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SEMINAR PROCEEDINGS

UGC Sponsored 2-Day National Seminar on

Economy & Entrepreneurship


Editors

Dr. V. Srinivasa Prasad


Sri G. Ramesh Babu
Sri R. Raja Sekhar

Organized by

PG Department of Commerce & Management Studies

VRS & YRN College,


Vodarevu Road,
Chirala - 523 157, Andhra Pradesh
First Impression December, 2017

© VRS & YRN College, Vodarevu Road, Chirala - 523 157, Andhra Pradesh

Economy & Entrepreneurship


ISBN:978-93-5300-292-3

No. of part of this publication may be reproduced or transmitted in any form by any
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ner. Errors, if any, are purely unintentional and readers are requested to communicate such
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Preface

There is no gainsaying the fact that the countries which are entrepreneurially developed have taken
a quantum leap in terms of economic development. Desired level of progress on entrepreneurial front has
been acknowledged as need of the hour in developing economies where entrepreneurship development
has been progressing at a snail’s pace. The developing economies which are currently in a precarious
position on economic growth front are poised to place themselves on a growth trajectory realizing the
importance of key drivers of economic growth. In a bid to reinforce entrepreneurial base and to foster the
entrepreneurial culture and spirit among the persons who aspire to prove their mettle as entrepreneurs
of tomorrow spade work has been completed in terms of Government role towards entrepreneurship
development.
The grave cause of concern in India is ever growing unemployment problem which is compounded
alarmingly by unprecedented dearth of employability among the persons produced by the institutions of
higher learning. Entrepreneurial development is no larger crying for attention in India. It has emerged as a
force to be reckoned with whose prominence has been felt in all the plans and policies of the Government
in recent time.
Buoyed by the resounding growth and exemplary contribution of entrepreneurial development to
economic development in so called developed countries, developing counties like India are in the process
of endorsing and kindling inclination among persons who are all set to start start-ups. Thanks to slew
of opportunities bestowed on enterprising entrepreneurs marked by incentives, subsidies, scores of new
breed of entrepreneurs are entering into league of entrepreneurs.
The present national seminar is an attempt to provide a platform where academicians, researchers,
students from national wide converge at the seminar to explore the factors which inhibit growth of
entrepreneurial culture. The topic selected for two-day national seminar is of immense relevance in the
light of some solution to be expected to be provided by entrepreneurial development to grave problem of
unemployment.
This book bestows a good opportunity on academicians, researchers and students from national
wide who have ample inclination to express their views on various aspects of issues and challenges and
suggestions which will go a long way to enable India to take great leap in entrepreneurial development.

G. RAMESH BABU
Associate Professor
PG Department of Management Studies
Message

VV Rama Chandra Vasu


President, College Committee

I am so delighted to know that PG Department of Commerce & Management Studies of our


College is organizing a UGC Sponsored 2-Day National Seminar on “Economy & Entrepreneurship” on
27th and 28th October, 2017 and bring out a conference volume with regard to the above topic. On this
auspicious occasion I extend my warm greetings to the organizers, academic luminaries, presentars, guests
and participants.
I earnestly hope that the path breaking deliberations resulting from the seminar are expected to be
of immense use for making Economy and Entrepreneurship in India more vibrant.

(VV Rama Chandra Vasu)


Message

A. Venu Gopal
Secretary & Correspondent,
College Committee

I am extremely cheerful on knowing that the PG Department of Commerce & Management


Studies of our College is organizing a UGC Sponsored 2 Day national Seminar on “Economy &
Entrepreneurship” on 27th and 28th October, 2017 and bring our a conference volume on this occasion .
I have exemplary confidence that the seminar is likely to provide a platform where academic
luminaries and other stake holders converge to deliberate towards devising appropriate strategies
and remedies for sorting out the problems which are plaguing entrepreneurship in a bid to reinforce
entrepreneurship development.
I wish the seminar a grand success.
(A. Venu Gopal)
Keynote Address

M. Adinarayana,
Company Secretary &
V.P.(Legal & Corp. Affairs),
NATCO Pharma Ltd.,
Hyderabad

In his inaugural address as a keynote speaker and chair person of one of the sub-theme role
of Government in Entrepreneurship Development highlighted about the theme of two day National
Seminar by stating that Entrepreneurship is the process of discovering new ways of combining resources.
When the market value generated by this new combination of resources is greater than the market value
these resources can generate elsewhere individually or in some other form, the entrepreneur makes a
gain in the form of profit. Entrepreneurs occupy a central position in a market driven economy. For
it’s the entrepreneurs who serve as the spark plug in the economy’s engine, activating and stimulating all
economic activity. The economic success of nations worldwide is the result of encouraging and rewarding
the entrepreneurial instinct.
He highlighted about the sub-themes of the seminar,
Role of an Entrepreneur. An entrepreneur is one who undertakes the risk of investment to create
and market goods or services for financial gains. He is very perceptive and takes advantage of business
opportunities that will generate profits, employment etc. Entrepreneurs are of vital importance to the
development of an economy.
Educational entrepreneurs are proving that the calcified delivery system of public schooling /
college can be shaken up and retooled for the twenty-first century. Within education, social entrepreneurs
create many different types of organizations that seek to have a positive impact on the broader system.
Over the last decade, agricultural entrepreneurship has changed dramatically due to economic
liberalization, a reduced protection of agricultural markets, and a fast changing, more critical, society.
Agricultural companies increasingly have to adapt to the vagaries of the market, changing consumer
habits, enhanced environmental regulations, new requirements for product quality, safety, supply chain
management, sustainability, and so on. These changes have cleared the way for new entrants, innovation
and portfolio entrepreneurship.
Entrepreneurship in India has indeed undergone a major change in the recent past. Businesses
are looking to break-even in a few months, a distant dream even for the most viable traditional family
businesses that started a few decades ago. The rising population and the increasing desires for a better and
luxurious lifestyle have fuelled the demand for better quality Goods and Services. This growing demand
has been the inspiration for many startups. Indian Governments flagship program ‘Start up India’ aimed
for promoting Entrepreneurship, Tax Sops on new startups, Large companies setting up Incubator Cells,
big companies pledging funds for innovative startups have all led to an increase in interest to start new
ventures. India witnessed the emergence of Hundreds of Startups in the recent past with the innovative
solutions for solving day to day problems. The Gen-Y entrepreneurs are very aggressive in their approach
to the market and have been able to convince venture capitalists to dole out crores of rupees to take their
ideas forward.
Despite falling commodities prices and an uncertain global economic scenario, the Global
Entrepreneur Indicator (GEI) survey conducted by Entrepreneurs Organization (EO) in 2015 has shown
that 82 per cent of all respondents globally and 75.8 per cent respondents from India have reported a
willingness to start a new business in their current economic environment .
Now a days, Women entrepreneurship has been recognized as an important source of economic
growth and Women entrepreneurs create new jobs for themselves and others and also provide society with
different solutions to management, organization and business problems. However, they still represent a
minority percentage of all entrepreneurs.
In India, the Micro, Small & Medium Enterprises development organization, various State Small
Industries Development Corporations, the Nationalized banks and even NGOs are conducting various
programmes including Entrepreneurship Development Programmes (EDPs) to cater to the needs of
potential entrepreneurs, who may not have adequate educational background and proper technical skills.
The Office of MSME has also opened a Women Cell to provide coordination and assistance to women
entrepreneurs facing specific problems.
There are also several other schemes of the government at central and state level, which provide
assistance for setting up training-cum-income generating activities for needy entrepreneurs in particular
women to make them economically independent. Small Industries Development Bank of India (SIDBI)
has also been implementing special schemes for women entrepreneurs.
Message

Dr. Sandeep Pandy


Ramon Magsaysay Awardee
& Social Activist

It is my pleasant duty to extend my hearty greetings to the organizers of UGC sponsored 2 Day
National Seminar on Economy and Entrepreneurship which was held on 27th and 28th October 2017.
I congratulate you on selecting good topic for national seminar which needs great deal of deliberations
which can go a long way in fostering entrepreneurial culture which is the need of the hour.
It gives me an immense pleasure to be a part of this national seminar which provided opportunity
for the convergence of academic stalwarts and corporate managers and students and teaching fraternity
to deliberate on contemporary issues pertaining to economy and entrepreneurship. The grave impediment
to the entrepreneurship development in India is low rate of investment. Any increase in entrepreneurship
results in increase in rate of investment.
The need of the hour is creation of hassle free environment for all kinds of entrepreneurs who
are desirous of contributing their mite towards entrepreneurship development . Not withstanding, some
headway on entrepreneurship front in India it is progressing at a snail’s pace. The entrepreneurship and
importance attached to entrepreneurship development in some countries forced India to follow the suit
and to encourage entrepreneurship through announcement of slew of sops and inducements by the
Government.
Emergence of all forms of entrepreneurship namely Women entrepreneurship, agricultural
entrepreneurship and educational entrepreneurship are worth noting developments in the realm of
entrepreneurial landscape in India in recent times. Thanks to flag ship programmes namely Start-up India,
Make in India, Digital India embarked on by the Government of India, entrepreneurial landscape and
culture has received face-lift in India in recent times.
In addition, balanced regional developments which is the top priority of the Government is bound
to spur entrepreneurship in India.
This seminar has been an endeavor at the opportune time when deliberations concerning problems
faced by entrepreneurs and present environment for entrepreneurship add new dimension to the bid to
ensure India’s name figure in the list of countries to be reckon with investment from both home and
abroad.
Message

Dr. K. Sarada Devi


Retd. Reader in PG Commerce
VRS & YRN College, Chirala

Greetings and hearty congratulations on the grand success of UGC sponsored 2 Day National
Seminar on Economy and Entrepreneurship which was held on 27th and 28th October 2017. It was a great
opportunity to meet academicians, researchers and industrialists at National level, to learn more on the
subject and to explore the future research areas.
Thank you for inviting me as chairperson for Technical session III - Women Entrepreneurship.
The session was rapporteured by Ms. Anilambika and the presentations were very good some of
them were excellent with research exploration. In this context I would like to present some of my ideas
on the subject.
Entrepreneurs shape the economy by creating new wealth and new jobs and by inventing new
products and services. However, an insight study reveals that it is not about making money, having the
greatest ideas, knowing the best sales pitch, applying the best marketing strategy. It is in reality an attitude
to create something new and an activity which creates value in the entire social eco-system.
Empowering women has become the key element in the development of any economy
Entrepreneurship enhances financial independence and self esteem of women. Around 50 per
cent of India‘s population is women, yet business spheres such as trade, commerce and industry is still
considered a male preserve. Entrepreneurial work has also been predominantly a man‘s world in India.
Indian women are in no way inferior to men in all walks of life and they can be as good
entrepreneurs as men in the country. Therefore, it is essential to exploit the potential of Indian women.
Women‘s participation in trade, industry and commerce, requiring entrepreneurship, is still poor, mainly
because of the problems associated with their gender roles. According to the National Sample Survey
Organization, only 14% of business establishments in India are being run by women entrepreneurs. The
data also revealed that most of these women-run companies are small-scale and about 79% of them are
self-financed.
Therefore, promotion of entrepreneurship and economic empowerment of women poses a
challenge to the government, funding agencies and non- government organizations. It is important for
these people to focus on the limitations faced by the women and to plan supporting systems to enhance
women entrepreneurship in India.
Although women face various problems in the process of establishing, developing and running
their enterprises, nevertheless, their scope of development is very high in India, especially in rural areas
with more women making development oriented programme viz. Development of Women and Children
in Rural Areas (DWCRA) which was launched in 1982-83.
Although The Government of India, through its newly established Ministry of Skill Development
and Entrepreneurship (MSDE), focuses on developing entrepreneurial and employability skills among
the youth through entrepreneurship education and training, advocacy and easy access to entrepreneurship
networks, there has been no proper awareness on these programmes.
The Ministry has been also trying to deliver world class Learning and Management System (LMS)
to equip potential as well as early stage entrepreneurs. The Govt. of India has launched many Programmes
to develop entrepreneurs in sectors such as manufacturing, IT and digital services, healthcare, and sanitary
and hygiene. To achieve balance in the both male and female entrepreneurship, the Government has
launched pan India programmes, viz. ‘Start-up India’, ‘Stand-up India’, ‘Make-in India’, ‘Digital India’,
‘Swachha Bharat (Clean India)’, that are aimed at further propelling entrepreneurship movement in India.
So Let us hope that there are better prospects for women entrepreneurship which eventually strive
for
The best economy in the world.
With best wishes and warm regards
Dr. K. Sarada Devi
ORGANIZING COMMITTEE

Chief Patrons
Sri VV Ramachandra Vasu
President, College Committee

Sri A. Venu Gopal


Secretary & Correspondent

Patron
Dr. J. Revathy
Dr. V. Srinivasa Prasad, Seminar Director
Registration Committee: Reception / Accommodation / Transport
Sri M. Seshu Babu Committee
Smt. G. Cherlina Kumari Sri B. Venkateswarlu,
Kum R. Padmvathi Sri T. Uday Pavan Kumar
Kum Sk. Rizwana Sultana Sri P. Ashok Sekhar Babu
Sri John Bunyan Sri P. Ganapathi Siva Raja

Stage Management Committee Food Committee


Sri R. Raja Sekhar Sri T. Naganjaneyulu
Sri Ch. Pothu Raju Sri N. Srinivasa Rao
Smt. G. Cherlina Kumari Sri N. Sambasiva Rao
Kum D. Ramya

Finance Committee Print & Electronic Media Committee


Sri R. Raja Sekhar Sri M. Brahmaiah
Sri G. Ramesh Babu Sri R. Raja Sekhar
Sri T. Uday Pavan Kumar

Souvenir Committee
Sri G. Ramesh Babu
Sri R. Raja Sekhar
Kum D. Ramya
TABLE OF CONTENTS

Preface iii
Messages iv
Keynote Address vii
Organizing Committee xii
Technical Session - I (Entrepreneurship & Economic Development)
1. Role of Entrepreneurship Education in Nurturing Potential Entrepreneurs to
Fuel the Economic Growth Engine
K. Sivaji Ganesh, Prof. G. V. Chalam,  1
2. A Study on Essential Skills Required for Modern Entrepreneurs
T. Narayana Rao, Dr. V. Srinivasa Prasad 11
3. Role of Entrepreneurship in Economic Development in India
A. Bhagyaraj, Prof. D. V. Ramana,  17
4. Perspectives of Entrepreneur’s in the New Era
Anilambica Kata, B. Raghavi 23
5. Role of Government in Entrepreneurship Development
O. Naresh, Dr. J. Revathy,  30
6. The Role of Government in Promoting Entrepreneurship
Dr. A. Kanaka Durga, Immaniyelu Yepuri 36
7. Role of Entrepreneurship Development in Economic Development
Y. Srinivasa Rao, 41
8. Role of Entrepreneurship in Economic Development
B. H. Venkata Siva Krishna, Dr. V. Srinivasa Prasad 45
9. Role of Govt. in Entrepreneurship Development
D. Bhaskara Rao, Dr. J. Revathy  52
10. Role of Govt. in Entrepreneurship Development
Vunnam Venkata Ramanjaneyulu 57
11. Development of Entrepreneurship in India
M. Krishna Chaitanya,  60
12. Relation between Entrepreneurship and Economic Growth through Manufacturing
Sector: Review
P. Daniel Paul, Dr. V. Srinivasa Prasad 62
13. Emerging Entrepreneurship in Indian Scenario
Kumaraswamy Manepalli  66
14. A Glimpse on Contribution of Entrepreneurship in GDP Growth
V. Mydhili MBA 70
15. “Role of Entrepreneurs in Economic Development”
Taidala Vasantaha Rao. Bandlamudi Kalpana 76
16. Educational Entrepreneurship – The Need of the Hour
B. Satyavani 81
17. Role of Government in Entrepreneurship Development
B.V. Brahmaji, Harika 87
18. Entrepreneurship Development in India- A Special Emphasis on Start-Ups – An
Empirical Study
Dr. Prasad Chundi  92
19. Role of Personality and Leadership Traits in Entrepreneurship
G. Venkateswarlu, PVS Chowdary 100
20. Role of Entrepreneurship on Economic Development & Entrepreneurial
Development and Its Antecedents in India- A Study
Dr. Y. Ramakrishna Prasad  105
21. Entrepreneurs – In the Era of GST
P. Anitha Saravanan 114
22. Role of Central Government in Empowerment & Entrepreneurship Development
of Persons with Disabilities (PWDS) In India
Y. Nagendra Dr. S. Subba Reddy 119
23. Problems and Prospectus of Entrepreneurship in India
Dr. R. Emmaniel, P. Vikram Babu 124
24. Problems and Prospects of Social Entrepreneurship
M.V Subba Rao, MVS Vaishnav, 131
25. Government Initiatives for Entrepreneurship Development
N. Rama Krishna,  136
26. An Outlook of Indian Beauty & Wellness Industry: A Future Scope for Budding
Entrepreneurs
A Sai Manideep, Dr. P Srinivas Reddy 141
27. Entrepreneurship Through Online Grocery Stores
Dr. A. Kanakadurga, Syamala Devi Challa,  147
28. Ethical Entrepreneurs - Organizational Escalation in India
Dr. T. Lokeswara Rao, D. Poornima Devi 152
Technical Session - II (Young Entrepreneurs)
29. Role of Young Entrepreneurs
Anilambica Kata, N. Madhuri, Sk. Basheerunnisa 156
30. Health Care IT Entrepreneurship in India
Challa Maruthy Subrahmanyam, P. Srinivasa Reddy 162
31. Successful Young Entrepreneurs: The Case Studies of India
Dr. J. Revathy, Mr. S. Pratap  166
32. Challenges of Youth Entrepreneur in India: Role of Entrepreneurship Education
for the Aspirant Entrepreneur
Dr. Radhika Naidu, L. Jyotshna Reddy 171
33. Exogenous Determinants of Entrepreneurial Intuition & the Mediatory Role of
Psychological Capital among Potential Youth Entrepreneurs – A Study
Dr. V. Venkateswara Rao, D. Pushpa Sri 175
34. The Role of Young Entrepreneurship in India
Dr. Krishna Banana, V. Veeranjaneya Kumar. P, V Rama Krishna Rao Chepuri 179
35. Education Reforms in India
K. Sivaiah, Ch. Yashoda Rao 189
36. Role of Young Entrepreneurship in Economic Development Introduction
B. Ravi Kumar 199
37. “The Role of young Entrepreneurs in Indian Economy Development”
Md Sohil Baba 207
Technical Session - III (Women Entrepreneurs)
38. Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks
in Guntur District
Dr. M. Aravind, Dr. T. Umamaheswara Rao 213
39. A Study on Socio Cultural Factors Influencing Women Entrepreneurs At
Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP)
Ms. Syamala Devi Bhoganadam, Dr. Dasaraju Srinivasa Rao 229
40. Problems & Prospects of Women Entrepreneurs in India
Dr. Katreddi Satyanarayana 235
41. Women Entrepreneurs – A Mirage of Indian Women
Dr. R. Lilambeswara Singh 240
42. Women Entrepreneurs in Stressful Areas, A Study on Problems &Challenges of
Indian Perspective
Dr. J. Revathy, Maneeja Indupalli 245
43. Women Entrepreneurship
G. Ramesh Babu 250
44. Financial Inclusion of Women Entrepreneurs in India
K. Srinivas, Dr. M.S. Narayana 254
45. Women Entrepreneurship In India - An Overview.
Dr. N. Ratna Kishore E.Sheela 263
46. A study on awareness of entrepreneurial programs and support among the woman
MBA graduates with respect to SPSR Nellore district
P. Siva Prasad, Dr. Suja S. Nair 269
47. Women Entrepreneurship- The Way for Economic Empowerment
U. Chandramouli, A. Rajeswari,  278
48. Poverty Alleviation through SHGs with Micro Finance
D. Syamala, B. Saritha 283
49. Problems And Prospects of Women Entrepreneurs in India
Thurumella Ramanaiah Dr. N. Ratna Kishor 288
50. A Study on Problems Faced by Women Entrepreneurs in Rural Areas
V. Murali, Bhagyaraj. A 296
51. Women Entrepreneurs- Problems And Prospects
V. Pavani (MBA) M. Mounika (MBA) 302
52. Role of Women Entrepreneurship in Indian Economy
Kumba Nagamani, Dr. N. Ratna Kishor 307
53. Women Entrepreneurship in India
S. Rizwana Sultana, J. Syamala Devi, Y. Devi, K.Hari Babu 315
54. Women Entrepreneurship - Challenges And Opportunities
Madhavi. Nuthalapati, Dr. A. Kanakadurga 318
55. Role of Women Entrepreneur in India
B. Venkateswarlu T. Tulasi 323
56. Women Entrepreneurship in The Rural Environment
Dr. B.V.H. Kameswara Sastry 331
57. Challenges, Contributions and Factors for Successful Women Entrepreneurs in
Rural Development
Shaik Mastan Vali, 336
Technical Session - IV (Rural and Agriculture Entrepreneurs)
58. The Role of Micro enterprises in the Promotion of Rural Entrepreneurship in the
Guntur District of Andhra Pradesh
Dr. P. Nagamani, Dr. T. Ramadevi 342
59. The Socio-Economic Conditions of Rural Tribal Agricultural Women Workers in
Prakasam District of Andhra Pradesh
Atyala Salem Raju 354
60. Women in Arunachal and their Status in the Socio - Cultural Life, Shillong:
Government of Arunachal Pradesh.
K. Prabhu Rani 361
61. Agricultural Entrepreneurship
Anilambica Kata, Suresh Chandra.T 366
62. A Study on Agriculture Entrepreneurship Development with Reference to
Kothapali Mandal, East Godavari District
*B. Swathi Devi, G. V. Chaitanya 370
63. Emerging Trends in Agricultural Entrepreneurship
A. J. Mohan Rao, Gk. Patnaik Karakavalasa 376
64. A Study on Employment Conditions and Risks among Street Food Vendors in
Thiruvannamalai District
Dr. E. Sambasivan,  382
65. Role of Agricultural Entrepreneurship for Sustainable Economic Development
-Special focus on Food Processing Industry
Smt. L. Vijaya, Smt. P. Rupavathi 389
66. Agriculture: Socio Economic Factors as Leads to Farmers Suicides in A.P
G. Saritha,  394
67. Rural Women Entrepreneurship in India Problems and Challenges
Dr. Mazharunnisa  403
68. Emerging Green Market as an Opportunity for Green Entrepreneurs and
Sustainable Development in India
Mr. B. Sudheer Kumar, Dr. V. Mallikarjuna, Dr. N. Kumara Swamy, 406
69. Agricultural Entrepreneurship
Ch. Rajasekhar, P. Chinnari 416
Role of Entrepreneurship Education in Nurturing Potential Entrepreneurs to Fuel
the Economic Growth Engine
*K. Sivaji Ganesh, **Prof. G. V. Chalam,
*Ph.D. Scholar, Department of Commerce and Business Administration, Acharya Nagarjuna University, Nagarjuna Nagar,
**Professor, Department of Commerce and Business Administration, Acharya Nagarjuna University, Nagarjuna Nagar.
“The success of the young entrepreneur will be the key to India’s transformation in the new millennium”.
Dhirubhai Ambani, Former Chairman, Reliance Industries Limited

Abstract: Entrepreneurship education is extremely important from the national point of view as it promotes job
creation and ensures economic development. Entrepreneurship education in India has gained momentum in the recent
past but it is not free from deficiencies. There needs to be restructuring of pedagogy to suit the native requirements if at
all India wants to nurture a pool of talented entrepreneurs who can contribute to economic growth. This paper attempts
to present the role of entrepreneurship education in augmenting economic growth of a nation, the trends in and the
challenges faced by entrepreneurship education in India. If entrepreneurship education in India cannot completely
remove the major hindrances in the pursuit of economic development and employment, at least it can make a fine
restart. The Government also needs to play their part in encouraging entrepreneurship education directed at nurturing
entrepreneurial competencies and formulating favorable policies to reinforce the entrepreneurial ecosystem in the country.
Key words: Entrepreneurship, Economic development, Entrepreneurship education

Introduction
With the globalization as the order of the day, entrepreneurship has been receiving accolades
alike from government as well as educational institutions. Changes in the global economy have led to
fewer job avenues for students, which made the government to develop plans to foster creativity among
students through entrepreneurial activities and programs. Entrepreneurship education in India has gained
momentum in the recent past as it may help students to hone up their knowledge and skills, which in turn
could benefit them to begin their start-ups.
Entrepreneurship education is extremely important from the national point of view as it stimulates
innovation, promotes job creation and ensures economic development. To achieve this mission, teaching
pedagogy of entrepreneurship education should be appropriate and relevant enough to enable the
learner to acquire knowledge, develop creative talents and managing skills of an enterprise. However
entrepreneurship education in India is not free from deficiencies. There needs to be restructuring of
pedagogy to suit the native requirements if at all India wants to nurture a pool of talented entrepreneurs
who can contribute to economic growth.
The objectives of this paper are: to understand the role of entrepreneurship in economic
development, to present the role of entrepreneurship education in augmenting economic growth of a
nation, to analyze the trends in entrepreneurship education in India, to assess the challenges faced by
entrepreneurship education in India and to suggest measures for the improvement of entrepreneurship
education in India. The present paper makes use of qualitative literature to understand the pertinent
concepts undertaken for the study and to arrive at drawing suggestions and conclusions.
Entrepreneurship
Entrepreneurship is a derived from the French verb “entreprendre”, meaning to undertake, to
attempt, or to adventure. It is the process of giving individuals the prospect that enables them to identify
profitable opportunistic ventures and the needed application of knowledge, skills and attitudes to initiate
action to enter into the venture (Jones & English, 2004). Entrepreneurship is dealing with uncertainty,
making a distinction between risk, which can be calculated, and uncertainties which can’t be overcome
2 Role of Entrepreneurship Education in Nurturing Potential Entrepreneurs to Fuel the Economic Growth Engine

(Chandler, 1990).  Entrepreneurship as a systematic  innovation consists of purposeful and organized


search for changes, and systematic analysis of the opportunities such changes might offer for economic
and social innovation. Entrepreneur is a person who is willing to risk his capital and other resources
in new business venture, from which he expects substantial rewards if not immediately, then in the
foreseeable future (Peter Drucker, 1985). Entrepreneur is the bearer of the mechanism for change and
economic development, and entrepreneurship as the undertaking of new ideas and new combinations
that is innovations (Schumpeter, 1934).
Role of Entrepreneurship in Economic Development
Entrepreneurs contribute to economic development in terms of job creation, innovation and
external income generation depending upon priorities and different stage of market reform (Small bone &
Welter, 2001). The impact of entrepreneurship on employment is found to be high in firms with less than
twenty employees. Those firms have great potential for future economic development. Economic policy
changes should be precisely made to boost entrepreneurship (Carland & Carland, 2004). Entrepreneurship
has an important role to play in fostering from a predominantly traditional / agrarian economy to
modern economy. With innovation driven growth, productivity is increased in advanced countries. Self-
employment, startup and credit market determine quantity and quality of entrepreneurship and low
entrepreneurial activity contribute to economic stagnation and even developmental gap (Naude, 2008).
Some of the benefits that the Entrepreneurs contribute to the economic development are presented
here under.
ŠŠ An entrepreneur provides employment opportunities to a large number of people thus remove
unemployment problem.
ŠŠ Entrepreneurs to avail the incentives granted by the government establish industries in backward
and rural areas. In the process regional disparity is removed and regional development is
emphasized to help in improving the standard of living of the people residing in suburban and
rural areas by providing employment and income.
ŠŠ Entrepreneurs help to mobilize and utilize local resources like small savings and talents of
acquaintances, which might otherwise remain idle and unutilized. Thus they help in effective
utilization of resources.
ŠŠ Entrepreneurs reduce the pressure on the country’s balance of payments by exporting their goods.
They earn valuable foreign exchange through exports.
ŠŠ Entrepreneurs produce a wide range of products required by consumers. They meet the demand
of the consumers without creating a shortage for goods.
ŠŠ Entrepreneurs help in the development of the society by providing employment to people and
encourage democracy and self-governance.
ŠŠ Entrepreneurs raise money for running their business through shares and debentures. Trading
of shares and debentures by the public with the help of financial services sector leads to capital
market growth.
ŠŠ The infrastructure development of any country determines the economic development of a
country. Entrepreneurs by establishing their enterprises in rural and backward areas influence the
government to develop the infrastructure of those areas.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Entrepreneurship Education in Nurturing Potential Entrepreneurs to Fuel the Economic Growth Engine 3

The Indian Scenario


Modernization is one area that is witnessing development of entrepreneurship in the regional
areas in the country. Due to financial constraints and competition in the metro cities, entrepreneurs are
setting up industries in Tier II cities. Some State Governments like Kerala, Maharashtra and Tamil Nadu
are offering schemes/incentives for setting up of SME’s in Tier II and III cities. The growth of businesses
in these smaller towns is not only providing several public benefits like better transportation, health
facilities, education etc., but also promoting a balanced development in the country. This has motivated
more entrepreneurs setting up base in their hometowns due to lower costs and affordable talent driving
investor attention and incubation centers to these cities too. Today, entrepreneurial driven economy is the
answer to better standard of living as it drives innovation in manufacturing of goods and services leading
to availability of goods at lower costs making them more affordable. These are for consumption within
the country and hence will lead to growth in the national income and invariably reduce our import
dependency making the economy stronger (Ajai Chowdhry, 2015).
Entrepreneurship is getting importance as the current economic situation demand job providers
to have a dominant role in the nation’s economic development as India is struggling to provide job and
income security to its citizens. Entrepreneurship assumes significant role in the global as well as domestic
economy by industrializing rural and backward areas, as a supplier of input to large industries, creating
employment opportunities. It is key driver to transform agrarian economy into industrial economy. This
is vital for India, as its 31% of population resides in rural areas that are devoid of basic amenities forcing
them to migrate from rural areas to urban areas. Despite the importance of entrepreneurship environment
for venturing into it is not so favorable in India even though it has improved significantly (Amit, 2014).
A study of Entrepreneurial framework condition in India proves that there are some loose ends that are to
be fixed up for realizing the benefits of entrepreneurship to the fullest extent (See Table 1).
Table 1 Entrepreneurial framework condition in India

Strengths Weaknesses

Education and training Emphasis on entrepreneurship is lacking in the


Large pool of manpower. education sector.
Strong educational base in the country. Education is not practice-based.
High quality management education which Poor literacy rates in the country.
can be branched out to entrepreneurship. Poor quality of school education.
Entrepreneurship is not considered a high status
Cultural norms
career in India.
Hardworking and innovating Indians.
Indians are risk averse.
Entrepreneurially oriented communities in
Lack of awareness of entrepreneurship as a ca-
the states of Rajasthan (community: Mar-
reer.
waries, Sindhies) and Gujarat.
Entrepreneurial spirit lies dormant.
There is change in perception, entrepre-
Lack of support in non- business families.
neurship is gaining respect.
Succeeding generations tend to follow earlier
Greater awareness of opportunities amongst
generations; hence secured employment is the
present generation.
first choice.

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4 Role of Entrepreneurship Education in Nurturing Potential Entrepreneurs to Fuel the Economic Growth Engine

Strengths Weaknesses
Entrepreneurial capacity Entrepreneurial potential is not nurtured in the
Large number of NGOs facilitates entrepre- country.
neurship. Fear of failure.
Good industrial base in the country makes There needs to be greater awareness about entre-
people entrepreneurial. preneurship.
Too many government controls.
Government policy
A more proactive role of the government is re-
The country’s liberalization policy in the
quired.
early 90’s has established the government’s
Too many laws regulating the starting and run-
role of being viewed as a ‘facilitator’ rather
ning of business.
than a ‘provider of job’.
Multiple legislations on every issue.
Labour policy on wages is conducive to
Reforms need to continue and further reforms
small business.
required.
Social status and esteem
Well documented and published success stories
Publicity for success stories like Infosys
could help in changing some negative percep-
and Wipro.
tions.
Low manpower cost is a big advantage.
Source: S. Vaidya (2014). Developing Entrepreneurial Life Skills, Springer Briefs in Education.
Entrepreneurship Education
Entrepreneurship education includes all activities aiming to foster entrepreneurial mindsets,
attitudes and skills and covering a range of aspects such as idea generation, start-up, growth and innovation
(Fayolle et al., 2009).
Entrepreneurship education was pioneered by Shigeru Fij II, who started teaching in this field in
1938 at Kobe University in Japan. Courses on small business management were started in the 1940s and
Myles Mace introduced the first course in entrepreneurship in US in 1947 at Harvard Business School.
Only half a century later this phenomenon did gain a more universal recognition (Alberti et al, 2004).
Entrepreneurial education has seen worldwide exponential growth in higher education institutions
(Kuratko, 2005). Entrepreneurship courses are taught at nearly every AACSB (American Assembly of
College Schools of Business) accredited institutions. By the year 2001, it was offered at around 1200
business schools only in United States (Katz, 2008).
The objectives of entrepreneurship education as predicted by Osuala (2010) are:
ŠŠ To provide meaningful education for youth to make them self-reliant and subsequently encourage
them to be self-independent
ŠŠ To provide graduates with the training and support necessary to help them establish a career in
small and medium size business.
ŠŠ To provide graduates with training skills that will make them meet the manpower needs of the
society.
ŠŠ To provide graduates with enough training in risk management to make uncertainty bearing
possible and easy.
ŠŠ To stimulate industrial and economic growth of rural and less developed areas.

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Role of Entrepreneurship Education in Nurturing Potential Entrepreneurs to Fuel the Economic Growth Engine 5

ŠŠ To provide graduates enough training that will make them creative and innovative in
ŠŠ Identifying new business opportunities.
ŠŠ To provide small and medium sized companies with the opportunity to recruit qualified graduates
who received training and tutoring in the skills relevant to management of the business.
Understanding the benefits related with entrepreneurship education, many researchers are now
shifting their attention to the study of economic development through entrepreneurship education
(Haveman & Habinek, 2012). Today entrepreneurial education has become an important part of both
industrial and educational policy in many countries (Hytti & O’Gorman, 2004). Entrepreneurship
contributed to the creation of 27 million jobs in the United States between 1980 and 1995 (Sexton
& Smilor, 1997). The self-employment intentions among students of institutions of higher learning
could be increased through entrepreneurship education and training programs (Tkachev & Kolvereid,
1999). The most common reason that researchers and experts promote entrepreneurial education is that
entrepreneurship is seen as a major engine for economic growth and job creation (Wong et al., 2005).
Entrepreneurial education is also frequently seen as a response to the increasingly globalized, uncertain
and complex world we live in, requiring all people and organizations in society to be increasingly
equipped with entrepreneurial competencies (Gibb, 2002). Table 2 depicts the reasons for the relevance
and importance of entrepreneurial education.
Table 2 Reasons for the relevance and importance of entrepreneurial education.

Reason Individual level Organizational level Societal level


Commonly stated reasons for entrepreneurial education.
More individuals are needed Entrepreneurship and innovation
Growing organizations create
Job creation that are willing and capable to are primary paths to growth and
more jobs
create job growth job creation
Organizational renewal is Renewal processes are
Economic Entrepreneurship can give
fundamental to every firm’s fundamental to the vitality of
success individuals economic success
long-term success economies
Globalization, People need entrepreneurial Entrepreneurial firms play A deregulated and flexible market
innovation and skills and abilities to thrive in a crucial role in changing requires people with higher-level
renewal an ever-changing world market structures general skills
Rarely stated reasons for entrepreneurial education.
Employee creativity and joy is
Joy, Creation / value creation / Economic wealth of nations
essential for the performance
engagement, creativity is a main source of correlates with happiness of its
of new and existing
Creativity joy and pride for people citizens
organizations
People can make a difference Corporations can Social entrepreneurship Addresses
Societal to society, and marginalized collaborate with small Social problems in Society that the
Challenges people can achieve economic entrepreneurship initiatives to market Economy has failed to
success create social value Address
Source: Martin Lackéus “Entrepreneurship in Education – What, Why, When, How”
Having appreciated the contribution of entrepreneurship education in economic development,
many institutions of higher learning have enriched their entrepreneurship program with practical pedagogy
such as case studies, simulations, and internships in order to bring out the entrepreneurship competencies

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6 Role of Entrepreneurship Education in Nurturing Potential Entrepreneurs to Fuel the Economic Growth Engine

of students. Such approaches allow enhanced job creation and not only help the government but also
individuals and the society by reducing the dependency rate and consequently leading to economic
growth and development (Peggy &Maramark, 1996).
Indeed, entrepreneurship education has truly earned a global status for itself, given that it is now
pursued with equal passion even in the developing countries. Most of the studies on entrepreneurship
training look at whether people who have received this education perform better as entrepreneurs than
those who have not. Studies by researchers at the University of Arizona, New York University and other
institutions have found that people who have received entrepreneurship education perform better at
running their own businesses (Scott Shane, 2011).
Entrepreneurship Education in India
Entrepreneurial education is considered as an instrument for economic growth as it has immense
potential of employment generation. Therefore developing the culture of entrepreneurial mindset among
the students has become a thrust area for Government, policy makers and the society. Government has
to promote entrepreneurial culture to create new venture for the economic growth. New venture creation
is the result of excellent human skill with developed technology and availability of resources. In order to
nurture the entrepreneurial spirit among the younger generation some of the educational institutions in
India are beginning to include entrepreneurship as a core course in business education. Greater emphasis
has been laid down in the recent past on benefits of entrepreneurial focused education at the universities,
instilling the confidence in students to turn ideas into business ventures.
With over 3100 start-ups and a steep projection to reach around 10000 by 2020 India is building
its very own Silicon Valley. India is the 3rd largest start up location globally with over 800 start-ups
created each year and over USD 2.9 Billion in funding received since 2010 (NASSCOM Startup Report,
2014). With a strong venture capital and private equity backbone of over 70 active players in just 2014,
more than 550 angel investors and over 80 incubators and accelerators, the youth in India are being
groomed to succeed with new and innovative ideas (CXO Today, 2015).
The Government of India has also been contributing significantly in order to promote
entrepreneurial spirit within the students by way of risk funding. In order to push start-ups and SMEs,
the Government of India has launched two new investment and loan programs with a combined budget
allocation of INR 12,000 Crore (Mohul Ghosh, 2015). The Finance Ministry of India has launched a
new program “fund of funds” in order to invest in various venture capitalists funds for meeting the equity
requirement of start-ups. The Ministry has also launched “India Aspiration fund” with an initial corpus
of INR 200 Crore in order to boost the entrepreneurial ecosystem within the country (Sujata Sangwan,
2015).
As the role of institutes of higher education in promoting entrepreneurial mind set among the
students is concerned, most of the top business schools and technical schools are offering entrepreneurship
education in the form of short and long term programs. The NS Raghavan Centre for Entrepreneurial
Learning in Indian Institute of Management (IIM) Bangalore has a management program designed
for entrepreneurs and family businesses. The Indian School of Business in Hyderabad offers executive
management and post graduate programs in entrepreneurship education. IIM Bangalore is in the process
of making entrepreneurship a compulsory course in the years to come. The Indian Institute of Technology
(IIT) Madras incubation cell consists of alumni dedicated to providing funding along with the technical
and business mentorship needed for a start-up to succeed and thrive. iCreate is an autonomous center to
facilitate a wide range of “Next Generation Entrepreneurship” in order to create a vibrant entrepreneurial

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Role of Entrepreneurship Education in Nurturing Potential Entrepreneurs to Fuel the Economic Growth Engine 7

ecosystem. S. P. Jain Institute of Management and Research has set-up a Centre for Entrepreneurship
development with a view to promote student interest in entrepreneurship, facilitate new venture creation
and commercialize grass-root inventions (IDCK, 2016).
The start-up ecosystem growth has also brought together faculty members and students at
universities and institutions to join in with their own ventures. Many faculty members across universities
in India are now working with startups either independently or collaboratively with students and co-faculty
members. Faculty members of IITs from across India, including Bombay, Delhi, Madras, Kharagpur and
Hyderabad, are leading the trend of joint start-up collaboration (IDCK, 2016).
Apart from institutional support the methods of teaching entrepreneur education and student
orientation are important dynamics to determine the effectiveness of entrepreneurship education. At
university level the methods of teaching entrepreneurship education can be classified into: traditional
methods also known as passive methods which comprise normal lectures and innovative methods also
known as active methods that are more action-based respectively. Compared with passive methods,
active methods require the teacher to facilitate learning, not to control and apply methods that enable
student‘s self-discovery (Bennett, 2006). In India, the three methods that are mostly employed for
teaching entrepreneur education are: lectures, case studies, group discussions. In reality these are the same
approaches used in other business management courses and are passive and ineffective in developing
entrepreneurial spirit. Such methods actually make students become indolent participants and prepare
them to work for an entrepreneur, but not to become entrepreneurs.
Challenges of Entrepreneurship Education in India
The leaning to pursue entrepreneurship is comparatively strong in India, where as the educational
support for its development is still far cry from the agenda (Raichaudhuri, 2005).Entrepreneurship
education in India is well established but it is not free from deficiencies. Entrepreneurial education in
India has several challenges to take on and the most important one is turning the idea of entrepreneurship
into an educational model. Creation and the success of entrepreneurs greatly depend on motives, attitudes
of people. Entrepreneurship has not been the preferred course among management students in India and
it has to go a long way in attaining the status of a favored destination. Perhaps, this is one of the reasons
why entrepreneurship is offered as an extra-curricular or co-curricular program in the majority of the
colleges and universities in India (Shankar, 2012).
Lack of institutionalization, absence of indigenous experience, dearth of trained teachers, focus on
short-term results, limitations with pedagogy and subject not considered as core are six primary obstacles
to teaching entrepreneurship in India (Shankar, 2012).
Top institutes in India are offering technical or management education with their popular support
programs for entrepreneurship, called “entrepreneurship cells” or “E-cells” are inadequate to create
entrepreneurial spirit (Mutsuddi, 2012). The educational framework for instructing the entrepreneurial
frame of mind seems far from being satisfactory (Dutta, 2012). Entrepreneurship education is an
important component for entrepreneurship policy framework. But entrepreneurship education taught by
many Indian institutions is not holistic enough (Liyan, 2003). There are contextual differences between
developed and developing economies that demand the development of indigenous standards that are
appropriate for entrepreneurial education with relevant knowledge about sociopolitical governance,
infrastructure, unorganized competition, chronic shortages, or sensitivity to local culture (Bhardwaj &
Sushil, 2012).

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8 Role of Entrepreneurship Education in Nurturing Potential Entrepreneurs to Fuel the Economic Growth Engine

Indian Entrepreneurship Education Programs (EEP) offer training and coursework, but not the
other components. Even when the supportive frameworks exist, they are often not coordinated with the
other components of the EEP – for instance, almost every IIM has its own incubator, but these incubators
are mainly designed for outside entrepreneurs, and are not synchronized with the EEPs offered by the
IIMs (Liyan, 2003).
Teachers of entrepreneurship education lack practical experience in business. In most of
the institutions Management graduates without specialized skills in entrepreneurship teach the
students. Entrepreneurial intentions of the graduates in the developing countries are louder than that
of the developed ones, but actions speak lesser. The outcomes of entrepreneurship programs are not
instantaneous, as graduates’ impulse and competencies progress overtime. Hence, it is undesirable to
evaluate entrepreneurship education in terms of entrepreneurial intensions and the rate of graduates’
business creation.
Another problem related to entrepreneurship education is mixing it up with Management
education. As a result, the vital aspect of entrepreneurship education “entrepreneurial training” is missing.
Aspects like acquaintance with technological innovations, creative thinking, new product development,
leadership etc. do not get due recognition as they deserve. In most of the universities entrepreneurship
courses are comparable with general business programs.
The aim of entrepreneurship education is to sow the seeds of entrepreneurial drive and spirit
among the students. Passive modes of learning adopted by the schools of entrepreneurship education do
not meet the requirements of the real life situation and fails to instill such a vision in the younger students.
Most of the students prefer lucrative jobs with multinational companies with a good pay packet as it is
socially more satisfying and less risky. This mind set is a result of social norms and education imparted.
Younger generation in India is scared of launching startups as they believe that they lack confidence
and knowledge required. If properly trained, the students in India will have ample opportunities to
become entrepreneurs. Entrepreneurship will progress in those societies where cultural norms permit
variability in the choice of paths of life. Unfortunately, the Indian culture comprises a web of benefits that
in many ways run counter to entrepreneurship (Leo Paul Dana, 2000). Indians believe that it is healthier
to be passive and satisfied with the status quo for the inner soul than striving to improve one’s situation.
Most of the people, feel that taking up a job is much better than running the risk of starting a venture.
Suggestions for improving Entrepreneurship Education in India
ŠŠ No doubt the promotion of entrepreneurial education leads to true entrepreneurship among
the students which can be seen as fuel for economic growth engine and job creation. However
certain issues are to be addressed sooner than later to realize the intended results. The following
are the suggested measures to improve entrepreneurship education in India. Entrepreneurship
education programs must be precisely designed to multiply the students’ knowledge base in
entrepreneurship. The course contents and teaching methodologies have to be distinguished
between entrepreneurship education and other traditional business courses.
ŠŠ Strong didactic methods in entrepreneurial education for teaching, learning, and evaluation of
outcomes, review and feedback to teachers need to be established.
ŠŠ Entrepreneurial education requires qualified teachers who can motivate and instill the much
needed entrepreneurial mind set among the students. Competent teachers with entrepreneurial
qualities like risk taking, scouting for opportunities to exploit and good communications skills
must be selected in institutes of entrepreneurial education. Entrepreneurship education would be
Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship
Role of Entrepreneurship Education in Nurturing Potential Entrepreneurs to Fuel the Economic Growth Engine 9

more successful if some experienced entrepreneurs are invited to associate with the institute as
visiting faculty.
ŠŠ Small groups of teachers must be provided with strong encouragement, support, time for focus
and access to specialized knowledge to develop effective and efficient entrepreneurial education
pedagogy. To meet this purpose, they must be given the opportunity to observe in other premier
institutes of entrepreneurial education to discover and refine a methodology that exactly fits their
environment. A concerted effort involving stake holders such as teachers, students, heads, policy
makers, researchers, should be made in bringing in robust reforms in entrepreneurial education.
ŠŠ In order to make entrepreneurial education more effective, diligent care must be taken by the
institutions while identifying and selecting the candidates for the courses. Proper testing tools
should be devised to select the best candidates with entrepreneurial spirit. Teachers should give
their students assignments that can lead to continual interactions with the outside world, for deep
learning. Such “learning by doing” activities can produce the development of entrepreneurial
competencies among the graduates.
ŠŠ If graduates want entrepreneurship to be learned as a career, it is best done through apprenticeship.
The learning tools that must be deployed in entrepreneurial education to a greater effect could
be: student business start-up plans, consultation with practicing entrepreneurs, entrepreneurship
simulations, behavioral simulations, interviews with entrepreneurs, live case studies, field trips,
and the use of success stories of entrepreneurs.
ŠŠ Nurturing an entrepreneurial culture acts as a force to reckon with in the economic development.
An entrepreneurial culture can be fostered through promoting entrepreneurial values in media
and well documentation and publication of success stories. This could help in changing some
negative perceptions about entrepreneurship among the younger people.
ŠŠ Too many laws regulating the starting and running of business can do no good to the economy.
Multiple legislations on every issue will hamper the entrepreneurial spirit of the prospective
entrepreneurs. Hence the government should continue with reforms and should play more
proactive role to create an entrepreneurship friendly eco system which in turn will benefit
entrepreneurial education.
Conclusions:
Entrepreneurship supports economic development of a nation as it is a key contributor to
employment creation and national income. In the context of the Indian market, entrepreneurship led
economic growth is more inclusive and hence Governments, both at Centre and State level, have been
taking initiatives to boost the entrepreneurial ecosystem as they realize the benefits of entrepreneurship
brings to the economic growth of the country. Entrepreneurs and government can work collectively
to transform a developing economy into developed economy. In order to catch up with the developed
countries, India needs the hands of many entrepreneurs who are willing to make it big in businesses. If the
students with entrepreneurial dynamism get proper training, they will have the chances of becoming true
entrepreneurs and contribute their might for economic development of the nation. Entrepreneurship is
a philosophy that requires the government, society, and the educational institutions to work in tandem.
Entrepreneurship education in India to achieve its quest for nurturing potential entrepreneurs to
contribute to economic development and employment, the institutions should restructure their programs
and can make a fine restart. The Government also needs to play their part in encouraging entrepreneurship

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10 Role of Entrepreneurship Education in Nurturing Potential Entrepreneurs to Fuel the Economic Growth Engine

education directed at nurturing entrepreneurial competencies and formulating favorable policies to


reinforce the entrepreneurial ecosystem in the country.
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Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


A Study on Essential Skills Required for Modern Entrepreneurs
*T. Narayana Rao, **Dr. V. Srinivasa Prasad
*MVGR of College of Engineering (A), Department of Management Studies Chintalavalasa -Vizianagaram
**VRS&YRN College, Department of Management Studies Chirala –Prakasam-district

Abstract Entrepreneurs are people who start their own business. They are known for taking up high risk, having big
ideas, and making major innovations that can change how others do business. While anyone who starts a business has
entrepreneurial spirit which makes them move, true entrepreneurs are distinguished by a certain visionary quality.
For success of any business there are certain skills which are highly essential. In this research paper, we’ll look at the skills
need to be a successful entrepreneur, and we’ll explore resources that you can use to develop the traits needed for success.
Key words: Entrepreneurs competencies, Character, Entrepreneur behavior

Introduction:
Entrepreneurship has long been valued as a key contributor to the growth of an economy. It
is widely believed that economies that are abundantly supplied with entrepreneurs will tend to grow
far more rapidly than those in which entrepreneurial talent is scarce. The entrepreneur continues to
play a critical part in the growth process, and there is no reason to expect that role to disappear. An
entrepreneur is an individual or group of persons who try to create something new, who organizes
production and undertakes high risk involved in the establishment and operation of a business enterprise.
Entrepreneurship Development Institute of India(EDI) Ahmadabad conducted a research study of
entrepreneurs and explore (or) identified competencies namely, innovation, watching for opportunity,
persistence, information seeking, quality consciousness, commitment to work, efficiency lover, proper
planning, self confidence, assertiveness, persuasion, efficient monetary and concern for people.
Objective of the study:
The objective of the study is to identify the essentials skills that are required for modern
entrepreneurs.
Definition:
“Entrepreneurship as the function of seeking investment and production opportunity, organizing
an enterprise to undertake a new production process, rising capital, hiring labor, arranging the supply
of materials, finding site, introducing new techniques and commodities, discovering new sources of raw
materials and selecting top managers of day to day operations of the enterprise”
Prevailing concepts of entrepreneurship are:
Psychological Traits:
Entrepreneurship development is due to the ability of the rage to achieve something in their life.
This concept was developed by Mc Clelland. According to him individuals have psychological urge to
achieve something new. Of course the degree of urge varies from one individual to another. Those who
have high degree of urge to achieve in their life become entrepreneurs and all the activities enabling them
to fulfill their urges are called entrepreneurship.
Sociological Traits:
Entrepreneurship development is also due to the sociological traits of the individuals living in a
particular place. Certain individuals would like to attain status in the society by means of setting up of a
12 A Study on Essential Skills Required for Modern Entrepreneurs

new business or industry. However, they are allowed to act within the constraints of the cultural norms
and religious moves that are customary in the society.
Economic Factors:
Apart from the psychological and sociological factors, entrepreneurship development is also
due to the existing economic activities of the state where the entrepreneurs live. Individuals learn from
the existing economic activities as how best to equip themselves for meeting the future challenges. They
collect adequate economic and technical information and decide as how best to introduce new business
that suits to the expectations of the Government and its revised economic policies.
Review of literature:
ŠŠ There are many fields on what make someone an entrepreneur and what an entrepreneurial skill
is. An entrepreneur can be defined the one who organizes, manages and assumes the need of a
business enterprise. It can be defined as a person who have decided to take control f his/her future
and becomes self employed whether by creating his own unique business or working as a member
of a team at a multi level vocation. He is a person who has possession of an enterprise or venture
and assumes significant accountability for the inherent risks and the outcome. He is an ambitious
leader who combines land, labor and capital to create and market new goods or services (Stephen
1991)-(01)
ŠŠ Entrepreneurial skill can be defined as the ability to create something new with value by devoting
the necessary time and effort, assuming the accompanying financial, psychic and social risks, and
receiving the resulting rewards of monetary and personal satisfaction and independence (Hisrich
& Peters, 2002)-(02).
ŠŠ Pajarinen et al. (2006) [03] have said that entrepreneurs with higher academic background are more
innovative and will use modern techniques and models to do business. Barringer and Bluedorn
(1999) [04] have described entrepreneurs as individuals who can explore the environment,
discover the opportunities, and exploit them after proper evaluation. Kuratko (2009) [05], in his
book, distinguishes between entrepreneurs and small business owners. He highlights that these
two terms are often used interchangeably, but both have a lot of differences in their reaction
under certain situations.
ŠŠ Several researchers claimed that optimism was associated with positive outcomes in entrepreneurs,
their success, and their contributions to the economies in which they operate. Kuratko and
Hodgetts suggested that optimism among entrepreneurs, even in bad times, is an important
factor in their drive toward success (Kuratko & Hodgetts, 2004) - [06].
ŠŠ Marcela Rodica Luca (2013)–[07] Analyzed the relations between entrepreneurial personality
traits and entrepreneurial intentions in students belonging to bachelor, master and doctoral
level. From the comparison between two paired samples, one involved in entrepreneurial
training and the other one not involved, results a strong interaction effect between involvement/
non-involvement in entrepreneurial training and the intent of starting a business on all the
entrepreneurial personality traits.
ŠŠ Jeya Ani J. and Lourdes Poobala Rayen42 (2014) – [08] in their study says that the rural women
entrepreneurs doing family business have higher business management skills than the family
of women entrepreneurs doing private occupation, agriculture and others. Moreover, the rural

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


A Study on Essential Skills Required for Modern Entrepreneurs 13

women entrepreneurs doing family business are having higher enterprise skills than the other
categories.
Types of Entrepreneurs:
Based on their working relationship with the business environment they are functioning in,
various types of entrepreneurs can be found. The chief categories are these four types of entrepreneurs, i.e.
5.1 Innovative Entrepreneurs
This type of an entrepreneur is more interested in introducing some new ideas into the market,
organization or in the nation. They are drawn towards innovations and invest a lot of time and wealth in
doing research and development.
5.2 Imitating Entrepreneurs
These are often disparagingly referred to as ‘copy cats’. They observe an existing successful system
and replicate it in a manner where all the deficiencies of the original business model are addressed and
all its efficiencies are retained. These entrepreneurs help to improve an existing product or production
process and can offer suggestions to enhance the use of better technology.
5.3 Fabian Entrepreneurs
These are entrepreneurs that are very careful in their approaches and cautious in adopting any
changes. They are not prone to sudden decisions and try to shy away from any innovations or change that
doesn’t fit their narrative.
5.4 Drone Entrepreneurs
These are entrepreneurs who do not like a change. They are considered as ‘old school’. They want
to do business in their own traditional or orthodox methods of production and systems. Such people
attach pride and tradition to even outdated methods of doing business.
Skills for entrepreneur’s business to success:
Personal characteristics and attitudes which can often be hard or impossible to change entrepreneurs
can acquire skills if they are willing to learn them. Additionally, they can hire people to work for them
who have the needed skills. Either way, the following skills are important if the entrepreneur’s business is
to succeed.
Ability to Plan Leadership Skills Management skills

Team Building Skills Marketing Skills Interpersonal skills

Essential skills for modern entrepreneur:


There are certain skills helps to be expertise in some key area, but these are not defining
characteristics of entrepreneurship. Instead, the key qualities are traits such as creativity, the ability to
keep going in the face of hardship, and the social skills needed to build great teams. If you want to start
a business, it’s essential to learn the specific skills that underpin these qualities.

