Entrepreneurship Development:

Evolution of concept:
The word entrepreneur is derived from the French verb entreprendre. It means to
undertake it originally means that to designate an organize of musical or other
entertainments. Oxford dictionary in the director or a manager of a public musical
institution, one who gets up entertainment, especially musical performance. In it the early
16th century entrepreneur was applied to those who were engaged as to cover civil
engineering activates such as word entrepreneur was used to cover economic aspects. The
term entrepreneur is used in various ways and terms. The views are broadly classified in
three ways.
1. Risk bearer
2. Organizer and
3. Innovator

1. Risk bearer:
In 18th century Richard Cantillon an Irish man living in France, was first used
entrepreneur and defined as An Agent who buys factors of production at certain prices in
order to combine them into a product with a view entrepreneurs are risk bearing agents of
product.
Knight also described entrepreneur to be a specialized group of person who bear
uncertainty. Uncertainty can be defined as a risk which cannot be insured against and is
incalculable.
2. As an organizer:
Jean Baptiste says “one who combines the land of one the labour of another and
capital of yet another and thus produces a product. By selling the product in the market he
pays interest on capital, rent on land, wages to labourers and what remains is his/her
profit”. Thus he made a clear distinction between the role of capitalist as a financed and
entrepreneur as a organizer.
3. Innovator:
Joseph A Schumpeter in 1934 in his book “theories of economic development” he
says economic development as a discrete dynamic change brought entrepreneur by
instituting new combination of production i.e. innovations. according to him introduction
of new product may occur in aby of following five norms:
1.Introduction of new product in the market
2. The instituting of new production technology, which is not yet tested by experience
in the branch of manufacture.
3. Opening of new market into which the specific product has not previously entered
4. The discovery of new source of supply raw material.
5. The carrying out of the new form of organization of any industry creating of
monopoly position or the breading of it.
an individual who, rather than working as an employee, runs a small business and
assumes all the risk and reward of a given business venture, idea, or good or service
offered for sale. the entrepreneur si commonly seen as a business leader and innovator of
new ideas and business processes.
Characteristics' of an Entrepreneur:
The features of successful entrepreneurs are:
 hard work
 desire for high achievement
 highly optimistic
 independence
 foresight
 good organizer
 innovation

Functions of entrepreneurs:
An entrepreneur does perform all the functions necessary right from the genesis of
an idea upto the establishment of an enterprise. these can be listed in the following manner:
Mainly an entrepreneur does following functions:
 Risk bearing
 Organization
 Innovation
Following are the functions that he has to perform for bring up an enterprise as his idea
and concept.
1. Idea generation and scanning of the best suitable idea.
2. Determination of the business objectives/
3. Product analysis and market research
4. Determination of form of ownership/organization
5. Completion of promotional formalities
6. Raising necessary funds
7. Procuring machine and material
8. Recruitment of men
9. Undertaking the business operations.
Types of entrepreneurs:
The various types of entrepreneurs are classified as under:
1. Classification given by Danhof:
Clerence Danhof on the basis of his study of the American agriculture classified
entrepreneurs into four types, which are
Innovating entrepreneurs: an innovating entrepreneur is one who introduces new goods,
new method of production discovers new market and recognizes the enterprise.
Entrepreneurs under this classification have the feature of assembling of information for
trying out a novel combination of factors of production.
Imitative or Adoptive entrepreneur: these entrepreneurs do not innovate but themselves
imitate techniques and technology innovated by others. These entrepreneurs are has the
nature of readiness to adopt the successful innovations. Such entrepreneurs prefer to
imitate the technology already existing somewhere in the world.
Fabian entrepreneurs: Fabian entrepreneurs are characterized by very great caution and
skepticism in experimenting any change in their enterprises. They imitate only when it
becomes perfectly clear that failure to do so would result in a loss of the relative position in
the enterprise.
Drone entrepreneurs:
They are characterized by a refusal to adopt opportunities to make changes in
production formulae even at the cost of severely reduced returns relatives to other like
producers. Such entrepreneurs may even suffer from losses but they are not ready to
make changes in their existing production methods.
1. Classification given by other behavioral scientists:
Solo entrepreneurs: these are the entrepreneurs who essentially work alone and it
needed at all, employ a few employees. In the beginning most of entrepreneurs start
their enterprise like them.
Active partners: active partners are those entrepreneurs who start/carry on an enterprise
as a joint venture. It is important that all of them actively participant in the operations of
the business.
Inventors: such entrepreneurs with their competence and inventiveness invent new
products. Their basic interest lies in research and innovative activities.
Buyers: these are those entrepreneurs who do not like to bear much risk. Hence, in
order to reduce risk involved in setting up a new enterprise, they like to buy the ongoing
one.
Lifetime: these entrepreneurs take business as an integral part of their life. Usually, the
family enterprise and businesses which mainly depend on exercise of personal skill fall in
this type category of entrepreneurs.

2. According to motivation:
Pure entrepreneurs:
Pure entrepreneurs are those who are motivated by psychological and economic
needs. They may or may not posses an aptitude for entrepreneurship but it is tempted by
the monetary rewards or profits to be earned from the business venture. They also
undertake an entrepreneurial activity for their personal satisfaction in work, ego, status,
or recognition.
Induced entrepreneurs:
Induced entrepreneurs are induced by the government to take up entrepreneurial
task due to the policy measures of the government that provides basket of facilities like
financial assistance, incentives, and concessions. Land at a cheap price, secure raw
material, tax exemptions', infrastructure, skill training etc.
Spontaneous entrepreneurs:
These entrepreneurs start their own enterprise spontaneously. They are persons
with initiative, boldness, and confidence in their ability, inner urge and inborn talent
drive them to establish their own venture.
 Distinction between an entrepreneur and professional manager.

