Entrepreneurship Development Solved Papers: November' 2016 | Dibrugarh University | B.Com 5th Sem

1. Answer the following questions as directed:                                                  1x8=8

Ans: Functions: The major functions of the organisation are:

Ans: Skill development and vocational training programs are conceptualized, executed and monitored by various organizations, working closely with the government of India. There are various plans and schemes that are dedicated to achieve scalable skilling with quality and higher productivity, particularly in the unorganized  or informal sector which accounts for  83% of India’s workforce. The Ministry of Skill Development and Entrepreneurship (MSDE) is responsible for the co-ordination of overall skill development efforts across the country, building the vocational and technical training framework, skill up-gradation, building of new skills, and innovative thinking not only for existing jobs but also jobs that are to be created.

Ans: Problems Faced By Rural Entrepreneurs

Most of the rural entrepreneurs face peculiar problems like illiteracy, fear of risk, lack of training and experience, limited purchasing power and competition from urban entrepreneurs. Some of the major problems faced by rural entrepreneurs are as under.

1. Paucity of funds: Most of the rural entrepreneurs fail to get external funds due to absence of tangible security and credit in the market. The procedure to avail the loan facility is too time-consuming that its delay often disappoints the rural entrepreneurs.

2. Competition: Rural entrepreneurs face severe completion from large sized organizations and urban entrepreneurs. They incur high cost of production due to high input cost.

3. Middlemen: Middlemen exploit rural entrepreneurs. The rural entrepreneurs are heavily dependent on middlemen for marketing of their products who pocket large amount of profit.

4. Legal formalities: Rural entrepreneurs find it extremely difficult in complying with various legal formalities in obtaining licenses due to illiteracy and ignorance.

5. Procurement of raw materials: Procurement of raw materials is really a tough task for rural entrepreneur. They may end up with poor quality raw materials, may also face the problem of storage and warehousing.

1. No Policy at the National Level. Though Government of India is fully aware about the importance of entrepreneurial development, yet we do not have a national policy on entrepreneurship. It is expected that the government will formulate and enforce a policy aimed at promoting balanced regional development of various areas through promotion of entrepreneurship.

2. Problems at the Pre training Phase. Various problems faced in this phase are — identification of business opportunities, finding & locating target group, selection of trainee & trainers etc.

3. Over Estimation of Trainees. Under EDPs it is assumed that the trainees have aptitude for self employment and training will motivate and enable the trainees in the successful setting up and managing of their enterprises. These agencies thus overestimate the aptitude and capabilities of the educated youth. Thus on one hand the EDPs do not impart sufficient training and on the other financial institutions are not prepared to finance these risky enterprises set up by the not so competent entrepreneurs.

4. Duration of EDPs. An attempt is made during the conduct of EDPs to prepare prospective entrepreneurs thoroughly for the various problems they will be encountering during the setting up and running of their enterprises. Duration of most of these EDPs varies between 4 to 6 weeks, which is too short a period to instill basic managerial skills in the entrepreneurs. Thus the very objective to develop and strengthen entrepreneurial qualities and motivation is defeated.

Ans: Entrepreneur: The word “entrepreneur” is derived from the French word entreprendre which means to initiate or undertake. In the early sixteenth century, the Frenchmen who organised and led military expeditions were referred to as “entrepreneurs”. The term entrepreneur was applied to business in the early eighteenth century by French Economist Richard Cantillon. According to him, the entrepreneur buys factor services at certain prices with a view to sell their products at uncertain prices in the future. Richard Cantillon conceived of an entrepreneur as a bearer of non-insurable risk.

Entrepreneurs are classified as under different heads as given below. This helps the potential entrepreneurs to choose his own nature and style of entrepreneurship.

a) According to the Type of Business: Entrepreneurs are found in various types of business occupations of varying size. We may broadly classify them as follows:

Business Entrepreneur: Business entrepreneurs are individuals who conceive an idea for a new product or service and then create a business to materialize their idea into reality. They tap both production and marketing resources in their search to develop a new business opportunity. They may set up a big establishment or a small business unit.

Trading entrepreneur: Trading entrepreneur is one who undertakes trading activities and is not concerned with the manufacturing work. He identifies potential markets, stimulates demand for his product line and creates a desire and interest among buyers to go in for his product. He is engaged in both domestic and overseas trade.

Industrial Entrepreneur: Industrial entrepreneur is essentially a manufacturer who identifies the potential needs of customers and tailors product or service to meet the marketing needs. He is a product oriented man who starts in an industrial unit because of the possibility of making some new product.

Corporate Entrepreneur: Corporate entrepreneur is essentially a manufacturer who identifies the potential needs of customers and tailors product or service to meet the marketing needs. He is a product oriented man who starts in an industrial unit because of the possibility of making some new product.

Agricultural Entrepreneur: Agricultural entrepreneurs are those entrepreneurs who undertake such agricultural activities as raising and marketing of crops, fertilizers and other inputs of agriculture. According to the use of Technology.

Technical Entrepreneur: A technical entrepreneur is essentially an entrepreneur of “Craftsman type”. He develops a new and improved quality of goods because of his craftsmanship. He concentrates more on production than marketing.

Non-technical Entrepreneur: Non-technical entrepreneurs are those who are not concerned with the technical aspects of the product in which they deal. They are concerned only with developing alternative marketing and distribution strategies to promote their business.

