Unit III
Industrial Development in India
Q1) Discuss the role of industrialisation in Indian economy? 8
A1) Industrialization is the technique of producing customer and capital items and constructing infrastructure to offer items and offerings to each people and businesses. Thus, industrialization performs a prime function withinside the monetary improvement of growing international locations which include India, which has a massive exertions pressure and numerous sources. Let's speak extra approximately the function of industrialization withinside the Indian economic system.
1. Income boom: The first critical function is that the improvement of enterprise affords a secure basis for the fast increase of earnings. Empirical proof shows a near hyperlink among excessive stages of earnings and commercial improvement. For example, in industrialized international locations, GNP sales in step with capita may be very excessive at around $ 28,000. On the alternative hand, withinside the case of industrially underdeveloped international locations, it's miles very low at approximately $ 400.
2. Changing the shape of the economic system: In order to increase the economic system, growing international locations want structural modifications because of industrialization. History suggests that withinside the technique of turning into a evolved economic system, the proportion of the economic area rises and the proportion of the rural area declines. This is feasible simplest via way of means of intentional industrialization. As a end result, the blessings of industrialization "trickle down" to different sectors of the economic system withinside the shape of agricultural and carrier area trends that cause multiplied employment, output and earnings.
3. Responding to excessive-earnings call for: Beyond sure limits, people's call for is generally simplest for commercial merchandise. After assembly meals needs, people's earnings are specially spent on commercial merchandise. This approach that the call for commercial merchandise has excessive earnings elasticity and the call for agricultural merchandise has low earnings elasticity. Developing international locations want industrialization to satisfy those needs and boom monetary manufacturing.
4. Overcoming the deterioration of the phrases of change: Developing international locations which include India want industrialization to be loose from the poor outcomes of rate fluctuations in commodities and irritating phrases of change. Such international locations specially export number one merchandise and import synthetic items. Prices of commodities are declining or stable, however charges of commercial merchandise are rising. This brought about worsening phrases of change for LDCs. For monetary improvement, such international locations want to shake off their dependence on commodities. They ought to undertake import substitution and export-orientated industrialization.
5. Absorption of surplus exertions (activity creation): Developing international locations which include India are characterised via way of means of surplus exertions and a unexpectedly developing population. Rapid industrialization of USA is critical to soak up all surplus exertions. Only the established order of enterprise can boost up and create employment opportunities.
6. Bringing technological development: R & D is associated with the technique of industrialization. The improvement of industries that produce capital items, that is, machines, equipment, etc., permits USA to provide diverse commodities in big portions and at low cost, ensuing in technological development and modifications in people's views. The end result is a commercial civilization or surroundings for the fast development wished for a healthful economic system.
7. Economic Strengthening: National industrialization can offer the important factors to reinforce the economic system. In this regard, you could notice the following:
(A) Industrialization will allow the manufacturing of non-importable items which include railroads and dams. These monetary infrastructures are critical to the destiny increase of the economic system.
(B) Through the established order of enterprise, it's miles feasible to provide the machine elasticity and triumph over the traditionally given role of the number one generating USA. Therefore, industrialization can trade USA 's comparative benefit in keeping with the ability of USA’s sources and human sources.
(C) Through industrialization, the necessities for agricultural improvement may be met. For example, advanced farm equipment, fertilizers, garage and transportation centers appropriate for our very own situations can simplest be well furnished via way of means of our very own enterprise.
(D) Industrial improvement offers the economic system a dynamic detail withinside the shape of fast increase and numerous monetary structures, making it a innovative economic system.
(E) Providing security: Industrialization is needed to offer countrywide security. This attention will become even extra critical withinside the occasion of a global crisis. In those situations, counting on overseas reassets for protection substances is a risky issue. The countrywide aim of independence of protection substances can simplest be performed via industrialization in a big sense.
Q2) What do you mean by New Industrial Policy 1991? 5
A2) The new industrial policy of 1991 is at the heart of economic reforms initiated in the early 1990s. All subsequent reform measures were derived from new industrial policies. This policy has brought about a comprehensive change in national economic regulation. As the name implies, these reforms have taken place in various areas related to the industrial sector.
As part of the policy, the role of the public sector has been redefined. Under NIP 1991, reform policies dedicated to the public sector, including investment reduction programs, have been launched. The private sector is welcomed in the major industries that were previously reserved for the public sector.
Similarly, foreign investment is welcomed under this policy. But the most important reform of the new industrial policy was that it ended the industrial licensing practice in India. Industrial licenses represent bureaucracy.
Due to major changes, the 1991 industrial policy or the new industrial policy represents a major change from the early 1956 policy.
The new policies included policy directions for reform and, by extension, LPG (Liberalization, Privatization, Globalization). We have expanded the participation of private sectors to almost all industrial sectors except three (corrected). At the same time, this policy welcomed foreign investment and foreign technology. Since 1991, the country's foreign investment policy has gradually evolved by gradually introducing liberalization measures.
Industrial policy in 1991 is a major reform introduced into the Indian economy since independence. This policy has caused major changes, including the emergence of a strong and competitive private sector and the emergence of a significant number of foreign companies in India.
Q3) What are features of New Industrial Policy 1991? 5
A3) Features of New Industrial Policy:
1. Liberalized business licensing coverage
This coverage has eliminated licensing structures for all however 18 industries. Some of the 18 industries wherein licensing structures are nevertheless mandated are: Army / defense, woodland protection, industries engaged withinside the manufacture of environmentally dangerous products, industries that manufacture luxurious goods, wealthy (very wealthy) classes, etc.
2. Localization coverage
Located in towns with a populace of much less than 1 million, those industries do now no longer want to be commenced with a business allow from the authorities. In towns with a populace of over 1 million, all business devices may be 25 km far from the city's boundaries, besides for electronics and different smooth industries.
3. Foreign funding
Foreign traders are prepared to make investments as much as 51% withinside the shares of Indian groups. Previously, this restrict become restrained to a most of 40%. This will growth the influx of overseas capital into India and permit technological exchanges from evolved countries.
4. Participation in employee management
Under this business coverage, the emphasis is on defensive the hobbies of workers. Preparations had been made for participation in employee management, and arrangements had been made to shape and function employee co-operatives to control unwell devices.
5. Role of the general public area
Public area agencies which are presently unsuccessful however have right capacity for development need to be restructured. Public area agencies going through a regular economic disaster will be beneath the supervision of the Industrial Financial Reconstruction Commission or different organizations set up through the Government.
6. Changes to the MRTP method
Industrial coverage in 1991 made important adjustments to the monopoly and restrictive exchange practices. A employer that invests in Rs. Rs 10 billion will now no longer be required to gain previous authorities permission, open new parcels, increase present day industries or merge groups. This business coverage has additionally lifted the funding regulations set through the MRTP Act.
7. Creation of manufacturing capability
All manipulate controls had been eliminated to growth the capability of the brand new enterprise. Businessmen best want to inform the authorities of the hole of a brand new unit or multiplied capability.
8 Foreign generation
Up to the restrict of One Crore rupees, no previous permission from the authorities is needed to import overseas generation. Indian groups are unfastened to barter agreement phrases with overseas collaborators concerning generation transfer (“alternate of technical know-how”).
9. Promotion of enterprise in rural areas.
In order to remove nearby imbalances, diverse provisions had been set up beneath this business coverage to inspire enterprise in rural areas.
10. Small enterprise booking
The coverage states that the authorities will maintain to offer assist to small industries. The restriction for small industries has been decreased from three rupees to rupees. 1 Croix, after December 24, 1999.
