2019 (November)
COMMERCE
(General / Speciality)
Course:
502 (Entrepreneurship Development)
Time:
3 hours
The
figures in the margin indicate full marks for the questions
(NEW
COURSE)
Full Marks: 80
Pass
Marks: 24
1. (a) Write True or False of the following: 1x4=4
1)
There
is difference between a manager and an entrepreneur. True
2)
Innovativeness
is essential for an entrepreneur. True
3)
Entrepreneur
is not a risk taker. False
4)
Self-help
groups are formed by the government. False
(b) Write the full forms of the
following: 1x4=4
1) IIE - Indian
Institute of Entrepreneurship
2) KVIC- KHADI AND
VILLAGE INDUSTRIES COMMISSION
3) SIDO - Small
Industries Development Organisation
4) MSME - Micro,
Small and Medium Enterprises
2. (a) Write short notes
on the
following: 4x4=16
1) Social entrepreneur.
Ans: Social Entrepreneur: A social entrepreneur is one who sets up his organisation to work for social change where the society suffers from certain problem which deteriorates the lives of common people, particularly the poor or the weaker section of the society. Such entrepreneurs also address to the environment issues and work for protection of environment through protection of plant and animal lives.
Thus, social entrepreneurs are those exceptional individuals who dream up and take responsibility for an innovative and untested idea for positive social change and usher that idea from dream to reality. They focus on transforming system and practices that are root cause of poverty, marginalization, environmental deterioration and accompanying loss to human dignity. In doing so, they may set up for-profit or not-for-profit organisation and in either case; their primary objective is sustainable system change.
2) Mohila
Vikash Nidhi.
Ans: Mahila Vikash Nidhi: It is another initiative taken by the SIDBI to encourage women entrepreneurship. Under this scheme, the SIDBI extends development assistance to women to pursue income generating activities. It is a specially designed fund to support economic development of women, especially in the rural areas by providing them avenues for training and employment opportunities.
Under the scheme of assistance, a judicious mix of loan and grant is extended to accredited NGOs for creation of training and other infrastructural facilities. In addition to this, activities like vocational training, strengthening of marketing setup for the products marketing of the beneficiary groups, arrangement for supply of improved inputs, production and technology improvement are also covered under the Mahila Vikash Nidhi scheme.
3) Leadership style.
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 leadership style. A leadership style is a leader's method of providing
direction, implementing plans, and motivating people. Leadership style is of
various types some of them are listed below:
a) 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.
b) Laissez-faire or Free-rein Style Leader: Under this type of leadership, maximum freedom is allowed to subordinates.
c) 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.
d) 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.
4) Challenges of women entrepreneurship.
Ans: 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:
1. Social attitude and support: Being in
a male dominated society, the Indian women are treated as dependent on men and
have no liberty to take decisions of their own. The attitude of
non-co-operative from her husband or close family members stands heavily in the
way of developing women entrepreneurship.
2. Mobility constraint: The
women in Assam more particularly those of rural areas have restrictions in their
mobility so far as their social status is concerned. Although now-a-days they
have relatively more freedom of mobility, but most often become soft target of
suspicion by husband.
3. Dual Responsibility: A woman
entrepreneur has to perform dual responsibility of her profession at enterprise
as also at family as wife and mother. The unmarried girls also, in many cases,
are expected to take care of their younger’s and help mother in her work,
besides working at their enterprises.
4. Scanty Financial Resources:
Financial constraint is a problem for business in general. But when it comes to
the case of a woman entrepreneur, the problem becomes more severe. As both
family members and the officials of financial institutions have less confidence
on women as entrepreneurs, they are mostly reluctant to spare finance for a
woman business venture.
5.
Low risk
bearing capacity: Women in general have less confidence as
compared to their male counterparts. As such, they have less risk taking
ability; which is an essential pre-requisite for entrepreneurial success.
3. (a) Define the term
“Entrepreneur”. Explain the different classification of entrepreneur. 14
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.