Professional Entrepreneur: Professional entrepreneur is a person who is interested in establishing a business but does not have interest in managing or operating it once it is established.

b) According to Motivation: Motivation is the force that influences the efforts of the entrepreneur to achieve his objectives. An entrepreneur is motivated to achieve or prove his excellence in job performance. He is also motivated to influence others by demonstrating his power thus satisfying his ego.

Pure Entrepreneur: A pure entrepreneur is an individual who is motivated by psychological and economic rewards. He undertakes an entrepreneurial activity for his personal satisfaction in work, ego or status.

Induced Entrepreneur: Induced entrepreneur is one who is being induced to take up an entrepreneurial task due to the policy measures of the government that provides assistance, incentives, concessions and necessary overhead facilities to start a venture.

Motivated Entrepreneur: New entrepreneurs are motivated by the desire for self-fulfillment. They come into being because of the possibility of making and marketing some new product for the use of consumers. If the product is developed to a saleable stage, the entrepreneur is further motivated by reward in terms of profit and enlarged customer network.

Spontaneous Entrepreneur: These entrepreneurs start their business out of their natural talents and instinct. They are persons with initiative, boldness and confidence in their ability which motivate them to undertake entrepreneurial activity.

Growth Entrepreneur: Growth entrepreneurs are those who necessarily take up a high growth industry. These entrepreneurs choose an industry which has substantial growth prospects.

Super-Growth Entrepreneur: Super-growth entrepreneur are those who have shown enormous growth of performance in their venture. The growth performance is identified by the liquidity of funds, profitability and gearing.

First-Generation Entrepreneur: A first generation entrepreneur is one who starts an industrial unit by means of an innovative skill. He is essentially an innovator, combining different technologies to produce a marketable product or service.

Modern Entrepreneur: A modern entrepreneur is one who undertakes those ventures which go well along with the changing demand in the market. They undertake those ventures which suit the current marketing needs.

Classical Entrepreneur: A classical entrepreneur is one who is concerned with the customers and marketing needs through the development of a self supporting venture. He is a stereo type entrepreneur whose aim is to maximize his economic returns at a level consistent with the survival of the firm with or without an element of growth.

Innovating Entrepreneurs: Innovating entrepreneurship is characterized by aggressive assemblage of information and analysis of results, deriving from a novel combination of factors. Men/women in this group are generally aggressive in experimentation who exhibit cleverness in putting attractive possibilities into practice.

Imitative Entrepreneurs: Imitative entrepreneurship is characterized by readiness to adopt successful innovations by innovating entrepreneurs. They first imitate techniques and technology innovated by others.

Fabian Entrepreneurs: These categories of entrepreneurs are basically running their venture on the basis of conventions and customary practices. They don’t want to introduce change and not interested in coping with changes in environment. They have all sorts of inhibitions, shyness and lethargic attitude. They are basically risk aversor and more cautious in their approach.

Drone Entrepreneurs: Entrepreneurs who are reluctant to introduce any changes in their production methods, processes and follow their own traditional style of operations. Though they incur losses and looses their market potential, will not take any effort to overcome the problem. Their products and the firm will get natural death and knockout.

Forced Entrepreneurs: Sometimes, circumstances made many persons to become entrepreneurs. They do not have any plan, forward looking and business aptitude. To mitigate the situational problem, they are forced to plunge into entrepreneurial venture. Most of the may not be successful in this category due to lack of training and exposure.

Ans: Traits and Qualities (Characteristics or Matching of situational requirements) of an Entrepreneur: The true entrepreneur is one who is endowed with more than average capacities in the task of organizing and co-coordinating the various other factors of production. He should be a pioneer, a captain of industry. The supply of such entrepreneurship is however quite limited and all are not endowed with such talent. The modern entrepreneur is one who detects and evaluates a new situation in his environment and directs the making of such adjustments in the economic systems as he deems necessary. He conceives a new industrial enterprise, displays considerable initiative, grit and determination in bringing his project to fruition. Some of the qualities of an entrepreneur are mentioned below:

Despite various constraints faced by the women entrepreneurs of Assam in particular and India in general, several opportunities are also available now-a-days. These are discussed below:

Possible integration of India’s North East with South East Asian Nations: Strenuous efforts are being made towards integration of India’s North East with the South East Asian Countries including China for trade and commerce. In the process, there is possibility of reopening of the historic Stilwell Road. This will certainly boost up our tourism sector. Tourism being a multi-sectoral activity will considerably widen and prospect for development of women entrepreneurship in Assam, including the other states of the region. business.

The entrepreneurs in Assam in particular and those of Indian’s North Eastern Region in general, irrespective of their gender, have some specific problems in setting up and running their business ventures. Similarly the Indian women in general have some problems specific to them. The nature and magnitude of the problems faced by our women depends on various factors to which a woman is subjected. Women in general have high degree of patience, profound sincerity in work, diligence, sense of duty and efficient managerial skill (with initial guidance). But unfortunately, the society either fails to identify their quality or under-estimate them and /or suppress them as second class citizen. The problems in general the women entrepreneurs in developing countries like India face, which are equally applicable to the women entrepreneurs in Assam relate to the following:

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Cost: An innovating entrepreneur is one who introduces new goods, inaugurates new method of production to produce a new product. An innovator has to maintain more cost than imitative entrepreneurs. But the developing countries can not afford to bear this cost. On the other hand, an imitative entrepreneur follows the innovator entrepreneurs. They copy the product that has been innovated before. Since innovative entrepreneurs need to expense a lot of money that imitative entrepreneurs. So developing countries need imitative entrepreneurs.

