Meaning, Definition, Types,
Product range, Capital investment,
Ownership patterns, Sickness in
MSME’s, Meaning and definition of
a sick industry, Causes of industrial
sickness, Preventive and remedial
measures for sick industries.
STARTUP INCUBATORS -As an Opportunity for Entrepreneurship
What are startup incubators?,
What do they provide?,
Incubator companies in India,
services provided by Incubators,
Phases of Incubation,
Reasons to join business incubators,
Process of Startup Incubators,
The key ingredients,
The changing role of startup incubators,
Examples of startup incubators.
Role Of Agencies assisting EntrepreneurshipAnubha Rastogi
Various agencies in India including DICs, NSICs, EDII, NIESBUD,NEDB and more are functioning to promote entrepreneurship. Several new initiatives have also been taken by the Government of India to promote the culture of entrepreneurship.
Entrepreneurship development - Micro Small and Medium EnterprisesSOMASUNDARAM T
Meaning; Definition; Types; product range; capital investment; ownership patterns; Importance and role played in the development of the Indian economy; Problems and Remedies; Sickness in MSME’s; Meaning and definition of a sick industry; Causes of industrial sickness; Preventive and remedial measures for sick industries.
STARTUP INCUBATORS -As an Opportunity for Entrepreneurship
What are startup incubators?,
What do they provide?,
Incubator companies in India,
services provided by Incubators,
Phases of Incubation,
Reasons to join business incubators,
Process of Startup Incubators,
The key ingredients,
The changing role of startup incubators,
Examples of startup incubators.
Role Of Agencies assisting EntrepreneurshipAnubha Rastogi
Various agencies in India including DICs, NSICs, EDII, NIESBUD,NEDB and more are functioning to promote entrepreneurship. Several new initiatives have also been taken by the Government of India to promote the culture of entrepreneurship.
Entrepreneurship development - Micro Small and Medium EnterprisesSOMASUNDARAM T
Meaning; Definition; Types; product range; capital investment; ownership patterns; Importance and role played in the development of the Indian economy; Problems and Remedies; Sickness in MSME’s; Meaning and definition of a sick industry; Causes of industrial sickness; Preventive and remedial measures for sick industries.
An entrepreneurial culture consists of a group of individuals who have suppressed individual interests in an effort to achieve group success because group success will advance their individual interests. More Details available Inside.
This presentation is Made by Ruchi Sinha.
You may have heard the term "Intrapreneur," but what does it mean? What separates an intrapreneur from an entrepreneur and what can they do for your company? Find out here!
A brief presentation on the analysis of Rural Entrepreneurship from various sectors. Includes a few Rural Entrepreneurship Projects already operating in India.
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The major problems that have been identified are, poverty, illiteracy, unemployment, homelessness and crime and violence. Poverty is the condition, when the individuals experience scarcity of resources that are necessary to sustain their living conditions appropriately in my slide we can learn more about this
Challenges of entrepreneurship development in rural area and business educationPrashant Arsul
The majority of the population lives in villages, the village is the back bone of the country and village industries play an important role in the national economy, particularly in the rural development. Rural entrepreneurship is not only important as a means of generating employment opportunities in the rural areas with low capital cost and raising the real income of the people, but also its contribution to the development of agriculture and urban industries. Rural entrepreneurship can be considered one of the solutions to reduce poverty, migration, economic disparity, unemployment and develop rural areas and backward regions.
Quantitative management is not a modern business idea but a management theory that came into existence after World War II. Business owners initially used it in Japan to pick up the pieces of the devastation caused by the war and started taking baby steps toward reconstruction. It focuses on the following elements of business operations:
Customer satisfaction
Business value enhancement
Empowerment of employees
Creating synergy among teams
Creating quality products
Preventing defects
Being responsible for quality
Focusing on continuous improvement
Leveraging statistical measurement
Remaining focused on the processes
Commitment to refinement and learning
Quantitative techniques in management as a collection of mathematical and statistical tools. They’re known by different names, such as management science or operation research. In modern business methods, statistical techniques are also viewed as a part of quantitative management techniques.
When appropriately used, quantitative approaches to management can become a powerful means of analysis, leading to effective decision-making. These techniques help resolve complex business problems by leveraging systematic and scientific methods.
Angel investors and
entrepreneurs. Its objective would be to help lucrative, reasonable and pleasant relationships
between entrepreneurs and angels.
After being an energetic angel investor for around fifteen decades, many investors recognized
that lots of the conversations they were involved with were practically just like types they
would had often before.
Entrepreneur & Entrepreneurship Development Anubha Rastogi
Being an entrepreneur can be challenging, rewarding, frustrating, satisfying, disappointing, and exhilarating. To help you through all the highs and lows of starting your own enterprise here is easy to understand guide with basic fundamentals of entrepreneurship being explained.
Small business in INDIA FROM_Grey MATERgrey master
hii guy make a refer a from my slide show PPT
i think it will help you in your ppt and get good remark
os have a nice project of SMALL BUSINESS IN INDIA
os have fun.
An entrepreneurial culture consists of a group of individuals who have suppressed individual interests in an effort to achieve group success because group success will advance their individual interests. More Details available Inside.
This presentation is Made by Ruchi Sinha.
You may have heard the term "Intrapreneur," but what does it mean? What separates an intrapreneur from an entrepreneur and what can they do for your company? Find out here!
A brief presentation on the analysis of Rural Entrepreneurship from various sectors. Includes a few Rural Entrepreneurship Projects already operating in India.
This presentation is made by Toran Lal Verma. Meaning, nature, and scope of Financial Management are discussed. scope and objectives of financial management have been discussed along with merits and demerits.
The major problems that have been identified are, poverty, illiteracy, unemployment, homelessness and crime and violence. Poverty is the condition, when the individuals experience scarcity of resources that are necessary to sustain their living conditions appropriately in my slide we can learn more about this
Challenges of entrepreneurship development in rural area and business educationPrashant Arsul
The majority of the population lives in villages, the village is the back bone of the country and village industries play an important role in the national economy, particularly in the rural development. Rural entrepreneurship is not only important as a means of generating employment opportunities in the rural areas with low capital cost and raising the real income of the people, but also its contribution to the development of agriculture and urban industries. Rural entrepreneurship can be considered one of the solutions to reduce poverty, migration, economic disparity, unemployment and develop rural areas and backward regions.