Points Entrepreneurs Manager

Motive The main motive of an The main motive of a manager is
entrepreneurs is to start a venture by to render service in an enterprise
setting up an enterprise. He already set up by an entrepreneur.
understands the venture by his
personal gratification.
status The entrepreneur is the owner of A manager is the servant in their
the enterprise enterprise owned by the
entrepreneur.
Risk Being a owner of the entrepreneur, A manager as a servant does not
bearing he assumes all risks and uncertainty ear any risk involved in the
involved in running the enterprise enterprise.
rewards The reward to an entrepreneur gets A manager gets salary as reward for
bearing risk involved in the the services rendered by him in the
enterprise is profit which is highly enterprise. Salary of a manager is
uncertain certain and fixed.
innovation Entrepreneur acts as an innovator to A manager does simply to execute
meet the changing demands and to the plans prepared by the
launch new products and extend the entrepreneur. Thus a manger
business. simply translate the ideas into
practice.
qualificatio An entrepreneur needs to possess A manager needs to possess the
n qualities and qualification like high qualification in terms of sound
achievement motive, originality in knowledge in management theory
thinking foresight risk bearing ability and practice.
and so on.
Decision An entrepreneur is the decision A manager is simply the follow the
making maker while he takes all decision decision of entrepreneur and takes
regarding inside and outside factors small decision to his extent.
of his business.
Distinction between entrepreneur and entrepreneurship:
Entrepreneur
Entrepreneur is a person
He is an organizer
He is a risk bearer
He is a motivator
He is an innovator
He is a good planning
He is a leader
He is a decision maker
He is a visualisor
He is a creator
He is a administrator
He is a imitator
Entrepreneurship
Entrepreneurship is a process
It is an organization
It is risk bearing
It is the motivation
It is the innovation
It is the planning for successful
performance.
It is the leadership
It is the decision making
It is the visualization
It is the creation
It is the administration
It is the imitation.
Intrapreneurs: In recent years, an emerging group of persons left big
corporations and started their own small business in America either because their ideas
were not accepted by their bosses or because their idea was enough to make good profits.
These group of persons were turned to entrepreneurs and achieved great success in their
new ventures. These entrepreneurs to be known as intrepreneurs. These are well-paid
executives has idea to launch their own ventures.
A new breed of entrepreneurs is coming to the force in large industrial
organizations. They are called 'intrapreneurs.' They emerge from within the confines of an
existing enterprise. In big organizations, the top executives are encouraged to catich hold
of new ideas and then convert these into products through research and development
activities within the framework of organization. These concept of intrpreneurship has
become very popular in developed countries like America.
It was Gifford Pichot III an American Manangment expert who used the term
'intrapreneur, for the first time in 1983.
A person within a large corporation who takes direct responsibility for turning an
idea into a profitable finished product through assertive risk taking and innovation.
Intrepreneurs have entrepreneurial skills blended with managerial skills but
operate within the confines of an organization.
“Intrapreneurship refers to employee initiatives in organizations to undertake
something new, without being asked to do so”. This Intrapreneur focuses on innovation
and creativity and who transforms a dream or an idea into a profitable venture, by
operating within the organizational environment. Thus, entrepreneurs are inside
entrepreneurs who follow the goal of the organization.
DIFFERENCES BETWEEN ENTREPRENEURS AND INTRAPRENEURS
p o in ts E n tr ep re n eu rs ’ I n tra p r en eu r s
o w n er sh ip E n tr ep re n eu s is th e I n tra p r en eu r is th e
o w n er of th e em p lo ye e a b u sin e ss
b u s in ess en tity en tity .
S ta tu s H e is in d ep en d e n t H e is d ep e n d en t o n
in a n o r ga n iza tio n th e e n trep ren e u r in th e
o r ga n iza tio n
ca p ita l He b r in gs th e I n tra p r en eu r n ever
c ap ita l in th e ra ise s th e c a p ita l.
o r ga n iza tio n
R isk E n tr ep re n eu r b ea rs I n tra p r en eu r b e ar s ris k
ris k s to h is a fter sta r tin g o f h is o wn
b u s in ess b u s in ess .
G u ar a n tee An en trep r en eu r A n in tr a p ren eu r d o es
o f p ay m n et giv es g u a ra n tee o f n o t r eq u ired t o d o so
p a y m en t o f m o n ey
to th e len d er s
C o n ven tio n An en trep r en eu r A n in tra p r en eu r h a s
of n ew c o n v erts h is n ew o n ly to c rea te h is n ew
id ea s id ea s or h ig h id ea s b u t h e c o n n o t
in tr ep ren eu rs id e as co n ver t th em o n h is
in to r ea lity o w n a cc o u n t.
Entrepreneurial qualities/traits/ competences:
The quality of or traits of an entrepreneur may be defined as “An underlying characteristics
of a person which leads to his/her effective or superior performance in a job.”
1. Initiative: it s entrepreneur who initiates a business activity.
2. Looking for good opportunities: he looks for an opportunity and takes appropriate
actions as and when it arises.
3. Quality conscious: he has always strong urge to excel to beat the existing standard.
4. Committed to work: does every sacrifice to get the task completed.
5. Efficiency seeker: makes always renancious efforts to get the task completed with
minimum costs and time.
6. Proper planning: it helps to formulate realistic and proper plans and then executes
rigorous to accomplish the task.
7. Problem solver: always tries to find out ways and means to tide over the difficult
times.
8. Assertive: good in asserting his issues with others for the cause of his enterprises.
9. Employees well-wisher: he should have great concern and also takes necessary
measures to improve the welfare of the employees working in his enterprise.
10. Effective strategies: it helps to introduce the most effective strategies to effect
employees to employees to achieve the enterprise goal whatsoever it may be.
Women entrepreneurship:
Women constitute around half of the total world population. In tradition societies
they were confined to the four walls of houses performing household activates. In modern
societies, they have come out of the four walls to participate in all sorts of activities.
Concept of women entrepreneurship:
Women entrepreneurship may be defined as a women or group of women who
initiate, organize and run a business enterprise. According to Government of India, “an
enterprise owned and controlled by a women having a minimum financial interest of 5% of
the capital and giving at least 51% of the employment generated in the enterprise to
women.”
Thus a women entrepreneurs are those women “who think business enterprise,
initiate it, organize and combine the factor of production, operate the enterprise,
undertake risks and handling economic uncertainty by having a controlling interest in that
particular enterprise.”
Functions of Women Enterpreneurs:
As an entrepreneur, a women entrepreneur performs all the functions involved in
establishing an enterprise.
According to Fredrick Harbison has mentioned following functions:
1. Exploration of the prospects of starting a new business.
2. Underataking of risk and the handling of economic uncertainties involoved in
business.
3. Introduction of innovations or imitation of innovations.
4. Coordination, administration and control
5. Supervision and leadership
All these entrepreneurial functions can be classified broadly into three categories:
 Risk bearing
 Organization
 innovations
Problems of women entrepreneurs:
Women entrepreneurs encounters following problems.
1. Problem of finance
2. Scarcity of raw materials
3. Stiff competition
4. Family ties
5. Lack of education
6. Male dominated society
7. Low risk bearing ability
8. Low need of achievement
9. Lack of self confidence
10. Lack of encouragement from family
11.
Strategies for Development of women entrepreneurs:
Some suggestions to meet the challenges and to encourage women entrepreneurship are
given below:
1. Women are required to maintain cool and persistently to convince the husband and
husband family.
2. A women can set up a home based business.
3. Women must acquire education and go through confidence building training to get
rid of the traditional feeling that they are inferior to men and are dependent on men.
4. Workshop and seminars should be organized by the EDPs to support women to
establish the entrepreneurship.
5. Financial institutions must loose the procedures to women those who interested in
starting up the enterprise.
There is a need of loosen the collateral security to women entrepreneurs
Rural entrepreneurship:
India comprises majority rural areas where people are living with low income and
the income they earning from the agriculture. Incorporating the industry in rural villages
there is two main advantages first one is, industrial output can be produced and income of
the rural people can be raised. Only agriculture cannot make raise the income.
Meaning :
According to the Khadi and village Industries Commission (KVC), “village industry
or rural industry means any industry locatd in rural area, population of which does not
exceed 10000 or such other figure which produces any goods or renders any services with
or without use of power and in which the fixed capital investment per head of an artisan or a
worker does not exceed a thousand rupees”
The definition of village industry has been recently modified by the government so
as to enlarge its scope. Accordingly any industry located in rural area, village or town with a
population of 20000 and below and an investment of Rs.3 crores in plant and machinery is
classified as a village industry.
All the village industries have been grouped into seven major categories as follows:
1. Mineral based industry
2. Forest based industry
3. Agro-based industry
4. Polymer and chemical based industry
5. Endineering and non-conventional industry
6. Textile industry (including Khadi) and
7. Service industy.