Technology: From the technology the developed countries are better than the developing countries in case of technology. An innovative entrepreneur uses the modern technology. But developing countries can not use digital technology. So in the developing countries need imitative entrepreneurs.

Discovery of Market: Discovery of market is easy for the developed countries. So the developed countries can expect innovative entrepreneurs. On the other hand, in the developing countries it is difficult to spread the market of product. So developing countries need imitative entrepreneurs.

New method of production: It is very difficult to make a new method of production for the developing countries. As innovative entrepreneurs adopt new methods of production. So developing countries need to choose the imitative ones to reduce the risk of loss.

Reorganizing: An innovating entrepreneur reorganizes the enterprise. But the enterprises in the developing countries like India can not be re-formatted. So the imitative entrepreneurs are most suitable for the developing countries. 

Challenge: An innovating entrepreneur can take challenge. But the developing countries can not let the public in the face of the Black hole. That is why the imitative entrepreneurs are suitable for the developing countries.

Intention: In the developing countries like India the people are less educated for what they are not intentionally keen to engage in the entrepreneurial activities.

Less initiative: There is a lack of opportunities in the developing countries for what the individuals do not come forward to take initiative to form an enterprise.

Risk: In a developing country the people do not take a chance in using the new product for what the innovators do not take chance of inventing new products.

Imitation: In a developing country like ours the people do not possess any knowledge on the latest technology for what they take the path of imitation. They bring out the products that are being sold worldwide.

Rural entrepreneurs are those who carry out entrepreneurial activities by establishing industrial and business units in the rural sector of the economy. In other words, establishing industrial and business units in the rural areas refers to rural entrepreneurship. In simple words, rural entrepreneurship implies entrepreneurship emerging in rural areas. Or, say, rural entrepreneurship implies rural industrialisation. Thus, we can say, entrepreneurship precedes industrialization.

According to KVIC (Khadi and Village Industry Commission), "village industries or Rural industry means any industry located in rural areas, population of which does not exceed 10,000 or such other figure which produces any goods or renders any services with or without use of power and in which the fixed capital investment per head of an artisan or a worker does not exceed a thousand rupees".

Women Entrepreneurs may be defined as the women or a group of women who initiate, organize and operate a business enterprise. Government of India has defined women entrepreneurs as an enterprise owned and controlled by a women having a minimum financial interest of 51% of the capital and giving at least 51% of employment generated in the enterprise to women. Like a male entrepreneurs a women entrepreneur has many functions. They should explore the prospects of starting new enterprise; undertake risks, introduction of new innovations, coordination administration and control of business and providing effective leadership in all aspects of business.

A self help group is defined as a group consisting of people who have personal experience of a similar issue or life situation, either directly or through their family and friends. Sharing experiences enables them to give each other a unique quality of mutual support and to pool practical information and ways of coping.

Self help groups are small informal association of the poor created at the grass root level for the purpose of enabling members to reap economic benefits out of mutual help solidarity and joint responsibility. Self help groups are formed voluntarily by the rural and urban poor to save and contribute to a common fund to be lent to its members as per group decision and for working together for social and economic uplift of their families and community.

A self help group is defined as a "self governed, peer controlled information group of people with similar socio-economic background and having a desire to collectively perform common purpose."

Following are the important points in the formation of SHG:

After putting all these questions to the rural people, if the answer is affirmative (i.e. “yes”) to at least three or four of these questions, the family can be considered as poor and a person from that family can be accepted as a member of an SHG.

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Ans: Leadership is the ability to build up confidence and deal among people and to create an urge in them to be led. To be a successful leader, a manager must possess the qualities of foresight, drive, initiative, self-confidence and personal integrity. Different situations may demand different types of leadership.

Leadership means influencing the behaviour of the people at work towards realizing the specified goals. It is the ability to use non-coercive (no force) influence on the motivation, activities and goals (MAG) of others in order to achieve the objectives of the organisation.

Koontz and 0' Donnel “Leadership is the ability of a manager to induce subordinates to work with confidence and zeal”.

George R Terry “Leadership is the activity of influencing people to strive willingly for group objectives”.

It seems that everyone has their own ideas about what makes a successful entrepreneur. For some, the most important qualities are persistence and a high degree of tolerance for risk. For others, entrepreneurs need to be good communicators above all else, or have excellent financial management skills. Some claim that a solid vision is the most important trait, but regardless of what they believe to be most important, nearly everyone agrees that leadership is a vital skill for all business owners.

In any business, whether a small startup or a thriving mid-size company well on its way to becoming a major enterprise, leaders are an integral part of formulating and articulating the company’s direction, setting goals, and motivating employees to work toward the same goals. In other words, a leader’s priorities are the same as any entrepreneur’s priorities.

However, just because being a good leader can help you be a more successful entrepreneur, doesn’t mean that all entrepreneurs are good leaders. In fact, research shows that the majority of entrepreneurs who were able to take their enterprises public actually failed as CEOs, indicating that the leadership skills that were are useful in getting a company off the ground are not always the same as those required to lead the company as it grows. That being said, entrepreneurial leadership is clearly important if a business owner wants to successfully grow and manage their company.