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14 A Study on Essential Skills Required for Modern Entrepreneurs

Creative thinking:
Entrepreneurs are known for thinking outside of the box. Anyone can start an online business or
a storefront; it takes Jeff Bezos to conceive of Amazon.com and expand an online book-selling business to
using drones, streaming media, and supplying nearly any item under the sun Creative thinking can take
a smart, capable business owner to another level of success. In cover letters and interviews, emphasize this
skill to show potential employers that you see connections and possibilities where others do not.
Communication & Persuasion:
It is a skill to be able to express an idea in a clear and concise manner. You should be able to pick
out the most important concepts of your ideas and speak about them with clarity. You will also need to
understand thoroughly the business industry in order to be persuasive. If you are talking to a potential
investor and you get asked a hard question.
Finance. 
While you don’t need to be a CPA (Certified Public Accountant) to run a successful business,
you should still have a decent understanding of your finances, profit margins, cash flow and funding. The
more comfortable you are with all of these numbers, the more confident you’ll be, and the better decisions
you’ll make.
Time management & planning skills:
As mentioned earlier, time is a finite resource. If you let time get away from you, you will have
a hard time starting a successful business. Your planner should be your best friend. Learn to prioritize
and plan. Setting aside several hours each week to plan for the entire week and to make them utilized in
productive way.
Strong Work Ethic:
Being an entrepreneur may seem flashy and exciting. But a lot of hard work and long hours
are required to launch something new. To be successful, entrepreneurs must execute. You’ll often hear
stories of entrepreneurs who begin their workday well before sunrise, or send middle-of-the-night emails.
Entrepreneurs are relentless when it comes to completing projects and following through on the work
required to turn ideas and plans into sellable products.
Strategy. 
It’s easy to think about the “right-now” aspect of your business, because the results are easy to see.
But what about the bigger picture, long-term challenges and goals? How often are you thinking about
those? Without a constant eye on your business’ strategy and skilled assessment of that strategy relative
to the industry and your competition, you can’t hope to grow it over time and remain competitive in the
marketplace.
Risk Taking:
Entrepreneurs often seem more comfortable with risk than other business leaders. This can lead
to tremendous failures, but also stunning successes. Entrepreneurs are willing to live without a steady
paycheck and make short-term sacrifices for a long-term payoff. That said, the risks that entrepreneurs
take are calculated, and aren’t simply done for the thrill. 

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


A Study on Essential Skills Required for Modern Entrepreneurs 15

Identify strengths and weaknesses:


As a business owner, you don’t need to be perfect at everything. You do, however, have to
understand where you’re strong and where you’re weak. Assessing this will inform everything from the
business decisions you make, to the partners you bring on, and to the employees you hire.
Branding (personal and business). 
Whether you’re striving to brand your business or looking to establish yourself as an expert in
your industry, knowing how to do so online is essential to your success. Branding starts with being active
on social media, and is shaped through content publication, whether on or off your website. Be aware,
though, that poor content can lead to negative branding. It’s important to know how to deliver content
and resources that your target audience wants and will find valuable.
Make entrepreneur friends.
According to entrepreneur Jim Rohn, “You are the average of the five people you spend the most
time with.” So who do you want to be? Improve your odds of success by finding entrepreneur friends who
will be able to understand your struggles and give you much needed insight.
Connect via social networking:
Along with SEO, social networks represent a key part of any business’s marketing strategy. Not
only will you need to understand each platform, you’ll want to arm yourself with the best strategies for
getting your startup and personal brand noticed on each one.
Focus on your customers:
To be clear, without customers, you have no business. Make sure all of your pitches, products,
and services are focused on actual customer needs. If you don’t know what these are, research and ask
questions so that you’re able to give great customer service.
Learning skills:
Learning is a skill. As an entrepreneur you need to be a quick learner. You have to be willing to
learn new skills constantly. Understanding and find meaning that is deeper than the surface. You must
learn to make your own arguments (not just those made by the media), synthesize new knowledge,
memorize information, gain new relevant skills, and be able to utilize all this knowledge to create new
things and make old things more efficient.
Conclusion:
The present study achieves the stated objective. It provides an insight for proper understanding
of the skill that are essential for modern entrepreneurial success. in this article it has identified thirteen
major skill-related that act as driving agents for entrepreneurial success they are Creative thinking,
Communication & Persuasion, Finance, Time management & planning skills, Strong Work Ethic,
Strategy, Risk Taking, Identify strengths and weaknesses, Branding (personal and business), Make
entrepreneur friends, Connect via social networking, focus on your customers, in this article we focused
on understanding and acquisition of essential entrepreneurial skill are necessary strategies and tools for
the development of entrepreneurial competencies.
References:
yy Abbasi, M.H., Siddiqi, A., & Rahat ul Ain, A. (2011). Role of effective communications for enhancing leadership and entrepreneurial
skills in university students. International Journal of Business and Social Science, 2(10), 242–250.

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16 A Study on Essential Skills Required for Modern Entrepreneurs

yy Dickson, P. H., Solomon, G. T. and Mark Weaver, K. Entrepreneurial selection and success: does education matter? Journal of Small
Business and Enterprise Development, 15(2), 2008, pp.239–258.
yy Jeya Ani. J, Lourdes Poobala Rayen, Women Entrepreneurship in Rural Areas, Discovery Publications, New Delhi, 2014, p 232
yy Marcela Rodica Luca, Ana-Maria Cazan and Denisa Tomulescu, “Entrepreneurial Personality in Higher Education” Procedia - Social
and Behavioral Sciences, Volume 84, 9 July 2013, Pages 1045–1049.
yy Mr. T.D.Babu (2007) “A Study on Women Entrepreneurial Skills” Journal of Contemporary Research in Management.
yy Sunday Adeniyi ADEYEMO (2009) “Understanding and Acquisition of Entrepreneurial Skills: A Pedagogical Re-Orientation for
Classroom Teacher in Science Education” TURKISH SCIENCE EDUCATION Volume 6, Issue 3, December 2009.
yy https://www.thebalance.com/list-of-skills-entrepreneurs-need-2062391
yy https://www.entrepreneur.com/article/242327
yy https://www.mindtools.com/pages/article/newCDV_76.htm
yy http://www.huffingtonpost.com/neal-jenson/entrepreneurship-skills_b_3228479.html
yy http://www.cefe.illinois.edu/tools/Making%20A%20Job/MAJ_Student%20Guide%20Sample.pdf

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Entrepreneurship in Economic Development in India
*A. Bhagyaraj, **Prof. D. V. Ramana,
* Research Scholar Department of Management Studies, S. V. University, Tirupati
**Department of Management Studies, S. V. University, Tirupati

Abstract: Entrepreneurship is the engine of economic growth and development, particularly in India. The latest Census
reports the unemployment rate as 9.4%, and to further lower this percentage, we need more job opportunities. At a large
scale, it should be done by Entrepreneurs. Entrepreneurs provide a supernatural stroke to an organization, whether in
public or private or joint sector, in achieving inventiveness, speediness, flexibility and a strong wisdom of self-determination.
They bring a new vision to the forefront of economic growth. In that regard, an Entrepreneur can bring certain changes
to the society and to our country. This paper focuses on the entrepreneur’s role in economic development in India.
Key words: Entrepreneurs, Development, Economic Development, Wealth, Employment, Growth Rate
Introduction
The word “entrepreneur” is derived from the French word “entreprendre”, which means ‘to
undertake’. This refers to those who “undertake” the risk of new enterprises. An enterprise is created by
an entrepreneur. The process of creation is called “entrepreneurship”.
Definitions
According to A.H.Cole: Entrepreneurship is the purposeful activity of an individual or a group of
associated individual, undertaken to initiate, maintain or aggrandize profit by production or distribution
of economic goods and services.
According to J.A. Timmons: Entrepreneurship is the ability to create and build something from
practically nothing.
According to Musselman and Jackson: “Entrepreneurship is the investing and risking of time,
money and effort to start a business and make it successful.
According to economist Joseph Alois Schumpeter (1883-1950), “entrepreneurs are not necessarily
motivated by profit but regard it as a standard for measuring achievement or success.”
An entrepreneur can be industrialist as a person who has the initiative skill and motivation to
set up a business or enterprise of his own and who always look for high achievements. Entrepreneur is
the catalyst for social change and works for the general good. They looks for opportunities, identifies
them and seizes them mainly for economic gains. An action oriented entrepreneur is a highly calculative
individual who is always willing to to undertake risks in order to achieve their goals.
It’s evident that Entrepreneurs create initiatives, which in turn creates opportunities, which in
turn creates jobs. The latest Census reports the unemployment rate as 9.4%, and to further lower this
percentage, we need more job opportunities. At a large scale, it should be done by Entrepreneurs. It’s worth
noting that both the reports prepared by Planning Commission to generate employment opportunities
for 10crore people over the next ten years have strongly recommended self-employment as a way-out for
teaming unemployed youth. One such example can be pointed to Mr. N.R Narayana Murthy, whose
company Infosys now employs over 1,45,088 employees.
However, the most important role that Entrepreneurs can play in the country’s development is
by creating wealth for the country, which in turn can fund further start ups and budding Entrepreneurs.
Entrepreneurial companies offer the greatest opportunity for wealth creation, simply because they have
the potential of capturing the market, especially international. Creating and sharing wealth can enable
18 Role of Entrepreneurship in Economic Development in India

entrepreneurs to do what India’s government has failed to do since Independence, such as transforming
education and rural India, making wealth an instrument for bringing the revolutions to build the new
India.
Considering India’s increased poverty rate of 37.2%, Entrepreneurs should create wealth overflow
in the country for its development. The economy of India is an underdeveloped mixed economy. It is
the world’s seventh-largest economy by nominal GDP and the third-largest by purchasing power parity
(PPP). The country ranks 141st in per capita GDP (nominal) with $1723 and 123rd in per capita
GDP (PPP) with $6,616 as of 2016. After 1991 economic liberalisation, India achieved 6-7% average
GDP growth annually. In FY 2015 India’s economy became the world’s fastest growing major economy
surpassing China India has one of the fastest growing service sectors in the world with an annual growth
rate above 9% since 2001, which contributed to 57% of GDP in 2012–13. India has become a major
exporter of IT services, Business Process Outsourcing (BPO) services, and software services with $154
billion revenue in FY 2017. India ranks second worldwide in farm output. Agriculture and allied sectors
like forestry, logging and fishing accounted for 17% of the GDP and employed 49% of its total workforce
in 2014. Textile industry contributes about 4 per cent to the country’s GDP, 14 per cent of the industrial
production, and 17 per cent to export earnings. The services sector has the largest share of India’s GDP,
accounting for 57% in 2012, up from 15% in 1950. It is the seventh-largest services sector by nominal
GDP, and third largest when purchasing power is taken into account. The services sector provides
employment to 27% of the work force.
The Indian pharmaceutical industry has grown in recent years to become a major manufacturer of
health care products to the world. India produced about 8% of the global pharmaceutical supply in 2011
by value, including over 60,000 generic brands of medicines. The industry grew from $6 billion in 2005
to $36.7 billion in 2016, a compound annual growth rate (CAGR) of 17.46%.
Industry accounts for 26% of GDP and employs 22% of the total workforce. According to the
World Bank, India’s industrial manufacturing GDP output in 2015 was 6th largest in the world on
current US dollar basis ($559 billion),and 9th largest on inflation-adjusted constant 2005 US dollar basis
($197.1 billion).
Objectives of the Study
ŠŠ To know the importance of entrepreneurship in India.
ŠŠ To study the impact of entrepreneurship in economic development.
Review of literature
Characteristics of Entrepreneurship
Some of the key characteristics of the entrepreneurs
Economic and self-motivated activity:
Entrepreneurship is an economic activity because it involves the creation and operation of an
enterprise with a view to creating value or wealth by ensuring optimum utilization of scarce resources. Since
this value creation activity is performed continuously in the midst of uncertain business environment,
therefore, entrepreneurship is regarded as a dynamic force.
Risk bearing:
The essence of entrepreneurship is the ‘willingness to assume risk’ arising out of the creation and
implementation of new ideas. New ideas are always tentative and their results may not be instantaneous

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Role of Entrepreneurship in Economic Development in India 19

and positive. An entrepreneur has to have patience to see his efforts bear fruit. In the intervening period
(time gap between the conception and implementation of an idea and its results), an entrepreneur has
to assume risk. If an entrepreneur does not have the willingness to assume risk, entrepreneurship would
never succeed.
Profit potential:
“Profit potential is the likely level of return or compensation to the entrepreneur for taking on
the risk of developing an idea into an actual business venture.” Without profit potential, the efforts of
entrepreneurs would remain only an abstract and a theoretical leisure activity.
Value Creation:
The process of creating value is a characteristic in describing entrepreneurship. Through
entrepreneurship, services, new products, transactions, resources, technologies, and markets are created
that contribute some value to a community or marketplace. Drucker says, “Until entrepreneurial act,
every plant is a seed and every mineral just another rock.
Related to innovation:
Entrepreneurship involves a continuous search for new ideas. Entrepreneurship compels an
individual to continuously evaluate the existing modes of business operations so that more efficient and
effective systems can be evolved and adopted.
Skilful management:
Entrepreneurship involves skilful management. The basic managerial skill is the most important
characteristic feature of entrepreneurship. The effective management of an enterprise, the role of an
entrepreneur is to initiate and supervise design of organization improvement projects in relation to
upcoming opportunities is very much important.
Accepting challenges:
Entrepreneurship means accepting challenges amidst risk and uncertainty. While accepting
entrepreneurship as a career the entrepreneur accepts the challenges of all odds and puts his efforts to
convert the odds into viable business opportunities by pooling together the resources of building and
running the enterprise.
Goal-oriented Activity:
The entrepreneur who creates and operates enterprises seeks to earn profits through satisfaction
of needs of consumers; hence, entrepreneurship is a goal-oriented activity. Entrepreneurship emphasizes
results, achievements and targets achieved. It is work done not imaginary plans or paper decisions. Hence
entrepreneurship is a goal-oriented activity.
Dynamic Process:
Entrepreneurship is a dynamic function. Entrepreneur thrives on changes in the environment,
which bring useful opportunities for business. An entrepreneur deals proactively with changing markets
and environment. He looks at the changes as the source of market advantages, not as a problem.
Uncertainties are market opportunities for him. He capitalizes on fleeting market anomalies.
Individuality:
Other characteristic found in entrepreneurship is that of uniqueness. Entrepreneurship involves
new combinations and new approaches with which entrepreneurs are willing to experiment. Through

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20 Role of Entrepreneurship in Economic Development in India

Entrepreneurship unique products are created and unique approaches are tried. It’s doing something new,
something untested and untried – something unique.
Interest and Vision:
The first factor for entrepreneurial success is interest. Since entrepreneurship pays off according
to performance rather than time spent on a particular effort, an entrepreneur must work in an area that
interests them. The day-to-day activities of a business are interesting to an entrepreneur, this is not
enough for success unless she can turn this interest into a vision of growth and expansion. This vision
must be strong enough that she can communicate it to investors and employees.
Risk and Rewards:
Entrepreneurship requires risk. The measurement of this risk equates to the amount of time
and money you invest into your business. However, this risk also tends to relate directly to the rewards
involved.
Entrepreneurs Help Grow Indian Economy
An entrepreneur is business a leader look for ideas and puts them into effect in encouragement
economic growth and development. They play the most important role in the economic growth and
development of Indian economy. An entrepreneur plays a pivotal role not only in the development of
industrial sector of a country but also in the development of farm and service sector. The major roles
played by an entrepreneur in the economic development of an economy are as follows.
ŠŠ Create large scale Employment: Entrepreneurs provide direct large-scale employment to the
unemployed which is an unending problem of India. Small entrepreneurs provide self employment
to technically qualified persons and professionals. Entrepreneurs clear the path towards economic
development of our country.
ŠŠ Capital Formation: Entrepreneurs promote capital formation by mobilizing the idle savings of
our citizens. They employ resources for setting up their enterprises. Such types of entrepreneurial
activities lead to value addition and creation of wealth, which is very essential for the industrial
and economic development of India.
ŠŠ Balanced Regional Development: Entrepreneurs help to eliminate regional disparities by
industrializing rural and backward areas. The growth of industries and business in these areas lead
to a large number of public benefits like road transport, health, education, entertainment, etc.
They help to reduce the problems of overcrowding, slums and population in cities by providing
employment and incomes to them.
ŠŠ Standard of Living Improve: Entrepreneurs take up latest innovations in the production of wide
variety of goods and services in large scale that too at a lower cost. It enables the people to benefit
better quality goods at lower prices which results in the improvement of their standard of living.
ŠŠ Wealth Creation and Distribution: An entrepreneur stimulates impartial redistribution of
wealth and income in the interest of the country to more people and geographic areas, thus
giving benefit to larger sections of the society. Entrepreneurial activities also ensure equitable
distribution of income and wealthy by inculcating the spirit of entrepreneurship amongst people
thereby providing them self employment with limited resources.
ŠŠ Increasing GDP and Per Capita Income: They encourage effective resource mobilisation of
capital and skill, bring in new products and services and develops markets for growth of the

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Role of Entrepreneurship in Economic Development in India 21

economy. In this way, they help increasing gross national product as well as per capita income of
the people in our nation.
ŠŠ Facilitates Overall Development: Once an enterprise is established, the process of industrialization
is set in action. The unit will generate demand for various types of units required by it and there
will be so many other units which require the output of this unit. This leads to overall development
of an area due to increase in demand and setting up of more and more units.
ŠŠ Concentration of Economic Power Reduces: Industrial development normally leads to
concentration of economic power in the hands of a few individuals which results in the growth
of monopolies. Entrepreneurs contribute towards the development of society by reducing
attentiveness of income and wealth.
ŠŠ Induces Backward and Forward Linkages: Entrepreneurs work in an environment of changing
technology and try to maximise profits by modernization. Entrepreneurs induces backward and
forward linkages which encourage the process of economic development in the country.
ŠŠ Increase Country’s Export Trade: Entrepreneurs earn valuable foreign exchange through
increased exports. They produce goods and services in large scale for the purpose earning huge
amount of foreign exchange from export.
Discussion
The latest Census reports the unemployment rate as 9.4%, and to further lower this percentage,
we need more job opportunities. At a large scale, it should be done by Entrepreneurs. It’s worth noting
that both the reports prepared by Planning Commission to generate employment opportunities for
10 crore people over the next ten years have strongly recommended self-employment as a way-out for
teaming unemployed youth
Several state governments provides welfare schemes to the peoples, for that government want the
financial support from the central government, but some of the states like Gujarat, Tamil Nadu need not
depend central government. Because of they can get more income from the industrialist (entrepreneurs).
At the same time Mr. Narendra Modi became Prime Minister of India, the main reason is model
of Gujarat development but the main reason is Gujarat state is entrepreneurship state, the development
is credited to Modi pocket. Like Tamil Nadu provides a more welfare schemes to public, for the reason
well developed industry in Chennai and Coimbatore. So that industrial (entrepreneurs) developed states
provides employment, infrastructure facilities and standard of living.
A little of the business family like TATA group, Birla, RPG Group and Infosys Narayana moorthy
create a huge employment and production of the country development.
Some of the drawbacks of the same time India has the second highest number of shadow
entrepreneurs in the world. Shadow entrepreneurs are individuals who manage a business that sells
legitimate goods and services but they do not register their businesses. For every business that is legally
registered in India, there are 127 shadow businesses that are not. This means that they do not pay tax,
operating in a shadow economy where business activities are performed outside the reach of government
authorities.
Informal entrepreneurs trade legal products and services, yet do not apply for business registration
or file any incorporation documents with government authorities. The phenomenon of informal
entrepreneurship is seen as a potential driver of job growth and economic development, especially in
developing countries.

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22 Role of Entrepreneurship in Economic Development in India

Some of the entrepreneurs is identified to have adverse impact on the economic development of
India, like Satyam Ramallinga Raju, Vijay Malya and Gali Janardana Reddy.
Conclusion
Entrepreneurship plays an important role for economic development in developing countries
like India. It is evident from the study that entrepreneurs are ready to face the challenges associated with
setting up of business. Therefore, the entrepreneurs need to be motivated to take up entrepreneurship as
a career, with training and sustaining support systems providing all necessary assistance. Entrepreneurs
are creating jobs, generating wealth and nurturing innovation are some of the very crucial job roles that
entrepreneurs should play, all aimed towards sustained development of our country.
References
yy Bednarzick, Robert W. “The Role of Entrepreneurship in U.S. and European Job Growth.” Monthly Labor Review, Vol. 123, No.7,
2000, 3-16.
yy Cantillon. R. 1971. Entrepreneurship and economica development. The free press. New Yark.
yy Audretsch, David and Keilbach, Max. “Entrepreneurship and Regional Growth: An Evolutionary Interpretation.” Journal of
Evolutionary Economics, Vol. 14, No.5, 2004, 605–616.
yy http://unu.edu/publications/articles/are-entrepreneurial-societies-also-happier.html
yy S. Kanoi, “Role of Government in Developing Entrepreneurship in Assam”, Ph. D dissertation, Assam University, 2011.
yy Amrita Dhaliwal “Role of Entrepreneurship in Economic Development” International Journal of scientific research and management
(IJSRM), Volume.4, 4262-4269, 2016
yy Alvareza, S.A. and Busenitz Lowell W. (2001) ‘The entrepreneurship of resource-based theory’ Journal of Management 27: 755–775.
yy Gribben, A.A. (2006) ‘Entrepreneurship Learning: Challenges and Opportunities’ ETF-AF-2006-08.
yy Naude, W. (2008) ‘Entrepreneurship in Economic Development’, Working Papers RP2008/20. World Institute for Development
Economic Research (UNU-WIDER).

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Perspectives of Entrepreneur’s in the New Era
*Anilambica Kata **B. Raghavi
*Asst Prof, AKNU, Email ID: anila.ambica@gmail.com
**MBA, II Year, AU, Email ID: bsslraghavi@gmail.com

Abstract Before advent of 20th Century, the Success of Indian Business was a function of ambition, licenses, government
contacts, and an understanding of the bureaucratic system. All the business Decisions were based on connections, rather than
the market or competition. The Business goals reflected a continuation of the ‘Swadeshi’ movement, which promoted import
substitution to attain economic freedom from the West. During this era, entrepreneurship was subdued, capital was limited and
India had very few success stories. As well, society was risk averse and the individual looked primarily for employment stability.
In 1991, the Indian government liberalized the economy, thus changing the competitive landscape. Family businesses,
which dominated Indian markets, now faced competition from multinationals that had superior technology, financial
strength and deeper managerial resources. Thus, Indian business had to change its focus and re-orient their outlook
outward. A few existing Indian business families adapted to the new economic policies while others struggled. The
Present paper aims to illustrate the rapid changes that changed the world of business giving tempo to the growth
and scope of entrepreneurship & self employments. Firstly, a new breed of business was born, one that focused on ICT
(Information and Communication Technology) and created wealth for owners and employees. So after liberalization,
environment for entrepreneurs has changed. Many opportunities have been created for them to grow in their businesses.
Key words Connections, Import substitution, Risk averse, Liberalization, Re-orient, ICT, VCF’s

Introduction
Current Scenario
Entrepreneurship is not new to India. In fact to quote from the Indian Industrial Commission
Report (1916-1918)–”At a time when the West of Europe, the birth place of modern industrial system,
was inhabited by uncivilized tribes, India was famous for the wealth of her rulers and for high artistic skill
of her craftsmen. And even at a much later period, when the merchant adventures from the West made
their first appearance in India, the industrial development of this country was, at any rate, not inferior to
that of the more advanced European nations.”In fact an earlier version of the current Make in India policy
was the Swadeshi movement launched in 1905 during the pre-Independence era to boycott British made
goods and use Indian made goods. The movement saw the development of the Indian textile industry,
the iron & steel industry by the Tatas, publishing of vernacular newspapers, setting up of vernacular
medium educational institutions, financial institutions etc. However, post-independence the policy focus
of increased public investment in heavy industries and setting up of PSUs did not provide an ideal
environment for entrepreneurship. The main problems faced by an entrepreneur were lack of mentoring
facilities, technology support or easy availability of credit. Though different Reports on employment
highlighted the need for promoting entrepreneurship as means of self-employment, entrepreneurship
did not scale up. To mention a few, in the S.P Gupta “Special Group Report on Targeting 10 million
Employment Opportunities Per Year” (2002) recommended “appropriate programs should be launched
to increase entrepreneurial capabilities and skill for self employment.”
The Montek Singh Ahluwalia “Report of the Task Force on Employment Opportunities”, July
2001 also mentions about developing entrepreneurship ability among the newly self-employed. The
Report even recommends entrepreneurship training for the informal sector. To quote, “A large part of
the employment generated by the economy will be self-employment in the informal sector. These self-
employed entrepreneurs need training of the multi-skill variety, going beyond production skills to include
marketing, finance and accounting and elementary management.
24 Perspectives of Entrepreneur’s in the New Era

The government has over time implemented policies for the promotion of the small industries
which included providing concessional credit, training in entrepreneurship development, marketing
assistance etc. But the entrepreneurial growth did not take off in a big way in India as compared to
other countries because of the procedural hassles, stringent labor laws, economic regulations etc that the
establishments had to face. Further with import liberalization and entry of MNCs into India, the Indian
small scale entrepreneurs are not able to face the competition and are finding it difficult to survive. In
this context to quote from the Second National Commission on Labor (2002) “New economic changes
will provide more opportunities and not enough jobs. Therefore, one has to take advantage of the
opportunities. Both in urban and rural areas, there may not be an impressive rise in wage employment
but there will probably be enough scope for self-employment. The emphasis, therefore, has to be not on
wage jobs but on creating self- employed persons or entrepreneurs. The entire system of training and
education will have to give emphasis on the development of entrepreneurship”.
Reasons for such growth:
In the entrepreneurial ecosystem the journey of an entrepreneur begins from conceiving an idea
to developing it into a project proposal for starting a business. The handholding is required at this stage
which is lacking. The entrepreneur is saddled with regulatory hurdles and financial blocks in moving the
startup ahead. The availability of risk capital from banks or venture capital companies is limited. Poor
infrastructure availability also increases the operational costs for the startups. To quote the National
Knowledge Commission, “50% of the entrepreneurs experienced difficulties while seeking statutory
clearances and licences. Two-thirds faced hassles while filing taxes and 60% claimed to have encountered
corruption. Another hurdle was in accessing reliable information on registration procedures, finance and
other schemes. 56% claimed that the paucity of quality infrastructure – especially transport, power, and
telecommunications – was a critical barrier.” As a result of these hurdles the proportion of closure of units
is also high at the startup stage. The entrepreneurial culture is also lacking as the institutions of learning
train students for wage employment rather than in becoming entrepreneurs. A key socio cultural factor
also pertains to social attitudes towards risk and failure. To better understand and manage risk as well as
create a supportive social environment for entrepreneurs, it is essential to remove the stigma associated
with failure.
Startups:
However, a change is being witnessed today, as quoted by Prime Minister Shri. Narendra Modi,
‘The convergence of technology, integration across diverse fields, distributed architecture and people
willing to back an idea, have opened a new world for enterprise. I see Start-ups, technology and innovation
as exciting and effective instruments for India’s transformation, and for creating jobs for our youth . For
start-ups today there are different levels of financial support that has come to provide the initial seed
capital in the form of incubators, angel funds or venture capital funds followed by private equity and
debt in that order. Between January-September 2015, Angel Funds and VCFs have invested $7.3 billion
in early stage Indian Start-ups.
India’s first generation e-commerce and mobile entrepreneurs have become angel investors which
is a sign of maturing of startup ecosystem. However, there is a danger that too many mentors/ angel
investors with little experience may lead to a situation of unsuccessful startups.
The government has also come a big way in promoting startups. The question therefore what
needs to be answered is what is a start-up? A start-up is a company that is in the first stage of its operations.
These companies are often initially bank rolled by their entrepreneurial founders as they attempt to

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Perspectives of Entrepreneur’s in the New Era 25

capitalize on developing a product or service for which they believe there is a demand. The start-up and
SMEs appear to be of the same size with limited revenues, high cost of operation, job creating but they
operate on entirely different business models. The difference between a start-up and a SME unit is that
a startup is new organization designed to search for a repeatable and scalable business model. A SME,
according to the U.S. Small Business Administration (SBA) is an “independently owned and operated,
organized for profit, and not dominant in its field.” SMEs generally sell known products to known
customers in known local markets. This startup needs an appropriate ecosystem to thrive which includes
adequate funds for startups to help them grow; government to create an environment of ease of doing
business; ready availability of essential services like office space, location, supplies telecom connectivity
etc.; and mentors to provide strategic advice.
Policies for encouraging such startups:
To simplify the regulatory framework the government introduced the Ease of Doing Business
wherein an MSME unit has to fill in a single one page self-declaration online form called Udyog Aadhaar.
The Apprentices Act, 1961 was amended to enable even the MSME units engage apprentices which
will enable the units to get trained labor as well as in turn supply skilled labor. Under the Apprentice
Protsahan Yojana, 50 percent of the stipend payable to the apprentices would be reimbursed by the
Government for the first two years which is an incentive for MSME units to take in more apprentices.
To give boost to the Make in India program, the MSME Ministry has launched the ASPIRE scheme in
March 2015, a Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship. The objective
of the scheme is to set up a network of technology and incubation centers to accelerate entrepreneurship
and also to promote start-ups for innovation and entrepreneurship in agro-industry. To ease the credit
availability requirements of startups the Government had announced the MUDRA scheme- Micro
Units Development & Refinancing Agency, operated by SIDBI for providing refinance to micro units.
This would improve the liquidity of the micro units who right now have to borrow from NBFCs and
moneylenders at high rates of interest. Atal Innovation Mission (AIM). This program operated from NITI
Aayog is about an Innovation Promotion Platform involving academics, entrepreneurs and researchers
and draw upon national and international experiences to foster a culture of innovation, R&D and
scientific research in India. The platform will promote a network of world class innovation hubs and grand
challenges for India. The overarching purpose of this mission is to promote a culture of entrepreneurship
and innovation in India.
1. Self-employment and Talent Utilization (SETU):
SETU meaning bridge in Hindi is a Techno-Financial, Incubation and Facilitation Program to
support all aspects of startup businesses and other self-employment activities, particularly in technology
driven areas operated from NITI Aayog. An Expert Committee on Innovation & Entrepreneurship for
working out the detailed contours of the Atal Innovation Mission (AIM) and SETU was constituted by
NITI Aayog. The Expert Committee has identified five major drivers for creating a vibrant entrepreneurial
eco system viz;
ŠŠ Catalytic government policy and regulatory framework
ŠŠ Easy access to equity capital and debt
ŠŠ Businesses as entrepreneurial hubs
ŠŠ Culture and institutions which encourage entrepreneurship over careerism
ŠŠ Adequate and effective collaboration forums.

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26 Perspectives of Entrepreneur’s in the New Era

2. Electronics Development Fund (EDF):


The Ministry of C&IT has launched the Electronics Development Fund (EDF) to promote
innovation, research and development, and product development in the field of semiconductors, nano-
electronics, IT and associated sectors by bringing in established companies and startups on board. The
objective is to do research, design and develop electronic products within the country for which the
startup units would be provided supportive financial assistance from the EDF.
3. Digital India (DI):
Digital India Program has been launched to provide broadband connectivity in rural and urban
areas. Introduction of digital rural connectivity would give a big boost in developing traditional rural arts,
crafts or other innovative ideas into business models.
Intellectual Property Rights-With the growing number of startups it is essential to protect one’s
products from impersonators. The startups need to go for design patents, trademarks, copyright or trade
secrets protection as the need maybe before marketing their product. India Aspiration Fund- Rs. 2000
crore India Aspiration Fund (IAF) was launched by SIDBI in August 2015 to boost the startups fund
of-funds ecosystem in the country. This fund would invest in various venture capital funds for meeting
the equity requirement of MSME start-ups. A SIDBI Make in India Loan for Small Enterprises (SMILE)
Scheme of Rs.10,000 crore has also been launched to catalyze tens of thousands of crores of equity
investment in start-ups and MSMEs, creating employment for lakhs of persons, mostly educated youth
over the next 4-5 years. The objective of SMILE is to provide soft loans in the nature of quasi-equity and
term loans on relatively soft terms to MSMEs to meet the required debt-equity ratio norm. The 25 sectors
under the ‘Make in India’ program’ would be the focus with emphasis on financing smaller enterprises in
the MSME sector. There will be concessional terms for the enterprises promoted by (SC) / (ST) / Persons
with Disabilities (PwD) and women. The scheme is expected to benefit approximately 13,000 enterprises,
with employment for nearly 2 lakh persons14. These two schemes are in addition to the Rs. 20000 crore
MUDRA scheme.
Together the three finance schemes should boost the startups as well as MSMEs already in the
transition phase and create good number of jobs in the years to come. Till date the startups have been
successful in e-commerce, and other IT based applications of service sector. The startups in manufacturing
sector are yet to take off in a big way. The launch of the above-mentioned policy initiatives should give
a boost to startups in manufacturing as well. As of 16th November 2015, 806 startups have taken off
during the year and the main sources of funding were seed funding and private equity and the products
were mainly IT based applications in the service sector15. In the Global Competitiveness Index (GCI)
2015-16 India has scored 16 points and moved up from its earlier ranking of 71 to 55 out of a total of
144 countries. Region-wise among the emerging and developing Asia India ranks sixth after Malaysia
(18), China (28), Thailand (32), Indonesia (37) and Philippines (47). India does have the potential to
move ahead of these countries. In the World Bank’s Ease of Doing Business Ranking 2015 India is placed
at 142 place out of a total of 189 economies. But on the startup front India ranks third position globally
with 4200 startups. The new initiatives in promoting startups would enable India to move up to the top
position. To conclude, a startup ecosystem has been created through the new policy initiatives which
would not only promote startups particularly in the manufacturing sector but also the micro units would
be able to graduate faster as small and medium units. If this objective is achieved the goal of job realization
through self-employment would be complete as self-employment is the answer to providing jobs to the
huge proportion of population in the economically active age group. This process would be fast tracked by

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Perspectives of Entrepreneur’s in the New Era 27

the flagship programs well supported by the Skill India Mission which would facilitate availability of right
skilled manpower as entrepreneurs complains about skill mismatch. Given that startups are emerging as
major job creators, governments both at the Centre and States need to put in place appropriate policy
framework for the start-ups.
Environment for Startups:
Start ups cannot operate in a vacuum; they need a supporting eco-system to nurture them.
Entrepreneurs have been setting up businesses in India since kingdom come. It is no secret that these
entrepreneurs have originated from a dominant caste. How did this community sustain entrepreneurship
over the ages? The core of this eco-system is the incubation facility within the business that enabled the
next generation entrepreneur to dabble in incremental innovation, funded by angel funding drawn from
the surplus generated by the cash cow of the business. Prototypes were developed and test marketed
through access to vendors and distributors and the sales force. Timely customer feedback on the prototype
led to building the minimum viable product and the soft market launch. Business mentoring from the
experienced elders substituted for any classroom learning.
Those from non-business communities lacked the vital eco-system for creating a start up.
Education, particularly technical education, drew them as a means for joining ‘service’ and pursuing a
rising career which they considered superior to dhandha.
The two professions ran their own divergent paths with their own benchmarks for success. So
from the surnames, chances were, you could determine that Birla was, and Bhattacharya was not, in
business. Along with technology came the professional network or eco-system – with substantial support
from U S based NRIs. Truly, it was the impact of Indians in America that gave the lie to the deeply
held belief in traditional India that entrepreneurs were born – in a certain community. Indians in USA,
irrespective of their surnames, pursued knowledge based new venture creation with vigor and succeeded
with support from the eco-system. Over the past couple of decades an equivalent eco-system has been
getting in place in the country for the new age ventures starting with the well intentioned mentor and
gradually extending to growth stage investors who are the Venture Capitalists and Private Equity players,
and not excluding the markets – from U S based customers for the I T ventures right down to Tier 3 city
based consumers for the e-commerce ventures!
E-Cells in Engineering colleges have been influential in triggering awareness, interest, desire
and action toward entrepreneurship among students from non-business communities. The catalyst for
encouraging college managements to set up E-Cells was NEN, the National Entrepreneurship Network,
set up by the US based Wadhwani Foundation. NEN took roots in India through the pioneering role
played by the founding members, IIM Ahmadabad, IIT Bombay, SPJIMR, BITS Pilani and IBAB,
Bengaluru who designed and delivered courses on New Venture Creation, organized Business Plan
Competitions, and instituted E-Cells and started Incubation Centers. Over a decade plus years, the seed
sown by NEN has blossomed into a nursery of E-Cells engaged in promoting start ups at the college level.
Going beyond E-Cells, IIM A has built a reputed Center for Incubation and SPJIMR conducts public
programs on Start Your Business for aspiring entrepreneurs and Grow Your Business for early growth
stage entrepreneurs.
Besides E-Cells, the number of higher education institutions setting up incubation centers is
increasing with private players chipping in by rolling out start up accelerators. However, the paucity of
experienced mentors and domain experts restricts the effectiveness of these institutions. Entrepreneurship

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28 Perspectives of Entrepreneur’s in the New Era

is the youngest academic discipline in India, little more than a decade in existence, leading to a mis-match
between the startup entrepreneurs’ need and the availability of faculty and mentor expertise.
Is government doing anything to promote first generation entrepreneurship? Of course the primary
accountability is to considerably enhance the ‘ease of doing businesses. That apart, much is expected from
the follow up steps to the Startup India initiative launched on 16th January. In a fundamental way, the
vision for Startup India parallels that of the Green and White Revolutions, which had champions – Dr
Swaminathan and Dr Kurian - to both set the vision and execute sustainably at the grass-root level.
So now India generates entrepreneurs from all communities, whether first generation entrepreneurs
from non-business communities or next generation members from traditional family businesses. Truly
a remarkable feat achieved in less than 3 decades! Just as the radically transformed attitude towards
new venture creation of an IIT or IIM equipped Tamilian Brahmin draws appreciation, so does the
metamorphosis of a youngster into an IIT and or IIM equipped entrepreneur elicit praise.
Today’s new economy entrepreneurs and their ventures differ from the ‘old economy’ entrepreneurs
and their businesses in several respects.
If asset heavy manufacturing and conventional service businesses characterized by incremental
improvements in technology defined the old economy, asset light, online based new service ventures
characterized by rapidly changing technology represent the new economy.
In place of family based management teams, the co-founders of the new ventures are ‘merit’
based, bringing in specific complimentary skills. Often, the founding team can be traced to the college
dorm where you can assess both competence and compatibility. The skill set required for such ventures
are domain and execution-under-pressure, skills.
Ten per cent annual business growth has been substituted by ten per cent monthly growth.
New generation entrepreneurs do not build ventures for life-long association. They are reconciled
to winding up when the funding dries up and to exiting from their own venture for business and personal
reasons.
The worth of the conventional businesses was based on hard assets, the worth of new age ventures
is based on intangible valuation which cannot be mortgaged but can be bartered for equity capital. Till
recently, business operated on the ‘cost plus margin’ business model. This suited manufacturing and trading
companies with owned assets generating steady growth that is fundable by customer revenues and bank
borrowings. Today’s ventures have innovative business models with radically different pricing strategies
for products or services being offered. Business is funded by raising risk capital based on projections of
‘hockey stick’ product/service growth, while piling up huge losses. Such business model innovations aim
to jack up volumes to a level that will ensure business viability at scale in the shortest time possible.
Traditional family business owners accord the highest importance to retaining 100% equity
ownership. Loss of ownership is equated with loss of control over the business. The current entrepreneurial
generation does not conform to this mind set. Authority is not linked with owner ship, effectiveness is the
critical factor since rapid growth is the mantra. The founders see themselves as CEO/CXOs accountable to
customers and investors who have a significant equity share holding. Besides, they understand that, with
valuation inflated through equity dilution a small chunk of a divested pie is bigger than the ownership of
the whole pie.
Leadership is related to pursuing a shifting goal post, effective decision making, grasp of domain
technology and team building, not with age and past achievements in a slow paced environment. New
ventures are built with charged teams working together to create a sustainable venture in the shortest
Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship
Perspectives of Entrepreneur’s in the New Era 29

time. Team members remain as long as they perceive the goal is being achieved. Leadership is by consent
and through demonstration of competence in action.
Lacunae in the leadership required for steering expanding- on -steroids, billion dollar valued
start ups as dictated by competition and investors, in a VUCA (volatile, uncertain, complex, ambiguous)
environment is the critical failure factor today. Spanning the enterprise life cycle from ‘garage’ to ‘global’
level, or from zero to billions of dollars of GMV (Gross Merchandise Value) in less than a decade bears no
comparison to traditional SME growth to under Rs 20 cores in the same time span. To chase the mirage
of valuation or the reality of profits is the existential issue facing today’s entrepreneurs.
As India begins a new year, media coverage of the entrepreneurial eco-system, is not all rosy.
Entrepreneurs have begun to face the reality of being abandoned by risk funds, of the managerial
challenges of scaling up the start up to Business Plan projections, of pursuing growth that enables the
venture to capture value over valuation.
Can an entrepreneur whose venture carries a unicorn valuation with negative returns and is
owned majorly by foreign investors who are not above (or below?) exiting the founder or themselves from
the venture, be the inspiration for our youth to take to new venture creation? Can the nation evolve
an indigenous model of entrepreneurship that combines frugal innovation with customer traction and
equity dilution with profitable growth?
Statistics are available on the amount of equity capital invested in new ventures but not on the
investment in sunk or failed ventures. Point to ponder if India should evolve a more capital efficient
method of creating entrepreneurs.
In recent years, the Indian startup ecosystem has really taken off and come into its own—driven by
factors such as massive funding, consolidation activities, evolving technology and a burgeoning domestic
market. The numbers are telling—from 3,100 startups in 2014 to a projection of more than 11,500 by
2020, this is certainly not a passing trend. It’s a revolution. And it’s going to change the way the markets
are working today in India.
In this story, I’m going to highlight some key aspects of the Indian startup ecosystem and
underline the steps needed to make the environment more conducive for it. Starting with some of the
most disruptive startups, we’ll go on to explore how they raised their recent funding. Next, we’ll take
a look at the investment trends, escalating M&A activity, and the key enablers who are fostering this
growth.
Startups in India have given rise to more startups. Enablers, accelerators, and incubators are firms
providing startups with growth advice and decision-making tools. From advising on government policies
to act as market catalysts, they grow the maturity of young ventures.
Conclusion:
After liberalization and Globalization various initiatives, policies have been introduced in India,
create a pace to entrepreneurship/ self employment. Such policies and initiatives have created a platform
for rise of many start ups by individuals. This can be accounted for as a positive impact on economy of
India, since start ups are very vital for the growth of a developing country like India. Environment should
be friendlier for investors and promoters to start companies since privatization also plays a dominant role
in development of economy.
References:
yy Speech by Prime Minister Shri Narendra Modi at the Startup Event (27 September 2015, San Jose, California).
yy ‘Young Entrepreneurs turn Angels for Younger Startups’, Times of India, June 30, 2014.

