Hundreds of thousands of people start their own businesses every year, and untold more dream about the possibility of becoming their own bosses. While entrepreneurship has its many potential rewards, it also carries unique challenges. To start a business of your own you need to understand the environment to set up an enterprise of you own. Starting a business involves planning, making key financial decisions and completing a series of legal activities. To run a successful business, you need to learn all about your existing and potential customers, your competitors and the economic conditions of your market place. In both developed and developing countries, the Government is turning to small and medium scale industries and entrepreneurs, as a means of economic development and a veritable means of solving problems. It is a seedbed of innovations, inventions and employment. The Government has announced series of steps to promote industrial development by way of rationalization of the policies to encourage the new entrepreneurs as well as existing units. Entrepreneurship helps in the development of nation. A successful entrepreneur not only creates employment for himself but for hundreds. Deciding on a right project can lead you to the road to success. Entrepreneurship helps in the development of nation. A successful entrepreneur not only creates employment for himself but for hundreds. Deciding on a right project can lead you to the road to success.
Our Prime Minister unveiled a 19-point action plan for start-up enterprises in India. Highlighting the importance of the Standup India Scheme, Hon’ble Prime minister said that the job seeker has to become a job creator. Prime Minister announced that the initiative envisages loans to at least two aspiring entrepreneurs from the Scheduled Castes, Scheduled Tribes, and Women categories. It was also announced that the loan shall be in the ten lakh to one crore rupee range.
A startup India hub will be created as a single point of contact for the entire startup ecosystem to enable knowledge exchange and access to funding. Startup India campaign is based on an action plan aimed at promoting bank financing for start-up ventures to boost entrepreneurship and encourage startups with jobs creation.
Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem for nurturing innovation and Startups in the country. This will drive sustainable economic growth and generate large scale employment opportunities. The Government, through this initiative aims to empower Startups to grow through innovation and design.
Stand up India backed up by Department of Financial Services (DFS) intents to bring up Women and SC/ST entrepreneurs. They have planned to support 2.5 lakh borrowers with Bank loans (with at least 2 borrowers in both the category per branch) which can be returned up to seven years.
PM announced that “There will be no income tax on startups’ profits for three years”
PM plans to reduce the involvement of state government in the startups so that entrepreneurs can enjoy freedom.
No tax would be charged on any startup up to three years from the day of its establishment once it has been approved by Incubator.
This major contents of the book are with small scale industry definition and incentives, significance of SSI sector, institutional network to assist the small scale industry, for example national level institutions, Small Industries Development Organisation (SIDCO), National Small Industries Corporation (NSIC), state level institutions, rural entrepreneurship growth and potentials, means of finance (share capital, reserves and surplus, retained earnings), district industries centre for rural enterprise development, etc.
This book is a unique guideline for those who are looking for starting a new business and wants to start some industry with the help of different concerned departments. It also covers the export guidelines. We are confident that this book will prove to be important guidelines for new entrepreneurs.
