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By

Prof. VIKRAM H. SHINDE

DEPT. OF MANAGEMENT SCIENCE,

DR. BABASAHEB AMBEDKAR MARATHWADA UNIVERSITY,

SUB- CAMPUS OSMANABAD.

E-mail Id: vikrant007shinde@gmail.com

Mobile no: 9970860123

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The study on Employment v/s Self-employment is done for the purpose to present in One
day conference named ³Recent Trends in Business, Management and IT´. The subject is chosen
because of its wide scope and area of interest of the author.

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The descriptive type of research design is chosen for the paper report. The whole study is
being made with the rules of descriptive research design.

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Mostly the secondary data is used for the report work. It includes the books on Self-
employment , Reports of DIC Osmanabad and mostly the use of E-material is used for the study.

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-c Introduction
-c Statement of the Problem: What is comparatively better; Employment or Self-
employment?
-c Objectives of the study
-c Though to be self-employed is risky than to be employed, self-employment is always
better for self and national growth.
-c Introduction of the Topic
-c What is employed?
-c What is Self-employed?
-c Requirements to be self employed
 -c Challenges of Being Self Employed
-c Benefits of being Self-employment
-c Government support for self employment
-c Conclusion
-c Bibliography and References

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What is comparatively better; Employment or Self-employment?

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1.c To study Employment and Self-employment comparatively.

2.c To study the importance of both Employment and Self-employment.
3.c To study How Self-employment has a brighter future in developing countries.
4.c To know the share and importance of Self-employment in advanced and developing
countries.
5.c To study the benefits, challenges and scope in future for Self- employment.

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Though to be self-employed is risky than to be employed, self-employment is

always better for self and national growth.
According to the rule of risk and return, where there is more risk the ratio of
return is also better. And Self-employment at its primer stage looks so risky and harder
than the employment but is beneficial also than the employment.

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Employment and self-employment are generally two sides of a coin. If someone wants be
self-employed he has to arrange for various people who wants to be employed, so the whole
thing is inter-dependant. To study whether employment is better than self-employment or vice-
versa, we need to go with a deep study of both the concepts and phenomena.

The government of India and even other developing countries like China, Japan, etc are
trying to increase the number of self employed units in their countries, this can clear the
importance of self employment in a countries economy. Like said earlier, employment and self
employment, both the concepts are interdependent and help each other increase the share of each
other in business world. For example Mr. A wants to start his own business for being self
employed he has to assign various workers or people who wanted to be employed by someone.
And this cycle of being self-employed and employing others is a ongoing process for
development of business. Now we will discuss both the concepts in depth.




Employment is a contract between two parties, one being the employer and the other
being thecemployee. If we want to know what is employment we must go through the knowledge
of m
 and m


According to 
    dictionary, an  
 may be defined as:"a person in
the service of another under any contract of hire, express or implied, oral or written, where the
employer has the power or right to control and direct the employee in the material details of how
the work is to be performed."

On another side, an  

 is a person or organization that hires people to perform
work in exchange for compensation, which is usually money in the form of wages or a salary. An
employer can be any entity from an individual hiring a babysitter to a government body
or business hiring thousands of specialized professionals. In most developed nations,
governments are the largest single employers although most workers are employed in small and
medium businesses in the private sector.

In another words, a person is called employed when he/she is working for someone else.
An employee is generally given tasks and assignments which guides him or her through their
everyday work. They are not responsible and do not suffer or enjoy the losses or gains taken by
the business, for the most part.

If you can answer 'Yes' to the following questions, you are probably employed:

ùc Do you yourself have to do the work rather than hire someone else to do it for you?
ùc Can someone tell you at any time what to do or when to do it?
ùc Are you paid by the hour, week, or month?
ùc Can you get overtime pay?
ùc Do you work set hours, or given a number of hours a week or month?
ùc Do you work at the premises of the person you work for, or at a place or places he or she
decides?

 

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 is working for one's self. Self-employed people can also be referred to as a
person who works for himself/herself instead of an employer, but drawing income from
a trade or business that they operate personally.

