Tag: Event Management

(i) According to Oxford Dictionary an entrepreneur is “A person who sets up a business or businesses, taking on financial risks in the hope of profit”.

(ii) According to the International Encyclopaedia, an entrepreneur is “An individual who bears the risk of operating a business in the face of uncertainty about the future conditions”.

(iii) Schumpeter’s Definition: The entrepreneur, in an advanced economy is an individual who introduces something new in the economy – a method of production not yet tested by experience in the branch of manufacturing, a product with which consumers are not yet familiar, a new source of raw material or of new markets and the like”.

(iv) Adam Smith’s definition: “The entrepreneur is an individual, who forms an organization for commercial purpose. She/he is proprietary capitalist, a supplier of capital and at the same time a manager who intervenes between the labour and the consumer. “Entrepreneur is an employer, master, merchant but explicitly considered as a capitalist”.

(v) Peter F. Drucker’s Views on Entrepreneur: “An entrepreneur is the one who always searches for change, responds to it and exploits it as an opportunity. Innovation is the specific tool of entrepreneurs, the means by which they exploit changes as an opportunity for a different business or different service”.

(vi) In the 20th century the theorist Arthur H. Cole defined an entrepreneur as an ‘organization builder’.

Business = Entrepreneur + Capital = Products + Customers

Management Control:

Earlier writers used to consider the manage­ment control one of the chief functions of the entrepreneur. Management and control of the business are conducted by the entrepreneur himself. So, the latter must possess a high degree of management ability to select the right type of persons to work with him. But, the importance of this function has declined, as business nowadays is managed more and more by paid man­agers.

Decision Making:

The primary task of an entrepreneur is to decide the policy of production. An entrepreneur is to determine what to produce, how much to produce, how to produce, where to produce, how to sell and’ so forth. Moreover, he is to decide the scale of production and the proportion in which he combines the different factors he employs. In brief, he is to make vital business decisions relating to the purchase of productive factors and to the sale of the finished goods or services.

Division of Income:

The next major function of the entrepreneur is to make necessary arrangement for the division of total income among the different factors of production employed by him. Even if there is a loss in the business, he is to pay rent, interest, wages and other contractual incomes out of the realised sale proceeds.

Innovation:

Another distinguishing function of the entrepreneur, as emphasised by Schumpeter, is to make frequent inventions invention of new products, new techniques and discovering new markets to improve his competitive position, and to increase earnings.

Risk-Taking and Uncertainty-Bearing:

Risk-taking is perhaps the most important function of an entrepreneur. Modern production is very risky as an entrepreneur is required to produce goods or services in antici­pation of their future demand.

Broadly, there are two kinds of risk which he has to face. Firstly, there are some risks, such as risks of fire, loss of goods in transit, theft, etc., which can be insured against. These are known as measurable and insurable risks. Secondly, some risks, however, cannot be insured against because their probability cannot be calculated accurately. These constitute what is called uncertainty (e.g., competitive risk, technical risk, etc.). The entrepreneur undertakes both these risks in production.

(i) Imitating Entrepreneurs: These entrepreneurs are people who follow the path shown by innovative entrepreneurs. They imitate innovative entrepreneurs because the environment in which they operate is such that it does not permit them to have creative and innovative ideas on their own. In our country also, a large number of such entrepreneurs are found in every field of business activity. Development of small shopping complexes is the work of imitating entrepreneurs. All the small car manufacturers now are the imitating entrepreneurs.

(ii) Innovative Entrepreneurs: These entrepreneurs have the ability to think newer, better and more economical ideas of business organisation and management. They are the business leaders and contributors to the economic development of a country. Inventions like the introduction of a small car ‘Nano’ by Ratan Tata, organised retailing by Kishore Biyani, making mobile phones available to the common man by Anil Ambani are the works of innovative entrepreneurs.

(iii) Fabian Entrepreneurs: Fabian entrepreneurs are those individuals who do not show initiative in visualising and implementing new ideas and innovations. On the contrary, they like to wait for some development, which would motivate them to initiate unless there is an imminent threat to their very existence.

Meaning of ‘Fabian’: He/she is ‘a person seeking victory by delay rather than by a decisive battle’ & ‘Drone’ is ‘a person who lives on the labour of others’

(iv) Social Entrepreneurs: Social entrepreneurs drive social innovation and transformation in various fields including education, health, human rights, workers’ rights, environment and enterprise development. Dr. Mohammed Yunus of Bangladesh who started Gramin Bank is a case of social entrepreneur.

