Government encouragement to entrepreneurship

1. Government Encouragement to Entrepreneurship
From-
BADM Dept.
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2.  An entrepreneur requires a continuous flow of funds not only for setting up of
his/ her business, but also for successful operation as well as regular up
gradation/ modernization of the industrial unit. To meet this requirement, the
Government (both at the Central and State level) has been undertaking several
steps like setting up of banks and financial institutions; formulating various
policies and schemes, etc. All such measures are specifically focused towards
the promotion and development of small and medium enterprises.
 The government of India has been taking active steps to promote
entrepreneurship in various industry & service sectors. It has declared several
policy measures and is implementing schemes and programmes to enhance
the global competitiveness of small enterprises across the country.
Government Support
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3. Policies and Incentives
 The Ministry of Micro, Small and Medium Enterprises is the nodal Ministry for
formulation of policies, programmes and schemes, their implementation and related
co-ordination, for the promotion and development of small scale industries in India.
The role of the Ministry is to assist the States in their efforts for the growth of the small
scale sector, by enhancing their competitiveness in an increasingly liberalized economy.
It is assisted by an attached office and two public sector enterprise, namely:-
Micro, Small and Medium Enterprises Development Organization (MSME-DO)
National Small Industries Corporation Ltd (NSIC)
Khadi and Village Industries Commission (KVIC)
Coir Board
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4.  Micro, Small and Medium Enterprises Development Organization (MSME-DO) :- the Office
of the Development Commissioner (Micro, Small and Medium Enterprises) is also known as
Micro, Small and Medium Enterprises-Development Organization (MSME-DO). It is the apex
body for assisting the Government in formulating, coordinating, implementing and
monitoring policies and programmes for micro, small and medium enterprises (MSMEs) in
the country. MSME-DO provides a comprehensive range of common facilities, technology
support services, marketing assistance, entrepreneurial development support, etc.
 Coir Board :- is a statutory body, established under the Coir Industry Act, 1953, for the
promotion and development of coir industry in India as well as for uplifting the living
conditions of the workers engaged in this industry.
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5.  National Small Industries Corporation Ltd (NSIC) :- was established by the Government
with a view to promoting, aiding and fostering the growth of micro, small and medium
enterprises in the country, with a focus on commercial aspect of their operations. It
implements several schemes to help the MSMEs in the areas of raw material procurement,
product marketing, credit rating, acquisition of technologies, adoption of improved
management practices, etc.
 Khadi and Village Industries Commission (KVIC) :- established under the Khadi and Village
Industries Commission Act, 1956, as a statutory organisation engaged in promotion and
development of khadi and village industries for providing employment opportunities in the
rural areas.
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6. The other important policies for the sector
relate to:
I. Excise duty
II. Foreign direct investment approval
III. Labour laws
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7. Excise duty
Value of Clearance (Rs.) Rate of duty
Upto 100 Lakhs 60% of normal rate
100-300 Lakhs Normal rate of duty
Rate of duty in respect of Clearances of Specified goods
Rate of duty in respect of Clearances of Specified goods
Value of Clearance (Rs.) Rate of duty
Upto 100 Lakhs Nil
100-300 Lakhs Normal rate of duty
Rate of duty in respect of Clearances of Excisable Goods
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8. Foreign direct investment approval
 FDI is an investment in a business by an investor from another country for which the foreign investor has
control over the company purchased.
 An industrial undertaking, i.e., a company with interests in industry can invest up to 24% equity in a SSI unit.
 If the equity goes beyond 24%, the industrial unit loses its SSI status.
 There is no restriction on the extent of equity that can be held by a Non-resident Indian (NRI) as an
individual/partner in a SSI unit.
 Investors need to file an application with the Reserve Bank of India (RBI) in the prescribed format and
approval is ordinarily granted within 15 days.
 For foreign investment outside the automatic route, clearance has to be obtained from Foreign Investment
Promotion Board (FIPB).
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9. Labour laws
 Employment Exchange (Compulsory Notification of
Vacancies) Act, 1959
 Equal Remuneration Act, 1976
 The Factories Act, 1948
 The Industrial Disputes Act
 The Industrial Employment (Standing Orders) Act,1946
 The Inter-state Migrant Workmen (Regulation of
Employment and Conditions of Service) Act, 1979
 Labour Laws (Exemption from Furnishing Returns &
Maintaining Registers by Certain Establishments) Act, 1988
 The Sales Promotion Employees (Conditions of Service)
Act, 1976
 The Shops and Establishments Act, 1953
 The Trade Union Act, 1926
 Workmen’s Compensation Act, 1923
 The Weekly Holidays Act, 1942
Apprentices Act, 1961
The Bidi and Cigar Workers (Conditions of Employment)
Act, 1966
Bonded Labour System (Abolition) Act, 1976
Child Labour (Prohibition & Regulation) Act, 1986
The Children (Pledging of Labour) Act, 1933
The Contract Labour (Regulation & Abolition) Act, 1970
The Employees Provident Funds and Misc. Provisions Act,
1952
Employees State Insurance Act, 1948
Employers Liability Act, 1938
Maternity Benefit Act, 1961
The Minimum Wages Act, 1948
The Payment of Bonus Act, 1965
The Payment of Gratuity Act, 1972
The Payment of Wages Act, 1936
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10. Schemes and Programmes:
 Besides, several schemes and programmes have been undertaken by the Government
with the aim of facilitating access to:-
i. adequate credit from financial institutions;
ii. funds for technology upgradation and modernisation;
iii. integrated infrastructural facilities;
iv. modern testing facilities and quality certification laboratories;
v. modern management practices, entrepreneurship development and skill up
gradation through appropriate training facilities; etc.
The schemes so announced include:- (next slide)
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11. Schemes and Programmes:…contd…
 Tax Holiday Scheme
 Composite Loan Scheme
 Industrial Estate Scheme
 Scheme for International Cooperation
 Scheme of Surveys, Studies and Policy Research
 Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
 Scheme of Product Development, Design Intervention and Packaging
(PRODIP)
 Scheme of Khadi Karigar Janashree Bima Yojana for Khadi Artisans
 Scheme of Interest Subsidy Eligibility Certification (ISEC)
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12. Government help & Assistance
 Technical Assistance
 Raw material Assistance
 Cash Assistance
 Supply of Machinery & Equipment
 Marketing Assistance
 Assistance to small Entrepreneurs
 Rural Industrial Project Assistance
 Help to disabled Entrepreneurs
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13. Government help & Assistance
 Training Assistance to Women Entrepreneurs
 Single point registration for Government Purchase
 Facility of Exhibition
 Buyer Seller Meet
 Credit Support to MSMEs
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14. Government Incentives
 Investment Subsidy
 Export/ Import Subsidy
 Research & Development Subsidy
 Tax Subsidy
 Subsidy relating to Resources
 Capital Subsidy Scheme for Technology Upgradation
 Excise duty Exception
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15. Government schemes for Infrastructural Facilities
 Industrial Estates Programme
 Integrated Infrastructural Development Scheme
 Small Industry Clusters
 MSME tool Rooms
 Technology Development Centres
 Testing Centres & Stations
 Technology & Quality Upgradation
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16. Government schemes for Infrastructural Facilities
 Design Clinics
 Promotion of Information & Communication Tools
 WTO sensitization Workshop
 Vendor Development
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