1 SMALL SCALE INDUSTRY DEFINITION AND INCENTIVES
Significance of SSI Sector
Definition of Small Scale and Ancillary Industry
Incentives and Facilities for SSI Sector
Assistance to SSI by SIDBI
Streamlining of Procedures for Direct Assistance
Scheme for Development of Industrial Infrastructure
Raw Material Procurement for SSI Sector
Marketing Support for Small Scale Industries
Marketing Assistance Programmes of NSIC
Dissemination of Technology Information to Small Industries
Technology Bureau for Small Enterprise
TBSE- A Nurve Centre for Technology
Range of Services
Technology Information
Match Making
Finance Syndication
Export Promotion
Support Services
Export Oriented Unit (EOU)
Small Scale Services & Business Enterprises (SSSBE's)
List of Activities not Recognize as SSSBE's
Environmental Restrictions
2 INSTITUTIONAL NETWORK TO ASSIST THE SMALL SCALE INDUSTRY
National Level Institutions
Small Industries Development Organisation (SIDCO)
National Small Industries Corporation (NSIC)
Development Commissioner (Small Scale Industries)
State Level Institutions
State Financial Corporations (SFCs)
National Co-operative Development Corporation (NCDC)
Technical Consultancy Organizations (TCOs)
District Industries Centres (DICs)
State Industrial Development Corporations (SIDCs)
State Small Industries Development Corporations (SSIDCs)
Financial Institutions
Small Industries Development Bank of India (SIDBI)
Industrial Development Bank of India (IDBI)
Industrial credit and Investment Corporation of India (ICICI)
Industrial Financial Corporation of India (IFCI)
National Bank of Agricultural and Rural Development (NABARD)
Commercial Banks
Export-Import Bank of India (Exim Bank)
3 RURAL ENTREPRENEURSHIP GROWTH AND POTENTIALS
Studies on Rural Entrepreneurship
Rural Entrepreneurship in India
Rural Entrepreneurship in Tamilnadu
Rural Entrepreneurship in Dindigul District-Growth and Potentials
Socio-economic Status of Sample Entrepreneurs
Productions
Investment
Income and Employment Potentials
Problems for Rural Entrepreneurship
Suggestions for Promotion of Rural Entrepreneurship
Conclusion
4 COOPERATIVES FOR RURAL ENTERPRISE DEVELOPMENT
Introduction
Co-operative Society
Co-operative Movement and Handloom Co-operative Societies
A Study on Handloom Weavers Cooperative Society
Methodology-Design of the Study
Concepts
Co-operative Weavers
Industrial Co-operative Weavers
Evaluation of Handloom Weavers' Co-operative Societies
Registration of the Co-operative Society
Management Executives
Organisational Structure of Co-operative Society
Characteristics of Weavers' Co-operative Society
Objectives of a Weavers' Co-operative Society
(a) Purchase of Yarn
(b) Dyeing Process
(c) Loosening, Twisting, Rewinding and Warping
(d) Dressing and Sizing
(e) Piecing
(f) Fixing the Warp with the Loom and Weaving
Functions of Weavers' Co-operative Society in Pudur Block
Functions of Industrial Weavers' Co-operative Society in Pudur Block
Socio-Economic Status of Weaver-Member of the Co-operative Societies in Pudur Block
Employment Level and Wage
Annual Household Income
Expenditure Pattern of the Weavers
Savings of the Members of the Co-operatives
Problems of Weavers.
Suggestions
5 VOLUNTARY ORGANISATIONS FOR RURAL ENTREPRENEURSHIP
Literacy Campaign in Madurai District
Arivoli Mahalir Iyyakkam in Madurai Distict
Arivoli Mahalir Iyyakkam after DWCRA Assistance
Rural Enterprise Development by AMI-Few Case Studies
Fair Price Shops
Production of Soap Poder, PTC
Canteen by Women Group at BDO Office
Milk Depot
6 TERM FINANCE
What is Term Finance ?
