CHAPTER 1: FINANCIAL MANAGEMENT AND PROMOTION

1. TYPES OF CAPITAL?
Answer:
There are 2 types of capital. They are fixed capital and working capital:
Working capital:
Working

capital (abbreviated WC)

is

financial

metric

which

represents operating

liquidity available to a business, organization or other entity, including governmental entity.

Along with fixed assets such as plant and equipment, working capital is considered a part of
operating capital. Gross working capital equals to current assets. Working capital is calculated
as current assets minus current liabilities.[1] If current assets are less than current liabilities, an
entity has a working capital deficiency, also called a working capital deficit.
A company can be endowed with assets and profitability but short of liquidity if its assets cannot
readily be converted into cash. Positive working capital is required to ensure that a firm is able to
continue its operations and that it has sufficient funds to satisfy both maturing short-term
debt and upcoming operational expenses. The management of working capital involves
managing inventories, accounts receivable and payable, and cash.
Calculation:
Working capital is the difference between the current assets and the current liabilities. It is the
amount invested by the promoters on the current assets of the organisation.
The basic calculation of the working capital is done on the basis of the gross current assets of the
firm.
working capital = current assets - current liabilities
Inputs

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Current assets and current liabilities include three accounts which are of special importance.
These accounts represent the areas of the business where managers have the most direct impact:
accounts receivable (current asset)
inventory (current assets), and
accounts payable (current liability)
The current portion of debt (payable within 12 months) is critical, because it represents a shortterm claim to current assets and is often secured by long term assets. Common types of shortterm debt are bank loans and lines of credit.
An increase in net working capital indicates that the business has either increased current
assets (that it has increased its receivables, or other current assets) or has decreasedcurrent
liabilitiesfor example has paid off some short-term creditors, or a combination of both.

Fixed capital:
Fixed capital is a concept in economics and accounting, first theoretically analyzed in some
depth by the economist David Ricardo. It refers to any kind of real or physical capital(fixed
asset) that is not used up in the production of a product. It contrasts with circulating capital such
as raw materials, operating expenses and the like.
So fixed capital is that portion of the total capital outlay that is invested in fixed assets (such as
land, buildings, vehicles, plant and equipment), that stay in the business almost permanently - or
at the very least, for more than one accounting period. Fixed assets can be purchased by a
business, in which case the business owns them. They can also beleased, hired or rented, if that is
cheaper or more convenient, or if owning the fixed asset is practically impossible (for legal or
technical reasons).
Refining the classical distinction between fixed and circulating capital in Das Kapital, Karl
Marx emphasizes that the distinction is really purely relative, i.e. it refers only to the comparative
rotation speeds (turnover time) of different types of physical capital assets. Fixed capital also
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"circulates", except that the circulation time is much longer, because a fixed asset may be held
for 5, 10 or 20 years before it has yielded its value and is discarded for its salvage value. A fixed
asset may also be resold and re-used, which often happens with vehicles and planes.
In national accounts, fixed capital is conventionally defined as the stock of tangible, durable
fixed assets owned or used by resident enterprises for more than one year. This includes plant,
machinery, vehicles & equipment, installations & physical infrastructures, the value of land
improvements, and buildings.
The European system of national and regional accounts (ESA95) explicitly includes produced
intangible assets (e.g. mineral exploitation, computer software, copyright protected
entertainment, literary and artistics originals) within the definition of fixed assets.

2. FACTORS INFLUENCING TYPES OF CAPITAL?

Answer:
Main factors affecting the working capital are as follows:
(1) Nature of Business:
The requirement of working capital depends on the nature of business. The nature of business is
usually of two types: Manufacturing Business and Trading Business. In the case of
manufacturing business it takes a lot of time in converting raw material into finished goods.
Therefore, capital remains invested for a long time in raw material, semi-finished goods and the
stocking of the finished goods.
Consequently, more working capital is required. On the contrary, in case of trading business the
goods are sold immediately after purchasing or sometimes the sale is affected even before the
purchase itself. Therefore, very little working capital is required. Moreover, in case of service
businesses, the working capital is almost nil since there is nothing in stock.
2) Scale of Operations:

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There is a direct link between the working capital and the scale of operations. In other words,
more working capital is required in case of big organisations while less working capital is needed
in case of small organisations.
(3) Business Cycle:
The need for the working capital is affected by various stages of the business cycle. During the
boom period, the demand of a product increases and sales also increase. Therefore, more
working capital is needed. On the contrary, during the period of depression, the demand declines
and it affects both the production and sales of goods. Therefore, in such a situation less working
capital is required.
(4) Seasonal Factors:
Some goods are demanded throughout the year while others have seasonal demand. Goods which
have uniform demand the whole year their production and sale are continuous. Consequently,
such enterprises need little working capital.
On the other hand, some goods have seasonal demand but the same are produced almost the
whole year so that their supply is available readily when demanded.
Such enterprises have to maintain large stocks of raw material and finished products and so they
need large amount of working capital for this purpose. Woolen mills are a good example of it.
(5) Production Cycle:
Production cycle means the time involved in converting raw material into finished product. The
longer this period, the more will be the time for which the capital remains blocked in raw
material and semi-manufactured products.
Thus, more working capital will be needed. On the contrary, where period of production cycle is
little, less working capital will be needed.
(6) Credit Allowed:
Those enterprises which sell goods on cash payment basis need little working capital but those
who provide credit facilities to the customers need more working capital.
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(7) Credit Availed:

If raw material and other inputs are easily available on credit, less working capital is needed. On
the contrary, if these things are not available on credit then to make cash payment quickly large
amount of working capital will be needed.
(8) Operating Efficiency:
Operating efficiency means efficiently completing the various business operations. Operating
efficiency of every organisation happens to be different.
Some such examples are: (i) converting raw material into finished goods at the earliest, (ii)
selling the finished goods quickly, and (iii) quickly getting payments from the debtors. A
company which has a better operating efficiency has to invest less in stock and the debtors.
Therefore, it requires less working capital, while the case is different in respect of companies
with less operating efficiency.
(9) Availability of Raw Material:
Availability of raw material also influences the amount of working capital. If the enterprise
makes use of such raw material which is available easily throughout the year, then less working
capital will be required, because there will be no need to stock it in large quantity.
The requirement of fixed capital depends upon various factors which are explained below:
1. Nature of Business:
The type of business Co. is involved in is the first factor which helps in deciding the requirement
of fixed capital. A manufacturing company needs more fixed capital as compared to a trading
company, as trading company does not need plant, machinery, etc.
2. Scale of Operation:
The companies which are operating at large scale require more fixed capital as they need more
machineries and other assets whereas small scale enterprises need less amount of fixed capital.
3. Technique of Production:
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Companies using capital-intensive techniques require more fixed capital whereas companies
using labour-intensive techniques require less capital because capital-intensive techniques make
use of plant and machinery and company needs more fixed capital to buy plants and machinery.
4. Technology Up-gradation:
Industries in which technology up-gradation is fast need more amount of fixed capital as when
new technology is invented old machines become obsolete and they need to buy new plants and
machinery whereas companies where technological up-gradation is slow they require less fixed
capital as they can manage with old machines.
5. Growth Prospects:
Companies which are expanding and have higher growth plan require more fixed capital as to
expand they need to expand their production capacity and to expand production capacity
companies need more plant and machinery so more fixed capital.
6. Diversification:
Companies which have plans to diversify their activities by including more range of products
require more fixed capital as to produce more products they require more plants and machineries
which means more fixed capital.

