Beruflich Dokumente
Kultur Dokumente
Prof. J M Ovasdi
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Entrepreneur as a Risk-Bearer
Richard Cantillon defined entrepreneur as a agent who buys factorof productions at certain prices in order to combine them into a product with a view to selling it at uncertain prices in future. Uncertainty a risk which cannot be insured against and is incalculable A risk can be reduced through the insurance principle, where the distribution of outcome in a group of instances is known Uncertainty is the risk which cannot be calculated
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Entrepreneur as an Innovator
Organizer coordination of the factors of production, organization & supervision Innovator -- new product, new technology new market, new source of raw material, new process Inventor & innovator inventor is one who discovers new methods and new materials. Innovator utilizes inventions and discoveries in order to make new combination of products, services
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Characteristics of an entrepreneur
Risk-bearer Hard work Desire for high achievement Highly optimistic Independence Foresight Good organizer Good judge of persons Innovative Leadership
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Manager
Provide her services to an entrepreneur
A servant of entrepreneur No risk except punishment for non-performance Fixed salary and bonus for exceptional services Executes the plans of the entrepreneur Professional qualifications necessary. Experience preferred
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Motive
Status Riskbearing Rewards Innovation
Functions of an entrepreneur
Idea scanning and ideation Determination of the business objectives Product analysis and market research Determination of form of ownership/organization Promotional formalities for business set up Raising necessary funds Procuring machines and material Recruitment of workers Undertaking the business operations.
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Types of entrepreneurs
Innovating- new products/services, new markets Imitative -- duplicating Fabian least risk taker, follower of successful people Drone lack of adaptation to environmental changes Solo operators self with a few employees Active partners joint venture with active participation Inventors research & innovation Challengers Karsan Bhai, Gulshan Kumar Buyers who take over companies Life-timers family business extensions Intrapreneurs (from within) managers starting independent business ventures
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Dependency
Dependent on the entrepreneur the owner Raises funds himself Funds are not raised by her Bears the complete risk Bears partial risk Operates from outside She operates from not an employee within the organization
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Entrepreneurship
What an entrepreneur does is entrepreneurship It is an attempt to create value through recognition of business opportunity, the management of risk-taking appropriate to the opportunity, and through the communicative and management skills to mobilize human, financial and material resources necessary to bring a project to fruition It is the purposeful activity of an individual or a group of associated individuals, undertaken to initiate, maintain or increase profit by production or distribution
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Pre-independence
Till about 1750, that is, prior to the Industrial Revolution India & China had over 40 % share of the world trade. Industrial revolution of Europe and North America killed the entrepreneurship of the rest of the world Indian textile, carpets, gems, spices were traded world-over Indian entrepreneurs catered to all the needs of the common man and the nobility The surplus was exported by traders
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Other Factors
Imposition of heavy duties on the import of the Indian goods in England Mass-manufactured low priced goods killed Indian craftsmanship Indian Railways were built to help British trade The Indian nobility who were the patrons of Indian crafts became crazy about foreign goods Indian craftsmen failed to adapt to the changing tastes and needs of the people.
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After Independence
After getting political independence, the Government of India focused on economic growth Government took a number of initiatives to put economy on the fast track Five Year Plans were designed and implemented for all round development in urban & rural sectors, big and small business Infrastructure like electric power, roads, railways, telephones etc needed immediate attention
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Development of SME
From third Five Year Plan (1962-67) special emphasis was accorded to develop small-scale industries Various incentives & concessions were given in the form of capital, technical know-how, markets, and land to potential entrepreneurs Special concessions were granted for setting up small industrial units in backward areas to remove the regional imbalances in development
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The emergence of USA, Japan, and Russia as great economic powers in the 20th century was due to the spirit of entrepreneurship of small innovator investors who were the drivers of great economic development Most of the big businesses, world over had started as small enterprises In India, Gulshan Kumar revolutionized the audiocassette business with T-series, and Karsanbhai defeated the multinational HUL in detergent business by introducing Nirma Infosys was launched by six co-workers who sold the ornaments of their wives to raise Rs. 1 Lakh.