Economic Viability
Market Survey
Technical Feasibility
Appropriate Technology
Promoters' Technical Competence
Acquisition of Fixed Assets and Tying up of Raw Materials
Infrastructure
Financial Appraisal
Cost of Project
Means of Finance
1. Share Capital
2. Reserves and Surplus
3. Retained Earnings
4. Long Term Borrowings
5. Deferred Payments
6. Other Resources
Debt-Service Coverage Ratio (DSCR)
Internal Rate of Return
Exchange Rate of Deposit (ER) or Domestic Resources Cost (DRC)
Working Capital
Permanent and Variable Working Capital
Financing the Regular Working Capital
Financing Variable Working Capital
Factors Determining Working Capital Requirements
a) Nature of Business
b) Production Policies and Seasonal Fluctuations
c) Manufacturing Process
d) Turn-Over of Circulating Capital
e) Growth and Expansion of Industry
f) Business Cycle Fluctuations
g) Term of Purchase and Sale
h) Dividend Policy
i) Other Factors
Sources of Funds for Working Capital
Public Deposit
Ceiling of the Rate of Interest on Deposits
Ceiling on Brokerage
Maintenance of Liquidity of Assets
Retirement of Current Liabilities below Book Value
Trade Credit, Bank Overdraft and Inter-company Loans
Bank Overdrafts
Cash Credit from Bank
Inter Company Loans
7 TAX INCENTIVES & CONCESSIONS
Complete Tax Holiday
Five-Year Tax Holiday for New 100% Export Oriented Units Permissible Deductions from Gross Total Income
Income from Newly Established Industrial Undertakings or Hotel Business in Backward Areas [Sec. 80HH]
Income from Newly Established Small Scale Industrial in Certain Areas [Sec. 80HHA]
Deduction in Respect of Profits and Gains from Projects Outside India [Sec.80HHB]
Deduction in Respect of Profits and Gains from Housing Projects in India [Sec. 80HHBA]
Deduction in Respect of Export Turnover [80 HHC]
Deduction in Respect of Earnings in Convertibel Foreign Exchange [Sec. 80HHD ]
Deduction for Export of Computer Software [Sec. 80HHE]
Deduction in Respect of Profits and Gains from Industrial Undertakings or a Ship or the Business of a Hotel
Amount of Deduction :
Deduction in Respect of Profits and Gains from Business of Collecting and Processing of Bio-Degradable Waste [Sec. 80JJA]
Deduction in Respect of Employment of New Regular Workmen
[Sec. 80JJAA]
Deduction in Respect of Interest on Bank Deposits, Certain Securities etc.[Sec. 80L]
Deduction in Respect of Royalties etc. from Certain Foreign Enterprises [Sec. 80-o]
8 WORKING CAPITAL
Permanent and Variable Working Capital
Financing the Regular Working Capital
Financing Variable Working Capital
Factors Determining Working Capital Requirements
a) Nature of Business
b) Production Policies and Seasonal Fluctuation
c) Manufacturing Process
d) Turn Over of Circulating Capital
Growth and Expansion of Industry
Business Cycle Fluctuations
Terms of Purchase and Sale
Dividend Policy
Other Factors
Source of Funds for Working Capital
Public Deposit
Ceiling of the Rate of Interest on Deposits
Ceiling on Brokerage
Maintenance of Liquidity of Assets
Retirement of Current Liabilities below Book Value
Trade Credit, Bank Overdraft and Inter-Company Loans :
Bank Overdrafts
Cash Credit from Bank
Inter Company Loans
9 DISTRICT INDUSTRIES CENTRE FOR RURAL ENTERPRISE DEVELOPMENT
Performance of Provisional and Permanent
Registration Scheme
Performance of Cottage and Handicrafts Industry
Registration Scheme
Self-Employment for Educated Unemployed Youth Scheme (SEEUY)
State Capital Investments Subsidy Scheme
Low Tension Power Tariff and Generator Subsidy Scheme
Interest Free Sales Tax Deferral and Waiver Scheme
Problems of the DIC in Dindigul District
1. Poor Contact with the Beneficiaries
2. Inadequacy of Technical Staff
3. Proliferation of Supporting Institutions
4. Shortage of Staff
5. Delay in Sanctioning Approvals
6. Training Opportunities
7. Restrictive Bank Credit
8. Inadequate Transport Facilities
Recommendations
10 ALL INDIA FINANCIAL INSTITUTIONS
Small Industries Development Bank of India (SIDBI)
Objectives
Sphere of Business