ISBN: 978-93-5300-292-3 Technical Session - I


Role of Government in Entrepreneurship Development
*O. Naresh, ** Dr. J. Revathy,
*Research Scholar, Dept. of Commerce & Business Administration,
Acharya Nagarjuna University, Nagarjuna Nagar, India. Email: ogiral.naresh@yahoo.com
** Principal Associate Professor, PG Department of Commerce & Management Studies
VRS & YRN College, Chirala, Andhra Pradesh, India Email: revathy_jagarlamudi@yahoo.com

Abstract: In recent decades, economic growth in countries around the world has become increasingly dependent on
the dynamism of Entrepreneurship. This is especially important in the transition economies. The creation of a new SME
sector in India as a transition country may play an important role in the process of economic regeneration and job creation.
The paper sets out an approach to analyzing the development of Business Entrepreneurs in India. We have focused on
(i) attitudes of entrepreneurs in the private sector towards the role of government in Entrepreneurship development
through provision of assistance to Entrepreneurs in India, (ii) the business environment in which firms operate, and
(iii) attitudes of the employed in government sector towards the role of government in SME development through the
provision of assistance to SMEs in India. The paper reviews the literature on these three approaches and available
evidence on relevance to understanding the performance of SMEs as main agents of entrepreneurship in the India.
Key words: Entrepreneurship, Development of Indian Economy, Government schemes.

Introduction:
It is reported in entrepreneurship literature that several variants of definition of entrepreneurship
concept exist for the reason that entrepreneurship epitomizes a complex phenomenon, being examined
as a process, a resource or a state-of-being. In line with this, researchers classify entrepreneurship into
three main groups. The groups are behavioral definitions occupational definitions synthesis definitions.
This study will adopt the behavioral definition of Schumpeter. Schumpeter , defined entrepreneurship,
as making new combinations which include the introduction of new goods, new methods of production,
opening of new markets, new sources of supply and new organizations. The importance of entrepreneurship
development in several economies globally cannot be overemphasized; as such majority of countries
worldwide have established programmes to support entrepreneurship within their communities. One of
the support schemes that spur entrepreneurship development is the business incubator and the policy tool
to achieve this is the business incubation initiative.
Economic development has been defined by as the method of creating wealth by the gathering
of human, financial, capital, physical and natural resources to produce marketable goods and services.
Rice and Matthews reported that the main goal of business incubation initiative is entrepreneurship
development. In other words an incubator’s main goal is to produce successful firms that will leave
the programme financially viable and freestanding. Business incubators within such programmes serve
as places where entrepreneurs receive value-added support and access to critical tools, information,
education, contacts, capital, and other resources that may otherwise be unaffordable, inaccessible, or
unknown to them. These resources can be made available by a responsive government to fill gaps that
have been identified in entrepreneurship support activities stated that economic development is one of
the objectives that drive each incubator.
Other studies in entrepreneurship and economic development have focused on the role of
government as the lead entity in the entrepreneurial development study. Thus, this study fills the gap
by proposing a study where government policy moderates the relationship between entrepreneurship
and economic development. Against this backdrop, this study seeks to identify the salient role of
government enactment towards entrepreneurship in particular and the importance attached to the other
Role of Government in Entrepreneurship Development 31

factors of production in general. In the context of this study, three variables will be studied. They include
entrepreneurship which includes start-up motive,
Creativity and innovativeness and risk taking. The second variable is the economic development
which is composed of job creation, SME development and Wealth creation. The third variable is
government policy which consists of policy implementation, supportive government policies and
government funding. In this paper we seek to contribute to the entrepreneurship literature. Specifically,
this paper aims at examining the importance of government policy in the entrepreneurial development.
Objectives of the Study:
ŠŠ To Study the Role of government in providing the subsidiaries to Entrepreneurs.
ŠŠ To determine the Entrepreneurship development through government schemes in Entrepreneurship
training institutions.
ŠŠ To examine the role of Entrepreneurship in Economic development of the nation.
Research Methodology:
The study is fully based on Secondary data source from various Entrtrepreneural organizations,
journals, research papers and magazines etc. To be used for this study.
Review of Literature
It has been established that entrepreneurship is a very vital ingredient for job creation as well as
economic development as the success of income generation for the major group of both rural and urban
inhabitants without recognized paid job highly depends on entrepreneurship. The relationship between
entrepreneurship and economic development has been studied extensively both at the local, state and
federal levels. Kumar and Liu study reveal that entrepreneurial sector contribution to employment and
GDP is on the increase. For this reason suggested that governments should minimize the constraints
on entrepreneurship. In the case of government support policies, it is assumed that since government
is in the lead for entrepreneurial development, it should provide the much needed resources within its
capability. Such resources include provision of environment conducive to business that will highly promote
entrepreneurship. Government policy in this contexts any course of action which aims at regulating and
improving the conditions of SMEs in terms of supportive, implementation and funding policies by
the government. Based on this definition, government policy as it relates to entrepreneurial practice is
targeted at encouraging entrepreneurship by making a favorable environment for the entrepreneurs. This,
it does through enactment of guidelines that will regulate entrepreneurial activity generally for the reason
that entrepreneurship is the bedrock of a nation’s path to industrialization. Furthermore, government
needs to enact policies that would be user friendly to the entrepreneurs. Pals argued that there is a need
for government policies as they relate to entrepreneurship to be successfully implemented irrespective of
which administration is in power in order to achieve the goals of the guideline which often times is always
lacking. Government of most countries especially developing countries have in the past invested so much
efforts and resources in establishing policies intended to uplift entrepreneurship . Cases in point are in
China, Brazil, Saudi Arabia, Malaysia and Nigeria. The Chinese government has made concerted efforts
through policies and resources on the development of high technology businesses.
Role of Government in Providing the Subsidiaries to the Entrepreneurs.
The entrepreneurs and their dreams that create economic opportunity for cities, regions and
countries. So, what can governments do to support and encourage innovation development from
entrepreneurs?

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32 Role of Government in Entrepreneurship Development

ŠŠ Create incentives for risk capital. Establish policies (e.g. reduced capital gains taxes) and programs
(e.g. matching funding with the private sector such as the SBIR from the US government) to
ensure the availability of risk capital.
ŠŠ Establish incentives for small and large businesses to co-innovate together. Create a tax and
IP incentive for large businesses to invest, partner and support the innovations created by small
businesses.
ŠŠ Encourage entrepreneurs to invest in R&D. Eliminate the negative incentives such as the US
governments AMT that wipes out any R&D tax credit for most small businesses.
ŠŠ Build leverage into innovation programs. Establish incentives (reduced red tape, special
infrastructure investment, hiring and training incentives, etc) to invest in common areas thereby
creating an ecosystem of participants (university, investors, and entrepreneurs.
Government Subsidiaries In Various Activities:
ŠŠ Investment subsidy:
ŠŠ Reimbursement of Stamp duty, Transfer duty, Mortgage & Hypothecation duty
ŠŠ Reimbursement of land cost in Industrial Estates/Industrial Development Authority/Industrial
Parks (IE/IDA/IPs)
ŠŠ Reimbursement of land conversion charges
ŠŠ Reimbursement of Tax:
ŠŠ Tax on end product/intermediate product
ŠŠ Reimbursement of power consumption charges.
ŠŠ Reimbursement of Interest Subsidy.
ŠŠ Seed Capital Assistance
ŠŠ Reimbursement of expenses incurred for Quality Certification/Patent Registration
ŠŠ Incentives for Swachh Andhra
ŠŠ Reimbursement of cost involved in skill up gradation and training
ŠŠ Textile industry
ŠŠ Marketing incentives
ŠŠ Reimbursement of Transportation charges
ŠŠ Special Incentives for Biotechnology Units
ŠŠ Guidelines for SCSP/TSP schemes and B.C. Entrepreneurs
ŠŠ Service Sector projects by the SC/ST entrepreneurs as listed at Annexure- III
Proposed Scheme on Entrepreneurship Development in India:
An entrepreneurship development scheme is currently being developed by Ministry of Skill
Development and Entrepreneurship. The scheme will be designed around the following major elements:
1. Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
Approved for another four years (2016-2020) to benefit 10 million youth Pradhan Mantri Kaushal
Vikas Yojana (PMKVY) is the flagship scheme of the Ministry of Skill Development & Entrepreneurship
(MSDE).

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Role of Government in Entrepreneurship Development 33

2. UDAAN:
UDAAN is a Special Industry Initiative for Jammu & Kashmir in the nature of partnership
between the corporate of India and Ministry of Home Affairs and implemented by National Skill
Development Corporation. The programme aims to provide skills training and enhance the employability
of unemployed youth of J&K. The Scheme covers graduates, post graduates and three year engineering
diploma holders.
3. Standard Training Assessment and Reward (STAR) Scheme:
The National Skill Certification and Monetary Reward Scheme, known as STAR (Standard
Training Assessment and Reward), was operational between August 2013 and September 2014.
Schools
Expected No
State/Board (In 2014- Sectors
2014-15
15)
Auto, Healthcare, Retail, Security, IT-ITeS, Beauty and
Haryana 240 23,000
Wellness and Sports
Himachal
200 Auto, Healthcare, Retail, Security, IT-ITeS, Agriculture 18,000
Pradesh
Uttarakhand 44 Auto, Healthcare, Retail, IT-ITeS 5,000
Madhya Pradesh 50 Auto, IT-ITeS 2,500
Punjab 100 Auto, Retail, IT/ITES, Security, B&W and Healthcare 5,000
Automotive, Gems &Jewelry, Healthcare, Travel &
Rajasthan 70 3,500
Tourism and Beauty & Wellness
Maharashtra 350 Auto, Healthcare, IT-ITeS, Construction, Capital Goods 15,000
Nagaland 6 IT-ITeS 300
Karnataka 100 Auto, Healthcare, IT-ITeS, Retail 15,000
Chhattisgarh 30 Automotive, Retail and IT-ITES 2,000
ŠŠ Educate and equip potential and early stage entrepreneurs across India:
ŠŠ Connect entrepreneurs to peers, mentors, incubators:
ŠŠ Support entrepreneurs through Entrepreneurship Hubs (E-Hubs):
ŠŠ Catalyses a culture shift to encourage entrepreneurship:
ŠŠ Encourage entrepreneurship among underrepresented groups:
ŠŠ Promote Entrepreneurship amongst Women:
ŠŠ Foster social entrepreneurship and grassroots innovations:
16th Youth’s (2017) Profile as Respondents of Primary Survey, Andhra Pradesh
16th Youth’s Profile In , Andhra Pradesh(2017)
Trainees 33%
Employed 17%
Self employed 19%
Unemployed 31%
(Source: A survey of National Skill Development Centre).

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34 Role of Government in Entrepreneurship Development

List of Supporting Institutions to Entrepreneurship Development

35%

30%

25%

20%

15%

10%

5%

0%
Trainees Employed Self Employed Unemployed

ŠŠ National Institute for Entrepreneurship and Small Business Development (NIESBUD)


ŠŠ National skill development centers (NSDC)
ŠŠ Micro small medium enterprises (NSIC)
ŠŠ District industry centers (DIC)
ŠŠ Entrepreneurship Development Institute of India(EDII)
The Role of Entrepreneurship in Economic Development of the Nation
The important role that entrepreneurship plays in the economic development of an economy can
now be put in a more systematic and orderly manner as follows:
ŠŠ Entrepreneurship promotes capital formation by mobilizing the idle saving of the public.
ŠŠ It provides immediate large-scale employment. Thus, it helps reduce the unemployment problem
in the country, i.e., the root of all socioeconomic problems.
ŠŠ It promotes balanced regional development.
ŠŠ It helps reduce the concentration of economic power.
ŠŠ It stimulates the equitable redistribution of wealth, income and even political power in the interest
of the country.
ŠŠ It encourages effective resource mobilization of capital and skill which might otherwise remain
unutilized and idle.
ŠŠ It also induces backward and forward linkages which stimulate the process of economic
development in the country.
Conclusion
The main role which should played by the government is to do things which are not presently
done by any other bodies. The most important development in the post independence period has been the
Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship
Role of Government in Entrepreneurship Development 35

growth of number of key institutions to promote, assist and develop entrepreneurs to initiate industrial
growth in the country, the country has laid a strong foundation broad based its infrastructure and provide
much needed support & assistance
Reference:
yy Science Journal of Business and Management2014; 2(4): 109-115Published online September 30, 2014 (http://www.
sciencepublishinggroup.com/j/sjbm) doi: 10.11648/j.sjbm.20140204.12 ISSN: 2331-0626 (Print); ISSN: 2331-0634 (Online)
yy Toma, S.-G., Grigore, A.-M., and Marinescu, P.Economic Development and Entrepreneurship. Procedia Economics and Finance,
2014. 8: p. 436-443.
yy Naudé, W.A., Entrepreneurship and economic development: Theory, evidence and policy. 2013, IZA Discussion Paper.

ISBN: 978-93-5300-292-3 Technical Session - I


The Role of Government in Promoting Entrepreneurship
*Dr. A. Kanaka Durga, **Immaniyelu Yepuri
*Assistant Professor, **Research Scholar, Dept. of Commerce & Business Administration
Acharya Nagarjuna University, Guntur - 522510.

Abstract: Entrepreneurial activity involves identifying opportunities within the economic system. Entrepreneurship is
dynamic process. Entrepreneurship plays a crucial role in the growth and development of economic system of society. In spite of
having a large publicly funded science and technology infrastructure and a sizeable education base, India has not been able to
realize its innovative potential due to a fragmented innovation ecosystem. The government of India has taken many initiatives
towards strengthening the innovation ecosystem, the most important of which are: i) the establishment of the National
Innovation Council, whose mandate is to coordinate various innovation-related activities, and ii) the new Science, Technology
and Innovation Policy 2013, which is intended to promote entrepreneurship and science-led solutions for sustainable and
inclusive growth. Government support is a prerequisite for development of entrepreneurship among entrepreneurs. Government
of India is promoting this cause through various schemes such as Technical Assistance, Supply of Machinery and Equipment,
etc. The Department of Small-Scale Industries and Agro and Rural industries was created in 1991, in the Ministry of Industry
to exclusively formulate the policy framework for promoting and developing small-scale industries in the country. No doubt,
the Government has been introducing various self-employment generating schemes in order to generate employment but still it
is seen that entrepreneurial activities in some areas of the country is not satisfactory. Hence, there is an acute need to study the
role of Government in promotion and growth of entrepreneurship. The present study is a modest attempt to study on the Role
of Government in Developing Entrepreneurship.

Introduction:
Many developing countries like India has been facing the problem of rapid growth of population
on the one hand and increasing unemployment on the other hand. In order to promote economic
development, these countries have been spending huge amount of money in different sectors including
education. The Government has been launching number of entrepreneurship development programmes
/ schemes and as such have established various promotion and support organizations like Indian
Institute of Entrepreneurship (IIE), North Eastern Industrial and Technical Consultancy Organizations
(NIETCO), Khadi and Village Industries Commission (KVIC) etc. for entrepreneurship development
in the country. The Government has been providing various types of incentives in the form of subsidy
relating to investment, research and development, taxes, resources, export/import, excise duty exemption
etc. various assistance in different forms, viz.-technical assistance, cash assistance, assistance for obtaining
raw materials, marketing assistance etc., providing training through entrepreneurship development
programmes and providing infrastructural facilities to the entrepreneurs in the country.
Objectives of the Study:
ŠŠ To understand the concept of entrepreneurship
ŠŠ To study various entrepreneurship development programmes
ŠŠ To look into Government policies to micro, small and medium enterprises
ŠŠ To offer suggestions for further improvements
Meaning and Definition of Entrepreneurship:
Entrepreneurship is the capacity and willingness to develop, organize and manage a business
venture along with any of its risks in order to make a profit. The most obvious example of entrepreneurship
is the starting of new businesses. In economics, entrepreneurship combined with land, labor, natural
resources and capital can produce profit. Entrepreneurial spirit is characterized by innovation and risk-
The Role of Government in Promoting Entrepreneurship 37

taking, and is an essential part of a nation’s ability to succeed in an ever changing and increasingly
competitive global marketplace.
Richard Cantillon defined entrepreneurship as “self-employment of any sort. Entrepreneurs buy
at certain prices in the present and sell at uncertain prices in the future. The entrepreneur is a bearer of
uncertainty”.
The Entrepreneurship Center at Miami University of Ohio has an interesting definition of
entrepreneurship: “Entrepreneurship is the process of identifying, developing, and bringing a vision to
life. The vision may be an innovative idea, an opportunity, or simply a better way to do something.
The end result of this process is the creation of a new venture, formed under conditions of risk and
considerable uncertainty.”
An entrepreneur has been defined as, “a person who starts, organizes and manages any enterprise,
especially a business, usually with considerable initiative and risk; running a small business with all the
risk and reward of any given business process”. Entrepreneurs tend to be good at perceiving new business
opportunities and they often exhibit positive biases in their perception (i.e., a bias towards finding new
possibilities and seeing unmet market needs) and a pro-risk-taking attitude that makes them more likely
to exploit the opportunity. An entrepreneur may be in control of a commercial undertaking, directing
the factors of production – the human, financial and material resources – that are required to exploit a
business opportunity. Entrepreneurs act as managers and oversee the launch and growth of an enterprise.
Entrepreneurship is the process by which either an individual or a team identifies a business opportunity
and acquires and deploys the necessary resources required for its exploitation.
Joseph Schumpeter (1934); The entrepreneur is the innovator who implements change within
markets through the carrying out of new combinations. The carrying out of new combinations can take
several forms; 1) the introduction of a new good or quality thereof, 2) the introduction of a new method
of production, 3) the opening of a new market, 4) the conquest of a new source of supply of new materials
or parts, 5) the carrying out of the new organization of any industry.
Jean Baptiste Say (1816); The entrepreneur is the agent “who unites all means of production and
who finds in the value of the products...the reestablishment of the entire capital he employs, and the value
of the wages, the interest, and rent which he pays, as well as profits belonging to himself.”
Harvey Leibenstein (1979); the entrepreneur fills market deficiencies through input-completing
activities. Entrepreneurship involves “activities necessary to create or carry on an enterprise where not all
markets are well established or clearly defined and/or in which relevant parts of the production function
are not completely known.
Role of Government in Promoting Entrepreneurship:
India is a country with over 1.2 billion people, 379 million (31%) of which are between the ages
of 18 and 35 (Census of India, 2011). And, many of these young people are in search of jobs, despite
being educated. For example, only one in every four urban males under 29 years is employed even
though they hold at least a certificate or diploma (National Sample Survey Office, 2013). The aim of the
government has been to create employment opportunities for youth while focusing on rapid economic
growth. Entrepreneurship development is one of the mechanisms adopted by the Government of India
towards the creation of job opportunities. The government’s assumption is that support for innovation
will enhance entrepreneurship development, which will in turn accelerate economic growth.

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38 The Role of Government in Promoting Entrepreneurship

The Government has established number of institutions to implement various entrepreneurship


development programmes / schemes launched within the frame work of five year plan and provided
support facilities to the entrepreneurs in the form of various types of assistances and incentives. In fact,
both the Government and various industrial promotion and support institutions have been making
considerable efforts to facilitate the process of emergence of entrepreneurs for setting up of enterprises in
different field of activity.
The India Inclusive Innovation Fund is designed to “combine innovation and dynamism of
enterprises to solve the problems of the bottom of the pyramid in India” (National Innovation Council,
2014). The initial investment of INR 500 crores is slated to expand 10 times. The government contributed
20% of the fund, and the rest came from financial institutions, insurance companies, multilateral/
bilateral development agencies, and Indian and global corporations. The life of the fund is nine years, and
it is focusing on health care, food and nutrition, agriculture, education energy, financial inclusion, and
environment technology, among other areas.
Government always has a very vital role in the promotion of entrepreneurship. This is a key
objective of Government now since employment opportunities are limited and encouraging entrepreneurs
and entrepreneurship not only creates additional employment but also limits the burden of Government.
The government agencies promote entrepreneurship through different institutions which have been set
up to fulfill this objective.
Ministry of MSME is implementing the entrepreneurship development and skill upgradation
schemes through appropriate training facilities. The Ministry has set up three national level Entrepreneurship
Development Institutes viz., National Institute for Micro, Small and Medium Enterprises (NI-MSME)
(1960) at Hyderabad, The National Institute for Entrepreneurship and Small Business Development
(NIESBUD) (1983) at Noida (Uttar Pradesh), and Indian Institute of Entrepreneurship (IIE) (1993) at
Guwahati, to inculcate entrepreneurial culture especially among the first generation entrepreneurs. There
is the scheme for Providing Support for “Entrepreneurial and Managerial Development of SMEs through
Incubators” in implementation since 2008. There is the MSME Technology Centres (earlier Tool Room
& Technology Development Centres) which provide high end skill training to the youth. A national
award scheme has been initiated by MSME for outstanding performance in Entrepreneurship, Research
and Development, Innovation, Lean Manufacturing Techniques and Quality Products.
Government accords the highest preference to development of MSME by framing and
implementing suitable policies and promotional schemes. 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.
Besides providing developed land and sheds to the entrepreneurs on actual cost basis with appropriate
infrastructure, special schemes have been designed for specific purposes like quality upgradation, common
facilities, entrepreneurship development and consultancy services at nominal charges. Government of
India has been executing the incentive scheme for providing reimbursement of charges for acquiring ISO
9000 certification to the extent of 75% of the cost subject to a maximum of Rs. 75,000/- in each case.
ISO 9000 is a mechanism to facilitate adoption of consistent management practices and production
technique as decided by the entrepreneur himself. This facilitates achievement of desired level of quality
while keeping check on production process and management of the enterprise.
Focus will also be placed on encouraging women entrepreneurs through appropriate incentives
for women owned businesses under the public procurement process. It will also be ensured that gender
Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship
The Role of Government in Promoting Entrepreneurship 39

neutral incubation/ accelerator, network of mentors, industry, resource centres and credit institutes are
developed to facilitate Women Entrepreneurs. Priority will be given for mentorship and support system
for women entrepreneurs in existing business centres and incubators. Steps will also be taken to assemble
gender disaggregated data.
The problem of unemployment is a matter of great concern for any underdeveloped or a developing
country. In India, the unemployment rate has been increasing over the years. The increasing number of
job seekers in the Live Registers of different Employment Exchanges of the country signifies the alarming
rate of unemployment problem. To promote self-employment as a means of job-creation and to promote
entrepreneurship for further job creation, the Micro, Small and Medium Enterprises (MSME) Act, 2006
was enacted to facilitate the promotion, development and enhancing the competitiveness of micro, small
and medium enterprises. Earlier to that the small scale industries (SSIs) were regulated by two sections of
the Industries (Development & Regulation) Act, 1951 which led to absence of an institutional regulatory
and consultative mechanism to capture and guide the progress of an SSI unit from being a micro unit to
a small scale and eventually to medium scale one. The earlier Act also excluded the fast emerging service
sector. But even after the implementation of the MSME Act, 2006 the high proportion of unregistered
MSME units outside the purview of the Act is a matter of concern.
Besides, several schemes and programmes have been undertaken by the Government with the
aim of facilitating access to adequate credit from financial institutions; funds for technology upgradation
and modernisation; integrated infrastructural facilities; modern testing facilities and quality certification
laboratories; modern management practices, entrepreneurship development and skill up gradation
through appropriate training facilities; etc. The schemes so announced include i. Tax Holiday Scheme
ii. Composite Loan Scheme iii. Industrial Estate Scheme iv. Scheme for International Cooperation v.
Scheme of Surveys, Studies and Policy Research vi. Scheme of Fund for Regeneration of Traditional
Industries (SFURTI) vii.Scheme of Product Development, Design Intervention and Packaging (PRODIP)
viii. Scheme of Khadi Karigar Janashree Bima Yojana for Khadi Artisans ix. Scheme of Interest Subsidy
Eligibility Certification (ISEC).
A startup ecosystem has been created through the new policy initiatives which would not only
promote startups particularly in the manufacturing sector but also the micro units would be able to
graduate faster as small and medium units. If this objective is achieved the goal of job realization through
self-employment would be complete as self-employment is the answer to providing jobs to the huge
proportion of population in the economically active age group. This process would be fast tracked by the
flagship programmes well supported by the Skill India Mission which would facilitate availability of right
skilled manpower as entrepreneurs complains about skill mismatch. Given that startups are emerging as
major job creators, governments both at the Centre and States need to put in place appropriate policy
framework for the start-ups.
Suggestions:
ŠŠ The success of any Government sponsored programme/scheme depends very much upon proper
coordination between the Government officials and the officials of lending institutions but many
times it is seen that the outlook and approach of both are dissimilar. Thus, there is a need for
building up such an environment in which both the Government officials and the officials of the
lending institutions can play their role effectively and with proper coordination with each other.

ISBN: 978-93-5300-292-3 Technical Session - I


40 The Role of Government in Promoting Entrepreneurship

ŠŠ Efforts should be made by the government to channel funds to small businesses towards their
development. This can be done by compelling banks to set aside certain percentage of their credit
distribution for lending to small businesses.
ŠŠ Both the Central and the State Governments should take adequate steps to disseminate
information to the entrepreneurs about its policies, incentives, schemes, programmes etc. relating
to enterprises. Moreover, the Government should organize re-orientation programmes, workshops
and seminars at district level in order to provide latest information on different entrepreneurial
activities and as such ensure people’s participation.
ŠŠ Government should establish more agencies meant to grant small scale businesses credit facilities
as well as financial and technical advice.
ŠŠ The Government institutions/departments under any Government sponsored programme /
scheme should select such activities which have sufficient potentialities for development rather
than selecting the stereo-type activities in the area where the scheme is implemented.
ŠŠ The Government should make arrangements to develop and provide all types of infrastructural
facilities to the entrepreneurs through policy resolution and various institutions.
ŠŠ The Government as a facilitator should motivate and provide proper training on different aspects
like research and extension, credit facilities, quality control, marketing facilities etc.
ŠŠ The Government should ensure such type of credit flow system which is free from political
influence or recommendation from higher authority.
ŠŠ Availability of good markets for goods and services is the first and foremost requirement of
an enterprise. Therefore, the Government should take efforts to provide such services to the
entrepreneurs.
ŠŠ The entrepreneur should try to develop a positive work culture by identifying the task, maintaining
punctuality and discipline in their enterprises.
Conclusion:
Entrepreneurship is the lifeblood of any economy. Indian entrepreneurs are more about
overcoming barriers, obstacles, inspiring & surmount in their fields. Entrepreneurship is one of the
important segments of economic growth. Innovation is a key factor that an entrepreneur brings in an
overall change through innovation for the maximum social good. However, the investments in science,
technology, and innovation are not yet translating into the desired reality. Realizing that the innovation-
led entrepreneurship development holds promise for growth, the government should take major policy
initiatives with a strong innovation agenda.
References:
yy T.Swetha, Dr. K. Venugopal Rao, Entrepreneurship in India, International Journal of Social Science & Interdisciplinary Research,
Vol. 2 (7), July 2013
yy Ravindra Abhyankar, The Government of India’s Role in Promoting Innovation, Technology Innovation Management Review, August
2014
yy Nkem Okpa Obaji1, Mercy Uche Olugu, The role of government policy in entrepreneurship development, Science Journal of Business
and Management Vol. 2, No. 4, 2014
yy Adeusi S.O., Aluko O.A., Assessing the Role of Government in Promoting Small Scale Businesses in Kogi State: The Kabba/Bunu
Experience, IOSR Journal of Business and Management (IOSR-JBM)
yy Amit, Entrepreneurship Development in India: Role of Economic Growth, Foreign Investment and Financial Development, AIMA
Journal of Management & Research, Volume 8 Issue 3/4, August 2014,
yy Sunita Sanghi & A. Srija, Entrepreneurship Development in India - The Focus on Start-ups, Laghu Udyog Samachar, January, 2016

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Entrepreneurship Development in Economic Development
Y. Srinivasa Rao,
Head of the Department, Department of Commerce, V.R.S. & Y.R.N. College, Chirala.
Abstract:-In developing countries, there is no paucity of ideas, but there is real scarcity of men with the right blend of
vision and practical sense to groom themselves as successful entrepreneurs. An entrepreneur is a kingpin in every economy.
Industrialization is indeed bedrock over which spectacular economic and social transformation always banks upon
in developing countries. In the event of failure of an agriculture sector to sustain the burden of ever increasing
population in developing country like India, the rapid progress on industrialization front becomes need of the hour.
Therefore, role played by the industrialization in developing countries for accelerating economic growth is much more
pronounced. Ever since entrepreneurship has been acknowledged as an engine of growth governments of developing countries
are leaving no stone unturned to create entrepreneur - friendly environment towards fostering vibrant entrepreneurial base in
India. Competitive advantage of every country emanates from strong entrepreneurial base. In the face of slew of road blocks to
entrepreneurship development the sincere attempt has been made in this paper to throw a light on various impediments which
inhibit the growth of entrepreneurship in India.

Introduction:-
Entrepreneur, is a person who discovers new ideas and business opportunities, bring together
funds to establish a business, organizes its operations to provide economic goods and services for public.
By and large, entrepreneurs are found in every economic system and in every form of economic activity
and in other social and cultural activities. Role of entrepreneurs in the economic development varies from
economy to economy depending upon its material resources, industrial climate and government policy
towards growth of entrepreneurs. Entrepreneur’s contribution to economic growth is relatively higher in
favorable conditions than in less favorable conditions.
Entrepreneurship is indeed barometer of overall economic, social and industrial growth and it
brings about revolutionary changes in society. It highly contributes to remarkable social transformation
marked by increase in employment generation and increase in economic conditions of people.
Entrepreneur is a king pin in every economy. Entrepreneur is an opportunity seeker. He is also the
organizer and co-ordinater of the agents of production. He not only pursues opportunities but also
mobiles other resources like 5 MS – Men, money, machines, materials and methods.
Entrepreneurship is the propensity of mind to take calculated risk with confidence to achieve
a predetermined business objectives. The need for expected growth of entrepreneurial class has been
recognized in the light of objectives to be attained such as creation of employment opportunities,
development of backward and tribal areas, improvement in the standard of living of the weaker and
vulnerable sections of the society, dispersal of economic activities and high rate of economic growth.
Objectives of the Study:-
ŠŠ To identify the lacuna in entrepreneurship development.
ŠŠ To make an objective examination of impact of entrepreneurship an economic development.
ŠŠ To analyze the stumbling blocks which hamper entrepreneurship development.
ŠŠ To examine the opportunities available for entrepreneurship development.
Methodology:-
The information required for preparing this paper has been gathered from secondary sources such
as magazines, journals, research studies.
42 Role of Entrepreneurship Development in Economic Development

Literature review:-
Having gone through the available literature on entrepreneurship, systematic attempt has been
made in this paper to present a holistic coverage about entrepreneurship landscape in India. Several
studies on entrepreneurship, Industrial policy statements, Five year Plans, National and International
Organizations form an important part of literature on which the present study has banked upon.
History or entrepreneurship:
History of entrepreneurship can be traced back to 60s when entrepreneurs hailed from mercantile
background. Traditionally Trading castes such as Hindus and Jain Brahmins of Gujarat were forerunners
as main springs of entrepreneurship. Naidus of south, patels of Gujarat, Kayasthas of West Bengal,
Khatris and aroras of Punjab showed legacy to the future generation entrepreneurship. First generation
entrepreneurs came from non-business community. Next generation entrepreneurs came from traditional
family businesses.
The Crucial role played by entrepreneurs in western countries made people of developing
countries conscious of the significance of entrepreneurship for economic development. Importance of
Entrepreneurship development has been recognized a long time back. It was as early as 1950 that the need
for entrepreneurial development was first felt. Entrepreneurship has developed along with civilization.
Entrepreneurship in Pre – Independence Period:
Growth of entrepreneurship in India was negligible and slow. It was plagued by several obstacles.
Since the environment for entrepreneurship in India in Pre – Independence Period was unfavorable,
entrepreneurship did not take off at that time.
Entrepreneurship in Post – Independence Period:
Growth of entrepreneurship in India was slow and inhibited by several hassles. Since 1950 a
substantial volume of study has been carried out on the different facets of entrepreneurial development
in India to accelerate the process of industrialization. The study showed that entrepreneurs are born and
they can be made. Post - planning period witnessed phenomenal spike in number of entrepreneurs.
Present Entrepreneurial Landscape:
Growth of entrepreneurship in post – planning period was commendable. Between 1960-1989
number of Private companies went up from 26,000 to 1, 05,200. Number of small scale units increased
from 16,000 in 1951 to 38,00,000 units by the end of 2004. New economy entrepreneurs and their
units differ from old economy entrepreneurs and their ventures.
Every growing problems triggered by the ever increasing population necessitated the need for
identifying individuals and creating entrepreneurial urge in all communities in rural areas, urban areas
among men and women motivate them to groom them entrepreneurs of tomorrow through properly
organized programmes for raising growth in agriculture, industry and service sectors through creation
of entrepreneurship development institutions. In India, entrepreneurship landscape has Undergone sea
changes in recent times. With the onset of new breed of entrepreneurs such as first generation enterprises,
women entrepreneurs and social entrepreneurs new era has started in the history of entrepreneurship in
India. First generation entrepreneurs like N.R. Narayana Murthy, Azizm Premji have made path breaking
contribution by creating numerous opportunities in technology segment and created unprecedented
wealth which enabled India to get global laurels.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Entrepreneurship Development in Economic Development 43

Role of Several Institutions in the Entrepreneurship Development:-


Government and development financial institution are the forerunners in the realm of
entrepreneurship development. Economic liberalization has opened up new vistas for unleashing
entrepreneurial base. Opportunities for reinforcing entrepreneurial base are galore thanks to favorable
environment created by new economic policy of Government in 1991.
It is widely acknowledged that entrepreneurs can be developed through properly designed
entrepreneurship development programmes. EDPS are most sought after activities which several
organizations have embarked on in letter and spirit. Training is an important element in EDP programme.
Training should be not only to set up venture but also to enable trainee to run it successfully.
Entrepreneurs cannot be created like degree holders in a university EDPS should focus on
encouraging those who possess potential to became entrepreneurs and eliminate those who lack basic
capabilities for joining into league of entrepreneurs.
Following institutions are bound to play catalyst role towards the creation of congenial environment
for EDP in India.
ŠŠ Management development institute.
ŠŠ Entrepreneurship development institute of India.
ŠŠ Science and technology entrepreneurial parks
ŠŠ National institute for entrepreneurship and small business development.
ŠŠ National skill development centres.
ŠŠ District Industries centers.
ŠŠ Micro small Medium enterprises.
Role of Entrepreneurship Development in Economic Development:-
Economic development will remain a distant dream, when entrepreneurship development is
beset with several hassles. Following advantages to be reaped by the EDP will provide justification for
promotion of EDP.
ŠŠ Entrepreneurship development will scale up competitiveness of developing economics.
ŠŠ Grave and perennial problem of unemployment in developing countries will be mitigated through
EDP.
ŠŠ EDP results in substantial escalation in public revenue.
ŠŠ Balanced regional development will become reality through EDP.
ŠŠ It will make economy self-reliant.
ŠŠ It will undermine concentration of economic power.
ŠŠ It steps up domestic skills for reducing imports.
ŠŠ It will go a long way in stepping up capital formation.
Conclusion:-
India is no longer poor performer on entrepreneurship front. The phenomenal increase in
number of entrepreneurs since Independence bears testimony to the splendid growth of entrepreneurship
in India. Notwithstanding several impediments in the way of ED, the ED has come a long way evidenced
by the exemplary success of some men and women entrepreneurs who became embodiment of good

ISBN: 978-93-5300-292-3 Technical Session - I


44 Role of Entrepreneurship in Economic Development

entrepreneurial skills. The efforts made by government and educational institutions and financial
institutions to promote ED are laudable. In addition, economic liberalization ushered in 1991 has
provided enormous impetus to ED in India. Scores of institutions are in the process of making India
resurgent and vibrant in the realm of entrepreneurship.
References:-
yy Dynamics of entrepreneurial development and Management – Vasant Desai.
yy Naude. W.A. Entrepreneurship and economic development theory, evidence and policy 201312A discussion paper.
yy The Hindu dt. 28-08-2017.
yy The Deccan Chronicle dt.11-06-2017.
yy Mr. Sanjay Maocha, Innovation and entrepreneurship in Today’s scenario, International Journal of marketing, Financial Services and
Management Research.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Entrepreneurship in Economic Development
*Mr. B. H. Venkata Siva Krishna, ** Dr. V. Srinivasa Prasad
*Research Scholar at Acharya Nagarjuna University
**Director, V.R.S. & Y.R.N. P.G. & U.G. College, Chirala, (A.P.)

Abstract: The study tells that the entrepreneur acts as a trigger head to give spark to economic activities by his
entrepreneurial decisions. He plays a pivotal role not only in the development of industrial sector of a country but also in
the development of farm and service sector. Entrepreneurs are like gamblers, and like any gambler, their chances of winning
increase if they have the right cards. The role of entrepreneurship in economic development varies from economy to economy
depending upon its material resources, industrial climate and the responsiveness of the political system to the entrepreneurial
function.Path breaking offerings by entrepreneurs, in the form of new goods & services, result in new employment,
which can produce a cascading effect or virtuous circle in the economy.If we understand the benefits and drawbacks, a
balanced approach to nurturing entrepreneurship will definitely result in a positive impact on economy and society.
Key words:-Entrepreneur, Economic development, balanced regional development

Introduction
An entrepreneur can be regarded as a person who has the initiative, skill and motivation to set
up a business or enterprise of his own and who always look for high achievements. He is the catalyst for
social change and works for the common good. They look for opportunities, identifies them and seizes
them mainly for economic gains. An action oriented entrepreneur is a highly calculative individual who is
always willing to undertake risks in order to achieve their goals. An entrepreneur supplies risk capital as a
risk taker, and monitors and controls the business activities. The entrepreneur is usually a sole proprietor,
a partner, or the one who owns the majority of shares in an incorporated venture.
The entrepreneur who is a business leader looks for ideas and puts them into effect in fostering
economic growth and development. Entrepreneurship is one of the most important input in the economic
development of a country. The entrepreneur acts as a trigger head to give spark to economic activities by
his entrepreneurial decisions. He plays a pivotal role not only in the development of industrial sector of a
country but also in the development of farm and service sector.
According to economist Joseph Alois Schumpeter (1883-1950), “entrepreneurs are not necessarily
motivated by profit but regard it as a standard for measuring achievement or success.”
Characteristics & Skills
Entrepreneurs are like gamblers, and like any gambler, their chances of winning increase if they
have the right cards. Let’s look at some characteristics and skills that help an entrepreneur succeed.
ŠŠ A tolerance for risk-taking is a necessary attribute for entrepreneurs. You can think of risk-taking
as pursuing an activity even if there is a chance of a negative consequence. Starting a business is
risky, and even more so when you’re using your own money. Sometimes you can spread the risk by
convincing investors to come along on your new venture or by forming an entrepreneurial team.
But at the end of the day, you can’t avoid risk if you are going to start a new business and innovate.
ŠŠ Entrepreneurs also need creativity. Think about Steve Jobs and Mark Zuckerberg; these two
entrepreneurs brought innovative products to the market that changed the way we live. Successful
entrepreneurs innovate in one of two ways. They can bring an entirely new product or service
to the market, like the first cellular phone. On the other hand, they can radically improve upon
something in a dramatic way, just like the iPhone changed the world of smart phones.
46 Role of Entrepreneurship in Economic Development

ŠŠ Initiative is also required. Entrepreneurs lead. If you are not willing to start without being pushed,
your new business will never get off the ground. For example, Eddie had an idea fresh out of
college and took the initiative to start his business venture. No one had to convince him to act;
he just acted.
ŠŠ Independence is also a paramount attribute for entrepreneurs. Nobody holds an entrepreneur’s
hand, and they don’t want any hand-holding. Successful entrepreneurs must be willing to go it
alone and succeed or fail on their own effort without relying much on the other people.
Need for Entrepreneurship Development
Economic development essentially means a process of upward change whereby the real pr capita
income of a country increases over a period of time .Entrepreneurship has an important role to play in
the development of a country. It is one of the most important inputs in economic development. The
number and competence of entrepreneurs affect the economic growth of the country. The economic
history of the presently advanced countries like USA, Russia and Japan supports the fact that economic
development is the outcome for which entrepreneurship is an inevitable cause. The crucial and significant
role played by the entrepreneurs in the economic development of advanced countries has made the
people of developing and under developed countries conscious of the importance of entrepreneurship for
economic development. It is now a widely accepted fact that active and enthusiastic entrepreneurs can
only explore the potentials of the countries availability of resources such as labour, capital and technology.
Role of entrepreneurs in Economic Development
The role of entrepreneurs is not identical in the various economies. Depending on the material
resources, industry climate and responsiveness of the political system, it varies from economy to economy.
The contribution of entrepreneurs may be more in favorable opportunity conditions than in economies
with relatively less favorable opportunity conditions.
Adam Smith, the foremost classical economist, assigned no significance to entrepreneurial role in
economic development in his monumental work. An Enquiryinto the Nature and Causes of the Wealth
of Nations, published in 1776. Smith extolled the rate of capital formation as an important determinant
of economic development.
The problem of economic development was ergo largely the ability of the people to save more and
invest more in any country. According to him, ability to save is governed by improvement in productivity
to the increase in the dexterity of every worker due to division of labor. Smith regarded every person as
the best judge of his own interest who should be left to pursue his own advantage. According to him,
each individual is led by an invisible hand in pursuing his/her interest. He always advocated the policy of
laissez-faire in economic affairs.
In his theory of economic development, David Ricardo identified only three factors of production,
namely, machinery, capital and labour, among whom the entire produce is distributed as rent, profit and
wages respectively. Ricardo appreciated the virtues of profit in capital accumulation. According to him,
profit leads to saving of wealth which ultimately goes to capital formation.
ŠŠ Thus, in both the classical theories of economic development, there is no room for entrepreneurship.
And, economic development seems to be automatic and self-regulated. Thus, the attitude of
classical economists was very cold towards the role of entrepreneurship in economic development.
They took the attitude: “the firm is shadowy entity and entrepreneur even shadowed or at least is
shady when he is not shadowy.” The economic history of the presently developed countries, for

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Entrepreneurship in Economic Development 47

example, America, Russia and Japan tends to support the fact that the economy is an effect for
which entrepreneurship is the cause.
ŠŠ The crucial role played by the entrepreneurs in the development of the Western countries
has made the people of underdeveloped countries too much conscious of the significance of
entrepreneurship for economic development. Now, people have begun to realize that for achieving
the goal of economic development, it is necessary to increase entrepreneurship both qualitatively
and quantitatively in the country. It is only active and enthusiastic entrepreneurs who fully explore
the potenti­alities of the country’s available resources– labour, technology and capital.
ŠŠ Schumpeter (1934) visualised the entrepreneur as the key figure in economic development because
of his role in introducing innovations. Parson and Smelser (1956) described entrepreneurship as
one of the two necessary conditions for economic development, the other being the increased
output of capital.
ŠŠ Harbison (1965) includes entrepreneurs among the prime movers of innovations, and Sayigh
(1962) simply describes entrepreneurship as a necessary dynamic force. It is also opined that
development does not occur spontaneously as a natural consequence when economic conditions
are in some sense right: a catalyst or agent is always needed, and this requires an entrepreneurial
ability. It is this ability that he perceives opportunities which either others do no see or care about.
Essentially, the entrepreneur searches for
ŠŠ Change, sees need and then brings together the manpower, material and capital required to
respond the opportunity what he sees.
ŠŠ Akio Morita, the President of Sony who adopted the company’s products to create Walkman
Personal Stereo and India’s Gulshan Kumar of T-Series who skimmed the audio-cassette starved
vast Indian market are the clearest examples of such able entrepreneurs.
ŠŠ The role of entrepreneurship in economic development varies from economy to economy depending
upon its material resources, industrial climate and the responsiveness of the political system to
the entrepreneurial function. The entrepreneurs contribute more in favourable opportunity
conditions than in the economies with relatively less favourable opportunity conditions. Viewed
from the opportunity conditions point of view, the underdeveloped regions, due to the paucity
of funds, lack of skilled labour and non-existence of minimum social and economic overheads,
are less conducive to the emergence particularly of innovative entrepreneurs. In such regions,
entrepreneurship does not emerge out of industrial background with well developed institutions
to support and encourage it. Therefore, entrepreneurs in such regions may not be an
ŠŠ “Innovator” but an “imitator” who would copy the innovations introduced by the “innovative”
entrepreneurs of the developed regions (Brozen 1954-55).
ŠŠ In these areas, according to McClelland’s (1961) concept of personality aspect of entrepreneurship,
some people with high achievement motivation come forward to behave in an entrepreneurial
way to change the stationary inertia, as they would not be satisfied with the present status that
they have in the society.
ŠŠ Under the conditions of paucity of funds and the problem of imperfect market in underdeveloped
regions, the entrepreneurs are bound to launch their enterprises on a small-scale. As imitation
requires lesser funds than innovation, it is realized that such regions should have more imitative
entrepreneurs. And, it is also felt that imitation of innovations introduced in developed regions
on a massive scale can bring about rapid economic development in underdeveloped regions

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48 Role of Entrepreneurship in Economic Development

also. But, it does not mean that such imitation requires in any way lesser ability on the part of
entrepreneurs.
In this regard, Berna opines: “It involves often what has aptly been called „subjective innovation,
that is, the ability to do things which have not been done before by the particular industrialists, even
though unknown to him, the problem may have been solved in the same way by the others.”
These imitative entrepreneurs constitute the main spring of development of underdeveloped
region Further, India which itself is an underdeveloped country aims at decentralized industrial structure
to militate the regional imbalances in levels of economic development, small-scale entrepreneurship in
such industrial structure plays an important role to achieve balanced regional development.
It is unequivocally believed that small-scale industries provide immediate large- scale
employment, ensure a more equitable distribution of national income and also facilitate an effective
resource mobilization of capital and skill which might otherwise remain unutilized. The establishment of
Entrepreneurship Development Institutes and alike by the Indian Government during the last decades is
a good testimony to her strong realization about the premium mobile role of entrepreneurship plays in
economic development of the country.
The important role that entrepreneurship plays in the economic development of an economy can
now be put in a more systematic and orderly manner as follows:
Promotes Capital Formation:-Entrepreneurs promote capital formation by mobilising the idle savings
of public. They employ their own as well as borrowed resources for setting up their enterprises. Such type
of entrepreneurial activities lead to value addition and creation of wealth, which is very essential for the
industrial and economic development of the country.
Creates Large-Scale Employment Opportunities:-Entrepreneurs provide immediate large-scale
employment to the unemployed which is a chronic problem of underdeveloped nations. With the setting
up. of more and more units by entrepreneurs, both on small and large-scale numerous job opportunities
are created for others. As time passes, these enterprises grow, providing direct and indirect employment
opportunities to many more. In this way, entrepreneurs play an effective role in reducing the problem
of unemployment in the country which in turn clears the path towards economic development of the
nation. Growing unemployment particularly educated unemployment is the problem of the nation. The
available employment opportunities can cater only 5 to 10 % of the unemployed. Entrepreneurs generate
employment both directly and indirectly. Directly, self employment as an entrepreneur and indirectly by
starting many industrial units they offer jobs to millions. Thus entrepreneurship is the best way to fight
the evil of unemployment.
Promotes Balanced Regional Development:-Entrepreneurs help to remove regional disparities through
setting up of industries in less developed and backward areas. The growth of industries and business in
these areas lead to a large number of public benefits like road transport, health, education, entertainment,
etc. Setting up of more industries lead to more development of backward regions and thereby promotes
balanced regional development. When the new entrepreneurs grow at a faster rate, in view of increasing
competition in and around cities, they are forced to set up their enterprises in the smaller towns away
from big cities. This helps in the development of backward regions.
Reduces Concentration of Economic Power:-Economic power is the natural outcome of industrial and
business activity. Industrial development normally lead to concentration of economic power in the hands
of a few individuals which results in the growth of monopolies. In order to redress this problem a large