3. CAPITAL STRUCTURE
Answer:
In finance, capital structure refers to the way a corporation finances its assets through some
combination of equity, debt, or hybrid securities.
A firm's capital structure is the composition or 'structure' of its liabilities. For example, a firm
that has $20 billion in equity and $80 billion in debt is said to be 20% equity-financed and 80%
debt-financed. The firm's ratio of debt to total financing, 80% in this example, is referred to as
the firm's leverage. In reality, capital structure may be highly complex and include dozens of
sources of capital.
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Leverage (or gearing) ratios represent the proportion of the firm's capital that is obtained through
debt (either bank loans or bonds).
The Modigliani-Miller theorem, proposed by Franco Modigliani and Merton Miller, forms the
basis for modern thinking on capital structure, though it is generally viewed as a purely
theoretical result since it disregards many important factors in the capital structure process
factors like fluctuations and uncertain situations that may occur in the course of financing a firm.
The theorem states that, in a perfect market, how a firm is financed is irrelevant to its value. This
result provides the base with which to examine real world reasons why capital
structure is relevant, that is, a company's value is affected by the capital structure it employs.
Some other reasons include bankruptcy costs, agency costs,taxes, and information asymmetry.
This analysis can then be extended to look at whether there is in fact an optimal capital structure:
the one which maximizes the value of the firm.

Capital Structure - What It Is and Why It Matters

The term capital structure refers to the percentage of capital (money) at work in a business by
type. Broadly speaking, there are two forms of capital: equity capital and debt capital. Each has
its own benefits and drawbacks and a substantial part of wise corporate stewardship and
management is attempting to find the perfect capital structure in terms of risk / reward payoff for
shareholders. This is true for Fortune 500 companies and for small business owners trying to
determine how much of their startup money should come from a bank loan without endangering
the business.
Let's look at each in detail:
Equity Capital: This refers to money put up and owned by the shareholders (owners). Typically,
equity capital consists of two types: 1.) contributed capital, which is the money that was
originally invested in the business in exchange for shares of stock or ownership and 2.) retained
earnings, which represents profits from past years that have been kept by the company and used
to strengthen the balance sheet or fund growth, acquisitions, or expansion.

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Many consider equity capital to be the most expensive type of capital a company can utilize
because its "cost" is the return the firm must earn to attract investment. A speculative mining
company that is looking for silver in a remote region of Africa may require a much higher return
on equity to get investors to purchase the stock than a firm such as Procter & Gamble, which
sells everything from toothpaste and shampoo to detergent and beauty products.
Debt Capital: The debt capital in a company's capital structure refers to borrowed money that is
at work in the business. The safest type is generally considered long-termbonds because the
company has years, if not decades, to come up with the principal, while paying interest only in
the meantime.
Other types of debt capital can include short-term commercial paper utilized by giants such as
Wal-Mart and General Electric that amount to billions of dollars in 24-hour loans from
the capital markets to meet day-to-day working capital requirements such aspayroll and utility
bills.
Other Forms of Capital: There are actually other forms of capital, such as vendor
financing where a company can sell goods before they have to pay the bill to the vendor, that can
drastically increase return on equity but don't cost the company anything. This was one of the
secrets to Sam Walton's success at Wal-Mart. He was often able to sell Tide detergent before
having to pay the bill to Procter & Gamble, in effect, using PG's money to grow his retailer. In
the case of an insurance company, the policyholder "float" represents money that doesn't belong
to the firm but that it gets to use and earn an investment on until it has to pay it out for accidents
or medical bills, in the case of an auto insurer.
Seeking the Optimal Capital Structure
Many middle class individuals believe that the goal in life is to be debt-free (see Should I Pay
Off My Debt Or Invest? ). When you reach the upper echelons of finance, however, that idea is
almost anathema. Many of the most successful companies in the world base their capital
structure on one simple consideration: the cost of capital. If you can borrow money at 7% for 30
years in a world of 3% inflation and reinvest it in core operations at 15%, you would be wise to
consider at least 40% to 50% in debt capital in your overall capital structure.

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Of course, how much debt you take on comes down to how secure the revenues your business
generates are - if you sell an indispensable product that people simply must have, the debt will be
much lower risk than if you operate a theme park in a tourist town at the height of a boom
market. Again, this is where managerial talent, experience, and wisdom comes into play. The
great managers have a knack for consistently lowering theirweighted average cost of capital by
increasing productivity, seeking out higher return products, and more.

4. FACTORS DECIDING CAPITAL STRUCTURE?

Answer:
Capital structure of a firm is determined by various internal and external factors. Following are
the main factors which affect the capital structure decision.
1. Size of A Firm
There is a positive relation between the capital structure and size of a firm. The large firms are
more diversified, have easy access to the capital market, receive higher credit ratings for debt
issues, and pay lower interestrate on debt capital. Further, larger firms are less prone to
bankruptcy and this implies the less probability of bankruptcy and lower bankruptcy costs.
Therefore, larger firms tend to use more debt capital than smaller firms.
2. Growth in Sales
Anticipated growth rate in sales provides a measure of extent to which earning per share (EPS)
of a firm are likely to be magnified by leverage. The firm is likely to use debt financing with
limited fixed charge only when the return on equity is likely to be magnified. However, the firms
with significant growth in sales would have high market price per share as a result of which they
might prefer equity financing. The firm should make a relative cost benefit analysis against debt
and equity financing in anticipation to growth in sales to determine appropriate capital structure.
3. Business Risk

