part: a Finance & Trade • ow

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Latest CBSE Syllabus • •
It •
tents as per
urship Development (ED): Conce
critieprene
o pt, Characteristics and Need. "
Process eneurship D
f ctual
Entrepr evelopment:
Property Rights and Entrepre Start-up India Scheme, Ways to fund start-
p Intelle neurship
Sumall scale enterprise as defined by MSMED Act, 2006 (Micro, Small and Medium
rise Development Act)
Enterp
mall business in India with special reference
Role of s to rural areas
rnment schemes and agencies for small scale indu
Gove stries: National Small Industries
Corporation (NSIC) and District Industrial Centre
areas (DIC) with special reference to rural,
backward

PRENEURSHIP DEVELOPMENT
LENTRE (ED): CONCEPT,
TERISTICS AND NEED
CHARAC
ncept of Entrepreneurship
11 The Co
I
ENTREPRENEUR (PERSON)

Entrepreneurship (Process)

Enterprise (Outcome)

Why Seek an Enterprise? Fig. 1

in creating goods and services which bring
Entrepreneur seeks an enterprise because it results
ing looks for a world full of happiness, joy, comfort
happiness, joy, comfort and peace. Every human be and
r looks for opportunities for converting challenges
peace. In order to bring this, the entrepreneu into comfort.
ng up a venture, which brings about change.
Setting up of an enterprise is setti
 Part: B Plnonce & Trade
eurship
!P1111111111111 Need and importance of Entrepren
nt for national growth and social developmen
Entrepreneurship is importa t. Mo
! ry of long years of foreign domination. They have st cif tilt
developing countries have the histo
on problem they are facing is to conserve the ()Litt] ow ofattairie,. (1
freedom recently. The most commemand for consumer goods and services by locally ,s: iiriiiteci
national wealth and fulfillingblem
the of
d foreign exchange. These countries need to im cR
them.
They are also facing the pro port
major source of foreign exchange is export. 4Pitai
goods and technology and the
resent conditions demand developing countries to:
In short, we can say that the p
itute goods to stop outflow of national wealth.
(i) Produce import subst
d more consumer goods and services to meet the increasine d.
(ii) Produce more an rnand r) f
these goods locally.
port purpose to earn more and more foreign exchange,
(iii) Produce goods for ex
requirements can be met by more and more entrepre
All the above mentioned neur
nd risk of launching a new venture, developing new ' neur s.s
Entrepreneurs bear the cost a
ping new markets. So, entrepreneurs offer a new Products
, adapting new technology and develo gstrategy of
development.
ship helps in increasing national production.
Fig. 2 shows how entrepreneur

ods
Import Substitute Go

Entrepreneurship must raise

production of Consumer goods and services Increase in national production

_ Export productions
► and services

Fig. 2

Need for entrepreneurship can be made more clear from the following points:

I. Life line of a nation: Entrepreneurship is a yardstick to measure the development of any

country as no country can prosper and grow without development of entrepreneurship.
We can see that in U.S., U.K., and other developed countries, there are well developed
and well established enterprises. So every nation tries to increase its trade by having
more enterprises.

2. Provide innovation: Entrepreneur is an innovator who tries new methods of production,

new technology, new ways of marketing etc. He develops new business ideas and puts
them into action to enhance the process of economic development.
r
Chapter: 8 Sma ll Business and Enterprises 111111111
•L of economy: The Entrepreneurs adapt
to cha
1. Groi"",..ient. The changes adopted by nges as changes take place in the
entrepren0,AIcolci:
eh, and economy. Latest techn eurs in enterprises e
1 ology used by en ven bring changes
ill the
,, elite es
in enterprises but it also brings growth of economy terprises not only brings growth
at large.
creased profits: An entrepreneur always tries to minimise cost. He alway
4. 111`'. um utilisa s tries to get
°P uit in increase in profit. ency
alwaystion of resources. The reduction of cost and increase in effici
res
mpioyment opportuni
opportunities: Entrepreneurship
nt but also offers emplo not only provides the scope for self-
5' Eemployme yment to larg
e number of people as in the case of
euccessFill enterprises. Growth in entrepreneurial activities leads to momployment. d mn ore a er

enefits: Entrepreneurs al
6 Social b ways try to adopt latest technology and raise the

ng of living by providing good quality products and servi S ces at lowest cost. By
Standard
setti up enterprises in backward areas, they try to bring balanced regional growth. By
optimum utilisation of resour
making ces, they save scarce resources of society.
pRocESS OF ENTREPRENEURSHIP
have to follow a seque
Entrepreneurs nce of steps before starting an enterprise. Following is the
ss of entrepreneurship.
proce
scovery: Under this step, entrep
I. Self-di reneur assesses what are his strengths and
es, what all he enjoys doi
weakness ng and his work
e. Self discovery
experienc
ifying opportunities: Under this step,
2. Ident he tries to
nt and Identifying opportunities
find out the need, wa problems so that he can get an
opportunity to overcome the problems and fulfil the need.
Generating and evaluating ideas
3. Generating and evaluating ideas: Through various
measures such as discussion, brain storming, creativity
Planning
and his own experiences, he tries to develop new ideas
to overcome problems and meet the expectations of
customers. Raising start-up capital