(v) Drone Entrepreneurs: Drone entrepreneurs are those individuals who are satisfied with the existing mode and speed of business activity and show no inclination in gaining market leadership. In other words, drone entrepreneurs are ‘die-hard conservatives’ and even ready to suffer the loss of business.

(vi) Agricultural Entrepreneur: The entrepreneurs who undertake agricultural pursuits are called Agricultural Entrepreneurs. They cover a wide spectrum of agricultural activities like cultivation, marketing of agricultural produce, irrigation, mechanization and technology.

(vii) Trading Entrepreneur: As the name itself suggests, the trading entrepreneur undertakes the trading activities. He/she procures the finished products from the manufacturers and sells these to the customers directly or through a retailer. These serve as the middlemen as wholesalers, dealers, and retailers between the manufacturers and customers.

(ix) Women Entrepreneurs: Women entrepreneurship is defined as the enterprises owned and controlled by a woman/women having a minimum financial stake of 51 per cent of the capital and giving at least 51 per cent of employment generated in the enterprises to women.

(x) Inventors & Challenger Entrepreneurs: Inventor entrepreneurs with their competence and inventiveness invent new products. Their basic interest lies in research and innovative activities & Challenger entrepreneurs plunge into industry because of the challenges it presents. When one challenge seems to be met, they begin to look for new challenges.

(viii) Manufacturing Entrepreneur: The manufacturing entrepreneurs manufacture products. They identify the needs of the customers and, then, explore the resources and technology to be used to manufacture the products to satisfy the customers’ needs.

(xi) Life-Timer Entrepreneurs: These entrepreneurs take business as an integral part to their life. Usually, the family enterprise and businesses which mainly depend on exercise of personal skill fall in this type/category of entrepreneurs.

Union Ministry of Micro, Small and Medium Enterprises (M/o MSMEs) has issued Gazette notification to pave way for implementation of the upward revision in the definition and criteria of MSMEs in the country. The new definition and criterion will come into effect from 1st July, 2020.

After 14 years since the MSME Development Act came into existence in 2006, a revision in MSME definition was announced in the Atmnirbhar Bharat package on 13th May, 2020. As per this announcement, the definition of Micro manufacturing and services units was increased to Rs. 1 Crore of investment and Rs. 5 Crore of turnover. The limit of small unit was increased to Rs. 10 Crore of investment and Rs 50 Crore of turnover. Similarly, the limit of medium unit was increased to Rs. 20 Crore of investment and Rs. 100 Crore of turnover. The Government of India on 01.06.2020 decided for further upward revision of the MSME Definition. For medium Enterprises, now it will be Rs. 50 Crore of investment and Rs. 250 Crore of turnover.

The existing criterion of definition of MSMEs is based on the MSMED Act, 2006. It was different for manufacturing and services units. It was also very low in terms of financial limits. Since then, the economy has undergone significant changes. After the package announced on 13th May, 2020, there were several representations saying that the announced revision is still not in line with market and price conditions and hence it should be further revised upwardly. Keeping in mind these representations, Prime Minister decided to further increase the limit for medium Units. This has been done in order to be realistic with time and to establish an objective system of classification and to provide ease of doing business.

Also, a new composite formula of classification for manufacturing and service units has been notified. Now, there will be no difference between manufacturing and service sectors. Also, a new criterion of turnover is added.

Ministry officials said that the new definition will pave way for strengthening and growth of the MSMEs. Particularly, the provision of excluding the exports from counting of turnover will encourage the MSMEs to export more and more without fearing to loose the benefits of a MSME unit. This is expected to exponentially add to exports from the country leading to more growth and economic activity and creation of jobs.

The new definition applies to existing enterprises as on 30.06.2020 also. If existing enterprises are registered under Udyog Aadhaar or EM Part II, the same will be reclassified as per the new definition. The UAM registration shall remain valid only till 31.03.2021. All existing enterprises registered under UAM as on 30.06.2020 need to re-register under Udyam on or after 01.07.2020 before their UAM registration expires on 31.03.2021.

There is no particular form of legal organisation to be adopted to be eligible for benefits under the MSMED Act. Benefits under MSMED Act will be available so long as the enterprise satisfies the investment and turnover limits as above and has filed Entrepreneur’s Memorandum (EM) or Udyog Aadhaar Memorandum (UAM) or Udyam Registration. It does not matter whether the enterprise is a proprietorship or partnership firm or a limited liability partnership (LLP) or a company or Hindu undivided family (HUF).