Q4) What are the objectives of New Industrial Policy 1991? 12
A4) Objectives of New Industrial Policy:
The new commercial coverage of 1991 ambitions to loose the enterprise from the bindings of the licensing gadget. It substantially reduces the function of the general public quarter and encourages foreigners to take part in India's commercial improvement. The widespread motive of the brand new commercial coverage is as follows.
(I) Liberalize the enterprise from regulatory gadgets including licensing and management.
(Ii) Strengthen assist for the small quarter.
(Iii) Increase the competitiveness of the enterprise for the gain of the not unusual place people.
(Iv) Secure the operation of public establishments at the commercial enterprise line and thereby lessen its losses.
(V) Providing greater incentives for industrialization in underdeveloped regions,
(Vi) Ensuring fast commercial improvement in a noticeably aggressive environment.
The new commercial coverage has made very crucial adjustments to 4 predominant regions: the function of commercial licensing withinside the public quarter, overseas funding and technology, and MRTP legislation. The important provisions of this coverage are defined below.
(1) Abolition of commercial license:
In preceding commercial coverage, enterprise changed into strictly regulated via the licensing gadget. Several liberalization measures have been delivered withinside the 1980s, which had a effective effect at the increase of the enterprise. Still, commercial improvement remained to a huge quantity constrained.
The new commercial coverage will abolish the economic licensing gadget for maximum industries below this coverage. Except for a quick listing of industries associated with the country, no license is needed to put in new commercial gadgets or substantially make bigger the ability of current gadgets. Security and strategic worries, risky industries and industries that purpose environmental degradation.
First, 18 industries have been placed on this listing of industries that require a license. Subsequent coverage changes have decreased this listing. Currently, it covers most effective 5 industries associated with fitness protection and strategic worries that require enforcement permits. Therefore, the enterprise is nearly absolutely loose from the license phrases and their related constraints.
(2) Unbooking enterprise for the general public quarter:
The public quarter, which changed into taken into consideration as a way of fast commercial improvement, may want to hardly ever do the paintings assigned to it. Most public quarter groups have end up a image of inefficiency and feature positioned a heavy burden on governments via everlasting losses.
The huge commercial quarter changed into reserved solely for the general public quarter, so it remained absolutely non-performer (besides for a few gadgets like ONGC). Therefore, commercial improvement changed into the largest victim.
The new commercial coverage ambitions to restrict the function of the general public quarter and inspire the participation of the non-public quarter throughout a much broader variety of industries. From this perspective, the subsequent adjustments were made to the general public quarter enterprise coverage:
(I) Reduction of public quarter reservations:
Of the 17 industries reserved for the general public quarter below the 1956 commercial coverage, the brand new coverage unbooked nine industries and for that reason restricted the scope of the general public quarter to most effective eight industries.
Since then, numerous greater industries were unbooked, and now the most effective 4 industries of the general public quarter are (i) protection production, (ii) atomic energy, (iii) railroads, and (iv) minerals limited to. It is used to generate atomic energy.
However, if desired, even a number of those regions may be opened to the non-public quarter. If country wide pursuits require, the general public quarter can also permit gadgets to be set up in regions presently open for the non-public quarter.
(II) Efforts to restore deficit companies:
Public establishments with continual infection and chronic losses may be back to the Industrial Finance Reconstruction Commission (BIFR) or different high-degree establishments hooked up for this motive. BIFR or different such corporations broaden plans for the rehabilitation and revival of such commercial gadgets.
(III) Stop making an investment in decided on public quarter commercial gadgets:
As a degree you bought huge-scale assets and introduce wider non-public participation withinside the public quarter, the authorities will promote a number of its stake in those industries to funding trusts, monetary establishments, the overall public and workers.
To this end, the Government of India hooked up the "Investment Withdrawal Committee" in August 1996 to recall approaches to withdraw funding. Based at the tips of the Investment Withdrawal Committee, the authorities will promote the stocks of public establishments.
(IV) Greater autonomy for public establishments:
The new commercial coverage ambitions to offer more autonomy to the daily operations of public establishments. Trust lies in enhancing the overall performance of public establishments via a mixture of more autonomy and greater accountability.
(3) Liberalized policies for foreign capital and technology:
Foreign capital inflows and technology imports were tightly regulated under previous industrial policies. Each foreign investment proposal was to be pre-approved by the government. Whenever foreign investment was allowed, the share of foreign capital was kept so low that most of the ownership management was left to the Indians.
However, such policies kept the inflow of foreign capital very low, and industrial development suffered due to lack of capital resources and technology. Industrial policy in July 1991 made several concessions to facilitate the influx of foreign capital and technology into India.
(I) Relaxing the upper limit of foreign investment:
The maximum foreign capital participation was set at 40 percent of the total capital of the industrial unit, which was open to foreign investment under the policy of 1991. This limit has been raised to 51%. 34 specific industries have been added to this list with 51% foreign capital participation.
In some industries, the ratio of foreign capital has been raised to 74%. Foreign direct investment (FDI) has been further liberalized and now 100% foreign capital is allowed for the mining industry, including projects such as coal and flaxseed, pollution control equipment, power generation, transmission and distribution, ports and ports.
Recent decisions made to further liberalize FDI include a 100�I permit in oil refining, all manufacturing activities in the Special Economic Zone (SEZ), and some activities in telecommunications companies.
(II) Automatic permission of foreign technical agreements:
The new industrial policy states that foreign technical agreements in high-priority industries will be automatically licensed. Previously, technical agreements between Indian companies and foreign countries on the import of technology required prior permission from the government.
This delayed the import of technology and hindered the modernization of the industry. Indian companies can now enter into technical agreements with foreign companies and import foreign technology. If the agreement includes a lump sum payment of up to Rs, the permit will be granted automatically. Up to 5% for domestic sales and up to 8% for exports, with 100 million rupees and royalties.
(4) Changes to the MRTP method:
According to the Monopoly and Restricted Trade Practices (MRTP) Act of 1969, all large corporations and large corporations (which had assets of 100 chlores or more according to the 1985 amendment) were such companies ( The MRTP Commission for establishing a new industrial unit, as it was allowed to invest only in a few selected industries) (called MRTP companies).
Therefore, in addition to obtaining a license, it was also necessary to obtain MRTP approval. This was a major obstacle to industrial development as large companies with development resources were unable to grow and diversify their activities.
Industrial policy of 1991 made these industries with other industries by abolishing the provisions of the MRTP Act, which requires large industrial parks to seek prior permission from the MRTP Commission for new projects.
Under the revised law, the MRTP Commission is only interested in managing monopoly and restrictive trading practices that are unfair and limit competition that undermines the interests of consumers. No prior approval or permission of the MRTP Commission is required for large companies to establish an industrial park.
(5) Greater support for small industries:
The new industrial policy aims to provide greater government support to enable small industries to grow rapidly in an environment of economic efficiency and technological improvement. A series of measures announced in this context govern the establishment of institutions to ensure that the credit needs of these industries are fully met.
You can also include shares so that large companies in the small sector do not exceed 24% of their total shareholding. This is done to provide the small sector with access to capital markets and facilitate its upgrades and modernization, and the government will also encourage the production of parts and components needed for the small sector public sector industry.
(6) Other regulations:
In addition to the above measures, the 1991 Industrial Policy introduced numerous steps to sell fast business development. The authorities stated it might set up a unique committee (mounted as Foreign Investment Promotion Commission-FIPB) to barter with many worldwide businesses on direct funding in Indian enterprise.
