institutional support in Entrepreneurship


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  • The term institutional support system generally refers to the economic environment of industry and business comprising of authorities and institutions whose decisions and operational framework affect the level of business.These institutions include govt owned agencies, statutory corporations autonomous and semi autonomous organisations.
  • It is an apex body and has been entrusted to play advisory role in solving problems of SMEs.
  • For providing credit for the promotion of agriculture small scale industries, cottage and village industries handicrafts and other rural industries.1.To promote labour intensive industries in rural sector and open wide range of avenues for employment to the rural ppl. various schemes have been formulated by NABARD to provide exclusive support to activities undertaken by women like ASSISTANCE TO RURAL WOMEN IN NON FARM DEVELOPMENT, assistance for marketing of non farm products and so on..2.It is an integrated area based credit intensification pgm in collaboration with the govt. banks and other development agencies…so far it has been implemented in over 106 districts in the country..3.It is a promotional pgm setup to motivate and train educated unemployed rural youth to start their own enterprises.
  • With the objective of promoting and developing has two schemes in this context: hire purchase scheme and lease scheme…..under hire purchase scheme it arranges indigenous and imported machinery on easy instalmnt….in lease scheme 100% financial facilities are available to small entrepreneurs which enable them to diversify and ensure tech upgradation…2. Financial assistance provided for marketing, bills discounting, purchase of raw materials and export activities.3. …supply of raw materials…..import of raw materials… of scarce raw materials on priority basis….4. SSIs are interested to avail facilities for tech acquisition, adoption and upgradation. Technicl service centers are established by NSIC in different parts of the country to provide diverse technical support to SSS.5. ….ensures adequate margin or return to small entrepreneurs….encourage stadardisation and quality control for products of SSI…….assist in development of brand ie making pdts more marketable…..ensure effective advertising and publicity of pdts of SSI.6. These benefits include supply of tender form free of cost…..freedom from security deposit….exemption from payment of earnest money.
  • It is the principal financial institution for the promotion, financing and development of industry in the small, tiny and cottage industries.3.Acquiring of ISO 9000 series certification
  • SFC function wid the objective of financing and promoting SMEs, achieving regional socio-economic growth and generating grtr employment opportunities.1.And other assets3.To encourage new and technically qualified women entrepreneurs in setting up industrial projects.4.Expansion of industry by rural and urban artisans.5.Under the scheme of IDBI.
  • 3.PROVIDING ALLIED INFRASTRUCTURTE facilities and their maintenance.
  • INDIAN FINANCIAL INSTITUTIONS ALOGWITH COMMERCIAL BANKS AND STATE LEVEL FINANCIAL AND development institutions estblished a network of TCOS DURING THE 70S and 80s to cater to the consultancy needs of the SMEs and new entrepreneurs with a view to provide technical expertise.3. And providing them technical and mgmt assistance.6. And skill upgradation prgms.
  • Notable achievements of the kvic are introduction of fabric painted khadi, ready made garments, hand made paper….furthermore it also has tie ups with export companies for exporting kvi technology
  • To help tiny cottage and small industries and artisans of rural sector
  • To promote and safeguard the interest of small and medium scale has been given representation on the national and state level govt bodies.
  • institutional support in Entrepreneurship

    2. 2. Institutional support system is necessary at three stages enterprise development:  Inception or Promotion  Day-to-day management  Expansion and Diversification
    3. 3. Three dimensions of institutional support system are:  Central Government  State Government  Non-government Support System
    5. 5. SMALL SCALE INDUSTRIES BOARD Established in 1954 to provide effective coordination and inter-institutional linkages for the benefit of small scale sector. It consists of the following members:  Union Industry Minister  State Industry Minister  Selected members of Parliament  Secretaries of department concerned  Financial Institutions  Eminent experts in the field
    6. 6. NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT (NABARD) Services offered by NABARD:  Attracting youth to rural non-farm sector.  District Industries Rural Project (DRIP).  Rural Entrepreneurship Development Programme (REDP).
    7. 7. SMALL INDUSTRIES DEVELOPMENT ORGANISATION (SIDO) Constituted in 1954 to develop support services for promotion of SSS. Main objectives of SIDO are:  To formulate policy for promotion of SSI  Provide coordination of policies of state government  To collect and disseminate information  To offer consultancy services  Provision of testing services
    8. 8. NATIONAL SMALL INDUSTRIES CORPORATION (NSIC) Set up by government of India in 1955. Main functions are:  Supply of machinery and equipment.  Provision of financial assistance.  Assistance for arrangement of raw materials.  Establishment of technology transfer centers.  Arrangement of marketing assistance.  Priority in government purchase programme
    9. 9. SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI) Subsidiary of IDBI, setup as an act of parliament. Provides assistance for:  Setting up of new SSI units, small hotels, hospitals and so on  Technological upgradation and modernization, expansion and diversification.  Quality upgradation.  Discounting of bills of manufacturer-seller in
    11. 11. STATE FINANCIAL CORPORATIONS (SFC) Objectives:  Provide term loans for the acquisition of land, building, plant and machinery.  Promotion of self-employment.  Encourage women entrepreneurs.  Expansion of industry.  Provide seed capital assistance.