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Role of Entrepreneurship in Economic Development 49

number of entrepreneurs need to be developed, which will help reduce the concentration of economic
power amongst the population.
Wealth Creation and Distribution:-Itstimulates equitable redistribution of wealth and income in the
interest of the country to more people and geographic areas, thus giving benefit to larger sections of the
society. Entrepreneurial activities also generate more activities and give a multiplier effect in the economy.
Increasing Gross National Product and Per Capita Income:-Entrepreneurs are always on the lookout
for opportunities. They explore and exploit opportunities,, encourage effective resource mobilization of
capital and skill, bring in new products and services and develops markets for growth of the economy.
In this way, they help increasing gross national product as well as per capita income of the people in a
country. Increase in gross national product and per capita income of the people in a country, is a sign of
economic growth. . An increasing number of entrepreneurs are required to meet this increasing demand
for goods and services. Thus entrepreneurship increases the national income.
Improvement in the Standard of Living:-Increase in the standard of living of the people is a characteristic
feature of economic development of the country. Entrepreneurs play a key role in increasing the standard
of living of the people by adopting latest innovations in the production of wide variety of goods and
services in large scale that too at a lower cost. This enables the people to avail better quality goods at lower
prices which results in the improvement of their standard of living.
Promotes Country’s Export Trade:- Entrepreneurs help in promoting a country’s export-trade,
which is an important ingredient of economic development. They produce goods and services in
large scale for the purpose earning huge amount of foreign exchange from export in order to combat
the import dues requirement. Hence import substitution and export promotion ensure economic
independence and development.
Induces Backward and Forward Linkages:-Entrepreneurs like to work inan environment of change
and try to maximize profits by innovation. When an enterprise is established in accordance with the
changing technology, it induces backward and forward linkages which stimulate the process of economic
development in the country.
Facilitates Overall Development:- Entrepreneurs act as catalytic agent for change which results in chain
reaction. Once an enterprise is established, the process of industrialization is set in motion. This unit will
generate demand for various types of units required by it and there will be so many other units which
require the output of this unit. This leads to overall development of an area due to increase in demand and
setting up of more and more units. In this way, the entrepreneurs multiply their entrepreneurial activities,
thus creating an environment of enthusiasm and conveying an impetus for overall development of the
area.
Creating innovation:-An entrepreneur is a person who always look for changes. Apart from combining
the factors of production, he also introduces new ideas and new combination of factors. He always try
to introduce newer and newer technique of production of goods and services. An entrepreneur brings
economic development through innovation.
Entrepreneurs Create New Businesses:- Path breaking offerings by entrepreneurs, in the form of new
goods & services, result in new employment, which can produce a cascading effect or virtuous circle in
the economy. The stimulation of related businesses or sectors that support the new venture add to further
economic development. For example, a few IT companies founded the Indian IT industry in the 1990s
as a backend programmers’ hub. Soon the industry gathered pace in its own programmers domain. But

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50 Role of Entrepreneurship in Economic Development

more importantly, millions from other sectors benefited from it. Businesses in associated industries, like
call centre operations, network maintenance companies and hardware providers, flourished. Education
and training institutes nurtured a new class of IT workers offering better, high-paying jobs. Infrastructure
development organizations and even real estate companies capitalized on this growth as workers migrated
to employment hubs seeking new improved lives.
Similarly, future development efforts in underdeveloped countries will require robust logistics
support, capital investment from buildings to paper clips and a qualified workforce. From the highly
qualified programmer to the construction worker, the entrepreneur enables benefits across a broad
spectrum of the economy.
Entrepreneurs Also Create Social Change:-Through their unique offerings of new goods and services,
entrepreneurs break away from tradition and indirectly support freedom by reducing dependence on
obsolete systems and technologies. Overall, this results in an improved quality of life, greater morale and
economic freedom. For example, the water supply in a water-scarce region will, at times, force people
to stop working to collect water. This will impact their business, productivity and income. Imagine
an innovative, automatic, low-cost, flow-based pump that can fill in people’s home water containers
automatically. Such an installation will ensure people are able to focus on their core jobs without worrying
about a basic necessity like carrying water. More time to devote to work means economic growth.
For a more contemporary example, smart phones and their smart apps have revolutionized work
and play across the globe. Smart phones are not exclusive to rich countries or rich people either. As the
growth of China’s smart phone market and its smartphone industry show, technological entrepreneurship
will have profound, long lasting impacts on the entire human race. Moreover, the globalization of tech
means entrepreneurs in lesser-developed countries have access to the same tools as their counterparts in
richer countries. They also have the advantage of a lower cost of living, so a young individual entrepreneur
from an underdeveloped country can take on the might of the multi-million dollar existing product from
a developed country.
Personal Growth:-Entrepreneurship hascreated millions of good jobs. In a startup workplace, jobs often
call for creativity and collaboration, leading to personal development. Those exposed to entrepreneurship
have higher confidence and greater independence. Not bound by the hierarchy and restrictions of large
corporations, young entrepreneurs can take on greater responsibility, work flexible schedules and use
creative solutions to problem solve. The freedom associated with entrepreneurship comes with certain
challenges. Entrepreneurs often work long hours and risk their personal assets in developing their business.
Entrepreneurship puts new business ideas into practice:-In doing so, it creates jobs that facilitate
personal development. With their innovative and disruptive ideas, entrepreneurs can tackle social problems
too. It’s a worthy pursuit to consider, but if it’s not for you, see how to pass down its principles to the next
generation and enroll in How to Encourage and Teach Our Children Thus, it is clear that entrepreneurship
serves as a catalyst of economic development. On the whole, the role of entrepreneurship in economic
development of a country can best be put as “an economy is the effect for which entrepreneurship is the
cause”
Conclusion
Paradoxically, a significantly high number of entrepreneurs may lead to fierce competition and loss
of career choices for individuals. With too many entrepreneurs, levels of aspirations usually rise. Owing
to the variability of success in entrepreneurial ventures, the scenario of having too many entrepreneurs
may also lead to income inequalities, making citizens more – not less – unhappy. However, the interesting

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Entrepreneurship in Economic Development 51

interaction of entrepreneurship and economic development has vital inputs and inferences for policy
makers, development institutes, business owners, change agents and charitable donors. If we understand
the benefits and drawbacks, a balanced approach to nurturing entrepreneurship will definitely result in
a positive impact on economy and society. Entrepreneurship puts new business ideas into practice, in
doing so, it creates jobs that facilitate personal development. With their innovative and disruptive ideas,
entrepreneurs can tackle social problems too. It’s a worthy pursuit to consider, but if it’s not for you, see
how to pass down its principles to the next generation and to Encourage and teach our children. Thus,
it is clear that entrepreneurship serves as a catalyst of economic development. On the whole, the role of
entrepreneurship in economic development of a country can best be put as “an economy is the effect for
which entrepreneurship is the cause”
References
yy http://www.preservearticles.com/201101143326/role-of-an-entrepreneur-in-economic- development.html
yy http://www.indiastudychannel.com/resources/93451-Role-entrepreneurship-economic- development.aspx
yy http://study.com/academy/lesson/what-is-an-entrepreneur-definition-characteristics- examples.html
yy http://www.yourarticlelibrary.com/essay/role-of-entrepreneurship-in-economic-development/40658
yy http://unu.edu/publications/articles/are- entrepreneurial-societies-also-happier.html
yy https://blog.udemy.com/importance-of- entrepreneurship/
yy http://www.kauffman.org/what-we-do/resources/entrepreneurship-policy- digest/entrepreneurships-role-in-economic- development
Audretsch, David and Keilbach, Max.
yy “Entrepreneurship and Regional Growth: An Evolutionary Interpretation.” Journal of
yy Evolutionary Economics, Vol. 14, No.5, 2004, 605– 616.
yy Audretsch, David and Lehmann, Erik. “Does the Knowledge Spillover Theory of Entrepreneurship
yy Hold for Regions?” Research Policy, Vol. 34, No.8, 2005, 1191-1202.
yy Bednarzick, Robert W. “The Role of Entrepreneurship in U.S. and European Job Growth.” Monthly Labor Review, Vol. 123,
No.7, 2000, 3-16.
yy P. Sharma and J.J. Chrisman, 1999, “Toward a Reconciliation of the Definitional Issues in the Field of Corporate Entrepreneurship,
yy “Entrepreneurship Theory and Practice . .Sternberg and S. Wennekers, 2005, “The
yy Determinants and Effects of Using New Business Creation”
yy Cooper, 2003 “Entrepreneurship: The Past, the Present, the Future.” In Handbook of Entrepreneurship Research, 21-36.
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Shackle, “Foreword” to R.F. Hebert and A.N. Link, The entrepreneur: mainstream views and radical critiques

ISBN: 978-93-5300-292-3 Technical Session - I


Role of Govt. in Entrepreneurship Development
*D. Bhaskara Rao, **Dr. J. Revathy
*Research Scholar, Dept. of Commerce & Business Administration, Acharya Nagarjuna University, Nagarjuna Nagar, India.
* Principal & Associate professor, PG Department of Commerce & Management, Studies VRS & YRN College,Chirala, Andhra
Pradesh

Abstract Entrepreneurship is a complex term that’s often defined simply as running your own business. But there’s a difference
between a “business owner” and an “entrepreneur,” and although one can be both, what distinguishes entrepreneurship is a
person’s attitude. “Entrepreneurship is much broader than the creation of a new business venture,” said Bruce Bachenheimer,
a clinical professor of management and executive director of the Entrepreneurship Lab at Pace University. “At its core, it is a
mindset – a way of thinking and acting. It is about imagining new ways to solve problems and create value.”

Definition of entrepreneurship:
Entrepreneurship is both the study of how new businesses are created as well as the actual process
of starting a new business. The basic entrepreneurship definition is the act of creating a business or
businesses while building and scaling it to generate a profit.
Government schools in India are the largest providers of education. However, data indicates
that parents are increasingly opting out of the government system due to its poor quality and enrolling
their children in private schools. Therefore, the government must take steps to improve the quality of
education in schools. Public-Private Partnership (PPP) is a mechanism that can introduce innovation and
create models of quality within the government system.
Global evidence suggests that whole school adoption PPPs are particularly effective at demonstrating
innovation. In this model, the government authorises and reimburses a private operator to manage school
operations, with varying degrees of autonomy to innovate.
Whole school PPPs give flexibility to the operator to innovate, increase competition, give choice
to low-Income families and hold operators accountable for the quality of outcomes.
Public-Private Partnerships can introduce innovation and investment into India’s government
school system, which urgently needs to improve the quality of education. Lessons from existing models
in India and international efforts at collaboration between the private and public sector show that PPPs
have an important role in improving the system.
Opportunity for PPP in School Education
Well-designed PPPs can create models of innovation for the school system in India.
Increasing access to school:
India has a high dropout rate from primary to secondary school, with the national Gross Enrolment
Ratio (GER) falling from 118 in primary school 1 to 34 in senior secondary school.
Using under utilized school infrastructure:
Across India, major metropolitan areas such as Mumbai, Chennai, Pune and Ahmedabad
have experienced up to 25% decline in enrolment in government schools over the past 10 years and
simultaneously their education budgets have almost doubled.
Improving the quality of education:
The government school system urgently needs improvement.
Role of Govt. in Entrepreneurship Development 53

Understanding the School Management and School Adoption PPP Models Beginning with
government aided schools, the state in India has experimented with various forms of PPPs to improve
access and quality in education.
Recommendations for PPP Implementation
India can draw valuable insights from countries that have used PPPs as a policy response to
address quality and access issues in school education.
These include:
ŠŠ Private operators should have autonomy to introduce innovation
ŠŠ Government should reimburse private operators the full amount of per child costs in a timely
manner to ensure financial viability
ŠŠ Full transparency in selection process of operators
ŠŠ High accountability standards with well-defined evaluation and assessment methods.
Understand the process of identifying the beneficiaries and interact with them
Beneficiary Assessment (BA) is a qualitative research tool used to improve the impact of
development operations by gaining the views of intended beneficiaries regarding a planned or ongoing
intervention. The objective of BA is to assess the value of an activity as perceived by project beneficiaries
and to integrate findings into project activities. It is designed specifically to undertake systematic listening
of the poor and other stakeholders by giving voice to their priorities and concerns. This method of
systematic consultation is used by project management as a design, monitoring, and evaluation tool.
The BA approach is not intended to supplant quantitative surveys and other traditional methods
for data gathering. It seeks to complement these methods by providing reliable, qualitative, in-depth
information on the socio cultural conditions and perceptions of the project’s target group.
This information is intended to be immediate use to managers and policy makers responsible
for improving people’s lives. BA facilitates the development of initiatives that are demand-driven and
enhances their sustainability.
The approach is useful in:
ŠŠ Identifying and designing development activities;
ŠŠ Signaling constraints to participation faced by the target group;
ŠŠ Obtaining feedback on reactions of the target group to the interventions implemented;
ŠŠ Un covering new information that would otherwise not come to light
Techniques
The approach relies primarily on three data collection techniques:
ŠŠ Conversational Interviews
ŠŠ Focus group discussions
ŠŠ Direct Observation and Participant Observation

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54 Role of Govt. in Entrepreneurship Development

Conversational Interviews:
These interviews, which are in-depth in nature, are the foundation of the beneficiary assessment
approach. In well-guided, naturalistic interviewing, people reveal their feelings, thoughts, and beliefs
about a particular issue.
Key characteristics of conversational interviewing: -
ŠŠ Establishing a good rapport between interviewer and respondent based on mutual trust and
respect
ŠŠ Interviews that generally do not exceed 45 minutes — may require more than one visit to complete
all interviews.
Focus Group Discussions
This technique is used to interview target communities in groups. Such interviews are useful in
interviewing persons from the same neighborhoods, or those involved in making the same livelihoods.
Usage of focus groups facilitates data collection of a larger sample group at one time, although precise
attribution of findings and individuals is inherently difficult.
Direct Observation and Participant Observation
Direct Observation is the simplest of techniques. It involves counting, noting behavior traits and
patterns, and other notable facets of a particular developmental situation. The potential for quantifying
observed phenomena is major and immediate.
Critically analyze the financial commitments made under this project
Organizations perform work continuously. These works include operations or projects though
some works may overlap with each other. For the organizations, projects are important elements of
change. They are considered to be the leading edge of change in organizations. A project consists of a
combination of organizational resources pulled together to create something that did not previously exist
and that will provide a performance capability in the design and execution of organizational strategies.
Projects are conceptualized, designed, engineered and produced (or constructed); something is created
that did not previously exist. An organizational strategy has been executed to facilitate the support of
ongoing organizational life. Projects therefore support the ongoing activities of a going concern.
For example,
1. An R&D project bridges the gap from an existing technology to a future technology.
2. A new factory adds to the manufacturing capability.
3. A new building contributes to the infrastructure of the city.
4. A new highway improves transportation systems.
5. A canal provides a waterway over land.
6. A pipeline moves oil, gas, or water.
7. A new house improves the living standards of a family.
Classification of Projects, Sub-Projects
A detailed study of different types of projects with reference to sequence of stages or processes
used in each case would provide us an idea to use project management in a most effective manner. The
success of a project-based organization lies in managing a portfolio of projects. In this regard the study of
criteria for selection of projects is needed.
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Role of Govt. in Entrepreneurship Development 55

Types of Projects
One of the methods to classify projects is:
1. Open project or Walking in the fog‘
2. Semi-open project or ‘Making movies’
3. Closed project or ‘Painting by numbers’
4. Semi-closed project or ‘Going on a quest’
Open Project or “walking in the fog”:
Strict control over costs and on time-scale is important. Projects may not achieve anything as in
semi-closed project. Neither is it known what to do nor how to do it. But the project can be altered and
act differently. Usually these are reactions to change in certain circumstances like political, competitive).
A lot of quest and speed is required in projects. Not all the projects are closed projects with definite
mission. However as the projects passes through phases of a life cycle they usually change from ‘Fog’ to
‘Paint by Numbers’.
Semi-open Project or “making movies”
In this type, commitment to use of method adopted becomes essential. It can be known how to do
something but what is to be to achieve is unknown. The organization might have expertise and capability
but are looking for ways to apply it. It is like we have actors but no script but interested to make movie.
Closed Project or “Painting by Numbers”
Traditional projects are suitable example for this type of project. They have clear goals and a well
defined set of activities to be carried out. You can know what you want to achieve and how you will
achieve it. It is so clear-cut that you can paint the numbers on it.
Semi - closed Project or “Going on a quest”
In this type, strict control over the costs and time-scale at the same time allowing freedom to
explore is the main feature. The organization knows what they want to achieve but how to achieve it is
unknown. Hence they send employees on a quest to explore ‘out of the box possibilities‘. These types of
project will lead to overspending, getting delayed, or getting nothing from the project. Another method
to classify the projects is:
ŠŠ Simple projects
ŠŠ Rapid projects
ŠŠ Just-do-it projects or ‘Loose Cannons’.
“Simple” Projects
A usual project may start off as ‘painting by numbers’, a fog, a quest, or a movie. The investigative
stage are worked out until the organization is confident (say, around 90-95 percent) where at this stage
the required benefits can be achieved.
“Rapid” Projects
In this case a project is defined with a fixed budget and time-scale but scope is varied to suit
a predetermined minimum scope. Usually a prototype or actual operational platform is used in this
project to cut down resource requirements and time-scale. Hence some of the stages and processes are

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56 Role of Govt. in Entrepreneurship Development

merged. But it should be noted that just to save time and cost, phases, and processes of project couldn’t
be dispensed
”Just do it” Projects - Loose Cannons
These are undertaken to achieve results irrespective of time and cost. Sometimes these may be a
Management’s “pet project” with little relevance to strategy. Of course, these start often with optimistic
projections and end up bouncing around the organization demanding more and more resources.
Objectives of the study:
ŠŠ To study the initiatives proposed in the CSR-PPP model and the methods of implementation.
ŠŠ Understand the process of identifying the beneficiaries and interact with t
ŠŠ Critically analyze the financial commitments made under this project.
Conclusions
The main role which should be played by the government is to do things which is not presently
done by any another bodies. Develop the country with efficient private participation. Finally protect
investors and take up efficient taxation policy. Keep track of changes of the environment. It may be stated
that the role of government in future must be redefined but not en deed. The redefinition must be in the
direction of improving quality of intervention.
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H200823, EIM Business and Policy Research.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Govt. in Entrepreneurship Development
Vunnam Venkata Ramanjaneyulu
Head, Department of Commerce Andhra Muslim College, Guntur.
Introduction:-
The Entrepreneurship is very an old concept according to which anyone who runs business is
called an entrepreneur. The more precise meaning of entrepreneur is; one who receives a need and then
brings together manpower, material and capital required to meet that need.
Entrepreneur is one who understands the market dynamics and searches for change respond to it
and exploit is as an opportunity.
The word “Entrepreneur” is derived from the French Verb “Enterprendre”. It means “to undertake”.
Oxford Dictionary
The Entrepreneur as an individual who forms an organization for commercial purpose. He/ She
are proprietary capitalist, a supplier of capital and at the same time a manager who intervenes between
the labor and the consumer.
“Entrepreneur is an employer, master, merchant but explicitly considered as a capitalist”
Types of Entrepreneurs:-
ŠŠ Small Business
ŠŠ Home-based Business
ŠŠ Online Business
ŠŠ Inventors
ŠŠ Serial Entrepreneurs
Routes for getting started as an Entrepreneur:-
ŠŠ Family Business
ŠŠ Franchise
ŠŠ New Venture
ŠŠ Buying, Acquisition
ŠŠ Between age 20’s & 30’s
A person’s education, work experience and financial resources are most likely to enable him/her
to become an Entrepreneur.
Start-ups:-
Starting a business generally requires:
ŠŠ A business concept or idea involving a product, service, process. Or new technology
ŠŠ People to support the work, whether as employees, vendors, or advisors
ŠŠ A process by which the product or service will be delivered, or the technology will be developed
ŠŠ Enough money to support the development of the idea to the point that It generates revenue
Why New Business are Started:-
The main reasons entrepreneurs go out on their own, rather than staying employed, are:
58 Role of Govt. in Entrepreneurship Development

ŠŠ Control – to be their own boss


ŠŠ Ambition – to start something from scratch themselves
ŠŠ Financial – opportunity to earn more money
In fact, an Intelligent Office Study reported that 65% of employees would rather be entrepreneurs
than work for someone else.
Role of Govt. in Entrepreneurship Development
Government Policy
Supportive Government Policies
Policy Implementation
Government Funding

Entrepreneurship Economic Development


Startup Motive Job Creation
Creativity and innovativeness SME Development
Risk Taking Wealth Creation

Government plays a very important role in developing entrepreneurship. Government develops


industries in rural and backward areas by giving various facilities with the objective of balances regional
development. The government set programmes to help entrepreneurs in the field of technique, finance,
market and entrepreneurial development so that they help to accelerate and adopt the changes in industrial
development. Various institutions were set up by the Central and State Governments in order to fulfill
this objective.
Institutions Set Up by Central Government:-
ŠŠ Small industries Development Organization (SIDO)
ŠŠ Management Development Institute(MDI)
ŠŠ Entrepreneurship Development Institute of India (EDI)
ŠŠ All India Small Scale Industries Board (AISSIB)
ŠŠ National Institution Of Entrepreneurship and Small Business Development (NIESBUD), New
Delhi
ŠŠ National Institute of Small Industries Extension Training
ŠŠ Risk Capital and Technology Finance Corporation Ltd.,(RCTFC)
ŠŠ National Research and Development Corporation(NRDC)
ŠŠ Indian Investment Centre
ŠŠ Khadi and Village Industries Commission(KVIC)
ŠŠ Indian Institute of Entrepreneurship (IIE)
ŠŠ National Alliance of Young Entrepreneurs(NAYE)
ŠŠ Centre for Entrepreneurial Development(CED) Ahmadabad
ŠŠ Institute for Entrepreneurial Development (IED)

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Govt. in Entrepreneurship Development 59

ŠŠ Technical Consultancy Organization(TCOs)


ŠŠ Public Sector Banks
Institutions Set Up at State Level:-
There are a number of Institutions establishes at State Level for organizing, developing, assisting
and making successful entrepreneurial development programmes, prominent among these are :
ŠŠ Small Industries Service Institute (SISI)
ŠŠ State Finance Corporation (SFC)
ŠŠ State Small Industries Corporation (SSIC)
ŠŠ State Industrial Development Corporation
ŠŠ State Industries Corporation
ŠŠ Technical Consulting Organization Ltd.,(TCO)
ŠŠ Commercial and Cooperative Banks
The above mentioned State and Central level Institutions have provided a number of concessions
and facilities to promote entrepreneur development in India. They have also played an important role in
balanced industrial development in the country.
Conclusion and Policy Implication:-
From the foregoing, it can be seen that Government of several countries view entrepreneurship
as the bedrock of industrialization of their economy and thus encourage entrepreneurship. However,
argued that policy makers had better discontinued subsidizing the establishment of the generic start-up;
instead consideration should be on businesses with growth potential. His argument relates to how these
policies direct people to commence marginal companies that are likely to be unsuccessful or have slight
economic effect as well as making small employment. Nonetheless, entrepreneurial success of any nation
is largely dependent on the policy behavior of the government. Since most governments especially in
the developing countries are striving to achieve economic development, they are always bringing out
supportive policy programmes in different forms, e.g. infrastructural, financial, and fiscal among others.
This scholarly work fills the literature gap by linking the antecedents of entrepreneurship to economic
development while government policy intervenes in the relationship.
References:-
yy Two Hundred and Forty Fifth Report on Review of the implementation of Micro, Small and Medium Enterprises Development
Act,2006- Department- Related Parliamentary Standing Committee (2013)
yy Entrepreneurship in India,NKC,2008
yy IBID
yy Investopedia
yy Economic Times,11th June,2015
yy Speech by Prime Minister Shri Narendra Modi at the Startup Event (27th September,2015, San Jose, California)
yy http://www.indiainfoline.com
yy www.mca.gov.in

ISBN: 978-93-5300-292-3 Technical Session - I


Development of Entrepreneurship in India
M. Krishna Chaitanya,
Research scholar, Acharya Nagarjuna University, Guntur.
Entrepreneurs are a special group of people who enjoy a distinct status and play a crucial role
in the success of any business or trade. In the wake of liberalisation, privatisation and globalisation
of Economies across the world, the entrepreneurship has gained greater importance. Economic growth
of a nation basically draws vital initiative from a stream of young and talented entrepreneurs. Joseph
Schumpeter in his book titled “Small is Beautiful” has viewed an entrepreneur as an innovator who brings
economic development through new combinations of factors of production. Basically an entrepreneur is
one who assumes incalculable risks and uncertainties, seizes many opportunities for economic gain and
initiates activity leading to production of goods and services.
Promoting Entrepreneurship:
Entrepreneurship plays a significant role for expediting the process of economic development
is the country. Even the developed nations like U.S.A, U.K, Japan have long ago realised the need to
promote the entrepreneurship for their economic development. These could be able to change their
small based industries into big industrial houses only with the development of entrepreneurial abilities
and efforts. The advent of economic liberalisation and need for industrial growth in India has led to an
unprecedental development of entrepreneurship. An effective functioning of the support systems like
financial, marketing and infrastructural, play a crucial role in the development of entrepreneurship.
Today, a plethora of organisations are engaging themselves in the promotion of entrepreneurship.
The government has launched various programmes and schemes to promote industrial self-employment.
The major schemes are Prime Minister’s Rozgar Yozana (PMRY), Training of Rural Youth for Self-
Employment (TRYSEM), Self-Employment for Educated unemployed Youth (SEEUY), Indira Mahila
Yojana (IMY), Rashtriya Mahila Kosh (RMK),Science and Technology Entrepreneur’s Park (STEP) and
Development of women and Children in Rural Areas (DWCRA) etc..,
The above mentioned schemes have proved to be the most beneficial for the potential entrepreneurs
in the country. The Entrepreneurship Development Institute of India (EDII) set up in 1983, at Ahmadabad
has been serving as a national resource organization to facilitate and guide the state level agencies like state
Technical Consultancy Organizations Small Industry Service Institutes and nationalized banks. National
Institute of Entrepreneurship and small Business Development (NIESED) set up at New Delhi is serving
for promotion of entrepreneurship at the national level. The Industrial Development Bank of India
(IDBI) and State Bank of India (SBI), Small Industries Development Bank of India (SIDBI), APSFC and
District Industries centres (DICS), of late, are actively organising entrepreneurial training programmes
for the benefit of prospective entrepreneurs. The training is aimed at to effect changes in the individuals
in terms of knowledge, attitude and skills relevant to the selected field of trade. It is indeed landable that
government’s and development bank’s training programmes have achieved a remarkable degree of success
in creating a new class of entrepreneurs. The National Institute of Small Industry Extension Training
(NISIET) of Hyderabad is providing extension training mainly to officers and field staff working in
different government departments, banks and NGOS as to suit the specific requirements of the target
groups.
Development of Entrepreneurship in India 61

Problems of Entrepreneurship:
Despite that there has been a significant progress of entrepreneurship development, there are
certain problems which hinder the growth of entrepreneurial culture. The entrepreneurial field is still
dominated by a few individuals and organizations. The benefits and government licences and other
supportive measures have gone to select established business houses. The main problems faced by
India entrepreneurs are financial constraints, scarcity of raw materials, intense competition, high cost
of production, the initial lack of confidence in one’s own abilities etc, besides, lack of self-motivation
and shyness to venture into new activity reluctance to accept risk and change and lack of managerial
talents are some of the problems being faced by the individuals. Unrealistic policies and programmes of
implementing agencies, lack of integration among different agencies are also some of the other drawbacks
in the way of entrepreneurship.
Developing Entrepreneurship:
Entrepreneur and entrepreneurship are in fact, the dynamic processes that require a multi -
dimensional approach for development. More importantly, they have become of late, assumed greater
dimensions due to their substantial contribution to the process of economic development of the country,
Moreover part of the solution of growing unemployment particularly among educated youth lies in the
promotions of entrepreneurship. It is suggested that the government should encourage the formation
of “Entrepreneurship Development Cells” in all banks to help the prospective entrepreneurs for their
development. Voluntary and non-governmental organizations should work in close cooperation with
financial institutions and government agencies in creating a cadre of dedicated young men and women
entrepreneurs. It is necessary that all training institution and their training programmes be brought under
the control of an apex body to be set up at the national level to coordinate and regulate the activities of
all institutions engaged in the entrepreneurship development programmes throughout the country. The
apex body should have a mechanism for monitoring and evaluating the results of EDPS. The colleges
and universities should also be involved in the process of growth of entrepreneurship in the country. New
generation of entrepreneurs possessing creativity and professional skills will have to emerge to meet the
ever increasing challenges of industry and trade.

ISBN: 978-93-5300-292-3 Technical Session - I


Relation between Entrepreneurship and Economic Growth through Manufacturing
Sector: Review
*P. Daniel Paul, **Dr. V. Srinivasa Prasad
*
Department of Communications and Soft Skills, K L University, Green Feilds,
Vaddeswaram, Guntur, Andhra Pradesh, 522 520. Department of Human Resource Management,
University College of Arts and Commerce, Acharya Nagarjuna University, Nagarjuna Nagar, Guntur
PG Department of Commerce & Management Studies VRS & YRN College, Vodarevu Road, Chirala, AP 523157.
**

Abstract Entrepreneurship is the key to economically developing country like India. It is important as it utilized local
resources, employment and rural development. Entrepreneurship especially manufacturing industry is of significant importance
to the development of any economy. Developing countries like India largely depend on manufacturing industry for growth
and employment. Diversity of resources and the varying degree of skills and qualification of the available labour makes
it essential to understand the importance of both the small as well as large scale industries. The small-scale sector, largely
dependent on the strengths of our traditional skills and knowledge, creates largest employment opportunities, next only to
Agriculture. It also helps in alleviation of poverty and brings about equitable distribution of income and wealth. At the same
time the large scale industry, apart from providing job opportunities, plays important role in promoting exports resulting in
increased foreign exchange earnings and expanding demand base for domestic products leading to overall inclusive growth.
National manufacturing policy aims at enhancing the share of manufacturing in GDP to 25 per cent within a decade and
creating 100 million jobs. It also seeks to empower rural youth by imparting necessary skill sets to make them employable.
Manufacturing sector has the potential to play a crucial role for India to achieve its goal of becoming the fastest growing economy
in the world. And the right mix of strong commitment from the government as well as the industry can make this a reality.
Key words: Entrepreneurship, Manufacturing Sector, Economic Development

Introduction
The word “entrepreneur” is derived from the French verb “enterprendre”. It means “to undertake”.
The Frenchmen who organized and led military expeditions were referred to as “entrepreneurs”.
To understand the nature of entrepreneurship, it is important to consider some of the theory
development so as to better recognize the emerging importance of entrepreneurship. The research on
entrepreneurship has grown dramatically over the years. As the field has developed, research methodology
has progressed from empirical surveys of entrepreneurs to more contextual and process-oriented research.
As yet, no comprehensive theory base has emerged, however. A theory of entrepreneurship is defined as a
verifiable and logically coherent formulation of relationships, or underlying principles that either explain
entrepreneurship, predict entrepreneurial activity (for example, by characterizing conditions that are likely
to lead to new profit opportunities to the formation of new enterprises), or provide normative guidance
(that is, prescribe the right action in particular circumstances). As we are now in the new millennium,
it has become increasingly apparent that we need to have some cohesive theories or classifications to
better understand this emerging field. In the study of contemporary entrepreneurship, one concept
recurs: Entrepreneurship is interdisciplinary. As such it contains various approaches that can increase
one’s understanding of the field. Thus we need to recognize the diversity of theories as an emergence of
entrepreneurial understanding
Indian economy which has traditionally been agriculture based, is taking big leaps towards
promoting manufacturing which constitutes 16 per cent of GDP in India. But, its contribution
to employment sector and growth is well below its true potential. Restrictive and rigid labour laws,
abundance of unskilled workforce over skilled workforce, lack of technology innovations are some of the
factors contributing to this.
Relation between Entrepreneurship and Economic Growth through Manufacturing Sector: Review 63

Inadequate growth in manufacturing has had its adverse impact on employment generation
in India. The current mismatch between distribution of workforce and value added in agriculture is
one of the main reasons for the large number of poor in our country. This needs urgent correction.
Manufacturing has to be the sponge which absorbs people who need to move out of agriculture in pursuit
of higher incomes. In a highly globalised economy, the need for enhanced export competitiveness needs
no introduction. India must aim to match China in manufacturing given the low-cost labour with the
added virtue of skills. The share of the manufacturing sector in the gross domestic product in India is 17
per cent compared to 33 per cent in China, 29 per cent in Korea, 25 per cent Brazil and 27 per cent in
Thailand. However, we are short in other resources and infrastructure that investors seek, a weakness that
has checked the flow of investments into skill-intensive manufacturing.
The present paper provides an overview of the empirical evidence concerning the relationship
between independent entrepreneurship, also known as self-employment or business ownership in
manufacturing sector and economic development.
Important reason for the boom of entrepreneurship
Entrepreneurship has become a hot policy issue. The rise of solo self-employment is important
because it increases the flexibility and productivity of the economic system, while contributing to a
higher degree of job satisfaction. On the downside the re-emergence of self-employment also increases
insecurity for those involved and income inequality. The upward trend of innovative and/or ambitious
entrepreneurship at the high end of economic development is of particular interest for competitiveness,
economic growth and job creation. Policy makers in advanced economies should be aware of both
revolutions and tailor their policies accordingly.
Recent trends in some sectors, such as auto and auto components, specialty chemicals, generic
drugs and engineering, however, suggest a the author is Director, Institute of Small Enterprises and
Development. Cochin. He is recipient of the Birla National Fellowship in Economics, has served as
Member of the Dr. S. P. Gupta Committee on Development of Small Enterprises, at the Planning
Commission. He is also a Chevening Fellow of the Foreign and Commonwealth Office of the U.K.
Government. He is founder of the India Micro, Small and Medium Enterprise Report Series, and has
authored, Small Enterprise Development: The Experience of the North and the South (Oxford). Vast scope
for global manufacturers to locate here. The policy thrust outlined by the Prime Minister through the two
flagship programmes, ‘Make in India’ and ‘Skill India’, should be understood against this background.
And worryingly, it is losing depth. While China’s GDP is 3.8 times larger than India’s, its production of
machine tools, the ‘mother industry’ of manufacturing, is 55 times more! India needs a strategy to grow
manufacturing 12 per cent to 14 per cent per annum, create 100 million new manufacturing jobs in the
next 15 years to realise its ‘demographic dividend’, and create more depth in capital goods industries and
innovation for its manufacturing sector to be competitive and sustainable. An innovation strategy must
be closely intertwined with an integrated manufacturing strategy. This demands a radical departure from
the strategies we are used to. The recent budget of the Government has made efforts to provide favourable
environment and facilities to promote domestic as well as international industry by simplification,
rationalization and digitization of processes. Initiatives like “Make in India”, Skill India, MUDRA etc
are aimed at encouraging the spirit of entrepreneurship and making India the manufacturing hub of
the world. The budget also tries to address issues relating to lack of robust infrastructure, constraints on
energy supply, importance of innovation and technology etc. The articles inside take a look at what has
been done so far and what more needs to be done to give much needed impetus to the sector.

ISBN: 978-93-5300-292-3 Technical Session - I


64 Relation between Entrepreneurship and Economic Growth through Manufacturing Sector: Review

Entrepreneurship Policy
“Entrepreneurs, given the right market signals, can create growing businesses at a time of high
uncertainty, caused by rapidly changing technological and sociopolitical environment”
Employment generation policies in India consist of a number of self-employment schemes which
can be broadly clubbed as SME policies. These policies, in essence, represent a patchwork of financial
measures to mitigate the disadvantages of small businesses vis-à-vis their large counterparts. SME policies
mainly focus on creating small businesses, but not on entrepreneurs. Entrepreneurs, given the right
market signals, can create growing businesses at a time of high uncertainty, caused by rapidly changing
technological and sociopolitical environment. The world over, it is now being increasingly felt that massive
allocation for self-employment schemes and creating a good climate for small business are not enough to
ensure growth oriented entrepreneurial businesses, generate more employment and provide sustainable
competitive advantage.
Measurement and monitoring of the progress regarding the shifting of the Indian economy to an
entrepreneurial mode is crucial. Mechanisms need to be evolved for this. The implementation of a national
entrepreneurship policy cannot be left to a single Ministry alone. Inter-ministerial working groups are
necessary to make entrepreneurship development a priority. At the local level, this must translate into
cooperation and collaboration between different educational, financial and sociocultural organizations,
both from the public as well as private sectors. This is not possible without a strong political leadership at
local levels that has the capability tobring together a broad spectrum of professionals and social activists.
A young leadership that understands the need for an entrepreneurial economy better, is probably better
suited to drive the process of entrepreneurial transformation of the nation.
Having a manufacturing competitiveness agenda in place, this is the right time for India to launch
a National Entrepreneurship Policy. The rapid spread of globalization has stimulated integration process
of local SMEs into the international economy. In this dynamic marketplace, ‘strategy’ is of particular
importance to businesses. Therefore, local enterprises should try to construct their own brands or form
alliances with international enterprises in order to be better equipped to embrace competition; local
SMEs who continue to operate in old style single shop method should also adjust their strategy and
grasp every opportunity to improve their competitiveness and business environment, so as to improve the
business environment, create a distinctive brand, and finally to excel in the competition.
Hindrances in the Sector
The manufacturing sector is still afflicted by problems of land acquisition, rehabilitation, multiple
laws and rules to adhere to, lack of clarity for the entrepreneurs, multiple and complex process of
clearances to be obtained to set-up a factory, lack of marketing strategies and export orientation, lack of
infrastructure, power and water supplies. Economic Survey 2014-15 states that the manufacturing sector
has one of the highest numbers of stalled projects in the last few quarters. Among manufacturing, the
majority of stalled projects are in steel, cement, garments and processed food. 212 manufacturing projects
are stalled due to lack of funds, demand and unfavourable market conditions.
5. Policies to Boost the Sector
The manufacturing sector revolves around two sets of major participants, the entrepreneurs and
the workers. The Government comes in between these two, to balance and facilitate the interaction of
the two segments and provide enough facilities for both sides so that the system continues to function

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Relation between Entrepreneurship and Economic Growth through Manufacturing Sector: Review 65

smoothly. The policies and programmes rolled out by the Government come in this interplay and act like
a catalyst for the manufacturing sector as a whole.
The recent policy reforms clearly reveal that government is leveraging on skill development
for ensuring sustainable entrepreneurship development in the country. However, a proper supervision
and monitoring mechanism should be set to analyze the outcome of these initiatives on periodic basis
and to avoid the overlapping of activities performed by the newly established government agencies
and programmes. According to survey undertaken by Local Circles, 59 percent of citizens still feel that
corruption and delays prevent the growth of entrepreneurship in India while only 14 percent felt funding
as the main problem. Thus, the effectiveness of the recent policy reforms needs to be checked by analyzing
the benefits entailed by the entrepreneurs on regular basis to ensure that these initiatives deliver maximum
results unlikely the previous reforms.
According to Economic Survey 2015-16, start-up sector is witnessing unusual dynamism with
focus mainly on ecommerce and financial services sector which led to huge growth of technology enabled
start-ups in the year 2015. Therefore, the ‘Start-up India’ mission of government should go beyond digital
or technology start-ups and enable entrepreneurship in manufacturing sector to ally with Make in-India
drive and particularly at grass roots level so as to provide self-employment opportunities to technology
deficient section of the society.
Conclusions
Entrepreneurship acts as a catalyst for the economic prosperity of a nation as it leads to generation
of employment, contribution in national income, rural development, industrialization, technological
development, export promotion etc. In India, various initiatives have been taken by the government
from time to time for entrepreneurship development in the country. However, literature reveals that
entrepreneurs face a number of problems which obstruct the growth of entrepreneurship. To meet these
challenges, a need was felt by government to initiate a new set of policy reforms in India which has led to
a remarkable improvement in recent years. Therefore, an attempt has been made to study the implications
of the recent policy reforms of entrepreneurship in India which has made India a hotspot destination
for start-ups. The study found that most of these recent reforms are focusing on skills development
measures giving birth to technology enabled start-ups. Hence, it is suggested that a proper supervision
and monitoring mechanism should be set to analyze the outcome and effectiveness of these initiatives on
periodic basis and entrepreneurship development at grass roots level should be targeted so as to provide
self-employment opportunities to technology-deficient section of the society.

ISBN: 978-93-5300-292-3 Technical Session - I


Emerging Entrepreneurship in Indian Scenario
*Kumaraswamy Manepalli
MBA, M.Com, Asst. Prof. Department of Management Studies, manepalli505@gmail.Com,9966617505.
Pottisriramulu Chalavadi Mallikharjuna Rao College of Engineering and Technology, Kothapeta, Vijayawada-520001

Abstract: The Indian employment market is uncertain. The number of unemployed is ever increasing. In this
context, both the Central and State governments are working on to develop entrepreneurship as a recourse to employment
problems. In order to do so, there needs to be specific skill and knowledge set needed from the individual who is looking
for entrepreneurship. The dimension of the entrepreneurship is changing not from its perceptive form but also from
its origin. The lusts of entrepreneurship in rural and urban areas are different. Entrepreneurship is the key to India’s
development. It is important as it utilized local resources, employment and rural development. Entrepreneurship can
be viewed as a creative and innovative response to the environment and an ability to recognize, initiate and exploit an
economic opportunity. An entrepreneur is an innovator who introduces something new in an economy. Entrepreneurship
is doing things that are generally not done in the ordinary course of business. Innovation may be in; introducing a new
manufacturing process that has not yet been tested and commercially exploited, introduction of a new product with
which the customers are not familiar or introducing a new quality in an existing product, developing a new combination
of means of production. Innovation involves problem solving and an entrepreneur is a problem solver. An entrepreneur
does things in a new and a better way. A traditional businessman working in a routine manner is not entrepreneurial.
Innovative organization wants must have to prepare for renewing the offerings and its delivery process to its stakeholders
to survive in today’s globalised world. In the present paper, concept of innovation and entrepreneurship has been
studied by the authors. The paper will also include the challenges and opportunities faced by the entrepreneur in India.
Key words: Entrepreneurship, Challenges, Opportunities
Introduction:
Entrepreneur is a person who innovates, allocates and manages the factors of production. This
particular person has the ability to perceive latest economic opportunities and to device their exploitation.
This particular person is the supplier of resources, supervisor and coordinator and ultimate decision
maker. Entrepreneur has the greatest chance of success by focusing on a market niche either too small
or too new to have been noticed by established businesses. The new generation entrepreneurs are well
educated and are capable of understanding the fluctuating trends of markets. The entrepreneurs in most
of the cases are having business family background. In certain cases the new generation has started after
facing a lot of difficulties from their first generation. In these cases the new generation is very careful
in selecting their business career. Entrepreneurship has been a male-dominated phenomenon from the
very early age, but time has changed the situation and brought women as today’s most memorable and
inspirational entrepreneurs. In almost all the developed countries in the world women are putting their
steps at par with the men in the field of business.
An entrepreneur is a person who develops a new idea and takes the risk of setting up an enterprise
to produce a product or service which satisfies customer needs. All entrepreneurs are business persons,
but not all business persons are entrepreneurs. Entrepreneurship is the activity which is being carried out
by the Entrepreneur. Generally Entrepreneur is the concerned authority of the business, without their
permission, not single changes or decisions are made. In other words, “An Entrepreneur” is an owner or
manager of the business enterprise who makes money through risk or initiative. They are responsible for
any changes happened in the business or in the organization.
Importance of Innovation in Entrepreneurship:
The rules and principles are similar for every entrepreneur who owns large or small enterprise.
Only the difference is, the starter face toothache and hick ups at the early stage, whereas existing business
face different problems, limitations, management problems and constraints in the market etc. Both the
Emerging Entrepreneurship in Indian Scenario 67

cases it needs to learn many things and should be innovative for the survival in the business market. The
daily crisis cannot be postponed; it has to be dealt with right away. And the existing operation demands
high priority and deserves it. It thus takes special effort for the existing business to become entrepreneurial
and innovative.
As Drucker says, the enterprise that does not innovate inevitably ages and declines. And in a
period of rapid change such as the present, an entrepreneurial period, the decline will be fast. Innovation
requires major effort. It requires hard work on the part of performing, capable people—the scarcest
resource in any organization.
Women Entrepreneurs in India:
Since time in memorial women are contributing a great deal to the development of any nation
across the world. It goes without saying that Indian women entrepreneurs have significantly contributed
to the industrial development of India. Apart from giving good citizens to the nation, women have also
given good organizations to the nation. Obviously, what man can do, women can do better through their
dedication and commitment. This has been proved time and again in the analysis of Indian business
history. Under the stewardship of women scores of industries have made rapid strides and progress.
The business models and management styles followed women entrepreneurs worth replicating across the
world. There is saying where women are respected, dwells God. Similarly where women are there in the
industry dwells progress and prosperity.
Future of Entrepreneurship:
Technology plays a crucial role in the future of entrepreneurship. Entrepreneurs have the chance
to do both strategic planning and administrative work for their business. They can get involved in all sides
of their business because the Internet makes it possible to do so. The future of entrepreneurship could
involve high-performing entrepreneurs rather than people working for huge, faceless organizations. The
Internet and especially social media tools makes it possible to turning passion into a thriving business‘,
and that anyone can create a personal brand and leverage it worldwide through technology. Further, that
entrepreneurs need to get up to speed with the latest innovations in business. Managers, entrepreneurs
and other business-driven people simply cannot compete in today‘s market if they do not adopt the
right tools. This means that anyone, wherever that person is located, can build a successful business if
online tools are properly optimized. As the Internet revolution advances, so does entrepreneurship. With
constantly new and easier ways to build business, succeeding in this new era is a matter of having two
things: Internet and a device that gives you access to it. Once an entrepreneur is in possession of these
two, it is a matter of learning and mastering the different tools available online to turn your idea into a
thriving business.
Opportunities of Entrepreneurs:
ŠŠ Free entry into world trade.
ŠŠ Improved risk taking ability.
ŠŠ Governments of nations withdrawn some restrictions
ŠŠ Technology and inventions spread into the world.
ŠŠ Encouragement to innovations and inventions.
ŠŠ Promotion of healthy completions among nations
ŠŠ Consideration increase in government assistance for international trade.

ISBN: 978-93-5300-292-3 Technical Session - I


68 Emerging Entrepreneurship in Indian Scenario

ŠŠ Establishment of other national and international institutes to support business among nations
of the world.
ŠŠ Benefits of specialization.
ŠŠ Social and cultural development
Challenges faced by Entrepreneurs:
Family Challenges: Convincing to opt for business over job is easy is not an easy task for an
individual. The first thing compared is – Will you make more money in business of your choice or as a
successor of family business. This is where it becomes almost impossible to convince that you can generate
more cash with your passion than doing what your Dad is doing.
Social Challenges: Family challenges are always at the top because that is what matter the most
but at times social challenges also are very important. Let us say you and your friend graduated at the
same time. You opted for entrepreneurship and your friend opted for a job. He now has a flat, car and
what not because he could easily get those with a bank loan but you still have nothing to show off and
this is where challenge comes.
Technological Challenges: Indian education system lags too much from the Job industry as a whole but
then it lags even more when it comes to online entrepreneurship. What technology would be ideal and
how to use that technology effectively?
Financial Challenges: (Difficulty in borrowing fund): Financial challenges are a lot different in India
especially for online entrepreneurs. When you are starting out as an entrepreneur you don’t opt for
venture funding but try to go with funding from small to medium business people. Many such non-
technical business people don’t understand the online business models as a whole and so getting an initial
business funding from them becomes challenging. The other option you can think of is loan but bank
loan is not at all an option in India for new online entrepreneurs.
Policy Challenges: Now and then there is lot of changes in the policies with change in the
government.
ŠŠ Problems of TRIPS and TRIMS.
ŠŠ Problems of raising equity capital
ŠŠ Problems of availing raw-materials.
ŠŠ Problems of obsolescence of indigenous technology
ŠŠ Increased pollutions Ecological imbalanced.
ŠŠ Exploitation of small and poor countries, etc.
Conclusion:
“An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific
tool of an entrepreneur hence an effective entrepreneur converts a source into a resource.” -Peter Drucker,
Management Guru
Entrepreneurship is the lifeblood of any economy. Indian entrepreneurs are more about overcoming
barriers, obstacles, inspiring & surmount in their fields. Entrepreneurship is one of the important segments
of economic growth. Innovation is a key factor that an entrepreneur brings in an overall change through
innovation for the maximum social good. As someone said failures are the stepping Stones for Success.
If we observe the way any entrepreneur, their life is not a bed of roses. They faced many obstacles in the

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


A Glimpse on Contribution of Entrepreneurship in GDP Growth 69

way of entrepreneurial achievement. Furthermore, women can tell the condition of a nation, she acts as a
central cohesive source of support and stability, not only to her family but also to whole nation. There is
saying where women are respected, dwells God. Similarly where women are there in the industry dwells
progress and prosperity. The bottom line for all the entrepreneurial life taught the first lesson for success;
and that is failure.
References:
yy T. Swetha, Dr. K. Venugopal Rao: “Entrepreneurship in India” paper presented in International Journal of Social science &
Interdisciplinary Research.
yy Mr. Sanjay Manocha: “Innovation and Entrepreneurship in Today’s Scenario” paper presented in International Journal of Marketing,
Financial Services & Management Research.
yy Mr. Kapil Gulati, Mr. Suniel Sharma: “Entrepreneurship in Indian Scenario” paper presented in International Journal of Economics,
Finance and Management.

ISBN: 978-93-5300-292-3 Technical Session - I


A Glimpse on Contribution of Entrepreneurship in GDP Growth
V. Mydhili MBA
Assistant Professor, Dept of Management Studies, Vignan’s Nirula Institute of Technology & for Women, Guntur & Research
Scholar,
KLU Business school, KL University, Guntur; E-mail : mydhili.mba@gmail.com.