An entrepreneur is a person who starts an
enterprise. He searches for change and responds to it. A number of definitions
have been given of an entrepreneur. The economists view him as a fourth factor
of production along with land labour and capital. The sociologists feel that
certain communities and cultures promote entrepreneurship. Some others feel
that entrepreneurs are innovators who come up with new ideas for products,
markets or techniques. Some of the popular definitions are given below:
J.B. Say: An
entrepreneur is an economic agent who unites all means of production- land of
one, the labour of another and the capital of yet another and thus produces a
product. By selling the product in the market he pays rent of land, wages to
labour, interest on capital and what remains is his profit. He shifts economic
resources out of an area of lower and into an area of higher productivity and
greater yield.
Schumpeter: According
to him entrepreneurs are innovators who use a process of shattering the status
quo of the existing products and services, to set up new products, new
services.
To
put it very simply an entrepreneur is someone who perceives opportunity,
organizes resources needed for exploiting that opportunity and exploits it.
Types of Entrepreneurs
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.
c) According to Stages of
Development
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.
Or
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Also Read:************************************Also Read (Dibrugarh University)
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(b) Distinguish between
the following: 7x2=14
1.
Rural Entrepreneur and woman Entrepreneur
2.
Manager and Entrepreneur
Ans: 1. Difference between
Rural Entrepreneur and Woman Entrepreneur
Rural Entrepreneur: 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."
Women
Entrepreneurs: 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.
2. Difference between Manager and Entrepreneur
Ans:
Comparison of Managers and Entrepreneurs
|
Basis |
Traditional
Managers |
Entrepreneurs |
|
Primary
motives |
Promotional
and other Traditional corporate Rewards, such as office, Staff, and power |
Independence,
Opportunity to create And money |
|
Time
Orientation |
Short-term
meeting quotas and budgets, weekly monthly, quarterly, and the annual
planning horizons. |
Survival
and achieving 5-10 year growth of business. |
|
Activity
|
Delegates
and supervises More than direct involvement |
Director
involvement |
|
Risk |
Careful |
Moderate
risk taker |
|
Status |
Concerned
about status symbols. |
No
concern about status symbols. |
|
Failure
and mistakes |
Tries to
avoid mistakes and surprises |
Deals
with mistakes and failures. |
4. (a) Point out the
various opportunities available for development of woman entrepreneurship in
India. 14
Ans: Government Incentives and supports and
opportunities towards women entrepreneurship
Despite
various constraints faced by the women entrepreneurs of Assam in particular and
India in general, several opportunities are also available now-a-days. Women
Entrepreneurs can be seen everywhere in the startup-up ecosystem of India. Women
too are seen leaving their high-profile jobs as well as some stepping out of
the four walls of their homes and joining the pool of Entrepreneurship in
India. The major factor to jumpstart the entrepreneurial journey is capital and
various banks offer specialized loans for women entrepreneurs that have
slightly different and more flexible set of terms and conditions pertaining to
collateral security, interest rates, etc.
Central Government Incentives and
Supports: Now-a-days there are various Govt. schemes of incentive and
support to promote women entrepreneurship. Some of the schemes are absolutely
for women and other weaker sections of the society; while there are many others
which are gender free where women have some privilege. Here is a list of various
schemes and loans exclusively for women that aim at promoting and easing out
the process for them:
1. Annapurna Scheme: This scheme
is offered by the State Bank of Mysore for those women entrepreneurs who are
setting up food catering industry in order to sell packed meals, snacks, etc.
The amount granted as a loan under this scheme can be used to fulfill the
working capital needs of the business like buying utensils and other kitchen
tools and equipment. Under this
loan, a guarantor is required along with the assets of the business being
pledged as collateral security. Further, the maximum amount of money that is
granted is Rs. 50,000 which has to re-paid in monthly installments for 36
months, however, after the loan is sanctioned, the lender doesn’t have to pay
the EMI for the first month. The interest rate is determined depending upon the
market rate.