It additionally introduced the status quo of a fund (referred to as the National Renewal Fund) to offer social safety to brushed off employees, to assist and rehabilitate unemployed employees because of technological changes.
The new coverage additionally gets rid of obligatory conversion clauses that public quarter economic establishments had been required to transform loans granted with the aid of using them into the non-public enterprise in shares and consequently to be their control partners.
This has eliminated a chief hazard to non-public quarter enterprise. It became continuously beneath hazard that non-public quarter manipulate and manipulate should fall into the arms of presidency-owned economic establishments.
Q5) Explain MSME sector. 5
A5) Introduction
The Ministry of Small-Scale Industries and Argo and Rural Industries became created in October 1999. In September 2001, the ministry became cut up into the Ministry of Small-Scale Industries and the Ministry of Agro and Rural Industries. The President of India amended the govt. Of India (Allocation of Business) Rules, 1961, beneath the notification dated nine May 2007. Pursuant to the prevailing amendment, they have been merged into one ministry.
The ministry became tasked with the advertising of micro and small enterprises. The small Industries Development Organization became beneath the manipulate of the ministry, as became the National Small Industries Corporation Limited public quarter undertaking).
The Small Industries Development Organization became installed in 1954 on the basis of the pointers of the Ford Foundation. It is over 60 workplaces and 21 self sufficient our bodies beneath its management. These self sufficient our bodies consist of Tool Rooms, Training Institutions and Project-cum-Process Development Centers.
Services furnished consist of:
• Facilities for testing, device minting, schooling for entrepreneurship improvement
• Preparation of venture and product profiles
• Technical and managerial consultancy
• Assistance for exports
• Pollution and strength audits
It additionally presents monetary statistics offerings and advises Government in coverage formula for the advertising and improvement of SSIs. The world workplaces additionally paintings as powerful hyperlinks among the Central and State Governments.
Current scenario of MSMEs
The Ministry of Micro, Small and Medium Enterprises, a department of the authorities of India, is the primary government frame for the formula and management of rules, guidelines and legal guidelines referring to micro, small and medium organisations in India.
The Minister of Micro, Small and Medium Enterprises is Nitin Gadkari and the Minister of State is Pratap Chandra Sarangi on the grounds that May 31, 2019.
Statistics supplied through the yearly reviews of the Ministry of Small and Medium Enterprises (MIPYME) display an growth in the quantity of the plan spent withinside the Khadi region from 1942.7 million to 14.fifty four billion, and unplanned quantities from 437 million to 2.291 million. , withinside the period. from 1994–ninety five to 2014–2015. Interest subsidies to Khadi establishments expanded from 96.three million to 314.five million on this period.
Definition of micro, small and medium organisations
According to the supply of the Law for the Development of Micro, Small and Medium Enterprises (MIPYMES) of 2006, Micro, Small and Medium Enterprises (MIPYMES) are categorised into Classes:
Manufacturing organizations: organizations engaged withinside the manufacture or manufacturing of products belonging to any enterprise installed withinside the first annex of the Industries (Development and Regulation) Act, 1951) or that use flora and equipment withinside the procedure as a beneficial addition to the very last product that has a extraordinary name, character, or use. The production business enterprise is described in phrases of funding in plant and equipment.
Service organizations: -The organizations which are committed to the supply or provision of offerings and are described in phrases of funding in device.
The restriction for funding in flora and equipment / device for production / provider organizations, as notified, vide S.O. 1642 (E) dtd. 29-09-2006 are as follows
Manufacturing region
Enterprises
| Investment in plant & machinery
|
Micro Enterprises | Does not exceed twenty-five lakh rupees
|
Small Enterprises | More than twenty-five lakh rupees but does not exceed five crore rupees
|
Medium Enterprises | More than five crore rupees but does not exceed ten crore rupees
|
Service Sector
Enterprises
| Investment in equipments
|
Micro Enterprises | Does not exceed ten lakh rupees:
|
Small Enterprises | More than ten lakh rupees but does not exceed two crore rupees
|
Medium Enterprises | More than two crore rupees but does not exceed five core rupees
|
Q6) Explain the growth and performance of MSME. 8
A6) The micro, small and medium enterprises have made significant contribution in Indian economy in term of employment, investment, and output. It is depicted from the below mentioned tables.
Table 2: Performance of MSME
Year | Total MSME(Lakh)
| Employment (Lakh)
| Fixed Assets (Market value)
|
2005-06 | 123.42 | 249.91 | 188113 |
2006-07 | 361.76(193.11) | 805.23(222.20) | 868543.79(361.710) |
2007-08 | 377.36(4.31) | 842(4.57) | 920459.84 (5.98)
|
2008-09 | 393.7(4.33) | 880.84(4.61) | 977114.72(6.15)
|
2009-10
| 410.8(4.34)
| 921.79(4.64) | 1038546.08(6.28)
|
2010-11 | 428.73(4.36) | 965.15(4.7) | 1105934.09(6.48)
|
2011-12 | 447.66(4.41) | 1011.8(4.83) | 1183332(6.99)
|
2012-13 | 467.56(4.44) | 1061.52(4.91) | 1269338.02(7.26)
|
Note: The figures shown in bracket are the growth rate over the previous year. Source: Ministry of Micro, Small and Medium Enterprises Annual Report 2006-07, 2010-11 and 2013-14
Table 1 clearly shows that number of units in MSME sector has been increased from 123.42 lakh to 467.56 lakh which is around 4 times in span of 8 years. Since 2007-08 to 2012-13 growth rate is consistent this is moving around 4%. Highest growth rate was in the year 2006-07 wherein MSMED act, 2006 was passed. Similarly, Employment in this sector has improved from 249.91 to 1061.52 in the year 2012-2013 which is four times of the year 2005-06. Investment in MSMES has also been increased to develop this sector in the interest of the nation.
Table 3: Contribution of Manufacturing Output of MSMEs in GDP
YEAR | GROSS VALUE OF OUTPUT (CRORE) | PRECENTAGE SHARE IN TOTAL MANUFACTURING OUTPUT | PRECENTAGE SHARE IN GROSS DOMESTIC OUTPUT |
2006-07 | 1198817.55 | 42.02 | 7.73 |
2007-08 | 1322960.41 | 41.98 | 7.81 |
2008-09 | 1375698.6 | 40.79 | 7.52 |
2009-10 | 1488390.23 | 39.63 | 7.49 |
2010-11 | 1655580.6 | 38.48 | 7.42 |
2011-12 | 1790804.67 | 37.52 | 7.28 |
Source: Ministry of Micro, Small and Medium Enterprises, Annual Report 2013-14
Table 3 shows that that contribution of MSME in total manufacturing output is not increasing rather it is slightly decreasing. Similarly, in the case of GDP, contribution of the MSME is increasing at the consistent rate. It may be happening due to the use of outdated technology in the MSMEs and lack of the implementation of the schemes announced by the government.
Distribution of MSME
MSMES plays an important role in the development of the economy as a whole. Of the total MSMES, 31.79% are in the manufacturing industry and the remaining 68.21 are in service. More than 6000 products, from traditional products to high-tech products, are manufactured by MSMES in addition to services. 55.34% of all MSMES are in the country and 44.66% are in urban areas. It ensures the development of rural and posterior areas. 94.41% MSMES is a proprietary company, the rest is travel by partnerships, private companies, and co-operatives / trusts. This shows that this sector is encouraging new entrepreneurs.