Abstract: An organization comes into existence only because of the efforts put in by an individual, who would
be prepared to assume responsibility of leading the enterprise with him. For that, the individual must have a special
quality that is known as entrepreneurship. Entrepreneurship refers to all those activities which are to be carried
out by a person to establish and to run the business enterprises in accordance with the changing social, political
and economic environments. Entrepreneurship plays a major role in economic development. It serves as a catalyst.
The role of entrepreneurship in economic development varies from economy to economy depending upon its material resources,
industrial climate and political system. The primary objective of this paper is to throw light on role of entrepreneurship in economic
development. This paper begins with presenting segmentation of entrepreneurs. This paper gives an overview of contribution
of different sectors in growth of GDP in India and also studies contribution of Service sector in growth of GDP in India.
Key words: Entrepreneurship, Economic Development, GDP, Service Sector.

Entrepreneurship:
Entrepreneurship refers to all those activities which are to be carried out by a person to establish
and to run the business enterprises in accordance with the changing social, political and economic
environments. Entrepreneurship includes activities relating to the anticipation of the consumers likes
and dislikes, feelings and behaviors, tastes and fashions and the introduction of business ventures to meet
out all these expectations of the consumers. Entrepreneurship is the ability of entrepreneurs to assess the
risks and establish businesses which are risky but at the same time suits perfectly to the changing scenarios
of the economy.
“Entrepreneurship as the function of seeking investment and production opportunity, organizing
an enterprise to undertake a new production process, rising capital, hiring labor, arranging the supply
of materials, finding site, introducing new techniques and commodities, discovering new sources of raw
materials and selecting top managers of day to day operations of the enterprise”.
According to Schumpter, “Entrepreneurship is the purposeful and systematic innovation. It included
not only the independent businessman but also company directors and managers who actually carry out
innovative functions.”
According to Schumpeter “Entrepreneurship and economic development are intimately related.
Entrepreneurial process is a major factor in economic development and the entrepreneur is the key to economic
growth”.
According to Robert C. Ronstadt, “Entrepreneurship is a dynamic process of vision, change, and
creation. It requires an application of energy and passion towards the creation and implementation of new
ideas and creative solutions. Essential ingredients include the willingness to take calculated risks-in terms of
time, equity, or career; the ability to formulate an effective venture team; the creative skill to Marshall needed
resources; the fundamental skill of building a solid business plan; and, finally, the vision to recognize opportunity
where others see chaos, contradiction, and confusion”.
Schumpeter’s Definition ”The entrepreneur in an advanced economy is an individual who
introduce something new in the economy- a method of production not yet tested by experience in the branch of
A Glimpse on Contribution of Entrepreneurship in GDP Growth 71

manufacturing, a product with which consumers are not yet familiar, a new source of raw material or of
new markets and the like”.
Drucker’s Views on Entrepreneur “An entrepreneur is the one who always searches for change,
responds to it and exploits it as an opportunity. Innovation is the specific tool of entrepreneurs, the means by
which they exploit changes as an opportunity for a different business or different service”
Characteristics of an Entrepreneur:
The following are the characteristics of an entrepreneur:
ŠŠ Hardworking nature
ŠŠ Desire for high achievement
ŠŠ Highly optimistic
ŠŠ Independence
ŠŠ Foresight
ŠŠ Good organizer
ŠŠ Innovative
In a study it was found that possession of certain competencies or abilities result in superior
performance. An entrepreneur may possess certain competencies and at the same time it is possible to
develop these through training, experience and guidance.
Types of Entrepreneurs:
ŠŠ Innovating entrepreneurs: An innovative entrepreneur is the person who introduces new
products, new methods for production, discovers new market and recognizes the enterprise.
ŠŠ Imitating entrepreneurs: These are the people who are ready to adopt the innovations of
innovating entrepreneurs. They only imitate the techniques and technology innovated by
others.
ŠŠ Fabian entrepreneurs: These people are characterized by very great caution 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.
ŠŠ Drone entrepreneurs: These people are characterized by a refusal to adopt opportunities to
make changes in production even at the cost of severely reduced returns relative to others.
Positive attitude is very important to the entrepreneurs. If they do not have positive attitude,
they will not be able to achieve the goals. For people who have positive attitude, if they do any mistake
they learn a lesson from that mistake and carry on their life. They will spent more time for finding
out the optimal solutions. The positive attitudes which are associated with entrepreneurship are listed
below.
ŠŠ Attitude toward imagination
ŠŠ Attitude toward hard work
ŠŠ Attitude toward frank expression and action
ŠŠ Attitude toward new opportunities
ŠŠ Attitude toward change in the environment
ŠŠ Attitude toward initiative

ISBN: 978-93-5300-292-3 Technical Session - I


72 A Glimpse on Contribution of Entrepreneurship in GDP Growth

ŠŠ Attitude toward thoughts and execution upon a project


Role of Entrepreneurship in Economic Development:
Entrepreneurship plays a vital role in economic development. The following are the roles:
ŠŠ It promotes capital by mobilizing savings.
ŠŠ It provides employment.
ŠŠ It promotes balanced regional development.
ŠŠ It helps to reduce the concentration of economic power.
ŠŠ It stimulates the equitable redistribution of wealth, income and even political power in the interest
of the country.
ŠŠ It encourages effective utilization of resources.
ŠŠ Promotes exports.
Thus, it is clear that entrepreneurship serves as a catalyst of economic development. The
entrepreneurship is a cause and the economic development is the effect. It represents the cause and effect
relationship.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


A Glimpse on Contribution of Entrepreneurship in GDP Growth 73

Contribution Of Different Sectors In Growth Of GDP In India:

Contribution of Service sector in growth of GDP in India:


India’s services sector covers a wide variety of activities such as trade, hotel and restaurants,
transport, storage and communication, financing, insurance, real estate, business services, community,
social and personal services, and services associated with construction.
ŠŠ The contribution of service sector in Gross Domestic Product growth rate is around 66.1 per cent
of its Gross Value Added growth in 2015-16.
ŠŠ The contribution of service sector in Gross Domestic Product growth rate in 2014-15 is 57.9%.
ŠŠ The contribution of service sector in Gross Domestic Product growth rate in 2013-2014 is 57%.
ŠŠ The contribution of service sector in Gross Domestic Product growth rate in 2012-2013 is 64.8%
ŠŠ The contribution of service sector in Gross Domestic Product growth rate in 2011-12 is 34%.
The following table shows the year wise contribution of service sector in the growth of GDP:

Year Service Sector (%)


2011-12 34.0
2012-13 64.8
2013-14 57.0
2014-15 57.9
2015-16 66.1

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74 A Glimpse on Contribution of Entrepreneurship in GDP Growth

The reasons for the growth of contribution of service sector in GDP growth rate is due to the fact
that India has a large pool of highly skilled, low cost, and educated workers in the country. This has made
sure that the services that are available in the country are of the best quality.
Entrepreneurship development to Economic development
The significant role that entrepreneurship plays in the economic development of an economy can
now be put in a more orderly and systematic manner as follows:
Formation of capital
Entrepreneurs promote capital formation by mobilizing the idle savings of public. They employ
their own as well as borrowed resources for setting up their enterprises. Such type of entrepreneurial
activities leads to value addition and creation of wealth, which is very essential for the industrial and
economic development of the country.
Large-Scale Employment Opportunities
Entrepreneurs provide immediate large-scale employment to the unemployed which is a chronic
problem of underdeveloped nations. With the setting up of more and more units by entrepreneurs,
both on small and large-scale numerous job opportunities are created for others. As time passes, these
enterprises grow, providing direct and indirect employment opportunities to many more. In this way,
entrepreneurs play an effective role in reducing the problem of unemployment in the country which in
turn clears the path towards economic development of the nation.
Balanced regional development:
Entrepreneurs help to remove regional disparities through setting up of industries in less developed
and backward areas. The growth of industries and business in these areas lead to a large number of public
benefits like road transport, health, education, entertainment, etc. Setting up of more industries leads to
more development of backward regions and thereby promotes balanced regional development. When the
new entrepreneurism grow at a faster rate, in view of increasing competition in and around cities, they are
forced to set up their enterprises in the smaller towns away from big cities. This helps in the development
of backward regions.
Creation and Distribution of Wealth:-
It stimulates equitable redistribution of wealth and income in the interest of the country to more
people and geographic areas, thus giving benefit to larger sections of the society. Entrepreneurial activities
also generate more activities and give a multiplier effect in the economy.
Strengthens Export Trade
Entrepreneurs help in promoting a country’s export-trade, which is an important ingredient of
economic development. They produce goods and services in large scale for the purpose earning huge
amount of foreign exchange from export in order to combat the import dues requirement. Hence import
substitution and export promotion ensure economic independence and development
Facilitates Overall Development
Entrepreneurs act as catalytic agent for change which results in chain reaction. Once an enterprise
is established, the process of industrialization is set in motion. This unit will generate demand for various
types of units required by it and there will be so many other units which require the output of this
unit. This leads to overall development of an area due to increase in demand and setting up of more

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


A Glimpse on Contribution of Entrepreneurship in GDP Growth 75

and more units. In this way, the entrepreneurs multiply their entrepreneurial activities, thus creating an
environment of enthusiasm and conveying an impetus for overall development of the area.
Innovation
An entrepreneur is a person who always looks for changes apart from combining the factors of
production; he also introduces new ideas and new combination of factors. He always tries to introduce
newer and newer technique of production of goods and Services .An entrepreneur brings economic
development through innovation.
Social Change
Through their unique offerings of new goods and services, entrepreneurs break away from
tradition and indirectly support freedom by reducing dependence on obsolete systems and technologies.
Overall, this results in an improved quality of life, greater morale and economic freedom.
ŠŠ For a more contemporary example, smart phones and their smart apps have revolutionized work
and play across the globe. Smart phones are not exclusive to rich countries or rich people either.
As the growth of China’s smart phone market and its Smartphone industry show, technological
entrepreneurship will have profound, long lasting impacts on the entire human race.
ŠŠ Moreover, the globalization of tech means entrepreneurs in lesser-developed countries have access
to the same tools as their counterparts in richer countries. They also have the advantage of a lower
cost of living, so a young individual entrepreneur from an underdeveloped country can take on
the might of the multi-million dollar existing product from a developed country.
Conclusion:
Entrepreneurship plays a vital role in the economic development of the country. In India
entrepreneurship played an important role in the development of the economy. In the growth of India’s
gross domestic product there is contribution of different sectors. In particular service sector is playing a
major role in its contribution in the growth of gross domestic product. The contribution of service sector
in the growth of gross domestic product is increasing year by year.
Entrepreneurship puts new business ideas into practice. In doing so, it creates jobs that facilitate
personal development. With their innovative and disruptive ideas, entrepreneurs can tackle social problems
too. It’s a worthy pursuit to consider, but if it’s not for you see how to pass down its principles to the next
generation and enroll in How to encourage and Teach Our Children Thus, it is clear that entrepreneurship
serves as a catalyst of economic development. On the whole, the role of entrepreneurship in economic
development of a country can best be put as “an economy is the effect for which entrepreneurship is the
cause”
References:
yy Audretsch, David and Keilbach, Max. “Entrepreneurship and Regional Growth: An Evolutionary Interpretation.” Journal of
Evolutionary Economics, Vol. 14, No.5, 2004, 605– 616.
yy Cooper, 2003 “Entrepreneurship: The Past, The Present, The Future.” In Handbook of
yy Entrepreneurship Research, 21-36.
yy Dr. S.S.Khanka, “Entrepreneurial Development”, S. Chand Publications.
yy H. Nandan, “Fundamentals of entrepreneurship”, PHI Learning private Limited.
yy http://www.preservearticles.com/2011011433 26/role-of-an-entrepreneur-in-economic-development.html

ISBN: 978-93-5300-292-3 Technical Session - I


“Role of Entrepreneurs in Economic Development”
*Taidala Vasantaha Rao. *Bandlamudi Kalpana
*Research Scholar. Department of Commerce and Business Administration, Acharya Nagarjuna University, Guntur, AP
**Research Scholar. Department Of Commerce and Business Administration, Acharya Nagarjuna University, Guntur, AP

Abstract: Entrepreneurship is one of the most important inputs in the economic development of a country. Entrepreneurs play
a central role in the economy by establishing firms, which in turn create markets and organizations. An individual engages in
entrepreneurial activities before the firm is established and then becomes an owner after the firm is established. In the case of India,
Entrepreneur have performed below expectation due to a combination of different problems themselves through environmental
related factors, instability of governments and frequent government policy changes etc. Entrepreneurship Promotions should thus
ensure the availability or possession of managerial capacity and acumen before pursuing financial resources for the development
of the respective enterprise. The aim of the paper is to develop and analyze the contributions of entrepreneurship in the economic
development in India.Whereas both the positive as well as the negative impact of entrepreneurship on the economy has been discussed.
Key words Entrepreneurship, Positive Impact, Negative Impact, Economic Development, India.

Introduction:
The word entrepreneurship means has its origin in French Language which refers to organizers of
musical or other entertainment. An entrepreneur is a person who has already started or is in the process
of starting an enterprise. Entrepreneurship play vital role in the Economic growth and development of
the country and new product formation and technological change in production process and economic
transformation is occurs due to effective entrepreneurship. An entrepreneur takes more risk for the
organizational development and He gives innovation to the industry. This types of habit of taking High
risk innovate new things brings economic development of the country. In present scenario, Economic
development is not possible without effective entrepreneurship and thus a Entrepreneur is an major
component for Economic Growth. The entrepreneurs with their ability to scan, analyze and identify
opportunities in the environment transform them into business proposition through creation of economic
entities.
“Entrepreneurship is a purposeful activity of an individual or a group of associated individuals,
undertaken to initiate, maintain or organize profit oriented business unit for the production and
distribution of economic goods and Service. A. H. Cole
The entrepreneur who is a business leader looks for ideas and puts them into effect in fostering
economic growth and development. Entrepreneurship is one of the most important inputs in the economic
development of a country. The entrepreneur acts as a trigger head to give spark to economic activities by
his entrepreneurial decisions. He plays a pivotal role not only in the development of industrial sector of a
country but also in the development of farm and service sector. The major roles played by an entrepreneur
in the economic development of an economy are discussed in a systematic and orderly manner as follows.
1 Promotes Capital Formation:
Entrepreneurs promote capital formation by mobilizing the idle savings of public. They employ
their own as well as borrowed resources for setting up their enterprises. Such type of entrepreneurial
activities leads to value addition and creation of wealth, which is very essential for the industrial and
economic development of the country.
2 Creates Large-Scale Employment Opportunities:
Entrepreneurs provide immediate large-scale employment to the unemployed which is a chronic
problem of underdeveloped nations. With the setting up. of more and more units by entrepreneurs,
“Role of Entrepreneurs in Economic Development” 77

both on small and large-scale numerous job opportunities are created for others. As time passes, these
enterprises grow, providing direct and indirect employment opportunities to many more. In this way,
entrepreneurs play an effective role in reducing the problem of unemployment in the country which in
turn clears the path towards economic development of the nation.
3 Promotes Balanced Regional Development:
Entrepreneurs help to remove regional disparities through setting up of industries in less developed
and backward areas. The growth of industries and business in these areas lead to a large number of public
benefits like road transport, health, education, entertainment, etc. Setting up of more industries leads to
more development of backward regions and thereby promotes balanced regional development.
4. Reduces Concentration of Economic Power:
Economic power is the natural outcome of industrial and business activity. Industrial development
normally leads to concentration of economic power in the hands of a few individuals which results in
the growth of monopolies. In order to redress this problem a large number of entrepreneurs need to be
developed, which will help reduce the concentration of economic power amongst the population.
5. Wealth Creation and Distribution:
It stimulates equitable redistribution of wealth and income in the interest of the country to more
people and geographic areas, thus giving benefit to larger sections of the society. Entrepreneurial activities
also generate more activities and give a multiplier effect in the economy.
6. Increasing Gross National Product and Per Capita Income:
Entrepreneurs are always on the lookout for opportunities. They explore and exploit opportunities,,
encourage effective resource mobilization of capital and skill, bring in new products and services and
develops markets for growth of the economy. In this way, they help increasing gross national product as
well as per capita income of the people in a country. Increase in gross national product and per capita
income of the people in a country, is a sign of economic growth.
7. Improvement in the Standard of Living:
Increase in the standard of living of the people is a characteristic feature of economic development
of the country. Entrepreneurs play a key role in increasing the standard of living of the people by adopting
latest innovations in the production of wide variety of goods and services in large scale that too at a lower
cost. This enables the people to avail better quality goods at lower prices which results in the improvement
of their standard of living.
8. Promotes Country’s Export Trade:
Entrepreneurs help in promoting a country’s export-trade, which is an important ingredient of
economic development. They produce goods and services in large scale for the purpose earning huge
amount of foreign exchange from export in order to combat the import dues requirement. Hence import
substitution and export promotion ensure economic independence and development.
9. Induces Backward and Forward Linkages:
Entrepreneurs like to work in an environment of change and try to maximize profits by innovation.
When an enterprise is established in accordance with the changing technology, it induces backward and
forward linkages which stimulate the process of economic development in the country.

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78 “Role of Entrepreneurs in Economic Development”

10. Facilitates Overall Development:


Entrepreneurs act as catalytic agent for change which results in chain reaction. Once an enterprise
is established, the process of industrialization is set in motion. This unit will generate demand for various
types of units required by it and there will be so many other units which require the output of this
unit. This leads to overall development of an area due to increase in demand and setting up of more
and more units. In this way, the entrepreneurs multiply their entrepreneurial activities, thus creating an
environment of enthusiasm and conveying an impetus for overall development of the area.
Eminent entrepreneurs in History & Their Journey towards entrepreneurship
Walchand Hirachand Doshi (23 November 1882 – 8 April 1953)
Some of the major construction projects of the pre-independence era were all directed and
executed in the supervision of Walchand. Later it was again renamed as Premier Construction with a
major stake of the Tata’s. In his later years, he went on to start a Shipping company, the Scindia Steam
Navigation Company which went on to grab 21% of the Indian coastal traffic. Then the first Indian
Aircraft company; the Hindustan Aircraft, and a modern shipyard known as Hindustan Shipyard Limited
and lastly the first car factory of India known as Premier Automobiles.
Jamsetji Tata (3 March 1839 – 19 May 1904):
He was known as the Father of Indian Industry. The entrepreneurial insightfulness of Jamsetji
coupled with his nationalistic outlook, which led him to believe that the fruits of his business success
would enrich the nation as a whole, made him truly unique. The repression of the Indians in the hands
of British rulers coupled with widespread poverty all across the nation at that time, was at the root of
this entrepreneur‘s philosophy. This is what precisely set the stage for the Enterprise to plough back
profits into various social-development initiatives – a direct fallout of the empathy set in the founder‘s
philosophy of business. His started his adventurous life in business by setting a cotton mill in Bombay
and then one another in Nagpur. His dream was to set-up a iron and steel company, a science institution
where one can learn science, a world-class hotel, and a hydro-electric plant.
Ardeshir Godrej (1868 - 1936):
The founder of the Godrej group of companies. Ardeshir Godrej studied law but couldn’t do well
as a lawyer. So he came to Bombay and started to work as an attendant to a chemist. Because of his great
sense of business, he saw everything as a business opportunity. Taking a loan from his father’s friend he
started to manufacture medical equipment that are required by a surgeon. Equipment such as scalpels,
surgeon’s scissor, forceps etc. When he was satisfied that his equipment are world-class, he went to the
boss of the company which he was working as an attendant. His boss accepted that the equipment is great
but the tag “Made in India” will not be there as that won’t be marketable (I am talking about 1891).
Govindram Seksaria (October 19, 1888 - June 29, 1946):
He was the Cotton King of the World. Not many people know but Govindram Seskaria is the
most famous businessman of the pre-independence era of India. At that time, not many Indians ventured
in to business when the British were ruling the country. But that didn’t deter Govindram and he went
on to be known by the name of cotton king of the world. First he become a member of Bombay Cotton
Exchange and then of New York Cotton Exchange and many others throughout the world. He started
his firm in 1937 which sold vegetable oil and then diversified business to many other fields. Considering
the hostile environment for Indians at the time of British Raj; Govindram is nothing short of a pearl in
the ocean.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


“Role of Entrepreneurs in Economic Development” 79

Ghanshyam Das Birla (April 10, 1894 - June 11, 1983):


G.D Birla is the founder of the Aditya Birla group, now a multinational conglomerate having its
Base in Mumbai. Ghanshyamdas left the traditional business (to lend money on hocked items) of His
family and went to Bombay (now Mumbai) to start dealership in cotton. His venture was Successful.
Further in the years to come he diversified in various other industries. He started a paper mill, a sugar
factory, then a car factory, and also expanded his business in to cement, steel and also started a commercial
bank now known as United Commercial Bank which is still operational by the name of UCO Bank.
Now Aditya Birla group operates in more than 33 countries and employs over 133,000 with an annual
turnover of USD 35 billion.
Jahangir Ratanji Dadabhoy Tata (29 July 1904 – 29 November 1993):
Father of the Indian Aviation Industry. If JRD Tata started it then Ratanji Tata was the one who
made that in to a much larger success. The vision of his founder to set up a steel company was completed
by starting Tata Steel. And the other two wishes resulted in Indian Institute of Sciences and Tata Power.
JRD Tata was an aviator and got his commercial pilot license. He set up India’s first commercial airline
company known as Tata Airlines in 1932 which was rechristened as Air India in 1946 and is now India’s
national airline. For his achievement in business he was awarded the highest civilian award of India:
Bharat Ratna.
Dhirubhai Ambani (28 December 1932 - 6 July 2002):
Dhirubhai Ambani is the most famous businessman of India. Ask even a 5 year old in India,
and he/she will know about Dhirubhai Ambani or at least about his last name. In all his life, he learnt
and applied. From his student life in dusty lanes of a small village in Gujarat to the major seaport city of
Aden and finally in Bombay where he become the doyen of the Indian industry. All his life he had been
doing only one thing and that is to learn and apply. After doing his matriculation; though he wanted to
continue study, Dhirubhai went to Aden, Yemen to earn money as his home’s financial condition was not
good. In Aden he worked with a trading firm as a clerk. In those days, Aden was the second-most busiest
port in the world, and traders from across the world came there for business.
Entrepreneurship-Present Era:
C.K. Prahlad, Fortune at the bottom of the pyramid states that the need for innovation in
entrepreneurship. Entrepreneurs should follow the sand box approach in innovation. The reason is, sand
in box is free flowing, shifting boundaries i.e., free from exploration and even playful experimentation
with in extremely fixed specific constraints (the walls, straight & rigid). In countries like India with 700
million bottom-of-the pyramid. Consumers at varying level of income; the need for innovations that meet
these criteria is now become obvious. Nation urges Entrepreneurs to explore domestic opportunities To
succeed, one need to continuous innovation & to have continuous innovation, one need to tap thinking
of every one in enterprise. Innovation plays a key factor in an entrepreneurial quality.
Conclusion:
“An Entrepreneur Searches For Change, Responds To It And Exploits Opportunities. Innovation Is A
Specific Tool Of An Entrepreneur Hence An Effective Entrepreneur Converts A Source Into A Resource.”
-Peter Drucker, Management Guru.
Entrepreneurship is the lifeblood of any economy. Indian entrepreneurs are more about overcoming
barriers, obstacles, inspiring & surmount in their fields. Entrepreneurship is one of the important segments

ISBN: 978-93-5300-292-3 Technical Session - I


80 “Role of Entrepreneurs in Economic Development”

of economic growth. Innovation is a key factor that an entrepreneur brings in an overall change through
innovation for the maximum social good. The growth of entrepreneurship particularly in the small scale
sector can be traced to the Second World War boom which brought many enterprising people from
various walks of life. As someone said failures are the stepping Stones for Success. If we observe the way
any entrepreneur, their life is not a bed of roses. They faced many obstacles in the way of entrepreneurial
achievement. Furthermore, women can tell the condition of a nation, she acts as a central cohesive source
of support and stability, not only to her family but also to whole nation. There is saying where women are
respected, dwells God. Similarly where women are there in the industry dwells progress and prosperity.
The bottom line for all the entrepreneurial life taught the first lesson for success; and that is failure.
References:
yy Swami Vivekananda Entrepreneurship on Focus
yy Wikipedia, http://en.wikipedia.org/wiki/Entrepreneur
yy Jaggi Vasu dev, the 3 I‘mantras of entrepreneurs, Business Line, 2012
yy Tata steel India, Pioneers, The men of Steel, jemshedji Tata profile.
yy Scribd, History of entrepreneurship, entrepreneurship and SME Management.
yy Economics of the Indus valley civilization, by Chad greenwood
yy Ratnagar, Shereen (2006). Trading Encounters: From the Euphrates to the Indus in the Bronze Age. Oxford University Press, India
yy Ozgurzan, Peter Drucker on Entrepreneurship
yy The economist, Indian Entrepreneurs: 10 Greatest Businessman from History
yy C.K.Prahlad, Entrepreneurs to Explore domestic opportunities,2008.
yy Daniel Priestley, “The Future Of Entrepreneurship

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Educational Entrepreneurship – The Need of the Hour
B. Satyavani
Research Scholar, Dept of Commerce & Business Administration, Acharya Nagarjuna University, and
Assistant Professor, Dept of Management Studies, Vignan’s Nirula Institute of Technology & Science for Women, Guntur.
Abstract Much of the recent literature on improving education in India seeks to promote entrepreneurship as the solution
to raising educational quality and equity. But, the historical record documenting substantial and sustained departure from
conventional educational practices is scant despite numerous attempts at entrepreneurial innovation. This paper contends that
the challenge of entrepreneurially induced change is not due to a deficit of ideas or lack of volition on the part of those who seek
change. Rather it is due to intrinsic features of the educational system which defy modification. These include not only such matters
as a stubborn school culture, but also the very role of schools as organizations that must serve other organizations and depend
upon them for resources. The paper evaluates the record of new forms of organization such as charter schools and educational
management organizations as well as other well intentioned strategies for transforming Indian education. It concludes that
successful educational entrepreneurship must overcome a deeply-rooted institutional conservatism and resistance to change.
Key words: Educational Entrepreneurship, Educational Management Organizations, Educational quality and equity
and Indian education.

Introduction
There is a growing interest in the role that entrepreneurship can play as a catalyst to achieve
economic and social development objectives, including growth, innovation,­ employment, and equity.
An increasing area of interest in this field is how a range of actors—including governments, the private
sector, and international organizations—can bolster entrepreneurs’ success and progress on broader
socioeconomic goals. The potential beneficial spillovers of entrepreneurship and the potential success of
entrepreneurs have garnered attention—provoking interest in interventions­ that stimulate individuals’
decisions to become and succeed as entrepreneurs. Entrepreneurship promotion efforts can include the
easing of business environment constraints, enhancing access to finance and credit, as well as the provision
of support to strengthen business practices and enterprise management.
Embedded within a number of entrepreneurship promotion activities are efforts that aim to
develop mind sets, knowledge, and skills associated with entrepreneurial success. Research suggests that
several of these mind-sets, knowledge, and skills can be learned, thus situating educational institutions
and training programs firmly within the broader discussions around entrepreneurship promotion.
The Concept of Educational Entrepreneurship
The term entrepreneurship has been used commonly in recent years to describe strategies to
improve education. Because the term has been associated generically with the development of new
alternatives in the marketplace, its educational variant has typically referred to a system of school choice,
and especially charter schools and vouchers. The general view is that the rewards of the marketplace provide
incentives for undertaking the risk of innovation that is required to develop better educational alternatives.
Even in the public school districts it is not unusual to hear of a quest for entrepreneurship through the
establishment of new schools, and especially small high schools or to hear of “intrapreneurship,” the quest
to transform an existing school.
What is clear from the literature on entrepreneurship is that the term is used to describe a wide
range of phenomena. To some it is the establishment of a new enterprise under risky conditions and with
a high potential financial return for taking that risk. Others see entrepreneurship as closer to the act of
invention, also with great risk and great potential payoffs. Yet others attribute entrepreneurship to any act
that is likely to add considerable value to a product or service. Entrepreneurship is a globally recognized
phenomenon lacking a single precise definition. Early in the 20th century, the role of entrepreneurship
82 Educational Entrepreneurship – The Need of the Hour

in promoting innovation and implementing change in an ­economy by introducing new products or


processes. Researchers define entrepreneurship as a process of discovery; the acting upon previously
­unnoticed— and often marginal—profit opportunities. Some definitions tie entrepreneurship only
broadly to specific economic activities, describing a process of opportunity recognition to create value
and act upon that opportunity.
Emergence of Education and Training for Entrepreneurship
Even against the backdrop of debates about whether entrepreneurship can be learned, there
is a growing global interest in entrepreneurship education and training (EET and by its inclusion in
international agendas and programs. Few researchers suggests that this popularization of EET is in part
driven by the mutual self-interests of key stakeholders, including policy makers (the political imperative
for job creation), students (more graduates competing for fewer jobs, seeking new opportunities and ways
to set them-selves apart), and education institutions (to satisfy policy makers as well as the student market
through course offerings). Taken together with indications that aspects of entrepreneurship can be taught
and learned, education and training systems are emerging as a key component of broader discussions
about the pro-motion of entrepreneurship.
These broad definitions of entrepreneurship suggest a potentially key role entrepreneurship in
education, through innovation and managerial breakthroughs, providing the spark needed to improve
the productivity, quality, and equity of Indian education. Schools are the focus of great expectations,
but habitually charged with disappointing results and an inability to meet expectations. Education is
widely believed to be the solution to major social challenges including those of workplace productivity,
economic competition, social equity, civic behavior, technology, cultural knowledge, and effectiveness of
democracy. In response to these persistent issues, schools are under constant pressure to change, often in
conflicting directions, not only in the U.S., but in most countries.
Types of Entrepreneurship education and training (EET) Programs
Entrepreneurship education and training (EET) programs can be classified under two related
but distinct categories: education programs and training programs. Broadly speaking, both aim to
stimulate entrepreneurship, but they are distinguished from one another by their variety of program
objectives or outcomes. While differing from program to program, academic entrepreneurship education
programs tend to focus on building knowledge and skills about or for the purpose of entrepreneurship.
Entrepreneurship training (ET) programs, by contrast, tend to focus on building knowledge and skills,
explicitly in preparation for starting or operating an enterprise (Volkmann et al. 2009; GEM 2010a).
While these two categories are conceptually distinct, it should be noted that in practice there are instances
where the characteristics of EE and ET overlap or are integrated into a single program.
Advancing the classification of EET, programs can also be distinguished by their target audiences.
The academic nature of EE means these programs target two groups in particular: secondary education
students and higher education students, the latter including both graduate and undergraduate students
enrolled in formal degree-granting programs. By contrast, ET programs target a range of potential and
practicing entrepreneurs who are not part of formal, degree-granting programs.
Potential entrepreneurs targeted by ET programs can include, at one end of the range, vulnerable,
unemployed, inactive individuals, or necessity-driven potential entrepreneurs, and at the other end of
the range, highly skilled, innovation­-led, or opportunistic potential entrepreneurs. Likewise, the range of
practicing entrepreneurs runs from individuals owning informal, micro- and small enterprises all the way
to high-growth potential enterprise owners. Building on these concepts, this study proposes the following
definitions for classifying EET programs according to both program type and target audience.
Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship
Educational Entrepreneurship – The Need of the Hour 83

ŠŠ EE—for Secondary and Higher Education Students. This category generally refers to the building
of capabilities, skills, and mindsets about or for the purpose of entrepreneurship. The goal is to
expand the pool of potential future entrepreneurs. Thus, it is generally integrated within formal
education institutions at the secondary and higher education levels (including universities,
colleges, and vocational schools). In this context, this study examines EE programs targeted at
both secondary and higher education students enrolled in formal secondary, undergraduate, and
graduate degree-granting programs.
ŠŠ ET—for Potential and Practicing Entrepreneurs. This category generally refers to the building
of knowledge and skills in preparation for starting or operating a business. Thus, the goal of ET
is to aid potential entrepreneurs to become entrepreneurs as well as help current entrepreneurs
become higher performing entrepreneurs. The broad nature of these target audience definitions
means that ET programs can target a range of potential and practicing entrepreneurs, regardless
of age, level of education, prior experience, or circumstances (e.g., highly skilled and educated,
self-employed, underemployed, and informal economy workers).
Business start-up as educational goal?
There are some general elements in the literature on what entrepreneurship education is, should
be or must be. It is described as perhaps the most important economic development mechanism
Entrepreneurship education is the structured, formal conveyance of entrepreneurial knowledge, namely
the concepts, skills and mentality individuals use during start-ups and development of growth-oriented
ventures
Entrepreneurship education is the process of providing individuals with the concepts, creativity
and skills to recognise opportunities that others have overlooked, and to have the insight, self-esteem
and knowledge to act were others have hesitated. Fostering entrepreneurship also means having a vision
of a future with a lot of possibilities. However, entrepreneurship education is about promoting change
in attitudes to ‘increase the number of students who view ‘business start-up’ as a viable career Extra
beneficial ways to conduct entrepreneurship education are to arrange competitions, live case discussions
(with successful entrepreneurs), students creating and running mini-companies, and placement in
entrepreneurial companies, in other words just like it is described as a practice There is a consensus that
students can be successfully endowed with an entrepreneurial culture. In contrast to traditional education,
viewed as transformation of knowledge and skills, entrepreneurship education is said to be about fostering
and changing attitudes and motives. The agreed importance of entrepreneurship education is not related
to entrepreneurship education in itself; it is related to the assumed effects of it.
Vitality of Entrepreneurial Education
These broad definitions of entrepreneurship suggest a potentially key role entrepreneurship in
education, through innovation and managerial breakthroughs, providing the spark needed to improve
the productivity, quality, and equity of American education. The focus of this paper is to ask whether
it is a shortage of entrepreneurialism or obstacles to entrepreneurial success that has accounted for the
inertia of the educational industry. Schools are the focus of great expectations, but habitually charged
with disappointing results and an inability to meet expectations. Education is widely believed to be the
solution to major social challenges including those of workplace productivity, economic competition,
social equity, civic behaviour, technology, cultural knowledge, and effectiveness of democracy. In response
to these persistent issues, schools are under constant pressure to change, often in conflicting directions,
not only in India, but in most countries.

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84 Educational Entrepreneurship – The Need of the Hour

One of the most common complaints about education is its resistance to change. Historically,
there have been many attempts to shift the direction of education in the U.S. through new ideas, new
leadership, national campaigns for excellence, and instilling fears of losing status or economic and military
superiority to competitors because of an under performing educational system.
Learning Entrepreneurial Education
Many scholars state that there is only one way to learn to become entrepreneurial, and that is by
learning through own experience. Cope leans on a variety of scholars when stating that there seem to be
no shortcuts, it “can only be acquired through learning-by-doing or direct observation”. The research that
has been done on how real-life entrepreneurs learn is however largely disconnected from the educational
domain, and offers little advice to teachers. This leaves teachers with the unanswered question “learning-
by-doing-what?” There is a need for robust advice on what to let students do in order to develop their
entrepreneurial competencies.
Activities that trigger entrepreneurial competencies
Previous research can give some initial advice on learning-by-doing activities that can trigger
the development of entrepreneurial competencies. Teachers should give their students assignments to
create value (preferably innovative) to external stakeholders based on problems and/or opportunities the
students identify through an iterative process they own themselves and take full responsibility for. Such
assignments lead to repeated interactions with the outside world, which triggers uncertainty, ambiguity
and confusion. This should be regarded as a positive outcome and a source of deep learning. To alleviate
the levels of difficulty and uncertainty such an assignment can result in, a team-work approach should be
applied giving the students access to increased creative ability and peer learning opportunities. Sufficient
time allowing for establishing fruitful relationships with external stakeholders should also be given to
the students, preferably months or years. Robust advice on how to manage the value creation process
should be given to the students, some of which will be outlined below in the Figure which outlines
the relation between educational assignments, triggered activities / events and developed entrepreneurial
competencies.
Educational Assignments Trigger emotional evetns, which in turn develop
situations and activities entrepreneurial competencies
Creation Interaction with outside Increased self efficacy
world
Value Creation Uncertainty and ambiguity in Increased uncertainty and
learning environment ambiguity tolarance
Venture Creation Team work environment Increased self Insights

Sustainable Venture Overcome competency gaps Formation of entrepreneurial


Creation identity

Presenting in front of others Increased marketing skills

Figure 1. A model of entrepreneurial education and its outcomes. The relationship between educational assignments,
emotional events / situations / activities and developed entrepreneurial competencies.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Educational Entrepreneurship – The Need of the Hour 85

The assessment of such an assignment should concentrate on the activities triggered rather than
the developed entrepreneurial competencies Each individual’s contribution in terms of interaction with
outside stakeholders should be assessed and supported by the teacher continuously. It is the interactions
and activities that drive the learning process, and these interactions and activities should therefore be the
focus of teachers’ assessment rather than the evasive entrepreneurial competencies. Assessment strategies
could include asking students to report names and other practical information about external stakeholders
contacted, occurrence of external stakeholders willing to engage with the students, and letting students
reflect on whether the value creation attempts were appreciated by the external stakeholders Such
assessment strategies will lead to what is often called constructive alignment, i.e. when the assessment
applied is in alignment with what the students need to do in order to achieve the learning outcomes stated
by the teacher
Future Perspectives
In the future we can hope for increased understanding of when, how and why learning-by-doing
works and how it can be integrated into education on all levels and for most (if not all) subjects. The tools,
methods and concepts presented in this chapter have hopefully been contextualized to education resulting
in curriculum material supporting teachers and students, a task preferably accomplished through close
collaboration between experienced and committed teachers on all levels of education and researchers in
entrepreneurship and education, in line with recommendations by Elmore (1996). A more comprehensive
list of tools, methods and concepts useful for iterative student-driven value creation processes in education
will hopefully be compiled, together with illustrative case studies outlining generalizable features. The
code will hopefully be found for how to unlock the door to the classroom, leading to teachers widely
adopting effective and efficient entrepreneurial education pedagogy. If so, it will have happened through
a concerted effort involving teachers, students, parents, principals, policy makers, researchers, authorities,
international associations and other key stakeholders, all playing their important role in the substantial
challenge of succeeding in educational reform. In the future we will hopefully also see the establishment
and strengthening of explicit support structures in schools, colleges and universities as well as other crucial
management and organizational structures, supporting teachers and students in the task of interacting
with the outside world leading to tandem learning and value creation.
Conclusion
Despite its promising effects on students and society, it is important to keep in mind that the field
of entrepreneurial education is in a quite early stage of development. It is still regarded as an innovative
but marginal pedagogical approach spurring much interest but also much confusion among various
stakeholders. There is tremendous work remaining if we are to succeed in making effective and efficient
entrepreneurial education available to a majority of people in the educational systems of the world.
And the road to achieving such an ambitious goal is still long, winding and risky. There is a need to
increase awareness of entrepreneurial education as a pedagogical approach relevant to all students and
on all levels of education, a need for more and closer collaboration between researchers and practitioners
in the two domains of education and entrepreneurship, a need for closing the gap between stated and
desired effects of entrepreneurial education and a need for increased understanding of when, how and
why entrepreneurial education can develop entrepreneurial competencies, especially on primary and
secondary levels of education and with an embedded approach.

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86 Educational Entrepreneurship – The Need of the Hour

References
yy Alberti, F. (1999). Entrepreneurship Education: scope and theory, in C. Salvato, P. Davidsson & A. Persson
yy Bird, B.J. (2002-2003) Learning Entrepreneurship Competences: the self-directed learning approach, International Journal of
Entrepreneurship Education, 1(2), pp. 203-227.
yy Giles, D. E. & Eyler, J. 1994. The theoretical roots of service-learning in John Dewey: Toward a theory of service-learning. Michigan
Journal of Community Service Learning, 1, 77-85.
yy Gilinsky, Jr., A. (2002), Turins Networks, Inc., Entrepreneurship Theory and Practice (ET & P), 27(1), pp. 77-91.
yy Henry, C., Hill, F. & Leitch, C. (2003). Entrepreneurship Education and Training. Aldershot: Ashgate.
yy Kirby, D. A. 2004. Entrepreneurship education: can business schools meet the challenge? Education + Training, 46, 510-519.
yy Kliebard, H. M. 1988. Success and failure in educational reform: Are there historical “lessons”? Peabody Journal of Education, 65,
143-1Solomon, G.T, Duffy, S. & Tarabisky, A. (2002) The State of Entrepreneurship Education in the United States: a national survey
and analysis, International Journal of Entrepreneurship Education, 1(1), pp. 65-86.57.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Government in Entrepreneurship Development
*B.V. Brahmaji, **Harika
*Assistant Professor **Student Coordinator-MBA
Department of MBA V.S. Lakshmi Engineering College for Women, Matlapalem
Abstract: In recent decades, economic growth in countries around the world has become increasingly dependent on
the dynamism of small and medium sized enterprises (SMEs). This is especially important in the transition economies.
We have focused on (i) attitudes of entrepreneurs in the private sector towards the role of government in SME development
through provision of assistance to SMEs in (ii) the business environment in which firms operate, and (iii) attitudes of the
employed in government sector towards the role of government in SME development through the provision of assistance to SMEs.
Without the government support they can’t do anything. Government will always support the Eco-Friendly Industries.
Pattern of entrepreneurial activities in India has undergone a sea change in the later half of the 20th century, more towards the
end of it. From being a government dominated sector in the immediate post-independence scenario to a one with reasonable
space for operation of private entrepreneurs, this transition has not been a smooth one at all. In fact, at every step, the country
has learnt by experience. We attempt to briefly and sequentially enumerate the policies followed by the government of India
with respect to entrepreneurial activities since its birth as an independent democracy, and their economic implications. We
attempt to bring out two main issues in this context, one being the public sector - private sector debate, and the other being
the foreign entrepreneur - domestic entrepreneur tussle. We use some elementary microeconomics in trying to show the problems
posed by these issues, and methods in which the government may intervene to improve situations.

Introduction
Pattern of entrepreneurial activities in India has undergone a sea change in the later half of the
20th century, more towards the end of it. From being a government dominated sector in the immediate
post-independence scenario to a one with reasonable space for operation of private entrepreneurs, this
transition has not been a smooth one at all. In fact, at every step, the country has learnt by experience.
What we attempt to do in this paper is to bring out two main issues in this context, one being the public
sector - private sector debate, and the other being the foreign entrepreneur ñ domestic entrepreneur
tussle. We use some elementary microeconomics in trying to show the problems posed by these issues, and
methods in which the government may intervene to improve situations. We also attempt to briefly and
sequentially enumerate the policies followed by the government of India with respect to entrepreneurial
activities since its birth as an independent democracy, and their economic implications. Section 2 briefly
discusses the scenario of the entrepreneurial sector as it was before The New Industrial Policy of 1991,
Section 3 briefly discusses the New Industrial Policy of 1991, section 4 tries to analytically
provide a solution to the public sector-private sector debate, section 5 addresses the foreign Vs domestic
entrepreneur issue and section 6 concludes the discussion.
Entrepreneurship
The capacity and willingness to develop organize and manage a business venture along with any
of its risks in order to make a profit. The most obvious example of entrepreneurship is the starting of new
businesses.
(The activity of setting up a business or businesses, taking on financial risks in the hope of profit.)
Entrepreneurship Development
The Entrepreneurship development involves equipping a person with the required skills and
knowledge needed for starting and running the enterprise.
88 Role of Government in Entrepreneurship Development

Role of Government in Entrepreneurship Development


To Encourage the Entrepreneurs financially the government of India establishes Financial
Institutions Such as Industrial Development Bank of India (IDBI) and the Small Industries Development
Bank of India (SIDBI).
Government plays a very important role in developing entrepreneurship. Government develops
industries in rural and backward areas by giving various facilities with the objective of balances regional
development. The government set programmes to help entrepreneurs in the field of technique, finance,
market and entrepreneurial development so that they help to accelerate and adopt the changes in industrial
development. Various institutions were set up by the central and state governments in order to fulfill this
objective.
1. Small industries development organization (SIDO)
SIDO was established in October 1973 now under Ministry of Trade, Industry and Marketing.
SIDO is an apex body at Central level for formulating policy for the development of Small Scale Industries
in the country.
2. Management development Institute (MDI)
MDI is located at Gurgaon (Haryana).It was established in 1973 and is sponsored by Industrial
Finance Corporation Of India, with objectives of improving managerial effectiveness in the industry.
3. Entrepreneurship development institute of India (EDI)
Entrepreneurship Development Institute of India (EDI), an autonomous and not-for-profit
institute, set up in 1983, is sponsored by apex financial institutions – the IDBI Bank Ltd., IFCI Ltd.,
ICICI Bank Ltd. and the State Bank of India (SBI). EDI has helped set up twelve state-level exclusive
entrepreneurship development centres and institutes.
4. All India Small Scale Industries Board (AISSIB)
The Small Scale Industries Board (SSI Board) is the apex advisory body constituted to render
advise to the Government on all issues pertaining to the small scale sector.
5. National Institution of Entrepreneurship and Small Business Development (NIESBUD)
It was established in 1983 by the Government of India. It is an apex body to supervise the
activities of various agencies in the entrepreneurial development programmes.
6. National Institute of Small Industries Extension Training
It was established in 1960 with its headquarters at Hyderabad. The main objectives of national
Institute of Small Industries Extension Training is:
Directing and coordinating Persons for training of small entrepreneurs.
7. National Small Industries Corporation Ltd. (NSIC)
The NSIC was established in 1995 by the Central Government with the objective of assisting the
small industries in the Government purchase programmes. The corporation provides a vast-market for
the products of small industries through its marketing network.

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Role of Government in Entrepreneurship Development 89

8. Risk Capital and Technology Finance Corporation Ltd .(RCTFC)


RCTFC was established in 1988 with an authorized capital of 15 crores rupees.The main objectives
of RCTFC are provision of risk capital for the extension and expansion of entrepreneurial development
and venture capital for the projects with high techniques for technology development and transfer.
9. National Research and development corporation (NRDC)
NRDC was established in 1953 under Department of Science and Industrial Research under
Government of India. Its main objectives are:
ŠŠ Providing assistance in technology transfer
ŠŠ Transfer of technology
ŠŠ Establishing relations with various technology institutions and collecting various indigenous
techniques developed by them.
10. Indian Investment Centre
This is an autonomous organization established by Central Government. Its main objective is to
assist in promoting foreign cooperation with Indian entrepreneurs and providing necessary information
to foreign entrepreneurs.
B) Institutions set up at State Level
There are a number of institutions establishes at state level for organizing, developing, developing,
assisting and making successful entrepreneurial development programmes. Prominent among these are:
ŠŠ Small Industries Service Institute (SISI)
ŠŠ State Financial Corporation (SFC)
ŠŠ State Small Industries Corporation (SSIC)
ŠŠ District Industries Centers (DIC)
ŠŠ Technical Consulting Organization Ltd. (TCO)
ŠŠ Industrial Directorates
ŠŠ Commercial and Cooperative Banks
ŠŠ State Industrial Development Corporation
ŠŠ Industrial Estates
ŠŠ State Industries Corporation
Industrial Policy Resolution, 1956
The government ís faith in the public sector was strongly expressed in the year 1956, when the
Industrial Policy Resolution, 1956, was adopted. Salient features of this policy were:
ŠŠ Rapid expansion of the public sector to cover almost all industries, barring a few.
ŠŠ In the ones remaining, the government was to play the role of pioneer entrepreneur, followed by
individual private sector initiatives.
ŠŠ The government would have extensive control and regulation over the activities of the private
sector units.
ŠŠ To exercise this control, the famous industrial Licensing System was adopted.

ISBN: 978-93-5300-292-3 Technical Session - I


90 Role of Government in Entrepreneurship Development

ŠŠ To deter direct foreign initiatives, laws like Foreign Exchange Regulation Act (FERA) were
introduced.
ŠŠ To encourage import substitution, high tariff rates were put into place.
ŠŠ To encourage development of Small Scale Industries (SSI) sector, by providing them huge
concessions and subsidies.
Industrial licensing system
Before making an investment, an entrepreneur had to obtain first approval in principle from the
Ministry of Industries. After having been granted this approval, he had to carry the issued Letter of Intent
(LoI). Armed with this LoI, he had to make other arrangements for his project. If he needed to import a
capital good, he had to obtain a Capital Good Import License from the Chief Controller of Exports and
Imports in the Ministry of Commerce, the formal approval for which, however, was given by the Ministry
of Industries. If he had to go to the capital market, he needed a separate approval from the Controller of
Capital Issues in the Ministry of Finance and so on and so forth!!!.
Monopolies and Restrictive Trade Practices Act (MRTP)
This Act, passed in the year 1969, was another tool through which the government could exercise
its control over the industries. This Act aimed at preventing restrictive trade practices on one side and
concentration of economic power on the other. Under this Act, undertakings whose assets are greater
than or equal to Rs. 20 crores had to register themselves with the MRTP Commission. They have to take
permission from the government for substantial expansion, establishment of new undertakings, mergers
and Acquisition. The MRTP Commission was given authority to investigate and control all restrictive
trade practices.
The New Industrial Policy, 1991
According to Bhagwati (1992), there were three main factors behind the failure to bring about
entrepreneurship development in India:
ŠŠ Extensive bureaucratic controls over production, investment and trade,
ŠŠ Inward looking policies for trade and foreign investment, and
ŠŠ A huge public sector. Mainly keeping these issues in mind, the 1991 Industrial Policy adopted
the following sub-policies:
»» Abolition of the Industrial Licensing system, except for investment in a few industries for
location or environmental reasons.
»» Relaxation of the restrictions on large industrial houses brought about by the MRTP Act.
»» Easing of entry requirements for foreign direct investment, keeping the playing field level for
the domestic producers.
»» Allowing private investment in a number of industries previously reserved for the public
sector, thereby reducing its size.
»» A new policy called for Exit Policy was constituted, which required the loss making firms to
be reorganized or to shutdown. A national renewal fund (NRF) for assisting workers currently
employed in enterprises that would have to be trimmed or closed down altogether was formed
so as to facilitate this policy, but this has not been implemented very strongly owing to severe
political pressure of the consequences of massive job losses.

