AKSHAY MEHTA

TEN1605004

Faculty of Engineering and Computing Sciences

Assignment

Program: B.Tech. Branch/Section: Civil

Course Name: Entrepreneurship Course Code: FOE 023
Semester: VIII Faculty member: Siddharth Mathur
Total Marks: 10 Submission Date: 30 April, 2020

Q.1: State any two factors affecting entrepreneurial growth. (1 Marks)

Ans- Economic Environment
Social Environment
Compelling Factor
Cultural Factor etc..
Q.2: What do you mean by need for achievement? (1 Marks)
Ans-
o The achieving society – A study of economically developed societies and their
literature
o The countries had high achievement imagery
o Consequently, they had people who had high need for achievement
o Setting standards
o Competing with peers and self
 o Quest for excellence
o Hope for success
o Moderate risk
o Desire for constant feedback on performance
o Autonomy preferred

Q.3: What is Feasibility Assessment? (1 Marks)

Ans- Feasibility Study is an assessment of the practicality of a proposed project or system. In
feasibility analysis, the project idea is examined from the point of view whether to go in for
making a detailed investment proposal or not.

Q.4: State and explain the four canons of taxation by Adam Smith. (3.5 Marks)
Ans-
Canon of Equality
canon of Certainty
Canon of Convenience
Canon of Economy
1. Canon of Equality
This states that persons should be taxed according to their ability to
pay taxes. That is why this principle is also known as the canon of
ability. Equality does not mean equal amount of tax, but equality in tax burden. Canon
of equality implies a progressive tax system.
2. canon of Certainty
According to this canon, the tax which each individual is required
to pay should be certain and not arbitrary. The time of payment, the
manner of payment and the amount to be paid should be clear to every tax payer. The
application of this principle is beneficial both to the government as well as to the tax
payer.
3. Canon of Convenience
According to this canon, the mode and timings of tax payment
should be convenient to the tax payer. It means that the taxes
should be imposed in such a manner and at the time which is most
convenient for the tax payer. For example, government of India
collects the income tax at the time when they receive their salaries.
So this principle is also known as ‘the pay as you earn method’.
 4. Canon of Economy
Every tax has a cost of collection. The canon of economy implies
that the cost of tax collection should be minimum.

Q.5: What are the causes and consequences of sickness in small business? (3.5 Marks)
Ans- Industrial sickness is defined all over the world as "an industrial company which has,
at the end of any financial year, accumulated losses equal to, or exceeding, its entire net
worth and has also suffered cash losses in such financial year and the financial year
immediately preceding such financial year"
Internal causes for sickness:-
a) Lack of finance: Weak equity base, poor utilization of assets, inefficient working
capital management, absence of costing & pricing, absence of planning and budgeting
and inappropriate utilization or diversion of funds.
b) Bad Production Policies :Wrong selection of site which is related to production,
inappropriate plant & machinery, bad maintenance of Plant & Machinery, lack of
quality control, lack of standard research & development.
c) Marketing and Sickness : Wrong demand forecasting, selection of inappropriate
product mix, absence of product planning, wrong market research methods, and bad
sales promotions.
d) Inappropriate Personnel Management: bad wages and salary administration, bad
labour relations, lack of behavioural approach causes dissatisfaction among the
employees and workers.
e) effective Corporate Management: Bad corporate management which includes
improper corporate planning, lack of integrity in top management, lack of coordination and
control etc
▪ External causes for sickness:-
a) Personnel Constraint: Non availability of skilled labour or manpower wages disparity
in similar industry and general labour invested in the area.
b) Marketing Constraints: Liberal licensing policies, restrain of purchase by bulk
purchasers, changes in global marketing scenario, excessive tax policies by govt. and
market recession.
c) Production Constraints: Shortage of raw material, shortage of power, fuel and high
prices, import-export restrictions.
d) Finance Constraints: Credit restrains policy, delay in disbursement of loan by govt.,
unfavorable investments, fear of nationalization.
 Consequences of sickness in small business

▪ Huge financial losses to the banks and the financial institutions

▪ Loss to employment opportunities
▪ Adverse effect on prospective investors and entrepreneurs
▪ Wastage of scarce resources
▪ Loss of revenue to the Government
Measures to overcome sickness
▪ Identifying sickness at initial stage : Identification and detection of the sickness at
incipient stage is the first and foremost measure to detect and reduce industrial
sickness
▪ Improving Infrastructure : Infrastructure facilities can be improved by setting up
industrial estates, Common testing centres etc.
▪ Technology Up-gradation : Funds may be provided by the financial institutions for
adoption of advanced technology.
▪ Marketing assistance : Government and Non Government Organizations (N.G.Os)
can come forward for marketing the goods produced by the SSI sector.
▪ Government Interventions : Periodic review of financial statements by government
can help to identify and prevent sickness at initial stage.
▪ Training : A proper environment must be created where an entrepreneur will be
educated and will have a proper knowledge, skill and experience about internal and
external environment of business to compete with large-scale industries and
multinational companies.