Need for rural industry:

 Generation of employment:. Rural industries are labour intensive so they can solve
the problem of unemployment and under-employmnet.
 Income generation:. Next to the agriculture the small scale industries generate the
employments in rural areas.
 Small scale industries encourage the economic activities. And promote the balanced
regional development.
 These industries help to build up the standard of living in the rural people.
 Rural industrialization posters the economic development of rural areas.
 Rural industries promote, by producing rural products, the rural heritage.
 Rural industries are environment friendly industries.
Problems of rural entrepreneurship:
Development of rural entrepreneurship is not easy task while it has many problems. Among
them major problems are:
1. Inadequate flow of credit
2. Use of obsolete technology, machinery and equipment.
3. Poor quality standards.
4. Inadequate infrastructural facilities.

Strategies for development of rural industries:

Establishing a enterprise in rural areas is not easy task while many factors of production
should be collected to produce a product. Following measures are suggested to encourage
the rural entrepreneurship.
1. A policy should be formulated to strengthen the raw materials.
2. There is need to be made available o time of funds and loosen the stiff availability of
funds.
3. Common production and marketing centers should be set up to solve the marketing
problems.
4. There is lack of entrepreneurial aptitude and competency so there is urge of
enhancing these is rural young generation.
5. There is need of providing entrepreneurial education in colleges and universities.
6. Bringing awareness in rural people about available facilities to set up enterprise.
7. Proper provisions and subsidies should be provided by the government.
8. The role of nongovernmental organizations (NGO's) is most significantly enhanced
and need to be extended.
Development of entrepreneurs means inculculatig entrepreneurial traits into a person
imparting the required innovation, developing the management and building of
entrepreneurial attitude. The process of entrepreneurial development incorporates
equipping a prospective entrepreneur with institutional support system and back up used
for enterprise development and sharpening his entrepreneurial competencies.
Entrepreneurship development is becoming most important matter discussing all over
the countries. However, the real problem is how to develop the entrepreneurship. To
solve this problem the EDPs plays an vital role.

Meaning of EDP's:
Entrepreneurship development programme means “a programme designed to
help a person in strengthening and fulfilling his entrepreneurial motive and in acquiring
skills and capabilities necessary for playing his entrepreneurial role effectively”. Towards
this end it is necessary to promote his understanding of motives, motivation pattern, their
impact on behavior and entrepreneurial value.

Need for EDP's:

Following are the reasons for EDP's
1. EDP is meant for the entrepreneurs those who are on their own enterprise but
cannot become successful owners of enterprises.
2. There is need of speed up the process of activating the factors of production to
ensure higher rate of economic growth.
3. EDP ensures the encouraging the backward and tribal areas to set up their
enterprises with the help government and institutional support system.
4. It helps in dispersal of economic activities to different regions by providing training
and other support to local people.
5. EDP develops the persons who are interested to work as job providers by
establishing enterprises not to those job seekers.
6. EDP improves the standard of living of the weaker sections of society and
involvement of all sections.
7. EDP develops motivating and competences necessary for successful launching,
management and growth of the enterprises.
Objectives of EDP's
The main objectives of EDP's are:
1. To accelerate the process of entering into business for those who come form
business families
2. To encourage first generation entrepreneurs who don to have ay business
background
3. To develop and strengthen the entrepreneurial competences of prospective
entrepreneurs.
4. To proved help in identification and formulation of viable projects
5. To arrange support system about the process and procedures of setting up of an
enterprise
6. To impart training in managerial understanding and skills.
7. To provide post-training assistance and monitoring facilities.
Phases of entrepreneurship development programmes:
An EDP consists of the following three phases.
 Pre-training phase
 Training phase of development phase
 Post training phase or follow up phase

1. Pre-training phase: this phase includes the actviteis and the preparations required
to launch the training programme. This phase includes.
 Selection of entrepreneurs
 Creation of infrastructure for training
 Preparation of training syllabus
 Tie up of guest faculty
 Arrangement for inaugaraion of the programme
 Designing tools and techniques for selecting the trainee
 Formation of selection committee for selecting trainees.
 Publicity campaign for the programme.
 Development of application form.
 Pre-potential survey of opportunities available in the given environmental
conditions.

2. Training phase:
Objectives of this phase is to bring desirable changes in the behavior of the trainees.
The trainees have to judge how much and how far the trainees have moved in their
entrepreneurial pursuits. How much they tuned towards proposed project. Are they ready
to take risk involved in the venture? The changes in attitude outlook skill, role etc. the
behavior of entrepreneur. Are observed in this phase.

3. Post training phase:

This phase involves assessment to judge how far the objectives of the programme
have been achieved. Monitoring and follow up reveals drawbacks in the earlier phases and
suggests guidelines for framing the future policy. The ultimate objective of this phase is top
prepare the participants to start their enterprise.