2. Stree Shakti Package For Women
Entrepreneurs: This scheme is offered by most of the SBI branches to
women who have 50% share in the ownership of a firm or business and have taken
part in the state agencies run Entrepreneurship Development Programmes
(EDP). The scheme also offers a
discounted rate of interest by 0.50% in case the amount of loan is more than
Rs. 2 lakhs.
3. Bharatiya Mahila Bank Business Loan: This loan is
a support system for budding women entrepreneurs looking to start new ventures
in the fields of the retail sector, loan against property, MICRO loans, and SME
loans.
The maximum loan amount under this loan goes up
to Rs. 20 crores in case of
manufacturing industries and also a concession is available to the extent of
0.25% on the interest rate and interest rates usually range from 10.15% and
higher. Additionally, under the Credit Guarantee Fund Trust
for Micro and Small Enterprises (CGTMSE), there is no requirement of collateral
security for a loan of up to Rs.
1 crore.
4. Dena Shakti Scheme: This scheme
is provided by Dena bank to those women entrepreneurs in the fields of
agriculture, manufacturing, micro-credit, retail stores, or small enterprises;
who are in need of financial assistance. The interest rate is also decreased by
0.25% along with the maximum loan amount being Rs. 20 lakhs for retail trade; education and housing whereas ₹50,000 under the
microcredit.
5. Udyogini Scheme: This scheme
is offered by Punjab and Sind Bank so as to provide women entrepreneurs
involved in Agriculture, retail and small business enterprises to get loans for
business at flexible terms and concessional interest rates. The maximum amount
of loan under this scheme for women between the age bracket of 18-45 years is ₹1 lakhs but your family
income is also taken into consideration and is set at Rs. 45,000 per annum for SC/ST women.
6. Cent Kalyani Scheme: This scheme
is offered by the Central Bank of India with the aim of supporting women in
starting a new venture or expanding or modifying an existing enterprise. This
loan can be availed by women who are involved in village and cottage
industries, micro, small and medium enterprises, self-employed women,
agriculture and allied activities, retail trade, and government-sponsored
programs. This scheme requires no collateral
security or guarantor and charges no processing fees. And the maximum amount
that can be granted under the scheme is Rs. 100 lakhs.
7. Mahila Udyam Nidhi Scheme: This scheme
is launched by Punjab National Bank and aims at supporting the women entrepreneurs
involved in the small scale industries by granting them soft loans that can be
repaid over a period of 10 years. Under this scheme there are different plans
for beauty parlors, day care centres, purchase of auto rickshaws, two-wheelers,
cars, etc. the maximum amount granted under this scheme is Rs. 10 lakhs and the interest depends upon the market
rates.
8. Mudra Yojana Scheme For Women: This scheme
has been launched by the Govt. of India for individual women wanting to start
small new enterprises and businesses like beauty parlors, tailoring units,
tuition centres, etc. as well as a group of women wanting to start a venture
together. The loan doesn’t require any collateral security and can be availed
as per 3 schemes :
i. Shishu – loan
amount is limited to Rs.
50,000 and can be
availed by those businesses that are in their initial stages.
ii. Kishor – loan
amount ranges between Rs.
50,000 and Rs. 5 lakhs and can be availed by those who have a
well-established enterprise.
iii. Tarun – loan
amount is Rs. 10 lakhs and can be availed
by those businesses that are well established but require further funds for the
purpose of expansion
If the loan is
granted, a Mudra card will be given to you which functions the same way as a
credit card however the funds available are limited to 10% of the loan amount
granted to you.
9. Orient Mahila Vikas Yojana Scheme: This scheme
is provided by Oriental Bank of Commerce to those women who hold a 51% share
capital individually or jointly in a proprietary concern. No collateral
security is required for loans of Rs.
10 lakhs up to Rs. 25 lakhs in case of small-scale industries and the period of
repayment is 7 years. A concession on the interest rate of up to 2% is given.
Or
(b) Define Leadership and
Point out the major features of leadership.
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”.
Qualities
and features of leadership:
1.