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Role of Entrepreneurship
There are certain barriers for entrepreneurs in underdeveloped regions Paucity of funds Lack of skilled labor Non-existence of minimum social and economic overheads Lack of infrastructural amenities electricity, roads and other means of communication In India, largest number of entrepreneurs have been imitators rather than innovators great scope for duplicate/unbranded goods produced by jugad methodology.
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Role of Entrepreneurship
Role of Entrepreneurship
Entrepreneurship promotes capital formation by mobilizing the idle saving of the public Provides immediate large-scale employment Promotes balanced regional development Helps reduce the concentration of economic power Stimulates the equitable distribution of wealth, income and even political power in the interest of the country Encourages effective resource mobilization of capital & skill which might otherwise remain unutilized and idle It includes backward & forward linkages which stimulate the process of economic development It promotes countrys export trade (40% in India)
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Disadvantages
You are alone You are the risk-bearer You cant blame others for bad decisions All losses are yours Work may not be satisfying Long hours at the establishment unlike employees Lack of success will affect self-esteem Difficult to exit from a failed business An employee may get a new jobs in a couple of months but starting a new business may take years.
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Entrepreneurial Skills
1. 2. 3. 4. 5. 6. 7. 8. Curiosity, Craziness, and Creativity Real-time strategy and decision making Comfort with change and chaos Teamwork Good judge of people Tolerance of imperfections Extremely efficient negotiator Good mastery of the basics of finance, accountancy, marketing, and communication skills
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Entrepreneurial Skills
9. Comfortable with life style changes 10.Willing to break/bend/stretch laws 11. Patience to start from the scratch 12. Prepared to make enemies 13. Comfortable with confrontations 14. Dealing with failure 15. Willingness to learn
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Types of Entrepreneurs
Classification based on the Timing of Venture Creation Early Starters with little or no full-time work experience. Normally the entrepreneur is from a business family. An extreme case of an early starter is Suhas Gopinath who listed his company Globals Inc, in the USA because Indian laws do not permit a minor to run a company. Experienced few years experience in family business or as employee for some years Narayan Murthy and five colleagues launched Infosys at the age of 35 years with practically no resources Mature Ex-CEOs, senior mangers taking VRS and starting their ventures Jagdish Khatter of MUL started his own venture, Ashok Soota and Subroto Bagchi quit Wipro to start Mindtreee, and B V R Subbu, the ex- CEO of Hyundai India, started his own venture by buying the Daewoo plant in India.
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Types of Entrepreneurs
Based on Socio-cultural Variables First-generation Entrepreneurs Dhirubhai Ambani and Narayan Murthy Entrepreneurs from Business Families few socio-ethnic family groups have dominated the business scene in India Parsee, Gujarati, Sindhi, Chettiyar. Tatas,Birlas, Wadias, Murugappas, and Singhanias are from these groups. Road-transport business is dominated by Punjabis, particularly Sikhs.
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Jagadish Khattar
Ex IAS and the CMD of Maruti Udyog Limited has launched his new venture Carnation, a network of multi-car sales and after sale service outlets. Carnation plans to pumps a whopping Rs1000 Cr for developing its business model. Carnation planning to focus on sales, service, lease and finance multi-branded cars. Also they are planning to sell value added products and accessories like batteries, tyres etc.
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Suhas Gopinath
Born in Bengaluru (1986), Suhas launched a web site called CoolHindustan.com at the age of 14, and incorporated his company in the USA, since Indian Laws do not permit minors to register a company, making him the world's youngest CEO at that time. Gopinath taught himself how to build websites and sold portals to bricks-and-mortar firms in the US. Achievements He has received awards from his home state, European Parliament and he has advised World Bank for the development of computer skills in Africa for generating employability in poor countries.
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Micro, Small & Medium Enterprises - The Engine of inclusive growth & development
Worldwide, the micro small and medium enterprises (MSMEs) have been accepted as the engine of economic growth and for promoting equitable development. The major advantage of the sector is its employment potential at low capital cost. The labour intensity of the MSME sector is much higher than that of the large enterprises.