Quantitative management is not a modern business idea but a management theory that came into existence after World War II. Business owners initially used it in Japan to pick up the pieces of the devastation caused by the war and started taking baby steps toward reconstruction. It focuses on the following elements of business operations:
Customer satisfaction
Business value enhancement
Empowerment of employees
Creating synergy among teams
Creating quality products
Preventing defects
Being responsible for quality
Focusing on continuous improvement
Leveraging statistical measurement
Remaining focused on the processes
Commitment to refinement and learning
Quantitative techniques in management as a collection of mathematical and statistical tools. They’re known by different names, such as management science or operation research. In modern business methods, statistical techniques are also viewed as a part of quantitative management techniques.
When appropriately used, quantitative approaches to management can become a powerful means of analysis, leading to effective decision-making. These techniques help resolve complex business problems by leveraging systematic and scientific methods.
Angel investors and
entrepreneurs. Its objective would be to help lucrative, reasonable and pleasant relationships
between entrepreneurs and angels.
After being an energetic angel investor for around fifteen decades, many investors recognized
that lots of the conversations they were involved with were practically just like types they
would had often before.
Entrepreneur & Entrepreneurship Development Anubha Rastogi
Being an entrepreneur can be challenging, rewarding, frustrating, satisfying, disappointing, and exhilarating. To help you through all the highs and lows of starting your own enterprise here is easy to understand guide with basic fundamentals of entrepreneurship being explained.
Small business in INDIA FROM_Grey MATERgrey master
hii guy make a refer a from my slide show PPT
i think it will help you in your ppt and get good remark
os have a nice project of SMALL BUSINESS IN INDIA
os have fun.
As per PTU Syllabus: Entrepreneurship and Micro, Small and Medium Enterprises Small scale industry, product range, capital investment, ownership patterns -Importance and role played by SSI in the development of the Indian economy - Problems faced by SSI’s and the steps taken to solve the problems - Policies governing SSI’s.
Difficulties Small Business Face Due to Marekt Conditionsijtsrd
Micro, Small and Medium Enterprise (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country. The researcher has tried to find out the possible difficulties that small enterprises face in the market. The reasons behind the failure of maximum small enterprises in Indian market. The market policies which effect such businesses and also the steps taken by the government to relief the small market enterprises. Some of the important policies have been discussed in the paper introduced by the government or which already exists. The researcher has tried to give solutions to solve such problems incurred by the SME'. The researcher has tried to find the existing governmental policies which will ease in doing business and also provide suggestions to solve the problems being faced by such business organisations. Arihant Agrawal"Difficulties Small Business Face Due to Marekt Conditions" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-2 | Issue-5 , August 2018, URL: http://www.ijtsrd.com/papers/ijtsrd17022.pdf http://www.ijtsrd.com/management/operations-management/17022/difficulties-small-business-face-due-to-marekt-conditions/arihant-agrawal
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This presentation covers the topic of small scale enterprises, it sheds light on its definition, types, features, relation to large scale enterprises and role played by it in economic development. It also covers the concept of ownership, the various forms ownership structure and selection of an appropriate ownership structure. It uses the study note format. Enjoy learning!
Growth of Micro, Small and Medium Enterprises in Manipurinventionjournals
Economic development and industrial development is considered as synonym and entrepreneurs play a major role in industrial development. Micro, Small and Medium Enterprises (MSMEs) extend to the necessary support and compliment to the beneficial effects of industrialization. Entrepreneurship is an important segment of economic growth and micro, small and medium enterprises play a key role in the industrialization of a state. It will also leads to economic development creating vast employment opportunities, redistribution of economic power and income, raising the standard of living for the people and also leads to reduction of regional imbalances, disparities in income, wealth and consumption etc. Manipur has got many areas of strength and opportunities that can raise the state into a developed state with the help of entrepreneurship and micro, small and medium enterprises are an important segment of the economy contributing substantially in the form of production, employment and exports. Numbers of registered industrial units fluctuates each year and this paper attempt to study the level of growth of these enterprises in the state. This paper also attempts to highlight the strength and weaknesses with the overview growth of micro, small and medium enterprises in Manipur.
Meaning of Service; Characteristics of Services; Classification of Services; Marketing mix of services; Customer involvement in services; Building customer loyalty; GAP model; Balancing demand & capacity.
Meaning and Elements – Classification of products; product life cycle, new product development process; branding, packaging; Pricing: Objectives, factors influencing pricing policy; types of pricing methods, Distribution: definition; need; types of marketing channels, factors affecting channels;; Promotion: Nature and importance of promotion; promotion mix; advertising; sales promotion; public relation; direct selling and publicity.
Definition; Nature; Scope and Importance of marketing; Approaches to the study of marketing; Functions of marketing, Market Segmentation: Meaning; Importance; Bases of Segmentation; Market Targeting; Types of targeting; Market Positioning; Strategies for positioning, Recent trends in Marketing
Introduction to Spreadsheet, Features of Spreadsheet, Cell reference, Format cells, Data Validation, Protecting Sheets, Data Analysis in Excel: Sort, Filter, Conditional Formatting, Preparing Charts, Pivot Table, What if Analysis (Goal seek, Scenario manager), Financial Functions: NPV, PMT, PV, FV, Rate, IRR, DB, SLN, SYD. Logical Functions: IF, AND, OR, Lookup Functions: V Lookup, H Lookup, Mathematical functions and text functions
Introduction to Data and Information, database, types of database models, Introduction to DBMS, Difference between file management systems and DBMS, advantages & disadvantages of DBMS, Data warehousing, Data mining, Applications of DBMS, Introduction to MS Access, Create Database, Create Table, Adding Data, Forms in MS Access, Reports in MS Access.
Transaction Processing Systems (TPS), Management Information System (MIS), Decision Support Systems (DSS), Group Decision Support System (GDSS), Executive Information System (EIS), Expert System (ES) – features, process, advantages & disadvantages, role of these systems in decision making process.
Introduction to Information Technology (IT), Introduction to Information System (IS), Difference between IS & IT, Need for Information System, Information systems in the enterprise, Impact of information technology on business (Business Data Processing, Intra and Inter organizational communication using network technology, Business process and Knowledge process outsourcing), Managers and activities in IS, Importance of IS in decision making and strategy building, Information systems and subsystems.
Data Mining – Definition, Challenges, tasks, Data pre-processing, Data Cleaning, missing data, dimensionality reduction, data transformation, measures of similarity and dissimilarity, Introduction to Association rules, APRIORI algorithm, partition algorithm, FP growth algorithm, Introduction to Classification techniques, Decision tree, Naïve-Bayes classifier, k-nearest neighbour, classification algorithm.
Data Warehouse – Introduction, characteristics, architecture, scheme and modelling, Differences between operational database systems and data warehouse.