According to Notification No. SO 1642 (E), dated 29-9-2006, an enterprise may be:

• Proprietorship,
• hindu undivided family,
• association of persons,
• co-operative society,
• partnership firm,
• company,
• undertaking, or
• any other legal entity

The term ‘any other legal entity’ used in Notification No. 1642 (E) is wide enough to cover limited liability partnership and formed and registered under the Limited Liability Partnership Act, 2008. Even Self-Help Groups can be considered as “enterprises”.

Following the MSMED Act, 2006, the Micro Small and Medium Enterprises (MSME) enterprises are classified into the following two types.

• Manufacturing enterprises: The enterprises which engaged in the manufacturing or production of goods are known as manufacturing enterprises
• Service enterprises: The units which engaged in providing or rendering services are stated as service enterprises

Essentially, family partnership is akin to proprietorship. In fact, the two forms are so intermingled with each other that they cannot be differentiated from each other as these two categories are practically family concerns by virtue of the ownership and management structure. Therefore, we have lumped them together under one category, i.e. sole proprietorship. Similarly, cooperatives are lumped with company. After this, we find the following pattern of business ownership used in micro and small-scale enterprises in India.

Ownership Pattern

It is seen from above that the ownership pattern in micro and small-scale enterprises in India is highly lopsided skewed in favour of sole proprietorship.

Highly Lopsided Ownership Structure

Individual research studies also report similar lopsided ownership structure skewed in favour of proprietorship enterprises is indicated by its 87% share in all. That proprietorship is the most popular form of ownership structure in small enterprises. Out of every 10 small enterprises, 9 belong to proprietorship form of business ownership. This is attributed to simplicity in their establishment. Partnership is the second largest form of ownership after proprietor.

As regards the company form of ownership, it is almost non-existent in micro and small- scale enterprises. The reason is not difficult to seek. Establishment of company form of organisation involves cumbersome and complex procedure as compared to proprietorship and partnership forms of business organization.

Lack of financial expertise

Even as entrepreneurs keep devising new strategies and plan the expansion of their existing business, there are still a large number of entrepreneurs who lack the financial knowledge to steer the business in the right direction. Those entrepreneurs without sound financial knowledge may not be in a position to make crucial business decisions related to MSME loans. In absence of financial knowledge, you may end up taking wrong decisions that may cost the business unless you are seeking any external advice. Also, the knowledge about finance is important because you have to rely on an MSME loan to tide over crises that may knock at the door anytime. Hence, it is important to understand everything related to MSME loans, find out about the MSME loan interest rate and compare the same in the market before availing a loan.

Ease of doing business remains a bottleneck

Most start-ups in India face the problem in the initial stages because of too many regulations and approvals. Even as India managed to jump places in the World Bank’s Ease of Doing Business index, there are several loopholes in the system that keep businesses on the edge and prevent them from expanding or flourishing. Many times, entrepreneurs are demotivated to start up because of troubles relating to MSME loan, enforcing contracts and dealing with construction permits. In fact, the time taken by businesses to enforce a contract remains longer, at 1,445 days, than it was 15 years ago (1,420 days). There have been significant changes in terms of registering a new business which has come down to 30 days from 127 days, local entrepreneurs have to still wait and clear 12 procedures to start a business in Mumbai, whereas globally it takes just five procedures on an average.

Technical changes

There has been no dearth of technical changes over time, and most industries have undergone some form of change in order to remain competitive. As a result, Indian MSMEs have had to deal with some very important changes which have affected their growth potential. At first, there was a change in the ownership right of land, which has made the sector more prone to mismanagement and, with it, a fall in productivity.

Competition

Due to various factors, such as the rise of eCommerce and the advent of globalization, bigger firms have forced MSMEs out of their markets. However, this is not new because MSMEs were facing competition from year one, but they could fight it off successfully compared to professional firms. In fact, MSMEs continue to face competition in many areas, including agricultural machinery, garments, and tourism.