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Role of Government in Entrepreneurship Development 91

Supportive Role:
ŠŠ Supportive Polices. (Less Rules and Regulations)
ŠŠ Government Funding to Eco-Friendly Industries.
ŠŠ Based on the industries (Small, Medium, and Large) the taxes should be imposed.
ŠŠ Developing Credit System (Installment payments of Taxes etc.,)
ŠŠ Providing Infrastructure facilities.
ŠŠ Support to the Young Entrepreneurs.
ŠŠ Established IDBI Bank (Industrial Development Bank of India) to support the Industries form
sickness.
ŠŠ Giving a chance to take the help of FDI.
ŠŠ Support to the Innovational Ideas.
ŠŠ Encouraging small scale Industries by support financially.
Conclusion
We have discussed in brief the policies followed by the Indian Government with respect to
entrepreneurship since independence, and have observed that changes were very slow in coming. It took
two and a half decades to understand what was good for the economy at what time. We have also seen
that it cannot be said whether more government intervention or less government intervention is good for
the society or not; it depends crucially on the goals that have been set to achieve. Also, in a situation when
a country like India, being a member of the WTO, cannot erect entry barriers to foreign investments
from other member countries, we have seen that it can strengthen the domestic firms through various
policies of indirect assistance.

ISBN: 978-93-5300-292-3 Technical Session - I


Entrepreneurship Development in India- A Special Emphasis on Start-Ups – An
Empirical Study
Dr. Prasad Chundi
(Freelancing Business & Law consultant), HoD – Dept.of Business Administration, Scient Institute of Technology,
Imbrahimpatnam, R.R. Dist.Telangana State E.mail: prasadchundi2016@gmail.com

Abstract: The Entrepreneurship Development policy of government of India is projected to empower the manpower system
of the country to gain competitive advantage in the global market. Entrepreneurship is not new to India. In fact to quote
from the Indian Industrial Commission Report (1916-1918)–”At a time when the West of Europe, the birth place of modern
industrial system, was populated by uncivilized tribes, India was famous for the wealth of her rulers and for high creative skill
of her craftsmen. And even at a much later period, when the merchant adventures from the West made their first appearance
in India, the industrial development of this country was, at any rate, not inferior to that of the more advanced European
nations.” Andhra Pradesh is strategically located on the Southeast coast of India and is a natural gateway to East and Southeast
Asia. The State has a population of 4.93 crores.
Introduction
India is a fast developing economy, emerging as one among the top industrial countries in the
world. The higher education policy of government of India is projected to empower the manpower
system of the country to gain competitive advantage in the global market. The supply of intellectually
equipped and technically qualified manpower in the form of software engineers, scientists ,Entrepreneurs
and other professionals to the global market is a good sign to the country. India today has reached that
stage of the demographic shift wherein more than 60 percent of the population is in the economically
active age group of 15-59 years, commonly referred to as the DEMOGRAPHIC DIVIDEND. For India
to tap this dividend it is necessary that the economy is able to generate enough job opportunities to
productively absorb this economically active population. We do keep mentioning of 500 million strong
workforce by 2022 but India faces challenges in reaping this demographic dividend considering that
illiteracy levels among the labour force is still high and between 70-80 percent of the labour force have
education levels below secondary. Almost 48 percent of the workforce is engaged in agriculture while
contribution of agriculture to GDP is not more than 16 percent. This situation may be attributed to
the low level of education and thereby inability to access decent jobs in the non-farm sector. In terms of
status of employment 52 percent of the workforce is self-employed as own-account workers or helpers, 30
percent as casual workers while only around 18 percent have regular jobs. This has resulted in more than
90 percent of the workforce engaged in informal jobs and slowing down the structural transition from
farm to the non-farm sector. The policy focus in the labour market has therefore been to create decent
jobs which can give the workforce a reasonable standard of living. While the emphasis has been on wage
employment it has been felt essential to promote self-employment or to be specific entrepreneurship as
an entrepreneur would be in a position to create more jobs.
Entrepreneurial Environment in India
The Entrepreneurship Development policy of government of India is projected to empower the
manpower system of the country to gain competitive advantage in the global market. Entrepreneurship
is not new to India. In fact to quote from the Indian Industrial Commission Report (1916-1918)–”At a
time when the West of Europe, the birth place of modern industrial system, was populated by uncivilized
tribes, India was famous for the wealth of her rulers and for high creative skill of her craftsmen. And
even at a much later period, when the merchant adventures from the West made their first appearance
in India, the industrial development of this country was, at any rate, not inferior to that of the more
advanced European nations.” In fact an earlier version of the current Make in India policy was the
Entrepreneurship Development in India- A Special Emphasis on Start-Ups – An Empirical Study 93

Swadeshi movement launched in 1905 during the pre-Independence era to boycott British made goods
and use Indian made goods. The movement saw the development of the Indian textile industry, the iron
& steel industry by the Tatas, publishing of vernacular newspapers, setting up of vernacular medium
educational institutions, financial institutions etc.
However, post-independence the policy focus of increased public investment in heavy industries
and setting up of PSUs did not provide an ideal environment for entrepreneurship. The main problems
faced by an entrepreneur were lack of mentoring facilities, technology support or easy availability of
credit. Though different Reports on employment highlighted the need for promoting entrepreneurship as
means of self-employment, entrepreneurship did not scale up. To mention a few, in the S.P Gupta “Special
Group Report on Targeting 10 million Employment Opportunities Per Year” (2002) recommended
“appropriate programmes should be launched to increase entrepreneurial capabilities and skill for self-
employment.” The Montek Singh Ahluwalia “Report of the Task Force on Employment Opportunities”,
July 2001 also mentions about developing entrepreneurship ability among the newly self-employed.
The Report even recommends entrepreneurship training for the informal sector. To quote, “A large part
of the employment generated by the economy will be self-employment in the informal sector. These
self-employed entrepreneurs need training of the multi-skill variety, going beyond production skills to
include marketing, finance and accounting and elementary management. Such skills cannot be developed
through structured formal training but requires the guidance of “mentors” in actual business conditions”.
Need of the Study
There is a rising demand for manpower and employment opportunities across various countries
all over the world. Since globalization has blurred borders people move across continents to take up
employment opportunity. But at the same time it is an obvious fact that the demand is most often for
the qualified and suitably skilled manpower only. Various studies and research have shown that providing
employment opportunities in Government sector as well as private sector is a big challenge for the public
governments influencing the various factors on it. This being the scenario, most institutions of higher
learning, state and National Government taking positive initiatives aim at incorporating entrepreneurial
building skills in their curriculum. India has a huge band of population in the young age group and
statistics show that most of them are professionals. The fact that they are technically knowledgeable alone
is not enough. They need to be trained in various aspects of employability and entrepreneurial skills.
Based on the need the researcher has taken the problem to study the new approach to Entrepreneurship
development in India and concept of startups in modern times. The sun rising state of Andhra Pradesh is
one among others potentially utilizing the natural resources as well as human resources in order to create
the new avenues for skill development and entrepreneurship for sustainable development.
However, entrepreneurship in India has been confined to being own-account workers with one
or more helpers and did not expand in size beyond that. As maybe seen from the Fifth Economic Census
2005, 95 percent of establishments were engaging not more than five workers and they accounted for
almost 64 percent of the employment. If the employment size of a unit is taken as not more than 10
workers then 98.5 percent of the establishments are covered. (Table-1)
Table-1 Distribution of Establishments by size class of Employment
Size by class of
S. No Item Year
Employment
1 1-5 Establishments 1990 1998 2005
Persons usually working 93.4% 94.0% 95.1%

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94 Entrepreneurship Development in India- A Special Emphasis on Start-Ups – An Empirical Study

Size by class of
S. No Item Year
Employment
2 6-9 Establishments 54.5% 58.6% 64.2%
Persons usually working 3.5% 3.3% 3.4%
3 10 & above Establishments 8.4% 8.3% 10.2%
Persons usually working 3.1% 2.8% 1.5%
37.1% 33.1% 25.5%

Source: Table 5.12, Chapter V, Fifth Economic Census 2005- All India Report, GoI
To promote self-employment as a means of job-creation and to promote entrepreneurship for
further job creation, the Micro, Small and Medium Enterprises (MSME) Act, 2006 was enacted to
facilitate the promotion, development and enhancing the competitiveness of micro, small and medium
enterprises. Earlier to that the small scale industries (SSIs) were regulated by two sections of the
Industries (Development & Regulation) Act, 1951 which led to absence of an institutional regulatory
and consultative mechanism to capture and guide the progress of an SSI unit from being a micro unit to
a small scale and eventually to medium scale one. The earlier Act also excluded the fast emerging service
sector. But even after the implementation of the MSME Act, 2006 the high proportion of unregistered
MSME units outside the purview of the Act is a matter of concern.
The government has over time implemented policies for the promotion of the small industries
which included providing concessional credit, training in entrepreneurship development, marketing
assistance etc. But the entrepreneurial growth did not take off in a big way in India as compared to
other countries because of the procedural hassles, stringent labour laws, economic regulations etc that
the establishments had to face. Further with import liberalization and entry of MNCs into India, the
Indian small scale entrepreneurs are not able to face the competition and are finding it difficult to survive.
In this context to quote from the Second National Commission on Labour (2002) “New economic
changes will provide more opportunities and not enough jobs. Therefore, one has to take advantage of
the opportunities. Both in urban and rural areas, there may not be an impressive rise in wage employment
but there will probably be enough scope for self-employment. The emphasis, therefore, has to be not on
wage jobs but on creating self- employed persons or entrepreneurs. The entire system of training and
education will have to give emphasis on the development of entrepreneurship”.
In keeping with this spirit the Ministry of MSME is implementing the entrepreneurship
development and skill upgradation schemes through appropriate training facilities. The Ministry has
set up three national level Entrepreneurship Development Institutes viz; The National Institute for
Entrepreneurship and Small Business Development (NIESBUD) (1983) at Noida (Uttar Pradesh),
National Institute for Micro, Small and Medium Enterprises (NI-MSME) (1960) at Hyderabad, and
Indian Institute of Entrepreneurship (IIE) (1993) at Guwahati, to inculcate entrepreneurial culture
especially among the first generation entrepreneurs. There is the scheme for Providing Support for
“Entrepreneurial and Managerial Development of SMEs through Incubators” in implementation since
2008. There is the MSME Technology Centres (earlier Tool Room & Technology Development Centres)
which provide high end skill training to the youth. A national award scheme has been initiated by
MSME for outstanding performance in Entrepreneurship, Research and Development, Innovation, Lean
Manufacturing Techniques and Quality Products.

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Entrepreneurship Development in India- A Special Emphasis on Start-Ups – An Empirical Study 95

In addition the creation of Self Help Groups cannot be underestimated. Self Help Group is a
homogeneous group of micro entrepreneurs which are formed voluntarily to save whatever amount they
can and mutually agree to contribute to a common fund of the group from which small loans are given
to the members for meeting their productive and emergent credit needs on rate of interest and terms
decided by the group. These have helped in providing livelihood opportunities to group of women to
start their own business and break the shackles of poverty. Some of the best case entrepreneurial models
are the SEWA, Kudumbashree etc. Though entrepreneurship has been privy to India and despite various
schemes being in place the country has not witnessed the natural gradation from self-employment to
entrepreneurship as part of the growth process excepting a few cases.
Entrepreneurship climate in Andhra Pradesh
Andhra Pradesh is strategically located on the Southeast coast of India and is a natural gateway
to East and Southeast Asia. The State has a population of 4.93 crores (as per population census - 2011),
accounting for 4% of India’s population, residing in 4.9% of geographical area. The State is endowed
with abundant natural resources (Barytes, Limestone, Bauxite, and a number of minor minerals), fertile
land and river basins, water resources, extensive canal system and conducive agro-climatic conditions. The
State has the second longest coastline in India and is also one of the largest producers of marine products.
At current prices, the Gross State Domestic Product (GSDP) of Andhra Pradesh was 4,75,859 crores
in 2013-14. Between 2004-05 and 2012-13, the average annual GSDP growth rate of Andhra Pradesh
was 7.25% while the average per capita income at (current prices) increased from 46,345 in 2008-09 to
88,876 in 2013-14.
The Advanced Estimate for GSDP in 2014-15 is 5,20,030 crore and the target for GSDP in
2015-16 is 6,36,606 crore (both at current prices). Over the years, the State has established a strong
presence in agro and food processing, textiles, chemicals & petrochemicals, pharmaceuticals, metallurgy,
electronics and electrical engineering sectors.
Under the stable leadership of Sri. N Chandra Babu Naidu, Chief Minister of Andhra Pradesh has
identified development of MSMEs as a catalyst for job creation and poverty mitigation and Government
of AP has accorded top priority to their development. In parallel, there is significant thrust on encouraging
startups and setting up incubation centres to provide a conducive eco-system for MSME. The MSME
sector in AP manufactures a variety of products. There is a high concentration of micro and small units
in the food sector, mineral and building materials sector, drugs and pharmaceuticals, fabricated materials,
trading and service sector. The Andhra Pradesh MSME Policy 2015-20 is aimed at “establishing state-of
the art infrastructure, advancing inclusivity, fostering innovation and creating employment opportunities
across different skill sets”.
Strategic advantages that Andhra Pradesh State
Robust Infrastructure
Andhra Pradesh has robust infrastructure comprising good road and rail network, 4 major ports,
4 active airports and 24X7 power for industrial/commercial use. Additionally, the State is creating a land
bank of 10 lakh acres to facilitate industrial development. Mega projects like Vizag-Chennai Industrial
corridor (VCIC) and Chennai-Bengaluru Industrial Corridor (CBIC) will help develop new economic
centres in the State, further giving fillip to industrial development

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Large base of Skilled Manpower


The State has over 120 polytechnics, 225 engineering colleges and several management institutes
which meet the industries requirements for skilled manpower. The State also boasts of cordial labour
relations as well as general peace and order owing to GoAPs welfare policies (Andhra Pradesh was the
first state to amend Contract Labour Act to define core and non-core activities). Last but not the least,
Andhra Pradesh is uniquely positioned to access the global talent pool by leveraging a strong diaspora
active in this sector.
The factors inhabiting in up gradation process
In the entrepreneurial ecosystem the journey of an entrepreneur begins from conceiving an idea
to developing it into a project proposal for starting a business. The handholding is required at this stage
which is lacking. The entrepreneur is saddled with regulatory hurdles and financial blocks in moving the
startup ahead. The availability of risk capital from banks or venture capital companies is limited. Poor
infrastructure availability also increases the operational costs for the startups. To quote the National
Knowledge Commission, “50% of the entrepreneurs experienced difficulties while seeking statutory
clearances and licenses. Two-thirds faced hassles while filing taxes and 60% claimed to have encountered
corruption. Another hurdle was in accessing reliable information on registration procedures, finance and
other schemes. 56% claimed that the paucity of quality infrastructure – especially transport, power, and
telecommunications – was a critical barrier.” As a result of these hurdles the proportion of closure of units
is also high at the startup stage. The entrepreneurial culture is also lacking as the institutions of learning
train students for wage employment rather than in becoming entrepreneurs. A key socio-cultural factor
also pertains to social attitudes towards risk and failure. To better understand and manage risk as well as
create a supportive social environment for entrepreneurs, it is essential to remove the stigma associated
with failure.
Start-up a Revolutionary thought for Transformation
On the other hand, a change is being witnessed today, as quoted by Prime Minister Shri. Narendra
Modi, ‘The convergence of technology, integration across diverse fields, distributed architecture and
people willing to back an idea, have opened a new world for enterprise. --- I see Start-ups, technology
and innovation as exciting and effective instruments for India’s transformation, and for creating jobs for
our youth. For start-ups today there are different levels of financial support that has come to provide the
initial seed capital in the form of incubators, angel funds, or venture capital funds followed by private
equity and debt in that order. Between January-September 2015, Angel Funds and VCFs have invested
$7.3 billion in early stage Indian Start-ups. India’s first generation e-commerce and mobile entrepreneurs
have become angel investors which is a sign of maturing of startup ecosystem. However, there is a danger
that too many mentors/ angel investors with little experience may lead to a situation of unsuccessful
startups.
Start-up! An ‘Idea’ selling for self empowerment
The government has also come a big way in promoting startups. The question therefore what
needs to be answered is what is a start-up? A start-up is a company that is in the first stage of its operations.
These companies are often initially bank rolled by their entrepreneurial founders as they attempt to
capitalize on developing a product or service for which they believe there is a demand. The start-up and
SMEs appear to be of the same size with limited revenues, high cost of operation, job creating but they
operate on entirely different business models. The difference between a start-up and a SME unit is that
a startup is new organization designed to search for a repeatable and scalable business model. A start-up

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Entrepreneurship Development in India- A Special Emphasis on Start-Ups – An Empirical Study 97

according to Steve Blank –‘is searching for answers to the product it will sell, the customers it will serve
and the way it will make money from delivering value to its customers’. A SME, according to the U.S.
Small Business Administration (SBA) is an “independently owned and operated, organized for profit,
and not dominant in its field.” SMEs generally sell known products to known customers in known
local markets. These startup needs an appropriate ecosystem to thrive which includes adequate funds
for startups to help them grow; government to create an environment of ease of doing business; ready
availability of essential services like office space, location, supplies telecom connectivity etc.; and mentors
to provide strategic advice.
Latest Policy Initiatives for Start-ups
To simplify the regulatory framework the government introduced the Ease of Doing Business
wherein an MSME unit has to fill in a single one page self-declaration online form called Udyog Aadhaar.
The Apprentices Act, 1961 was amended to enable even the MSME unit’s engage apprentices which
will enable the units to get trained labour as well as in turn supply skilled labour. Under the Apprentice
Protsahan Yojana, 50 percent of the stipend payable to the apprentices would be reimbursed by the
Government for the first two years which is an incentive for MSME units to take in more apprentices.
To give boost to the Make in India programme, the MSME Ministry has launched the ASPIRE
scheme in March 2015, a Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship.
The objective of the scheme is to set up a network of technology and incubation centers to accelerate
entrepreneurship and also to promote start-ups for innovation and entrepreneurship in agro-industry.
To ease the credit availability requirements of startups the Government had announced the
MUDRA scheme- Micro Units Development & Refinancing Agency, operated by SIDBI for providing
refinance to micro units. This would improve the liquidity of the micro units who right now have to
borrow from NBFCs and moneylenders at high rates of interest.
Atal Innovation Mission (AIM) - This programme operated from NITI Aayog is about an
Innovation Promotion Platform involving academics, entrepreneurs and researchers and draw upon
national and international experiences to foster a culture of innovation, R&D and scientific research
in India. The platform will promote a network of world class innovation hubs and grand challenges for
India. The overarching purpose of this mission is to promote a culture of entrepreneurship and innovation
in India. The key objectives of the AIM are:
ŠŠ To create an umbrella structure to oversee innovation eco-system of the country;
ŠŠ To provide platform and collaboration opportunities for different stakeholders;
ŠŠ To study and suggest best and novel practices to be adopted by different stakeholders in the
innovation chain;
ŠŠ To provide policy inputs to NITI Aayog and various Government Departments and Organizations.
ŠŠ To create awareness and provide knowledge inputs in creating innovation challenges and funding
mechanism to government; and,
ŠŠ To develop new programmes and policies for fostering innovation in different sectors of economy.
SETU (Self Employment and Talent Utilization)- SETU meaning bridge in Hindi is a Techno-
Financial, Incubation and Facilitation Programme to support all aspects of startup businesses and other
self-employment activities, particularly in technology driven areas operated from NITI Aayog. An Expert
Committee on Innovation & Entrepreneurship for working out the detailed contours of the Atal Innovation

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98 Entrepreneurship Development in India- A Special Emphasis on Start-Ups – An Empirical Study

Mission (AIM) and SETU was constituted by NITI Aayog. The Expert Committee has identified five
major drivers for creating a vibrant entrepreneurial eco system viz; (i) catalytic government policy and
regulatory framework (ii) easy access to equity capital and debt (iii) businesses as entrepreneurial hubs
(iv) culture and institutions which encourage entrepreneurship over careerism (v) adequate and effective
collaboration forums.
Electronics Development Fund- the Ministry of C&IT has launched the Electronics Development
Fund (EDF) to promote innovation, research and development, and product development in the field
of semiconductors, nano-electronics, IT and associated sectors by bringing in established companies and
startups on board13. The objective is to do research, design and develop electronic products within the
country for which the startup units would be provided supportive financial assistance from the EDF.
Digital India- Digital India Programme has been launched to provide broadband connectivity
in rural and urban areas. Introduction of digital rural connectivity would give a big boost in developing
traditional rural arts, crafts or other innovative ideas into business models.
Make in India – is an initiative launched by the Government of India to encourage national,
as well as multi-national companies to manufacture their products in India. It was launched by Prime
Minister Narendra Modi on 25 September 2014.
Standup India - This is organically integrates Bhartiya Micro Credit (BMC) E-Rickshaws program
into Prime Minister Shri Narendra Modi flagship ‘Stand Up India’ initiative. The Prime Minister on 15th
August 2014 launched the Pradhan Mantri Jan Dhan Yojana (PMJDY) for “Banking the Unbanked.
This program was launched by Hon’ble Prime Minister Narendra Modi the ‘Stand up India’
scheme on 5 April 2016 as part of the government’s efforts to support entrepreneurship among women
and SC & ST communities.
Intellectual Property Rights-With the growing number of startups it is essential to protect one’s
products from impersonators. The startups need to go for design patents, trademarks, copyright or trade
secrets protection as the need maybe before marketing their product.
India Aspiration Fund- A Rs. 2000 crore India Aspiration Fund (IAF) was launched by SIDBI
in August 2015 to boost the startups fund of-funds ecosystem in the country. This fund would invest in
various venture capital funds for meeting the equity requirement of MSME start-ups. A SIDBI Make in
India Loan for Small Enterprises (SMILE) Scheme of Rs.10,000 crore has also been launched to catalyze
tens of thousands of crores of equity investment in start-ups and MSMEs, creating employment for lakhs
of persons, mostly educated youth over the next 4-5 years. The objective of SMILE is to provide soft loans
in the nature of quasi-equity and term loans on relatively soft terms to MSMEs to meet the required
debt-equity ratio norm. The 25 sectors under the ‘Make in India’ programme’ would be the focus with
emphasis on financing smaller enterprises in the MSME sector. There will be concessional terms for
the enterprises promoted by (SC) / (ST) / Persons with Disabilities (PwD) and women. The scheme is
expected to benefit approximately 13,000 enterprises, with employment for nearly 2 lakh persons.
These two schemes are in addition to the Rs.20000 crore MUDRA scheme. Together the three
finance schemes should boost the startups as well as MSMEs already in the transition phase and create
good number of jobs in the years to come. Till date the startups have been successful in e-commerce,
and other IT based applications of service sector. The startups in manufacturing sector are yet to take
off in a big way. The launch of the above-mentioned policy initiatives should give a boost to startups in

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Entrepreneurship Development in India- A Special Emphasis on Start-Ups – An Empirical Study 99

manufacturing as well. As of 16th November 2015, 806 startups have taken off during the year and the
main sources of funding were seed funding and private equity and the products were mainly IT based
applications in the service sector.
In the Global Competitiveness Index (GCI) 2015-16 India has scored 16 points and moved up
from its earlier ranking of 71 to 55 out of a total of 144 countries. Region-wise among the emerging
and developing Asia India ranks sixth after Malaysia (18), China (28), Thailand (32), Indonesia (37) and
Philippines (47). India does have the potential to move ahead of these countries. In the World Bank’s Ease
of Doing Business Ranking 2015 India is placed at 142 place out of a total of 189 economies. But on
the startup front India ranks third position globally with 4200 startups. The new initiatives in promoting
startups would enable India to move up to the top position.
Conclusion:
Startup India campaign is based on an action plan aimed at promoting bank financing for
start-up ventures to boost entrepreneurship and encourage start ups with jobs creation. The Standup
India initiative is also aimed at promoting entrepreneurship among SCs/STs, women communities. To
conclude, a startup ecosystem has been created through the new policy initiatives which would not only
promote startups particularly in the manufacturing sector but also the micro units would be able to
graduate faster as small and medium units. If this objective is achieved the goal of job realization through
self-employment would be complete as self-employment is the answer to providing jobs to the huge
proportion of population in the economically active age group. This process would be fast tracked by the
flagship programmes well supported by the Skill India Mission which would facilitate availability of right
skilled manpower as entrepreneurs complains about skill mismatch. Given that startups are emerging as
major job creators, governments both at the Centre and States need to put in place appropriate policy
framework for the start-ups.
References:
yy Two Hundred and Forty Fifth Report on Review of the implementation of Micro, Small and Medium Enterprises Development Act,
2006-Department-Related Parliamentary Standing Committee (2013)
yy Transferred to Ministry of Skill Development & Entrepreneurship vide GoI Order No.9(1)2015-EDI dated 22nd May 2015
yy Entrepreneurship in India, NKC, 2008
yy Speech by Prime Minister Shri Narendra Modi at the Startup Event (27 September 2015, San Jose, California)
yy http://yourstory.com/2015/10/indian-startups-invested/
yy ‘Young Entrepreneurs turn Angels for Younger Startups’, Times of India, June 30, 2014.
yy Investopedia
yy https://www.quora.com/Peter Baskerville
yy ‘Young Entrepreneurs turn Angels for Younger Startups’, Times of India, June 30, 2014.
yy Economic Times, 11th June,2015
yy http://www.indiainfoline.com/article/news-sector-banking-financials/sidbi-launches india-aspiration fund-and-sidbi-
makein-india-loan-for-enterprises-scheme-5082000192_1.html
yy Source: http://trak.in/india-startup-funding-investment-2015/.
yy Figures in brackets indicate GCI rankings
yy MSME Policy document of Andhra Pradesh State

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Role of Personality and Leadership Traits in Entrepreneurship
*G. Venkateswarlu, **PVS Chowdary
*Asso. proff in Psychology, V.R.S&Y.R.N College, Chirala.
**Asso. Professor in Physics, VRS & YRN College, Chirala

The concept of ‘Entrepreneurship’ is most influenced factor of the national economic development
and growth. Innovative nature is developed globally by the name of Rationalization, privatization and
Globalization and it can influence the sustainable economic growth due to the technical relation between
the nations. The entrepreneurs with their vision and innovative qualities lay down a strong foundation
for sustainable growth of the various sectors like agriculture, industry, technology, education, trade and
services. Various factors contributing to economic development and labor, capital, natural resources,
technology and entrepreneurship. Entrepreneurship plays a key role in the process of development.
Entrepreneurship is depend upon production, marketing, financing, pricing and personnel relations.
Mostly depends upon effective policies and their efficient implementation.
Definitions of Entrepreneur:
The concept of entrepreneur varies from country as well as from period to period and the level of
economic development thoughts and perceptions. The word entrepreneur is derived from the French word
“Entrepreneur” Which means to “undertake” i.e the person who undertakes the risk of new enterprise.
Adam Smith described entrepreneur as a person who only provides capital without taking active
part in the leading role in enterprise.
Jean Baptiste say opined that the entrepreneur was a person endowed with the qualities of judgment,
perseverance and a knowledge of the world as well as business. The entrepreneur shifts economic resources
out of an area of lower and into an area of higher productivity and greater yield.
Karl Marx regarded entrepreneur as a parasite.
Noah Webster thinks entrepreneur is one who assumes the responsibility of the risk and management
of business.
Peter F. Drucker defines an entrepreneur as one who always searches for change, respond to it and
exploits it as an opportunity. Innovation is the specific tool of entrepreneurs, that means by which they
exploit change as an opportunity for a different business or service.
Akhouni, M.M.P describe entrepreneur as a character who contributes, innovativeness, readiness
to take risk, sensing opportunities, identifying and mobilizing potential resources concern for excellence,
and who is persistent in achieving the goal.
Hennry Ford who created the manufacturing miracle that launched a modern era in industry.
Entrepreneur can do anything with passion and enthusiasm. Enthusiasm is the yeast that makes his
hopes rise to the stars. Enthusiasm is the spark in his eye, the swing in his gait, the grip of his hand,
the irresistible surge of his will and his energy to execute his ideas. Enthusiasts are fighters, they have
fortitude, they have strong qualities.
Qualities of entrepreneur:
A true entrepreneur besides possessing functional qualities, must also process in a broad personality
which help in developing initiative and drive to accomplish great task and face challenges squarely.
Role of Personality and Leadership Traits in Entrepreneurship 101

James J. Berne has stressed the following qualities of a good entrepreneur:


ŠŠ He is an enterprising individual, energetic, hardworking, resourceful, aware of new opportunities
and able to adjust himself to changing conditions with ease and willing to assume risk involved
in change.
ŠŠ He is interested in advancing technologically and in improving the quality of his product or
service
ŠŠ He is interested in expanding the scale of his operations by reinvesting his earnings.
ŠŠ He visualizes changes and adapts to changing conditions.
ŠŠ He is a firm believer in planning and systematic work.
ŠŠ He works for the society at large and for the good of his fellow-beings.
Psychologists View:
Among psychologists, Frank young describes an entrepreneur as a change-agent. K.L. Sharma
maintains that entrepreneurs are men who exhibit qualities of leadership is solving persistent professional
problems; but those persons likewise demonstrate eagerness to seize unusual opportunities. They have a
business gambler’s itch. T.v rao and Udai Pareek describe entrepreneurship as a creative and innovation
response to the environment. The entrepreneur is goal-oriented rather than means-oriented. He must not
only have a high capacity of risking-taking but must also have a high capacity of risk-sustaining which is
a function of high degree of self-confidence.
Joseph Schumpeter states that the entrepreneur is mainly motivated and driven by three things:
ŠŠ ‘The dream and the will to found a private kingdom’.
ŠŠ ‘The will to conquer’.
ŠŠ ‘The joy of creating’.
J. Schumpeter’s formulation can be translated as:
ŠŠ The desire for power and independence.
ŠŠ The will to succeed.
ŠŠ The satisfaction of getting things done.
According to him, money is not what ultimately motivates the entrepreneur ‘Entrepreneurs’,
according to Schumpeter, ’are certainly not economic men in the theoretical sense’.
According to David McClelland, entrepreneurship has to do with an individual’s so called need for
achievement. He identified three features of entrepreneurs that were related to their need for achievement:
ŠŠ Desire to accept responsibility for solving problems, setting goals and reaching the goals.
ŠŠ A willingness to accept moderate risks.
ŠŠ A desire to know the outcomes of their decisions. It was widely believed that a high achievement
motivation has a strong likelihood of predicting entrepreneurial behavior. Individuals with high
achievement motive tend to take keen interest in situations of risk, desire for responsibility and a
desire for concrete measure of task performance.

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102 Role of Personality and Leadership Traits in Entrepreneurship

Motivational entrepreneurs:
Motivation is the force that influences the efforts of the entrepreneur to achieve his objectives.
An entrepreneur is motivated to achieve or prove his excellence in job performance. He also motivated to
influence others by demonstrating his power, thus satisfying his ego.
Pure entrepreneur:
A pure entrepreneur is an individual who is motivated by psychological and economical rewards.
He undertake an entrepreneurial activity for his personal satisfaction in work, ego or status.
Induced entrepreneur:
This entrepreneur is one who is induced to take up an entrepreneurial task due to the policy
measure of the government that provides assistance, incentives, concessions and necessary overhead
facilities to start a venture. Most of the entrepreneurs belong to this category and enter business due to
financial, technical project is provided package assistance to his project. Today, import restrictions and
allocation of production quotas to small units have induced many people to start a small-scale industry.
Motivated entrepreneur:
New entrepreneurs are motivated by the desire for self-fulfillment. They come into being because
of the possibility of making and marketing some new products for the use of consumers. If the product
is developed to a saleable stage, the entrepreneur is further motivated by reward in the in term of profit.
Spontaneous entrepreneurs:
These entrepreneurs start their business out of their natural talents. They are persons with initiative,
boldness and confidence in their ability which motivate them to undertake entrepreneurial activity. Such
entrepreneurs have a strong conviction and confidence in their ability.
Entrepreneurial skills:
ŠŠ Creative problem solving.
ŠŠ Persuading.
ŠŠ Negotiating.
ŠŠ Selling.
ŠŠ Proposing.
ŠŠ Holistically managing business/project/situations.
ŠŠ Strategic thinking.
ŠŠ Intuitive decision making under uncertainty.
ŠŠ Networking.
Leadership is the capacity to frame plans which will succeed and the facility to persuade others to
carry them out in the face of all difficulties
Strategic Leadership:
This style of leadership analyze the current situations, decide on strategies and put those strategies
into action and evaluation or modify if changes are needed in strategies.

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Role of Personality and Leadership Traits in Entrepreneurship 103

Transactional Leadership:
Transactional leadership focus on tactical issues, daily affairs of short term goals, maintain human
relations and fulfill role expectations by striving to hole effectively.
Visionary Leadership:
Characteristics are mostly influenced are innovative, whole system thinkers, conventional through
in their efforts. They have advance planning, highly professional with little supervision, flexibility, rapid
change, innovation, complexity and optimism about the future.
Charismatic leader create a good atmosphere of change and they have an ability to communicate
complex ideas and goods in clear, compelling ways ,so that everyone can understand and identify with
their message, they inspire to the followers.
Leadership traits influenced in entrepreneur:
The following leadership traits mostly influenced in entrepreneur are –
1) Decision making. 2) Leading by examples. 3) Setting standards. 4)Multi-tasking. 5) Building
Relationship. 6) Creativity. 7) Dedication. 8) Commitment. 9) Mission. 10) Vision. 11) Resolving
conflicts. 12) Team player. 13) Approachable. 14) Approachable. 15) Integrity. 16) Trust. 17) Passion.
18) Compassion. 19) Capability. 20) Involvement. 21) Presence of mind. 22) Energy. 23) Clarity of
thoughts.24) Patience. 25) Daring to dream. 26) Sincerity. 27) Trust. 28) Honesty.
Roles of personality traits in an entrepreneurship:
Personality is defined as the whole characteristics of the individual. Personality is the dynamic
organization with in the individual of those psycho physical systems that are determine his characteristic
behavior and thought. Personality traits mostly influenced in Entrepreneurship .They are
ŠŠ Outgoing:
It means entrepreneur have the warm hearted, easy going and participating nature.
ŠŠ More intelligent:
Entrepreneur have Abstract thinking, brightness in behavior.
ŠŠ Emotionally stable:
It means mature in nature, faces reality and calm.
ŠŠ Dominant:
This trait is more influence on entrepreneur they have aggressive, stubborn and competitiveness.
ŠŠ Happy. go. lucky:
He is enthusiastic in nature of work.
ŠŠ Conscientious:
Persistent, moralistic and staid behavior.
ŠŠ Venture some:
Uninhibited, socially bold.
ŠŠ Tender-hearted:
Sensitive, clinging and overprotected.

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104 Role of Entrepreneurship on Economic Development & Entrepreneurial Development and Its Antecedents in India- A Study

ŠŠ Trusting:
Accepting conditions.
ŠŠ Practical:
Practical in nature.
ŠŠ Forthright:
Unpretentious, genuine but socially clumsy.
ŠŠ Self-assured:
Secured, placid, complacent.
ŠŠ Conservative:
Respecting traditional ideas.
ŠŠ Group-dependent:
Joiner and sound follower.
ŠŠ Controlled:
Socially precise, exercising will power and compulsive.
ŠŠ Relaxed:
Tranquil, unfrustrated and composed.
Entrepreneurship plays an influential role in the economic growth and standard of living of
the country as a startup founders or small business owners, can identified various sectors needed the
startups. The below futures of aerospace, agriculture, artificial intelligence, financial services, healthcare,
manufacturing, technology ,transportation and logistics, virtual reality, and augmented reality.
Several studies prove the existence of a relationship between entrepreneur personality traits and
firms performance. Personality traits can be correlated with start-up’s innovativeness .Entrepreneurs
plays a crucial role in managing them. Their personality strongly influenced business decision. The main
personality traits we consider are narcissism, the big five (i.e. extraversion, agreeableness, conscientiousness,
openness to experience) and locus of control.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Entrepreneurship on Economic Development & Entrepreneurial
Development and Its Antecedents in India- A Study
*Dr. Y. Ramakrishna Prasad
Professor, Department of Management Studies, GRIET, Hyderabad
Phone No # +91- 09849826538, Email: rkprasady@gmail.com, yrk@griet.ac.in

Abstract: The role of entrepreneurship in economic development varies from economy to economy depending upon its material
resources, industrial climate and the responsiveness of the political system to the entrepreneurial function. The entrepreneurs
contribute more in favourable opportunity conditions than in the economies with relatively less favorable opportunity
conditions. Now, people have begun to realize that for achieving the goal of economic development, it is necessary to increase
entrepreneurship both qualitatively and quantitatively in the country. It is only active and enthusiastic entrepreneurs who
fully explore the potentialities of the country’s available resources – labour, technology and capital. Several dynamic forces, such
as technological disruption, fluctuating economies or demographical changes, have brought new opportunities and threats for
organizations, and transformed societies from all over the world. In order to cope with these shifting forces, governments, public
and private organizations, and the public are more and more aware of the importance of entrepreneurship. Entrepreneurship is
a multifaceted phenomenon, being analysed as a process, a resource or a state-of-being. According to the Schumpeterian view, the
entrepreneurial process constitutes one of the key factors in the economic development of a country/region. However, researchers
have expressed different views about the relationship between the stages of economic development and entrepreneurship during
the time This conceptual paper emphasis on the growth of entrepreneurship development in India and its status in promoting
economic development of India. Entrepreneurship can play a pivotal role in giving a boost to the economic development to one
of the largest populated countries like India. Based on the review of literature about the ancient aspects about entrepreneurial
development in India as well as the current trends in growth of entrepreneurship in India. Data was collected from the
secondary source. The outcomes are resultant to find the development of Indian entrepreneurial economy in comparison with
other fast-growing economies like China and Brazil, its role in providing large scale employment/ self-employment, and
modes of promoting entrepreneurship and entrepreneurship training in India. It has been concluded that the time is ripe
for an entrepreneurial revolution in India and entrepreneurship provides a great scope for faster development of its economy.
Key words: Entrepreneurship, Economic Development, Innovation, Self-Employment, Service Sector, Promoting
entrepreneurship, entrepreneurial revolution.

Introduction:
Entrepreneurs who are business leaders look for ideas and puts them into effect in nurturing
economic growth and development. They play the most important role in the economic growth and
development of Indian economy. The entrepreneur acts as a trigger head to give spark to economic
activities by his entrepreneurial decisions. An entrepreneur plays a pivotal role not only in the development
of industrial sector of a country but also in the development of farm and service sector.
Entrepreneurship is the process of designing, launching and running a new business, which is
often, initially a small business, offering a product, process or service for sale or hire. The people who
create these businesses are called entrepreneurs. Entrepreneurship has been described as the “capacity
and willingness to develop, organize and manage a business venture along with any of its risks to make a
profit”. While definitions of entrepreneurship typically focus on the launching and running of businesses,
due to the high risks involved in launching a start-up, a significant proportion of businesses should close,
due to “lack of funding, bad business decisions, an economic crisis – or a combination of these” or due
to lack of market demand.
In the 2000s, the definition of “entrepreneurship” expanded to explain how and why some
individuals (or teams) identify opportunities, evaluate them as viable and then decide to exploit them,
whereas others do not and, in turn, how entrepreneurs use these opportunities to develop new products
or services, launch new firms or even new industries and create wealth. Recent advances stress the
fundamentally uncertain nature of the entrepreneurial process, because although opportunities exist their
106 Role of Entrepreneurship on Economic Development & Entrepreneurial Development and Its Antecedents in India- A Study

existence cannot be discovered or identified prior to their actualization into profits. What appears as a
real opportunity exalted might be a non-opportunity or one that cannot be actualized by entrepreneurs
lacking the necessary business skills, financial or social capital.
An entrepreneur is an individual who, rather than working as an employee, founds and runs a
small business, assuming all the risks and rewards of the venture. The entrepreneur is commonly seen as
an innovator, a source of new ideas, goods, services and business/or procedures.
Entrepreneurs play a key role in any economy. These are the people who have the skills and initiative
necessary to anticipate current and future needs and bring good new ideas to market. Entrepreneurs who
prove to be successful in taking on the risks of a start-up are rewarded with profits, fame and continued
growth opportunities. Those who fail suffer losses and become less prevalent in the markets.
Entrepreneurship is one of the resources economists categorize as integral to production, the
other three being land/natural resources, labour and capital. An entrepreneur combines the first three of
these to manufacture goods or provide services. He or she typically creates a business plan, hires labour,
acquires resources and financing, and provides leadership and management for the business.
The term entrepreneur comes from the French word “entreprendre”, which means to undertake
something. Entrepreneurship is a process which involves all those activities associated with identifying
an opportunity and creating an enterprise to utilise that opportunity. Joseph A. Schumpeter defined
entrepreneurship in 1939, which was considered as most appropriate. He defined it as “entrepreneurship
is based on purposeful and systematic innovation. It includes not only the independent businessman
but also company directors and managers who actually carry out innovative functions”. Given the
increasing significance and visible impact of Entrepreneurship in wealth-creation and employment-
generation, National Knowledge Commission considers it critical to India’s growth and development. It
has undertaken this study to explore factors that have advanced Entrepreneurship in India as also various
other factors that could further encourage and facilitate even greater growth.
National Knowledge Commission, 2008 defines Entrepreneurship as follows: ‘Entrepreneurship
is the professional application of knowledge, skills and competencies and/or of monetizing a new idea,
by an individual or a set of people by launching an enterprise de novo or diversifying from an existing
one (distinct from seeking self-employment as in a profession or trade), thus to pursue growth while
generating wealth, employment and social good’. It is proved that there is positive correlation between
economic development, innovation and entrepreneurship (Guin K.K., 2014). Entrepreneurship not
only creates large scale jobs thereby increasing the national income, but also function as a bridge between
innovation and the market (Barot D. H., 2015). Entrepreneurship is also considered as an important
ingredient along with knowledge which differentiates the level of wealth among rich and poor countries
(Nickels W.G., 2004). This is a concept paper which looks at the growth of entrepreneurship development
in India and its present status in promoting economic development of India.
Economic development is the development of economic wealth of countries, regions or communities
for the well-being of their inhabitants. From a policy perspective, economic development can be defined
as efforts that seek to improve the economic well-being and quality of life for a community by creating
and/or retaining jobs and supporting or growing incomes and the tax base. Economic development is
the process by which a nation improves the economic, political, and social well-being of its people. The
term has been used frequently by economists, politicians, and others in the 20th and 21st centuries. The
concept, however, has been in existence in the West for centuries. Modernization, Westernization, and

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Role of Entrepreneurship on Economic Development & Entrepreneurial Development and Its Antecedents in India- A Study 107

especially Industrialization are other terms people have used while discussing economic development.
Economic development has a direct relationship with the environment and environmental issues.
Generally, tax authorities will view a person as self-employed if the person chooses to be recognized
as such, or is generating income such that the person is required to file a tax return under legislation in the
relevant jurisdiction. In the real world, the critical issue for the taxing authorities is not that the person is
trading but is whether the person is profitable and hence potentially taxable. In other words, the activity
of trading is likely to be ignored if no profit is present, so occasional and hobby- or enthusiast-based
economic activity is generally ignored by authorities. Self-employed people generally find their own work
rather than being provided with work by an employer, earning income from a trade or business that they
operate.
Entrepreneurship to have a broader impact on job creation and in promoting sustainable
development, policy makers can enhance the regulatory environment by addressing regulatory barriers
that hinder young entrepreneurs from starting up, introducing online registration and simplified
regulations, minimizing the stigma surrounding business failure and facilitating restarts. Orienting
business development services to provide services to young entrepreneurs is essential to ensure that they
obtain adequate support. The public and private sectors, as well as other relevant partners, can come
together to improve education and skills development, and better align the skills acquired by young
people with labour market demands. Building the capacity of teachers to inculcate entrepreneurship skills
among students is critical.
Literature Review
The purpose of the literature review on entrepreneurial development is to identify the related facts
in the research work that were determined by other authors through their research in the similar field
of work and to know the outcome of their research. The literature reviews will throw light on the broad
spectrum of entrepreneurial activities in India and other countries.
Conventional entrepreneurship has been linked to the discovery of opportunities, innovation and
the creation of new business ventures and is implicitly associated with the pursuit of commercial objectives
separate from, and perhaps in conflict with, ethical behaviour (Clarke and Holt 2010; Sen 1993b). In
contrast, the emergence of social entrepreneurship, with its focus on ‘‘the innovative use of resources to
explore and exploit opportunities that meet a social need in a sustainable manner’’ (Sud et al. 2009, p.
203), presents a more ethical variant of entrepreneurial activity, with an explicit social change agenda
(Branzei 2012). Social entrepreneurship offers solutions to a range of social problems (Nicholls 2006)
and is acknowledged to be an effective mechanism for generating economic, social and environmental
value (Acs et al. 2013; Austin et al. 2006; Murphy and Coombes 2009). Social entrepreneurship has
also been associated with wider social change processes (Acs et al. 2013; Alvord et al.2004; Mair et al.
2012a, b; Mair and Martı´ 2009; Steyaert and Hjorth 2006); however, we know little about how social
entrepreneurship leads to social change.
Entrepreneurial competencies have been identified as a specific group of competencies relevant to
the exercise of successful entrepreneurship. Such entrepreneurship is often associated with the development
of small and new businesses (e.g. Colombo and Grilli, 2005; Nuthall, 2006), although there is increasing
interest in corporate entrepreneurship and intraprenuership (e.g. Hayton and Kelley, 2006; Sathe, 2003;
Zahra et al., 1999). In a study into the learning behavior of small firms, Chaston et al. (1999) looked
at how differing modes of behaviour relate to, and, impact on organisational capability and found that
despite the extensive literature which exists relating to organizational learning, there were few attempts

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108 Role of Entrepreneurship on Economic Development & Entrepreneurial Development and Its Antecedents in India- A Study

to operationalise the construct through the application of quantitative techniques, especially in the small
firm sector. “Research to determine whether identifiable relationships exist between the performance
of the firm, the learning mode of the organisation and organizational competence does not provide
clear statistically significant relationships and further work is clearly needed” (Chaston et al., 1999).
Scholars researching in the field of entrepreneurship distinguish between managerial competencies and
entrepreneurial competencies (Lerner and Almor, 2002; Chandler and Hanks, 1994a, b, c). Some suggest
that entrepreneurial competencies are needed to start a business, while managerial skills are needed to
grow the business, although competence in entrepreneurship requires competencies in both areas (Man
et al., 2002).
Let us regard things in retrospection. When human society entered the 20th century the spotlights
were on the ’big things’- ‘big’ used to be beautiful and respectable, or the political ‘establishment’. ‘Big’
was the future. It provided a scale economy based on mass production which brought welfare to the
people, if not exactly wealth. In this way, the Western democracies kept the ordinary man in his place.
Those times bore their own professional elite: the managers (Burns, 2011).
In most developed economies, the first two post-war decades represented a success for the great
enterprise, considered the only one capable to conform itself to the code of the industrial society, expressed
in six essential principles: standardization, specialization, synchronization, concentration, maximization
and centralization. The small enterprise seemed doomed to remain the Cinderella of the economies, maybe
even a brake on their way towards development. At the beginning of the 1970s, the literature started to
refer to the role of the SMEs in the economy. There was ample evidence that economic activity moved
away from large firms to small firms in the 1970s and 1980s. But did this mean that the small companies,
a David of business, had triumphed over the Goliath of the big enterprises? In act, the small companies,
the new companies and the entrepreneurs had always been there. Therefore, in the latter part of the past
century the perception began to change. Schumacher (1973) asserted that the giant organizations and
the growth of specialization would lead to economic inefficiency at the macroeconomic level, to pollution
and to improper working conditions and offered as an alternative a system of intermediary technologies
based on small production units. It seemed that the orthodoxy of the big enterprise had not brought
mankind the economic success it had expected (Burns, 2011). People started to value the importance
of the SMEs. Around the 1980s the special contribution that the SMEs brought to the labour market
began to be much more appreciated as more than 80% of all new jobs were created by small enterprises
(below 500 employees) in the India. Since then this pattern has been kept until today. In India, the SMEs
generate more than a half of the gross domestic product (GDP) and more than 50% of all the exports
are carried out by companies with less than 20 employees. As the clear majority of companies (80-90%)
are micro-enterprises, they have reduced the bureaucracy a lot to make sure that the requirements of the
SMEs have been taken into account.
Entrepreneurship should do with individuals, people with their own traits and actions (roles).
Various roles of the entrepreneur can be distinguished in the business world. To express the connection
between entrepreneurship and economic growth and development, two major roles of the entrepreneur
can be singled out. The first should do with ‘new entry’ and the second with ‘newness’ in general. Firstly,
the entrepreneur is the founder of a new business: “. . . someone who creates and then, perhaps, organizes
and operates a new business firm, whether there is anything innovative in those acts”. Secondly, the
entrepreneur plays a more general innovative role in economic life: “... the entrepreneur as the innovator
– as the one who transforms inventions and ideas into economically viable entities, whether or not, while

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Role of Entrepreneurship on Economic Development & Entrepreneurial Development and Its Antecedents in India- A Study 109

doing so they create or operate a firm” (Wennekers and Thurik, 1999). Thus, newness through start-ups
and innovations are some of the most relevant factors linking entrepreneurship to economic growth.
Methodology & Analysis
For analysis, the articles were categorized under the following headings which made the analysis
easier. The categories were 1) Entrepreneurship in India, a historical perspective, 2) Entrepreneurship in
India compared with other fast-growing economies like China and Brazil, 3) Entrepreneurship- provider
of large scale employment/ self-employment, 4) Growth of Service Sector, 5) The role of MSME in
economic development and
Data Reviewed for Inference
Emerging Economy Entrepreneurship and the International Domain
Entrepreneurship in emerging economies is not an isolated domain. Instead, it is part of the
broader international business domain that helps to identify other relevant issues. For example, more
and more emerging economy firms go international soon after their founding (Ahlstrom, Bruton, &Yeh,
2007; Zucchella, Palamara, & Denicolai, 2007). The nature of these entrepreneurial firms’ local market
that encourages them to seek out other markets should be explored. For example, these firms often
internationalize to either gain market share or to gain knowledge; which of these two is the principal
motivator for entrepreneurial firms or how the two motivations impact each other merits examination.
There is also a need to understand the impact of cultural and institutional differences between the
country of the entrepreneur and the country where the entrepreneur is doing business. For example, the
cultural distance between countries and how that impacts the expansion of entrepreneurial firms should
be explored.
It is important to not stop at the firm- and country-level effects in examining entrepreneurship in
emerging economies. Country effects are important, yet often overlooked are the country–firm interaction
effects. The interaction effects would include how firms uniquely benefit from going international in
that type of country. For example, Middle Eastern entrepreneurs are experiencing some success with
investment in the Moslem countries of Southeast Asia such as Malaysia and Indonesia. Similar religious
and cultural orientation would appear to provide a variety of benefits apart from standard cost savings or
new marketing opportunities that emerge.
A third aspect of examining international dimensions of entrepreneurship in emerging economies
is seeking to better understand born global firms from the developing worlds. Born global firms are firms
that are international from their very beginning. These firms are not unlike domestic only firms as they
must consider all the difficult questions entrepreneurs have about financing, managing, and strategizing
within the organization.
But the born global firms face a far more complex analysis since the new firms are crossing
national borders. By crossing boundaries, the entrepreneurial firm faces constraints but the firm also
obtains opportunities to enhance market value based on the strategic deployment of firm resources and
assets, as well as intangible assets gained by going international. For firms from emerging economies that
are often facing constrained resources, the act of going international would appear to provide unique
challenges that need greater understanding.