Nature and purpose of organization, principles of organization, types of organization, formal and informal organization, types of organization structure, departmentation, importance and bases of departmentaion, committees, meaning and types, centralization vs decentralization of authority and responsibility, span of control, MBO and MBE (meaning only), nature and importance of staffing, process of recruitment & selection (in brief)
Meaning and nature of directing, leadership styles, motivation, meaning and importance, Communication, meaning and importance, co-ordination, meaning and importance and techniques of co-ordination, control, meaning, features, importance and steps in control process, essentials of a sound control system, methods of establishing control (in brief).
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Statistical Methods for Data Analysis (Only Theory), Meaning of Interpretation, Technique of Interpretation, Significance of Report Writing, Steps, Layout of Research Report, Types of Research Reports, Precautions while writing research reports
General features of computer – Evolution of computers; Computer Applications – Data Processing – Information Processing – Commercial – Office Automation – Industry and Engineering – Healthcare – Education – Disruptive technologies.
What You're Going to Learn
- How These 4 Leaks Force You To Work Longer And Harder in order to grow your income… improve just one of these and the impact could be life changing.
- How to SHUT DOWN the revolving door of Income Stagnation… you know, where new sales come into your magazine while at the same time existing sponsors exit.
- How to transform your magazine business by fixing the 4 “DON’Ts”...
#1 LEADS Don’t Book
#2 PROSPECTS Don’t Show
#3 PROSPECTS Don’t Buy
#4 CLIENTS Don’t Stay
- How to identify which leak to fix first so you get the biggest bang for your income.
- Get actionable strategies you can use right away to improve your bookings, sales and retention.
When listening about building new Ventures, Marketplaces ideas are something very frequent. On this session we will discuss reasons why you should stay away from it :P , by sharing real stories and misconceptions around them. If you still insist to go for it however, you will at least get an idea of the important and critical strategies to optimize for success like Product, Business Development & Marketing, Operations :)
Reflect Festival Limassol May 2024.
Michael Economou is an Entrepreneur, with Business & Technology foundations and a passion for Innovation. He is working with his team to launch a new venture – Exyde, an AI powered booking platform for Activities & Experiences, aspiring to revolutionize the way we travel and experience the world. Michael has extensive entrepreneurial experience as the co-founder of Ideas2life, AtYourService as well as Foody, an online delivery platform and one of the most prominent ventures in Cyprus’ digital landscape, acquired by Delivery Hero group in 2019. This journey & experience marks a vast expertise in building and scaling marketplaces, enhancing everyday life through technology and making meaningful impact on local communities, which is what Michael and his team are pursuing doing once more with Exyde www.goExyde.com
Salma Karina Hayat is Conscious Digital Transformation Leader at Kudos | Empowering SMEs via CRM & Digital Automation | Award-Winning Entrepreneur & Philanthropist | Education & Homelessness Advocate
Best Crypto Marketing Ideas to Lead Your Project to SuccessIntelisync
In this comprehensive slideshow presentation, we delve into the intricacies of crypto marketing, offering invaluable insights and strategies to propel your project to success in the dynamic cryptocurrency landscape. From understanding market trends to building a robust brand identity, engaging with influencers, and analyzing performance metrics, we cover all aspects essential for effective marketing in the crypto space.
Also Intelisync, our cutting-edge service designed to streamline and optimize your marketing efforts, leveraging data-driven insights and innovative strategies to drive growth and visibility for your project.
With a data-driven approach, transparent communication, and a commitment to excellence, InteliSync is your trusted partner for driving meaningful impact in the fast-paced world of Web3. Contact us today to learn more and embark on a journey to crypto marketing mastery!
Ready to elevate your Web3 project to new heights? Contact InteliSync now and unleash the full potential of your crypto venture!
Entrepreneurship development - Micro Small and Medium Enterprises
1. UNIT II
MICRO, SMALL & MEDIUM ENTERPRISES
(MSME)
MR.T.SOMASUNDARAM,
ASSISTANT PROFESSOR
DEPARTMENT OF MANAGEMENT STUIDES
KRISTU JAYANTI COLLEGE (AUTONOMOUS)
BENGALURUUnit 2 – MSME 1
2. UNIT II
MICRO, SMALL & MEDIUM
ENTERPRISES (MSME)
Meaning, Definition, Types,
Product range, Capital investment,
Ownership patterns, Sickness in
MSME’s, Meaning and definition of
a sick industry, Causes of industrial
sickness, Preventive and remedial
measures for sick industries.
Unit 2 – MSME 2
3. MICRO, SMALL & MEDIUM
ENTERPRISES (MSME)
Meaning:
Use of “Small” as a designation in industry differentiates
one set of industries from others.
Small Scale Industry (SSI) varies from one country to
another depending on stage of development, Government
policy and administrative set up of particular country.
Small enterprises is related to size of employment or
strength of labour force, investment, ownership terms, etc.
Small – Scale Industries constitute a key link in the process
of socio – economic transformation of underdeveloped
social structures.
Unit 2 – MSME 3
4. Definition:
“Small Scale Industry is defined as a unit engaged in
manufacturing, servicing, repairing, processing and
preservation of goods having investment in plant & machinery,
at an original cost not exceeding Rs.1 Crore.”
As per the provision of Micro, Small & Medium Enterprises
Development (MSMED) Act 2006, the Micro, Small & Medium
Enterprises (MSME) are classified into two categories:
a) Manufacturing Enterprises: – the enterprises engaged in
manufacture or production of goods pertaining to any industry
specified to Industries Development and Regulation Act, 1951
and defined in terms of investment in Plant & Machinery.
b) Service Enterprises: – the enterprises engaged in providing
or rendering of services and are defined in terms of investment
in equipment.
Unit 2 – MSME 4
5. 5
Manufacturing Sector
Enterprises Investment in Plant & Machinery
a) Micro Enterprises
b) Small Enterprises
c) Medium
Enterprises
a) Does not exceed Rs.25 lakhs.
b) More than Rs.25 lakhs but does
not exceed Rs.5 Crore.
c) More than Rs.5 Crore but does
not exceed Rs.10 Crore.
Service Sector
Enterprises Investment in Equipment
a) Micro Enterprises
b) Small Enterprises
c) Medium Enterprises
a) Does not exceed Rs.10 lakhs.
b) More than Rs.10 lakhs but does
not exceed Rs.2 Crore.
c) More than Rs.2 Crore but does
not exceed Rs.5 Crore.
