consisting of Secretary as its Chairman and Director General of the Institute as its Member-Secretary, executes the policies and decisions of the Governing Council through its whole-time Director General.
Major activities are discussed under three heads
Training:
1. Assessing the training programmes and identifying the gaps to systematically conduct training programmes, orienting them as well as motivating youth towards entrepreneurship.
2. Developing and Designing various communication media tools for promoting the culture of entrepreneurship among different strata of society in the country.
3. Supporting and playing a catalytic role towards organizations engaged directly or indirectly in developing and promoting entrepreneurship and self-employment in the Country.
4. Providing consultancy services in the area of entrepreneurship and Skill Development especially for MSDEs.
5. In addition to above, Also Providing consultancy services to other Institutions engaged in entrepreneurial training either in the Government or in the Private Sector.
6. Designing, Conceptualizing and standardizing course curriculum for entrepreneurship and skill development programmes.
Research & Development:
1. Promoting research and development activities in the area of entrepreneurship, particularly in MSDE sector. Undertaking documentation and disseminating information related to entrepreneurship/ enterprise development.
2. Developing and publishing literatures, articles, journals and information material related to entrepreneurship/enterprise development/ Skill Development/MSDEs
3. Providing an interactive platform for exchange of ideas and experiences for various targets groups mainly through seminars, workshops, conferences as well as through training programs.
4. Identifying the Problem and developing feasible solutions by conducting research studies for generating knowledge and accelerating the development of entrepreneurship.
Major Focus Areas:
1. Creating a holistic environment to support entrepreneurship and skill development within the Institute.
2. Evaluating and revising the training programmes sponsored by NIESBUD so as to fit in with the internal and external environmental changes with respect to entrepreneurship and small business Development
3. The institute is actively engaged in creating a positive image among the general public on entrepreneurship and eliminating the misconception related to it. This helps in disseminating the information on entrepreneurship and skill Development fruitfully.
Q12) Write a small note on women entrepreneurs. 5
A12) Women entrepreneurs may be defined as a woman or a group of women who initiate, organise and run a business concern. Women entrepreneurs are those women who think of a business enterprise, initiate it, organise and combine factors of production, operate the enterprise and undertake risks and handle economic uncertainty involved in running it.
According to Government of India, Government of India – “A woman entrepreneur is defined as an enterprise owned and controlled by a woman having a minimum financial interest of 51 per cent of the capital and giving at least 51 per cent of the employment generated in the enterprise to women.”
Frederick Harbison defines“Any women or group of women which innovates, initiates or adopts an economic activity may be called women entrepreneurship”.
Some of the successful women entrepreneurs in India are named below-
- Divya Gokulnath: Co-founder BYJU’S
- Falguni Nayar: The Founder of Nykaa
- Isha Choudhry: Co-Founder ZoloStays
- Malini Agarwal: Founder and Creative Director of Miss Malini
- Priyanshi Choubey: Co-founder of InstaCar
- Radhika Ghai Aggarwal: Co-Founder & CMO, Shopclues.com
- Richa kar: Co-founder & Ex-CEO, Zivame
- Shahnaz Hussian: CEO of Shahnaz Herbals
- Upasana Taku: Co-Founder of Mobikwik
- Vandana Luthra: The founder of VLCC
Q13) Discuss the problems of women entrepreneurs. 10
A13) Women entrepreneurs faces some roadblocks in promoting their start-ups due to patriarchy society, family responsibility etc. some of the significant problems of women entrepreneurs are-
1. Problem of Finance:
Finance is regarded as “life-blood” for any enterprise, be it big or small. However, women entrepreneurs suffer from shortage of finance on two counts. Firstly, women do not generally have property on their names to use them as collateral for obtaining funds from external sources. Thus, their access to the external sources of funds is limited. Secondly, the banks also consider women less credit-worthy and discourage women borrowers on the belief that they can at any time leave their business. Given such situation, women entrepreneurs are bound to rely on their own savings, if any and loans from friends and relatives who are expectedly meager and negligible. Thus, women enterprises fail due to the shortage of finance.