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MSME Importance
The MSMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. In India too, the MSMEs play a pivotal role in the overall industrial economy of the country. In recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to survive the recent economic downturn and recession.
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Importance of MSME
As per available statistics (4th Census of MSME Sector), this sector employs an estimated 59.7 million (about 6 crore) persons spread over 26.1 million (2.6 crore) enterprises. It is estimated that in terms of value, MSME sector accounts for about 45% of the manufacturing output and around 40% of the total export of the country.
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Definitions of MSMEs
Production A micro enterprise, where the investment in
plant and machinery does not exceed Rs 25 lakh A small enterprise, where the investment in plant and machinery is more than twenty five lakh rupees but does not exceed Rs. five crore or A medium enterprise, where the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees
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Definitions of MSMEs
Services
In the case of the enterprises engaged in providing or rendering of services, as A micro enterprise, where the investment in equipment does not exceed ten lakh rupees; A small enterprise, where the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees; or A medium enterprise, where the investment in equipment is more than two crore rupees but does not exceed five crore rupees
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Background
World over, micro and small enterprises (MSEs) are recognized as an important/constituent of the national economies, contributing significantly to employment expansion and poverty alleviation. Recognizing the importance of micro and small enterprises, which constitute an important segment of Indian economy in terms of their contribution to countrys industrial production, exports, employment and creation of entrepreneurial base, the Central and State Governments have been implementing several schemes and programmes for promotion and development of these enterprises.
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The small scale industries in India, including the tiny or micro industries and service/business entities, collectively referred as micro and small enterprises (MSEs), have a long history of promoting inclusive, spatially widespread and employment-oriented economic growth. In terms of employment generation, this segment is next only to agriculture.
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Objectives
2. To provide information, support, guidance and assistance to first generation entrepreneurs as well as other existing entrepreneurs through an Udyami Helpline (a Call Centre for MSMEs), to guide them regarding various promotional schemes of the Government, procedural formalities required for setting up and running of the enterprise and help them in accessing Bank credit etc.
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Udyami Mitras
Eligibility Under RGUMY, financial assistance would be provided to the selected lead agencies i.e. Udyami Mitras for rendering assistance and handholding support to the potential first generation entrepreneurs. Following agencies/ organizations can be appointed as the lead agency i.e. Udyami Mitra: i. Existing national level Entrepreneurship Development Institutions (EDIs). ii. Micro, Small and Medium Enterprises Development Institutes (MSMEDIs)/ Branch MSMEDIs. iii. Central/ State Government public sector enterprises (PSEs) involved in promotion and development of MSEs e.g. National Small Industries Corporation (NSIC) and State Industrial Development Corporations etc.
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Udyami Mitras
iv. Selected State level EDIs and Entrepreneurship
Development Centers (EDCs) in public or private sectors; v. Khadi and Village Industries Commission (KVIC). vi. Special Purpose Vehicles (SPVs) set up for cluster development involved in entrepreneurship development; vii. Capable associations of MSEs/SSIs; viii. Other organizations/training institutions/NGOs etc. involved in entrepreneurship development/ skill development.
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Role and Responsibilities of Udyami Mitras Udyami Mitras are expected to help the first generation entrepreneurs in: a) Identification of suitable project/product/enterprise and preparation of bankable project report for the same b) Creation of the proprietorship firm/ partnership firm/ Company/ Society/ Self Help Group (SHG) etc; c) Filing of Memorandum (as prescribed under MSMED Act 2006);
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clearances / No Objection Certificates (NOCs) etc. from the concerned regulatory agencies/ Government departments/ local bodies/ Municipal authorities etc.; i) Allotment of Income Tax Permanent Account Number (PAN) and Service Tax/ Sales Tax/ VAT registration etc; j) Sanction of working capital loan from the banks; k) Arranging tie up with raw material suppliers;
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Activity Clusters
The scheme emphasizes establishment of activity clusters through selection of key activities based on aptitude and skill of the people, availability of resources and market potentiality. The scheme adopts a process approach and attempts to build the capacities of the rural poor. It provides for involvement of NGOs/CBOs/Individuals/Banks and Self Help Promoting Institutions in nurturing and development of SHGs, including skill development.