Q7) Write the importance of MSME in Indian economy. 5
A7) The importances of MSME in Indian economy are as the follows:
MSMEs are accepted around the world as a means of economic growth and to promote equitable development. They are known to produce the highest growth rates in the economy. MSME has taken India to new heights through the requirements of low investment, flexible operations and the ability to develop the right native technology.
1. MSME employs approximately 120 million people and is the second largest job creation sector after agriculture.
2. There are about 45lac units’ nationwide, accounting for about 6.11% of the GDP of the manufacturing industry and 24.63% of the GDP of service activities.
3. The Ministry of MSME aims to increase its contribution to GDP by up to 50% by 2025 as India moves forward to become a $ 5 trillion economy.
4. Contributes about 45% of India's total exports
5. MSME promotes inclusive growth, especially by providing employment opportunities to people in vulnerable parts of rural societies.
6. MSMEs in Tier 2 and Tier 3 cities help people create opportunities to use banking services and goods. This will ultimately include MSME's contribution to the economy.
7. MSME promotes innovation by providing up-and-coming entrepreneurs with the opportunity to help build creative products, thereby driving business competition and driving growth.
Q8) State the issues of MSME. 8
A8) MSME issues in India are :
- Access to the global market: After the economic reforms, MSMES is ready to sell its products not only in the domestic market but also in the overseas market.
- Foreign Investment and Technology: MSMES in India faced a shortage of funds and used outdated technology, but after globalization, many foreign companies have worked with MSMES to raise funds and better technology. Supporting use.
- Balanced regional development: MSMES is located in rural areas and behind the economy, allowing it to meet regional needs and develop the region economically.
- Improved performance: After India's economic reform MSMES faces competition with MNCS, the competitive environment of the market will bring about improved performance of MSMES.
- Job Creation: Handicrafts and other products manufactured in this sector are in high demand in the market, and more often more if the sector gets support in terms of technology, finance and promotion strategies. Will increase. It provides 50% of private sector employment.
- New Business Areas: New technologies such as biotechnology and nanotechnology provide young entrepreneurs with the opportunity to start their own businesses in new areas such as outsourcing and subcontracting.
- Low capital intensity: MSMES requires less investment. Younger generations who have completed specialized courses such as MBA and engineering can start their own business with a small investment.
- Government Promotion and Support: Since MSMES is one of India's major contributors to economic growth, the government has announced several schemes to promote MSMES. Financial support and subsidies are also provided by the government.
- Export Contribution: 40% of India's exports go through the MSMES channel.
- Lack of Bank Loans: MSMES gets little or no percentage of net bank credit. This sector relies primarily on personal savings, loans from relatives, and loans from local money lenders.
- Outdated technology: Most MSMES manufacture inferiority complex products and use an inadequate technology base due to low productivity.
- Infrastructure issues: MSMES faces infrastructure issues including inadequate power supply, water supply, roads and more.
- Storage issues: Due to lack of suitable storage facilities in this sector, product quality will be degraded and huge losses will be incurred.
- Inadequate marketing: MSMES does not have the right marketing strategy and marketing research program. Even most MSMES don't have their own website, which is the biggest marketing tool.
- Lack of professional employees: Most employees are unskilled employees without diplomas, diplomas or knowledge. In the primary stage, new marketers aren't geared up to pay sufficient for skilled employees and should depend on an unskilled workforce.
- Withdrawal of reserving policy: Previously reserved for small industries, however after liberalization, multinational companies have additionally been opened to the home marketplace.
- Extreme competition: This zone faces sharp finishing touch from massive home agencies and MNCS with progressed technology, professional workforce, advertising skills, higher first-class and a huge variety of product selections.
Q9) What is small scale industry? Explain the role of small scale industry in India. 5
A9) The definition of small industry relied on the capital and workforce of the enterprise. This definition will continue to be used to distinguish between small, medium, and large industries.
The central government has the authority to determine fixed investment requirements for small industries. These requirements are set out in the Industrial (Development and Regulation) Act of 1951.
SMEs whose investment in plants and machinery is in the range between Rupees. From 25 rupees to rupees. 5 Crore is a small industry.
Similarly, for the service industry, the investment requirement is between rupees. 100,000 rupees and rupees. 2 rolls.
Below are some specific roles that SSI plays in the Indian economy.
1. SSI increases production
India is one of the fastest growing economies in the world. As a result, its production is enormous. It is worth noting that SSI accounts for almost 40% of India's total industrial value.
These industries produce goods and services that are worth more than rupees. Rs 400,000 for each investment in Rs. 100,000 rupees. In addition, the added value of this output is increased by more than 10%.
This is another interesting statistic for small industries. The number of small industries in India increased from about 80,000 rupees in 1980 to more than 300,000 rupees in 2000.
This number has increased further in recent years due to the government's "ease of business" policy.
As a result, total industrial output has increased significantly over the past few years. Therefore, SSI has a great responsibility for the growth of the Indian economy.
2. SSI increases exports
Apart from producing more goods and services, SSI was also able to export them in large quantities.
Almost half of India's total exports these days come from small businesses.
Direct exports by SSI account for 35% of total exports, and indirect exports reach 15%.
Even trading companies and merchants help SSI export their goods and services abroad.
3. SSI improves employment rate
First of all, it is important to note that small industries employ more people than all post-agricultural industries.
In the case of Rs, almost four people can get full employment. Rs 100,000 has been invested in fixed assets in the small sector.
In addition, SSI employs urban and rural people.
As a result, it distributes employment patterns across all parts of the country and prevents the unemployment crisis.
4. SSI opens up new opportunities
Small industries offer several benefits and opportunities for investment.
For example, they receive many tax incentives and rebates from the government. Opportunities to benefit from SSI are great for many reasons.
First, SSI is not capital intensive. They can even easily get financial support and funding.
Second, procuring human resources and raw materials is relatively easy. Even the government's export policy is in great support of them.
5. SSI advances welfare
Small industries not only provide profitable opportunities, but also play a major role in promoting the welfare measures of the Indian economy.
Many poorly marginalized sections of the population rely on them for their maintenance.
These industries not only reduce poverty and income inequality, but also raise the standard of living of the poor. In addition, it enables people to earn a living with dignity.
Q10) Discuss the problems of small scale industry. 8
A10) Major problems facing small industries in India
The various constraints and problems faced by small industries are:
(1) Finance:
Treasury is one of the most important issues facing small industries. Treasury is the lifeline of an organization, and without sufficient funding, the organization cannot function properly. Lack of capital and inadequate availability of credit lines are the main causes of this problem.
First, there is not enough money available, and second, entrepreneurs have poor creditworthiness due to their weak economic base. Others are not ready to lend them because they do not have their own resources. Entrepreneurs are forced to borrow money from money lenders at exorbitant interest rates, which confuses all their calculations.
After nationalization, banks began lending to this sector. These companies are still struggling with the problem of inadequate use of high-cost funds. These companies are promoting a variety of social objectives, and in order to promote them, they need to provide appropriate credit on simpler terms.
(2) Raw materials:
Small industries typically utilize local sources to meet raw material requirements. These units face a number of problems, including inadequate availability, poor quality, and even the lack of regular supply of raw materials. All these factors adversely affect the functioning of these units.
Larger units usually hunt down raw materials available on the open market because they have more resources. Therefore, small units are forced to buy the same raw materials from the open market at very high prices. It leads to increased production costs, thereby making those functions infeasible.