Often, developing entrepreneurial leadership skills first requires investing time in advanced education and additional training, especially formal leadership courses. But however you choose to grow your skills though, it’s important to focus on a few key areas.

1.       Autocratic or Authoritarian Style leader: An autocratic also known as authoritarian style of leadership implies wielding absolute power. Under this style, the leader expects complete obedience from his subordinates and all decision-making power is centralized in the leader. No suggestions or initiative from subordinates is entertained. The leader forces the subordinates to obey him without questioning. An autocratic leader is, in fact, no leader. He is merely the formal head of the organization and is generally disliked by the subordinates who feel comfortable to depend completely on the leader.

2.       Laissez-faire or Free-rein Style Leader: Under this type of leadership, maximum freedom is allowed to subordinates. They are given free hand in deciding their own policies and methods and to make independent decisions. The leader provides help only when required by his subordinates otherwise he does not interfere in their work. The style of leadership creates self-confidence in the workers and provides them an opportunity to develop their talents. But it may not work under all situations with all the workers, may bring problems of indiscipline. Such leadership can be employed with success where workers are competent, sincere and self-disciplined.

3.       Democratic or Participative Style leader: The democratic or participative style of leadership implies compromise between the two extremes of autocratic and laissez-fair style of leadership. Under this style, the supervisor acts according to the mutual consent and the decisions reached after consulting the subordinates. Subordinates are encouraged to make suggestions and take initiative. It provides necessary motivation to the workers by ensuring their participation and acceptance of work methods. Mutual trust and confidence is also created resulting in job satisfaction and improved morale of workers. It reduces the number of complaints, employee's grievances, industrial unrest and strikes. But this style of leadership may sometimes cause delay in decisions and lead to indiscipline in workers.

4.       Paternalistic Style leader: This style of leadership is based upon sentiments and emotions of people. A paternalistic leader is like a father to these subordinates. He looks after the subordinates like a father looks after his family. He helps guides and protects all of his subordinates but under him no one grows. The subordinates become dependent upon the leader.

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Also Read:

1. Introduction to Entrepreneurs, Traits and Qualities of Entrepreneurs

2. Rural Entrepreneurs and Woman Entrepreneurs Notes

3. Self Help Groups

4. Entrepreneurship Development Programme (EDPs)

5. Leadership - Styles and Qualities

6. MSME Promotional Agencies

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Also Read (Dibrugarh University)

1. Entreprenurship Development Question Papers

2. Entrepreneurship Development Solved Question Papers

3. Entrepreneurship Development MCQs

4. Entrepreneurship Develoment Important Questions for Upcoming Exams

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Ans: Entrepreneurial Development Programme (EDP) can be defined as a programme, formally designed to help an individual in strengthening his/her entrepreneurial motive and in acquiring skill and capabilities necessary for playing entrepreneurial role effectively. In fact, it is an academic exercise to build up human resources by including them to take up entrepreneurial activities through motivation and developing the required entrepreneurial skills through exposure creation to effectively manage their enterprises. According to N.P. Singh, EDP is not merely a training programme. It is a process of:

Thus, EDPs endeavous to change educate and equip a person to become a successful entrepreneur. The whole process envisages developing the participant’s latent qualities and skills as also equipping him with other capabilities. By the end of the programme, the participant is expected to be in a position to crystalise his vision in to action and launch and manage his enterprise with competence. The system involves a selection procedure and only those who prove to have certain minimum initial traits are selected as potential entrepreneurs to be trained up to develop the other required traits through interventions.

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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 with an aim 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 9001:2008 Certified Organisation.

It is a statutory body created by an Act of Parliament in 1956 and became operative from April 1957 by taking over the work of the erstwhile “All India Khadi and Village Industries Board” set up in 1950. The Commission is engaged in the task of promoting and developing Khadi and Village Industries (KVI) with a view to creating employment avenues in the rural areas thereby strengthening the rural economy of India. It functions under the administrative control of the Ministry of Micro Small and Medium Enterprises, Govt. of India.

KVIC has its central office at Mumbai. It has 36 State and Divisional offices, 6 Zonal offices, 15 Departmental and 23 Non-Departmental Training Centers and a number of accreted Training Centers in addition to 13 Departmental Sales Outlets. The KVIC operates through 33 Boards spread over in different states and union territories of the country, in addition to thousands of institutions and co-operatives including DIC/DICCs.

Objectives: The broad objectives of the KVIC are of three-fold as under:

Functions: The crucial functions which the KVIC performs towards attainment of its avowed objectives are as follows:

It is a state level statutory body formed by an Act of the concerned state legislature. In India, at present there are 33 KVIBs in different States and Union Territories. The Assam Khadi and Village Industries Board Act was passed in the year 1955. The basic objective of the Board is to work towards organizing, developing and regulating the village industries in the state.

Functions: As a statutory Body of the Govt. of Assam the KVIB is required to perform numerous functions for promotion and development of Khadi and Village Industries in the State. The most important functions of the Board as enumerated in the Assam Khadi and Village Act, 1955 are listed below:

On the basis of the above board outline of functions as assigned to the Board and stipulated in the Act, the KVIB of Assam undertakes the following activities.