2. Scarcity of Raw Material:
Most of the women enterprises are plagued by the scarcity of raw material and necessary inputs. Added to this are the high prices of raw material, on the one hand, and getting raw material at the minimum of discount, on the other. The failure of many women co-operatives in 1971 engaged in basket-making is an example how the scarcity of raw material sounds the death-knell of enterprises run by women.
3. Stiff Competition:
Women entrepreneurs do not have organizational set-up to pump in a lot of money for canvassing and advertisement. Thus, they have to face a stiff competition for marketing their products with both organized sector and their male counterparts. Such a competition ultimately results in the liquidation of women enterprises.
4. Limited Mobility:
Unlike men, women mobility in India is highly limited due to various reasons. A single woman asking for room is still looked upon suspicion. Cumbersome exercise involved in starting an enterprise coupled with the officials humiliating attitude towards women compels them to give up idea of starting an enterprise.
5. Family Ties:
In India, it is mainly a women’s duty to look after the children and other members of the family. Man plays a secondary role only. In case of married women, she has to strike a fine balance between her business and family. Her total involvement in family leaves little or no energy and time to devote for business. Support and approval of husbands seem necessary condition for women’s entry into business. Accordingly, the educational level and family background of husbands positively influence women’s entry into business activities.
6. Lack of Education:
In India, around three-fifths (60%) of women are still illiterate. Illiteracy is the root cause of socio-economic problems. Due to the lack of education and that too qualitative education, women are not aware of business, technology and market knowledge. Also, lack of education causes low achievement motivation among women. Thus, lack of education creates one type or other problems for women in the setting up and running of business enterprises.
7. Male-Dominated Society:
Male chauvinism is still the order of the day in India. The Constitution of India speaks of equality between sexes. But, in practice, women are looked upon as abla, i.e. weak in all respects. Women suffer from male reservations about a women’s role, ability and capacity and are treated accordingly. In nutshell, in the male-dominated Indian society, women are not treated equal to men. This, in turn, serves as a barrier to women entry into business.
- Low Risk-Bearing Ability:
Women in India lead a protected life. They are less educated and economically not self-dependent. All these reduce their ability to bear risk involved in running an enterprise. Risk-bearing is an essential requisite of a successful entrepreneur. In addition to above problems, inadequate infrastructural facilities, shortage of power, high cost of production, social attitude, low need for achievement and socioeconomic constraints also hold the women back from entering into business.
2. Lack of Information
Women entrepreneurs are not generally aware of the subsidies and incentives available for them. Lack of knowledge may prevent them from availing the special schemes.
3. Lack of persistent Nature
Women generally have sympathy for others. They are very emotional. This nature should not allow them to get easily cheated in business.
Q14) Discuss about the entrepreneurial promotion schemes. 10
A14) There is now a need for sustainable growth of women entrepreneurs to promote balanced growth in the country. Through several funding schemes for boosting women entrepreneurship, the central and state governments and banks across the country have been addressing the disparity. Some of the such schemes are-
1. Mudra Yojana Scheme
Mudra Yojana Scheme — a government scheme for small units — is also applicable to women who want to start a small enterprise, such as a beauty parlour, tuition centre, tailoring unit, etc. Women entrepreneurs can avail of loans from Rs 50,000 onwards and up to Rs 50 lakh under the scheme. They are required to present collateral and guarantors only if the loan amount exceeds Rs 10 lakh. There are three plans under this — Shishu plan (loans up to Rs 50,000 for new businesses), Kishor plan (loans between Rs 50,000 and Rs 5 lakh for well-established enterprises), and Tarun plan (loans between Rs 5 lakh and Rs 10 lakh for business expansion).
2. TREAD (Trade-Related Entrepreneurship Assistance and Development) scheme
The TREAD scheme is aimed at women who don't have easy access to bank credit. The scheme provides for business projects, conducting training and counselling sessions. It also helps with a government grant of up to 30 per cent of the total project cost as appraised by lending institutions. These institutions would finance the other 70 per cent. The grant is limited to Rs 5 lakh per project. The loan and grant amounts are routed through NGOs, which are also responsible for imparting the training sessions. The cost of training (up to Rs 1 lakh) will be borne by the government if the NGOs bring their share of the government grant to a minimum of 25 per cent.