Schemes of Assistance
Indirect Assistance
Direct Assistance
Credit Rating for SSI with the help of SIDBI
SIDBI Provides Foreign Currency Loans
SIDBI's Venture Capital Fund Provides Assistance
Lines of Credit are Established by SIDBI
Development and Support Services by SIDBI
Technology Upgradation
Programmes Implemented for Enterprise Promotion
Programmes for Human Resource Development of the SSIs
Programmes for Technology Upgradation
Institution Building
Special Purpose Funds in SIDBI
Rural Industries Programme by SIDBI
SIDBI's Various other Schemes in Details
Promotors' Contribution
Interest and Discount Rate Structure
Scheme of Pre-shipment Credit in Foreign Currency (PCFC)
Eligibility
Choice of Currency
Interest
Minimum Amount
Disbursements
Repayment
Margin
Security
Scheme for Pre-shipment Credit in Rupees (PCR)
Eligibility
Disbursements
Repayment
Margin
Security
Scheme of Export Bills Financing in Foreign Currency (EBF)
Scheme of Foreign Letter of Credit (FLCs)
Scheme of Post-Shipment Credit in Rupees (PSCR)
Small Industries Development Bank of India, Addresses of Offices
National Bank for Agriculture and Rural Development (NABARD)
Mission
Major Activities
Credit activities
1. Short-Term Refinance Eligible Institutions
2. Medium and Long-term Refinances Eligible Institutions
3. Conversion & Rescheduling of Refinance
Period
Criteria for Refinance
Ultimate Beneficiaries
Quantum of Refinance
Rates of Interest
Margin Money
Direct Finance
Special Focus
Removal Regional/Sectoral Imbalance
Monitoring Implementation of Projects
High-tech and Export Oriented Projects
Development Activities
Institutional Development
District Development Offices
Research and Development Fund
Soft Loan Assistance Fund
Agricultural and Rural Enterprises Incubation Fund (AREIF)
Rural Promotion Corpus Fund (RPCF)
Credit and Financial Services Fund (CFSF)
Linking SHGs to Credit Institutions
Regulatory Activities
Resources
Other Funds
International Borrowings (generally through GOI)
Eligible Institutions
Lending Terms & Conditions
Mode of Refinance
Automatic Refinance Facilities
Schematic Refinance Schemes Under NFS Schemes with Prior Sanction
Production Credit Facilities
Application for Sanction/Release of Refinance Under Automatic Refinance Facility
Promotional/Development Programmes under NFS
Training-cum-Production Centre (TPC)
Introduction
Target Group
Eligible Institutions
Nature of Assistance
Process
Rural Entrepreneurship Development Programme (REDP)
Introduction
Target Group
Eligible Institutions
Nature of Assistance
Training of and by Master Craftsmen
Introduction
Target Group
Eligible Institutions
Semfex-II
Introduction
Target Group
Purpose
Nature of Schemes
Artisan Guilds
Mother unit
Common Service Centres
Agriculture and Rural Enterprises Incubation Fund (AREIF) Venture Capital Fund
Introduction & Objectives
Assistance to Rural Women in Non-Farm Development (ARWIND)
Introduction & Salient Features etc.
Pilot Project for Linking Self-Help Groups (SHGs) with Banks
Technical, Monitoring & Evaluation Cells (TME Cells)
District Rural Industries Project (DRIP)
Annexure -I Spectrum of Small, Cottage, Tiny and Village Industries
Annexure - II Illustrative List of Small Scale Service/ Business Enterprises
Annexure -III Illustrative List of Activities which are not recognised as Small Scale Industry/Business Enterprises (SSSBE's)
National Small Industries Corporation (NSIC)
Marketing Assistance for SSI Products
Scheme for ISO-9000 Certification
Gujarat Industrial & Investment Corporation (GIIC)
Innovative Strategies
Financial Services
Guidelines of Different Scheme
Term Loan under the Normal Refinance Scheme
Other Schemes for Existing Units
Equipment Refinance Loans
Corporate Loans
Leasing
Hire Purchase
Bills Discounting/Rediscounting Schemes
Eligibility Criteria for Leasing/Hire Purchase and Bills Discounting
Line of Credit to NBFCs
Loan Against Asset Securitisation
Merchant Banking
Joint and Associate Sector Projects
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