(3) Idle capacity:
For small industries, the installed capacity is underutilized in the range of 40-50%. Various causes of this underutilization are the lack of raw materials related to funding and the availability of electricity. Small units do not have the complete equipment to overcome all these problems, as they do for rivals in the large sector.
(4) Technology:
Small entrepreneurs are not completely exposed to the latest technology. In addition, there is a lack of resources needed to update or modernize plants and machinery. Due to the old production method, we are faced with the problems of low quality and high cost. They are not in a position to compete with more well-equipped rivals who operate large units of modems.
(5) Marketing:
These small units are also exposed to marketing issues. They are not in a position to get direct information about the market: competition, tastes, tastes, consumer dislikes, and fashion trends.
As a result, they are not in a position to upgrade their products with market requirements in mind. They produce less inferior quality, which also produces at a higher cost. Therefore, in competition with larger, more well-equipped units, they are at a relatively disadvantage.
To protect the interests of small businesses, the Government of India reserves certain items for exclusive production in the small sector. Various government agencies such as India's Trade Office, State Trading Corporation and National Small Industries Corporation are expanding their support to the small sector in selling products in both the domestic and export markets.
(6) Infrastructure:
Infrastructure aspects negatively impact the functionality of small units. In the rear areas, availability of transportation, communications, electricity and other facilities is inadequate. Entrepreneurs are faced with the problem of getting power connections, and even if they are lucky enough to get them, they are exposed to long unplanned power outages.
Inadequate and improper transportation and communication networks make the work of various units even more difficult. All of these factors negatively impact the quantity, quality and production schedule of companies doing business in these areas. Therefore, their activities are uneconomical and infeasible.
(7) Low capacity usage rate:
Most small units are not reaching their full potential or are underutilizing their capacity significantly. Large units operate 24 hours a day, or 8 hours each, in 3 shifts, making the most of machines and equipment.
Smaller units, on the other hand, use only 40 to 50 percent of their installed capacity. Various reasons for this significant underutilization of capacity are problems in the underdeveloped markets of finance, raw materials, electricity, and their products.
8) Project plan:
Another important issue faced by small entrepreneurs is inadequate project planning. These entrepreneurs do not attach much importance to feasibility studies, both technical and economic, and enter into entrepreneurial activity simply from enthusiasm and excitement.
They don't mind studying demand aspects, marketing issues, raw material sources, and even the availability of the right infrastructure before starting a company. In addition to the technical and financial feasibility of the project, the feasibility analysis of the project, which covers all these aspects, is not given due weight.
It is an inexperienced and incomplete document, which will always delay the completion of the promotion process. Small entrepreneurs often submit unrealistic feasibility reports, and incompetent entrepreneurs do not fully understand the details of the project.
Moreover, due to limited financial resources, they cannot afford to use the services of project consultants. This results in poor project planning and execution. These small businesses have both time benefits.
(9) Skilled human resources:
Small units located far behind may be fine for unskilled workers, but skilled workers are not there. The reasons are, firstly, skilled workers may be reluctant to work in these areas, and secondly, companies can afford to pay the wages and other facilities required by these workers. Because it may not be.
We face a variety of issues, including absenteeism, high turnover, and strikes. These labor-related issues are reduced productivity, reduced quality, increased waste, increased other overheads, and ultimately the profitability of these small units.
(10) Management:
Administrative deficiencies cause another serious problem for small units. Modern business requires vision, knowledge, skills, aptitude, and sincere dedication. Entrepreneurial abilities are essential to the success of any venture. Entrepreneurship is a pivot that is centered around the entire enterprise.
Many small units became ill due to the lack of control of entrepreneurs. Entrepreneurs who need training and counseling to develop his management skills are added to the entrepreneurial problem.
Small entrepreneurs need to face a number of issues related to issues such as excessive reliance on institutions for funding and consultancy services, lack of creditworthiness, education, training, reduced profitability, and marketing hosts. The Government of India has launched various plans aimed at improving the overall functioning of these units.
Q11) Explain the role of public sector in Indian economy. 8
A11) The role of the public sector in economic development:
It is the experience of all developing countries that the public sector plays a very important role in economic development. Indeed, in order to accelerate economic development, its role must be dominant. The Indian public sector is also aimed at achieving some of the specific objectives of the plan.
These include:
1. Achievement of socialist patterns:
Achieving the goals of India's socialist pattern required the government to take direct responsibility for the development of certain industries. "In developing countries, high economic growth and the development of large public and co-operative sectors are one of the main means to bring about a transition to socialism." Public sector expansion is social. It is expected to counter the undesired tendency towards monopoly and concentration of economic power.
2. Building an industrial base:
The planning committee said: "The public sector is expected to be specially provided for the further development of industries that are fundamentally and strategically important, or other industries that are covered by the government to the extent necessary due to the nature of utilities."
The public sector must pioneer some important but difficult projects that have a very long gestation period and can reach full production only after a few years of operation. Therefore, the role of the public sector has been limited to growth-producing industries and infrastructure-type industries. In fact, the public sector has helped expand from plan to plan.
3. Capital formation:
It is now recognized that capital formation is the key to economic growth. The government encourages people to save and invest by creating investment opportunities. Governments can also increase collective savings through taxation and borrowing. The government can also resort to deficit finance. In these ways, it can mobilize the resources needed for rapid economic development.
4. Social expenses:
The public sector creates social overheads for general and technical institutions, hospitals, etc. Private investors cannot expect to invest in projects where money cannot be returned. Benefits in the form of better health and higher education and technical skills come to society as a whole, not to individual investors.
5. Economic expenses:
The investment in financial expenses is too large to be reached by individual investors. Not only are the returns from such investments low, but they will be realized for the first time in a while. Therefore, only the public sector can invest in the economic overhead of roads, railroads, ports, etc. Economic overheads create external economies for other industries and accelerate economic growth.
6. Optimal resource allocation:
The public sector plays an important role in ensuring the optimal allocation of resources in the community to promote economic development. Resources can be misallocated by private companies, driven by profit motives. For example, private investment may be directed to the production of non-necessities for the wealthy, while the production of necessities for the masses may be ignored.
Consideration for social welfare can only be guided by the public sector.
7. Balanced and unbalanced growth:
Nurkesian's doctrine of balanced growth also requires investment in the capabilities of private entrepreneurs.
Similarly, the planned disproportionate development advocated by Professor Hirschman is out of the question in the pure private sector, as investment must be made in some specific areas to generate the largest external economies. Therefore, the public sector must inevitably intervene to accelerate economic development.
8. Balanced regional development:
The private sector will not jeopardize investment in backward and relatively underdeveloped regions. But the development of such regions is considered socially desirable. Only the public sector can be trusted to do this. The government can create infrastructure in these regions and accelerate their growth.
9. Social objectives:
There are several desirable social goals for which the governments of underdeveloped countries can only rely on the public sector to avoid the concentration of income and wealth in a few hands. The profits from public companies can be used to promote general social welfare. Then there is the elimination of disguised unemployment by diverting surplus labour from agriculture to the productive spheres.
10. Creation of investable surpluses:
Private sector profits are wasted in conspicuous consumption, but profits from public companies can be reinvested in business.
Therefore, the role of the public sector in promoting economic development cannot be overemphasized. In the words of the then Prime Minister, Ms. Indira Gandhi, “We advocate for the public sector for three reasons: to gain control of the dominant height of the economy; promote critical development in terms of social gains or strategic value rather than primarily in terms of earnings; and provide trade surpluses with which to finance further economic growth.