3Entrepreneur training:
Training may be defined as any procedure, initiated by an enterprise, which intends
to foster and enhance learning among the employees working in the enterprise. In case of
small scale industries the owner takes responsibility himself to train the employees.
Objectives of training:
To improve job performance by enhancing employees knowledge and skill
To prepare employees well competent to discharge the new responsibilities.
Ro impart skill how to operate the new machinery and equipments
To reduce the wastages and accidents
To build a second line for more responsible positions at a later stage.
Objectives of training:
Methods of training:
The methods of training available to employees in small scale industries are:
On job, training (OJT) the oldest and most commonly used method of training is on job
training. It consists of the employees receiving training from their supervisors or other
departmental members while they perform their regular jobs. In this way the employees
are both producers and learners.
Training programme of this kind consists of the following three stages
Demonstration: the job is demonstrated to the employees each step involved in the
process is explained thoroughly.
Performance: the trainees perform the task what they have learned in the step of
demonstration.
Inspection: In this stage, the performance of employees is observed and immediate
feedback is taken.
Off job training: this type of training involves the employee are given training in class room
in the form of seminars, presentations, lectures etc.
Lectures:
Here the instructor communicates in theory and practice of subject matter
involved in job. Under this method the learners can clarify the doubts on the spot.
Written instruction method:
The written instructions are given for future reference to the learners.
Conference:
Conferences are organized for providing various issues in related matter. The
experts in field share the ideas and bring to the notice of learners new ideas and
techniques to increase the production.
Meetings:
Meetings are mode of training involving a group of people who discuss the various
problems confronting them. They exchange the different ideas and come to a single
conclusion.
Entrepreneurs play a risk playing role which is a difficult one. The entrepreneurs embark
on a difficult journey. Then how they motivated to embark the journey and what motivates
to do the business are the questions to be answered.
Meaning and definition of motivation:
The term motivation bas been derived from the work 'motive'. Motive may be
defined as an inner state of our mind that moves or activates or energizes and directs our
behavior towards our goals. Motives are expressions of a person's goals or needs. In simple
terms motives or needs are ways of behavior. It gives direction to human behavior to
achieve goals or fulfill needs.
Now, motivation may be defined as the process that motivates a person into action
and induces him to continue the curse of action for the achievement of goals. It is an
ongoing process because human needs/goals are never completely satisfied.
According to Dalton E McFarland, “motivation refers to the way in which urges,
drives desires, striving and aspirations or needs direct, control, or explain the behavior of
human being.”
Process of motivation:

Motivational factors which motivates one to become an entrepreneur:

Many studies are taken to find out the motivational factors to become a person into a
entrepreneur
In the study of Sharma classified all the factors motivating the entrepreneurs into two types
I. Internal Factors:
1. Desire to do something new
2. Education background
3. Occupational background or experience
II. External Factors:
1. Government assistance and support
2. Availability of labour and raw material.
3. Encouragement from the big business houses
4. Promoting demand for the product.
Another researcher Murthy have found three factors:
1. Ambitious factors
2. Compelling factors
3. Facilitating factors.
 Maslow's Need of Hierarchy theory:
Maslow's theory is based on the human needs. He classified them into five types
Physiological Needs:
These are basic human needs includes food, clothing and shelter. They make
influence on human behavior. An entrepreneur is also being a man needs to meet his
physiological needs for survival. Hence, he/she is motivated to work in the enterprise.
Safety and Security Needs:
After the physiological needs, he wants safety and security in the form of economic
protection and protection from physical dangerous. Entrepreneur takes more work to be
secured in future.
Social needs:
Man is a social animal. These are concerned to the belongingness, love, and
affection. Entrepreneur is motivated to interact with fellow entrepreneurs his employees and
others.
Esteem Needs:
These refers to self-esteem and self-respect, include self-confidence, achievement,
competence, knowledge, and independence. In case of entrepreneurs the ownership and
self-control, reputation, and independence are their esteem needs.
Self-actualization:
The final step of hierarchy model is the need for the self-actualization. It refers to
fulfillment. An entrepreneur may achieve self-actualization is being a successful
entrepreneur.
Entrepreneurial Ambitions:
Entrepreneurial ambition is one of the motivational factors, which decided to achieve
something new. Ambition influences the degree to which entrepreneurs seek to create
something great, important, and significant when they pursue opportunities. The nature of
the entrepreneurial ambition may include making money or the desire to create something
new, from conception to actuality. Ambition translates into setting high goals for oneself and
others (see the earlier Goal setting section). It is well known that high goals lead to better
performance results than moderate or low goals (Locke & Latham, 1990). To achieve high
goals requires enormous energy and stamina. When goal-directed energy is sustained over
time, it is called persistence or tenacity. Pursuing an opportunity

Theories of entrepreneurship:
The word entrepreneurship is changed from period to period. Many of scholars have
made an attempt to draft the emergence of entrepreneurship in the view of development.
The theories of entrepreneurship have been discussed below:
1. Traits theory entrepreneurship
2. Economic theory of entrepreneurship
3. Social-cultural theory of entrepreneurship
4. Psychological theory of entrepreneuship
Traits theory of entrepreneurship:
According to this theory entrepreneurship developed because individual called
entrepreneurs, possessed certain specific characteristic or traits or competencies which
made them capable of generating new ideas and creating new business ventures. The main
traits or qualities responsible for the raise entrepreneurship are such as innovative and
creative skills, ability to building a strong organization and managing it efficiency and
effectively, propensity to take risks, efforts patience and pursuance and foreseability.
Desire for high achievement.

Economic theory of entrepreneurship:

This theory is propounded by the economists. According to this theories, the
entrepreneurship and economic growth will take place in those situations where particular
economic conditions are most favourable. Many economists propounds the economic
incentives are the main drive for the entrepreneurial activities.
It may be noted that the economic factors are included under the following conditions.
 The marker incentives which are present themselves in the form of new social
needs and wants.
 The existence of adequate stock of capital to finance new enterprises.
 The occurrence of institutions like development banks in order to direct the capital
to those who want to use it for new entrepreneurial projects.
Socio-cultural theory of entrepreneurship:
Sociologists argue that entrepreneurship is most likely to emerge under socio-
cultural environment. According to them social changes, cultural values and role
expectations are responsible for the emergence of entrepreneurship. Max Weber says
that religious beliefs generate a drive for the entrepreneurship growth. For example
Marwari's in India.
Physiological theory of entrepreneurship:
According this theory the physiological characteristics of people plays main role
rather than resources available. It is said that the true power of generating and growing any
enterprises is 5% on technology and 95% on psychology.
David McClelland developed a theory to explain the psychological roots of
entrepreneurship. He identified three such motives of needs. They are as follows
Need for high achievement: this is concerned with the desire to do complex or very
difficult tasks, to do something better or more efficiently and to solve problems.
 He always desires to take personal responsibility for finding solutions to problems.
 Seeks challenge
 He desires immediate and specific feedback on his performance
 He is objective oriented
 He is pre occupied with his work and
 He has high level of energy to hard work.
Need for power:
This is concerned with three desires:
 To influence or control other people
 To be responsible for others
 To hold authority over others and
 To control one's environment including resources and information.
Need for affiliation:
This is concerned with the desire to establish and maintain friendly, cordial, and
warm relationship with others.
An entrepreneur is the opportunity seeker. He is interested in exploit the opportunities in
the market those business which are viable and have a demand in the market.
Business opportunity is the transforming ones idea into business. The
entrepreneurs may select a product on the basis of following analysis.
 Own experience or their partner experience
 Expansion of diversification plans of their own ongoing industry of business.
 Products whose imports are banned or controlled by the government.
 Which have high profitability.
 Which productions have some concessions or reservations
 As per guidelines from the industrial policy. For example the production of
computers as per government policy of Software Technology Park of India.
 Support from EDPs or NGO's