Unit 2 – MSME 5
6. Objectives:
The main objectives of developing small scale industries are –
i) To generate immediate and large scale employment
opportunities with low investment.
ii) To eradicate unemployment problem from the country.
iii) To encourage dispersal of industries to all over country
covering small towns, villages and economically lagging
regions.
iv) To bring backward areas too in mainstream of national
development.
v) To promote balanced regional development in whole country.
vi) To ensure more equitable distribution of national income.
vii) To encourage effective mobilization of country’s untapped
resources.
viii) To improve the level of living of people in the country. 6
7. Scope of Small – Scale Industries:
The scope for small scale industries is quite vast covering a
wide range of activities requiring less sophisticated
technology and the important ones are –
a) Manufacturing activities.
b) Servicing / Repairing activities.
c) Retailing activities.
d) Financial activities.
e) Whole – sale activities.
f) Construction activities.
g) Infrastructural activities like transportation,
communication and other public utilities.
Unit 2 – MSME 7
8. Characteristics or Features of Micro, Small & Medium
Enterprises (MSME):
1. Ownership – small scale unit with one individual in
sole proprietorship or few individuals with partnership.
2. Management & Control – units are managed in
personalized fashion and owner is actively involved in all
decisions related to business.
3. Gestation period – it is the period after which teething
problems are over and ROI starts.
4. Area of Operation – it is generally localized catering to
the local or regional demand and overall resources at
disposal of small scale units are limited.
Unit 2 – MSME 8
9. 5. Technology – they are fairly labour intensive with
comparatively smaller capital investment than larger
units. So small units are suited for economies where
capital is scarce and abundant supply of labour.
6. Resources – small units use local or indigenous
resources and can located anywhere subject to availability
of resources.
7. Dispersal of units – small scale units use local
resources and dispersed over wide territory and its
development in rural & backward areas promotes
balanced regional development.
8. Flexibility – they are more change susceptible and
highly reactive and responsive to socio – economic
conditions and flexible to adopt changes. 9
10. Importance of Small Enterprises:
1. Small is beautiful – it emphasizes on small working
units, communal ownership, utilizing labour and
resources.
2. Innovative and Productive – share of innovation
success in business come from tiny groups that tend to
outperform large units.
3. Individual tastes, fashion & personalized services –
small firms are quick in studying changes in tastes and
fashions of consumers and in adjusting production
process accordingly.
- small units is flexible to adapt quick changes in
the business or technological environment.
Unit 2 – MSME 10
11. 4. Symbols of National Identity – small units are locally
owned and controlled, they can strengthen rather than
destroy the social and cultural systems as a symbols of
national identity.
5. Happier in work – people who work in small
enterprises are happier in their work.
6. Always winners of the game – small enterprises and
new entrepreneurs were at the forefront of practically
every business (may be electronics items, garments,
export business, etc.) boom of last decade.
- they establish large industrial house in shade with
quality of their performance, their ability to seize
business opportunities.
Unit 2 – MSME 11
12. Advantages of Small - Scale Enterprises:
It doesn’t require a high level of technology.
It is labour intensive and don’t require a large amount of
capital.
Small scale industries projects can be undertaken in a short
period.
It is based on processing of locally produced raw materials.
It is possible to save and earn foreign exchange by
exporting goods produced from local resources.
It is a training ground for local entrepreneurs on decision
making.
It can bring more equitable distribution of income.
It helps to create economic stability in society especially in
developing countries.Unit 2 – MSME 12
13. It create jobs in rural areas of developing countries.
It makes possible to transfer manufacturing activities from
metropolitan to non – metropolitan or rural areas.
There is an essential linkage between large scale and small
scale enterprises that creates opportunities or facilities for
growth.
It is own place in a country’s economy.
Development of small scale enterprises can be a part of
integrated rural development programmes in developing
countries.
It create immediate and permanent employment at a
relatively small capital cost.
They meet a substantial part of increased demand for
consumer goods.
Unit 2 – MSME 13
14. They facilitate mobilization of resources of capital and
skills.
They bring integration with rural economy on one
hand.
They offer a method of ensuring equitable distribution
of national income.
They involve a short gestation period.
They don’t require as heavy and costly infrastructure.
They have a favourable capital output ratio.
The products of small enterprises earn a substantial
exchange.
They assist in dispersal and avoid problems.
Unit 2 – MSME 14
15. TYPES OF SMALL SCALE
INDUSTRIES
1. Ancillary Unit:
Meaning:
• It is a subsidiary industry or supplementary industry to a main
industry.
(E.g.) Food production is a main industry, then supply of plastic
cups and plates to the food industry will become ancillary industry.
Definition:
“An industrial undertaking engaged in manufacture or
production of parts, components, tooling or rendering services and
undertaking supplies or proposes to supply not less than 50% of its
production or services, whose investment in fixed assets in plant
& machinery with ownership or lease or hire purchase, not
exceeding Rs.1 crore”.
Unit 2 – MSME 15
16. 2. Tiny Industries:
Meaning:
• Tiny industries are playing a major role particularly in the
rural and semi – urban areas.
• These industries are generally run by a single person or by
his family members.
• Self help Groups (SHGs) are considered as tiny industries
in rural economic scenario.
(E.g.) Paan shop, Hair dressing saloon, Grocery shops, etc.
Definition:
“A tiny industrial unit is one, with an investment limit
of Rs.25 lakhs in plant and machinery irrespective of location
of the unit”.
Unit 2 – MSME 16
17. 3. Cottage Industries:
Meaning:
• Cottage industries are catering mainly to local population and
depend upon local raw materials.
• It is located usually at the homes of producers hence the name
cottage industries.
• It is organized by individual private resources and with the
help of members of household (family member) and pursue
as full time or part time occupation.
• Capital investment is small and components used are simple.
• The output produced in each industrial unit is sold in local
market.
(E.g.) Carpet weaving, Paintings on wood, silk, carving of
panels, caskets, tray boxes furniture’s ivory items, etc.
Unit 2 – MSME 17
18. PRODUCT RANGE
• Manufacturing different varieties of items involving simply
to high technologies and offering opportunities for
utilization of local resources and skills.
• The sector has emerged as major supplier for variety of
products for mass consumption as well as parts and
components to large industry sector.
• It manufacture some of high value added products like
electronic typewriters, electronic survey equipment,
security and fire alarm systems, television sets and other
consumer durables.
• Many such products are used as original equipment items
by manufacturers in large industrial sector.
Unit 2 – MSME 18
19. • Small scale sector has flexibility of responding to varied
needs of the economy.
• The sector covers a wide spectrum with two clearly
identifiable segments –
i) Modern small scale industries – includes tiny units and
power looms.
ii) Traditional industries – khadi and village industries,
handlooms, handicrafts, sericulture and coir industry.