Q12) Discuss the main problems of Indian SOEs. 8
A12) The main management problems of Indian SOEs are as follows:
- Lack of clarity in objectives:
The objectives of private companies are quite clear, but this is not true for public companies. Even after so many years, we are still grappling with this issue and the policy statement has yet to come out with clear goals for these companies. In the absence of clearly defined objectives of the companies, it is indeed a big problem to judge their efficiency properly and correctly.
Ii. Capacity underutilization:
The CPU suggested that "the government should immediately analyze the reason for this persistent underutilization of capacities in various companies and take corrective action with respect to each of them." The main factors affecting capacity utilization are power shortages, insufficient demand, equipment breakdowns, and lack of balancing equipment, insufficient raw materials, and management inefficiencies.
Iii. Low profile of research and development activities:
In the 1980 Industrial Policy Statement, it was stressed that Indian industry should allocate substantial resources to research and development for the constant updating of technologies with a view to optimal utilization if resources are scarce, better service to the consumer and achieve higher exports.
Recurring R&D expenses were incurred solely by the giant companies. The nature of the activities of PE units also limits the scope of R&D efforts. Many of the public companies are engaged in the provision of services, the manufacture of dire and critical items, and the production of those items whose imports they were heavy. In all of these cases, incentive research and development efforts are not required.
Iv. Over capitalization:
The study team found several overcapitalized companies. In this sense, the study team mentioned that the causes of loans to overcapitalization can be attributed to inadequate planning, delays and avoidable expenses during construction, excess capacity of the machines, linked aid that give rise to the obligation of buying imported equipment uncompetitive, expensive turnkey contracts, poor project locations, and provision of housing and other amenities on a liberal scale.
v. Defective pricing policy:
The pricing policy of public companies is not governed solely by the principle of profit maximization, but is under the regulation and control of the government. Most public companies produce products that serve as inputs for other sectors of the economy. It would be suicidal from the point of view of the overall growth of the economy if the prices of steel, fertilizers or coal are set too high. Public companies must take into account the social implications of their pricing policy. In this regard, it is important to remember that prices remain low even when costs have been increasing.
Vi. Low profitability and lower returns:
A review of the operation of public companies reveals that either the profits in them have been woefully low or that they have made losses. Consequently, losses increase year after year.
Vii. Problem of low labour productivity:
Work well-being increases the productive efficiency of workers and infuses them with a new spirit of self-realization and awareness. In the early years of operation, public sector units are not in a position to provide all of the fringe benefits and wellness services that the company has provided for decades or so.
(viii) Management Training and Development Problem:
A skilled workforce is a critical factor in economic development. With the rapid expansion of existing SOEs and additions through nationalization, training and staff development has assumed great importance. Many of the SOEs do not have their own training institutes.
Regarding development programs abroad, the selection of participants is carried out entirely mechanically. The content of many of the programs is based on traditional theories of managerial organization and Western philosophy. Since employee training is not directly related to consideration, employees of public companies have no interest in acquiring training facilities.
(ix) Lack of professionalism in management:
The ARC study team on public companies reported that personnel managers in public companies were often not professionally qualified and professional departments more or less resembled the establishment sections of government departments with their activity often declining towards a higher level.
(x) Vacancy for senior management:
Until recently, appointments to the highest positions of Managing Director, General Managers, Financial Advisors, etc., had to be made by the government. With respect to the other important positions, many companies also had to obtain prior government approval for the creation of positions and the making of appointments. This result in unnecessary delays in filling posts and senior posts remain vacant for an extended period.
(xi) Competition with private sector companies:
The tough and fierce competition in case of elastics increases advertising spending. Units, if it is a monopolistic position for an inelastic product, can enjoy a good market for their sales operations.
(xii) Poor quality control system:
PEs generally has a "state-by-stage" inspection from incoming material to finished product. Some companies also hold quarterly review meetings to discuss unfavourable trends in quality and also to set targets for quality reduction. Statistical quality control techniques are used by a large number of public companies to regulate the quality of products.
(xiii) Problem of parliamentary control:
The real problem with parliamentary scrutiny is how to strike a balance between the autonomy necessary for business operations and the right of Parliament to discuss the operation and performance of public companies. EPs are more likely to seek advice from the Ministry, even on minor matters, so that responsibility for explaining them automatically shifts to the Ministry.
Q13) Explain the new industrial scheme … Make in India. 5
A13) Make-in-India is flagship software released with the aid of using the Government of India on September 25, 2014. Due to the truth that the country's biotechnology enterprise is in an immeasurable degree of boom, biotechnology has been decided on as one of the champion sectors of the Make-in-India initiative. Recognizing this truth, DBT has delegated duty for organising a biotechnology enterprise merchandising mobileular to BIRAC.
During the year, the subsequent foremost sports took place:
Make-in-India Cell ensures the broader dissemination of presidency packages and different records associated with start-ups, SMEs, and the established order and boom of groups.
After the success crowning glory of Make-in-India 1.zero, the BIRAC facilitation mobileular evolved the Make-in-India Action Plan 2.zero beneath the steerage of DBT.
BIRAC's Make-in-India Facilitation Cell is likewise worried in diverse conversation and outreach sports to disseminate diverse DBT and BIRAC tasks.
A strategic assembly turned into held in July 2018 to speak about a roadmap for accomplishing the $ a hundred billion bio-economic system of India with the aid of using 2025. DBT and BIRAC have begun enforcing the recommendations.
Creating deregulation cells in BIRAC.
Creation of product commercialization unit in BIRAC. The Secondary Agricultural Entrepreneurs Network (SAEN) is led with the aid of using scientists from the Punjab State Parliamentary Technology (PSCST) and different companions along with the National Institute of Agricultural Food Biotechnology (NABI) and the Center for Innovative Applied Bio processing (CIAB). It turned into released in 2018. ) And BIRAC's Boniest-Punjab University (Boniest-PU). Project
It goals to sell new groups and assist current industries withinside the secondary agriculture sector.
BIRAC and Kalam Institute of Health Technology (KIHT) have partnered to sell Make-in-India withinside the regions of clinical tool checking out and standardization for start-ups, entrepreneurs, researchers, scholars, incubation facilities, small and medium-sized groups. Promoting companies. Cell will especially screen the sports required with the aid of using Startup India and Makein-India's movement plans and could music the development of key DBT and BIRAC tasks along with BioNEST, BIRAC's local facilities and fairness financing schemes, respectively. Prompt the scheme coordinator of.
Q14) What is new industrial scheme in India, Start up? 5
A14) Top five Government Schemes for Indian Startups and MSME MSMEx Team 2 September 24, 201
"Government. The Government of India and the Ministry of MSME have released numerous precise authorities schemes and applications designed to empower Indian start-united statesand MSMEs. Top five startups and MSME authorities schemes. These have helped force increase and commercial enterprise expansion. "
When it involves micro and small agencies (MSMEs) and start-ups, the Government of India could be very clear. They want to be nurtured, included and advocated for the development of India.
The Government of India hopes that MSME's contribution to India's GDP will attain 50% via way of means of 2024, imparting jobs to Indians presently among Rs 1.1 billion and Rs 1.five billion. .. This is why the Ministry of Micro, Small and Medium Enterprises has added numerous authorities schemes for start-united statesand SMEs. These schemes goal to offer greater assets and a platform to force greater increase.
Start-united statesand MSMEs are the muse for the fulfillment of the authorities's Atma Nirbhar task and Make In India's vision. Creating jobs, growing exports, enhancing the dwelling requirements of hundreds of thousands of Indians, and strengthening India globally.