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Capacity Building
Due emphasis is being laid on different components such as capacity building of the poor, skill development training, credit, training, technology transfer, marketing and infrastructure. The subsidy allowed under the SGSY is 30 per cent of the total project cost, subject to a ceiling of Rs.7,500 (for SC/STs and disabled persons subsidy limit is 50 per cent of the project cost subject to a ceiling of Rs.10,000). For Self-Help Groups (SHGs), subsidy would be 50 per cent of the project cost subject to a ceiling of Rs.1.25 lakh or per capita subsidy of Rs.10,000, whichever is less.
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Relaxations
The SGSY seeks to promote multiple credits rather than a one-time credit injection. The SHGs may consist of 10-20 members and in case of minor irrigation, and in case of disabled persons and difficult areas, i.e., hilly, desert and sparsely populated areas; this number may be a minimum of five. Self Help Groups should also be drawn from the BPL list approved by the Gram Sabha. The SHGs broadly go through three stages of evolution such as group formation, capital formation through the revolving fund and skill development and taking up of economic activity for income generation.
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Conclusion
The scheme lays special emphasis on development of swarozgaris through well designed training courses tailored to the activities selected and the requirement of each swarozgari. SGSY is being implemented through the District Rural Development Agencies (DRDAs) , with active involvement of panchayati raj institutions, banks and NGOs. It is financed on 75:25 costsharing basis between the Centre and the states.
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Women Entrepreneurs
Traditionally, Indian women had their position restricted to the house-hold and lack of education and opportunities Abla nari Social stigma for working women. Limited career opportunities school teachers, nurses, clerks, receptionists etc. Empowerment of women through higher education, SHG, and institutional financial help have created room for women entrepreneurs.
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Women Entrepreneurs
The GoI has defined women entrepreneurs based on women participation in equity and employment of a business enterprise Enterprise owned and controlled by women having a minimum financial interest of 51 % of the capital and giving at least 51 % employment generated in the enterprise to women Women Entrepreneurs are those who think of a business enterprise, initiate it, organize, combine the factors of production, operate the enterprise and undertake risks and handle economic uncertainty involved in running a business enterprise.
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Women Entrepreneurs
Examples Solar cookers in Gujarat Small foundaries in Maharashtra TV capacitors in Orissa Famous Indian Women Entrepreneurs Sumati Morarji Shipping Corporation Yamutai Kirloskar Mahila Udyog Neena Malhotra Exports Shahnaz Huaasain Beauty Clinics and Personal care products Kiran Mazumdar Shaw Bio-Technology
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Ekta Kapoor
Ekta Kapoor, creative head of Balajji Telefilms, is the daughter of actor Jeetendra, and sister of actor Tushar Kapoor. She has been synonymous with the rage of soap operas on Indian TV, after her most famous venture 'Kyunki Saas Bhi Kabhi Bahu Thi', which started airing on STAR Plus in 2000. Ekta dominates Indian television with shows in multichannels. At the 6th Indian Telly Awards 2006, she bagged the Hall of Fame award for her contributions to Indian TV.
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Sunita Narain
Sunita Narain, an environmentalist and political activist as well as a major proponent of the Green concept of sustainable development, was awarded the Padma Shri by the Government of India in 2005. Narain, who has been with the India-based Centre for Science and Environment since 1982, is currently the director of the Centre, and the director of the Society for Environmental Communications, and publisher of the fortnightly magazine, 'Down to Earth'.
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a) Lack of confidence In general, women lack confidence in their strength and competence. The family members and the society are reluctant to stand beside their entrepreneurial growth. To a certain extent, this situation is changing among Indian women and yet to face a tremendous change to increase the rate of growth in entrepreneurship. b) Socio-cultural barriers Womens family and personal obligations are sometimes a great barrier for succeeding in business career. Only few women are able to manage both home and business efficiently, devoting enough time to perform all their responsibilities in priority.