In other words, He or she must decide when He or She will work and how long and be
fully responsible for the overall success of the company. If the business fails, the damages will
be taken out of the self-employed employee¶s account.

If you can answer 'Yes' to the following questions, it will usually mean you are self-employed:

ùc Do you have the final say in how the business is run?

ùc Do you risk your own money in the business?
ùc Are you responsible for meeting the losses as well as taking the profits?
 ùc Do you provide the main items of equipment you need to do the job, not just the small
tools many employees provide for themselves?
ùc Are you free to hire other people on your own terms to do the work you have taken on?
ùc Do you pay them out of your own pocket?
ùc Do you have to correct unsatisfactory work in your own time and at your own expense?

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Starting a business is not for everyone. Being self-employed is very different than being an
employee. And some people find it impossible to adjust to the differences. Let's see if you have
the necessary entrepreneurial mindset to become self-employed.

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If you start a business, you no longer have "one" job with clearly defined duties and
responsibilities. You'll suddenly have multiple jobs, which will be often interrupted by
unforeseen crises (particularly in the startup phase). Many employees are used to having days
filled with predictable activities; many self-employed people don't. And once you start a
business, there's nowhere to pass the buck. As an employee, you may be used to passing
problems up along the food chain or not be very involved in decision making. As a self-
employed business owner, you're the one who will have to deal with whatever the crisis is and
solve the problem. You're the one who will have to make the decisions.

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 When you're an employee, other people tell you what to do, either directly or indirectly.
You get used to having your actions directed by others. But you have to direct your own actions
as a small business owner. You can't just sit there and hope that maybe some clients stroll in or
that someone will drop by out of the blue with inventory for your retail store. No one's going to
drop work on your desk or point out what needs to be done. For many people who try to become
self-employed and start businesses after having a long-term full-time job, this is the hardest
adjustment to make.

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Most employees do what they're assigned to do. There's someone else who's "assigned"
to look out for opportunities, either a boss in a small business, or perhaps a sales department or a
managerial team in a large corporation. If you start a business, you need to be the one constantly
watching for opportunities - and be able to recognize them when you see them. It might be a
small opportunity, such as the chance to pick up a new client, or a large one, such as getting your
product on the shelves in a large retail chain, but as a small business owner, you have to keep
scanning the horizon yourself and positioning yourself to benefit from the opportunities that you
find. As an employee, you may be used to operating in a "head-down" position; if you're going to
start a business and become successfully self-employed, you need to start operating in the "head-
up" position.

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Your last job may have involved no planning at all, as that was someone else's job. Or perhaps
your job involved planning on a localized level, such as planning a particular project. If you want
to start a business, you need to develop expertise in both short-term and long-range planning; it's
about to become a big part of your life.

When you start a business, one of your first tasks will be to work through a business plan. As
your business becomes operational, you'll find that this plan (however detailed) needs to be
revised and that other plans need to be created, as you work towards the long-range goals that
you've set for your business. From following someone else's plan as an employee, you have to
learn how to create the plans yourself - and adapt the plans to changing circumstances.

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We've all seen employees who are just going through the motions, or who were just "putting in
the time" until retirement. You don't need to be a co-worker to know who these people are. As a
customer or client you can tell, too. Bluntly, starting a business takes energy, and you need to be
able to give it 100 percent. You can't afford to just coast along, or go through the motions, if
you're running a business. Your customer and/or clients need to know that you are devoting 100
percent of your talent or skill or attention to &
- and will go elsewhere if they don't feel this is
the case.

Worse, you need to deliver this constant and consistent effort without the employee safety. Many
employees are used to being able to "call in sick" and have someone else cover their job, for
instance. As a self-employed business owner, you'll have to go in and give it your best effort no
matter how you feel or close up shop if you don't have employees who can fill in. You can also
say goodbye to the holidays that many employees enjoy, both the annual number of weeks and
the statutory holidays, at least until your business is established to the point that you can manage
your own time.