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There is negative relation between the capital structure and business risk. The chance of business
failure is greater if the firm has less stable earnings. Similarly, as the probability of bankruptcy
increases the agency problems related to debt become more aggravating. Thus, as business risk
increases, the debt level in capital structure of the enterprises should decrease.
4. Debt Service Capacity
The higher debt level in capital structure increases the probability of bankruptcy and bankruptcy
costs of the enterprises. Probability of bankruptcy refers to the chances of cash flows to be less
than the amount required for servicing the debt. The debt service ratio measured by the ratio of
operating income to total interest charges indicates the firm's ability to meet its interest payment
out of its annual operating earnings. Therefore, the higher debt service ratio shows the higher
debt capacity of the enterprises. Hence, there is the positive relation between the debt service
capacity and capital structure of the firm.
5. Operating Leverage
The use of fixed cost in production process also affects the capital structure. The high operating
leverage; use of higher proportion of fixed cost in the total cost over a period of time; can
magnify the variability in future earnings. There is negative relation between operating leverage
and debt level in capital structure. Higher the operating leverage, the greater the chance of
business failure and the greater will be the weight of bankruptcy costs on enterprise financing
decisions.
6.Stability In Cash Flow
The firm's cash flow stability also affects its capital structure. If firm's cash flows are relatively
stable, then it may find no difficulties in meeting its fixed charge obligation. As a result, the firm
may attempt to take the benefits by using leverage to some extent.
7. Nature Of Industry
Capital structure of a firm also depends on the nature of industry in which it operates. If there
were no barriers in industry for the entry of new competing firms, the profit margin of existing

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firms in the industry would be adversely affected. As a result, the firm may find a more risky to
use fixed charge bearing securities.
8. Asset Structure
The sources of financing to be used are affected to several ways by the maturity structure of
assets to be used by the firm. If a firm has relatively longer term assets with assured demand of
their products, the firm attempts to use more long term debt. In contrast to this, the firms with
relatively greater investment in receivables and inventory rather than fixed assets rely heavily on
short-term financing.
5. SOURCES OF CAPITAL?
Answer:
The sources of fixed capital are :
(i) Equity Shares:
Equity shareholders are the owners of the company and their contribution constitute the main
source of finance. The promoters are the first to contribute towards share capital of the company
and the remaining amount of funds are raised through sale of shares to general public. Equity
shareholders are the risk bearers of the company and are going to absorb all stress and strains of
the business.
Financial structure of the company is strengthened by equity capital. Equity shareholders have
limited liability and they enjoy voting rights. They can increase their stake in the firm or can
keep full control over the company through issue of right and bonus shares. Equity capital is
permanent capital of the firm and there is no liability for repayment and even dividend payment
to the equity shareholders is not obligatory.
(ii) Preference Shares:
These shareholders enjoy preference w.r.t. dividend and return of capital. Those investors who
opt for limited but steady return on their investment prefer preference shares. Preference share
capital possesses certain features of both equity and debt capital. Preference shareholders receive
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dividend like equity shareholders. Similarly it is like debt capital since the rate of dividend is
predetermined.
Preference shares are not a permanent liability on the firm as dividend is payable only when
there are profits. A company can introduce flexibility in its capital structure by issuing
redeemable preference shares which can be redeemed when the company has sufficient profits.
These are not very popular in India and can be made more popular by issuing cumulative
convertible preference shares.
(iii) Debentures:
Debenture provides the firm with another option of raising term loans from the public.
Debentures are normally secured and yield a fixed percentage of interest. Thus they are less risky
and give regular return to debenture holders. With the issue of debentures shareholders can retain
control and earn more return on their investment.
Debenture capital add more financial burden on the firm during hard times and increase risk of
insolvency of the firm. Many companies in India in recent years have issued convertible or partly
convertible debentures with the discretion to convert them into equity shares of the company.
(iv) Term Loans:
These are the loans obtained from banks and financial institutions and constitute the most
important source of finance. Term loans are normally repayable within a period of ten years or
more and carry a fixed rate of interest.
Lending institutes insist on margin money from promoters and are ready to defer repayment till
gestation period is over. Term loans are raised for meeting fixed and working capital needs. Term
loans provide - the advantage of trading on equity and at the same time allow owners to have
control over the business.
(v) Retained Earnings:
Retained earnings reer to the surplus or reserve accumulated over years. This amount can be rePage 12 of 42

invested in the enterprise for upgradation and expansion. The cost of employment of this capital
is practically nil and at the same time no liability worth the name is created.
(vi) Capital Subsidy:
In order to tempt entrepreneurs towards backward areas the Central Government provides capital
subsidy. Similarly certain state governments too grant development loans to entrepreneurs for
setting up industries in exclusively notified areas in their states.

Long-Term Loans
A loan is the amount of money that is given to an individual or a company on the agreement they
will repay the amount borrowed in a period that exceeds 12 months and at predetermined interest
rates. Long-term loans are usually secured against certain assets and are offered by commercial
banks, the government and financial institutions. This type of loan provides the long-term
working capital for the business.
Short-Term Loans
Short-term loans are loans that are to be repaid within a year from the time they are borrowed.
Savings banks, cooperatives and the government through the Small Business Administration are
some of the institutions that offer these loans. Bank overdraft is one such source of business
finance. A bank overdraft is a withdrawal made by a business that exceeds the amount of balance
in its bank account, although the amount of money does not exceed a set limit.
Line of Credit
This is a form of a loan agreement between the bank and the borrower that enables the borrower
to acquire some amount of the funds on demand, but the borrower does not have to take the loan.
A business may secure working capital through this service if it has recurring expenses at regular
intervals.
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Trade Credit
This credit service offered by suppliers allows businesses to get goods and pay for them later.
This is a source of working capital that may be acquired from all suppliers depending on the
business arrangements, the type of business you conduct and the worth of the credit to be
offered.
Asset-Based Financing
A business may use its assets to secure working capital from financial institutions that offer asset
based loans. The asset includes machinery, vehicle or accounts receivable. Accounts receivable
are financial documents of people or companies that owe money to the business and they may be
traded in to finance working capital at discounting companies.
6. BUSINESS FINANCE?
Answer:
Business finance is also referred as corporate finance or financial management. Generally the
term corporate finance is connected with financial management of companies. However, it is
applied to all activities where finance is required such as agriculture, industry and services.
Financial management is concerned with raising of funds and utilization of funds. The main aim
of financial management is to attain maximum return on investment.
Objectives of financial management:
The financial management is generally concerned with procurement, allocation and control of
financial resources of a concern. The objectives can bea.