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Constraints
c) Market-oriented risks Stiff competition in the
market and lack of mobility of women make the dependence of women entrepreneurs on middleman indispensable. Many business women find it difficult to capture the market and make their products popular. They are not fully aware of the changing market conditions and hence can effectively utilize the services of media and internet. d) Motivational factors Self motivation can be realized through a mind set for a successful business, attitude to take up risk and behavior towards the business society by shouldering the social responsibilities. Other factors are family support, Government policies, financial assistance from public and private institutions and also the environment suitable for women to establish business units.
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Constraints
e) Knowledge in Business Administration Women must be educated and trained constantly to acquire the skills and knowledge in all the functional areas of business management. This can facilitate women to excel in decision making process and develop a good business network. f) Awareness about the financial assistance Various institutions in the financial sector extend their maximum support in the form of incentives, loans, schemes etc. Even then every woman entrepreneur may not be aware of all the assistance provided by the institutions. So the sincere efforts taken towards women entrepreneurs may not reach the entrepreneurs in rural and backward areas.
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Overcoming Constraints
g) Exposure to the training programs - Training programs and workshops for every type of entrepreneur is available through the social and welfare associations, based on duration, skill and the purpose of the training program. Such programs are really useful to new, rural and young entrepreneurs who want to set up a small and medium scale unit on their own. h) Identifying the available resources Women are hesitant to find out the access to cater their needs in the financial and marketing areas. In spite of the mushrooming growth of associations, institutions, and the schemes from the government side, women are not enterprising and dynamic to optimize the resources in the form of reserves, assets mankind or business volunteers.
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What is a Project
The very foundation of an enterprise is a project It is a distinct mission to achieve and a clear termination point It is a set of activities involved in using resources to gain benefits. Every project has three basic attributes 1. A course of action definite plan 2. Specific objective what do you what to achieve 3. Definite time perspective Procedure project identification and project selection.
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Idea Generation is done through internal & external sources 1. Knowledge of potential customers 2. Watching emerging trends 3. Scope for good copying of existing products 4. Study magazines , journals 5. Success stories of known entrepreneurs, friends etc. 6. Visiting fairs and exhibitions 7. Meeting government agencies, Udhyami Mitras 8. Knowledge about government policy, concessions and incentives etc.
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After collecting data and information about various opportunities we have to make a short list of choices according to our strengths & weaknesses We have to list the requirement of financial investment and other resources Some projects may be very beneficial but require resources that are not easy to get. There may be technical problems Considering all the opportunities, and constraints the final selection is made. Then a project report is made. It is the most important step if we have to apply for a loan.
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Selection
Market potential 1. Demand & supply position how the gap between the two will be filled up 2. Expected price of the production per unit Marketing Strategy arrangements for selling the products After-sales Service state the execution procedure Transportation what facilities are available or will be required
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Project Appraisal
Every industrial project involves risk Project appraisal is a process to reduce the risk Ex-ante analysis for proposed project Post-ante analysis is for the executed project Project appraisal is a cost & benefit analysis of different aspects of the project to adjudge its viability Economic, financial, technical, market, managerial and social aspects are analyzed Project appraisal is done by financial institutions to assess its credit worthiness before extending finance to a project. They also get it evaluated by other agencies Sometimes the scope and contents of the project are modified after the appraisal & evaluation
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Financing of Enterprise
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Entrepreneurial Finance
Entrepreneurs raise funds to start their business though various sources like internal & external Internal sources Self-generated funds that can be spared from the business, plus savings, property, investments, rents. Priority to internal resources External sources Help from family and friends Loans from banks /non-banking financial institutions (NBFC) Loans from State Financial Corporations
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Entrepreneurial Finance
RBI has identified lending to MSMEs as one of the priority sector advances MSMEs may get loans up to Rs 25 lakhs without collateral RBI has fixed time limits for dealing with a loan application from MSMEs The lender organization studies the business plan of the applicant and get it reviewed by experts. Series of meetings are held between the lender and the borrower before loans are granted.
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MSMI MINISTRY
Ministry of Micro, Small and Medium Scale Industries is primarily responsible for promotion and development of SMEs in India, and has evolved several policies, institutional and support measures, spread all over the country, in order to enable them to meet their changing needs. Small Industries Development Bank of India (SIDBI) has developed various financing schemes.