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110 Role of Entrepreneurship on Economic Development & Entrepreneurial Development and Its Antecedents in India- A Study

Entrepreneurship in India Compared with Other


Fast Growing Economies like China and Brazil Indian economy has become the second fastest
growing economy in the world even during the recent world-wide recession (Kular I.K.A.S.B.J.S.). It
is expected to be the fastest growing economy in the years to come. Small and medium enterprises are
considered world-wide as the promoters of economic development. In India, they constitute 95% of the
industrial units, accounts for 40% of the total industrial production and 34% of the exports. They provide
employment to about 312.5 lakh people in 128.5 lakh units as on 2006- 07(Kular I.K.A.S.B.J.S.). China
gives more importance to SMEs than India, where over 68% of China’s exports come from small and
medium sector. The growth of SMEs in China has been phenomenal that in the last 20 years it has created
more SMEs than the total number of SMEs in US and Europe combined. In the case of Brazil, another
fast-growing economy, SME’s constitute 96.8% of the registered business employing 59% of the active
population (Kular I.K.A.S.B.J.S.). This shows that India
Economic Development and Institutional Theory
Similar institutions and resources can have different effects in different contexts. Thus, there is
also a need for a more subtle way to analyse how contextual variables differ in emerging economies and to
what degree they shape entrepreneurial goals, behaviours, and effectiveness of actions. A theory is more
powerful if its applicability is established in different settings. The ability to connect established theories in
new and rich manners offers the potential for significant new insights. Emerging economies are a unique
environment that offers the ability to obtain fresh insights to expand theory and our understanding of
it by incorporating more contextualized considerations. To illustrate the need for a richer theoretical
development, institutional theory has been recognized for its ability to provide insight to emerging
economies (Hoskisson, Eden, Lau, &Wright, 2000). However, the exact nature of institutional forces in
emerging economies is not yet well conceptualized. The most common model used by researchers is Scott’s
(2002) formulation of institutional theory. However, some applications of this model, even in leading
journals, are somewhat unusual. In addition, in sociology this model is somewhat controversial. Other
slightly different formulations exist in economics (e.g. North, 1990, 2005) and political science (Patriotta
& Lanzara, 2006). Thus, there is a need to more fully develop a conceptualization of institutional theory.
The richness of emerging economies has the potential to allow that to occur. It was noted earlier that too
often, culture differences are given as the cause of any differences from mature economies that are found.
But there is a rich set of institutions that could be causing any difference. Therefore, there is a strong need
to better understand the impact of those different institutions on entrepreneurs and entrepreneurship in
emerging economies. For example, the impact of legal institutions has been shown to have an impact
in the finance domain (La Porta, Lopez-de Silanes, Shleifer, & Vishny, 1998, 2000). Entrepreneurship
should explore if legal institutions play a similar role in the development and success of new ventures
emerging economies.
A desired outcome of better theory development is better application of the theory. The better
understanding of the role of institutions has the potential to not only shape the understanding of
institutional theory in emerging economies but also in mature economies. It is surprising, but rarely has
previous research examined the impact of institutions in shaping entrepreneurial actions in developed
economies. If institutions have the explanatory power expected then it would imply that researchers in
these developed economies should be including institutions in their research in a manner no different than
if they were examining a topic in China or India. As a result, emerging economies can help researchers
to develop theory in a way so that they can better understand how to incorporate the theory in mature
economies.

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Role of Entrepreneurship on Economic Development & Entrepreneurial Development and Its Antecedents in India- A Study 111

Role of MSMEs in Indian Economic Development


In India, small enterprises are now included in the category MSME, Micro Small and Medium
Enterprises. These small enterprises are equated with entrepreneurship and their growth is considered as
growth of entrepreneurship which in turn will facilitate economic development. The MSMEs generate
“highest employment per capita investment” as well as it will reduce rural urban migration by providing
employment in the village itself (Kular I.K.A.S.B.J.S.). It is very easy to start an SME as compared to large
industry. Analysis of census data on SMEs have shown that an investment of Rs.0.72 lakh is required
for creating one employment in the MSME sector as compared to Rs.5.56 lakh in the large-scale sector
(Kular I.K.A.S.B.J.S.), So employment generation is more in the MSME sector.
Small enterprises offer “cost effective and customised products to niche markets and provide
employment to local talents” [Majumdar S.]. They are a source of products for large organizations and it
is very easy for small enterprises to adapt to changing environment [Majumdar S.].
Like other small businesses in the world, small enterprises in India face challenges in their activities.
Then there are problems they face which are unique to India. Challenges like efficiency and global reach
can be overcome through embracing information technology. Those related to risk taking, innovation
and proactiveness can be met by encouraging entrepreneurship (Patricia R Todd R.G.J., 2007). India has
abundant unskilled labour, widespread underemployment while it lacks skilled labour, enterprising and
experienced entrepreneurs and managerial talent. By promoting small enterprises, India can overcome
these adversities and promote a democratic socialistic society and prevent concentration of economic
power (Barot D. H., 2015). Due to liberalisation and globalisation, the small enterprises in India began
to face competition from foreign companies. Due this intense competition, these domestic firms have to
change their ways and improve their efficiency in order to survive (Patricia R Todd R.G.J., 2007). The
recent advances in the IT front and communication infrastructure have helped the Indian SMEs to cater
to the global markets.
Encouraging and supporting entrepreneurship, encouraging innovation and providing necessary
finance are necessary for Indian SMEs to go globally (Patricia R Todd R.G.J., 2007). According to the
National Sample Survey of 1999-2000, the total workforce as on 01-01-2000 was 40.6 crores. Only
7% of the workforce were employed in the organized large-scale sector. 93% were employed in the
unorganized small-scale sector. The unorganized sector employed 36.9 crores people during 2000. This
data shows the importance of entrepreneurship in the economic development of a developing country
like India (Barot D. H., 2015).
Findings
Even though India had a glorious past in entrepreneurship, two centuries of British rule had
demolished it and India became a poor less developed country at the time of Independence with a large
population and rampant unemployment. After independence, the Government of India had come out
with Industrial Policy Resolutions and Five-Year Plans to give boost to industrialisation and promote
entrepreneurship. But during the initial four decades, it did not produce the desired result in the case of
entrepreneurship and an entrepreneurial culture was not evolved in the country. Thrust was not given to
entrepreneurship as it was an engine of economic development.
But, things changed from 1991 onwards due to liberalisation and when the New Small Enterprises
Policy was announced in the year 1991. The Government has realised the importance
entrepreneurship has got in the economic development of the country. All the advanced countries like

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112 Role of Entrepreneurship on Economic Development & Entrepreneurial Development and Its Antecedents in India- A Study

US, Japan etc. achieved progress due to a vibrant entrepreneurship culture. When compared with other
fast-growing economies like China and Brazil, India still has to go long way in the entrepreneurial front.
All over the world, entrepreneurship is associated with small businesses. In India, small
enterprises which falls in the category MSME is generating highest employment per capita investment.
It is providing about 93% of the industrial employment. Entrepreneurship development is one of the
mechanisms adopted by the government of India for creating large scale employment. MSME Act was
passed in 2006 to provide necessary assistance to entrepreneurs and small businesses. A separate ministry
was formed to look after the affairs of MSME. Government is providing institutional, financial and fiscal
support to entrepreneurs. Government has also realised the importance of entrepreneurship training,
which is equally important for the promotion of entrepreneurship. To enhance the skill set of people a
comprehensive policy on National Skill Development and Entrepreneurship was formulated in 2015. A
separate ministry is also formed for Skill Development and Entrepreneurship Development. So, time is
ripe for an entrepreneurial revolution in India. An entrepreneurial culture will slowly develop which will
make India an advanced country.
Conclusion
India is one of the fastest growing economies in the world. But it is plagued by an ever growing
population and unemployment. India has gone through the Agricultural revolution, White revolution,
Blue revolution etc. An entrepreneurial revolution is due which will take India in comity with the
developed nations. Only an entrepreneurial awakening will make India to grow on a much faster rate
and become a developed nation at least by 2050. Government initiatives like ‘Make in India”, “Stand Up
India”, “PMKVY” are going to jump start the entrepreneurial revolution and mind set.
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ISBN: 978-93-5300-292-3 Technical Session - I


Entrepreneurs – In the Era of GST
P. Anitha Saravanan
Research scholar, under the guidance of Dr. R. Siva Ram Prasad,
Department of Commerce & Business Administration, Acharya Nagarjuna University, Guntur.

Abstract: Entrepreneurship is a rapidly rising concern of a modern competitive economy and its contribution in
economy is viably recognized worldwide. It is the purposeful activity of an individual or a group of associated individuals,
undertaken to initiate, maintain or organize a profit oriented business unit for the production or distribution of economic
goods and services. Goods and Services Tax (GST) will give a boost to Indian economy and also help the entrepreneurs
to become stable in Indian Market. GST will help in streamline of the business and create a common market for the
whole country. It will help entrepreneurs to focus on their business rather than being worried about tax compliances.
GST is set to benefit entrepreneurs of all kind, with a transformational shift in the indirect tax administration in India.
This paper focuses to highlight the main points of GST and its working and impact on entrepreneurship and business.
Key words: Entrepreneur, GST

Introduction:
The entrepreneur “is someone who specializes in making judgmental decisions about the
coordination of scarce resources.” The term emphasizes that the entrepreneur is an individual. As G. L.
S. Schackle wrote, “The entrepreneur is a maker of history, but his guide in making it is his judgment
of possibilities and not a calculation of certainties,” and identified uncertainty bearing as the economic
function of the entrepreneur. According to Schumpeter, the entrepreneur is the prime mover in economic
development and his function is to innovate. It is defined and established in traditional theories that
Investment in new knowledge increases the technology opportunity set and sharpens the ability to look
into the future. Entrepreneurial activity thus could be very well understood as the activity that holds the
discovery, evaluation and exploitation of opportunities within the defined established framework and
how these opportunities are discovered exploited is related to institutional arrangement of the country or
the individual.
Characteristics of Enterpreneurs:
To be successful entrepreneurs one has to acquire and develop certain qualities, namely:
ŠŠ High motivation for achievement of goal,
ŠŠ Insatiable drive and persistent enthusiasm,
ŠŠ Ready to take risk and face challenge,
ŠŠ Technical expertise,
ŠŠ Spirit of innovation,
ŠŠ Hard working, dedication, commitment and self –confidence,
ŠŠ Willingness to take advice/ learn from the failure and use of Feedback,
ŠŠ Effective management of time.
ŠŠ During the study we found four types of ventures:
»» Independent start-ups;
»» Spin-offs;
»» Acquisitions;
»» Corporate ventures
Entrepreneurs – In the Era of GST 115

How was the necessity entrepreneurship born? After the fall of the Berlin Wall many uneconomical
factories were closed in Central Europe as economies became integrated into the global economy. Those
workers who had jobs in the plants and factories of the former socialist countries were productive members
of society. However, as factories were closed one after another, many of these workers found them- selves
with no other options for work than self employment— necessity entrepreneurship. As one would
expect, the influx of many former wage workers into necessity entrepreneurship resulted in several years
of negative GDP growth. When a new business opportunity is taken up or exploited it is assumed that it
will lead to economic development but on the other hand taking up of necessity entrepreneurship may
not lead to the same. It also may be the case that under development may happen due to self employment.
Many countries have some level of both opportunity and necessity entrepreneurship, studies suggest
that the ratio of opportunity-to-necessity entrepreneurship could be a useful indicator of economic
development; we can say it can also act as a guide for development policy for the policy makers. So the
equation comes out to be of positive relationship between the opportunity ratio and GDP per capita. The
suggestion could be given to less developed countries that they should focus on strengthening General
National Framework Conditions, and developed economies policy should focus on strengthening the
entrepreneurial framework conditions.
GST:
The Goods and Services Tax (GST) is a vast concept that simplifies the giant tax structure
by supporting and enhancing the  economic growth  of a country. GST is a comprehensive tax levy
on manufacturing, sale and consumption of goods and services at a national level. The Goods and
Services Tax Bill or GST Bill, also referred to as The Constitution (One Hundred and Twenty-Second
Amendment) Bill, 2014, initiates a Value added Tax to be implemented on a national level in India. GST
will be an indirect tax at all the stages of production to bring about uniformity in the system.
On bringing GST into practice, there would be amalgamation of Central and State taxes into a
single tax payment. It would also enhance the position of India in both, domestic as well as international
market. At the consumer level, GST would reduce the overall tax burden.
Various central taxes that will be subsumed in GST are:
ŠŠ Central Excise Duty,
ŠŠ Additional Excise Duty,
ŠŠ Service tax,
ŠŠ Additional Custom Duty,
ŠŠ Special Additional Duty and
ŠŠ Central Sales tax.
In order to avoid the payment of multiple taxes such as excise duty and service tax at Central
level and VAT at the State level, GST would unify these taxes and create a uniform market throughout
the country. Integration of various taxes into a GST system will bring about an effective cross-utilization
of credits. The current system taxes production, whereas the GST will aim to tax consumption. Out of a
diversified range of proposals that are necessary to encourage the startups, Goods and Services Tax (GST)
is the one, which is quite important too in terms of indirect tax perspective.

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116 Entrepreneurs – In the Era of GST

Statement of problem:
Entrepreneurial skills and knowledge, their talents and abilities in business and compelling desire
of wanting to do something positive are some of the reasons for the entrepreneurs to organize industries.
Entrepreneurship leads to break the inequalities and reduce the poverty in the economy. The purpose
of the study is to explore and determine the problems faced by entrepreneurs in the recent changes in
the taxation system. It also aims to understand the various motivational factors and policies influence
them to start their business and also make an evaluation regards government support activities for GST
implementation.
Objectives of the study:
ŠŠ To know the favourable impacts of GST on entrepreneurs
ŠŠ To know the problems faced by the entrepreneurs for the implementing GST
ŠŠ To study the policies, programmes, institutional networks and the involvement of support
agencies in promoting entrepreneurship.
Research methodology:
ŠŠ The purpose of methodology is to describe the process involved in research work. The present
study is based only on secondary data. The data were collected from books, journals, and websites.

Favourable impacts of GST on entrepreneurs


ŠŠ Ease of starting a business by bringing uniformity in the Centralized registration process.
ŠŠ An easy regulatory mechanism will bring out benefit not only to new age business, but also helps
to attract more foreign investment from the global market.
ŠŠ Higher exemption to new business by extending the limit up to 25 lacs which will bring down the
tax burden to newly established business.
ŠŠ GST will make the process of paying tax simpler by merging all taxes of different states.
ŠŠ In GST, there is no difference between sales & services and thus tax will be calculated on total
basis.
ŠŠ GST will reduce the logistic cost of the company producing non-bulk goods by 20%.
ŠŠ GST eliminate the cascading effect of multiple Central & States taxes.
ŠŠ GST is a destination base tax system i.e. the liability to pay tax is only generated after the goods/
services reach to the customers.
ŠŠ GST bring down the fiscal deficit, boost GDP & bring economic integration in the country.
ŠŠ GST is levied only at the point of sale & not on the purchase i.e. levied only by the last dealer and
make the product cheaper for the final consumer.
ŠŠ GST is about to create a unified market by cutting the cost of various taxes imposed by central
and state government
ŠŠ In previous tax laws, various input tax credit is not available for set off, after GST implementation
this problem gets resolved.
The inclusions from the Traders association Confederation of All India Traders also deducted the
point that GST will surely increase the compliance policies and structural working of the business units

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Entrepreneurs – In the Era of GST 117

worthwhile but the building of the framework online and creating knowledge and awareness may prove
lacking in the case of small business units.
Problems faced by the entrepreneurs in implementing GST:
ŠŠ The registration on multi stages can be an issue if the business is doing the trade with multiple
states because now it is mandatory to register with each state you are doing business with
ŠŠ The monthly return filing procedure can create problems for businesses as they have to comply
with it else they will be burdened with Rs. 100 per day penalty which is not favourable even for
their compliance rating on the portal
ŠŠ As there are total 36 returns to be furnished in a year, to cope-up with the system they have to hire
an accountant or ask the third party to do the return filing work. So, the burden of return filing
can increase the cost for businesses
ŠŠ For e-commerce operator, it became more complicated because they don’t have any threshold
limit to exempt from the law and they have to register and track the supply of each goods
ŠŠ SMEs dealing with supply to end-users can face the burden as there is no tax exemption for
supply of goods under input credit and it will increase the cost of the product
ŠŠ It can create mismatch in society as there are same tax on luxury goods and normal goods; it can
make rich to be more rich and poor to be poorer
ŠŠ There is variation in demand-supply ratio due to increased raw material cost. So it is expected
that the profitability and debt ratio for SMEs can be burdened if they are not able to overcome
the tax fumes. The last resort for the SMEs is to increase the product prices so that they can resist
the overload
Policies and programs introduced by government in promoting entrepreneurship:
The government supports innovative enterprises and entrepreneurs in a number of ways
Promoting cooperation between researchers and the private sector
The government is working with the private sector and knowledge institutions to improve public-
private partnership.
Reducing the regulatory burden on entrepreneurs
The government is taking steps to reduce the regulatory burden on entrepreneurs. These include
granting permits more quickly – or even automatically – and making greater use of digital technology.
Developing IT tools for entrepreneurs
Providing government services online reduces the regulatory burden on entrepreneurs. IT also
offers unlimited scope for new products or for making business processes more efficient.
Better links between education and the labour market
The government also wants to establish better links between education and the labour market. It
is important for young people who have finished their training to find a job quickly and for there to be
enough skilled workers for companies.
Better cooperation with the franchise sector
The government and the franchise sector created a code of conduct. An independent disputes
committee will also be established. These measures should improve cooperation in the sector and prevent

ISBN: 978-93-5300-292-3 Technical Session - I


118 Entrepreneurs – In the Era of GST

issues like unfair distribution of income between the entrepreneur (franchisee) and the owner of the
trading name (franchisor).
Retail Agenda
Customer behavior and preferences are changing. More and more purchases are being made
online. The government’s 2015 Retail Agenda describes these and other developments in the retail sector.
It also lists the 20 agreements reached between the government and the retail sector. These include new
ideas on combined zoning for shops, cultural establishments and hospitality businesses, and additional
training for shop workers.
Increasing scope for finance
The government has various financial schemes for:
»» Entrepreneurs wanting to expand their businesses quickly;
»» Innovative entrepreneurs.
Conclusion:
An entrepreneur is one who plays significant role in the economic development of a country. The
most important challenges faced by new entrepreneurs include Developing the Vision and Business Idea,
Raising Capital for Startup, Assembling a Business Team, Finding the Right Business Location, Finding
Good Employees, infrastructural facilities etc. So it is necessary to overcome these challenges in order to
conduct an efficient business. GST facilitates various benefits for entrepreneurs. It might have affected
entrepreneurs due to procedural difficulties such as registration, returns filing etc., but in the long run, it
is going to break all the hurdles for startups and lays a great path for the country’s development.
References:
yy https://blog.saginfotech.com/impact-gst-on-startups-smes
yy https://blog.saginfotech.com/gst-benefits-for-startups-in-india
yy The Chartered Accountant journal, ICAI may 2017, Regd. With the RNI No.738/57 ISNN 0009-188X
yy The Management Accountant journal, ICMA July 2017, Regd. With the RNI No.12032/66
yy https://yourstory.com/2017/07/impact-gst-small-businesses-india-tax-finance-arun-jaitley/
yy https://gst.registrationwala.com/gst-impact/impact-of-gst-on-entrepreneurs

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Central Government in Empowerment & Entrepreneurship Development of
Persons with Disabilities (PWDS) In India
*Y. Nagendra **Dr. S. Subba Reddy
*Research Scholar, Department of Business Management, Yogi Vemana University, Kadapa, AP.
**Assistant Professor, Department of Business Management, Yogi Vemana University, Kadapa, AP.
Introduction:
Entrepreneurship Development is a rapidly growing distinct field of study. Entrepreneurship
and entrepreneurship development has become an everyday buzzword, Policy makers, economists,
academics and even common people are talking about it. Seminars, conferences and workshops are being
conducted every year across the world. Which emphasized on the importance of entrepreneurship to
country, society as well as individual development (Bechard and Toulouse 1998). Today entrepreneurship
is regarded as one of the best economic development strategies to develop country’s economic growth
and sustain the country’s competitiveness in facing the increasing trends of Globalization (Schaper and
Volery 2004). Entrepreneurship is a major engine driving many nation’s economic growth, innovation
and competitiveness.
Many studies have been made in the subject of entrepreneurship in general and other relative
field, women entrepreneurship, Ethnic entrepreneurship, Social entrepreneurship, and other allied topics.
Entrepreneurship and social development, but less works and studies has been found out in the field of
Entrepreneurship Development of PwDs.
This paper is attempts to present the various central government measures for the empowerment
of disabled people through the development of entrepreneurial quality, innovation and creativity.
World Scenario
Persons with disabilities make up an estimated 15 per cent of the world’s population, over one
billion–80% of whom live in developing countries. They frequently experience discrimination and face
barriers to participation in all aspects of society. As a result, persons with disabilities are at a high risk
of poverty, which in itself increases the likelihood of having a disability. The inclusion of persons with
disabilities in development programming also makes sense from an economic perspective. Excluding
persons with disabilities from the world of work has costs for societies, in terms of their productive
potential, the cost of disability benefits or pensions, where these exist, and the implications for their
families. This exclusion may cost countries between 1 and 7 per cent of Gross Domestic Product. These
costs to society can be minimized by dismantling barriers to participation of persons with disabilities, in
education, skills development, enterprise development and employment, as well as poverty reduction and
development programmes.
Indian Context:
According to the employment projection given in the Eleventh and twelfth Plans, in the Chapter
‘Employment Perspective and Labour Policy’, 116 million job opportunities will be created leading to
a reduction in the unemployment rate to below 1%. There is a wide gap between the employment rate
of people with and without disabilities in the country. Therefore, the above target for bringing down
the unemployment rate cannot be achieved without addressing the employment issues of people with
disabilities, who constitute about 5-6% of the population.
According to census 2011, there are 2.68 Crore Persons with Disabilities (PwDs) in India.
About 1.34 crores persons with disabilities are in the employable age of 15 to 59 years. Even though,
120 Role of Central Government in Empowerment & Entrepreneurship Development of Persons with Disabilities (PWDS) In India

disabled people constitute a significant percentage of the population of India, their need for meaningful
employment largely remains unmet, in spite of implementation of “The Persons with Disability Act,
1995”. Improving vocational training and employment opportunities for people with disability is a
critical element for enhancing the quality of life for individual with disability, their families, but there are
also substantial gains for the broader economy.
Government Initiatives for empowerment and entrepreneurship development of PwDs : The following
are the details of the Schemes & Institutions working for Entrepreneurship and Skill Development of
PwDs being implemented by the Government of India.
NHFDC (National Handicapped Finance Development Corporation):
In 1997, the Government set up a Corporation named National Handicapped Finance and
Development Corporation (NHFDC) under the administrative control of the Ministry of Social
Justice & Empowerment for providing financial assistance at concessional rate of interest to Persons
with Disabilities (PwDs) for self-employment. This Corporation also gives skill training grant for Skill
Training and Entrepreneurship of PwDs wherein it provides 100% of the total recurring cost of the
training programme to the training institutes/organisations. The various schemes of NHFDC are
ŠŠ Scheme for Financial Assistance for Skill & Entrepreneurial Development: The objective
of the scheme is to provide training to the disabled persons to make them capable and self-
dependent through proper technical training in the field of traditional and technical occupations
and entrepreneurship. Financial assistance in the form of grant is provided for conducting/
sponsoring the training. The major features of this scheme are
»» The beneficiaries should be in the age group of 15-50 years and fulfill the other eligibility
criteria for availing loan from NHFDC.
»» 100% of the total recurring cost of the training programme is provided by NHFDC.
»» Stipend - The recurring training cost shall include a stipend of Rs. 500/- per week per trainee
i.e Rs 2000/- per month to the trainee to cover the cost of transportation and other incidental
expenses. The training institute/SCA shall release the stipend in favour of the trainee through
A/c payee cheque only.
»» The training may be provided through Government Training Institutes like Industrial Training
Institute (I.T.I.), Polytechnic, Engineering College, Agriculture University, National Institute
for Entrepreneurialship and Small Business Development etc. or by the Private Training
Institutes.
»» Persons with Disabilities can also be included in regular batches of scheduled training along
with non-disabled persons. In such cases, the number of Persons with Disabilities and the
nature of their disability should be clearly indicated.
ŠŠ Micro Financing Scheme: The Corporation assists PwDs by providing loan for self –employment
and other economic ventures. The major features of this scheme are
»» NHFDC would provide 100% of the project cost.
»» The Loan will be provided for the income generation activities like Small business/trade,
Tiny/cottage industry, Artisan activities, Agricultural & allied activities, Transport sector
activities etc.,
»» The maximum loan amount shall be limited to Rs 10 lakhs in case of NGO or SHG. The rate
of interest shall not exceed 5% per annum.
Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship
Role of Central Government in Empowerment & Entrepreneurship Development of Persons with Disabilities (PWDS) In India 121

»» A rebate of 1% per annum on interest rate will be admissible to women beneficiaries.


»» The term loans should be repaid within a period of 36 months in quarterly installments.
ŠŠ Scheme for Vocational Education and Training of PwDs: The scheme aims at providing
financial support to those eligible PwDs who, have the minimum qualification, as required by
the institution / organization running the vocational education or training. The major features of
this schemes are:
»» The Quantum of finance is up to Rs 2.00 Lakhs.
»» The Rate of interest is as per the education loan scheme of NHFDC.
»» If the course duration is 1 year, then the repayment will start 6 months from the completion
of the course.
»» If the course duration is more than 1 year, then the repayment will start 12 months from the
completion of the course.
»» The repayment period is up to 7 years after commencement of the repayment.
ŠŠ Scheme of Financing Construction of Commercial/Business Premises for starting Self
Employment Activity: The main objective of the Scheme is to assist the needy disabled
persons by providing composite concessional loan for construction of Commercial/Business
premises and starting self-employment activity. The Commercial/Business premises constructed
under the Scheme must be approved by concerned department i.e. Development Authority or
Urban Improvement Trust etc. The major features of this schemes are:
»» The Quantum of finance is up to Rs 3.00 Lakhs.
»» Eligibility and rate of interest as per the NHFDC norms for self-employment loan.
»» The loan is to be repaid within 10 years.
ŠŠ Scheme for providing handholding support to Disabled Entrepreneurs through ‘Vishesh
Udyami Mitras: The main objective of the Scheme is to provide assistance to the needy disabled
persons in form of information, support, guidance for procedural/documentation formalities
required for availing concessional credit under NHFDC schemes through SCAs/RRBs by various
Institutions/Agencies individuals i.e. ‘Vishesh Udyami Mitras’ for setting up and running of the
enterprise. Role and Responsibilities of Vishesh Udyami Mitras are as follows:
»» Identification of potential eligible PwDs interested to take up self-employment ventures.
»» Identification of suitable project/product/enterprise and preparation of bankable project
report for the same; and filling of loan application for accessing concessional credit under
NHFDC scheme through SCAs/RRBs/etc., of NHFDC.
»» Provide guidance to PwDs entrepreneurs regarding various registrations / licenses/ clearances
/ No Objection Certificates related to chosen business activity.
»» Once the enterprise has been successfully set up, the Udyami Mitras would also monitor
and follow up on the functioning of the enterprise and provide help in overcoming various
managerial, financial and operational problems.
»» Rates of financial assistance to be given by NHFDC to Vishesh Udyami Mitras
(i) For loan up to Rs.1.0 lakh : Rs.500/- per project
(ii) For loan above Rs.1.0 lakh & up to Rs 5.0 lakh : Rs.750/- per project

ISBN: 978-93-5300-292-3 Technical Session - I


122 Role of Central Government in Empowerment & Entrepreneurship Development of Persons with Disabilities (PWDS) In India

(iii) For loan above Rs 5.0 lakh :Rs.1000/-per project


ŠŠ Scheme of Financing NGOs working in the area of Disabilities in order to make Social
Entrepreneurs: The major Purpose of the scheme is to provide financial assistance in the form
of loan to the NGOs working in area of disabilities in order to make them social entrepreneurs
by setting up/expansion of an income generating activity for the benefit of the disabled persons.
The nature of income generating activity will be such that it involves the PwDs directly and
income will be distributed among the PwDs. The income generating activity will be managed by
concerned NGOs, which is expected to render its services voluntarily.
The main objective of the Scheme is to assist the NGOs working in area of disabilities
in order to promote economic development activities and self-employment ventures in production/
manufacturing sector for the benefit of Persons with Disabilities.
ŠŠ Scheme of financing assistive devices to enhance the employability or increased opportunity
of self-employment of PwDs: The major purpose of this scheme is to provide financial assistance
in the form of loan to the target group for purchase of assistive devices like screen reader, motorized
tricycle, scooty, hearing aid etc. to enhance their employability/improve the prospects of self-
employment.
The main objective of the Scheme is to assist the needy disabled persons by providing concessional
loan for procuring durable, reliable and scientifically manufactured, modern, standard aids and appliances
that may enhance their prospects of taking up self-employment/ employability. The aids and appliances
purchased under the Scheme must be ISI marked or has equivalent certification of quality. The major
features of this scheme are follows:
»» The quantum of loan is up to Rs 5.00 lakhs.
»» The repayment of loan is to be made within 5 years.
»» The rate of interest up to Rs 50,000 to be paid by SCAs to NHFDC is 2% P.A and individual
beneficiaries need to pay 5% P.A to SCAs.
»» The rate of interest for above Rs 50,000 to Rs 5.00 lakhs to be paid by SCAs to NHFDC is
3% P.A and individual beneficiaries need to pay 6% P.A to SCAs.
II. Deendayal Disabled Rehabilitation Scheme (DDRS):
The umbrella Central Sector Scheme of this Ministry called the “Scheme to Promote Voluntary
Action for Persons with Disabilities” was revised w.e.f. 01.04.2003 and was renamed as the “Deendayal
Disabled Rehabilitation Scheme (DDRS)”.
Under Deendayal Disabled Rehabilitation Scheme (DDRS) Vocational Training Centre projects
are given financial assistance (up to 90% of the project cost) for skill up gradation of PwDs. These are
meant for the age group of 15-35 years to provide skills to enable such persons to move towards economic
independence. “Rehabilitation” as “a process aimed at enabling persons with disabilities to reach and
maintain their optimal, physical, sensory, intellectual, psychiatric or social functional levels”. Some of the
main components of rehabilitation are:
ŠŠ Provision of assistive aids and appliances
ŠŠ Education
ŠŠ Vocational training
ŠŠ Assistance for employment

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Role of Central Government in Empowerment & Entrepreneurship Development of Persons with Disabilities (PWDS) In India 123

ŠŠ Training in or assistance for independent living


III. Skill training through the National Institutes:
The seven National Institutes (NIs) under the administrative control of Department of Disability
Affairs also organize Vocational Training Programmes for the PwDs in their respective field of disability
for appropriate trades.
IV. SIPDA (Scheme for Implementation of Persons with Disabilities Act:
Under this scheme, financial assistance is provided to State Governments and to autonomous
organizations/Institutions under Central or State Governments, for various activities relating to
implementation of “The Rights of Persons with Disabilities Act, 2016. Under this scheme grant-in-aid is
provided for the skill development programmes for PwDs with effect from the year 2013-14.
V. Vocational Rehabilitation Centre for Handicapped:
The Ministry of Labour & Employment has set up 21 Vocational Rehabilitation Centres for
Handicapped (VRCs) at different parts of the country. The main objective of these centers is to impart
non formal vocational training and extend vocational rehabilitation assistance to PwDs as per their
residual capacities with a view to assist them to lead an independent and productive life in society.
VI. Pradhan Mantri Kaushal Vikas Yojana:
PMKVY is a skill development initiative scheme of the Government of India for recognition
and standardization of skills maintained by Ministry of Skill Development and Entrepreneurship. This
scheme the targets to provide training to 50,000 PwDs from 2016 to 2020.
Reference
yy Shanimon.S ‘The Emerging Development Model in India Differently-Abled Entrepreneurs’, IJSR Publications, Volume 4, Issue 1,
January 2014.
yy Base Line Report ‘Employment of Disabled People in India’ prepared for National Centre for Promotion of Employment for Disabled
People (NCPEDP), February 2009.
yy Reports of WHO, UNDP, UNICEF.
yy The Rights of Persons with Disabilities Act, 2016.
yy Various schemes of NHFDC. Retrieved from http:// www.nhfdc.nic.in/schemes.
yy Pradhan Mantri Kaushal Vikas Yojana. Retrieved from http://www.pmkvyofficial.org.
yy Deendayal Disabled Rehabilitation Scheme. Retrieved from http://disabilityaffairs.gov.in/content/page/ddrs.php.

ISBN: 978-93-5300-292-3 Technical Session - I


Problems and Prospectus of Entrepreneurship in India
*Dr. R. Emmaniel, **P. Vikram Babu
*Professor & HOD, St. Ann,s col.of Engineering & Technology. Chirala. Andhra Pradesh,
**Asst professor, St. Ann,s col.of Engineering & Technology. Chirala. Andhra Pradesh,

Abstract: Entrepreneurship is the risk taking by innovators called entrepreneurs in an economy. Typically, entrepreneurship
involves the creation of new products, new ways to produce products, or new businesses. Innovation is the intrinsic
characteristic of every developed nation. Innovation fuels a nation’s growth, and a highly innovative country has the potential
to reach pinnacle of prosperity. The actions of entrepreneurs are so valuable to the operation of a dynamic, changing economy
that some economists consider entrepreneurship to be a fourth factor of production joining natural, human, and capital
resources. This paper focuses on the importance of innovation in entrepreneurship development as it is only innovation,
which made the products and services better from the others. This paper clearly depicts the current role of innovation in
entrepreneurship development. It also highlights how these innovations can lead to economic growth of our country.
Key words: Growth, Government Policy, growth of Indian economy, innovation in business.

Introduction
To quote the economist, T. N. Srinivasan, „Innovation and Entrepreneurship is a two-way
relationship. In one sense, in innovation, someone finds something but that somebody may not be
equipped to translate that something into a commercial proposition. That is where Entrepreneurship
comes in.
“Innovation is the specific instrument of entrepreneurship…the act that endows resources with
a new capacity to create wealth” – (Drucker, 1985). An entrepreneur is a person who is willing and able
to convert a new idea or invention into a successful innovation. Invention means generation of new ideas
whereas innovation means bringing that idea into life. Eentrepreneurs are those persons who take the risk
to bring those ideas into life. The success of a business enterprise depends upon its novelty or the unique
thing, be it a product or any feature, which it offers to its customers (Sharma and Chrisman, 1999). The
vitality of entrepreneurship and innovation can be highlighted by the fact that they form the backbone
of a majority of the economic s growth in a given country. Thus, if USA is the largest economy, it can be
attributed to the commitment towards research and innovation.
In research work, an attempt has taken to explore all important factors in relation of
entrepreneurship and innovation. In India, how education system is playing a significant role in
promotion of entrepreneurship is a very challenging issue. Data collected from the National Knowledge
Commission defines how several numbers of entrepreneurs are increasing over a period of time with
innovative business plans.
The Objective of this paper is to understand the role of innovation in entrepreneurship development
in India, and also try to understand the Government support for innovative knowledge enterprises.
Furthermore, it tries to examine the role of education studies in generation of innovative ideas. The main
objective will be to suggest certain measures; this can be adopted to take the advantage of innovation.
India has tremendous potential in the field. India offers a unique incubation environment for most,
entrepreneurs, greatly distinguishing it from other western democracies. A country where almost 50% of
the Indian population is below 35 years old, it is apparent that India has a large working class, which is a
great potential and assets for a nation (Chandra, 2009). In addition, young technocrats are also looking
out for opportunities to exploit their full potential by setting up their own ventures thus becoming “job
generators” rather than “job seekers”. They are generating job opportunities for the unemployed people.
Problems and Prospectus of Entrepreneurship in India 125

In spite of being a developing nation with a population of over billion people, we fail to produce
the entrepreneurs, such as Narayana Murthy, Dhirubhai Ambani, Lakshmi Mittal, Kiran Shaw in large
numbers, which is required for large nation. This is deep rooted problem and involves a minutiae analysis
of our complex mindset (Menon and Ramsay, 2008).
Relevance of the Study
Given the increasing significance and visible impact of Entrepreneurship in wealth-creation and
employment-generation, we consider it critical to India’s growth and development. This study has been
undertaken to explore factors that have advanced Entrepreneurship in India and also several other factors
that could further encourage and facilitate even greater growth through innovation.
The Role of Education Studies in Generation of Innovative Ideas
As discussed previously, the key generators of wealth from knowledge depends upon the availability
of the skilled human resource. These skills and competencies can be generated in an individual through
good education system. There is a fact that passion and curiosity form the very base of innovation. An
entrepreneur should have good perception of an idea, credible business plan, and clarity of what he wants
to do to become successful. This knowledge and idea about the business can only be built through sound
education system.
The purpose is to fill the gap in preparing today’s youth with a CEO mindset, supported with
skills to deal with changing critical needs of the knowledge era that is revolutionizing the global economy.
Generating a critical mass of entrepreneurs oriented to high levels of growth depends on the quality of
education provided and the presence of an environment that encourages innovation (Maqbool, 2006).
The highly rigid educational system should be more flexible one, so that students can choose
their own subjects of interests and thus design their own curriculum. This will result in a greater level of
interest, which indirectly would result in a greater level of interest with more curiosity and passion. The
schools across America follow this flexible system, which has proved to a blessing in disguise and is now
an intangible asset (Drucker, 2007).
To encourage entrepreneurship, the academic institutions must encourage student’s initiatives,
organizations and unions. Business plans competitions should be organized on more frequent basis
and proper guidance and assistance to prospective entrepreneurs on various aspects, such as preparing
reports, obtaining project approvals, loans and facilities from agencies of support system, information
on technologies, etc (Devarajan and Ramnarayan, 2003). History had recorded many school and college
leaders blossom into business pioneers. Be it N Hira Nandani, Lakshmi Mittal or Arun Jaietly, they
were all leaders at their schools, colleges at some point in time. Recently, some young students from R.A
Poddar School start their very own cookie company under the guidance of the school authorities. These
facts point out to the need of developing leadership qualities at an early stage in life.
Government Role Regarding Innovation
The government has to be investor and entrepreneur friendly, in order to exploit the true potential.
The government on its part should give a plethora of incentives to new risk takers in order to make
theirs rather than risky decision that is somewhat easier. These incentives could include tax benefits, land
allocations, water and electricity supply etc. Novice risk takers should be provided with trouble shooters
and mentors on behalf of the government, so as to choose the correct path and strategy. Banks and other
financial institutions should also provide adequate credit to new ventures, so as to stimulate the business
through good liquidity. Besides helping to establish companies, government should also regulate these

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126 Problems and Prospectus of Entrepreneurship in India

companies in order to ensure that they abide by the highest standards of business ethics (Goswami and
Dalmia, 2008).
Role of Innovation in Entrepreneurship Development in India
Entrepreneurship is to take the initiative to start a new business venture with an innovative idea
or to make certain amendments in the existing product according to the opportunities available to the
entrepreneurs. To take repeated action to overcome obstacle that may prevent them from reaching their
goals. Entrepreneurs takes action on their own to get information that will help them to achieve their
objectives or clarify problems and to successfully persuades others to buy a product or service, also to
convinces’ someone to provide finance, and finally, to monitor continuous change for further innovation.
Highlights of Innovative Entrepreneurship in India
A critical eye on the „power of ideas‟ that is, innovation and „bringing ideas into life‟ which
is done through entrepreneurship together can be considered as innovative entrepreneurship. Here an
analysis of some of such innovative ideas and their success in the business field is thus explained further.
ŠŠ Suvarna Urja wind power Pvt. Ltd., Pune: It designs and manufactures wind-turbines and power
storage systems specifically for the Indian rural power market. Since 2009, this small company
has already received orders to produce wind turbines and power systems for four Indian states
(Ramachandaran et al., 2006).
ŠŠ Sustainable technologies and environmental projects Ltd., Mumbai
»» In the focus on oil industry recycling technologies, STEPS have been developed, such as the
“Poly Crack” technology, to converts plastic waste into diesel. The process is more efficient than
competing technologies and leaves no heavy metal residues (pollutants). Since 2007, STEPS
efforts have received world-wide media coverage. The company has sold their Poly Crack
conversion system to several companies in India and Europe. Promising new opportunities
in the USA and South East Asia are on the horizon, and STEPS N.A., a North American
subsidiary has already been established.
»» Telugumatrimony.com: An idea of starting a Telugu portal, which later shifted its focus on
Matrimony, became a world class business. The innovative ideas of Telugu matrimony.com
are as follows:
»» Photo Protection: they saw the need from their customers about privacy.
»» Horoscope matching and creation: Another important need which created value for their
customers.
»» Profile verification: To their surprise, people opted for 3rd party verifications, while searching
for their business partner on the net
»» Matrimony reference: Their customers became their marketers when reference system was put
into place.
»» Payment options – Through Sifi Way, tie ups with banks, creating local associates (who get
commission) in various cities.
»» Going mobile: Another trend they spotted to serve the needs of their customers
»» Partnerships, such as with Tata Sky. All of these innovative ideas lead to the success of
Telugumatrimony.com.

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Problems and Prospectus of Entrepreneurship in India 127

In May 2008, 27-year old Rajnish Sinha and his IIM-Kozhikode batch mate Siva Cotipalli started
Bangalore-based DhanaX. A microfinance firm and the idea of clubbing it with person to person (P2P)
lending, a platform where people contribute small amounts online as loans. NGOs take up the task of
disbursing these loans to needy communities in their areas of operation. Interest is charged at 24%, of
which DhanaX keeps approximately 6%. So far, DhanaX has helped its four partner NGOs acquire loans
of Rs 20 lakh.
In summary, in this new era of the knowledge revolution, India must seek out and exploit some
of its inherent strengths to accelerate economic development, while creating extremely attractive avenues
for employment generation. Bio–Technology (BT) and Information Technology (IT) are the two new
pillars of the era of knowledge management.
Recent surveys, such as those undertaken by Goldman Sachs and Price water house Coopers,
have estimated that India has the potential to be among the world’s leading economies by 2050.1 In this
situation, India enjoys enormous potential for the creation of wealth through knowledge. Entrepreneurship
and Innovation are the key drivers for generating wealth from knowledge, supported principally by the
availability of skilled human resources, access to finance and the ability of the State to create an enabling
environment (Punnathara, 2009).
Outlook Business, May 5, 2007; Goldman Sachs’ BRIC report states that by 2050, India could
have a GDP of $37.66 trillion, just marginally less than USA’s estimated $38.51 trillion. The Price water
house Coopers report, ‘The World in 2050’ states that India could be the fastest growing economy by
2050.
Science, Technology, and Innovation in the Indian context
The use of the word “innovation” in the national science and technology policy lexicon is rather
new. India’s Scientific Policy Resolution 1958 sought the “cultivation of science and scientific research
in all its aspects.” The focus was on “early and large scale development of science and technology” for
the wealth and prosperity of the nation. The 1983 Technology Policy Statement focused on the need for
technical competence and self-reliance. It also mentioned technology acquisition and transfers, as well as
a critical facet that was hitherto missing from policy debate in India implementation.
The idea of innovation was inserted in the Science and Technology Policy 2003 with a view to
strengthening the national R&D infrastructure and creating a “national innovation system.” Innovation
implies science- and technology-based solutions that are successfully deployed in the economy or the
society. Also mentioned was the need to develop and leverage India’s traditional knowledge, as well as to
generate and manage India’s intellectual property resources. Monitoring for speedy implementation of
the policy was also given weight age.
Barriers to Innovation in India SMEs
To improve the innovation performance of SMEs, it is very important to understand the key
barriers in the innovation ecosystem. The barriers to innovation are classified in six categories: people,
financial, information, government policy, infrastructure, and market constraints. The Indian National
Innovation Survey captures the response of the innovative firms for different barriers and sub-barriers. The
responses show the factors that firms typically consider to be barriers to pursuing innovation. The barriers
are analyzed in the context of innovative small and medium firms; non-innovative firms as classified in
the survey are not included.

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128 Problems and Prospectus of Entrepreneurship in India

1. People and Skills as a Barrier to Innovation


Development and implementation of any innovation demand skilled labor. The need for
specialized skills in the form of scientists, technicians, or engineers is more apparent in the case of R&D
innovations. Non-R&D innovations, such as organizational and marketing innovations, also require
specialized skills and staff who are well versed in management and marketing practices. More than 85% of
innovative small and medium firms see unavailability of skilled workers as a barrier to innovation, making
it one of the foremost challenges in SME innovation. SMEs are generally unable to recruit a highly skilled
workforce due to financial constraints and lack of adequate infrastructure. The lack of the right internal
management can adversely impact both the firm’s innovation capability and its overall performance due
to lack of direction, rising inefficiencies, and absence of market focus, among others. Innovative small and
medium firms perceive internal management as a barrier to innovation.

2. Finance as a Barrier to Innovation


The financial barriers mainly involve the availability of internal and external finance and the cost
of innovation. More than 87% of innovative small and medium firms see limited availability of finance
from both within the enterprise and external sources as a barrier to innovation. The cost of innovation is a
key barrier for more than 75% of the innovative small and medium firms; this clearly shows that financial
constraints remain one of the biggest barriers to SME innovation.
3. Information as a Barrier to Innovation
Timely access to valuable information is critical for SMEs to gain strategic advantage in pursuing
innovation. The inability to access key market information can seriously impair a firm’s performance. The
information barriers refer to access to information on technology and markets.
4. Government as a Barrier to Innovation
Government policy and the government in itself exert a strong influence on the innovation
capacity of SMEs. The government has a critical role to play in every sphere of innovation including
access to finance and technology, capacity building and human resources, market linkages, availability
of research facilities, and access to key information, among others, via different policies and schemes.
It would not be wrong to say that the government is the single biggest factor governing the innovation
ecosystem of SMEs, especially in the case of developing economies such as India.
5. Infrastructure as a Barrier to Innovation
Availability and access to infrastructure are crucial for R&D-based innovations. The ability of
a firm to use laboratories and research facilities inside and/or outside the premises exerts a significant
influence on its capability to develop R&D innovations. Majority of the innovative small and medium
firms do not have access to adequate infrastructure and test labs
6. Market Factors as a Barrier to Innovation
Market factors have an important role to play in innovation. Market characteristics such as
competition, protectionist nature, dominance and monopoly, and demand, among others, affect a firm’s
ability to innovate, especially product and market-related innovations. More than half of the innovative
small and medium firms also face the barrier of uncertain demand for innovative products and services.
Given the uncertain demand, SMEs would be reluctant to invest their resources in developing new
products and would focus instead on improving their production and quality processes.