Generation of ideas:
Idea can be generated through
 By discussion with friends, relatives, business man, industries and persons
associated with trade commerce and industries
 By contracting promotional agencies like district industries centre's small industries
service institute, entrepreneurship development institutes, small industries
corporation, chamber of commerce and industries, industry associations etc.
 Generating project ideas from technical consultancy cells of commercial banks,
vendor development cells of large industrial houses.
 Generating idea by observing products or services required by society.
 Internet browsing: ideas can also be generated by th e internet by accessing different
sites related to business and industry.
Identification of opportunities through:
 Scanning of business environment
 Evaluation of opportunities
 Selection of opportunities based on personal competences ( SWOT Analysis)
Steps for starting of an enterprise:
The main steps involved in the establishment of a small scale industry are as follows:
1. Selection of project
a. Product or service selection
b. Location selection
c. Project feasibility study
d. Business plan preparation
e. Prepare project profile
2. Decide on form of ownership
3. Complete legal requirements
a. No objection certificate
b. Obtain SSI Registration
c. Obtain Clearance from departments as applicable
4. Arrange for land and building
5. Arrange for plant and machinery
6. Arrange for infrastructure
7. Prepare project report
8. Apply and obtain finance
9. A. proceed to implement
B. obtain final clearance
I. Selection of project:
Project: concept and meaning:
The project is an important groundwork of an enterprise and is also very crucial to
the entrepreneur.
According the ECAFE report, the project is defined as the smallest unit of
investment activity to be considered in the case of programming.
A project can be defined as a scientifically evolved work plan devised to
achieve a specific objective with a specified period.
The three basic attributes of project are:
i. Course of action
ii. Specific objectives and
iii. Definite time perspective
A project is planned to achieve a specific objective, which calls for a specific
authority to implement it. Project management has three attributes; input characteristics,
output characteristics and the social benefit characteristics.
The input characteristics are raw materials, energy, manpower, financial resources
and organizational set up. The output characteristics are production and provision of
additional services. Last one social benefit characteristics are welfare activities of the
project to be taken.
Project classification
A project can be classified as
i. Quantifiable and non quantifiable projects:
Quantifiable projects are those that can be made assessment of benefit whereas the
non quantifiable projects are those which have no assessment of benefit can be made.
Projects concerned to the power, mineral full in first category and health education and
defense fall in second category.
ii. Sectoral projects:
According the planning commission of India the sectoral projects are:
a. Agriculture and allied sector
b. Irrigation and power sector
c. Industry and mining sector
d. Transport and communication sector
e. Social service sector
f. Miscellaneous
i. -Economic Projects:
These projects are characterized under techno economic basis
1. Factor intensity oriented classification : the factor intensive sectors are labour
intensive and capital intensive industries.
2. Causation oriented classification: here the projects are classified on the basis of
demand based or raw material based projects.
Magnitude oriented classification: in this the size of investment forms the basis of
classification. Those are large scale, small scale and medium scale industries
i. Financial institutions classification:
According to financial institutions the projects are classified as follows
 New projects
 Expansion projects
 Modernization projects
 Diversification projects
ii. Services projects:
 The services projects are
 Welfare projects
 Service projects
 Research and development projects
 Educational projects
Project selection is the initial stage of project:
Product or service selection.
The entrepreneur selects a product or service by considering the technological know-how,
financial resources, a rough estimation of demand, customer's satisfaction, position of
competitors, interest of dealers, infrastructural facilities etc.
Location selection:
Next step is the entrepreneur should see the location where the project is to set up.
Some of major aspect to be considered when selecting a location are
 Availability of land
 Nearence to the market
 Availability of raw materials
 Availability of transportation and communication
 Supply man power
 Availability of incentives or concessions
 Government policy
 Local laws and regulations
 Ecological and environmental factors
 Regional development
 Convenience to the entrepreneur.

Project feasibility study:

An entrepreneur is expected to involve himself in only those projects which are
technically sound, financially feasible, economically beneficial, commercially dependable
and organically effective and adequate.
The feasibility study is defined as “a formal investigation of profitable opportunity
which leads to rational decisions about making an investment decions”.
Feasibility studies consist of
 Market analysis
 Technical analysis
 Financial analysis
 Economic and special analysis
 Commercial analysis
 Ecological analysis.
1. Market Analysis:
Market analysis is taken to know the aggregate demand of proposed product or service
in future and market share expected to be acquire in future.
The market analysis consists of
 Potential market
 Customer segmentation
 Demand forecasts
 Marketing strategies
Cost, pricing methods and profitability.
1. Technical analysis:
It is an analysis of technical requirements of the industry can be met. It takes
consideration into equipment and machines, production method, raw materials etc.
2. Financial analysis:
Financial analysis deals with the evaluation of the estimates of cost of the project. It
examines whether project financially viable or not. The following aspects are covered
under financial analysis:
1. The capital requirements
2. Working capital requirements
3. Means of financing
4. Projected profitability
5. Level of risk
6. Capacity utilization
7. Financial analysis tools like ratio analysis, break even analysis, cash flow of the
project are used to find the viability of project.
3. Economic and Social Analysis:
The economic analysis include the government policies with regard to particular
segment of the industries, the government incentives for specific location or tax holidays
and the like. The aspects which covered under this analysis are:
1. Demand projection
2. Sales volume
3. Outputs and services
4. Employment
5. Higher earnings higher standard of living.
6. Increased national income and improved income distribution.
4. Commercial analysis:
It evaluates the commercial aspects of the arrangements of the project. It also
examines the arrangement process for procurement of machinery and equipments. The
whole evaluation process includes the progress regarding placement of orders of
equipment procedure for selection, and tendering etc. arrangement process for sale of
goods and services is included in this analysis.
5. Ecological analysis:
The ecological analysis deals with the significant ecological implications like power
plants and irrigation schemes, and for environment polluting industries like drugs
chemicals and leather processing. The damage caused by the project and restoration
measures required to ensure that the damage are the important aspects taken in this
analysis.
IV. Business Plan Preparation:
A business plan is the written document giving in details all relevant internal and
external elements that affect business and strategies for starting a new venture. It describes
the current statues, expected needs, and projected results of new business.
Business planning is an ongoing process in any industry or business or business
enterprise. The initial business plan includes study about market, product, the
management team and the fund requirements. The business plan is also referred as
entrepreneurs' road map or game play for successful enterprise.