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MSMI MINISTRY
Ministry of Science and Technology (DST, DBT, DSIR) has evolved several measures and programs for technological assistance and development and transfer of technologies for SMEs. Some of the economic ministries such as Ministry of Textiles, Department of Food Processing and Department of Handicrafts etc. have also recently announced initiatives for technical assistance in various firms
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New initiatives
Progressively reduce protection measures and simplify implementation policies and control mechanisms SME Development Centres at SIDBI and IIFT Considering liberalizing FDI in SMEs and encouraging their linkages with TNCs and large companies Promoting industrial growth centres/clusters, EOUs(export oriented units), district industry centres, business incubators and business parks Market assistance and export promotion National Small Industries Corporation Small Industries Development Organization Limited Liability Partnership Bill 2006
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NMCC Funds
NMCC seems to have prepared Rs. 1,000 crore National Manufacturing Competitiveness Program for small and medium enterprises jointly with Ministry of Small Scale Industries. This aims to benefit over 10,000 firms in more than 500 SME Clusters. The thrust of the plan is towards technology infusion. The areas for support include lean manufacturing, ICT, technology and quality up gradation, increasing number of tool rooms, encouraging patents and so on.
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NMCC Funds
National Knowledge Commission has also identified SMEs as a thrust sector for education, skills up-gradation, training and ICT encouragement. Various studies have shown that ICT and technology levels are higher in internationalized SMEs in sectors such as food processing, auto components, ICT, leather, to engineering, garments etc. compared to non-exporting or domestic SMEs.( Agarwal 2005, 1b)
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A survey of over 8000 SMEs in Europe in 2003 revealed that internationalization spurs growth and competitiveness (http://ec.europa.eu). The foreign supply relationships are the most common forms of internationalization while exporting is the next and some establish foreign subsidies and branches. Access to know-how is a frequent motive for going abroad. The study has revealed that smaller countries with small domestic markets are more internationalized. Further the study point to three elements as crucial for developing holistic measures with regard to internationalization.
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Internationalization is more than just exporting. Policy measures, whether general or companyspecific, need to encompass all the different approaches to internationalization and the support to include a wide range of international activities. Foreign partnerships, foreign investments and cross boarder clustering represent new viable ways to strengthen the international business strategies of SMEs. Such diverse international activities may integrate different business functions (i.e. R&D, production and marketing) and thus involve elements across the entire value chain.
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Discussions
A quick analysis of various studies and data indicates that SMEs are going through a transition phase and are generally restructuring their strategies and capabilities to remain competitive and grow in the emerging world trade environment. The government are also evolving policies, strategies and modes of implementation to encourage and support SMEs for their growth, capacity building and international competitiveness. The issues and strategies vary with the level of development and priorities in national economies.
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Discussions
Some of the countries such as Republic of Korea, Singapore and Taiwan have been able to adopt and implement new policies and measures to promote and support SMEs more successfully than many other countries. Innovation, technology, productivity and quality, though inter-related, are assuming greater significance for competitiveness in manufacturing and businesses. Foreign Direct Investments (FDI), networking and technical tie ups are being encouraged to facilitate access to newer technologies, strengthening technological and management capabilities, and access to market information. Creation of training and skill up gradation facilities, ICT applications, and sharing of risks in financing and development, are the thrust areas.
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Discussions
In India, effective implementation of policies and delivery of results to the satisfaction of the SMEs, remain much below than desired, though there are a large number of institutional mechanisms and support measures available and concerns shown by the government. There is a need to critically review the existing policies and mechanisms, to assess the constraints and gaps in delivering the desired outputs.
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Discussions
For example, there are overlapping agencies and programmes for development of technologies and technological assistance to the SMEs, but the SMEs continue to be weak in R&D, technology development, acquisition and induction of new technologies, productivity and quality among other factors. The technology support programmes are largely implemented from Delhi or the capitals of the states and the awareness about programmes and fiscal incentives available is limited among SMEs.
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Discussions.