To ensure regular and adequate supply of funds to the concern.

b.

To ensure adequate returns to the shareholders which will depend upon the earning
capacity, market price of the share, expectations of the shareholders.

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c.

To ensure optimum funds utilization. Once the funds are procured, they should be utilized
in maximum possible way at least cost.

d.

To ensure safety on investment, i.e, funds should be invested in safe ventures so that
adequate rate of return can be achieved.

e.

To plan a sound capital structure-There should be sound and fair composition of capital
so that a balance is maintained between debt and equity capital.

7. ENTREPRENEURSHIP DEVELOPMENT PROGRAM?

Answer:
As the term itself denotes, EDP is a programme meant to develop entrepreneurial abilities among
the people. In other words, it refers to inculcation, development, and polishing of entrepreneurial
skills into a person needed to establish and successfully run his / her enterprise. Thus, the
concept of entrepreneurship development programme involves equipping a person with the
required skills and knowledge needed for starting and running the enterprise.
The main purpose of such entrepreneurship development programme is to widen the base of
entrepreneurship by development achievement motivation and entrepreneurial skills among the
less privileged sections of the society.
According to N. P. Singh (1985), Entrepreneurship Development Programme is designed to
help an individual in strengthening his entrepreneurial motive and in acquiring skills and
capabilities necessary for playing his entrepreneurial role effectively. It is necessary to promote
this understanding of motives and their impact on entrepreneurial values and behaviour for this
purpose. Now, we can easily define EDP as a planned effort to identify, inculcate, develop, and
polish the capabilities and skills as the prerequisites of a person to become and behave as an
entrepreneur.
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Objectives of EDP:
The major objectives of the Entrepreneurship Development Programmes (EDPs) are to:
a. Develop and strengthen the entrepreneurial quality, i.e. motivation or need for achievement.
b. Analyse environmental set up relating to small industry and small business.
c. Select the product.
d. Formulate proposal for the product.
e. Understand the process and procedure involved in setting up a small enterprise.
f. Know the sources of help and support available for starting a small scale industry.
g. Acquire the necessary managerial skills required to run a small-scale industry.
h. Know the pros and cons in becoming an entrepreneur.
i. Appreciate the needed entrepreneurial discipline.
j. Besides, some of the other important objectives of the EDPs are to:
k. Let the entrepreneur himself / herself set or reset objectives for his / her enterprise and strive
for their realization.
l. Prepare him / her to accept the uncertainty in running a business.
m. Enable him / her to take decisions.
n. Enable to communicate clearly and effectively.
8.

VARIOUS

ORGANIZATIONS

PROVIDING

ENTREPRENEURSHIP

DEVELOPMENT PROGRAMME?
Answer:
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The government has setup various centers or institutes to impart training and development to
entrepreneurs so as to improve their knowledge, attitudes, and skills. Some of the various
institutes are briefly explained as follows:
a. National institute for entrepreneurship and small business development:
NIESBUD is an apex body under the Ministry of Micro, Small & Medium Enterprises ,
Government

of

India

for

coordinating

and

overseeing

the

activities

of

various

institutions/agencies engaged in entrepreneurship development particularly in the area of small

industry and small business. The Institute which is registered as a Society under Societies
Registration Act, 1860 (XXI of 1860), started functioning from 6thJuly, 1983.
The policy, direction and guidance to the Institute is provided by its Governing Council whose
Chairman is the Minister of MSME.The Executive Committee consisting of Secretary (Micro,
Small & Medium Enterprises) as its Chairman and Director General of the Institute as its
Member-Secretary, executes the policies and decisions of the Governing Council through its
whole-time Director General.
b. Small industries development organisations(SIDO):
The Small Industries Development Organization (SIDO) is the national SME Development
Agency of India. It is a major constituent of the Ministry of Small Scale Industries of the
Government of India. A senior official of the Government of India, who is designated as the
Development Commissioner for Small Scale Industries (DCSSI), heads SIDO. He is also the exofficio Additional Secretary in the Ministry of Small Scale Industries; that is, he is second in
command in the bureaucratic hierarchy of the Ministry. Set up in 1954, SIDO provides services
to small industry throughout the country by implementing a broad program of activities and
services including the following:

Entrepreneurship Development

Tool Room Services

Testing Centres
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Extension Services

R&D Services

Consultancy Services

Policy Development
The strength of SIDO lies in its countrywide spread of almost 100 offices/service centres, which
employ over 2500 staff, mostly technical. SIDO partners and networks with other national
providers of support and financial services to SMEs such as the Small Industries Development
Bank of India (SIDBI), the National Small Industries Corporation (NSIC), the Bureau of Indian
Standards (BIS), the Reserve Bank of India (RBI) (India's Central Bank) and relevant agencies of
the Governments of the 28 States of the country. The Government of India essentially funds
SIDO but, of late, some its activities (such as Tool Rooms, Testing Centres and Consultancy
Services) are becoming increasingly self-sustaining.

c. Entrepreneurship development institute of india(EDII):

EDI, an autonomous institution set up in 1983 as a pioneering institute for Entrepreneurship
Development

and

Training

in

India

and

around

the

globe.