V. Project profile:
A project profile gives a bird's eye view of the proposed project. This may be used
for the obtaining the provisional registration certificate from the approving institutions.
In formation of project, profile contains:
 Introduction
 Promoters background(education, experience and so on)
 Products description
 Market and marketing
 Details of infrastructure needed
 Plant and machinery
 Process details
 Raw materials
 Manpower
 Cost of the project and means of finance
 Cost of production and profitability
I. Decide form of ownership:
The form of ownership determines the level of ownership risk, responsibilities,
control, and management of business enterprise.
There are main legal forms of ownership, form which the choice can be made:
 Sole proprietorship
 Partnership
 Joint stock company
 Cooperative society.

II. Complete the legal requirements:

Important laws and regulations which are required to fulfill by the entrepreneurs
are:
1. No objection certificate: the NOC is obtained from the local
body/Panchayat/Municpality for the purpose of using the land and to start the enterprise.
2. Obtain SSI Registration: the SSI industries should get the registration from the
Director of Industries of the concerned states.
3. Provisional Registration Certificate (PRC): it is to be taken from the concerned
departments of state SSI institutions.
4. Permanent Registration Certificate (PRT)
5. Registration on SSI Unit: some states are providing the state registration scheme so
entrepreneur can register under the schemes.
Obtain Clearance from the departments applicable:
 Several clearances are required from different authorities those are
 Agriculture land conversion
 Urban land ceiling clearance
 Building plan approval
 Factories act
 Trade license
 Pollution control board clearance
 Sales tax registration
 Fruit products order
 Food adulteration act license
 Drugs and cosmetics license
 Electronics industries registration.
I. Arrange Land and Building:
The promoters of the unit need arrange industrial shed and industrial land. The
good location should be considered while arranging the land and building.
II. Arrange for plant and machinery:
The plant and machinery required for the project could be purchased form
recognized manufactures or dealers. The plant and machinery could also be taken on hire
purchase scheme operated by the National Small Industries Corporation.
III. Arrange for infrastructure:
The main infrastructural facilities required for a SSI unit are
 Land and construction and Building
 Water supply and
 Power supply.
I. Prepare project Report or Project Formulation:
Project report is designed to get a blue print of business concern to be taken in
future.
Webster New 20th Century Dictionary defines a project as a scheme, design, a
proposed of something intended or devised. In simple words project report or business
plan is a written statement of what an entrepreneur proposes to take up. It is a kind of guide
frost or course of action what the entrepreneur hopes to achieve in his business and how he
is going to achieve. In other words a project report serves like a kind of big road map to
reach the destination determined by the entrepreneur.
Significance of project report:
An objective without plan is a dream. The essential functions are
It is like a road map. It guides how to reach the goals.
It can make influence on the lenders and investors.
Contents of a project report:
1. Executive summary :
a. Introduction
b. Financial performance
c. Balane sheet analysis
d. Proposed project
e. Project profitability analysis
f. SWOT analysis
g. Pr-operative expenses
h. Margin money for wording capital
i. Banks
2. Company details :
a. History
b. Manufacturing facilities
c. Promoters
d. Shareholding pattern
e. Board of directors
f. Key executives
g. Major customers
h. Details of divisions
i. Group units
3. Operational details:
a. Capacity and utilization
b. Profit and loss account
c. Balance sheet
d. Term loans
e. Working capital loans
f. Marketing and distribution network of the company
g. Marketing strategy
h. Export sales
i. Trends in selling prices
j. Details of sub contracts out sourcing etc
4. Project details:
a. Proposed project
b. Orders and enquiries
c. Location
d. Manufacturing process
e. Technical feasibility/ superiority
f. Technical know how
g. Inputs for production
h. Manpower
i. Power
j. Water
k. Marketing
l. Auxiliary service:
 5. Means of finance :
a. Eauity share caitral
b. Internal accruals
c. Deposits
d. Debt other sources
6. Project status:
a. Implementation schedule
b. Pert and cpm analysis
c. Current status
d. Government approvals
7. Profitability and risk analysis
a. Financial of the project
b. Financial of the company
c. Analysis of break even return on investment payback period, and sensitivity
analysis
d. Major risk factors
e. SWOT analysis.
8. Company related details
a. General analysis
b. Competing industries
c. Advantages of the company
9. Employment generation direct/indirect:
10. Conclusion
11. Annexure:
a. Promoters bio-data
b. Organization chart
c. Details of group units
d. Statutory sanctions approvals
e. Arrangement for land and building
f. Statement of cost of plant and machinery and other equipment
g. Process chart
h. Financials for project and its analysis
i. Any other details.
IX. Apply and obtain finance
a. Share capital
b. Internal accruals
c. Deposits own public
d. Debentures
e. Short term borrowings
f. Long term loans
g. Bridge loans
h. Working capital loans like cash credit
I. Means of finance:
a. Own equity
b. Internal accruals
c. Inter corporate deposits/investments
d. State financial institutions
e. Other financial institutions
f. Other borrowing like ECB, CP, EDI, FCNRB etc.
g. State subsidy and seed capital
h. Lease finance.

II. Implement the project and obtain final clearances:

Finally, the entrepreneur undertakes the project.
Small-Scale industries:
The small industries play a vital role in self-employment, generation of
employment, industrial and economic growth and support function to the higher
industries. Small industries comprise tiny industries, cottage industries, and ancillaries as
small units. The word small has relevance to the investment in the industry. In addition,
the number of employees is lesser, wags are lower, the shed is smaller, production
volume is smaller and sales purchases in terms of value are small.
Definitions:
The reserve bank of India adopts an expanded definition of SSIs which included
traditional industries as well.
a. Small Scale Industrial undertakings which are engaged in the manufacture,
processing, or preservation of goods in which the investment in plant and machinery
does not exceed Rs.1 crore. These would include units engaged in mining or quarrying,
servicing and repairing of machinery.
b. Tiny enterprises whose investment in plant and machinery does not exceeds Rs.
25 lakhs
c. Power looms;
d. Traditional industries which require high workmanships and techniques as also
village and household industries producing common goods of consumption,
predominantly by using simple tools.
e. The decentralized and informal sector like handlooms, handcrafts, coir, etc,. and
f. The industry related Service/Business Enterprises which are notified as such.