Lack of Access to Financing Solutions

Most businesses face perennial problems of accessing finance or availing an MSME loan even as the government has implemented measures to make credit for businesses readily available to foster entrepreneurship. The regulatory loopholes that cause a delay in getting licenses, insurance, and certifications also hamper the prospects of MSMEs. Most businesses face problems related to manufacturing, timely purchase of raw materials, or even access to new technologies or acquire new skills due to lack of funding. Another major problem is the economic slowdown that has led to liquidity crunch, but the government had given a breather to MSMEs by asking banks not to declare any stressed loan account of MSMEs as NPA till March 2020 and work on recasting their debt.

Labour issues

Most SMEs face frequent labour issues and especially in the new normal times, the ongoing migrant crises has manifested itself as one of the most difficult areas for industries to operate in such times of pandemic. Apart from labour problems, businesses also need to emphasize skill development, training, and ensuring market linkages to facilitate both urban and rural micro-entrepreneurs. The emphasis on skill development can benefit the sector substantially and more so at the time of crisis.

Technology remains a major deterrent

Most businesses fail to reap the benefits of the latest technological developments in their sector due to a lack of expertise and awareness. Hence MSMEs need to be apprised of the technological developments that are significant for the growth of their businesses. It is important for scientific research bodies to remain involved with the local MSME clusters, and take notice of their technology-related problems and issues. However, there have been concerted efforts to offer solutions to MSMEs on these issues as the government is working towards the launch of E-commerce portal ‘Bharat Craft’ that will act as a direct interface between sellers and buyers.

Lack of Trust

It is seen that banks refrain from extending MSME loan since the amount remains small and also, banks believe MSMEs lack the required repayment capacity. In such a situation, they end up implementing stricter regulations on these start-ups. Some businesses also fail to keep track of their credit rating that hampers the prospect of availing loans. Moreover, traditional lending options make it difficult for business owners to meet strict eligibility criteria besides the lengthy procedure of MSME loan approval further dampens their spirits.

Skills

When it comes to skills, Indian MSMEs are far behind their counterparts in other countries because they depend heavily on the help of informal workers, who are not paid well and lack the technical skills which can help enhance productivity. As a result, smaller firms are forced to take up jobs that require low levels of skill and expertise, which further affects their growth prospects in the long term.

Absence of collateral in loan

Some businesses may find it difficult to avail MSME loan as a result of a strict collateral protocol. Since small companies may not have the property to substantiate the criteria to avail a loan, business owners may opt for unsecured business loans from lenders and not fret over offering collateral or assets to get the MSME loan approval.

Despite these challenges, the success in business is not elusive if you are determined and these problems can be easily addressed if you get the right support from the lender.

According to provisions of MSMED Act 2006, businesses which can come under the purview of the Act are based on their definition and categorization under either Manufacturing Enterprises or Service Enterprises; and the registration policy relevant to Central government and State governments.

Manufacturing Enterprises

• Engage in the manufacture and production of goods
• Defined with relevance to investment in plant and machinery
• Examples include energy-efficient pumps, engineering and fabrication, auto part components etc.

Service enterprises

• Engage for providing of services and defined in
• Defined with relevance to investment in equipment
• Examples include servicing for agricultural farm equipment, IT service provider etc.

List of MSME Businesses

• Leather products.
• Moulding: This includes products like combs, umbrella frames, plastic toys, etc
• Natural Fragrance and Flavours.
• Placement and Management Consultancy Services.
• Training and Educational Institute.
• Energy Efficient Pumps
• Beauty Parlour and crèches.
• Auto repair services and garages.
• X-Ray Clinics.
• Equipment Rental & Leasing.
• Photographic lab.
• Servicing of Agricultural Farm Equipment. This includes tractor, pump repairing, ring boring machine.
• Back Office Operation Relating to Computerised Data.
• STD/ISD booths.
• Retail Trade with low Capital.
• Multi Channels Dish cable T.V. with Dish Antenna.
• Laundry and Dry Cleaning.
• Toughened Metallic Ware.
• Automotive Electronic Component products.
• Electronic Surveillance and Security.
• Mechanical Engineering Excluding Transport Equipment. This is inclusive of steel almirahs, cocks, and valves, wire cutters, etc.
• Engineering and Fabrication.
• Recorders, VCRs, Radios, Transformer, Motors, Watches.
• Micronutrients For Plants.
• Active Pharmaceutical Ingredients and Ayurvedic Products.
• Khadi Products and Hosiery Products.
• Handicraft activities like Spinning, Weaving, Artisans.
• Printing and other products made of paper.
• Coir Industry.
• Furniture and wood products.
• Poultry Farm.
• Bicycle parts.
• Stationery Items.
• Call centre.
• Rubber Products.
• IT Solution Provider. Services include creating a server bank, application service provider, smart card customization, service provider, etc.
• Testing Labs for industries.
• Auto Parts Components. Which includes horn buttons, door channels, wiper blade components, battery cell tester.
• Ceramics and glass products include roofing tiles, glass flooring tiles, granite, etc.
• Retail and wholesale business