The driving values at the Institute are innovation, experimentation, risk-taking, inclusiveness,
thinking out of the box and to offer need based & socially relevant solutions.
EDI conducts several training programmes both national and international, implements projects
for the state governments, central government and international organisations, and offers two
unique Post Graduate Programmes under its Centre for Entrepreneurship Education & Research.
d. National small industries corporation(NSIC):
National Small Industries Corporation Limited (NSIC) is a PSU established by
the Government of India in 1955 it falls under Ministry of Micro, Small & Medium Enterprises
of India.
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It was established in 1955 to promote and develop micro and smalls scale industries and
enterprises in the country. It was originally founded as a Government of India agency later made
into a fully owned government corporation.
Government of India in order to promote small and budding entrepreneurs of post independent
India, decided to establish a government agency which can mediate and provide help to small
scale industries (SSI). As such they established National Small Industries Corporation with
objectives to provide machinery on hire purchase basis and assisting and marketing in exports.
District industries centres(DICs):
DICs are the Nodal Offices towards development of Industries. All intending entrepreneours
are welcome. DICs also depute Industrial Development Officers at the Block Office.
Since the introduction in 1978, District Industries Centres are engaged for promotion of SSI to
achieve the goal of providing more employment and rendering economic development.
Identification and careful selection of potential entrepreneurs with the appropriate traits and
attributes are a major part of training and motivation activities of DICs. Regular sitting with
entrepreneurs and Block/ Gram Panchayat wise group discussion to make them aware and
motivate the local people and artisans are taken up.
In each District Industries Centre, there are groups of Managers in the rank of Asst. Director of
Industries and also a number of Industrial Development officers to assist the General Manager
who is the organisatioal Head of the District. Moreover in each block of the state and in some
boroughs of Kolkata and Howrah Municipal Corporation one Industrial Development Officer is
posted under the control of Block Development Officer or G.M., DIC, Kolkata and Howrah in
case of Borough , respectively.
e. National institute of small industry extension training(NISIET):
ni-msme was originally set up as Central Industrial Extension Training Institute (CIETI) in New
Delhi in 1960 as a Department under the Ministry of Industry and Commerce, Government of
India. It was decided to keep it free from the tardy and impeding administrative controls and
procedures, so that the Institute can play a pivotal role in the promotion of small enterprise.
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Therefore the Institute was shifted to Hyderabad in 1962, and was renamed as Small Industry
Extension Training (SIET) Institute.
SIET, as it was fondly known for over two decades later, is managed by Governing Council,
appointed by the Government of India. The Founder-Chairman of SIET is Dr P.C. Alexander, the
then Development Commissioner (Small Scale Industries).
SIET was conferred the status of national institute by the Government of India with the charter of
assisting in the promotion of Small Enterprises mainly by creating a pro-business environment.

CHAPTER 2: CHALLENGES AND RECENT TRENDS

1. VARIOUS CHALLENGES FACED BY ENTREPRENEURS IN INDIA?

Answer:

The Indian entrepreneurs have to face following challenges:

1.

To understand, tackle and survive the era of globalization.

2.

To take optimum advantage of business opportunities arose due to liberalization of Indian

economy since 1991.

3.

To replace outdated technology with improved modern technology.

4.

To motivate and properly manage needs and expectations of women and young managers
that make an Indian workforce.

5.

To follow marketing techniques that are result and consumer-oriented.

6.

To professionally manage the financial activities of the business.

7.

To improve production process and produce high-quality goods.

8.

To balance profit earning capacity and social-welfare activities.

Discussed below are the challenges before Indian entrepreneurs.
Page 20 of 42

1. Challenge of globalization
A few years back the Indian entrepreneurs had to fight regional and national competition.
However, today, the scenario has changed and become much more complex than what it was
earlier. Now, almost all countries have opened up their economies, and the world (globe) has
become one giant global market.
To survive this competitive era of globalization, Indian entrepreneurs must prepare themselves
with new, better, and innovative business tactics and skills. They must accept this global
challenge willingly and try their best to seek business opportunities to establish their dominant
place in this ever-changing and always challenging open market.

2. Liberalization in India, 1991

Liberalization is a process of giving liberty or freedom to someone to do something, which was
previously restricted, banned or prohibited. In context of this article, liberalization means
removing all restrictions imposed on the entry and growth in trade or business.
The Government of India (GOI) started the process of liberalization in India in year 1991. With
its initiation, private entrepreneurs were granted liberty (freedom) to start any business in any
open domain (unreserved sector) of choice. However, this openness came with few exceptions
that were strictly restricted only for Indian government to operate and manage, this included
Railways, Water Supply, Defence, and other reserved public sectors

3. Adapting a modern technology

With each passing day, Science and Technology are developing rapidly. Modern technology not
only improves quality of produced goods and services, but it also helps to reduce their cost of
production. It speeds up their process of production. High-quality commodities, lower cost of
production, and faster production rate makes any company a highly competitive one. Therefore,

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it becomes mandatory for every company to keep pace with new emerging technologies and
adapt it regularly to remain as cutthroat as possible.

4. Changing workforce in India

In the recent decade, the workforce in India has undergone a remarkable change. Statistics
indicate the dominance of men in the workforce is shrinking day-by-day. A new breed
(generation) of highly educated Indian women has entered the workforce in India. Breaking all
traditional and social barriers, they have established themselves as efficient employees and
professional managers. Today, it is very common to see a lady professional working in a
corporate office. This presence of women in the workforce has brought new challenges before
Indian entrepreneurs.
5. Marketing is a big challenge
Today, companies have formulated many new techniques to market their products and services.
High pressure salesmanship is used. Children are often targeted in the many advertisements. It is
so since kids compel their parents to buy products they are lured by. Advertising is done to
propagate marketing message and this is done through various media like television, newspapers,
magazines, the internet, radio, cell phones, hoardings, etc. Advertising is now become an
inseparable part of modern marketing.

6. Managing the finance of business

Finance is the life blood of a business. It can either make a business or break it. Undercapitalization and Over-capitalization are very harmful to the business. Managing the finance of
his business is a big challenge for an Indian Entrepreneur. He must manage both Fixed and
Working capital properly. He must borrow money from the right source. He must manage his
Cash Flow properly.

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7. Challenges in the field of production

The Indian entrepreneurs have to face many challenges in the field of production. They must
replace all outdated plants and machineries with new modern ones. They must provide
continuous training to their production staff. They must use good quality raw-materials to
produce high quality finished goods. They must have a good Inventory Control system. This will
avoid Over-stocking and Under-stocking. Over-stocking will block the working capital, and
Under-stocking will block the production process. Indian entrepreneurs should use a part of their
profits for Research and Development (R & D). They must pay special attention to Quality
Control (QC). Now-a-days most companies also use Total Quality Management (TQM) to ensure
their finished goods are of good quality.

8. Balancing economic and social Objectives

This is also a big challenge before Indian entrepreneurs. They must balance between earning
high profit and doing social-welfare activities. They must use modern machines without causing
unemployment and harm to the environment. They must earn a profit without reducing quality of
their goods and services. They must earn a profit without charging high prices for their products.