Patience: Patience
is the capacity to face difficult situations, hardships or inconvenience
without making a single complaint. It is the ability to wait calmly for
something to happen without complaining or giving up or getting angry. Patience
requires Calmness, Self-Control, Willingness or Ability to tolerate delay. A
good leader must show patience while waiting for expected results, facing
difficult situations and taking important decisions. He must avoid taking hasty
decisions and actions.
2.
Good Personality: A good personality is a combination of
physical, mental and social qualities. Good personality helps a leader to
influence his followers. Attractive physique and good manners add an advantage
to the leader's personality.
3.
Self-confidence: A good leader must have self confidence. This
quality is necessary for facing challenging situations and for solving problems
easily and effectively.
4.
Human Skills: A good leader must have essential social and
human skills. That is, he must understand people. This quality is necessary for
dealing with different types of persons and social groups.
5.
Judgment skills: A good leader should be able to examine problems in right perspective.
His judgment and decision making abilities should be superior to others. He
should be able to form opinions and judge based on facts and not be prejudiced
6.
Communication skills: A good leader should be able to communicate the goals and procedures of
the organisation clearly, precisely and effectively to the subordinates. Only
then will it be possible for him to convince, persuade and stimulate
subordinates to action.
7.
Listening skills: People tend to avoid a leader who does not listen. Hence a good leader
in one who can listen to other peoples problems. He should be able to create a
culture whereby people can be frank with him and give him information and also
give him feedback about himself, which can help him to improve himself.
8.
Inspiring skills: A good leader should be able to inspire people to deal with the “why”
question. He should not just command and control but be able to lead the people
and get them involved to work together as a team.
9.
Administrative Skills: A good leader must have an administrative
ability. This means, he must be able to get the work done through his
followers. He must know how to plan, organize and control the work of his
followers.
10.
Discipline: A good
leader must be a disciplined person. This means he must have respect for the
rule and regulations of the organisation. This is because his followers will
follow his example.
11.
Initiative: A good
leader must always take an initiative. This means he should do the right thing
at the right time without being told by others. He must be able to construct
and implement his own plan.
12.
Intelligence: A good leader must be smart and intelligent. That
is, he should have a good educational background and sound technical knowledge.
He should be more intelligent than his followers. If not, his followers will
not respect him. This will have a bad effect on his performance.
13.
Innovative: A good leader must have an art of
innovation. That is, he must have a good imagination and visualization skills.
He must develop new ideas and tactics to solve problems. He must combine the
new ideas with the old ideas.
5. (a) What are the
salient features of the Micro, Small and Medium Enterprises Development Act,
2006? Explain. 14
Ans: Salient
features of Micro, Small and Medium Enterprises Development Act, 2006 are as
follows (Role)
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:
|
Class |
Manufacturing
Enterprises – Investment in Plant & Machinery |
Services
Enterprises – Investment in Equipment |
|
Micro |
Less
than Rs. 25 lacs |
Less
than Rs. 10 lacs |
|
Small |
Greater
than Rs. 25 lacs but up to Rs. 5 Cr. |
Greater
than Rs. 10 lacs but upto Rs. 2 Cr |
|
Medium |
Greater
than Rs. 5 Cr. but up to 10 Cr. |
Greater
than Rs. 2 Cr. but upto Rs. 5 Cr. |
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.
5.
Functions of the Advisory Committee
Ø
To examine the matters referred to it by the
National Board;
Ø
To advise Central Government on matters
relating to classification of MSMEs, programmes, guidelines or instructions for
the promotion and development and enhancing the competitiveness of MSMEs.
Ø
To advise State Governments on matters
specified in the rules related to repeal of, “The Interest on Delayed Payments
to Small Scale and Ancillary Industrial Undertakings Act, 1993, including
anything done or any action taken under the Act so repealed
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:
Ø Ensuring
smooth credit flow to the MSMEs,
Ø Minimizing
sickness among them, and
Ø Ensuring
enhancement of their competitiveness
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.
9.
Provisions to Check Delayed Payments
Ø Provisions
related to delayed payments to micro and small enterprises (MSEs) strengthened.