Services:

    Healthcare and hospitality

    IT Service Provider

MSMEs contribute nearly 8% of the country’s GDP, around 45% of the manufacturing output, and approximately 40% of the country’s exports. It won’t be wrong to refer them as the ‘Backbone of the country.’

The Government of India has introduced MSME or Micro, Small, and Medium Enterprises in agreement with Micro, Small and Medium Enterprises Development (MSMED) Act of 2006. These enterprises primarily engaged in the production, manufacturing, processing, or preservation of goods and commodities.

MSMEs are an important sector for the Indian economy and have contributed immensely to the country’s socio-economic development. It not only generates employment opportunities but also works hand-in-hand towards the development of the nation’s backward and rural areas. According to the annual report by the Government (2018-19), there are around 6,08,41,245 MSMEs in India.

A proposal was made to redefine MSMEs by the Micro, Small and Medium Enterprises Development (Amendment) Bill, 2018, to classify them as manufacturing or service-providing enterprises, based on their annual turnover.

Since its formation, the MSME segment has proven to be a highly dynamic Indian economy sector. MSMEs produce and manufacture a variety of products for both domestic as well as international markets. They have helped promote the growth and development of khadi, village, and coir industries. They have collaborated and worked with the concerned ministries, state governments, and stakeholders towards the upbringing of rural areas.

MSMEs have played an essential role in providing employment opportunities in rural areas. They have helped in the industrialization of these areas with a low capital cost compared to the large industries. Acting as a complementary unit to large sectors, the MSME sector has enormously contributed to its socio-economic development.

MSMEs also contribute and play an essential role in the country’s development in different areas like the requirement of low investment, flexibility in operations, mobility through the locations, low rate of imports, and a high contribution to domestic production.

With the capability and capacity to develop appropriate local technology, provide fierce competition in domestic and international markets, technology-savvy industries, a contribution towards creating defense materials, and generating new entrepreneurs by providing knowledge, training, and skill up-gradation through specialized training centers.

Importance of MSMEs to Indian Economy

• MSMEs employ about 12 crore people, making them the second-largest source of jobs after agriculture.
• It contributes about 6.11% of GDP from manufacturing and 24.63% of GDP from service activities, with about 45 lakh units across the country.
• As India strives to become a $5 trillion economy, the MSME ministry aims to raise its contribution to GDP by up to 50% by 2025.
• They account for approximately 45% of India’s total exports.
• MSMEs promote inclusive growth by creating job opportunities, especially for people from lower socioeconomic backgrounds in rural areas.
• MSMEs in tier-2 and tier-3 cities contribute to the creation of opportunities for people to use banking services and goods, which can result in the final accounting of MSMEs’ contribution to the economy.
• MSMEs encourage creativity by assisting aspiring entrepreneurs in developing innovative goods, thereby increasing market competitiveness and fueling growth.

MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy. When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries or SSI’s. MSME registration helps these industries to obtain the various benefits provided by the government to MSMEs.

Even if the company is in the manufacturing line or the service line, MSME registration for both these industry sectors can be obtained as per the MSME Act. The MSME registration is not yet made mandatory by the Government of India but it is beneficial to get one’s business registered under this because it provides a lot of benefits in terms of taxation, setting up the business, credit facilities, loans etc.

The MSME Act became operational in 2006. It aims to promote, facilitate and develop the competitiveness of micro, small and medium enterprises in India.

MSME Online Registration Process on Udyam

MSME registration is completely online. MSME online registration is to be done in the government portal of udyamregistration.gov.in. The registration of MSMEs can be done under the following two categories in the portal:

• For New Entrepreneurs who are not Registered yet as MSME or those with EM-II
• For those having registration as UAM and for those already having registration as UAM through Assisted filing.

For New Entrepreneurs who are not Registered yet as MSME or those with EM-II

New entrepreneurs and entrepreneurs having EM-II registration need to click the button “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II” shown on the home page for registering MSME. New registration of MSME is done by entering the Aadhaar card number and PAN number.

