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Q. 1. Explain the process of entrepreneurship development program.
Ans. An entrepreneurship Development Programme consists of three broad stages: -
(i) Pre-training Stage.
(ii) Training or Development stage.
(iii) Post-training or Follow-up stage.
(i) I Stage : Pre-training Stage.
The first stage of Entrepreneurial Development Programme is the pre-training stage. It includes the preparations required to launch the programme. This stage involves the following main activities :
(a) Creation of Infrastructure for training.
(b) Development of training syllabus.
(c) Selection of faculty.
(d) Designing tools and techniques for selection of trainees
(e) Formation of selection committee.
(ii) II Stage : Training or Development..
The process of training helps an entrepreneur in gaining written and practical knowledge and to accept new technology. ED training is usually more effective when linked to finance and other services such as marketing, quality assurance and productivity improvement. During this stage the training programme is implemented to develop motivation and skills among the participants. Some methods of training are:
(a) Lecture method
(b) Individual instructions
(c) Group instructions
(d) Demonstration method
(g) Conferences, etc.
(iii) III Stage: Post Training or Follow-up.
The third stage of Entrepreneurial Development Programme is the post -training stage. This phase involves follow up meeting and a follow up register to ensure the success of the entrepreneurial development programme. It includes preparing and maintaining a separate file for each trainee. Passing the desired information to the entrepreneur well in time.
Q. 2. Write about the administrative setup for small scale, agro and rural industries.
Ans. Administrative setup for small scale, agro and rural industries is as follows:
(i) The ministry of small scale industries and agro and rural industries has been created by the government of India for formulation of policy for the promotion and development of small scale industries in India.
(ii) In September 2001, this ministry was separated into two ministries i.e., ministry of small scale industries and ministry of agro and rural industries.
(iii) Ministry of agro and rural industries is concerned with designing of policies, programmes and schemes for growth and development of village and khadi industries, tiny and micro enterprises both in urban and rural areas.
(iv) Many development projects and schemes to provide a number of supporting incentives for the development and promotion of small scale industries are executed by the state governments in their respective states.
(v) The schemes are implemented by the State Directorate of Industries.
Q. 3. Write the features of small scale industries (SSI).
Ans. The features of small scale industries are as follows:
(i) Personal character: SSIs enjoy personal character. It is generally owned by a single entrepreneur or partnership.
(ii) Simple managerial structure: It is managed by owners only. Thus, can reap the benefits of direct motivation, secrecy, flexibility, etc.
(iii) Labour intensive techniques: There is predominance of labour. These units use labour intensive techniques of production instead of mechanised methods of production.
(iv) Local area of operations: The operations of a unit are localised. It depends mainly on local resources but products are exported all over the world.
(v) Simple technology: The machinery and equipment used for production of goods are operated manually and are not very sophisticated.
Q. 4. Jaya, Rohit and Raman are three friends who have completed a vocational course in entrepreneurship after their school education. Finding the job market tough, they were contemplating the idea of setting up a small business using the skills they had learnt in their course. They came across a notification given by the District Industries Centre located near the Industrial Estate in VKIA Jaipur, Rajasthan regarding a seminar on Government assistance for a small business. They attended the seminar and got useful information about Government assistance to SSIs. Jaya decided to open a micro enterprise as a fruit processing in her village. Rohit planned to start business of providing courier services in Jaipur city, Raman planned to start a small shoe manufacturing factory, in backward area of Odisha.
(i) Give the limit of Investment in plant and machinery for Jaya’s small business.
(ii) What is the limit of investment in plant and machinery in case of Service Enterprises according to MSMED Act.
(iii) Why promotion of Small Scale Industries is considered as a powerful instrument for development ?
Ans. (i) Jaya is running micro enterprise of manufacturing nature in which the investment limit in plant and machinery can’t exceed ₹25 lakh.
(ii) Service Enterprise has following investment limit if it is:
(a) Micro enterprise: Doesn’t exceed ₹10 lakh.
(b) Small enterprise: More than ₹10 lakh but doesn’t exceed ₹2 crores.
(c) Medium enterprise: More than ₹2 crores but does not exceed ₹5 crores.
(iii) SSIs are promoted by the Government as a powerful instrument for rural development as SSIs.
(a) Generates employment for rural artisans and seasonal employment for agricultural labour.
(b) Prevents migration of rural population to urban areas.
(c) Accelerates rural industrialisation.
(d) Contributes to socio-economic development of rural areas.
(e) Addresses the problem of poverty, income inequalities.
Q. 5. Explain any six problems being faced by small business in India. (KVS 2013) (NCT 2010)
Ans. Following are the main problems faced by small businesses:
(i) Finance: Non-availability of adequate funds in order to carry out business operations is one of the major problems. Due to lack of credit worthiness, many of these units fail to raise funds from the capital market. Banks also hesitate to lend money to these units because many of these units fail to provide adequate collateral security or guarantees.
(ii) Raw materials: Obtaining good quality raw material is another important problem faced by these industries. They have to either compromise on the quality or have to pay a high price to get good quality materials. Bargaining power is relatively low because of the small quantity of purchases made by them.
(iii) Managerial skills: A small business is established and managed by a single individual. Hence, he/ she may not possess all the managerial skills needed to run the business. Due to shortage of funds, they cannot afford to employ professional managers.
(iv) Labour: Due to shortage of funds, these enterprises are not in a position to afford high salaries to the employees. As a result, the productivity per employee is low and the rate of labour turnover is high. Therefore, attracting talented and skilled employees is a major problem faced by these units.
(v) Marketing: In many small scale units, marketing is a weak area. Direct marketing is not feasible for these units since they lack the necessary infrastructure. Hence, they have to depend on middlemen who sometimes exploit them by paying low prices and delaying the payments.
(vi) Sickness: Many of these units are becoming sick because of various internal and external problems. Lack of talented and skilled labour and managerial and marketing skills are the various internal problems while delayed payments, inadequate loans, lack of demand for their products, etc. are various external problems faced by these units.