• Both the segments have their own special characteristics in
terms of capital / labour intensity, locational orientation,
manufacturing process and skill requirements.
Unit 2 – MSME 19
20. CAPITAL INVESTMENT
• Analysis of capital structure will provide a ground to
understand the size of SSI in terms of capital investment.
• It also involved in developing a sound financial plan for
SSIs.
• It reveals certain information about capital cost, operating
cost and operating revenue.
• Capital structure deals with three financial components –
a) Fixed cost or Fixed capital.
b) Variable cost or Working capital.
c) Revenue or receipts or income.
• Capital investment problems in SSIs are greatly solved by
providing various types of financial incentives like seed
capital, venture capital, subsidized interest rates, etc. 20
21. Financial Plan:
• It is the analysis of capital structure which indicates total
project outlay of a business activity.
• It considered total project cost in terms of –
i) Fixed Capital (Land & Building, Plant & Equipment,
Furniture, Power supply cost) and Working Capital (Raw
material, inventories, goods in process, direct & indirect
expenses)
ii) Sources through which these capital raised (own capital,
borrowed, grant & subsidies)
iii) Supply of these capitals on time.
• A sound financial plan will be an integrated financial
statement which explains the financial status of a business
activity.
Unit 2 – MSME 21
22. Capital Investment:
• Capital Investment is discussed in two terms –
I) General investment decision and its components:
• It is concerned with allocation of funds.
• Funds are mobilized through short – term, medium term
and long – term sources.
• The main aim of this investment is to get proper yield from
project and recover the cost associated with each source of
funds.
• Investment is possible by evaluating investment proposals
in relation to expected returns and risk.
• Capital budgeting is a financial management tool through
which capital expenditure proposals are evaluated.
Unit 2 – MSME 22
23. Factors influencing investment decisions / Capital budgeting /
Capital structure:
1. Availability of funds:
• Funds are available in different sources and it influence the
investment decisions.
• Equity capital, debentures and preference capital can be
raised through primary market.
• Term loans are available through commercial banks, financial
institutions.
• Project should have target of recovering the cost of funds
which always vary on basis of its availability.
2. Structure of Capitals:
• It structure contains only equity or debt and equity.
• Debt – equity ratio offer leverage benefits, which a firm
increases return. 23
24. 3. Taxation Policy:
• Investment proposal should be chosen to get benefits from
sales tax, stamp duty, exercise duties, direct subsidies.
• It helps the firm to recover the investment quickly, if they
made investment in thrust areas.
4. Government Policy:
• Industrial policy, foreign trade policy and finance policy
of government will have direct bearing on investment
policies.
• ‘Make or Buy’ or ‘Delete or Continue’ are directly
influenced by government policies.
• Existing business firm adopting strategic management
policies to survive in modern business environment.
24Unit 2 – MSME
25. 5. Lending Policies of the Financial Institutions:
• Policies regard to various agreements of term loan,
documentation, security margin, lending rate, money
supply, etc. will have direct impact on flow of funds or
lending policies.
6. Immediate need of the Project:
• Need of project is directly influence the investment
proposal.
• Some investment decisions related to expansion,
diversification and R & D will not yield immediate returns.
• Manager of finance portfolio has to take care in analyzing
the need for the investment proposals.
25Unit 2 – MSME
26. 7. Earnings:
• Earnings measured with minimum earnings or cut – off point
of same firm or industry.
• Earnings are below cut – off, then investment become useless
and above cut – off, then firms get expected earnings.
8. Capital Return:
• It refers to payback of investment.
• Investment decision is influenced by liquidity concept.
• Cash flows are used for revenue expenditure and it directly
affects the long term planning of firm.
9. Economic Value of the Project:
• It means, how best the project can expand cash inflows &
outflows with initial investment.
• Project must be capable of running its activities mainly by
generated funds. 26
27. 10. Working Capital:
• Permanent working capital is portion of capital which is
permanently needed in the organization.
• This requirement of this capital will be met by long – term
sources.
11. Accounting practices:
• Accounting policies & practices are different for different
types of projects.
• Acquisition of assets may be financed through term loan,
leasing and hire purchase.
• Each instrument will have different cash inflows and tax
commitment.
27Unit 2 – MSME
28. Investment decision influenced by factors like –
i) Type of capital.
ii) Capital cost.
iii) Sources of funds like internal and external sources.
iv) Effect of project on capital structure.
v) New additional working capital required.
vi) Economic viability of project.
vii) Time value of money.
viii) Hurdles that may creep in implementing the project.
ix) Installation expenses.
• Some standard methods has to be evolved to assess the tax
burden and estimate the minimum return on project.
28Unit 2 – MSME
29. II) Capital Investment in SSIs:
• Capital investments in SSIs can be assessed through a draft
financial plan with three components –
i) Fixed Capital. ii) Working capital
iii) Revenue Projection.
The promoter or entrepreneur has to bear in mind the following
aspects to manage financial function –
a) Ensure a fair return on investment (ROI).
b) Generate and build up surpluses and reserves for growth and
expansion.
c) Plan, direct and control the utilization of finances to ensure
maximum efficiency operations.
d) Co-ordinate the operations of various departments through
appropriate measures.
29Unit 2 – MSME
30. Some of the concepts relating to financial operations are –
1. Capital:
“Capital refers to total investment of money in tangible
assets like buildings, etc. and intangible assets like goodwill
also includes expenditure required for day to day operations.”
It has two components –
a) Fixed capital – which is non securing in nature, comprises of
money spent on asset of permanent nature which given return.
b) Working capital – it is the money which is available for day
to day operations.
2. Capitalization:
“Capitalization is the sum total of all long – term
securities issued by a company and the surplus not meant for
distribution.”
30
31. • It includes only term loans and retained profit.
• The components are – i) Equity share capital, ii) Preference
share capital, iii) Debentures, iv) term loans and v) retained
earnings.
• There are two terms used to know the level of utilization of
capital and earning capacity. They are – i) over capitalization
and ii) undercapitalization.
3. Capital Structure:
“Capital structure is a financial statement which shows
capital requirement of a business unit for short – term and long
– term period.”
• It is also called as ratio of ownership capital and borrowed
capital.
• It exhibits the capital investment pattern in business units
including SSIs. 31
32. Investment Pattern in SSIs:
SSIs or any business unit should consider certain factors for
sound debt management. They are –
i) Time period for which fund is required.
ii) Cost of borrowing funds.
iii) Stipulations of the lender.
iv) Repaying capacity and clearing the debt as per stipulated
time.
v) Time consumed to avail such fund.