4. Planning: Under this step, entrepreneur conducts research,

makes business plan and strategies. Start-up

ss plan,
5. Raising start-up capital: By using busine
d partners.
entrepreneur tries to attract venture capitalist an Growth

Harvest

Fig. 3
10 11111 Part: B Financ,.e & Trade

repreneur launches his enterprise and t

Start-up: Under this step, the ent
anges as per changes in the environn.,ent. ries to d...
more customers. He also makes ch
and and grow the enterprise.
7. Growth: Entrepreneur tries to exp
business and harvesting the reward.
S. Harvest: This means selling the Many
art a new venture. fltrepre_
sell their existing business and st

2.1 Startup INDIA SCHEME

ernment of India. The campaign w
Startup India is an initiative of Govs speech on 15 August, 2015. as first an,..oil„
Prime Minister, Mr. Narendra Modi in hi ,■ced by
develop an eco-system to
Startup India is an action plan to promote an
vernment is offering various bank
entrepreneurship across the country. Go
f sch ure
ipnaarntcniefinancing promote Startups. ernes to

2.2 Meaning/Definition/What is Startup?

rm of private ltd. com
A Startup is a business enterprise in the fo pany,
:ilp::
in India, which was st limit
liability partnership or sole proprietor, registered arted less than f
re. ive
ago and have annual turnover of less than 25 cro Years
hould not have fo
To be eligible for Startup, the enterprise s rmed by splitting u
eded Z 25 crore s
reconstruction and its turnover should not have exce ince its existence. P Of
ment of I
2.3 Various Schemes and Ways to fund startup by Govern ndia

The Government of India is taking lot of steps to encourage startup projects. Corrimon
schemes/benefits offered by government are:
1. No inspection under this scheme no inspection would be carried out at startupsfor thre
e
years regarding labour laws, etc., as they need only self-certification.

2. Registration: The Government has launched a mobile app in April 2016 and a portal that
will allow startup to get registered in one day. In addition there will be a single window for
clearance, approvals and registration.

3. Income Tax Exemption: Income tax exemption is available for first three years. This
exemption is available only after obtaining a certificate from inter-ministerial board set up
for this purpose.

4. Capital gain tax exemption: The startup can claim capital gain tax exemption also for first
three years.

5. Benefit in Patent and Intellectual property: In patent cost, startup can claim an 80% rebate
that means if a startup applies for patent the government will give 80% rebate in fees. Even
faster patent registration and protection for intellectual property rights are also provided
under this scheme.
 Uliapter. 8 Smoil Business nnrl Enternry;w:

sacines for startup: Governme

Iv" 14 500 crore (Or credit nt has announced 10,000 crore fund for new
e ortor au" guarantee scheme, Even fOreign aid is also provided to

stArturs' for example a sofibank ofJapan

invested $ 2 billion in Indian startups.
.410
It • funding options for startups to help raise capital.
4%003 ding: TO start business self fun
stitIon
1. ding is first option on later stage investors may get

4153‘ .4,„ding as a Funding Option: Crowdiunding

crolvo".. is one of the newer ways of funding
„tor that )1'is been gaining lot of
popularity lately. It's like taking a loan, pre-order,
stiributioo or investments from more than one person at the same time.
ThThi s crowding works-An
is is how entrepreneur will put up a detailed description of his
df platform.He will m
on a crow unding
ention the goals of his business, plans for
much funding he needs and for what reasons, etc. and then investors
blntkriellilapbrootfiitt.tihle"brusiness and give money if they like the idea. Those giving money will
pledges with the
male online promise of pre-buying the product or giving a donation.
-4nvone can contribute money toward helping a business that they really believe in.
Get Angel investment In Your Startup: Angel investors are individuals with surplus cash
and
keen interest to invest in upc
a oming startups. Angel investors have helped to startup many
t comp
prominen anies, including Google, Yahoo and Alibaba. This alternative form of
investing generally occurs in a company's early stages of growth, with investors expecting a
upto

ns. 30% equity, They prefer to take more risks in investment for higher
retur

Venture Capital for your Business: Venture

4. Get capitals are professionally managed funds
in companies that
who invest have huge potential. They usually invest in a business against
equity and exit when there is an IPO or an acquisition.
oney Through Bank L
5, Raise M oans: Normally, banks are the first place that entrepreneurs
go when thinking about funding.