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By enacting the Micro, Small and Medium Enterprises Development Act, 2006, the Government has recently fulfilled one of the needs felt and articulated by this segment for long. This Act seeks to facilitate promotion and development and enhancing competitiveness of these enterprises. It provides the first-ever legal framework for recognition of the concept of “enterprise” (comprising both manufacturing and services) and integrating the three tiers of these enterprises, namely, micro, small and medium. Apart from clearer and more progressive classification of each category of enterprises, particularly the small, the Act provides for a statutory consultative mechanism at the national level with wide representation of all sections of stakeholders, particularly the three classes of enterprises.

1. Section 7 of Act provides for the following classification in respect of industries engaged in production or manufacture of goods or rendering service enterprises:

2. Filing of Memoranda by MSMEs: Process of two-stage registration of Micro and Small Enterprises dispensed with and replaced by filing of memoranda. 1. Filing of Memorandum optional for all Micro and Small Enterprises. 2. Filing of Memorandum optional for Service Sector Medium Enterprises. 3. Filing of memorandum mandatory for Manufacturing Sector Medium Enterprises.

3. Constitution of National Board: National Board for Micro, Small and Medium Enterprises (MSME) to be headed by the Central Minister in-charge of MSMEs and consisting of 46 members from among MPs and Representatives of Central Ministries, State Governments, UT Administration, RBI, SIDBI, NABARD, Associations of MSMEs including women etc.

Functions of the National Board: Examine the factors affecting the promotion and development of MSMEs and review the policies and programmes of the Central Government in this regard.

4. Advisory Committee Headed by Central Government Secretary I/c of MSMEs and including not more than five officers of the Central Government and not more than three representatives of State Governments; and One representative each of the Associations of micro, small and medium enterprises.

6. Promotional and Enabling Provisions Central Government to notify programmes, guidelines or instructions for facilitating the promotion and development and enhancing the competitiveness of MSMEs. Central Government to administer the Fund or Funds for purpose mentioned in Section 9 and coordinate and ensure timely utilization and release of sums with such criteria, as may be prescribed.

7. Credit: The policies and practices in respect of credit to the MSMEs shall be progressive and such as may be specified in the guidelines or instructions issued by the Reserve Bank of India, with the aims of:

8. Procurement Policies: Central Government or a State Government to notify preference policies in respect of procurement of goods and services produced and provided by MSEs, by its Ministries, departments or its aided institutions and public sector enterprises .

10. Facilitating Closure of Business: Central Government may (within one year of the commencement of the Act) notify a scheme for facilitating closure of business by a micro, small or medium enterprise. The objectives of the rehabilitation policy are to give guidelines in the following areas:

• Identifying the sickness at an early stage.

• Initiating remedial measures promptly with a pro active approach

• Formulation and implementation of rehabilitation package for potentially viable sick MSME units

Ans: Functions of DI&CC: The DI&CC words at the grass-root for promotion and development of indigenous entrepreneurship in the state through policy supports initiated by the central and the state Governments. The major functions include the following:

(OLD COURSE)

Pass Marks: 32

Time: 3 hours

1. (a) Write True or False of the following:                                            1x4=4

(b) Fill in the blanks of the following:                                                       1+1=2

(c) Write the full forms of the following:                                                1+1=2

Ans: The true entrepreneur is one who is endowed with more than average capacities in the task of organizing and co-coordinating the various other factors of production. He should be a pioneer, a captain of industry. The supply of such entrepreneurship is however quite limited and all are not endowed with such talent. The modern entrepreneur is one who detects and evaluates a new situation in his environment and directs the making of such adjustments in the economic systems as he deems necessary. He conceives a new industrial enterprise, displays considerable initiative, grit and determination in bringing his project to fruition. Some of the qualities of an entrepreneur are mentioned below:

1)Initiative: Initiation of any business activity should come from the entrepreneur. It is the entrepreneur who takes action that goes beyond job requirements or the demand of the situation. He does things before being asked or forced by the events.

2)Looking for opportunities: A successful entrepreneur is one who always is on the look for and takes action on opportunities. He must be always in readiness to exploit it in maximizing the interest of the organization.

3)Persistence: An entrepreneur should take repeated actions to overcome the obstacles that get in the way of reaching goals. He should never be disheartened by failures. He should believe in the Japanese proverb, "Fall seven times, and stand up eight".

4)Information seeking: An entrepreneur is always in search of new ideas and information’s from various sources to help reach objectives or clarify problems. He can consult experts for business or technical advice. He personally undertakes research, analysis or investigation on his own to get information in realizing his goals.

5)Concern for quality products: Successful entrepreneurs always believe in high quality standards of their products with reasonable prices. They believe in excellence. They act to do things that meet or beat existing standards of excellence.

Ans: Entrepreneurial motivation is the process of transforming an ordinary individual to a powerful businessman, who can create opportunities and helps in maximizing wealth and economic development. It is defined as various factors stimulate desires and activates enthusiasm in entrepreneurs which make them attain a particular goal. Entrepreneurship is the process of identifying strengths and opportunities which help in the realization of one’s dreams for designing, developing and running a new business by facing threats and risks effectively. To become an entrepreneur one should identify their strengths and opportunities from the external environment. Here motivation plays a major role in identifying their own strengths to become strong leaders or powerful entrepreneurs which make them to accepting risks and face uncertainty for the purpose of reaching pre-described goals.

Ans: Imitative Entrepreneurs: Imitative entrepreneurship is characterized by readiness to adopt successful innovations by innovating entrepreneurs. They first imitate techniques and technology innovated by others.  Such entrepreneurs imitate the existing entrepreneur and set their enterprise in the same manner. Instead of innovation, may just adopt the technology and methods innovated by others. Such types of entrepreneur are particularly suitable for under-developed countries for imitating the new combination of production already available in developed countries.