• In SSIs, it is always better to have mix of funds considering
cost of each category.
• Capital structure planning, keyed to the objectives of profit
maximization and ensures the minimum cost of capital and
maximum rate of return to entrepreneur.
32Unit 2 – MSME
33. OWNERSHIP
Meaning:
Entrepreneur’s personal capacity to take decisions, manage
and control.
Entrepreneur’s capacity to cover risk.
Entrepreneur’s educational background, technical expertise
and experience.
It indicates the capacity to invest.
Definition:
‘The Owner of a small industry values his undertaking for
the job it provides him as well as for any return it may
make on his invested capital.”
33Unit 2 – MSME
34. Ownership Organization Decision:
It depend upon the nature of business, scale of operation,
capital requirements, decision making opportunities and
impact of taxation.
It should understand the impact of these factors to operate
business as one man show or joint venture company.
Risks associated with the unlimited liability can be avoided
and large amount of capital can be formed a limited
company.
According to survey, 78.5% of total units were of private
proprietorship type, joint family and partnership
accounting together 20%, cooperative and private limited
units for about 1% of total.
34Unit 2 – MSME
35. FORM OF OWNERSHIP (OWNERSHIP
PATTERNS)
1. Sole Proprietorship (Individual):
“Sole Proprietorship is a form of business organization in
which an individual invests his own capital, uses his own skill
and intelligence in the management of its affairs and is solely
responsible for results of its operation.”
- business owned & controlled by only one person.
Advantages:
• Easy and Simple formation.
• Smooth Management.
• Promptness in decision – making.
• Direct motivation and incentive to work.
• Personal touch with customers.
• Secrecy.
• Social Advantages
35
36. Limitations:
Limited financial resources.
Unlimited liability.
2. Partnership organization:
As per Indian Partnership Act 1932, Section A defines
a “Partnership as the relation between persons who have
agreed to share profits of a business carried on by all or any of
them acting for all.”
- association of two or more persons to carry on co-owners
of a business.
Basic Features:
a) Number of persons. (minimum – 2 & maximum 10 or 20)
b) Contractual relationships.
c) No legal distinction between firm and its partners.
Limited managerial ability.
Lack of continuity.
36
37. Partnership Agreement:
1. Objective and duration.
3. Dividing profits & loss.
Advantages:
• Easy organization.
• Combined talent & skills.
• Division of risks.
• Less incidence of tax.
Disadvantages:
• Unlimited liability.
• Limited resources.
• Divided authority.
• Personal disagreements.
2. Duties and rights.
4. Proper settlement.
• Flexibility.
• Chances of growth.
• Strong credit position.
• Mutual trust, personal
element in business.
• Instability.
• Lack of harmony interest.
37Unit 2 – MSME
38. 3) Joint – Stock Companies:
“A Company is an voluntary association of persons whose
contribute to its capital but their liability remains limited.”
- Shareholders or Members of the Company.
Type of Company:
1) Private. 2) Public.
Characteristics:
• Limited liability.
• Contract binding.
Features:
• It exists as a separate legal entity.
• It has right to own and transfer any property.
• It is an extension of the partnership form.
38Unit 2 – MSME
39. Advantages:
• Transferability shares.
• Expansion.
• Representative management.
4) Co-operative Society:
“A Co-operative society is defined as an association of
persons, usually of limited means, who voluntarily join together
to achieve a common economic through formation of business
unit.”
Features:
• Voluntary organization.
• Government Control.
Advantages:
• Easy formation.
• Social service & Limited liability.
Disadvantages:
• Lack of performance interest.
• Legal restrictions.
• Lack of secrecy.
• Service Motive.
Disadvantages:
• Lack of Interest.
• Lack of business acumen. 39
40. Role played in the development of the Indian Economy:
The small scale sector has stimulated the economic activity
and played a significant role in attaining following major
objectives –
Elimination of economic backwardness of rural and
underdeveloped regions in the country.
Attainment of self reliance.
Reduction of regional imbalances.
Reduction of disparities in income, wealth and
consumption.
Mobilization of resources of capital and skills and their
optimum utilization.
Creation of employment opportunities and increased output,
income and standards of living.
40Unit 2 – MSME
41. Meeting a substantial part of the economy’s requirements
for consumer goods and simple producer goods.
Provides employment and a steady source of income to
the low income groups living in rural and urban areas.
Provides substitutes for various industrial products now
being imported into the country.
Improves the quality of industrial products manufactured
cottage industry sector.
To enhance both production and exports.
It assist in entrepreneurship and skills development and
ensure better use of scarce financial resource and
appropriate technology.
41Unit 2 – MSME
42. PROBLEMS OF SSI
Some of the major problems of SSI are –
1. External Vs Internal Problems:
42
External Problems Internal Problems
i) Infrastructural
- Location & Power.
- Water & Communication.
ii) Financial
- Capital & Working Capital.
- Long – term funds & Recovery.
iii) Marketing & iv) Taxation
v) Raw material & Technology
vi) Industrial and Financial
Regulations
vii) Inspections & Policy
ix) Competitive and Volatile
environment
i) Choice of data
ii) Feeble structure & Faulty Planning
iv) Poor Project Implementation
v) Poor Management & Poor
Production
vii) Quality & Marketing
ix) Inadequate Finance
x) Labour Problems
xi) Capacity Utilization
xii) Lack of vertical and horizontal
integration
xiii) Inadequate training in skills
xiv) Poor and loose organization
xv) Lack of strategies
43. 2. Teething Trouble:
It related to preparation of project report, collection of data
on marketability of product.
Availability of raw materials, manufacturing techniques
involved.
Choice of machinery and location.
3. License:
To obtain permission and license from Industries
department of state or local bodies, etc.
Many small scale sector doesn’t know about various
schemes and facilities provided by both State and Central
government.
Procedures for obtaining license will keep on changing
frequently due to change in Government’s policy.
43Unit 2 – MSME
44. 4. Finance:
Initial investment of small units are mainly done by
investing their own funds.
Some units borrow funds from bank or government
agencies.
It is difficult to follow the procedures to avail the loan for
small units.
Skilled – worker – entrepreneur gets some assistance to get
funds for the business based on previous experience.
5. Location:
Choice of location, getting water and power connections
are great deal of effort on this part.
Once location selected, then purchase a plot of land,
construct shed, arrangement of machinery & installed.
44Unit 2 – MSME
45. 6. Raw Materials:
Shortage of right type of raw material at standard prices
affected entire industrial sector.
Raw materials has to get on credit with the help of
middlemen.
Higher costs for raw materials import is disadvantages.