Proposals of NMCC are praiseworthy, but the implementation mechanisms are not clear, and also the focused targets likely to be achieved. Hopefully these proposals will not be just an addition to the existing set of support measures, without effective monitoring and assessment mechanisms for the intended results. What is needed perhaps is a strong innovation & technology development policy with legal instruments for implementation, clearly meeting the needs of SMEs at different stages of their development.
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Discussions.
National Knowledge Commission has been generally active in evolving strategies for education and skill up gradation, and employment or entrepreneurship opportunities in ICT and other areas. Digital divide has been an area of concern but at the same time offers opportunities for SMEs. National Small Industries Commission is engaged in evolving policy instruments and mechanisms to utilize and support SMEs.
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Needs of MSMEs
Access to Latest Technologies --Most SMEs, need easier access to new or modern technologies abroad, technology support facilities and easier access to finance, including technology finance, besides marketing information and incentives for training and skills development. Differentiated policies and mechanisms are needed for SMEs in different sectors, stages of their development, nature of operations. For example, the technological needs of SMEs in traditional sectors such as food processing, leather textiles, toys etc. would be different than those in new and advanced technological areas such as microelectricals, pharma, precision instruments and so on.
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Needs of MSMEs
Strategies --There is a need to have short term and long term strategies for enhancing competitiveness of SMEs in one broad based strategy. The R&D expenditure and technological capacities of most of the SMEs would continue to be limited because of their inherent constraints in the resources and vision. The support structures should recognize this fact. However, the SMEs have enormous potential for innovations and incremental development, which need to be nurtured for production of new goods and services at competitive costs.
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The SMEs development project should recognize the needs of internationalizing companies or those who have the potential to internationalize, differently than those of domestic oriented companies or stagnating companies. The analysis of FDI data for SMEs in India tend to show that some SMEs are internationalizing or willing to internationalize through various types of collaborations through FDI route since the amounts involved are small.
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IT, ITEs & BPO SMEs becoming Global January 2008 Survey report of Dun & Bradstreet
The small and medium enterprises (SMEs) in the Indian IT space are confident of achieving 65 percent growth in the next two years, surpassing 43 percent growth rate posted for the last two years (2006-7) The study titled 'Emerging IT SMEs of India 2007', provides insights into 244 IT companies involved in providing software and hardware products and services. All the companies profiled were in the below-Rs 100 million-turnover bracket during the previous fiscal year.
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IT, ITEs & BPO SMEs becoming Global The study notes that close to 53 percent of companies faced moderate problems in acquiring funding and 43 percent felt the proposed withdrawal of tax sops for the IT, ITEs (IT enabled call centres), BPO industry by 2009, will be significant in terms of deciding future industry growth.
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Limitations of SMEs
At the same time one has to understand the limitations of SMEs, which are: Low Capital base Concentration of functions in one / two persons Inadequate exposure to international environment Inability to face impact of WTO regime Inadequate contribution towards R & D Lack of professionalism In spite of these limitations, the SMEs have made significant contribution towards technological development and exports. SMEs have been established in almost all-major sectors in the Indian industry such as:
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Reach of SMEs
Food Processing Agricultural Inputs Chemicals & Pharmaceuticals Engineering; Electricals; Electronics Electro-medical equipment Textiles and Garments Leather and leather goods Meat products Bio-engineering Sports goods Plastics products Computer Software, etc.
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VENTURE FUNDS
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What Does Venture Capital Funds Mean? An investment fund that manages money from investors seeking private equity stakes in startup and small- and medium-size enterprises with strong growth potential. These investments are generally characterized as high-risk/high-return opportunities. Venture capital typically comes from institutional investors and high worth individuals, and is pooled together by dedicated investment firms. There are 157 trusts and institutional VCs registered with SEBI
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Venture Capital
Skills of VC Firms
Venture capital firms typically comprise small teams with technology backgrounds (scientists, researchers) or those with business training or deep industry experience. A core skill within VC is the ability to identify novel technologies that have the potential to generate high commercial returns at an early stage. VCs also take a role in managing entrepreneurial companies at an early stage, thus adding skills as well as capital (thereby differentiating VC from buy-out private equity, which typically invest in companies with proven revenue), and thereby potentially realizing much higher rates of returns.
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