3. Mahila Udyam Nidhi Scheme
Under the Small Industries Development Bank of India (SIDBI), Mahila Udyam Nidhi Scheme provides financial assistance of up to Rs 10 lakh to women entrepreneurs to set up new small-scale ventures. It also assists with upgrading and modernisation of existing projects. The loans are to be repaid within 10 years, which includes a five year moratorium period. Interest rates on these loans can vary according to market rates and from bank-to-bank.
4. Annapurna Scheme
Annapurna Scheme applies to women entrepreneurs who have started a food catering unit or wish to start one. Under this scheme, they can avail of a loan of up to Rs 50,000 to purchase kitchen essentials, utensils, gas connections, raw materials, water filters, etc. A guarantor is required to secure the loan. After securing the loan, it can be repaid in 36 instalments (the repayment period is three years). Further, interest rates under this scheme are decided as per prevailing market rates.
5. Stree Shakti Package for Women Entrepreneurs
It is offered to women who have majority ownership (over 50 per cent) in a small business. These women also need to be enrolled in the Entrepreneurship Development Programmes (EDP) organised by their respective state agency. Loans under the scheme require no security and are given at an interest rate of 11.2 per cent onwards. The repayment tenure is a maximum of 36 months, including one month moratorium period. Under the scheme, an interest concession of 0.05 per cent can be availed on loans above Rs 2 lakh.
6. Bhartiya Mahila Business Bank (BMB) Loan
This loan scheme is categorised under four types — BMB Shringaar for beauty parlour/salons and spas; BMB Annapurna Loan for food catering; BMB SME Easy for SMEs; and BMB Parvarish for daycare centres. This scheme — which comes under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) — involves loans of up to Rs 20 crore for women business owners. In fact, there is no need for collateral for loans up to Rs 1 crore. The loans under this scheme are to be repaid in seven years. The scheme was implemented by Bhartiya Mahila Bank, which merged with the State Bank of India in 2017.
7. Dena Shakti Scheme
The Dena Shakti Scheme provides loans up to Rs 20 lakh for women entrepreneurs in agriculture, manufacturing, micro-credit, retail stores, or similar small enterprises. Under the scheme, loans up to Rs 50,000 are offered under the micro-credit category. The rate of interest is charged as per extant guidelines of Dena Bank, which facilitates loans, and RBI directives. A concession or rebate of 25 basis points in the rate of interest as applicable to existing activities is provided to women beneficiaries, subject to conditions specified by the Dena Bank.
8. Udyogini Scheme
This scheme provides subsidised loans to aspiring women entrepreneurs from rural and under-developed regions. It extends interest-free loans of up to Rs 3 lakh to women entrepreneurs running or starting small-scale industries. The government proposes up to 30 percent subsidy on loans extended under this scheme. Women entrepreneurs between the ages of 25 and 65 with a family annual income of less than Rs 1.5 lakh can apply. The upper limit for income is not applicable for women under special categories, including disabled, widowed, and destitute.
9. Cent Kalyani Scheme
Offered by the Central Bank of India, this scheme is for women business owners in multiple areas across manufacturing and services, including handlooms, food processing, garment making, etc. The purpose of the scheme is to provide loans to meet capital expenditure on plant and machinery, equipment, daily expenses, and others. Under this scheme, loans up to Rs 1 crore are sanctioned with a 20 per cent margin on collateral. Moreover, the interest rate on loans depends on varying market rates.