The SSI sector covers a wide spectrum of industries as under:

Ancillary industry:
This is a sub-class of Small Scale Industries (SSI). An industrial undertaking,
which is engaged or is proposed to be engaged in
(1). The manufacture of parts components, sub assemblies, toolings or intermediaries.
(2). Rendering a service or supplying or rendering a less than 50 percent of its production
of its total services.
Tiny industry:
A unit is treated as tiny industry, where the investment in plant and machinery
does not exceed Rs. 25 lakhs, irrespective of the location of the unit.
Export- oriented Unit:
An industrial undertaking in which the investment in fixed assets in plant and
machinery, whether held on ownership terms, or on lease or by hire purchase, does not
exceed Rs. 100 lakhs and has an obligation to export 30% of production.
Medium Scale Industry:
Medium Scale Industries are those units with investment in plant and machinery
above the small scale industry limit up to Rs. 10 crores.
Cottage industry:
These are also called hose hold industries are characterized by the following
features:
They are organized by individuals private resources and with the help of members of the
household including family labour and are pursued as full time or part time occupation.
The capital investment is small and the components used are simple. These industrial
units normally use local resources and local skills. The output produced in each
Features of small scale industries:
1. Generally a small scale industry is run by one person. Means that the ownership
pattern in sole proprietorship. Or some moderately partnership pattern is common.
2. The proprietor himself or herself may the manager of the industry. It is most
common in SSI industries.
3. Small scale industries has lesser gestation period.
4. The scope of operation is associated to the local area where the SSI industry
located.
5. Local resources are used to produce goods and services, most commonly purchase
from outside.
6. Small industries are labour intensive. Having little capital SSI industries operate
with the unskilled labourers where skilled labourers are lesser with compared to the
large-scale industries. Family members are the larger in labours of the SSI
industries.
7. SSI industries decentralized to rural areas only.
8. SSI industries has changing nature to the social economic fluctuations. Even they
are more flexible to the new products, raw material, capital etc,.
Relationship between small-scale industries and large scale industries:
Competition:
Small-scale industries cannot compete with the large scale industries.
Supplementary:
Small industries can fill the gap between large scale products and standard outputs
caused by the large scale industries.
Complementary:
Small industries supply the complementary products to the large-scale industries. It
like walking by two legs one is small and another is large one.
Initiative:
Small-scale production sometimes act as initiative to the large scale production.
Servicing;
Small scale industries provides servicing and repairing services to the large scale
units.

Importance of small scale industries:

1. Small scale industries are labour intensive industries wherein they provide the
employment to the rural unskilled labourers.
2. Flexibility of small scale industries provides change to the technical and economic
organization with compared to the large scale industries.
3. They are highly adoptable to the market changes .
4. The social cost of developing small units specially handicrafts and village industries
is lower.
5. They are essential to the combating the poverty and unemployment.
6. SSI industries ensures the balanced regional development.
Role played by SSI in the development of Indian economy:
Being country of village, India is more needed the SSI sector. As Gandhiji observed
economic development can only be achieved if SSI industry is developed.
Following are the main contribution of SSIs to the development of Indian economy:
1. Share in industrial output:
There has been an increase in the total volume of output of SSI industries. From
producing of non-durable consumer goods to the durable electronic consumer goods, the
SSI Sector contributing major share to the economy.
2. Employment Generation:
Small scale industries are labour intensive techniques and therefore provide
employment on large scale.
3. Contribution to the export:
Ready made garments, sport goods leather products food products engineering goods
etc are largely exported by the small scale sector. These exports strengthen the
country's balance of payments position by strengthening its foreign export change
reserves.
4. Optimization of capital:
Small scale firms requires less capital per unit of output and provide quick returns on
investment due to shorter gestation period.
5. Mobilization of local resources:
SSI plays important role in mobilizing the local resources to produce goods from
that they make optimum utilization of local resources.
6. Equitable distribution of National Income:
They play important role in distribution of income to financial backward people and so
that they balance income with all category of people in the society.
7. Support to the large scale industries:
Small scale industries play a complementary role to large scale sector. They provide
parts, components, accessories, to large scale industries.
8. Socio-economic development:
Small-scale industries are engaged in development of socio-economic
progress by eliminating the concentration of income in the society.
9. Cultural heritage:
India is known for it handicrafts and fine arts. It improves the quality of life by bringing
the unrecognized rural skills to mainstream of society
Problems faced by the Small Scale Industries:
1. Even having vast potentiality the SSI sector could not progressed satisfactorily due
to:
2. Lack of finance and credit.
3. Lack of raw materials
4. Problem of skilled and inefficient labour.
5. Lack of machinery and equipment
6. Problems of marketing
7. Unsuitable location.
8. Inadequate infrastructure.
9. Poor project planning.
10. Competitions from large scale units
11. Lack of research and development
12. Adverse affects of economic reforms and globalization.

Steps taken by the government to solve the problems

The government has taken many steps to solve the problems of SSI industries by
considering the importance of SSI Sector and contribution to the economic development.
Those are in the form of
1. Financial assistance:
The government suggested the banks to provide loans and credit to the SSIs with lower
interest rates.
a. The RBI evolved the credit guarantee scheme under that it guarantees the banks for
credit extended by them to the small scale industries.
b. Public and private banks are advised to provide concessional long term and short-
term finance to the SSI.
c. Fiscal concessions like exemption from exercise duty, subsidy to units in backward
areas tax holidays etc.
d. Several schemes have been introduced to provided financial assistance to the small
scale sector:
1. Small industries Development Fund (SIDF) set up in 1986 to refinance assistance
for development, expansion, diversification, and rehabilitation of small units.
2. National Equity Fund (NEF) was set up in 1987 that provides equity support to
small entrepreneurs for setting up new projects and rehabilitating sick industries.
3. Single Window Scheme (SWS) was set up in 1988 to provide working capital loans
and term loans to the small scale industries.
4. Small Industries Development Bank of India (SIDBI) was set up in 1989 to
provide financial assistance to small industries.
2. Marketing Assistance:
Products of small-scale industries are usually unbranded and therefore face difficulties
in their marketing. To ensure smooth sale of products the govt buys some products from
small firms. The National Small Scale industries corporation (NSIC) was set up in 1955
and it helps SSI secure orders from the Director General of Supplies and Disposals.
3. Technical Assistance:
Following steps are taken to provide technical assistance to the small-scale industries:
a. Central small scale industries organization (CSIO) provides technically qualified
staff to advise on their technical problems.
b. Common facility workshops help small industries in undertaking difficult
production operations at reasonable cost.
c. A council for Advancement of Rural Technology (CART) was set up in 1982 to
provide technical help to rural industries.
d. Technology development and modernization fund (TDMF) has been set up for
modernizing and updating the technology of export oriented units.
e. Small industries development organizations (SIDO) provides technical and non-
technical assistance to the small scale industries.
4. Infrastructural Facilities:
Infrastructural facilities like power, transport, communication etc., provided by
integrated infrastructure development centers (IIDC) set up in March 1994.
5. Industrial estates:
Industrial estates have been set up to provide basic common facilities to small
entrepreneurs at reasonable prices.
6. Allocation of raw materials and other equipments:
State Small Industries Development Corporation have adopted measures to
supply raw materials and imported components to small-scale units on a priority basis.
7. Reservation of item:
About 812 items have been reserved for exclusive production by the small-scale
sector. This gives protection to small-scale industries and strengthens their competitive
position with large-scale industries.