Cheap raw materials affects the quality of product.
7. Technology:
Absence of latest technology is the handicaps for small
scale industry.
Small industry should develop the technology so as to –
- remain in the market.
- improve the quality of products.
- lower the cost of production. 45
46. 8. Marketing:
Many problems in marketing are –
- lack of standardization.
- Poor designing and poor quality.
- Lack of quality control & service after sales.
- Poor bargaining power.
- Scale of production & brand preferences.
- lack of knowledge of marketing.
- distribution contacts & Competition.
- ignorance of potential markets.
- unfamiliarity with export activities.
- financial weakness.
Due to weak financial base, small units can’t spend as much
as large units does on marketing the products. 46
47. 9. Recoveries:
Small units can’t recover from their sales and also credit
based on the compulsion.
Difficulties in paying the dues in time in order to recover
from the credit facility.
10. Labour:
Difficult in managing the labour due to change in labour laws
time to time.
Trade union create a problems and protect the interest of
labours.
11. Faulty Planning:
Inadequate appraisal of projects and faulty planning in
establishing small units.
Through study on market, economic, technical should be
done before establishing small units. 47
48. REMEDIES OF SSI
Steps taken to solve the problems of SSI:
Some of the specialized institutions help small scale sector to
minimize the problems. They are –
1. Institutions which promote SSI:
The following institution plays an advisory role and initiate
appropriate policies, measures and schemes for promotion of
SSI.
i) Directorate of Industries.
ii) Small Industries Development Organization (SIDO) with –
- 30 Small Industries Service Institutes (SISLs).
- 4 regional testing centres.
- 7 field testing stations.
- tool rooms and tool design institutes.
48Unit 2 – MSME
49. - 4 product and process development centre.
- 2 central footware training institutes.
- 2 National level training institutes.
iii) Industrial Development Corporation.
iv) Udyog Mitra.
v) National Small Industries Corporation Ltd. (NSIC)
vi) Khadi and Village Industries Commission (KVIC)
vii) Small scale Industries Board.
viii) National Industrial Development Corporation.
2. Institutions offering Financial Support:
The following institution provides financial support to
accelerate industrial development.
i) Industrial Finance Corporation of India (IFCI).
ii) Industrial Credit and Investment Corporation of India (ICICI)
49Unit 2 – MSME
50. iii) Industrial Development Bank of India (IDBI).
iv) Industrial Reconstruction Bank of India (IRBI).
v) Small Industries Development Bank of India (SIDBI)
vi) Karnataka State Financial Corporation Ltd (KSFC)
vii) Karnataka State Industrial Investment Corporation Ltd
(KSIIDC).
3. Institutions offering Technical Support:
The following institution provides technology to small
industries.
i) Central Institute of Tool Design (CITD).
ii) National Institute of Design (NID).
iii) Technology Development and information company of India
Ltd.
iv) Product and Process development centre’s.
v) Industrial and Technical Consulting organization. 50
51. 4. Institutions offering Marketing Support:
The following institution provides marketing support to
come out with purchasing policy.
i) State Trading corporations.
ii) Export-Import Bank of India.
iii) Export Promotion councils and commodity boards.
iv) Indian Institute of Packaging.
5. Institutions promoting Entrepreneurship:
The following institutions has established to promote
entrepreneurship in our country.
i) Centre for Entrepreneurship Development.
ii) Entrepreneurship Development Institute of India (EDII).
iii) Indian Institute of Entrepreneurship (IIE).
51Unit 2 – MSME
52. iv) National Institute for Entrepreneurship and Small
Business Development (NIESBUD)
v) National Science and Technology Entrepreneurship
Development Board (NSTEDB).
vi) National Institute for small industry Extension and
Training (NISIET).
vii) Industrial Training Institutes.
viii) National Bank for Agricultural and Rural
Development (NABARD).
ix) Housing and Urban Development cooperation ltd.
x) Technical Consultancy Organization (TCOs).
52Unit 2 – MSME
53. SICK INDUSTRY
Meaning:
Sick Industry is one which is not healthy.
A small scale industry unit is considered as sick
when any of its borrowal accounts has become a
doubtful advance (i.e.) principal or interest in
respect of any of its borrowal accounts has remained
overdue for a period exceeding 2 and ½ years.
Company incipiently sick if it has eroded 50% or
more of its peak net worth during any of preceding
five financial years.
53Unit 2 – MSME
54. Definition:
According to Reserve Bank of India, “a sick unit is
one which incurs cash losses for one year, unit has
imbalance in its financial structure such as current ratio
of less than 1:1 and worsening debt-equity ratio and when
the cumulative losses exceed capital and reserve.”
“Sick industry is defined as an industrial company
which has at the end of any financial year accumulated
losses equal to or exceeding its entire net worth and also
suffered from cash losses in such financial year
immediately preceding such financial year.”
- Sick Industrial Companies Act, 1985
54Unit 2 – MSME
55. Signals of Industrial Sickness:
The important signals of sickness are –
i) Decline in capacity utilization.
ii) Shortage of liquid funds to meet short-term financial
obligations.
iii) Inventories in excessive quantities.
iv) Non submission of data to banks and financial institutions.
v) Irregularity in maintaining bank accounts.
vi) Frequent breakdown in plants and equipment's.
vii) Decline in the quality of product manufactured or service
rendered.
viii) Delay or default in payment of statutory dues such as
provident fund, sales tax, excise duty, ESI, etc.
ix) Decline in technical efficiency.
x) Frequent turnover of personnel in the industry. 55
56. Symptoms of Industrial Sickness:
Some of the important symptoms which characterize industrial
sickness are given below –
i) Persisting shortage of cash.
ii) Deteriorating financial ratios.
iii) Widespread use of creative accounting.
iv) Continuous tumple in the prices of the shares.
v) Frequent request to banks and financial institutions for
loans.
vi) Delay and default in the payment of statutory dues.
vii) Delay in the audit of annual accounts.
viii) Morale degredation of employees and desperation among
top and middle management level.
56Unit 2 – MSME
57. Causes of Industrial Sickness:
The origin of causes of Industrial Sickness are broadly
classified into two broad categories –
1. External or Exogenous causes:
• This causes which are beyond the control of industry .
• There are several external factors causing a sick unit and
vary from time to time for industry to industry.
Some of the external factors causing industrial sickness are –
i) Change in industrial policies of government from time to
time.
ii) Inadequate and untimely availability of necessary inputs
like raw materials, power, transport and labour.
iii) Lack and shrinkage of demand of he product.