When clicked on the “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II” button on the homepage of the government portal, it opens the page for registration and asks to enter the Aadhaar number and the name of the entrepreneur. After entering these details, “Validate and Generate OTP Button” is to be clicked. Once, this button is clicked and OTP is received and entered, the PAN Verification page opens.

Registration for Entrepreneurs Already Having UAM

For those already having registration as UAM, they need to click the button “For those having registration as UAM” or “For those already having registration as UAM through Assisted filing” shown on the home page of the government portal. This will open a page where Udyog Aadhaar Number is to be entered and an OTP option should be selected.

The options provided are to obtain OTP on mobile as filled in UAM or obtain OTP on email as filled UAM. After choosing the OTP Options, “Validate and Generate OTP” is to be clicked. After entering OTP, registration details are to be filled on the MSME registration form and Udyam registration will be complete.

Documents Required for MSME Registration

Aadhaar Card and PAN Card are the only documents required for MSME registration. MSME registration is fully online and no proof of documents is required. PAN and GST linked details on investment and turnover of enterprises will be taken automatically by the Udyam Registration Portal from the Government databases. The Udyam Registration Portal is fully integrated with Income Tax and GSTIN systems.

GST is not compulsory for enterprises that do not require a GST registration under the GST law. However, the enterprises that need to compulsorily obtain GST registration under the GST regime need to have GST registration for obtaining Udyam Registration.

Those who have UAM registration or any other registration issued by any authority under the Ministry of MSME, will have to re-register themselves in the Udyam Registration Portal by clicking on the “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II”.

The enterprises having UAM registration need to migrate to Udyam Registration by 30/06/2022. If the entrepreneurs having UAM registration do not migrate to Udyam Registration by 30/06/2022, the UAM registration will be invalid and they will not be able to receive the benefits provided to the MSMEs.

MSME Registration Fees

The enterprises having UAM registration need to migrate to Udyam Registration by 30/06/2022. If the entrepreneurs having UAM registration did not migrate to Udyam Registration by 30/06/2022, the UAM registration is invalid and they will not be able to receive the benefits provided to the MSMEs. They will have to re-register themselves for Udyam registration to obtain MSME benefits.

MSME Registration Certificate

After submitting the MSME registration form online, a message of successful registration with a reference number will appear. The Ministry of MSME will issue the Udyam Registration certificate or MSME certificate to the email ID of the entrepreneur after verification of the registration form submitted on the portal.

The Ministry will issue the MSME certificate after a few days from the submission of the registration form. The MSME registration certificate validity is for a lifetime. Thus, it requires no renewal.

How to Get MSME Certificate Online

To get MSME Certificate Online entrepreneur needs to download the MSME certificate online by visiting the Udyam Registration portal. The process to get the MSME registration certificate online is as follows:

• On the homepage of the portal, the entrepreneurs have to click on the ‘Print/Verify’ tab and click on the ‘Print Udyam Certificate’ option.
• The next page will open where the entrepreneurs have to enter the Udyam Registration Number, mobile number, choose the OTP option and click on the ‘Validate and Generate OTP’ button.
• Enter the OTP received on the mobile number or email ID and click on the ‘Validate OTP and Print’ button.

According to the Startup India Portal, India has about 50,000 start-ups and is the 3rd largest ecosystem in the world. Start-ups are now emerging in tier-II and tier-III cities, such as Pune, Ahmedabad, and Kochi. Further, there is an increase in the investment flows from Chinese, Japanese, and Singapore based investors.

Causes for success

Reasons responsible for the growth of start-ups are:

• Large Indian Market:

India’s diversity in culture, religion, and language has helped start-ups to create diversified products, according to the needs of a particular community. This becomes their Unique Selling Proposition, which in-turn entices investors to fund the start-up.

• Fast-moving business environment:

In an uncertain and changing business ecosystem, the companies are under constant pressure to innovate to find a footing in the market. Sometimes, other companies invest or buy the start-ups to increase their own uniqueness.

• Easy access to funds

The government has set up funds for easy startups in the form of venture capital.

• Apply for tenders

New companies can apply for government tenders. They are excluded from the “related knowledge/turnover” standards appropriate for typical organizations explaining government tenders.

• Reduction in cost

The government additionally gives arrangements of facilitators of licenses and brand names. They will give top-notch Intellectual Property Rights Services including quick assessment of licenses at lower expenses.