Ans: A self help group is defined as a group consisting of people who have personal experience of a similar issue or life situation, either directly or through their family and friends. Sharing experiences enables them to give each other a unique quality of mutual support and to pool practical information and ways of coping.  Self help groups are small informal association of the poor created at the grass root level for the purpose of enabling members to reap economic benefits out of mutual help solidarity and joint responsibility. Self help groups are formed voluntarily by the rural and urban poor to save and contribute to a common fund to be lent to its members as per group decision and for working together for social and economic uplift of their families and community.

A self help group is defined as a "self governed, peer controlled information group of people with similar socio-economic background and having a desire to collectively perform common purpose."

3. (a) Define entrepreneurship. Explain its significance.                                  4+7=11

Entrepreneur: The word “entrepreneur” is derived from the French word entreprendre which means to initiate or undertake. In the early sixteenth century, the Frenchmen who organised and led military expeditions were referred to as “entrepreneurs”. The term entrepreneur was applied to business in the early eighteenth century by French Economist Richard Cantillon. According to him, the entrepreneur buys factor services at certain prices with a view to sell their products at uncertain prices in the future. Richard Cantillon conceived of an entrepreneur as a bearer of non-insurable risk.

The entrepreneur is the key to the creation of new enterprises thatenergise the economy and rejuvenate the established enterprises that make upthe economic structure. Entrepreneurs initiate and sustain the process ofeconomic development in the following ways:

1. Capital formation: Entrepreneurs mobilise the idle savings of the public through the issues of industrial securities. Investment of public savings in industry results in productive utilisation of national resources. Rate of capital formation increases which is essential for rapid economic growth. Thus, an entrepreneur is the creator of wealth.

2. Improvement in per capita income: Entrepreneurs locate and exploit opportunities. They convert the talent and idle resources like land, labour and capital into national income and wealth in the form of goods and services. They help to increase net national product and per capita income in the country, which are important yardsticks for measuring economic growth.

3. Improvement in living standards: Entrepreneurs set up industries which remove scarcity of essential commodities and introduce new products. Production of goods on mass scale and manufacture of handicrafts, etc., in the small scale sector help to improve the standard of life of a common man. These offer goods at lower costs and increase variety in consumption.

4. Economic independence: Entrepreneurship is essential for national self-reliance. Industrialists help to manufacture indigenous substitutes of hitherto imported products thereby reducing dependence on foreign countries. Businessmen also export goods and services on a large scale and thereby earn the scarce foreign exchange for the country. Such import substitution and export promotion help to ensure the economic independence of the country without which political independence has little meaning.

5. Backward and forward linkages: An entrepreneur initiates change which has a chain reaction. Setting up of an enterprise has several backward and forward linkages. For example, the establishment of a steel plant generates several ancillary units and expands the demand for iron ore, coal, etc. These are backward linkages. By increasing the supply of steel, the plant facilitates the growth of machine building, tube making, utensil manufacturing and such other units.

6. Generation of Employment: Entrepreneurship development training which helps in strengthening informal and unorganised sector is expected to motivate enterprising people to opt for self employment and entrepreneurial career. It will therefore, help in solving the problem of increasing unemployment to some extent.

7. Harnessing Locally Available Resources and Entrepreneurship: India is considered to be very rich in natural resources. In spite of about five decades of planned development a large number of states have remained economically backward. A few large scale industries started by entrepreneurs from outside the state in an economically backward area may help as model of pioneering efforts, but ultimately the real strength of industrialisation in backward areas depends upon the involvement of local entrepreneurship in such activities: Increased activities of local entrepreneurs will also result in making use of abundantly available local resources.

8. Balanced Regional Growth: Medium and large scale industries can only be started with huge investment which is either available with well established industrial houses or need to be drawn from public exchequer. Also, promotion of such industries does not help in reducing disparities of income and wealth. On the other hand, an important advantage of small scale enterprises is that they can be started with meager financial ‘resources and little or no previous experience or entrepreneurial background.

9. Reducing Unrest and Social Tension amongst Youth: Many problems associated with youth unrest and social tensions are rightly considered to be due to youth not being engaged in productive work. In the changing environment where we are faced with the problem of recession in wage employment opportunities, alternative to wage career is the only viable option. The country is required to divert the youth with latent entrepreneurial traits from wage career to self employment career. Such alternate path through entrepreneurship could help the country in defusing social tension and unrest amongst youth.

10. Innovations in Enterprises: Business enterprises need to be innovative for their survival and better performance. It is believed that smaller firms have relatively higher necessity and capability to innovate. The smaller firms do not face the constraints imposed by large investment in existing technology. Thus they are both free and compelled to innovate: The National Science Foundation, an organisation in USA found that small companies produce four times more innovations per research dollar than do bigger companies. Entrepreneurship development programmes are aimed at accelerating the pace of small firms growth in India. Increased number of small firms is expected to result in more innovations and make the Indian industry compete in international market.