When it involves startups, specially tech startups, India is one of the quickest developing ecosystems. Last year, assignment capitalists injected record-breaking $ forty eight billion into Indian corporations and supplied thoughts to enlarge their presence.
Therefore, India is now in a completely unique function in which each authorities and personal buyers need Indian marketers and start-ups, MSMEs, to be triumphant and cause them to sense their presence across the world. In this effort, the Government of India and the Ministry of Micro, Small and Medium Enterprises have released numerous precise authorities schemes and applications designed to empower Indian start-united statesand MSMEs.
The Top five Government Schemes for Startups and MSMEs Help Drive Growth and Business Expansion.
- Pradan Mantrim Dorayojana
Prime Minister Modi released Pradhan Mantri Mudra Yojana. Here, Micro Units Development and Refinance Agency Bank or MUDRA Banks provide low hobby charge loans to microfinance and non-financial institution economic institutions, which provide low hobby charge loans to startups and MSMEs.
Therefore, Pradhan Mantri Mudra Yojana is one of these sorts of price range of price range devised and conceptualized to empower Indian marketers. Loans of up to ten rupees are to be had withinside the MUDRA scheme.
It began out in 2015 and inside years, loans and agencies generated thru MUDRA generated greater than Rs one hundred eighty million jobs. By August 14, 2020, greater than 670,000 rupees, equal to forty 8, 000 rupees, have been permitted beneath the MUDRA scheme.
It began out in 2015 and inside years, loans and agencies generated thru MUDRA generated greater than Rs one hundred eighty million jobs. By August 14, 2020, greater than 670,000 rupees, equal to forty 8,000 rupees, have been permitted beneath the MUDRA scheme.
There are 3 classes of agencies that may take out loans beneath MUDRA loans for startups.
Category 1: Shima for brand new agencies. Loans as much as Rs50, 000 are to be had
Category 2: Middle-elderly business enterprise Kishor. Loans as much as 50,000 rupees are to be had
Category 3: Tarn, a current skilled commercial enterprise. Loans up to ten rupees are to be had.
The Mudra scheme is meant for MSMEs which includes small production units, retailers, wholesalers and craftsmen. Learn greater about.
2. Credit Guarantee Trust Fund for SMEs (CGT SME)
CGT SME is one in all the most important start up mortgage schemes released via way of means of the Ministry of MSME of India. The authorities’ scheme presents eligible start-united states and MSMEs with as much as Rs one hundred million unsecured loans. The mortgage may be different thru a believe named Credit Guarantee Fund Trust (CGTMSE) for Small and Medium Enterprises. Ministry of MSME and Indian Small Business Development Bank (SIDBI). Learn greater about.
3. Financial aid for MSME in ZED certification scheme
The task of ZED or Zero Defect and Zero Effects, with a focal point on current and new production units, is to inspire producers to create better, quality, defect-unfastened merchandise. The recognition is on permitting producers to undertake world-magnificence production techniques and use era to make certain that their merchandise are best-in-magnificence.
Government schemes offer each economic aid and the era and equipment to get rid of product defects. Start-ups and MSMEs can join withinside the ZED software here.
4. Credit Link Capital Subsidies for Technology Upgrades (CLCSS)
The government is clearly aware that technology is a tool for Indian start-ups and MSMEs to compete with global competitors.
That's why we created the Credit Link Capital Subsidy (CLCSS) Government Scheme for Technology Upgrades. In this scheme, the government will provide MSME funding to upgrade technology and implement a state-of-the-art technology platform for the business.
Under CLCSS, Govt will provide a 15% subsidy for investments of up to Rs 1 to upgrade the technology of Indian start-ups and MSMEs. This government scheme covers over 7,500 products / services. Learn more about.
5. Design clinic for design expertise to MSME
Design and innovation are important to any sector, and all startups and MSMEs need to take a design-centric approach to solving niche problems. To encourage and inspire SMEs to experiment and experiment with new designs for their products, the MSME Ministry has set up a design clinic to bring design-related expertise to startups and MSMEs.
Government under this government scheme. Offers up to 60,000 rupees and up to 3.75 effortlessly, or 75% of the cost of a seminar, where entrepreneurs and / or their teams can learn, implement and learn more about design theories. To do. Through this program, entrepreneurs can learn about the latest trends and practices related to design, interact with other designers and entrepreneurs, build networks, and learn deeply about the spirit and theory of design.
MSMEs, new businesses, start-ups and agencies can sign up for this design clinic online and enter a new portal of innovation.
Q15) What is new industrial scheme In India, Stand up? 8
A4) The Stand Up India scheme goals to offer ladies in targeted castes or tribes, or ladies withinside the country, with a mortgage of Rs 10 to Rs 1 primarily based totally on requirements. The cause is to sell entrepreneurship amongst them. The topic "Stand Up India Scheme" is below the Indian Polity Syllabus for the IAS exam, and this newsletter gives associated facts.
Under this scheme, 1.25 Rak's financial institution branches are anticipated to lend cash every yr to as a minimum one Dalit or tribal entrepreneur and one lady entrepreneur withinside the provider area, respectively.
Key capabilities of the stand-up India scheme:
- Indian Prime Minister Narendra Modi released the Standup India Scheme in April 2016, lending a big amount of cash to begin a enterprise to roster castes and rosters and ladies nationwide. Encouraged to be home.
- The major capabilities of the Stand Up India scheme are proven below.
- This scheme is a part of an initiative with the aid of using the Treasury Department of Financial Services (DFS) to sell entrepreneurial initiatives.
- A mortgage quantity starting from 10 to one rupee, such as running capital to installation a brand new enterprise.
- The scheme states that every financial institution's department wishes to sell entrepreneurial initiatives on average. One for SC / ST and the opposite for lady marketers.
- A RuPay debit card might be supplied for credit score withdrawals.
- The borrower's credit score records is maintained with the aid of using the financial institution and isn't used for non-public use.
- Refinancing duration via India's Small Industrial Development Bank (SIDBI), the preliminary quantity is 10,000 rupees.
- Under this scheme, we are able to create a corpus of Rs.5000 Crore for credit score assure via NCGTC.
- We assist debtors with the aid of using supplying complete assist for pre-mortgage schooling inclusive of mortgage promotion, factoring and marketing.
- A net portal has been created to assist human beings with on-line registration and assist offerings.
- The major cause of this scheme is to gain the institutional credit score shape with the aid of using accomplishing out to the minority of the populace with the aid of using beginning financial institution lending withinside the non-agricultural sector.
- This scheme additionally advantages the continuing schemes of different departments.
- The Stand Up India scheme might be led with the aid of using the Indian Small and Medium Enterprise Development Bank (SIDBI) with the involvement of the Dalit Indian Chamber of Commerce and Industry (DICCI). In addition to DICCI, there's additionally the involvement of different sector-particular institutions.
- Standup Connect Center (SUCC) designations might be supplied to SIDBI and the National Bank of Agriculture and Rural Development (NABARD).
- An preliminary quantity of Rs 10,000 might be allotted to India's Small Industrial Development Bank (SIDBI) to offer economic assistance.
- The scheme has pre-financing and operational phases, and structures and group of workers generally tend to help human beings all through those phases.
- To assist the credit score gadget attain out to marketers, compound mortgage margins may be up to twenty-five percent.
- Those who practice for this scheme are acquainted with on-line systems and sources inclusive of e-marketing, net entrepreneurship, factoring offerings and registration.
