presentation for bussiness studies
Bell rang...
Neenu and Janu are returning home, from school. They were discussing about the topic they have learned today, in their social class. Revathy ma'am taught them that, in our nation ''GOVERNMENT ASSIST MANY SMALL BUSINESS UNITS ''. Janu was contemplating about the same topic mentioned above. LET'S TRY TO PERCEIVE HOW NEENU HELPED HER TO FIND A SOLUTION!!!
The Indian government has taken several measures to promote the growth of small businesses and protect them from large-scale business units. According to the National Council of Educational Research and Training (NCERT), the government has reserved 590 products that can be produced exclusively by small-scale units. The Ministry of Small Scale Industries and Agro and Rural Industries is the nodal ministry for the formulation of policy and coordination of central assistance for the promotion and development of small-scale industries in India .
1. Government Policies For Small Scale Industries
India has recently been described as the world’s only genuinely emerging market at the moment. The growing SME sector of India propels a portion of this development. The Small and medium-sized sector accounts for over 40% of the total GDP and continues to be a vital source of jobs for the increasing population of India. Recognising the significance of Local SMEs in the government has launched several schemes to boost the SME sector.
As a result, India is experiencing a boom in startups in all industries, including IT, service delivery, wellness, technology, and others. The government has launched several schemes to make the process quick in order to enable young entrepreneurs to kickstart startup companies that will ultimately generate job opportunities. The majority of these schemes offer financial aid in the form of subsidies and loans to prospective individuals and organisations.
2. Beneficial Government Policies for Budding Entrepreneurs
1. Atal Incubation Centre (AIC)
Atal Incubation Centre is a funding scheme that Started in the year 2016. Envisioned by the NITI Aayog, this aims at supporting entrepreneurs by covering their operating costs of capital. The approved business ventures can avail up to Rs. 10 crore over a five-year term. Atal Incubation Centre allows researchers, students, and startup owners to apply for the scheme across different verticals and sectors. The entrepreneurs can set their company as a Public-private partnership, Public organisations, or as a completely private organisation. The entrepreneur needs to set up space of around 10,000 sq. ft. and should set up the physical infrastructure within six months of disbursement of financial assistance.
AICs would be provided a maximum of 50% of the total project cost, subject to a maximum of Rs. 10 crore per AIC which would cover capital and operational expenditure.
2. MSME Business Loans in 59 Minutes
Right now, the MSME Business Loans in 59 Minutes is undoubtedly the most discussed business loan scheme. This program was introduced in the year 2018 by the Government of India. This scheme is introduced to provide financial assistance to micro, small, and medium enterprises. The entrepreneurs can avail of loans of up to one crore under this scheme. This scheme is very quick and, within 59 minutes, you will know about your eligibility. Disbursement of the financial assistance happens within 1-2 weeks. A majority of the public sector banks are a part of this scheme.The maximum and minimum loan amount one can avail under MSME loan in 59 minutes is INR 10 lakhs and 5 crores. And in NBFC business loan, it is as less as just INR 1 lakh to 5 crores. Although you will get loan approval in 59 minutes, the loan would be disbursed in 7-8 days in the 59-minute loan.
3. National Small Industries Corporation Subsidy
NSIC subsidy offers two forms of financial benefits for small businesses: Raw Material Assistance and Marketing Assistance. Raw Material Assistance helps to purchase raw materials from abroad and from India. Marketing Assistance, on the other hand, helps to improve the sales of products and services with an efficient marketing process. The program is introduced to provide loans to SMEs who are looking for growth or rapid expansion.
National Small Industries Corporation Subsidy Credit Amount: The National Small Industries Corporation (NSIC) facilitates MSMEs in accessing credit support (fund-based or non-fund-based limits) of up to INR 5 lakh from the banks.
4. MSME Market Development Program
This development program is designed to provide market expansion assistance to micro, small, and medium enterprises using international events, trade fairs, and roadshows. This system helps in the growth of the business by providing them assistance in terms of expansion into international markets.
Any startup organisation registered under District Industries Centre can apply for this program under which the to and fro travelling expenses will be borne by the government for participating in international exhibitions. Not only that, it bears half of the accommodation charges and ¾ amount of the participation charges.
In February 2023, government revamped credit guarantee scheme for MSMEs to take effect from April 1, 2023 through the infusion of Rs. 9,000 crore (US$ 1.09 billion) in the corpus. This scheme would enable additional collateral-free guaranteed credit of Rs 2 lakh crore (US$ 24.41 billion) and also reduce the cost of the credit by about 1%.
5. MUDRA Loans
The Government of India initiates MUDRA loans for providing business finance for micro-business units. This program was launched with the single motive of ‘paying the unfunded’. Since most of the time, the small-medium enterprises suffer from lack of funds, the government launches this program to encourage participation and growth of the startups across different sectors like trading, manufacturing, services, etc.
There are three categories of Mudra loan products: Shishu, Kishore, and Tarun. The maximum loan amount that can be disbursed is Rs. 10 lakh 12. The repayment period is between 3 to 5 years, including a moratorium of up to 6 months 2
3. Government Policies For SMEs In India
The best government policies for SMEs in India are as follows:
- Market Development Assistance Scheme for MSMEs
- Mini Tools Room And Training Centre Scheme
- Credit Guarantee Fund Scheme for MSEs (CGMSE)
- National Award Scheme
- Credit Link Capital Subsidy Scheme for Technology Upgradation
4. Government Loan Schemes for Small Businesses in India
India has been noted as the country with the highest number of SMEs in the world. The government policies for small scale industries are pretty diversified according to the needs of entrepreneurs. Let's have a look at some of the government policies for SMEs in India:
- MSME Business Loans in 59 Minutes- Announced in September 2018, under which you get financial assistance for MSME growth. This process takes 8-12 days for completion where public sector banks grant the funds.