57Unit 2 – MSME
58. iv) Recessionary trends hovering in the economy.
v) Frequent industrial strikes and labour unrest.
vi) Shortage of financial resources especially working capital.
vii) Natural calamities like drought, floods, etc.
In view of nature of all these factors, these can be classified into
three categories like a) Government Policy, b) Environment
and c) Natural Calamities.
2. Internal or Endogenous Causes:
• This causes are those which are within the control of the unit.
• It arises due to some internal deficiencies in various
functional areas like finance, production, marketing and
personnel.
• It is related with mismanagement in various operational
areas.
58Unit 2 – MSME
59. • Majority of projects (53.8%) are found default due to
internal causes like problems of poor management, poor
implementation, shortage of working capital, operational
and labour problems.
• Unit may commit some mistakes in recruitment and
training of workers, underestimates various inputs such as
powers, funds, etc.
• Due to changes in demand for product, new and advanced
methods of production may have devised and create new
competitors.
• Too small unit cannot withstand fluctuation setbacks,
frequent changes in government policies, market changes,
etc.
• It operates on small margins and small error can make the
unit sick. 59
60. Consequences of Industrial Sickness:
The various consequences of Industrial sickness are –
1. Huge Financial losses to the banks and the financial
institutions:
• Banks and financial institutions provide substantial funds to
start an industry.
• Huge funds are locked up in 1336 non SSI sick units, 245575
small sick units and 813 weak units leads to financial loss.
• Recovery of overdue takes long period of time and only small
portion of overdue amount is finally recovered.
2. Loss to Employment Opportunities:
• It is the socio economic problem of unemployment in labour
surplus economy.
• 30 lakhs of workers are likely to be affected by closure of sick
and weak units. 60
61. • 6% of total employment in industrial sector is likely to be
affected by industrial sickness.
3. Emergence of Industrial Unrest:
• Closure of sick units leads to industrial unrest also.
• Trade unions oppose the retrenchment and rendering of jobs
and leads to industrial strikes.
• It threatens the peace and tranquility of industrial
environment.
4. Adverse Effect on Prospective Investors and Entrepreneurs:
• Due to sickness, share price of unit tumbles down, which
affects the stock market of country.
• Sickness creates a psychology of despair for investment
among prospective investors.
• The industrial climate becomes non – conducive for industrial
development of economy. 61
62. 5. Wastages of Scarce resources:
• In under developed economy, resources are already scarce.
• If scarce resources are locked in sick units, it becomes
wastage of scarce resources, otherwise invested would have
yield substantial returns to economy.
6. Loss of Revenue to the Government:
• Government raises a substantial portion of its revenue from
industrial units by way of various taxes and duties levied on
them.
• Taxes and duties are reduced if no. of industrial units becomes
sick, which leads to loss of revenue to the government.
• Industrial sickness not only tends to aggravate the problem of
unemployment, but also renders infructuous capital
investment and creates adverse climate for further industrial
growth. 62
63. SICKNESS IN SMALL SCALE
ENTREPRISES
Problems & Industrial sickness in SSI & their remedial
measures:
1) Management Problems:
a) Growth for growth’s sake.
b) Inadequate cost analysis.
c) Lack of balance sheet concern.
2) Financial Problems & issues:
* Remedies to overcome issues –
i) Entrepreneur should realize that the business success is
sufficient & growing profits from year to year.
ii) Performance of various business activities should measured
& evaluated & necessary action should be taken.
iii) Accounting principle of conversation is adapted.
63Unit 2 – MSME
64. iv) When business is good then reduce credit period, if it is
dull then expand credit on sale.
v) Good financial management is need for business growth &
it depend on credibility, solvency, availability of resources.
vi) Both assets & liabilities should be managed.
vii) If no proper a/c – losses occur & success of business
depends on relationship b/w banker, entrepreneur &
accountant.
3) Marketing Problems issues. (E.g.) Handicraft Product.
4) Operation Management problems & issues.
64Unit 2 – MSME
65. MANAGING CONCEPTS IN RUNNING A
SMALL BUSINESS
Need for integration of Marketing, Production, Finance
& Personnel functions:
1) Marketing Management:
* Marketing Orientation.
* Marketing Mix.
2) Production / Operation Management:
i) Technology Selection & Management.
ii) Capacity management, iii) Schedule, Time allocation.
iv) Systems management.
Study customer’s
Needs & wants.
Provide them with
Product / Service.
65Unit 2 – MSME
66. 3) Finance Department:
* Statement of A/c.
4) Personnel Management:
* Organizing & managing the small Business
successfully.
Balance Sheet Operation System
(P & L A/c)
Shows that firm owns &
what it owes at a
particular date in terms
of assets, liabilities
respectively.
Shows income, cost of
Sales, Gross Profit,
Expenses, Tax, Net
Profit during period of
time , day, year.
66Unit 2 – MSME
67. Corrective measures for sick industries: (Preventive and
Remedial measures)
Some of the remedial measures to detect the fast spreading
disease of sickness in industries are –
It is not an overnight occurrence but it is a gradual process
taking from 5 to 7 years corroding the health of a unit.
Identification and detection of sickness at the incipient
stage is first and foremost measure to detect and reduce
industrial sickness.
For identifying industrial sickness at an early stage,
appropriate yardsticks need to be evolved and developed.
Large no. of sick units are permitted to close due to limited
resources and only few sick units go for revival or
rehabilitation by combining together with large units to
prevent sickness. 67
68. Attitude of three different sets of a unit – a) Management
seeks to close the units as it is more viable, b) financial
institutions think that whatever can be salvaged should be
salvaged and c) labour view is that, they will lose job, PF
and other benefits. If all three properly integrated, then unit
can be salvaged in best interest of all three in proper time.
Sick industry fall within purview of Board for Industrial
and Financial Reconstruction (BIFR) and to have separate
division in BIFR to deal with sickness in small scale
industries.
Rehabilitation programmes for sick units are often carried
out in adhoc manner and to help sick units related to
rescheduling of debts, sanction of additional term loans
for installation of new machineries, enhancement of
working capital limit, etc.
68Unit 2 – MSME
69. Once a decision related to rehabilitate of sick unit,
programmes should be finalized quickly and implemented
speedily.
Rehabilitation programmes should be implemented in full
pledge to jeopardizes the efforts to rehabilitate the unit.
Banks and financial institutions should periodically review
the accounts of small scale industries to identify units
which are becoming sick or prone to sickness.
Government of India and RBI should request the
commercial banks and financial institutions to provide
information about sickness and to facilitate them to take
appropriate action.
To impart necessary knowledge to the entrepreneur in
various functional areas through training program like
EDP to avoid sickness in the industries. 69