    12. 12. STATE SMALL INDUSTRIES DEVELOPMENT CORPORATION (SSIDC) Important functions performed are:  Procurement and distribution of raw materials.  Supply of machine on hire-purchase basis.  Construction of industrial estates.  Providing assistance for marketing of products of SSI.  Eg:- KARNATAKA STATE SMALL INDUSTRIES DEVELOPMENT CORPORATION LTD.
    13. 13. TECHNICAL CONSULTANCY ORGANISATON Services of TCOs include:  Preparation of project profiles.  Undertaking industrial potential surveys.  Identification of potential entrepreneurs.  Undertaking market research.  Project supervision and rendering technical and administrative assistance.  Conducting EDPs.
    14. 14. KHADI AND VILLAGE INDUSTRIES COMMISION (KVIC) It is engaged in the development of khadi and village industries in rural areas. Main objectives of KVIC are:  Providing employment in rural areas.  Skill improvement.  Rural industrialization.  Transfer of technology.
    16. 16. INDIAN COUNCIL OF SMALL INDUSTRIES (ICSI) It was established in 1979. Main functions are:  Information dissemination.  Entrepreneurship development.  Consultancy and managerial support.  Training and research.
    17. 17. LAGHU UDYOG BHARTI (LUB) It was founded in 1995. It is responsible to undertake:  Entrepreneurial training.  Technology upgradation.  Marketing services.
    18. 18. Framework for setting up a business  General Information  Project Report  Financial Assistance  Marketing
    19. 19. General Information:  Selecting an activity  Industry potential survey  Market study  Inputs required  Agencies providing help-MSMEDI, SIDC
    20. 20. Project Report:  Gives an account of the project proposal  Detailed information  Model project reports  Agencies providing help-MSMEDI, SFC, NSIC
    21. 21. Financial Assistance:  Loan for fixed capital and working capital  Suitable source of funding  Eligibility criteria  Margin money  Procedure for getting a loan  Agencies providing help-SIDBI, NSIC, SFC
    22. 22. Marketing:  Offer goods and services of desired quality at optimum cost  Create awareness through a network of dealers  Exhibitions and trade fairs  Agencies providing help-NSIC, KVIC
    23. 23. Success story of Raisin Cluster, Sangli in Maharashtra  MSME sector in India contributes- 8% to GDP 45% to Mfg output 40% to total exports  Cluster Development Programme (MSE-CDP) one of the flag-ship schemes of the Ministry  Cluster :- Group of enterprises located within an identifiable area having similar properties like methods of production, quality control, testing, technology & marketing strategies/practices
    24. 24. What does the GoI do?  Diagnostic Study for SWOT analysis  Soft Intervention – Activities like general awareness, counseling, motivation, seminars, workshops  Capacity Building - M/S. Sangli Grape Processing, Marketing & Research Industries  Marketing Development - National level Exhibition , W.T.O. Mumbai  Management Development - Seminar on management practice at VP Institute of Management
    25. 25.  Hard Interventions i.e. setting up of Common Facility Centers  Facilities of CFC a) Common Processing Centre b) Common Testing Centre c) Common Packaging Centre  Benefits of CFC 1) Increase the efficiency and productivity of the MSME units 2) Reduced cost of Product 3) Mfg. of the internationally competitive raisins is possible What does the GoI do?
    26. 26. Success of the Cluster 32.36 51.58 36.45 34.56 19.94 37.64 28.89 36.76 49.7 36.32 87 Increase in Revenue (Rs. in Lakhs) Increase in Revenue (Rs. in Lakhs)
    27. 27. CONCLUSION The most important development in the post- independence period has been the growth of a number of key institutions to promote, assist and develop entrepreneurs to initiate industrial growth in the country. The country has laid a strong foundation broad based its infrastructure and provided much needed support and assistance.
    28. 28. REFERENCES  Entrepreneurship and Small Business Management -M. B. SHUKLA  The Dynamics of Entrepreneurship Development and Management -VASANT DESAI
    29. 29. THANK YOU