Sickness of Industries:
Introduction:
The sickness of industries is very acute in india. It
Effects adversely to the healthy of the nation's economy. In india many of industries are
showing poor performance in the form of consistent losses, and frequently failures in
debt repayment obligations. In 1985, Sick Industrial Companies (special Provisions) Act,
was passed to make industries to bring up them in financial performance.
Definition of sickness of industry:
In common terms the sickness is one, which is not healthy.
According to the RBI,
if any one of it borrowed accounts has remained sub standard for more than two years,
i.e., principal or interest in respect of any of its borrowed accounts has remained over due
for a period exceeding 2 ½ years and
there is erosion in the net worth due to accumulated cash, losses to the extent of minimum
50% or more of its peak net worth during the preceding two accounting years.
According to the State Bank of India:
“A sick small scale unit is one which fails to generate internal surplus on continual
basis and depends for its survival upon frequent infusion of external funds.”
According to the State Financial Corporation:
A small scale industry is considered as sick unit if it has failed to pay them:-
1. Two installments of loan repayment, or
2. Three installments of interest payment on loans.
Symptoms of sickness:
 The signals of symptoms of industrial sickness are:
 There are continuous cash losses.
 Continuous decline in gross output.
 Irregularities in payment of cash credit or advances.
 Failure in payments of installments of principal and interest.
 Complaint from suppliers of raw material, power , water and bills.
 Frequent closure of units.
 Heavy rejection of goods from customers for quality problems .
 Larger and longer outstanding in bill accounts.
Causes of industrial sickness:
There is no single factor which caused to sickness. There are two main reasons which
causes to the industrial sickness.
1. External causes
2. Internal casues.
External causes:
These causes are beyond the control of industry which aroused from external
factors. Those are:
Changes in the industrial policies of the government form time to time.
Inadequate and untimely availability of necessary inputs like raw materials, power,
transport, and the skilled labour.
Lack and shrinkage of demand for the product.
Recessionary trends hovering in the economy.
Frequent industrial strikes and labour unrest.
Shortage of financial resources especially working capital.
Natural calamities like drought, floods, etc.
Internal causes:
Internal or endogenous causes are those which are within the control of the unit.
 Wrong selection of product
 Lack of good management.
 Outdated or obsolete production methods.
 Poor implementation.
 Marketing problems
 Non-availability of raw materials
 Shortfall of working capital
 Labour trouble.
 Technical and operational problems.
 Etc,.
Consequences of industrial sickness:
1. Huge financial losses to the banks and financial institutions.
2. Loss to employment opportunities.
3. Emergence of industrial unrest.
4. Adverse effect on prospective investors and entrepreneurs.
5. Wastages of scarce resources.
6. Loss of revenue to the government.
Remedial measures or steps taken to wipe out the industrial sickness:
The industrial sickness is the social problem in India. There are number of steps
taken by the government to overcome the problem of industrial sickness.
(1). Policy, framework of the government:
As per the guidelines released in 1981, the central government, state government
and financial institutions are required to monitor the sickness and coordinate the action
for revival and rehabilitation of sickness.
(2). Sick Industrial Companies Act, 1985.
The objectives of SICA are:
1. Afford maximum protection of employment
2. Optimize the use of funds.
3. Salvage the production assest.
4. Releasing the amounts due to the banks.
5. Replace the existing time consuming and inadequate machinery by efficient
machinery for expeditious determination by a body of experts.
(3). Steps taken by the commercial banks:
The commercial banks taken following steps:
1. Grant additional working capital facilities to over come the shortage of working
capital by such units.
2. Recovery of interest at reduced rates.
3. Suitable moratorium on payment of interest.
4. Freezing a portion of the outstanding in the accounts etc.
(4). Concessions by government:
 Income tax relief:
 Margin money scheme.
 Liberalized Money Scheme.
 Excise Loan Scheme.
(5). The Industrial Investment Bank of India:
The IIBI is establishes for the purpose of
1. To provide financial assistance to the sick industrial units.
2. To provide managerial and technological assistance to sick industrial units.
3. To secure assistance of other financial institutions and the government agencies for
ensuring the revival and rehabilitation of sick industrial units.
4. To provide merchant banking services for amalgamation, merger, etc and
5. To provide constancy services to banks in matters relating to sick industrial units.

Medium Scale Industry:

It is an industry which invests more than Rs 100 lakhs on plant machinery and the
total project cost does not exceed Rs 500 lakhs. An Industrial Entrepreneur
Memorandum (IEM) is being by the Ministry of Industry, Govt. of India.
Large Scale Industries
It is an industry which invests more than Rs 100 lakhs on plant machinery and the
total project cost exceeds Rs 500 lakhs. An Industrial Entrepreneur Memorandum
(IEM) or Industrial Licence (IL) is being by the Ministry of Industry, Govt. of India
Large scale industries refers to those industries which require huge infrastructure,
man power and a have influx of capital assets. The term 'large scale industries' is a generic
one including various types of industries in its purview. All the heavy industries of India
like the Iron and steel industry, textile industry, automobile manufacturing industry fall
under the large scale industrial arena. However in recent years due to the IT boom and
the huge amount of revenue generated by it the IT industry can also be included within
the jurisdiction of the large scale industrial sector. Last but not the least the telecoms
industry also forms and indispensable component of the large scale industrial sector of
India. Indian economy is heavily dependent on these large industries for its economic
growth, generation of foreign currency and for providing job opportunities to millions of
Indians.