2. PROBLEM OF WOMEN ENTREPRENEURS?

Answer:
Women entrepreneurs face a series of problems right from the beginning till the the enterprise
functions. Being a woman itself poses various problems to a woman entrepreneur, The problems
of Indian women pertains to her responsibility towards family, society and lion work.
The tradition, customs, socio cultural values, ethics, motherhood subordinates to ling husband
and men, physically weak, hard work areas, feeling of insecurity, cannot be tough etc are some
peculiar problems that the Indian women are coming across while they jump into
entrepreneurship.
Page 23 of 42

Besides the above basic problems the other problems faced by women entrepreneurs are as
follows:
1. Family ties:
Women in India are very emotionally attached to their families. They are supposed to attend to
all the domestic work, to look after the children and other members of the family. They are over
burden with family responsibilities like extra attention to husband, children and in laws which
take away a lots of their time and energy. In such situation, it will be very difficult to concentrate
and run the enterprise successfully.
2. Male dominated society:
Even though our constitution speaks of equality between sexes, male chauvinism is still the order
of the day. Women are not treated equal to men. Their entry to business requires the approval of
the head of the family. Entrepreneurship has traditionally been seen as a male preserve. All these
puts a break in the growth of women entrepreneurs.
3. Lack of education:
Women in India are lagging far behind in the field of education. Most of the women (around
sixty per cent of total women) are illiterate. Those who are educated are provided either less or
inadequate education than their male counterpart partly due to early marriage, partly due to son's
higher education and partly due to poverty. Due to lack of proper education, women
entrepreneurs remain in dark about the development of new technology, new methods of
production, marketing and other governmental support which will encourage them to flourish.
4. Social barriers:
The traditions and customs prevailed in Indian societies towards women sometimes stand as an
obstacle before them to grow and prosper. Castes and religions dominate with one another and
hinders women entrepreneurs too. In rural areas, they face more social barriers. They are always
seen with suspicious eyes.
5. Shortage of raw materials:
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The scarcity of raw materials, sometimes nor, availability of proper and adequate raw materials
sounds the death-knell of the enterprises run by women entrepreneurs. Women entrepreneurs
really face a tough task in getting the required raw material and other necessary inputs for the
enterprises when the prices are very high.
6. Problem of finance:
Women entrepreneurs stiffer a lot in raising and meeting the financial needs of the business.
Bankers, creditors and financial institutes are not coming forward to provide financial assistance
to women borrowers on the ground of their less credit worthiness and more chances of business
failure. They also face financial problem due to blockage of funds in raw materials, work-inprogress finished goods and non-receipt of payment from customers in time.
7. Tough competition:
Usually women entrepreneurs employ low technology in the process of production. In a market
where the competition is too high, they have to fight hard to survive in the market against the
organised sector and their male counterpart who have vast experience and capacity to adopt
advanced technology in managing enterprises
8. High cost of production:
Several factors including inefficient management contribute to the high cost of production which
stands as a stumbling block before women entrepreneurs. Women entrepreneurs face technology
obsolescence due to non-adoption or slow adoption to changing technology which is a major
factor of high cost of production.
9.Low risk-bearing capacity:
Women in India are by nature weak, shy and mild. They cannot bear the amount risk which is
essential for running an enterprise. Lack of education, training and financial support from
outsides also reduce their ability to bear the risk involved in an enterprises.
3. INTELLECTUAL PROPERTY?

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Answer:
Intellectual property (IP) is a legal term that refers to creations of the mind. Examples of
intellectual property include music, literature, and other artistic works; discoveries and
inventions; and words, phrases, symbols, and designs. Under intellectual property laws, owners
of intellectual property are granted certain exclusive rights. Some common types of intellectual
property rights (IPR) are copyright, patents, and industrial design rights; and the rights that
protect trademarks, trade dress, and in some jurisdictions trade secrets.
Patents
A patent grants an inventor the right to exclude others from making, using, selling, offering to
sell, and importing an invention for a limited period of time, in exchange for the public
disclosure of the invention. An invention is a solution to a specific technological problem, which
may be a product or a process.
Copyright
A copyright gives the creator of an original work exclusive rights to it, usually for a limited time.
Copyright may apply to a wide range of creative, intellectual, or artistic forms, or
"works". Copyright does not cover ideas and information themselves, only the form or manner in
which they are expressed.
Industrial design rights
An industrial design right protects the visual design of objects that are not purely utilitarian. An
industrial design consists of the creation of a shape, configuration or composition of pattern or
color, or combination of pattern and color in three-dimensional form containing aesthetic value.
Trademarks
A trademark is a recognizable sign, design or expression which distinguishes products or
services of a particular trader from the similar products or services of other traders.

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Trade dress
Trade dress is a legal term of art that generally refers to characteristics of the visual appearance
of a product or its packaging (or even the design of a building) that signify the source of the
product to consumers.
Trade secrets
A trade

secret is

a formula, practice, process, design, instrument, pattern,

or

compilation

of information which is not generally known or reasonably ascertainable, by which

a business can obtain an economic advantage over competitors or customers. In the United
States, trade secret law is primarily handled at the state level under the Uniform Trade Secrets
Act, which most states have adopted, and a federal law, the Economic Espionage Act of 1996 (18
U.S.C. 18311839), which makes the theft or misappropriation of a trade secret a federal
crime. This law contains two provisions criminalizing two sorts of activity.

4. OPPORTUNITIES FOR RURAL ENTREPRENEURS?

Answer?
Rural entrepreneurs have a number of opportunities in several areas. Some of the opportunities
are as follows:
a. Manufactured items:
Some of the product categories are well established in rural areas which include:

Means of transportation- bicycles, scooters, and motor cycles.

Entertainment goods such as radios and TV sets.

Agriculture related goods such as agricultural machinery, fertilizers, pesticides, etc.

Page 27 of 42

Beverages such as packed tea etc.

b. Tourism sector:
Some of the rural areas provide a rich source of tourist attraction, especially waterfalls, wildlife
and so on. Therefore there is a good scope for entrepreneurs in rural areas in respect of
restaurants, transport operations and so on.
c. Raw materials industry:
Rural areas provide a good source of raw materials such as mineral ores, limestone and so on.
Therefore rural entrepreneurs can setup industries, such as mining, drilling etc. they can also
provide services such as transportation for transporting the raw materials from the sites to the
places of manufacturing.
d. Food processing industry:
Rural areas produce a number of food crops. Villagers also collect forest produce such as honey.
Therefore, rural entrepreneurs can setup food processing industries such as making jam, honey ,
tomato ketchup, fruit juices etc.
e. Herbal products:
Rural areas provide a rich source of herbs. With the help of herbal research, rural entrepreneurs
can produce a number of health related herbal products. Now a days ayurvedic and homeopathic
medicines have become popular not only in india but also in western countries.
f. Micro units:
Small entrepreneurs can setup small units such as carpentry works, small engineering works, etc.
central and state government provides a lot of incentives and support to setup self-employment
projects in rural areas.
g. Rural development projects:

Page 28 of 42

The government takes various rural development activities such as construction of roads,
housing, water supply, irrigation projects, rural electrification etc. the rural entrepreneurs can
take sub contracts from the government to undertake rural development activities.
h. Dairy business:
Rural entrepreneurs have a good scope in dairy business. India is the largest producer of milk in
the world. Dairy products such as packed milk, ice-creams and other milk based products have a
good demand in the urban markets.
5. FUTURE OF ENTREPRENEURSHIP IN INDIA?
Answer:
In India, business was traditionally considered to be the domain of scholarly challenged
individuals or the result of natural inheritance within business communities. Gradually, the
appetite for risk and the acceptance of failure increased, but only recently have alternate
professions and the idea of "following ones dream" gained approval. In particular,
entrepreneurship caught the fancy of the Indian middle class after the economy was liberalized.
The economic reforms introduced in 1991 reduced the bureaucratic controls, promoted private
enterprise, and lowered the barriers to creating new businesses. Coupled with the emergence of
knowledge economy, the demand for skilled employees greatly increased and a trend emerged
toward technology entrepreneurship in the services sector, which is less capital-intensive than
traditional industries.
Indeed, the future of entrepreneurship in India lies in the services sector, and the Government of
India is providing support to encourage this trend. However, there are as many challenges as
there are opportunities, as will be discussed below.
Traditionally, government programs, and support from the banking and finance industry, were
largely focused and aligned to the manufacturing sector with its strong product focus. Industry
associations such as the Confederation of Indian Industry (CII), the Federation of Indian
Chambers of Commerce and Industry (FICCI) and the Associated Chambers of Commerce and
Industry of India (ASSOCHAM) have existed since the pre-independence era and lobby the
Page 29 of 42

government for policy initiatives that favour traditional businesses and industries. With the
information technology sector emerging as a rapidly growing segment of Indian industry the
National Association of Software and Services Companies (NASSCOM) was formed in 1988 as
the industry association for information technology industry.
In 2000, the National Science & Technology Entrepreneurship Development Board (NSTEDB)
under the aegis of the Department of Science and Technology (DST) launched the Technology
Business Incubation (TBI) program, which is geared towards supporting entrepreneurship in
emerging technology areas such as information and communications technology, manufacturing,
biotechnology, nanotechnology, and agricultural technology. This program was an extension of
the Science & Technology Entrepreneurs' Park program, which was initiated in 1985 by the
NSTEDB in academic institutions and research labs of excellence with an objective of promoting
self-employment for young science and technology graduates. The NSTEDB identified 120
technology business incubators in different technology areas within India (NSTEDB, 2009). Of
these, 53 were promoted by the NSTEDB, 40 were software technology parks promoted by the
Ministry of Information and Communication Technology, and the remaining 30 were promoted
by other government departments, banks, financial institutions, or private companies.

Recently, India is considered to be amongst the three top investment destinations. According to a
report released by Evalueserve research, over 44 U.S. based VC firms are now seeking to invest
heavily in startups and early-stage companies in India. Reports from PricwwaterhouseCoppers
predict that between 2010 and 2024, 2219 multinational companies will emerge from India.
In conclusion, with a consistently growing local market for indigenous products, supported by a
reasonably efficient and transparent legal system, I believe India could potentially emerge as one
of the top 3 world economies in the world by 2020. This articles concludes with these lines from
The Mystery of Capital by Hernando de Soto.
People in developing countries are not pitiful beggars, are not helplessly trapped in obsolete
ways and are not uncritical prisoners of dysfunctional cultures. In fact, he says and I can vouch
from my experience that the developing world is teeming with entrepreneurs who possess an
astonishing ability to wring a profit out of practically nothing.
Page 30 of 42

CHAPTER 3: MANAGING A NEW ENTERPRISE

INTRODUCTION
It is needless to mention that water, a compound of Hydrogen and Oxygen is a precious natural
gift which is very essential for survival of mankind including animals. The water used for
potable purposes should be free from undesirable impurities. The water available from untreated
sources such as Well, Boreholes and spring is generally not hygienic and safe for drinking. Thus
it is desirable and necessary to purify the water and supply under hygienic conditions for human
drinking purpose. As the name implies, the mineral water is the purified water fortified with
requisite amounts of minerals such as Barium, Iron, Manganese, etc which can be absorbed by
human body. It is either obtained from natural resources like spring and drilled wells or it is
Page 31 of 42

fortified artificially by blending and treating with mineral salts. The mineral water shall be
manufactured and packed under hygienic conditions in properly washed and cleaned bottles in
sterilized conditions.
To take advantage of this expanding market for drinking water, KENT BLUE AQUA Bottled
Water has been established under the company named BHAIRAVNATH FOODS AND
MINERALS PVT. LTD. to provide home and office delivery of bottled water and 20 liter water
jars facility in the local areas of Rajasthan.
After months of extensive industry and market research, the company has developed a business
plan to enter the market for bottled water. The plant is located in Rajasthan on the land area of
3000

sq.ft.

The

business

will

be

carried

out

through

50%

partnership

mode.

MARKET DEMAND
Unfortunately sufficient safe potable water is not available everywhere in the country; either
harmful chemical substance is found in the layers of the earth which enter into water or it may be
contaminated due to pathogenic micro-organisms. If such water is consumed, the body suffers
from water borne diseases. Due to this, it has become imperative to process and bottle safe
potable water for the mankind in prevailing conditions. The demand for purified water becomes
more during summer season. Although few companies have already entered in the bottling of
safe potable water and mineralized water, but still huge gap is there in between demand and
supply at all metropolitan-cities and towns. The product is widely accepted in offices,
restaurants, railway stations, airport, bus stands, and hospitals and to some extent even in rich
house-holds. So there is good scope for establishing the units for processing and bottling plain
and mineralized drinking water in different parts of the country.
PRODUCT:
The name of the packed mineral water will be Kent blue aqua.