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Ans: Innovation: Innovation is one of the most important functions of an entrepreneur according to Schumpeter. An entrepreneur uses information, knowledge and intuition to come up with new products, new methods of reducing costs of a product, improvement in design or function of a product, discovering new markets or new ways of organization of industry. Through innovation, an entrepreneur converts a material into a resource or combines existing resources into new and more productive configurations. It is the creativity of an entrepreneur that results in invention [creation of new knowledge] and innovation [application of knowledge to create new products, services or processes.] Systematic innovation means monitoring the following for innovative opportunity:

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Ans: Meaning: Rural entrepreneurs are those who carry out entrepreneurial activities by establishing industrial and business units in the rural sector of the economy. In other words, establishing industrial and business units in the rural areas refers to rural entrepreneurship. In simple words, rural entrepreneurship implies entrepreneurship emerging in rural areas. Or, say, rural entrepreneurship implies rural industrialisation. Thus, we can say, entrepreneurship precedes industrialization.

According to KVIC (Khadi and Village Industry Commission), "village industries or Rural industry means any industry located in rural areas, population of which does not exceed 10,000 or such other figure which produces any goods or renders any services with or without use of power and in which the fixed capital investment per head of an artisan or a worker does not exceed a thousand rupees".

The modified definition of rural industries has been given by Government of India in order to enlarge its scope. According to Government of India, "Any industry located in rural area, village or town with a population of 20,000 and below and an investment of Rs. 3 crores in plant and machinery is classified as a village industry."

All the village industries come under the following broad categories:

Most of the rural entrepreneurs face peculiar problems like illiteracy, fear of risk, lack of training and experience, limited purchasing power and competition from urban entrepreneurs. Some of the major problems faced by rural entrepreneurs are as under.

1. Paucity of funds:Most of the rural entrepreneurs fail to get external funds due to absence of tangible security and credit in the market. The procedure to avail the loan facility is too time-consuming that its delay often disappoints the rural entrepreneurs.

2. Competition: Rural entrepreneurs face severe completion from large sized organizations and urban entrepreneurs. They incur high cost of production due to high input cost.

3. Middlemen: Middlemen exploit rural entrepreneurs. The rural entrepreneurs are heavily dependent on middlemen for marketing of their products who pocket large amount of profit.

4. Legal formalities:Rural entrepreneurs find it extremely difficult in complying with various legal formalities in obtaining licenses due to illiteracy and ignorance.

5. Procurement of raw materials:Procurement of raw materials is really a tough task for rural entrepreneur. They may end up with poor quality raw materials, may also face the problem of storage and warehousing.

6. Risk element:Rural entrepreneurs have less risk bearing capacity due to lack of financial resources and external support.

7. Lack of technical knowledge:Rural entrepreneurs suffer a severe problem of lack of technical knowledge. Lack of training facilities and extension services crate a hurdle for the development of rural entrepreneurship.

8. Lack of infrastructural facilities:The growth of rural entrepreneurs is not very healthy in spite of efforts made by government due to lack of proper and adequate infrastructural facilities.

9. Poor quality of products:Another important problem is growth of rural entrepreneurship is the inferior quality of products produced due to lack of availability of standard tools and equipment and poor quality of raw materials.

10. Negative attitude:The environment in the family, society and support system is not conducive to encourage rural people to take up entrepreneurship as a career. It may be due to lack of awareness and knowledge of entrepreneurial opportunities.

By enacting the Micro, Small and Medium Enterprises Development Act, 2006, the Government has recently fulfilled one of the needs felt and articulated by this segment for long. This Act seeks to facilitate promotion and development and enhancing competitiveness of these enterprises. It provides the first-ever legal framework for recognition of the concept of “enterprise” (comprising both manufacturing and services) and integrating the three tiers of these enterprises, namely, micro, small and medium. Apart from clearer and more progressive classification of each category of enterprises, particularly the small, the Act provides for a statutory consultative mechanism at the national level with wide representation of all sections of stakeholders, particularly the three classes of enterprises.

1. Section 7 of Act provides for the following classification in respect of industries engaged in production or manufacture of goods or rendering service enterprises:

2. Filing of Memoranda by MSMEs: Process of two-stage registration of Micro and Small Enterprises dispensed with and replaced by filing of memoranda. 1. Filing of Memorandum optional for all Micro and Small Enterprises. 2. Filing of Memorandum optional for Service Sector Medium Enterprises. 3. Filing of memorandum mandatory for Manufacturing Sector Medium Enterprises.

3. Constitution of National Board: National Board for Micro, Small and Medium Enterprises (MSME) to be headed by the Central Minister in-charge of MSMEs and consisting of 46 members from among MPs and Representatives of Central Ministries, State Governments, UT Administration, RBI, SIDBI, NABARD, Associations of MSMEs including women etc.

Functions of the National Board: Examine the factors affecting the promotion and development of MSMEs and review the policies and programmes of the Central Government in this regard.

4. Advisory Committee Headed by Central Government Secretary I/c of MSMEs and including not more than five officers of the Central Government and not more than three representatives of State Governments; and One representative each of the Associations of micro, small and medium enterprises.

6. Promotional and Enabling Provisions Central Government to notify programmes, guidelines or instructions for facilitating the promotion and development and enhancing the competitiveness of MSMEs. Central Government to administer the Fund or Funds for purpose mentioned in Section 9 and coordinate and ensure timely utilization and release of sums with such criteria, as may be prescribed.

7. Credit: The policies and practices in respect of credit to the MSMEs shall be progressive and such as may be specified in the guidelines or instructions issued by the Reserve Bank of India, with the aims of:

8. Procurement Policies: Central Government or a State Government to notify preference policies in respect of procurement of goods and services produced and provided by MSEs, by its Ministries, departments or its aided institutions and public sector enterprises .