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As a self-employed entrepreneur, there's no guarantee that the products or services you offer will
be in initial days of your business. There's no guarantee that your customers will pay their bills
on time or even pay them at all. There's no guarantee that your current big client, who seems to
be perfectly happy with your work, won't drop you next week. There's actually no guarantee that
you will make any income this month or the month after. For many ex-employees who are used
to having a pay cheque arrive regularly every two weeks, the uncertainty of being self-employed
is very difficult to deal with.
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The first and foremost stage of starting the business is that, we have to go with a feasible
and profitable business idea. The new entrepreneur may have various misunderstandings
regarding the market and market motivators and this could lead to a non-efficient and unfeasible
business. If you want to start a good business, u have to go with various steps like market
analysis, historical study of the market, trend analysis, etc. Again the selection of an idea from
bunch of ideas is difficult things at this stage also we must so scientific to go with an idea.

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Second and most faced challenge for starting a new business is lack of financing. A
person should not start a business with his own fund totally. Using own fund totally is not useful
for getting success in business. Many financial institutes and Government also ready to provide
funds but still it requires many formalities (security property, political support, etc.). Next
source of financing can be credits from various sources but the refund of those funds can be a
negative factor to start because in initial stage of business you have to bear losses.

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One of the most important factor of any business is Human Resource. Now days, the
situation is changed. Before a period of 5 years there were plenty of human resources available
in the market but due to the increased industrialization and globalization you may face the
challenge to get appropriate and qualitative human resources. And this could be big issue for a
full-stop for your business.

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As a new business firm in market, we have to wait a lot for the returns from the market.
We may have various well settled competitors in the market at our initial stage. In this situation
way have to wait for market response and have to mould our strategy as per the need like
competitive strategies. In this strategy we can not raise income from the market, might be we
have to go for less than product cost also. This way the risk tolerance period can be large
according to market condition.

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As a self employed person, one have to keep all the powers of running business with self till it
get enough human resources and centralized power is, as per my view, more problematic than a
supporting thing. It may be the reason of clashes in the organization.

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One of the most faced challenges for a new concern or businessmen is the taxation system of
our country. As we all know, as businessmen I have to pay 50% of my profits as tax. There
should be some relaxation for a new concern for at least the initial period from the establishment.

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1. To at least some degree, the self-employed person can set their own business hours.
2. There¶s often more freedom in taking vacation time or sick time, as long as arrangements are
made (depending on the type of business and client needs).

3. The self-employed can often avoid getting stuck in rush hour traffic, by
either working at home, or adapting their commute time to a different schedule.

4. Entrepreneurs don¶t have to directly answer to a boss or supervisor.

5. Business owners and freelancers have a direct impact on the success or failure of the business,
and how much income they make.

6. Entrepreneurs get to make the rules, rather than following someone else¶s.

7. The self-employed essentially have an unlimited earning potential rather than a set salary, all
dependent on the work they put in.

8. Entrepreneurs have the opportunity to be trailblazers in their industry.

9. The self-employed (other than freelancers or service providers looking for clients) don¶t have
to worry about actually searching for a job.

10. Entrepreneurs can decide on their own benefits, depending on what they¶re willing to pay.

11. Business owners and freelancers get to create their own work environment that¶s as
comfortable for them as possible.

12. Entrepreneurs sometimes have an easier time building their own reputation and name
recognition.

13. If a business owner or freelancer doesn¶t choose to set up a formal office to regularly interact
with clients or customers face to face, they can often be more casual in their dress, from business
casual clothes to working in their pajamas.

14. Entrepreneurs have the ability to directly determine the value of their work or products, by
setting their own fees, rates, and prices.
15. The self-employed can generally choose what types of projects they want to work on, as
opposed to having to complete any project dictated by a superior, which can lead
to better job satisfaction.

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The support for Self-employed by the governments is really appreciative in countries like India.
The Indian Government is always encouraging the Self-employers in real meaning by providing
various assistance like financial assistance, business assistance and like more.

The District Industry Centers are working efficiently as the representatives of

government in rural as well as urban areas all over India.