10. The Women’s Entrepreneurship Development and Gender Equality (WEDGE) project
The Women’s Entrepreneurship Development and Gender Equality (WEDGE) project (2008-2011) promotes women’s entrepreneurship and support women entrepreneurs to create decent employment, achieve women’s empowerment and gender equality, and work toward poverty reduction. Implemented within the framework of the ILO Decent Work Country Programme, in Asia, the WEDGE project is operational in Cambodia (since 2005), Lao PDR (since 2002) and Viet Nam (since 2009). It forms part of the global WEDGE programme, which is supported by the ILO-Irish Aid Partnership Programme. Its objectives are-
- Create an enabling environment for women’s entrepreneurship development and gender equality,
- Build the institutional capacity of agencies involved in women’s entrepreneurship development and gender equality, and
- Develop tools and support services for women entrepreneurs.
Q15) Write a brief note on IIE. 8
A15) The Indian Institute of Entrepreneurship (IIE) was established in the year 1993 in Guwahati by the erstwhile Ministry of Industry (now the Ministry of Micro, Small and Medium Enterprises), Government of India as an autonomous National Institute to undertake training, research and consultancy activities in small and micro enterprises focusing on entrepreneurship development. The institute began operating from April 1994 with the North East Council (NEC), Governments of Assam, Arunachal Pradesh and Nagaland and SIDBI as its other stakeholders. It is also An ISO 9001:2015 Certified Organisation.
Objectives of IIE are-
- To promote and develop entrepreneurship.
- To conduct research and provide consultancy for entrepreneurship development.
- To coordinate and collaborate with other organizations in undertaking training, research and other activities to increase outreach of the institute.
- To provide consultancy and monitoring service to MSMEs/ potential entrepreneurs and enhancing employability of participants.
- To promote greater use of information technology in the activities/ functions of the IIE.
- To comply with statutory responsibility.
Functions of IIE are-
- Designing and organising training activities for different target groups and undertaking research in areas relevant to entrepreneurship.
- Improving the efficiency, effectiveness and delivery of change agents and development practitioners i.e. trainers, support organizations engaged in enterprise building. Etc.
- Provide consultancy services to prospective and existing entrepreneurs.
- Increasing the outreach of activities of the institute through collaborative activities and increasing their effectiveness through use of different tools of information technology.
The major activities of the Institute includes:
- Training: The institute organizes training programmes for different target groups, including Trainers’ Training Programme (TTP), Management Development Programme (MDP), Faculty Development Programme for College and School Teachers, Orientation Programme for Government/Non-Government organizations, Entrepreneurship Development Programme (EDP), Entrepreneurship-cum-Skill Development Programme (ESDP) and other sponsored activities.
- Research: The Institute undertakes research and studies either on its own or on sponsored basis and provides consultancy in the field of growth and development of MSMEs across North East India and other states. The Institute also acts as a catalyst and a resource centre for providing various inputs on policy formulation for promoting entrepreneurship and development of MSMEs to Central and State governments. Other areas of focus include Action Research on development of MSMEs, Skill Gap studies, Evaluation studies, industrial potential survey etc.
- Consultancy: It offers advice and consultancy in the various areas of entrepreneurship, including, Enterprise planning; Enterprise Management; Enterprise Expansion, Diversification & Growth; Management Consultancy; Marketing consultancy with specialization on export and border trade; Technology sourcing; Technology propagation; Project and Reports.
- Seminars and Workshops: The Institute organizes Seminars and Workshops to share experiences on implementation of programmes of self-employment and entrepreneurship, on current topics and awareness generation. Besides, the institute organizes Entrepreneurs Meet to understand and appreciate their problems in launching projects and managing them successfully.
- Projects: The institute has also undertaken various projects such as, Centre for Sustainable Livelihood promotion (CSPL); Regional Resource Centre (RRC) for Cluster Development; Science and Technology Entrepreneurship Development (STED) Project; and Rural Industries Programme (RIP) ;Pilot Project on Entrepreneurship Promotion and Mentoring of Micro and Small Businesses in temple towns of Puri(Odisha), Bodh Gaya(Bihar) and Kollur(Karnataka) entrepreneurship promotion through capacity building and handholding support for beneficiaries of Jan Shikshan Sansthan & Cluster artisans of north eastern region and Prime Minister Van Dhan Yojana targeting livelihood generation for tribal population through harnessing of forest resources.