- Credit Link Capital Subsidy Scheme for Technology Upgradation- It is also known as CLCSS this aims for lowering the production cost of goods and services for small and medium enterprises. This scheme is authorised and monitored by the Ministry of Small-Scale Industries.
- MUDRA Loans- This program was launched with the single motive of ‘paying the unfunded’. Their structure is divided into 3 categories- Sishu Loans, Tarun Loans, and Kishor Loans.
- National Small Industries Corporation Subsidy- Also known as NSIC, it offers financial benefits for Raw Material Assistance and Marketing Assistance.
- Credit Guarantee Fund Scheme for Micro and Small Enterprises- Launched in the year 2000 it's a financial support scheme for all MSMEs in India. It offers working capital loans of around 10 Lakh Rupees for both new and existing businesses.
5. Government Policies For Business In India
The country is filled with new business enthusiasts every other day and the governing parties curates policies helping them grow. Let us check out the top government policies for business in India:
- Incentives and Subsidies for Home Industries
- Conducting Routine Quality Inspections
- Commercial Technology Transfer
- Developmental Assistance to Small Scale Industries
- Timely Information Supply
- Basic Infrastructure Provision
- Balancing Regional Growth & Development
- Rendering Monetary System
- Sustaining Law and Order
- Establishing & Implementing Laws
6. Key Takeaways
It is gruesome to start a home-based company and run it for a longer period of time and earn profits. The funding of startups and SMEs mentioned above is intended to reduce the burden of budding entrepreneurs. You can use this financial assistance for equipment purchase, machinery upgradations, space rental, etc., depending upon your line of business. However, it is necessary to carry out due diligence, homework, and proper study before shortlisting any particular scheme for your business.
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FAQs
Q. What is SME?
Ans- SMEs stands for small and medium enterprises. For every country, there is a separate definition of SME. If a company has less than 50 employees, it will be considered a small enterprise. The medium enterprise is the one where the number of employees is less than 250.
Q. Which is the most profitable small scale business in India?
Ans- This is a list of the top 15 most profitable small scale businesses in India:
- Apparel Boutique Stores
- Catering
- Coaching Classes
- Consultancy Companies
- Indian Handicrafts
- Jobs & Placement Services
- Salon
- Ice-Cream Parlour
- Travel Agency
- Wedding Bureau
- Photography
- Fitness Instructor
- Cooking Classes
- Online Businesses
- Embroidery/Tailoring
Q. Are SMEs and MSMEs the same?
Ans- Yes, in India the SMEs are known as MSMEs.
Q. What are the problems faced by MSMEs?
Ans- Some of the problems faced by MSMEs in India are:
- Usage of obsolete technology.
- Nonprofessional entrepreneurship and management.
- Massive competition from large scale industries and imports.
- Inadequate infrastructure, especially in rural areas.
- Harder to achieve economies of scale.
Government assistance to small scale industries
In India there are various institutions which provide financial and technical assistance to small scale industries. They are:
1- National Bank for Agriculture and Rural Development (NABARD)
- NABARD was set up in 1982 to promote integrated rural development.
- Apart from agriculture, it supports small industries, cottage industries, and rural artisans using credit and non-credit approach.
- It offers counseling and consultancy services and organizes training and development programs for rural entrepreneurs.
2.The rural Small Business Development Centre
3- National small Industries Corporation (NSIC)
It was set up in 1955 to promote small business units in the country. It helps small business in the following ways:
- Supply indigenous and imported machinery on easy hire purchase terms
- It distributes indigenous and imported raw materials.
- Export the products of small business units.
- Creating awareness on technological up gradation.
nill. Small Industries Development Bank of India (SIDBI)
It is an apex bank set up to meet the credit requirements of small scale sector. It was established in 1990 and its head quarters located at Lucknow. SIDBI provide financial assistance to small scale sector in the following way:
- Refinancing term loans
- Discounting and rediscounting bills of exchange
- Extension of equity type assistance
- Providing of factoring and leasing services
nill. State Industrial Development Corporation (SIDCO)
The important functions of SIDCO are as follows:
- To procure and supply of scarce raw materials.
- To supply machinery on hire purchase system.
- To provide marketing assistance.
- To construct industrial estates and providing infra structure facilities.
5- District Industries Centers (DIC)
- It was established in 1978 to coordinate various needs of small entrepreneurs.
- It acts as the chief coordinator in respect of various government departments and other government agencies.
- Registration of small industries is done at the DIC.
- They provide all services support to small entrepreneurs at under a single roof.
- Every district has one DIC to deal with all requirements small entrepreneurs.
The important functions performed by DIC are:
- To conduct techno-economic surveys to fix product lines .
- To arrange artisan training programmes.
- To advise entrepreneurs in matters relating to selecting appropriates machinery and equipments, sources of supply, assessing the requirements of raw materials etc.
- To arrange for the financial assistance with the lead banks in the respective areas
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