The government will bear all facilitator charges and the startup will bear just the legal expenses.

• Tax holidays for three years

New companies will be excluded from income tax for a very long time, they get a certificate from the Inter-Ministerial Board (IMB).

• R&D facilities

In the R&D area, seven new Research Parks will be set up to give offices to new businesses.

• Tax saving for investors

Individuals putting their capital additions in the endeavor subsidizes arrangement by the government will get an exemption from capital increases. Thus, this will assist new companies to convince more investors.

• Choose your investor

After this arrangement, the new companies will have an alternative to pick between the VCs, giving them the freedom to pick their investors.

• Easy exit

Now, talking about the easy exit then if there should be an occurrence of exit, a startup can close its business within 90 days from the date of use of winding up.

• No time-consuming compliances

For saving time and money numerous compliances have been facilitated for startups.

• Meet other entrepreneurs

The government has proposed to hold 2 startup fests yearly both broadly and universally to empower the different partners of a startup to meet.

Causes for failure

Lack of focus

When Bill Gates and Warren Buffet were asked about one factor that was responsible for their success, both replied with one word: focus. To understand how focus can help, let’s look at an example.

Grubhub is a food delivery startup. From the beginning, the company decided to focus only on food delivery. There are a lot of other services that a company like that could offer- pickup of food, catering, and more, but the founders chose to focus on just delivery. The result? They could execute technically and operationally and grow the business successfully.

Lack of funds

In 2018, bike rental startup, Tazzo, shut shop. The reason, as given by one of its funding partners, was a failed product-market fit that led to drying up of funding. Even though the startup had raised a considerable amount of funds, the lack of a profitable business model led to the startup shutting down.

Lack of Product Market Fit

There is no one “Fits in all” formula. It has deeper layers to it. This is more of a framework than a goal. Many-a-times, startups fail to validate their product ideas in the existing market scenario. In today’s competitive world, it is important to bring in a product or service that is both problem-solving and fulfils the customer’s expectations in every way, be it price-related or output-related. You don’t want to be wasting your time and efforts on creating something for which there is ‘no market need’!

Lack of innovation

According to a survey, 77% of venture capitalists think that Indian startups lack innovation or unique business models. A study conducted by IBM Institute for Business Value found that 91% of startups fail within the first five years and the most common reason is – lack of innovation.

Although India is said to have the third-largest startup ecosystem, it doesn’t have meta-level startups such as some of the big names like Google, Facebook, and Twitter. Indian startups are also known for replicating global startups, rather than creating their own startup models.

Among the most innovative Indian startups would be startups like ChaiPoint, Ola, Saathi, and Swiggy, according to a list of 50 most innovative companies in the world.

Fear of Startup Failure

While this fear lives in almost every entrepreneur, some tend to simply stop taking risks. Decision-making is hindered as the key goal becomes to not make even one wrong decision at any costs, thus limiting the startup’s gamut. Such fear can not only restrain but also motivate entrepreneurs when directed in a positive way. Having a negative approach from the start can influence thoughts and behaviour badly.

Poorly Harmonised Team

Any well-to-do startup requires a wide range of expertise in its team of employees and management. It is not hard to find technically proficient people these days. However, it is very difficult to find people who know how to get along with others and can be counted on when managers are not looking over their shoulders. Skills and work approach of the founder and his/her team should complement each other efficiently. Working for a startup can create a sort of pressure for the employees too, but as a founder you need to maintain quality communication with them and exchange thoughts eagerly.

Raw Material Assistance Scheme aims at helping MSMEs by way of financing the purchase of Raw Material (both indigenous & imported). This gives an opportunity to MSMEs to focus better on manufacturing quality products.

The following benefits are provided under the scheme:

• Financial assistance (Credit) for procurement of raw material up to 90 days.
• Materials facilitated under Bulk supplies arrangements are provided at bulk supplier’s rate by eliminating the middlemen and thus goods are procurred at a lower price.
• Discounts received under bulk supplies arrangements are shared with MSMEs, enabling them to reduce cost of purchase of materials (Economies of Scale).
• Availability of raw material on credit and enabling MSMEs to execute the orders in hand.

Any manufacturing MSME having Udyog Aadhaar Memorandum (UAM) can apply for the assistance under the Scheme.