Convergence and intersect oral linkage withinside the scheme:
b. At the start of this scheme, 5100 E-Rickshaws have been disbursed with the aid of using Bhartiya Micro Credit (BMC) below the Pradhan Mantri Mudra Yojna scheme.
c. In addition to receiving loans below the Stand-up India Scheme, recipients are Pradan Matryyandan Yoina, Pradan Mantrizi Banjoti Bimayojana, Pradan Mantris Laksha Yojana, Atal Pension Yojana Scheme, and eight others. It is likewise the problem of vital high minister schemes.
d. BMC – Bhartiya Micro Credit goals to elevate consciousness of economic inclusion and the social protection gadget and proposes to gain the negative and homeless withinside the country.
e. The concept is to make it less complicated to improve the pedal rickshaw puller to an E rickshaw proprietor and triple your income.
f. The Mudra scheme is liable for supplying credit score to all centers below this software.
g. The transition from pedal rickshaws to E rickshaws can even assist Swachh Bharat Abhiyan attain his goals.
h. Under this scheme, charging and provider stations can also be installed, developing many possibilities for marketers and helping the increase of the emergence of small and micro-corporation businesses.
i. It organically integrates the Bhartiya Micro Credit (BMC) E-Rickshaws software into the "Stand Up India" initiative.
What is the need for this scheme?
Currently, only established cities are encouraged by the establishment of new industries. However, when this plan is launched, new industrial activities will be triggered by people of Rs 25,000 and 1.25 locations nationwide each year.
Banks were nationalized in the name of the poor, but in the first 70 years after independence, nearly 40% of the population had no access to banking services.
The idea is to provide loans and loans not only to large corporations but also to the general public.
Qualification Criteria: Stand Up India Scheme
- There are certain eligibility criteria that people applying for a loan must meet:
- Individual must be at least 18 years old
- The company must be a limited liability / LLP or partnership company.
- Company sales should not exceed 25 crores
- The entrepreneur must be a woman who belongs to the designated caste or designated tribal category.
- Loans are provided only to fund the Greenfield Project. That is, the project must be the first project to take place in the manufacturing or service industry.
- The applicant must not be a defaulter at a bank or other organization.
- The company must be dealing with commercial or innovative consumer goods. DIPP approval is also required.
Benefits of stand-up Indian scheme
- When the government devises a system, its main purpose is to benefit the citizens, as is the stand-up India system. The benefits of starting a stand-up India scheme are:
- The basic purpose of this initiative is to encourage and motivate new entrepreneurs to minimize unemployment.
- If you are an investor, Stand Up India provides you with the right platform for you to gain expert advice, time, and knowledge of the law. Another advantage is that it helps you get started with the first two years of work.
- We also provide consultants with post-setup assistance.
- In addition, another advantage for entrepreneurs is that you have to repay the loan in seven years, so you don't have to worry too much about how to repay the amount of the loan. This reduces the stress of repayment. For the borrower. However, depending on the borrower's choice, a fixed amount must be repaid each year.
- This scheme also helps entrepreneurs eradicate legal, operational and other institutional obstacles.
- It can be a very positive boost in job creation and can lead to socio-economic empowerment of Dalits, tribes and women.
- It may also act as a driving force for other government schemes such as "Skill India" and "Make in India".
- It helps protect India's demographic dividend
- Access to bank accounts and technical education leads to financial and social inclusion of these social layers.
Stand Up India tax incentives / incentives
Applicants will receive an 80% refund after submitting the patent application form. This can only be met by startups, and the benefits for them are great compared to other companies.
A credit guarantee fund is also included, and entrepreneurs enjoy income tax relief for at least the first three years.
There is complete relaxation for capital gains tax entrepreneurs.
In addition, the entities covered by the program can enjoy additional benefits such as tax reimbursement on the profits earned.
This is to ease the entity during the early start-up phase so that you don't have to pay a lot of money for taxes.
Stand Up India Scheme: Challenges
- Every scheme or program launched has a set of strengths and weaknesses. The stand-up India scheme is the same. The various challenges of the Stand Up India scheme are:
- People's education on the socio-economic aspects of Dalit entrepreneurship and women's entrepreneurship has received little attention. If this is not done, the stand-up Indian scheme may not be very effective.
- The criteria of this scheme show that the company needs to be innovative. It is at the discretion of DIPP to determine if the product is innovative. This can lead to delays and potentially good entrepreneurial ventures can be lost in the process.
- The company must have sales of 25 chlores. Few female-led entrepreneurs or SC / ST-led companies meet this standard.
- Self-help groups that have certainly provided some impetus to female entrepreneurs, especially in rural areas, have been the target of elite capture and have been overwhelmed by the dominant local interests. The Stand Up India scheme does not mention institutional measures to address these challenges.
- Moreover, the banking sector has not yet penetrated the hinterland in a meaningful way. Therefore, despite the success of Pradhan Mantri Jan Dhan Yojana, lack of institutional banking, people's perceptions, the digital divide, and many other technical challenges can hinder banking. (PMJDY)
- For the manufacturing industry, financial support of about 100,000 to 100 million rupees is not enough.
SC / ST and women are not fully and meaningfully empowered in terms of technical know-how, access to skilled workers, knowledge of the sector, etc
Q16) What are the challenges of Stand up India? 5
A15) Stand Up India Scheme: Challenges
Every scheme or program launched has a set of strengths and weaknesses. The stand-up India scheme is the same. The various challenges of the Stand Up India scheme are:
People's education on the socio-economic aspects of Dalit entrepreneurship and women's entrepreneurship has received little attention. If this is not done, the stand-up Indian scheme may not be very effective.
The criteria of this scheme show that the company needs to be innovative. It is at the discretion of DIPP to determine if the product is innovative. This can lead to delays and potentially good entrepreneurial ventures can be lost in the process.
The company must have sales of 25 crores. Few female-led entrepreneurs or SC / ST-led companies meet this standard.
Self-help groups that have certainly provided some impetus to female entrepreneurs, especially in rural areas, have been the target of elite capture and have been overwhelmed by the dominant local interests. The Stand Up India scheme does not mention institutional measures to address these challenges.
Moreover, the banking sector has not yet penetrated the hinterland in a meaningful way. Therefore, despite the success of Pradhan Mantri Jan Dhan Yojana, lack of institutional banking, people's perceptions, the digital divide, and many other technical challenges can hinder banking. (PMJDY)
For the manufacturing industry, financial support of about 100,000 to 100 million rupees is not enough.
SC / ST and women are not fully and meaningfully empowered in terms of technical know-how, access to skilled workers, and knowledge of the sector.
Generation of consciousness:
As part of media awareness and coverage, the government will take the following initiatives to drive this plan:
Startup India Twitter handle created
The official website has been created and applications for initiatives to raise awareness about Stand Up India have also begun.
Motivational stories are also posted daily on the scheme's online web portal to encourage others.
A dedicated Facebook page will also be set up to spread awareness about this scheme on social media platforms.
Most of the female entrepreneurs involved in the co-operative and self-help group movements contribute primarily to the service sector. Experts believe that through this scheme the government can provide an institutional framework and assist women in servicing women to start in manufacturing as well.
The SC / ST population needs to be educated and sociopolitically empowered to significantly benefit from this plan. When implemented with proper ecosystem support, this scheme will certainly transform Gandhi's directive principle of transforming the socio-economic architecture of rural and urban areas of India and encouraging village and domestic industry. You can realize what you can be.