Ø Period of
payment of MSEs by the buyers reduced to forty-five days.
Ø Rate of
interest on outstanding amount increased to three times the prevailing bank
rate or Reserve Bank of India compounded on monthly basis.
Ø Constitution
of MSE Facilitation Council(s) mandatory for State Government.
Ø Declaration
of payment outstanding to MSE supplier mandatory for buyers in their annual
statement of accounts.
Ø Interest
(paid or payable to supplier) disallowed for deduction for income tax purposes.
Ø No appeal
against order of Facilitation Council to be entertained by any Court without
deposit of 75% of the decreed amount payable by buyer.
Ø Appellate
Court may order payment of a part of the deposit to the supplier MSE
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
Or
(b) Justify the
government of India’s effort towards the promotion of rural entrepreneurship. 14
Ans: 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."
Government Support for Rural
Entrepreneurs
Present Government of India has taken many steps to promote the entrepreneurship in rural areas. Some of them are listed below:
1. Government Incentives and Supports: With a view to encouraging entrepreneurship development in the rural areas, the Government of India has initiated various schemes of incentives and supports through various Ministries like the Ministry of Rural Development, the Ministry of MSME and the Ministry of Social Welfare. These schemes of incentives, if properly implemented can significantly add to the prospect of rural entrepreneurship in Assam in particular and India in general.
2. Government policies and subsidies: The
government of India is continuously monitoring and introducing the
new policies for encouraging the rural entrepreneurship. These
policies are very flexible, innovative, liberalized
and giving continues support to rural entrepreneurs. At the same time
government has also announced huge subsidies for promoting the rural
entrepreneurship.
3. Initiation of PURA model for Development:
Now day, our Government is actively considering the introduction of PURA
(Providing Urban amenities to Rural Areas) model for development to ensure
participatory development of the economy. Under such a trend, rural
entrepreneurship counts high prospect for development in the days ahead.
4. MNREGA: It is important to refer that in addition to various self-employment schemes, wage employment schemes like the MGNREGA are also being operated in rural areas. The main purpose of such schemes is to inject purchasing power in the hands of rural people; at the same time to create community assets. By the process, it was expected that the quality of man’s life in the rural areas would improve considerably. But unfortunately, rampant corruption at all levels of administration has neutralized the benefits of such schemes. Now, with the Right to Information (RTI) Act in place, a change is expected to come up gradually. Such developments may open up the scope for rural entrepreneurship in days ahead.
5. Skill Development in Rural areas: Labour is a factor of production, if it can be utilized properly. It multiplies economic development. On the contrary, if it remains un-utilized, it creates problems and becomes burden for the economy. The abundant supply of labour force in our rural areas is clearly visible. This abundant labour force will find its fruitful utilization through the practice of indigenous entrepreneurship in our rural areas. Thus, the practice of rural entrepreneurship will get tremendous support in the rural areas through locally available labour force. Availability of skilled labour force was a big problem in rural areas but with the introduction of skill development programme in rural areas, it is now possible for rural entrepreneurs to get skilled labour force in rural areas.
6. Ready online Market: As close to 70% of our population lives in rural areas, the products will find their markets within the rural areas through continuous process; as rural entrepreneurship ensures income generation through employment creation in those areas. Thus, there is high prospect of getting a sustained rural market in the long-run if entrepreneurship gains its ground in rural areas. Also, government of India introduces many online portal for farmers and rural entrepreneurs like ENAM.GOV.IN and FARMER.GOV.IN where they can easily sale their products.
7. Availability of Land: One important advantage in setting up of industrial units in our rural areas is the availability of land resource. As compared to our urban areas, land is still available in our rural areas; which makes the ground for setting up of industrial units in those areas. Thus, the prospect of entrepreneurship makes its ground in rural areas of our state in particular and the country in general. With the introduction of New Land Acquisition Bill, it is now easier for entrepreneurs to get land in rural areas.