Some of the most important supporting schemes in India for Self-employer are as
follows;

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It is a self-employment scheme for educated unemployed youth with eligibility...
a) Class VIII passed
b) Age ± 18 to 35 years (relaxable upto 45 years for SC / ST / Women / Physically handicapped /
Ex-Servicemen)
c) Project upto Rs 2.00 lakh for Industries/Service and Rs 1.00 lakh for Business
d) Annual family income ± Rs 40,000/- (Max)
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If is one of the major schemes for setting up SSI unit. The Projects/Schemes for the purpose should
have sufficient equity participation.
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This assistance is mainly for Handicrafts Sector. Limit of loan upto Rs 10,000/-. The rate of interest
is 8% with a rebate of 2.5% on regular re-payment.

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c1;;; ± SSI units commenced after 01.01.2000 will be entitled for this
scheme. The features of this scheme are...

a) 25% subsidy on fixed capital investment (Land, Building, Plant & Machinery)
b) 50% (60% in case of agro and food processing units, IT, Electronics industry) subsidy on paid interest on
Bank/FI loan for consecutive 7 years and 9 years
c) Remission of Stamp Duty and Registration Fee on purchase of Land or Buildings.

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a) Provisional/Temporary Registration : Before starting the SSI Unit, this registration is issued
b) Permanent/Final Registration : After commencement of production of SSI Unit, this registration is issued

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ccccPriority is given for WBSEB electric power connection to registered SSI Unit

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cccccProject Scheme of SSI unit is vetted for technical feasibility

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ccccGiven through participation in WB Handicrafts Expo'

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ccccFor setting up Haldia Petrochemicals Downstream Units.

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ccccConstruction of Bio-gas plant (family size 1-cum to 10-cum). Main usage are...
a) Domestic cooking and lighting
b) Production of organic manure (enriched with NPK) for better yield in agricultural, horticultural &
pisicultural sectors
c) Helps to maintain ecological balance. Provision of Govt. subsidy to all categories of beneficiaries

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cccccPollution Clearance Certificate (consent for starting all categories, a
 Green, Orange, Red of SSI units)
is issued on behalf of WBPCB and also the consent to operate for Green category only

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Some training programmes on different trades as mentioned below are organised from time to time for
prospective entrepreneurs and handicraft artisans

àc Entrepreneurship Development Programme

àc Special Training Programmes for Women/Physically Handicapped and Backward Classes
(plumbing, pump-set repair, umbrella repair, batik print, etc.)
àc Transfer of Skill and Service Centres (terracotta)
àc Design Development/Craft Development for Handicraft Industries, Cane and Bamboo Products,
 Wood Carving, Solapith work

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Technical vetting of project/scheme is done here for these Extra departmental financial assistance schemes...

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It is launched by Khadi and Village Industries Commission. The main features are...

- Meant only for rural areas of population (less that 20,000) and for viable village-industry projects.
- Maximum limit ± projects upto Rs 10.0 lakhs and Rs 25.0 lakhs for institution @ 30% project cost upto Rs
10.00 lakhs will be provided as Margin Money in the form of backend subsidy after 2 years.

/c+<)ccBangla Swanirbhar Karma Sangthan Prakalpa

This Scheme is promoted by Youth Welfare Department. The key features are...

i.c For municipal areas only

ii.c Projects on industry, service & business sectors
iii.c Projects upto Rs 10.0 lakhs for individual @ 20% Govt. Subsidy on the project cost

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Self-employment Project for Minority Communities only. Scheme is financed and promoted by West
Bengal Minorities Development & Finance Corporation (WBMDFC). The main features are...

i.c Age ± 18 to 45 years

ii.c Annual family income ± Rs 42,142/- for urban area and Rs 31,952/- for rural areas
iii.c Generation of Govt. or Semi Govt. employee upto 53 years
iv.c Interest ± 7.5% pa

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 At the conclusion we can say that Employment and self-employment are both inter-dependent
concepts and both are important for the making of an µEffective Nation.¶ The challenges and risks are more
in being self employed than in being employed. But according to the    it has proved
that,      
  

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Here I Prof. Vikram H. Shinde, Dept. of Management Science, Dr. BAMU, Sub-campus Osmanabad
declare that the work done by me regarding this research paper is not copied of someone else

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