The The Entrepreneurs and any MSME needs raw material through NSIC may apply to any of the NSIC field office for Raw Material Assistance in the prescribed application forms, which can be downloaded from NSIC’s web site (www.nsic.co.in) or may be obtained free of cost from any of the field offices. The duly filled in application form along with prescribed documents can be submitted with the nearest branch office of NSIC. Details of NSIC offices are available on www.nsic.co.in.

Process of Disbursement

NSIC will make a visit to the applicant’s unit for the purpose of preliminary appraisal after submitting the form. Then, the agency will sanction a limit for the unit post inspection. After getting the sanction, the prospective beneficiary will be required to sign the agreement with NSIC. After signing the agreement, NSIC will disburse the assistance for the unit, provided that a security in the form of Bank Guarantee from approved or nationalized banks is furnished by the applicant.

Scheme for Assistance in Rent to MSMEs

Micro, Small and Medium Enterprises (MSEs) play a significant role in the economic growth of the country owing to their contribution to production and employment. In the recent years, there is a sharp increase in the cost of land and building in the country and therefore Micro, and Small Enterprises having minimal financial resources could not able to start their manufacturing enterprises. Government of Gujarat has decided to provide financial assistance through Scheme for assistance in Rent to MSMEs for shed and plot developed by private developers for the generation of employment and development of MSMEs in the state. The task of administering and implementing this Scheme is entrusted with the Gujarat Industries Commissionerate. In this article, we will look at the Scheme for Assistance in Rent to MSEs

Features of the Scheme

Under this Scheme, the Government provides financial assistance to Private Developer for developing readymade sheds in Mini Estate.

Gujarat Government has felt that there is a need for small estates having a small row house type (Gala type) shed for MSEs which will provide basic infrastructure to set up MSEs. This type of mini Estate can be developed by a private developer for MSEs.

The government also offers financial Assistance in rent to MSEs

The Government felt that the MSE Industrial units have to keep more margins for purchase of land and building while approving the loan from the financial Institution/ bank. This will affect the working capital requirement and also adversely affect the overall viability of the entire project. In view of above, the government has decided to assist MSEs units in rent which will improve the initial liquidity of the project and also help the financial institution/bank to sanction the term loan on plant and machinery required for the project.

Note on Private Developer

Private Developer

Private Developer means any registered Private, Public Limited Company or Industrial Association, Individual industries, Group of industries or Cluster

Mini Estate

Mini Estate is an industrial estate having necessary infrastructure facilities like developed plot, water distribution facilities, internal roads, power distribution and such other facilities or services as may be required designed for the establishment of MSEs in manufacture any product

Eligibility Criteria

The eligibility criteria to obtain the financial benefit under the Scheme for Assistance in Rent to MSEs for Shed and Plot developed By Private Developer are explained in detail below:

The New Micro and Small Enterprise registered as an industrial unit under the MSME Development Act, 2006 with respective Director of Industries Commerce (DIC) as a manufacturing enterprise and obtained term loan from the Financial Institution.

Eligible new unit

For availing the grant under the Scheme for Assistance for in Rent to MSEs, the new unit has to commence production during the operative period of this Scheme.

Eligible Fixed Capital Investment

The eligible fixed Capital investment of the project will be decided based on the following criteria:

Cost of Land

The cost of land will be decided on the basis of prevailing jantri price of the area or the actual price paid by the private Developer, including the stamp duty and registration charges.

Cost of Building

The cost of the building is fixed up by SLEC for the industrial building and SOR of the Roads and Building Department.

Other Infrastructure Facilities

The cost of other infrastructure facilities will be as decided by the SLEC.

Assistance in Rent to MSEs

The Government felt that the MSE Industrial units have to keep more margins for purchase of land and building while approving the loan from the Financial Institution. This will affect the working capital requirement and also adversely affect the overall viability of the entire project. In view of above, the government has decided to assist MSEs units in rent which will improve the initial liquidity of the project and also help the financial Institution or bank to sanction the term loan on plant and machinery required for the project.

Quantum of assistance

The Scheme intends to provide assistance to set up MSEs by small entrepreneurs having limited financial resourced, the Government will assist with rent to strengthen the MSEs in the initial period of establishment.

• The assistance at 50% of rent paid or Rs.50000/- per annum, whichever is less in Municipal Corporation area and areas under the Urban Development Authority
• The assistance at 50% of rent paid or Rs.25000/- per annum, whichever is less except mentioned above
• The financial assistance will be provided for three years