Factors Affecting Entrepreneurial Growth in India - Introduction, Entrepreneurship & Small Businesse Video Lecture | Entrepreneurship & Small Businesses - B Com

welcome to pedasi State Open University
and has been department
I am Kishore Chandra party subject is
factors affecting entrepreneurship in
India entrepreneurship is basically
small business and small industry even
in USA small ventures account for 60% of
economic growth in United Kingdom Wilson
Committee and others have found out high
profitability in small ventures in India
in 30 years the number of small-scale
units has increased from sixteen
thousand to forty lakhs this is the
scale of expansion of entrepreneurship
in free independent India and it is
growing in many directions in such
directions as IT biotechnology new
avenues of opportunity which factors
have helped growth of entrepreneurship
in India first factories government has
established di C district industries
center single window system single
window system for collecting raw
material for arranging machineries for
helping in technology for promoting
export all these are possible in one
organization known as dis dis industry
Center there have been several other
institutions which have been established
by both government and state examples
are Industrial Development Bank of India
Indian and state financial corporations
the biggest benefit is availability of
credit the first major step was taken
when Imperial Bank of India was
nationalized into State Bank of India
then 20 major banks commercial banks
were nationalized this given impetus to
priority sector which includes small
industry and small business numerous
committees have been appointed to help
industries
dunh dunh committee chair a committee
goes through panel Nayak committee all
these committees facilitated flow of
loan to this small sector my committee
went to the extent of saying that if
your turnover is this then you are to
get this much of credit this is
simplified entire credit arrangement
credit is now no longer personal it is
determined by objective factors
therefore credit has been facilitated
numerous agencies have been set up to
get machines to provide technical
consultancy for example NSIC national
small Industries Corporation gives a
number of help to small scale industries
by finding out raw materials domestic
and international arranging the source
getting machinery from indigenous and
international sources arranging for
export helping in export
the financial corporations in the state
have also been rendering help under a
single roof banks and financial
corporation now say that you don't have
to go here and there you get both
working capital and term alone working
capital for day-to-day management and
term loan for purchase of machinery and
long term development or medium term
development now under one roof you get
all credit facilities you get
institutional assistance further if you
are export oriented then there are a
number of export councils Indian
Institute of Foreign Trade giving you
training Exim Bank giving you assistance
both in import and export numerous
agencies for helping export of tea
coffee leather handicrafts all
specialized agencies helping in those
areas where we export goods to other
countries so we have given two things
one is single roof system for helping
the entrepreneurs second credit
assistance credit assistance for
small-scale inmates third government has
changed the definition of micro small
and medium industries a small industry
in manufacturing will have five crores
investment in plant and machinery and
the maximum if it is working in service
sector then it will be 2 crores this
definition has helped small scale
industrial units small business units to
get flow of credit but there are
problems
in 1991 government initiated
liberalisation privatization and
globalization which is known as LPG
liberalisation means you liberalized
rules anybody can set up industry no
license is required no permit is
required when license and permit was
available you have problems in setting
up but after that you don't have any
problem because you know your market you
know your customer you know your export
there was virtually no competition or
less competition in 1991 liberalisation
took place that means anybody can set up
industry no license is required all
sectors were made open even foreign
investment it was made possible you got
money
but you also suffered from international
competition internationally things are
available at competitive prices our
small ventures have to compete them rice
weights the latest in our series is
problem of Chinese goods in China price
mechanism does not work it's a communist
rule therefore labor cost is kept
deliberately low when it is kept so low
it is very difficult to compete more so
for a democratic country like India our
wage rates are low but we are a free
country that is union that is
Constitution that is judiciary
there cannot be indiscriminate hire and
fair system in China it is different
therefore they sell goods
at very low rate second problem is
intellectual rights previously copyright
patent regulations were there but now
you have this enforcement is tough and
because we are part of world trade
organization known as WTO we have to
implement it faithfully you cannot have
imitation of a foreign goods technology
service without acknowledgment without
proper payment of royalty and other fees
this is a tough problem and our
investment in research and development
is low therefore new innovations take
time third we are not able to quickly
expand our capacity because of various
constraints that is a labor constraint
that is transport constraint that is
power constraint therefore when the
going is good we cannot expand
production to that extent to take
advantage because the problems on supply
side even if there is a demand we cannot
match after some other countries join
the PI becomes a smaller our share
becomes smaller we would have otherwise
got advantage of a pioneer we would have
got the entire market but because we are
unable to expand our production because
of supply side problems we are unable to
take advantage which would have turned
into a profitable venture forth we have
good in software but we have not that
good in manufacturing China has made it
manufacturing the primary key to growth
as I told you they have that advantage
of labor cost
labor cost which is deliberately kept
low we have low labor cost compared to
European countries compared to some
other ASEAN countries but it is not that
low
further doing business in India is a
dilatory World Bank survey always points
out India at the bottom among the 150
nations because we cannot start a
business quickly we cannot close a
business quickly
we have many other constraints unless
these constants are removed as a follow
up of economic reform measure
entrepreneurship cannot get a kickstart
to sum up we have discussed the
facilitating factors which promote
entrepreneurship the availability of
single roof single window the
organization of credit creation of
different institutions to help
industries and business venture there
have been constraints the constraints
are tough competition
internationally competition particularly
from the Chinese which has become tough
because of its low labor cost kept low
deliberately by the government then
thirdly our supply capabilities are low
and we are not in a position to expand
production because of infrastructural
problems problems of transport problems
of power problems of supply and
therefore we are unable to take
advantage of our expertise our technical
skill our low cost of level compared to
European and American countries
because our supply constraints are
restricting entrepreneurship growth
you