Page 32 of 42

The company is mainly oriented to manufacture 1 liter and 250 ml bottles and 20 liters water
jars, packed drinking water pouches of 100 ml.
KENT BLUE AQUA offers home and office delivery of drinking waters, as well as water cooler
rentals, under Bhairavnath foods and minerals private limited label.
The basic attribute of the product are as follows:
Bottle priced at rs. 10
Level of quality is exceptional.
Product is basically targeted to the common people who are not getting good water resulting into
various diseases.
OPERATING PLAN
Spring, distilled, and purified drinking waters are bottled by Bhairavnath foods and minerals pvt.
Ltd. Rajasthan, who will supply packed drinking water and water jars labeled with Kent blue
aqua logo.
Plastic is preferred as the bottle packaging because it is lightweight, unbreakable, and
inexpensive to produce and ship.
Location
The company will operate from approximately 23,000 sq. ft. of warehouse space in Rajasthan.
Deliveries
Two mini tempos will be required for delivering the purified water jars at various local places.
During the initial stage of the business the product will be distributed and transported in the local
areas of Rajasthan.
MARKETING STRATEGY

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In order to effectively and quickly build its customer base, Kent blue aqua intends to
aggressively promote its free trial program, offering new customers the use of a company cooler
water jars for a period of 30 days free of charge and includes two free bottles of water.
In addition, the company will implement a variety of other marketing methods to complement
and build on the free trial offer. Since the competition has failed to utilize other marketing
methods beyond the free trials, Kent blue aqua will quickly achieve a competitive advantage.
FINANCIAL NEED:
Sources of fund:
The capital will be invested partly by the partners and partly borrowed from the bank.
REQUIREMENTS TO START UP THE BUSINESS:

Capital, Land, Infrastructure, Bore well, Laboratory: micro lab and chemist lab

ISI certification, Machineries: filtration machine, packing machine, filling machine,

Labour, Vehicle for transportation

PRODUCTION TARGETS
Basis of estimation:

300 Working Days in a Year

Single Shift basis
8 hours per shift

Packaged Drinking Water Pouches (100 ML)

Quantity (Nos)

3000000
Page 34 of 42

Value (Rs)

1200000

MANUFACTURING PROCESS
As the name itself indicates that the proposed concern will purify the available water in such a
way that it may be kept 4-7 days at least as well as it should be a hygienic. The major steps
involved on the purification process are given below: Water treatment & Purification Mixing
of negligible mineral and necessary for human life. Pouch Filling Inspection and Packing
Dispatch
QUALITY CONTROL STANDARDS
Quality of the product must be according to Beauro of Indian standards (BIS) and parameters of
local municipal \ Food Controlling office.

LAND AND BUILDING:

Covered area

Sq. ft

3000

Uncovered area

Sq.ft

N.A

Whether constructed or rented

Constructed

If constructed, constructed value

45,00,000

If rented, rented value

N.A

Page 35 of 42

MACHINERY AND EQUIPMENTS:

The plant is a complete full automatic bottle production line from treatment to filling and
capping, Labeling and bagging everything is automated.
Equipment needed are:
1. Standard water Treatment Plant
2. Reverse Osmosis System
3. Ozonator
4. Industrial Filters
5. Industrial Ultra violet Light
6. Automatic bottling machine
8. Semi-automatic PET Blowing machine
9. Storage Tanks
11 Pallet
12. Generating Sets
13. Desktop Computer + Printer for office use
14. Office and Factory Furniture
15. Safety and Protective Gears
16. Delivery/Marketing Van + Branding
17. Fire Fighting and Prevention Equipment

S.N

DESCRIPTION

QUANTITY

Ozonator, tank & pump, U.V.System 1

VALUE
140000

(water processing unit)

2

Pouch Packaging Machine, filtration 1

machine, filling machine

Page 36 of 42

Syntex \ StorageTanks

Spares, Pipes and other fittings

Hand Tools

Furniture

Sales Tax, Freight & Insurance etc.

14000

Total

154000

RAW MATERIAL (PER MONTH)

The major material used is water. There will be a requirement of bore well for water source. The
plant has the capacity to produce empty plastic bottles from PET bottles. Other materials
includes treatment chemicals, bottle caps, bagging nylons, and bottle nylon labels.

S.N

Particulars

Different

Quantity(kg)
Chemicals

&

other L.S.

Value(rs)
5000

consumables required during cleaning

process
2

Packaging Material (Plastic Film for 250

37500

pouch packaging)
total

42500

STAFF AND LABOUR (PER MONTH)

Page 37 of 42

S.N

Particulars

quantity

Rate

Value (rs)

Administrative and Supervisory

Manager

3000

3000

Peon

2000

4000

Technical (Skilled-Unskilled)

Skilled labour

3000

15000

Unskilled labour

2000

6000

Total

28000

OTHER EXPENSES ( PER MONTH)

Electricity Charges

8000

Fuel Exp.

5000

Advertisement & Travelling

4000

Transport

5000

consumable & stores etc.

1000

Potage expenses/ telephones

1000

Stationery

1000

Repairs & Maintenances

10,000

Total

35,000

WORKING CAPITAL FOR ONE MONTH

Page 38 of 42

S.N

Description

Value

Raw material

42500

Salaries and wages

18200

Other expenses

24000

Total

84700

TOTAL CAPITAL INVESTMENT

Building and civil works

45,00,000

Machinery and equipment

15,40,000

Working capital for one month

87400

Total

61,27,400

COST OF PRODUCTION PER ANNUM

Total recurring cost per year

1016400

Depreciation on machinery & equipment

15000

Interest on total investment @ 10%

24000

Total

1055400

SALES PROCEEDS (PER ANNUM)

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S.N

Description

quantity

Drinking Water Pouches (100 Ml) and 20 3000000

Value (rs)
1200000

liter water jars

Total

1200000

PROFITABILITY

Annual Gross Profit

144600

% of Profit on Sales

12.05%

Break Even Analysis

Annual Fixed Cost

506400

2 Annual Sales

3000000

Annual Variable Cost

690000

Break Even Point

73.39%

SUPPLIERS OF RAW MATERIALS & CONSUMABLES

From Local chemical mandi of the area.
IMPLEMENTATION PERIOD
Proposed Project can commence production within 6-8 weeks after sanction and first
disbursement of term loan.

Page 40 of 42

ASSUMPTION FOR GENERATING PROJECT PROFITABILITY

Number of Working Days in a year

300 Days

Number of Shifts in a day

One

Hours in a Shift

8 hours

Plant Capacity

Consider

on

Average

production

capacities of plant.
Raw material Estimates

Based upon product Mix

Raw Material Availability

In all districts

Depreciation

Straight Line Method

Manpower

According to project Requirement

Rent estimate

N.A

Potential Area of Marketing the products

Railway Station, Bus-stands & Local

Hotels / Restaurants of the district .

If project is funded, term loan would be

60-80% of Total investment

Moratorium Period

6- 12 months

Repayment Period

5-7 years

Project may be established under

PMEGP

(GOI)

Tribal

Self

Employment Scheme (NSTFDC) or

Page 41 of 42

Rani Durgawati Scheme of MP

Page 42 of 42