8. Local for Vocal: PM Modi slogan “Local for Vocal” is now proved to be a booster for Indian entrepreneurs especially rural entrepreneurs. This slogan motivated us to buy local products which increase the turnover of local businessmen.
9.
Rural
Entrepreneurship Development Programme (REDP): This is one of the important
Non-Farm Sector (NFS) promotional programmes supported by the National Bank for
Agriculture and Rural Development (NABARD) for creating sustainable employment
and income opportunities in a cost effective manner for the benefit of educated
unemployed rural youths. As per the programme, the NABARD provides promotional
assistance to select agencies to meet the recurring expenditure in conducting
REDP. Under institutionalization of the REDP, the select institutions are
provided with need-based capacity building supports and long-term assistance by
way of continued financial assistance, for conducting REDP.
Objectives: The avowed objective of the programme is to develop entrepreneurial and activity oriented skills among unemployed rural youths willing to set up micro/small enterprises; by assisting Voluntary Agencies (VA), Non-Governmental Organisations (NGOs)/ Development Agencies (DA), etc with good track record in conducting REDPs.
From the above discussion, we can conclude that the present government is doing very well for the promotion and development of rural entrepreneurs.
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Also Read:************************************Also Read (Dibrugarh University)
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6. (a) What is EDP? Point out a brief
historical perspective of entrepreneurship development in India. 14
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:
a) Enhancing
and motivation, knowledge and skills of the potential entrepreneurs;
b) Arousing
and reforming the entrepreneurial behavior in their day-to-day activities; and
c) Assisting
them develop their own ventures or enterprise as a sequel to entrepreneurial action.
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.
History of Entrepreneurship Development in India
Traditionally, Indian economy is purely agriculture based due to which our country is still a backward country. The experience all over the world proves that the economies which are predominately agrarian in character continue to remain backward and fails to sustain development. To diversify the Indian economy and to accelerate the entrepreneurial activities, The Government of India soon after attaining independence laid down its first Industrial Policy Resolution in 1948. In order to promote local entrepreneurs, ban on the imports of a large number of consumers and other goods imposed by the Government of India during the post independence period. Subsequently, during 1953-54, the Ministry of Commerce and Industry, Government of India, invited an International Planning Team under the courtesy of Ford Foundation to report on measures that could be adopted to develop small scale industries for promotion of indigenous entrepreneurship. The team strongly recommended the need for development of “Modern Small Scale Industries” to meet the need of time and pace. The team also recommended several measures for promotion and development of entrepreneurship in this sector of the economy.
Since then, the Government of India has been adopting a series of measures for promotion of local entrepreneurship in the country. In course of time, with unemployment problem taking serious turn, the self employment and Entrepreneurial Development Programmes (EDPs) came to receive serious attention in the country. The literature available indicates that the birth of training effort for the promotion of entrepreneurship in India was purely an indigenous initiative i.e. the “Technician Scheme” launched in the year by two state level agencies of Gujarat. The scheme visualized 100% finance without collaterals. A large number of people took the advantage of this scheme. The real gain of the scheme was the realization that there is vast entrepreneurial potential available in the country that could be tapped and developed through appropriate training intervention. This led the Gujarat Industrial Investment Corporation (GIIC), along with other state level agencies to conceptualize, mount and develop, in 1970, a 3-month long training programme known as Entrepreneurship Development Programme (EDP). However, with the number of programme increasing, the need for having a separate state level organization to look into selection, training and development of first generation entrepreneurs was strongly felt. Thus, the Centre for Entrepreneurship Development (CED), Gujarat, the first of its kind in the country came into existence in 1979 with the support of the Government of Gujarat and the industrial promotion and the assistance agencies in the state.
Meanwhile, the success story of Gujarat experiment spread far and wide and the Ford Foundation encouraged the Gujarat team to test out EDP strategy in a few less developed states like Rajasthan, Assam, etc. Several development agencies in other parts of the country also mounted their own EDPs and the Gujarat CED provided professional support to some of them.