Almost every bank in India offers finance through various programs. For instance, leading
Indian banks-SBI, HDFC, ICICI and Axis banks have more than 7-8 different options to
offer collateral free business loans.

6. Get Business Loans from NBFCs: There is an option. Non Banking financial companies
(NBFC) provide services to those who would not have access to conventional baking
services. It is increasingly becoming popular for those whose requirements are limited and
credit ratings are not favoured by bank.

7. Government Programs that Offer Startup Capital: The Government of India has launched
10,000 Crore Startup Fund in the Union Budget to improve startup ecosystem in India,
further the government has also launched various schemes such as
 • m mr MI VI I t . I , UM I /

Schemes
(I) Central Government
Innovations programme—in order to boost in
(a) Bank of Ideas and
companies. 11°vative pt

414:
Micro Units Development and Refinance A
(b) Pradhan Mantri ll ti
10 lakh sma and medium entergpeocy

xtent benefits to
1
offer bus: Is s. 44,1
(c) (MUDRZ)— To e
SIDBI—Small Indus
tries Development Bank of India also
iness ,
MSME sector. Joh
.is
emes
(ii) State Government Sch
Entrepreneur Development Mission (KSSEDIK
(a) Kerala State Self
entre for Entrepreneurship Development,
(b) Maharashtra C
Fest, etc.
(c) Rajasthan Startup
boost up small business in India.
These schemes are set up to
nt's Startup India Action Plan.
Read about Indian governme

Y RIGHTS AND ENTREPR

3. INTELLECTUAL PROPERT ENEURSH IP
s can be critical in helping new v
Intellecutal Property (IP) system entures transf
market value and competitiven
innovation potential and creativity into
rs to protect their inventio
ess. Intellectual ; dieit rights
(IPR) allow innovative entrepreneu ns. It also give a_ r°Pen,
n ed
your competitor. edge over
3.1 What is the IP System?

General definition of intellectual property rights (IPR)

Intellectual Properly (IP) is divided into two categories: 1.
Industrial property, which includes inventions
and geographic indications; and (patents), trademarks, industrial desig4
Copyright, which includes literary and artistic works.

Intellectual property rights (IPR) refer to the general term for the assignm ent of properly
rights on these assets)

The IP system as an asset for innovative entrepreneurship

The Intellectual Property Right, i.e., IPR is very very important and beneficial for innovative
entrepreneur in the following way:
1. Innovative potential get market value.

2. Specially upcoming entrepreneur can make their name and place in market with IPR.
3. Research shows more than 25% patent are taken by new and upcoming entrepreneurs.
4. IPR gives the entrepreneur property right on intangible assets.
 er your competitor a
give .1n edge ov nd help you to become leader in your field.
1Z
lectu.1 Property include

Copyrights
1.
patents
3. .trademarks
n gives the co
right protectio pyright holder the exclusive right to copy the work,
reate "derivative
C°PY it (that is, c works"), and distribute, perform and display the work
niodifY
otect processes,
tents: patents pr methods and inventions that are "novel," "non-obvious" Pa
d „usefur if granted, a patent gives you monopoly on selling, using, making or importing
ention. The requirements for a patent are complex.
ail inv
Trademarks: A trademark is like a brand name. It is any word(s) or symbol(s) that represent
entify and distinguish it from
3' a product to id other products in the marketplace.
Eonipie Nike
rk gives you a 'legal
is trademark of Nike
protection that no onecompany.
else can use this trade mark.
Tradema

SINESS: INTRODUCTION
SMALL BU
enterprises exist in every country of
Small-scale the world, but in a developing country like small-
erprises occupy a
scale ent special place as there is scarcity of capital and abundance of
scale enterprises use labour-inten
Lour and small- sive or capital-saving techniques.

g of Small Business
Meanin
Definition
iately after independence
Immed
-scale industry was defined by
small
ies Development and Regulation
Industr Act,
terprise which e
1951 as "Any en mploys
persons when using power
not more than 50 and
100 when not using power and with
capital assets not exceeding 5 lakh".
Later on, in 1959, 1960, 1966, 1975,
1980, 1990 the definition was revised.
 cation of small business as per MSMED ACT
Meaning and new classifi 202„
ct) "
Small and Medium Enterprise A ctf,

SME Certification
Revised M
riteria: Investment and Annual Turnover
Composite C
Small
Classification Micro Medium
Investme
nt < 10 crore Investment
Manufacturing Investment < 1 crore 2cier„%le
and
and and and
Turnover < 50 crore
Services Turnover < 5 crore Turnover < z 1 on
cror„

Caw Stud■,
unit to produce all kinds of school and off
. 1. 'Do Well' is manufacturing ice stati

tebooks, etc. in Gurgaon. The total investment of

onery
such as pencils, pens, paper, no
y is
company in plant and machiner crore. Identify the category into which tthehis
ct, 2006.
business will fall as per MSMED A
z25 lakhs but less than Z5
Ans. The investment of 'Do well' is more than crore. Hence asper
nterprise.
MSMED Act 2006, "Do well' is a Small E

5. ROLE OF SMALL BUSINESS IN RURAL INDIA

Small-scale industries provide the following benefits in rural area:
(1) Employment: Small-scale industries are labour-intensive so they provide additional
the
employment to men and women. Next to agriculture, small business constitutes
popular occupation of people of India. They also provide employment to agriculturists who
remain idle during a part of year.