10. Facilitating Closure of Business: Central Government may (within one year of the commencement of the Act) notify a scheme for facilitating closure of business by a micro, small or medium enterprise. The objectives of the rehabilitation policy are to give guidelines in the following areas:

• Identifying the sickness at an early stage.

• Initiating remedial measures promptly with a pro active approach

• Formulation and implementation of rehabilitation package for potentially viable sick MSME units

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Ans: Entrepreneurial Development Programme (EDP) can be defined as a programme, formally designed to help an individual in strengthening his/her entrepreneurial motive and in acquiring skill and capabilities necessary for playing entrepreneurial role effectively. In fact, it is an academic exercise to build up human resources by including them to take up entrepreneurial activities through motivation and developing the required entrepreneurial skills through exposure creation to effectively manage their enterprises. According to N.P. Singh, EDP is not merely a training programme. It is a process of:

Thus, EDPs endeavous to change educate and equip a person to become a successful entrepreneur. The whole process envisages developing the participant’s latent qualities and skills as also equipping him with other capabilities. By the end of the programme, the participant is expected to be in a position to crystalise his vision in to action and launch and manage his enterprise with competence. The system involves a selection procedure and only those who prove to have certain minimum initial traits are selected as potential entrepreneurs to be trained up to develop the other required traits through interventions.

This is the apex body for promotion and development of micro, small and medium enterprises in India. On enactment of the MSME Act 2006, MSME – DO came into being after revocation of the Small Industries Development Organisation (SIDO). The MSME – DO is headed by the Additional Secretary and Development commissioner under the Ministry of Micro, Small and Medium Enterprises.

Functions: The major functions of the organisation are:

The District Industries and Commerce Centre (DI&CC) operate from the District head quarters of Assam. The centres work in close association with the Commissioner of Industries and Commerce, Guwahati. All the preliminary works relating to availing of the Govt. policy supports by the entrepreneurs in the form of schemes and incentives are done at the DI&CC level.

Functions of DI&CC: The DI&CC words at the grass-root for promotion and development of indigenous entrepreneurship in the state through policy supports initiated by the central and the state Governments. The major functions include the following:

It is a statutory body created by an Act of Parliament in 1956 and became operative from April 1957 by taking over the work of the erstwhile “All India Khadi and Village Industries Board” set up in 1950. The Commission is engaged in the task of promoting and developing Khadi and Village Industries (KVI) with a view to creating employment avenues in the rural areas thereby strengthening the rural economy of India. It functions under the administrative control of the Ministry of Micro Small and Medium Enterprises, Govt. of India.

KVIC has its central office at Mumbai. It has 36 State and Divisional offices, 6 Zonal offices, 15 Departmental and 23 Non-Departmental Training Centers and a number of accreted Training Centers in addition to 13 Departmental Sales Outlets. The KVIC operates through 33 Boards spread over in different states and union territories of the country, in addition to thousands of institutions and co-operatives including DIC/DICCs.

Objectives: The broad objectives of the KVIC are of three-fold as under:

Functions: The crucial functions which the KVIC performs towards attainment of its avowed objectives are as follows:

It is a state level statutory body formed by an Act of the concerned state legislature. In India, at present there are 33 KVIBs in different States and Union Territories. The Assam Khadi and Village Industries Board Act was passed in the year 1955. The basic objective of the Board is to work towards organizing, developing and regulating the village industries in the state.

Functions: As a statutory Body of the Govt. of Assam the KVIB is required to perform numerous functions for promotion and development of Khadi and Village Industries in the State. The most important functions of the Board as enumerated in the Assam Khadi and Village Act, 1955 are listed below:

On the basis of the above board outline of functions as assigned to the Board and stipulated in the Act, the KVIB of Assam undertakes the following activities.

The North Eastern Development Finance Corporation Ltd (NEDFi) is a Public Limited Company registered under the Companies Act 1956 on 9^th August, 1995. It is notified as a Public Financial Institution under Section 4A of the said Act and was registered as an NBFC in 2002 with RBI. The shareholders of the Corporation are IDBI, SBI, LICI, SIDBI, ICICI, IFCI, SUUTI, GIC and its subsidiaries. The management of NEDFi has been entrusted upon the Board of Directors comprising representatives from shareholder institutions, DoNER, State Governments and eminent persons from the NE Region and outside having wide experience in industry, economics, finance and management.

NEDFi provides financial assistance to micro, small, medium and large enterprises for setting up industrial, infrastructure and agri-allied projects in the North Eastern Region of India and also Microfinance through MFI/NGOs. Besides financing, the Corporation offers Consultancy & Advisory services to the state Governments, private sectors and other agencies. NEDFi conduct sector or state specific studies under its Techno-Economic Development Fund (TEDF) and is the designated nodal agency for disbursal of Govt. of India incentives to the industries in the North-East India under North–East Industrial and Investment Promotion Policy 2007 (NEIIPP 2007).

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(b) Discuss the following in brief:                              6+5=11

(i) Functions of district industries and commerce centre.

Ans: Functions of DI&CC: The DI&CC words at the grass-root for promotion and development of indigenous entrepreneurship in the state through policy supports initiated by the central and the state Governments. The major functions include the following:

(ii) Role of IIE.

Ans: 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 with an aim 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 9001:2008 Certified Organisation.