There is another story of the origin of Entrepreneurship Development Programme (EDP) in India. The story suggests that the well known behavioural scientist David McClelland at Harvard University made an interesting investigation into why certain societies developed great creative powers at particular period of time of their history. He found that “the need for achievement” was the answer. It was the “need to achieve” that motivated people to work hard and money making was incidental. Money was only a measure of achievement, not its core motivation.
In order to answer the next question whether this need for achievement could be induced, McClelland conducted a five-year experimental study in one of the prosperous distracts of Andhra Pradesh in India in collaboration with the Small Industry Extension Training Institute (SIET); which later came to be known as the National Institute for Small Industry Extension Training (NISIET) and now called National Institute for Micro Small and Medium Enterprises (ni-msme), Hyderabad. This experiment is popularly known as “Kakinda Experiment”. Under this experiment, young persons were selected and put through a three month training programme and motivation to see fresh goals.
One significant conclusion of the experiment was that traditional belief did not seem to inhibit an entrepreneur and that suitable training can provide the necessary motivation to entrepreneurs. It was the Kakinda Experiment that made people appreciate the need for entrepreneurial training (now popularly known as EDPs) to induce motivation and competence among young prospective entrepreneurs. Based on this realization India embarked in 1971 on a massive programme of entrepreneurship development. At present there are more than 700 all India and state level institutions conduct EDPs.
The above findings reveal that EDP was conceptualized almost at the same time in two parts of India viz Gujarat and Andhra Pradesh. However, while the Gujarat model was applied first to organize massive EDPs in 1970, the Andhra Pradesh (SIET) model found its massive application in 1071.
Or
(b) Write short notes on
the following: 7x2=14
(i) Major Functions of DICC
(ii) Role of KVIC
Ans:
(i) DISTRICT INDUSTRIES AND COMMERCE CENTRE (DI&CC)
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:
1. To
facilitate the voluntary filling of Memorandum by the Micro and Small
Enterprises (MSEs) as per the Government of India’s MSME Development Act 2006.
2. To
facilitate the compulsory filling of Memorandum by the Manufacturing Sector
Medium Enterprises as per the Govt. of India’s MSME Development Act 2006.
3. To
facilitate pre registration of the enterprises to avail benefits under the
different schemes of assistance and supports under the central and the state
Governments.
4. To guide
the prospective entrepreneurs through appropriate counseling and suggestions in
staring their new enterprises.
5. To guide
the entrepreneurs through documentation and counseling in availing the Govt.
incentive and support facilities.
6. To facilitate organization of Entrepreneurship
Development Programmes (EDPs) by the NGOs through liaison.
7. To
organize screening committee (Task Force) meeting for selection of
beneficiaries for grant of Govt. incentives and supports.
8. To forward
and recommend the entrepreneurs’ applications for availing of Govt. incentive
and supports to the Commissioner of Industries and Commerce, Guwahati for
onward recommendations.
(ii)
KHADI AND VILLAGE INDUSTRIES COMMISSION (KVIC)
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:
·
The social objective of providing employment;
·
The economic objective of producing saleable
articles, and
·
The wider objective of creating self-reliance
amongst the people and building up a strong rural community spirit.
Functions:
The
crucial functions which the KVIC performs towards attainment of its avowed
objectives are as follows:
1. Works
towards planning, promotion, organization and implementation of programmes for
the development of Khadi and other village industries in the rural areas of the
country in coordination with the other agencies engaged in rural development.
2. Works
towards building up of a reserve of raw materials and implements for supply to
producers, creation of common service facilities for processing of raw
materials as semi-finished goods and provision of facilities for marketing of
KVI products.
3. Organizes
training of artisans engaged in Khadi and Village Industries.
4. Encourages
and promotes research in the production techniques and equipments employed in
the KVI sector and provides facilities for study of the problems relating to
the same.
5. It also
encourages the use of non-conventional energy, bio-fertilizer and other organic
products.
6. Provides financial assistance to institutions and persons who are engaged in the development and operation of Khadi and Village Industries and guides them through the supply of designs, prototypes and other technical information.
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