(ii) Improves Economic Condition: By providing employment opportunities, the small-scale

industries provide more income to people living in rural areas, which improves economic
conditions in villages.

(iii) Promotion of Artistic and Creative Sense: Small business set up in rural area provides
scope for the promotion of artistic achievement and creativity that has been suppressed in
rural areas.

(iv) Rural Development: Small-scale industry set up in rural areas leads to their development
nal
which may result in rural reconstruction, sustained growth and removal of regio
disparity
 Chapter: 8 Small Business and Enterprises
bilisat o ff Local Res
ources: Small-sc
0) 1 ale indu
0.4 utilisation of local resources wh stries facilitate mobilisation
all. ich might otherwiseo therwise remain unutilised.
reso This
s in tapping urces like entrepreneurrn s and small savings specially in rural
areas'

GOVERNMENT ASSISTANCE AND SP

01/
6.6FOR IN ECIAL SCHEMES
DUSTRIES IN RURAL, BACKWARD
Fy in view the co D AND HILLY AREAS
keeping ntribution of SSI to empl
th oyment generation, balanced regional
n of exp
and promotio ort, the government of India
ge .,s in has formed various' and offered
various state level.centives and benefits for growth and promotion of small-scale business at central level as
The government assistance are translated into action thro ugh various agencies,
 d corporations etc.
w'ellartments an

deP some ofgrouped

the support measures
in following two and programmes meant for the promotion of small and rural
dustries are categories:
tional Support
Institu
es offered by the
• Incentiv Government to SSI

stitutional Support
6.1 In
tional Small Industries Corporation (N
j.Na SIC): This was set up in 1955 with a view to
d fostering the
promoting an growth of SSI in the country.
cus was on:
Its main fo
(i) To supply indigenous and imported machines in easy installments
(ii) To procure and supply imported raw materials
(iii) To export products of SSI
(iv) To provide advisory and mentoring services
(v) To provide technological assistance
(vi) To develop software technology part and technology transfer
A new scheme of performance and credit rating of small business is implemented through
NSIC with following twin objectives:
ing
(a) Sensitising small industries about need of credit rat
rack record
(b) Encouraging SSI to maintain good financial t

•
 Part: B Finance & Trade I t

The DIC programme was st

-'. The District Industries Centres (DICs): arted „
es at the district level. oil may 1,
to provide assistance to small-scale industri lq

These centres provide all the promotional ac tivities such as identification ofsuitak,
uls
e
g for credit etc.
preparation of feasibility report, arrangin cheme
ude in rural areas. DIC is
These centres promote entrepreneur attit the institut.
pport to entrepreneur
district level which provides all services and su for settingicin at the
suitable scheme, preparation ma
scale business, such as identification of of feasibiii!
'I report
arranging for credit etc.
n the attitude of rural entr
Broadly, DICs are trying to bring change i epreneurs:1h
d industrial growth at the
emerging as the focal point for economic an district levele1)1C is
in Rural Area
6.2 Incentives Offered by Government for Industries
ry are developing rapidly
After Independence, some areas in our count whereas so
ional growth a rtie
remain backward and underdeveloped. But balanced reg nd development is a" areas
due to the following reasons: must
eas
(i) To provide employment opportunities in all the ar
(ii) To develop local skills and resources
(iii) To restrict the migration of people to urban areas.
To have balanced regional growth and for the development of rural backward and hilly the a as
government has provided the following incentives: re
(i) Availability of land in these areas at concessional rates
(ii) Location of public sector projects in backward areas
(iii) Establishment of industrial estates in backward areas

(iv) Development of infrastructure facilities such as transport, banking, power supply etc.
(v) Offering tax concessions to units located in backward areas
(vi) Finance at concessional rates to industries set up in these areas
(vii) Granting subsidies from time to time. Some of the subsidies offered are:

(a) Transport subsidy for carrying raw materials and finished products in these areas.
(b) Capital subsidy for investment in fixed assets of industries set up in backward areas.
(c) Infrastructure subsidy. The central government bears apart of the expenses incurred
on infrastructure.

(viii) Special programmes for the development of backward areas have been initiated by the
government.