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Problems and Prospectus of Entrepreneurship in India 129

7. Intellectual Property Rights (IPR) issues


The patent offices in the country work very slowly and SMEs are able to get patents only after
Some delay. In some case, it has taken almost five years for a patent to be granted. This hampers
the introduction of new products developed by SMEs into the market.
Conclusion
Entrepreneurship is a critical aspect of the knowledge economy and India has a large pool
of entrepreneurs, who have the ability to make a difference and need to be nurtured to achieve their
potential, and provide a further boost to the Indian economy. India needs entrepreneurs for two reasons
– first, to create employment and wealth and, second, to get the most out of existing opportunities.
Practical knowledge based education system should be started that will create more interest in the
students. Educational institutes should also work as regional information centers by keeping the record
of databases of the research work done (Srinivasan, 2007). Government should also take the initiatives
by not only providing adequate support in financial terms but also by rendering training facilities to
the entrepreneurs as and when the need arises. To explore the possibility of having an all encompassing
website on Entrepreneurship as a one-stop information portal for current and aspiring entrepreneurs.
Synergies between Education (including modern vocational education training/skill development),
Innovation (converting ideas into wealth and employment) and Entrepreneurship should be encouraged.
There is need to enact a uniform legislation for publicly funded research that would grant IP the rights
for successful results of research to universities/research centers and also entitle the inventor to a share
of the royalties from commercialization, as a source of innovation and entrepreneurial advancement.
India’s innovation intensity could also improve significantly if more PhD and other research scholars
are encouraged by providing a supportive environment for Entrepreneurship. There is also a need to
significantly increase business incubation for Entrepreneurship (BIE) by comprehensively exploring
policy options to improve access to financing. While valuable work is being done by Indian incubators,
there is huge scope for them to become entrepreneurial themselves by providing services such as market
data, helping in preparing business models, recruiting skilled employees, etc.
If India is able to use its true potential of becoming leader in entrepreneurial activities, then the
resultant financial gain are always of benefit to the country. The budding sectors to innovate and in which
Indian entrepreneurs can prove themselves the leaders are Bio-technology and Information Technology
(Saxena, 2004).
References
yy Export-Import Bank of India. 2012. Strategic Development of MSMEs: Comparison of Policy Framework and Institutional Support
Systems in India and Select Countries. Occasional paper. Mumbai.
yy Finston, S. K. 2015. The Innovation Blueprint: Identifying, Adapting and Assimilating Best Practices for R&D Intensive MSMEs.
Washington, DC: Finston Consulting, LLC. www.finstonconsulting.com/files/InnovationBlueprint-Final-2015.pdf
yy Fourth All India Census of Micro, Small and Medium Scale Enterprises 2006–2007: Unregistered Sector. New Delhi.
yy The contribution of MSMEs to GDP, Exports, and Employment. Press Information Bureau. July. http://pib.nic.in/newsite/
PrintRelease.aspx? relied=10720
yy Chandra A (2009). India: Country replete with phenomenal innovation and entrepreneurship potential. Available on the web at http://
www.knowledgeportal-in/contents/node/445,
yy Devarajan RTP, Ramnarayan S (2003). Entrepreneurial Leadership and Thriving Innovation Activity, Proceed of 7th Intl. Conf. on
Global Business and Eco. Development, Bangkok,
yy Drucker PF . The Practice of Innovation, Innovation and Entrepreneurship Practice and Principles, Harper and Row, New York, pp.
19-33.

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130 Problems and Prospectus of Entrepreneurship in India

yy Drucker PF. Entrepreneurial Strategies, Innovation and Entrepreneurship Practice and Principles, Harper & Row, New York, pp. 207-
243. Corporate Entrepreneurship, Effective Executive, the ICFAI University Press.
yy Goswami A, Dalmia N, Pradhan M,Report of Knowledge Commission India 2008 ‘Entrepreneurship in India‟.
yy Ramachandaran K, Devarajan TP, Sougata Ray , Corporate Entrepreneurship: How?, Vikalpa, 31: 1.
yy Saxena SC, The Role of Innovation: Technology and entrepreneurship lead the way. Prabandhan: Ind. J. Manage., 12(1): 49-65.
yy Srinivasan TN, Create a Framework that helps Entrepreneurs, interview to The Hindu, Business Line.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Problems and Prospects of Social Entrepreneurship
*M.V Subba Rao, **MVS Vaishnav,
*Assistant Professor, Viswa Bharathi pharmacy and Management, Perecharla,
**MVS Vaishnav, MBA student, Gitam University, Vishakhapatnam

Abstract: Social entrepreneurship is a topic of growing interest among academicians and practitioners. The
potential of social problems in India is well known, but the degree of support and interest is hardly significant. An
entrepreneurial mindset is re-emerging in India. Right from ancient times, India has been entrepreneurial. But
the era of liberalization of late had released the genie from the bottle – the suppressed urge and natural instincts
of our effervescent entrepreneurial class has once again been unleashed. The opening up of the industrial sector to
foreign competition had created a flutter among the Indian industrial circles. The paper attempts to shed light on the
comment state of affairs on the theme of challenges and opportunities facing the social entrepreneurship scene in India.
Key words: social entrepreneurship, challenges, problems, opportunities.

Introduction
The economic development of a Nation depends on its industrial development. The industrial
development is based on the entrepreneurial competencies of the people. Entrepreneurs are innovative,
highly motivated, and critical thinkers. When these attributes are combined with a drive to solve social
problems, a social entrepreneur is born. Social enterprises are the organizations which aim their efforts
toward improving the general welfare of society and they apply market based strategies to achieve a social
purpose. Social entrepreneurs and social enterprises share a commitment of going ahead with a social
mission of improving society. There is a great difference between social entrepreneurs and nonprofit
organizations on the basis of their goals and objectives. Social Entrepreneurs are driven by social as well
as financial goals whereas non profit organizations work purely for social purpose.
An understanding of whether and how social entrepreneurship differs from processes and activities
by political actors or social activists who also aim to bring about social change or alleviate social problems.
In a nutshell, the concept of social entrepreneurship is still poorly defined and its boundaries to other
fields of study are still fuzzy. While to some this may appear to be a problem, we see it as a unique
opportunity for researchers from different fields and disciplines, such as entrepreneurship, sociology and
organizational theory, to challenge and rethink central concepts and assumptions.
Literature Review
Social entrepreneurship as a practice that integrates economic and social value creation has a long
heritage and a global presence. The global efforts of Ashoka, founded by Bill Drayton in 1980, to provide
seed funding for entrepreneurs with a social vision (http://www.ashoka.org); the multiple activities of
Grameen Bank, established by Professor Muhammad Yunus in 1976 to eradicate poverty and empower
women in Bangladesh (http://www.grameen-info.org); or the use of arts to develop community programs
in Pittsburgh by the Manchester Craftsmen’s Guild, founded by Bill Strickland in 1968 (http://www.
manchesterguild.org): these are contemporary manifestations of a phenomenon that finds its historical
precedents in, among other things, the values of Victorian Liberalism. The conviction of “enlightened
entrepreneurs”, as some Victorian industrialists are referred to, that there was a need to combine
commercial success with social progress gave birth to industrial groups that used economic wealth for
the good of the community (Bradley, 1987; Thompson, Alvy, & Lees, 2000). While entrepreneurial
phenomena aimed at economic development have received a great amount of scholarly attention (see
Busenitz, West III, Sheperd, Nelson, Chandler, & Zacharakis (2003) for a review of the empirical and
132 Problems and Prospects of Social Entrepreneurship

theoretical development of the entrepreneurship concept), entrepreneurship as a process to foster social


progress has only recently attracted the interest of researchers (Alvord, Brown, & Letts, 2004; Boschee,
1995; Dees and Elias, 1998; Thompson, 2002). The development of social entrepreneurship as an area
for research closely resembles the development of research on entrepreneurship itself. Williams (1999)
argued that interest in entrepreneurship as a field of study was crucially stimulated by community leaders’
belief that entrepreneurship was a defining trend of the 21st century. Similarly, we observe that the
rise of scholarly interest in social entrepreneurship goes hand in hand with an increasing interest in the
phenomenon among elites. Over the last few years, a number of successful business entrepreneurs have
dedicated substantial resources to supporting social entrepreneurship. For example, Jeff Skoll, co- founder
of eBay, created a foundation and donated 4.4 million pounds to establish a research center for social
entrepreneurship (http://www.skollfoundation.org). Jeff Bezos, founder of Amazon, recently announced
a one million US dollar award for innovative approaches and breakthrough solutions to effectively
improve communities or the world at large (http://www.amazon.com). Finally, social entrepreneurs join
the leaders of nations and corporations in panel discussions at the World Economic Forum in Davos
(http://www.weforum.org).
Discussion
Scope of Social Entrepreneurship
Social entrepreneurship is a growing, worldwide movement. The scope of social work is no longer
limited to activism. Today, there are many opportunities in child welfare, community policing, healthcare,
counselling etc in not only NGO’s but also national and international bodies as well as social enterprises.
Additionally, there is immense scope for social entrepreneurship and starting your own social initiatives.
Social entrepreneurship will play a big role in bringing the growth to the rural masses in India and so
it becomes important to study the factors, like fair trade, that will shape the social entrepreneurship
philosophy.
First we will look into the areas where India faces problems, some of which are listed below:
ŠŠ Making the educated youths employable- many of our courses are designed in such a way that
they don’t cater to needs of the industry.
ŠŠ Healthcare- affordability
ŠŠ Urban and Rural Sanitation
ŠŠ Making use of renewable sources of power
ŠŠ Nutrition and Food for the poor.
ŠŠ Affordable housing.
ŠŠ Agriculture
Many more are there, but these are the basic needs of the Indian society, which are being the topics
of discussions from so many years, many policies and laws were passed by state and central governments
of India. But still exists!
Social enterprises in these sectors will not only create many opportunities but also can find a
solution for these problems. For example an enterprise to train the youth with industrial oriented skills,
is a good entrepreneurial option at the same time it will answer the problem of unemployed educated
youth.

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Problems and Prospects of Social Entrepreneurship 133

COSTFORD, an organization with 13 centers across Kerala offers cost effective plans to build
house. “COSTFORD encourages its institutional, public and private clients. Along with organizations
sharing similar concerns about social equity and a healthier ecosystem, to envision alternative architecture
as a path to a more just, peaceful and sustainable world” (www.costford.com) is a very good example for
an enterprise with social goal (social enterprise) of affordable homes.
EARTHEN LIFE Earthen Life provides a sustainable and a decentralized waste management
solution by converting organic waste to renewable energy at source while taking an inclusive approach
of integrating the waste pickers and other low income communities in the value chain. Earthen Life is
based in Maharashtra with offices at Mumbai and Pune. When many opportunities are available, when
the Indian scene is wide open for new ideas, when many social entrepreneurs set the examples, why does
entrepreneurs hesitate to make a first step?
Challenges for Social Entrepreneurs in India
The positive feedback of success and attention will naturally encourage new entrants, driving
more and more effective social entrepreneurial initiatives. Peredo & McLean (2006) indicate that there
are nevertheless tremendous hurdles and challenges that many social entrepreneurs face while operating in
India and that hinder the entrance of new social entrepreneurial ventures. Unfriendly bankers, procedural
delays, bureaucratic indifferences all impede the smooth launching of enterprises. Ironically enough,
the policy imperatives with their trust on protecting the new entrepreneurs in the small sector from the
shocks of unequal market relations with the large sector, have turned out to be the hardest stumbling
blocks on their path to growth and prosperity. Complex and burdensome regulatory and administrative
environment created as a result of excessive state intervention became the major deterrent to the emergence
of new entrepreneurship. Some of the major challenges are explained below:
Lack of Education in Entrepreneurship: Entrepreneurship in India is still encumbered
by the traditional educational system of the country. As education is the main source for promoting
entrepreneurship in the business sector of the economy, there is still a lack of specific curriculum on
entrepreneurship development in the Indian education system. Due to the increasing demand of this
sector, currently, the entrepreneurship education is a “new cup of tea” limited to graduates of business
schools and management institutes, whereas for other streams of education like the sciences and arts there
is not a single course on entrepreneurship in the curriculum. Due to this gap in the Indian education
system the country’s entrepreneurial sector is still underdeveloped and struggling. Even business schools
that have developed curriculum on entrepreneurship are lacking in terms of social entrepreneurship. This
lack of social entrepreneurship knowledge presents a major challenge for social enterprises in finding
competent and skilled promoters.
Lack of Financial Assistance: Lack of financial sources is a major challenge for the Indian
entrepreneur. Generally, the social entrepreneurs run their business with their own funds or by raising
funds from the local money lenders at a high rate of interest, which sometimes becomes a financial
burden on them. The reason behind this is the bank’s avoidance to providing loan facilities for social
entrepreneurs given the various social complications attached with them. Hence the social enterprises
have to deal with the challenge of facing a hostile reaction from financial institutions and governments as
far as funding is concerned. This forces social entrepreneurs to take, what can be, a more difficult path of
approaching venture capitalist and philanthropic organizations.
Social and Cultural Effect: In India, the social and cultural perception of social entrepreneurship
sometimes becomes a challenge for social entrepreneurs in running their business activities. As in the

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134 Problems and Prospects of Social Entrepreneurship

case of Water Health International, the major focus of this social venture was to awaken the people about
various water diseases and how they can be cured, but people were still sceptical about how, and why,
WHI is providing the purified water at such a low cost. This impression shows the lack of knowledge or
foresightedness of the local community in distinguishing a social business from a normal profit‐driven
business.
Comparative disadvantages to business:
Social entrepreneurs mainly deal with the difficult task of improving the welfare of the society and
they are always keen to find affordable solutions to various societal problems. But every activity of social
business carries a cost, which is mostly borne by the owner out of his own pocket or by taking loans from
money lenders. Social entrepreneurs are not necessarily working in a lucrative market; they identify a
problem within society and try to find affordable solutions for them. Once they find the way to earn some
profit after providing the best low cost solution to the needs of the society, more traditional businesses
will enter the market competing with a similar solution and technique, increasing transaction costs and
competition for social entrepreneurs and hampering their future growth.
Lack of Government support: Lack of government support is a major hindrance for social business
development in India. Currently, the government is not providing any kind of assistance for promoting
these social cause ventures. The government’s policies and regulations for social entrepreneurs are very
complex and strict, with no tax incentives or subsidies being provided for a social business, the combination
of which acts as major impediment to the growth of social businesses in India.
Lack of Skilled Manpower:
Social enterprises have to get competent Manpower from a variety of sources; professionals,
volunteers, labourers and community participants. To align the motives of all these groups with the long
term growth of the organization is a challenge for the founders. In order for social enterprises to fulfil their
mission in a holistic manner they must typically employ manpower from the underprivileged sector of the
society, leading to increased training and developmental cost as these people are typically uneducated and
unskilled. The organizations have to attempt to fulfil the aspirations of all these divergent groups and still
come out with the best results.
Social entrepreneurs in India face a variety of challenges and problems in their day to
day operations and while many of them have come a long way in meeting these challenges, there
remains a long journey ahead in terms of satisfying their social mission.
Suggestions
A few workable suggestions could help Indian social entrepreneurs in achieving their objectives:
ŠŠ Social enterprise should use the network approach with other ocial enterprises to avail the
opportunities in the market. It helps them to educate the consumer and set the market standards.
The social enterprises should work together to educate customers about the difference between
their product and those offered (possibly at lower Prices) by other businesses. This would lead
to increased demand for their products by the people who support their cause. This network
approach can also be used in lobbying the government and regulatory agencies to create a business
environment supportive of social enterprising. This lobbying can influence the government to
provide liberal tax policies and investment regulations for the social enterprises.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Problems and Prospects of Social Entrepreneurship 135

ŠŠ Social entrepreneurs should assist higher education institutes in India in developing curriculum
that instils social entrepreneurship in their students and, in doing so, provides social enterprises
with access to good quality managers and promoters.
ŠŠ Majority of the social enterprises are operating mostly in the southern and western parts of India.
This is primarily due to the jurisdictional focus of many of these enterprises and this leads to a
regional imbalance in the growth of social entrepreneurship within the country. These enterprises
should try to expand their operations to act as a mentor for similar organizations in the under‐
serviced areas of India. Balancing the growth of social entrepreneurship in the country would go
a long way in solving the social problems of a large population spread over the width and breadth
of the country.
Conclusion
Social entrepreneurship is the work of a social entrepreneur. A social entrepreneur is someone who
recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture
to make social change. Social entrepreneurship is a process aimed at enabling business to develop more
advanced and powerful forms of social responsibility.
The Indian scene is full of possibilities and challenges. The country possesses capable human
resources, and has made good progress in achieving scientific and technological capabilities. The economy
has been witnessing rapid growth since the onset of liberalizations from 1991 onwards. Unfortunately
social and environmental problems of the country are increasing year after year (Christie& Honig, 2006)
which necessitates the extensive application of multidisciplinary approaches and entrepreneurial energy in
the social and environmental sectors.
India is experiencing an increase in social entrepreneurship and attempts by social entrepreneurs to
find affordable solutions to various social problems of society. With changes in technology and increasing
competition, social entrepreneurs have to become more dynamic.
References
yy Austin, J., Stevenson, H., & Wei‐Skillern, J. (2003). Social Entrepreneurship and Commercial Entrepreneurship: Same, different, or
both?
yy Harvard Business Review pp.04‐029. Chakraborty, S.K. (1987),Managerial effectiveness And Quality of Work life: Indian Insights, New
Delhi, Tata McGraw‐Hill Publishing Co. Ltd.pp.169.
yy Christie, M. J., & Honig, B. (2006). Social Entrepreneurship: New Research Findings. Journal of World Business, pp 1‐5, 44.
yy Dees and Anderson (2006), “Framing a Theory of Social Entrepreneurship: Building on Two Schools of Practice and Thought,” in
Research on Social Entrepreneurship: Understanding and Contributing to an Emerging
Field, Association for Research on Non‐profit Organizations and Voluntary Action (ARNOVA), 006.
yy Frumkin, P. (2002). Social Entrepreneurship on Being Nonprofits. Cambridge, Mass.: Harvard University Press pp.129‐162.
yy Gupta, R. (2001) “Creating Indian Entrepreneurs. India Today”, organizations India. “Participatory Research in Asia” (PRIA) (2002),
167‐195.

ISBN: 978-93-5300-292-3 Technical Session - I


Government Initiatives for Entrepreneurship Development
*N. Rama Krishna,
MBA, Asst. Prof. Department of Management Studies,
Pottisriramulu Chalavadi Mallikharjuna Rao College of Engineering and Technology, Kothapeta,
Vijayawada-520001

Abstract: India today has reached that stage of the demographic transition wherein more than 60 percent of the population
is in the economically active age group of 15-59 years, commonly referred to as the DEMOGRAPHIC DIVIDEND. For India
to tap this dividend it is necessary that the economy is able to generate enough job opportunities to productively absorb this
economically active population. We do keep mentioning of 500 million strong workforce by 2022 but India faces challenges
in reaping this demographic dividend considering that illiteracy levels among the labour force is still high and between 70-80
percent of the labour force have education levels below secondary. Almost 48 percent of the workforce is engaged in agriculture
while contribution of agriculture to GDP is not more than 16 percent. This situation may be attributed to the low level of
education and thereby inability to access decent jobs in the non-farm sector. In terms of status of employment 52 percent of
the workforce is self-employed as own-account workers or helpers, 30 percent as casual workers while only around 18 percent
have regular jobs. This has resulted in more than 90 percent of the workforce engaged in informal jobs and slowing down the
structural transition from farm to the non-farm sector. The policy focus in the labour market has therefore been to create decent
jobs which can give the workforce a reasonable standard of living. While the emphasis has been on wage employment it has
been felt essential to promote self-employment or to be specific entrepreneurship as an entrepreneur would be in a position to
create more jobs.

Introduction:
Entrepreneurship is not new to India. In fact to quote from the Indian Industrial Commission
Report (1916-1918)–”At a time when the West of Europe, the birth place of modern industrial system,
was inhabited by uncivilized tribes, India was famous for the wealth of her rulers and for high artistic skill
of her craftsmen. And even at a much later period, when the merchant adventures from the West made
their first appearance in India, the industrial development of this country was, at any rate, not inferior to
that of the more advanced European nations.”
In fact an earlier version of the current Make in India policy was the Swadeshi movement launched
in 1905 during the pre-Independence era to boycott British made goods and use Indian made goods. The
movement saw the development of the Indian textile industry, the iron & steel industry by the Tatas,
publishing of vernacular newspapers, setting up of vernacular medium educational institutions, financial
institutions etc.
However, post-independence the policy focus of increased public investment in heavy industries
and setting up of PSUs did not provide an ideal environment for entrepreneurship. The main problems
faced by an entrepreneur were lack of mentoring facilities, technology support or easy availability of credit.
Though different Reports on employment highlighted the need for promoting entrepreneurship as means
of self-employment, entrepreneurship did not scale up. To mention a few, in the S.P Gupta “Special
Group Report on Targeting
10 million Employment Opportunities Per Year” (2002) recommended “appropriate programmes
should be launched to increase entrepreneurial capabilities and skill for self- employment.” The Montek
Singh Ahluwalia “Report of the Task Force on Employment Opportunities”, July 2001 also mentions
about developing entrepreneurship ability among the newly self-employed. The Report even recommends
entrepreneurship training for the informal sector. To quote, “A large part of the employment generated
by the economy will be self-employment in the informal sector. These self-employed entrepreneurs need
training of the multi-skill variety, going beyond production skills to include marketing, finance and
Government Initiatives for Entrepreneurship Development 137

accounting and elementary management. Such skills cannot be developed through structured formal
training but requires the guidance of “mentors” in actual business conditions”.
However, entrepreneurship in India has been confined to being own-account workers with one
or more helpers and did not expand in size beyond that. As maybe seen from the Fifth Economic Census
2005, 95 percent of establishments were engaging not more than five workers and they accounted for
almost 64 percent of the employment? If the employment size of a unit is taken as not more than 10
workers then 98.5 percent of the establishments are covered. (Table-1)
Table-1 Distribution of Establishments by size class of Employment
Size by class of
S. No. Item Year
Employment
1 1-5 Establishments 1990 1998 2005
Persons usually working 93.4% 94.0% 95.1%
2 6-9 Establishments 54.5% 58.6% 64.2%
Persons usually working 3.5% 3.3% 3.4%
3 10 & above Establishments 8.4% 8.3% 10.2%
Persons usually working 3.1% 2.8% 1.5%
37.1% 33.1% 25.5%
Source: Table 5.12, Chapter V, Fifth Economic Census 2005-All India Report, GoI
To promote self-employment as a means of job-creation and to promote entrepreneurship for
further job creation, the Micro, Small and Medium Enterprises (MSME) Act, 2006 was enacted to
facilitate the promotion, development and enhancing the competitiveness of micro, small and medium
enterprises. Earlier to that the small scale industries (SSIs) were regulated by two sections of the Industries
(Development & Regulation) Act, 1951 which led to absence of an institutional regulatory and consultative
mechanism to capture and guide the progress of an SSI unit from being a micro unit to a small scale and
eventually to medium scale one. The earlier Act also excluded the fast emerging service sector. But even
after the implementation of the MSME Act, 2006 the high proportion of unregistered MSME units
outside the purview of the Act is a matter of concern.
The government has over time implemented policies for the promotion of the small industries
which included providing concessional credit, training in entrepreneurship development, marketing
assistance etc. But the entrepreneurial growth did not take off in a big way in India as compared to
other countries because of the procedural hassles, stringent labour laws, economic regulations etc that
the establishments had to face. Further with import liberalization and entry of MNCs into India, the
Indian small scale entrepreneurs are not able to face the competition and are finding it difficult to survive.
In this context to quote from the Second National Commission on Labour (2002) “New economic
changes will provide more opportunities and not enough jobs. Therefore, one has to take advantage of the
opportunities. Both in urban and rural areas, there may not be an impressive rise in wage employment but
there will probably be enough scope for self-employment. The emphasis, therefore, has to be not on wage
jobs but on creating self- employed persons or entrepreneurs. The entire system of training and education
will have to give emphasis on the development of entrepreneurship”.
In keeping with this spirit the Ministry of MSME is implementing the entrepreneurship
development and skill up gradation schemes through appropriate training facilities. The Ministry has
set up three national level Entrepreneurship Development Institutes viz; The National Institute for

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138 Government Initiatives for Entrepreneurship Development

Entrepreneurship and Small Business Development (NIESBUD) (1983) at Noida (Uttar Pradesh),
National Institute for Micro, Small and Medium Enterprises (NI-MSME) (1960) at Hyderabad, and
Indian Institute of Entrepreneurship (IIE) (1993) at Guwahati, to inculcate entrepreneurial culture
especially among the first generation entrepreneurs. There is the scheme for Providing Support for
“Entrepreneurial and Managerial Development of SMEs through Incubators” in implementation since
2008. There is the MSME Technology Centers (earlier Tool Room & Technology Development Centers)
which provide high end skill training to the youth. A national award scheme has been initiated by
MSME for outstanding performance in Entrepreneurship, Research and Development, Innovation, Lean
Manufacturing Techniques and Quality Products.
Start-up Revolution
However, a change is being witnessed today, as quoted by Prime Minister Shri. Narendra Modi,
‘The convergence of technology, integration across diverse fields, distributed architecture and people
willing to back an idea, have opened a new world for enterprise.
I see Start-ups, technology and innovation as exciting and effective instruments for India’s
transformation, and for creating jobs for our youth. For start-ups today there are different levels of
financial support that has come to provide the initial seed capital in the form of incubatorsii, angel
fundsiii or venture capital fundsiv followed by private equity and debt in that order. Between January-
September 2015, Angel Funds and VCFs have invested $7.3 billion in early stage Indian Start-ups. India’s
first generation e-commerce and mobile entrepreneurs have become angel investors which is a sign of
maturing of startup ecosystem. However, there is a danger that too many mentors/ angel investors with
little experience may lead to a situation of unsuccessful start- ups.
What is Start-up?
The government has also come a big way in promoting startups. The question therefore what needs
to be answered is what is a start-up? A start-up is a company that is in the first stage of its operations. These
companies are often initially bank rolled by their entrepreneurial founders as they attempt to capitalize
on developing a product or service for which they believe there is a demand. The start-up and SMEs
appear to be of the same size with limited revenues, high cost of operation, job creating but they operate
on entirely different business models. The difference between a start-up and a SME unit is that a startup
is new organization designed to search for a repeatable and scalable business model. A start-up according
to Steve Blank –‘is searching for answers to the product it will sell, the customers it will serve and the
way it will make money from delivering value to its customers’. A SME, according to the U.S. Small
Business Administration (SBA) is an “independently owned and operated, organized for profit, and not
dominant in its field.” SMEs generally sell known products to known customers in known local markets.
These startup needs an appropriate ecosystem to thrive which includes adequate funds for startups to help
them grow; government to create an environment of ease of doing business; ready availability of essential
services like office space, location, supplies telecom connectivity etc.; and mentors to provide strategic
advice.
Latest Policy Initiatives for Start-ups
To simplify the regulatory framework the government introduced the Ease of Doing Business
wherein an MSME unit has to fill in a single one page self-declaration online form called Udyog Aadhaar.
The Apprentices Act, 1961 was amended to enable even the MSME units engage apprentices which
will enable the units to get trained labour as well as in turn supply skilled labour. Under the Apprentice

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Government Initiatives for Entrepreneurship Development 139

Protsahan Yojana, 50 percent of the stipend payable to the apprentices would be reimbursed by the
Government for the first two years which is an incentive for MSME units to take in more apprentices.
To give boost to the Make in India programme, the MSME Ministry has launched the ASPIRE
scheme in March 2015, a Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship.
The objective of the scheme is to set up a network of technology and incubation centers to accelerate
entrepreneurship and also to promote start-ups for innovation and entrepreneurship in agro-industry.
To ease the credit availability requirements of startups the Government had announced the
MUDRA scheme- Micro Units Development & Refinancing Agency, operated by SIDBI for providing
refinance to micro units. This would improve the liquidity of the micro units who right now have to
borrow from NBFCs and moneylenders at high rates of interest.
Atal Innovation Mission (AIM) - This programme operated from NITI Aayog is about an
Innovation Promotion Platform involving academics, entrepreneurs and researchers and draw upon
national and international experiences to foster a culture of innovation, R&D and scientific research in
India. The platform will promote a network of world- class innovation hubs and grand challenges for
India. The overarching purpose of this mission is to promote a culture of entrepreneurship and innovation
in India. The key objectives of the AIM are:
ŠŠ To create an umbrella structure to oversee innovation eco-system of the country;
ŠŠ To provide platform and collaboration opportunities for different stakeholders;
ŠŠ To study and suggest best and novel practices to be adopted by different stakeholders in the
innovation chain;
ŠŠ To provide policy inputs to NITI Aayog and various Government Departments and Organizations.
ŠŠ To create awareness and provide knowledge inputs in creating innovation challenges and funding
mechanism to government; and,
ŠŠ To develop new programmes and policies for fostering innovation in different sectors of economy.
Digital India-Digital India Programme has been launched to provide broadband connectivity
in rural and urban areas. Introduction of digital rural connectivity would give a big boost in developing
traditional rural arts, crafts or other innovative ideas into business models.
Intellectual Property Rights-With the growing number of startups it is essential to protect one’s
products from impersonators. The startups need to go for design patents, trademarks, copyright or trade
secrets protection as the need maybe before marketing their product.
India Aspiration Fund- A Rs. 2000 crore India Aspiration Fund (IAF) was launched by SIDBI
in August 2015 to boost the startups fund- of-funds ecosystem in the country. This fund would invest in
various venture capital funds for meeting the equity requirement of MSME start-ups. A SIDBI Make in
India Loan for Small Enterprises (SMILE) Scheme of Rs.10,000 crore has also been launched to catalyze
tens of thousands of crores of equity investment in start-ups and MSMEs, creating employment for
lakhs of persons, mostly educated youth over the next 4-5 years. The objective of SMILE is to provide
soft loans in the nature of quasi-equity and term loans on relatively soft terms to MSMEs to meet the
required debt-equity ratio norm. The 25 sectors under the ‘Make in India’ programme’ would be the focus
with emphasis on financing smaller enterprises in the MSME sector. There will be concessional terms for
the enterprises promoted by (SC) / (ST) / Persons with Disabilities (PWD) and women. The scheme is
expected to benefit approximately 13,000 enterprises, with employment for nearly 2 lakh persons. These
two schemes are in addition to the Rs.20000 crore MUDRA scheme. Together the three finance schemes

ISBN: 978-93-5300-292-3 Technical Session - I


140 Government Initiatives for Entrepreneurship Development

should boost the startups as well as MSMEs already in the transition phase and create good number of
jobs in the years to come.
Till date the startups have been successful in e-commerce, and other IT based applications of
service sector. The startups in manufacturing sector are yet to take off in a big way. The launch of the
above-mentioned policy initiatives should give a boost to startups in manufacturing as well. As of 16th
November 2015, 806 startups have taken off during the year and the main sources of funding were seed
funding and private equity and the products were mainly IT based applications in the service sector.
In the Global Competitiveness Index (GCI) 2015-16 India has scored 16 points and moved up
from its earlier ranking of 71 to 55 out of a total of 144 countries. Region-wise among the emerging and
developing Asia India ranks sixth after Malaysia (18), China (28), Thailand (32), Indonesia (37) and
Philippines (47). India does have the potential to move ahead of these countries. In the World Bank’s Ease
of Doing Business Ranking 2015 India is placed at 142 place out of a total of 189 economies. But on
the startup front India ranks third position globally with 4200 startups. The new initiatives in promoting
startups would enable India to move up to the top position.
Conclusion:
To conclude, a startup ecosystem has been created through the new policy initiatives which would
not only promote startups particularly in the manufacturing sector but also the micro units would be
able to graduate faster as small and medium units. If this objective is achieved the goal of job- realization
through self-employment would be complete as self-employment is the answer to providing jobs to the
huge proportion of population in the economically active age group. This process would be fast tracked by
the flagship programmes well supported by the Skill India Mission which would facilitate availability of
right skilled manpower as entrepreneurs complains about skill mismatch. Given that startups are emerging
as major job creators, governments both at the Centre and States need to put in place appropriate policy
framework for the start-ups.
References
yy Two Hundred and Forty Fifth Report on Review of the implementation of Micro, Small and Medium
Enterprises Development Act, 2006-Department-Related Parliamentary Standing Committee (2013)
yy Transferred to Ministry of Skill Development & Entrepreneurship vide GoI Order No.9(1)2015-EDI dated
22nd May 2015
yy ibid
yy Entrepreneurship in India, NKC, 2008
yy Speech by Prime Minister Shri Narendra Modi at the Startup Event (27 September 2015, San Jose,
California)
yy http://yourstory.com/2015/10/indian-startups-invested/
yy ‘Young Entrepreneurs turn Angels for Younger Startups’, Times of India, June 30, 2014.
yy Investopedia
yy https://www.quora.com/Peter Baskerville
yy Economic Times, 11th June,2015
yy http://www.indiainfoline.com/article/news-sector-banking-financials/sidbi-launches-india-aspiration-fund-and-sidbi-make-in-india-
loan-for-enterprises-scheme 115082000192_1.html
yy Source: http://trak.in/india-startup-funding-investment-2015/

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


An Outlook of Indian Beauty & Wellness Industry: A Future Scope for Budding
Entrepreneurs
* A Sai Manideep, ** Dr. P Srinivas Reddy
*Research Scholar, Department of Management Studies, Vignan’s Foundation for Science, Technology and Research University,
Vadlamudi, Guntur District, Andhra Pradesh.
**Professor, Department of Management Studies, Vignan’s Foundation for Science, Technology and Research University, Vadlamudi,
Guntur District, Andhra Pradesh.

Abstract: All desire for is to look good and fit and admire ourselves if we are and if others make a compliment
of our attire it would boost our confidence and makes happy. Ones strive to look good and fit drives them to a wellness
center it may be salons/beauty parlor, hair and skin care, cosmetic treatment, spa and fitness/slimming centers. Research
on wellness industry is imperative because the wellness market is expanding with a growth rate about 33% per
year. It is an attractive platform for budding entrepreneurs to concentrate on a low explored market to fulfill their
entrepreneurial notion. The field of entrepreneurship is characterized by a competitive spirit, financial gain, independence
and socioeconomic factors; it would be possible only when future markets are explored by budding entrepreneurs.
This paper speaks to the growth of Indian Beauty & Wellness Industry and scope for entrepreneurship development.
Key words: Entrepreneurship, Health & Wellness, budding entrepreneurs.

Introduction and Industry Overview:


In India, wellness is an idea which has been in vogue since antiquated circumstances. Customary
therapeutic and wellness hones like Ayurveda and yoga have propounded the idea of mental and real
health. The greater part of the antiquated wellness ideas have generally centered around the fundamental
needs of a person inside the need progressive system, specifically an emphasis on wellness, sustenance, and
unwinding.
The evaluated showcase size of the worldwide wellness and health industry is about $1.4 Trillion. It
is a proof that wellness and health industry could require a more noteworthy measure of workforce and an
open door for the millennial age to adapt their entrepreneurial wish. Divisions, for example, assembling,
development, and coordinations require enormous venture and one ought to manage a contemporary
rivalry to keep up their business as usual. In any case, Beauty and wellness industry is consistently thriving
it might due to expanded magnificence and wellness cognizant, urbanization and impact of brand famous
people who we begrudge them.
The worldwide excellence and health industry is developing at a CAGR of 15 % every year (Report:
NSDC and KPMG) in the course of the most recent ten years. The main five development magnificence
and health markets are US, Brazil, China, India, and Indonesia. The ascent in world’s driving medical
issues (stoutness, hypertension, and cardiovascular maladies) add to the interest for wellness related items
and administrations. The rundown of another quickly developing sub - parts incorporate needle therapy,
naturopathy, Ayurveda, reflection, biofeedback, and yoga.
142 An Outlook of Indian Beauty & Wellness Industry: A Future Scope for Budding Entrepreneurs

Global beauty and wellness Industry

Market size in Billions


1200
1000
1000

800

600 500

400
200
200

0
2002 2007 2012

From the above source it is clearly that the sector’s is prosperous. The market share was about $200
billion in 2002and there is an drastic increase to $1000 billion by 2012 and it is expected to $1.4 trillion
by 2020. A budding entrepreneur could avail this source to explore opportunity in this sector. To establish
a firm to other sectors like manufacturing, construction and logistics could require huge resources in
terms of finance, skilled labor, etc., but to attain expertise over these sector government organizations
like NSIC, MSMC Institutions are extending their services through offering diploma certified courses.
These institutions also give training over entrepreneurial activities, optimization of resources, market
establishment and financial support from banks encouraging budding entrepreneurs.
Indian Beauty and wellness Industry

90000
80000 3713
70000
2856
60000
2197 39744
50000 1690 33120
40000 1300 27600
1000 25056
30000 20880 10419
17400 8540
20000 6251 7000
4200 5124
22080 26494
10000 16704 18400
11600 13920
0
2012 2013 2014 2015 2016 2017

Beauty and Wellness Fitness and slimming


Counter sale of Beauty products Rejuvenation

(Source: KPMG Analysis)


Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship
An Outlook of Indian Beauty & Wellness Industry: A Future Scope for Budding Entrepreneurs 143

From the above source the total industry is classified into four major categories. Now we have
a look at the present statics i.e. is 2017 with 2012. Initially beauty and wellness sector increase of 34%
from 33%, it can be inferred that there was and study and constant growth. So that investment by an
entrepreneur in this category would always have a constant and persistent opportunity. When come to
sale of beauty products by the service provider has shown a consistent growth from 51% to 49% with
an average of 50% growth expected. When come to fitness and slimming category has a constant trend
followed through the years, but when come to Rejuvenation sector has an increase form 3% to 5% to the
FY2012 to FY2017. As a whole it can be determined that the industry is persistently consistent since last
five years and would it could be expected as growth and because of foreign and domestics fashion products
could positively impact the industry.
The beauty and wellness industry in India is growing at a CAGR of 18.6 %( Report: KPMG and
NSCD). The sector is thriving on the increasing section of affluent and middle-class population that has
started considering beauty and wellness as a necessity- when come to demographic factors of the country
47% (census 2011) are young and most of this workforce in private sector and their contribution to
economy is about 50%. According to CSO, personal expenditure has reduced to 4% in FY2016 from 8%
in FY2015, but expenditure on personal products and services was study instead of global crises. Expanded
accentuation on an all encompassing prosperity with individuals’ want to look great and youthful are
different helpers for the business. The restoration fragment is never again seen as a minor extravagance
benefit yet it is presently recognized as a basic instrument to de-stretch.
Created nations like the US, European countries and numerous Asian creating countries like
India, China, and Indonesia are endeavoring their conceivable endeavors to degree their administrations
into wellness, excellence and health industry. The real angles like the impact of beautifying agents,
FMCG organizations through their ad techniques having an effect on customer conduct towards wellness
administrations. Changing pattern and purchaser want towards extravagant way of life would likewise
tend towards benefiting these administrations. Were, advertise is client driven. At whatever point there is
need and wand frames a hole and this hole is a possibility for ones like maturing business visionaries to
enter the market.
The factor that is broadly looked into in connection to business enterprise is inspiration.
McClelland (1961) and Winter (1969) has set up this accomplishment inspiration is a powerful factor for
business enterprise. Indian examinations have likewise settled the way that accomplishment inspiration
adds, as it were, in helping the general population to end up business visionaries (Rao and others 1975).
It has additionally been discovered that exceptionally energetic business people have obtained an attention
to their own qualities and shortcoming, in the meantime they know about encouraging components and
limitations winning in the earth.
Industry Classification:
ŠŠ The sector includes services that can be broadly classified along an evolving continuum as
»» Hygiene services
»» Preventive services
»» Enhancement services
ŠŠ Each of the following sub-segments fall into each of the above segments or are placed at their
intersection.

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144 An Outlook of Indian Beauty & Wellness Industry: A Future Scope for Budding Entrepreneurs

ŠŠ From a notional perspective, the industry considers the following as distinct subsectors based on
the unique skill requirements across each
ŠŠ Beauty care services, including invasive (Botox) and non-invasive cosmetic treatments including
nail services, pedicure and manicure.
ŠŠ Hair cutting, hair styling, hair colouring and advanced techniques, such as hair weaving and
rebonding.
ŠŠ Physical activity, including gymnasiums and group exercises such as aerobics and zumba.
ŠŠ Slimming and weight loss centers such as body therapy, weight loss and lymphatic drainage
therapies.
ŠŠ Includes therapeutic massages for body rejuvenation and detoxification, anti-ageing treatments
and extended therapies such as acupuncture.
ŠŠ Sale of beauty and cosmetic products at salons and retail outlets (both general and specialized
outlets)
ŠŠ Includes traditional systems of Indian, oriental and western healthcare system such as ayurveda,
yoga, unani, siddha and homeopathy.
Sprouting business people could investigate this market and offer significance to most recent
patterns and shopper fulfillment in conveying this excellence and wellness administrations with most
extreme care and could pick up the market. Fixation on target divided customer and their necessity as a
noteworthy need. Presently, there is the place a business visionary could extend his firm by obtaining new
abilities and innovation selection.
Levers for income development for Entrepreneur
Embracing an adjusted way to deal with scaling up: Franchising has been a typical course to
accomplish quick scale. Notwithstanding, organizations are additionally investigating half and half models
and growing the system of their own outlets with a specific end goal to deal with the difficulties around
the loss of control and brand weakening.
Multi-mark procedure to address differing client portions: Companies are chalking out a multi-mark
methodology so as to target particular client fragments, enter further into existing markets, and at the
same time broaden into more up to date advertises.
Putting resources into building buyer mindfulness and put stock in: Consumer mindfulness and trust
assumes a key part in the development of the wellness items and administrations showcase and in addition
broadening its purchaser base. Players have taken up various activities to teach and enhance purchaser
mindfulness with respect to the advantages of wellness items and benefits, and are setting up systems for
star dynamic shopper associate and criticism.
Training Infrastructure from Government to boost Entrepreneurship in these sectors:
Modular Employable Skills (MES) Schemes:
ŠŠ Offered under the Skill Development Initiative Scheme (SDIS)
ŠŠ The plan has a goal to enhance aptitude improvement for early school leavers and existing laborers,
IT/ITC graduates, and so on, particularly in the chaotic segment, in close meeting with the
business, smaller scale ventures in the sloppy area, state governments, specialists and the scholarly
world

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An Outlook of Indian Beauty & Wellness Industry: A Future Scope for Budding Entrepreneurs 145

ŠŠ Further, the ability levels of people officially utilized can likewise be tried and guaranteed under
this plan, i.e., accreditation of earlier/experiential learning
ŠŠ It has given a pathway to various passage and ways out, and additionally changing expertise
advancement from long haul aptitude obtaining periods (1– 2 years) to here and now (around
three months).
Star Schemes:
ŠŠ The Beauty and wellness segment aptitude chamber is the national body organization for the
advancement and development of the excellence and health industry
ŠŠ To advance ability improvement in the division, the Beauty and wellness Sector Skill Council of
India take an interest in the national accreditation and reward plot the STAR (Standard Training
Assessment and Reward) Scheme and means to connect with a million adolescents.
ŠŠ The program rewards workers experiencing preparing with a normal reward of INR10,000 per
competitor as motivating force under the National Skill Certification and Monetary Reward
Scheme (NSCMRS) dependent upon the hopeful clearing the evaluation with least 90 percent
participation
Several leading organized players have established training capacities, primarily to meet capative
requirements:
ŠŠ VLCC Institute: Established in 2001, VLCC has 51 organizations offering courses in 39 urban
communities alongside open doors for temporary positions; VLCC is subsidiary to IGNOU
to offer professional preparing in nourishment and excellence in India and is associated with
Doncaster College, UK; Cengage Learning, US, and City and Guilds.
ŠŠ L’oreal Academy: L’Oréal Professional International Hairdressing Academy was propelled in
2006 to draw in ability into the calling of hairdressing. The courses offered at the foundation are in
hairdressing and prepare the coach; they offer prepare the-mentor courses and permit accomplice
establishments to give coach
ŠŠ Anand spa organization, Hyderabad: It was built up in March 2008 by India’s head spa
administrator, IHHR Hospitality Pvt. Ltd . The courses offered at the Institute are International
body medications, Ayurveda and Yoga. It offers three understudy admissions a year, with CIBTAC
and ITEC accreditation that keeps going 6 days
ŠŠ Enrich Academy: Enrich foundation was propelled in 2009. Right now, it has a nearness in more
than five areas crosswise over Mumbai, Pune, and Ahmedabad. Improve institute offers more than
30 courses in hair, excellence and compensate for people at all levels. Accreditations for the courses
are from India Skills City and Guild and CIBTAC
ŠŠ Matrix: Matrix was set up with around 36 Educational studios; the establishment offers C.R.A.F.T
instructive projects and in-salon ace class for existing experts searching for greater innovativeness
Matrix conducts instructive visits exhibiting hair form and showings
ŠŠ Jawed Habib Academy: Jawed Habib Academy built up around 45 salon institutes in India. It
offers courses in an assortment of courses in hair mind and furthermore courses in excellence and
skin.
ŠŠ Talwalker Training Academy: Established in 2007, Talwalkers offers courses, positions, and
open doors for the establishment. It empowers preparing for different types of activity, including
Personal preparing Zumba, Nutrition, Nuform, and so on.

ISBN: 978-93-5300-292-3 Technical Session - I


146 An Outlook of Indian Beauty & Wellness Industry: A Future Scope for Budding Entrepreneurs

ŠŠ Blossoms Kochhar Training Institutions: Operates a chain of preparing foundations under the
brand name Blossom Kochhar College of Creative Arts and Design. BKCCAD possesses Pivot
Point India – A Hair and Beauty Academy, Style Inc. – a preparing institute, MUD – Make-up
Designory and Blossom Kochhar Esthetics and Spa Academy – giving all-encompassing way to
deal with spa and wellness instruction
Some of the Successful Entrepreneurs in the Industry:
ŠŠ Ms Carolin Praba Reddy is the first south indian certified Trichologist from the international
associaltion of Trichologists(IAT), Australia. She started praba’s Vcare hair clinic in 2001 in
Chennai to provide complete hair care solutions. With strong network of over 100 professionals
in clinics in Andhra Pradesh and Tamilnadu.
ŠŠ Vandana Luthra: Founder of VLCC. In 1989, Vandana Luthra framed a gathering of
Transformation focus in New Delhi. The goal was to offer weight reduction arrangements and
a threpeutic approach for magnificence, wellness and wellness. It is among the biggest chains
of thinning and magnificence focuses crosswise over Asia. Spreaded its operations in India, Sri
Lanka, Nepal, UAE, Saudi Arabia, Kenya and so forth.
ŠŠ Anoo’s: Anoo’s is a cosmetics company established in 1982, they have 9 branches in south india.
Anoo’s is the brain child of four sisters ( Ms Anuradha, Ms Annapurna, Ms Anupama, Ms
Anirudha).
ŠŠ Vijay Krishna D: He is the founder of Kolors Health care institute is an organization of health
and wellness specialist has begun with just 11 employees they have grown to a leading health
service provider, with branches across major metro cities in south India.
Conclusion:
While there are just a modest bunch of players today with incomes of 0.5-1 billion INR, new
venture openings are relied upon to develop as littler players try to develop in size and scale. The wellness
segment has a set number of players having a sizeable extent of operations (i.e. incomes of more than 0.5-
1 billion INR). This can be credited to the moderately late passage of sorted out players ‘into a division,
which was to a great extent described by little scale operations and single-store outlets. Be that as it
may, passage of numerous corporate players in this section is relied upon to produce greater speculation
openings.
Reference:
yy Acs, Z. J. & Armington, C. (2004). Employment growth and entrepreneurial activity in cities. Regional Studies, 38(8), 911-927.
yy Ahl, H. (2006). Why research on women entrepreneurs needs new directions? Entrepreneurship Theory and Practice, 30(5), 595-621.
yy Aidis, R., Welter, F., Smallbone, D. & Isakova, N. (2007). Female entrepreneurship in transition economies: the case of Lithuania and
Ukraine. Feminist Economics, 13(2), 157-183.
yy APEC (1999). Women entrepreneurs in SMEs in APEC region. Taejon-city: Asia-Pacific Economic Cooperation, viewed 25 April 2005,
<http://www.apec.org/apec/publications/all_publications/ small__medium_enterprises.html>
yy Audretsch, D. B. (2003). Entrepreneurship: a survey of the literature. Enterprise paper no: 14, European Commission, viewed 25
August 2008, http://ec.europa.eu/enterprise/library/enterprisepapers/ pdf/enterprise_paper_14_2003.pdf>
yy www.ficci.in/sector/83/project_docs/
yy www.makeinindia.com/sector.wellness
yy www.livemint.com/homepage/wellness
yy WWW.KPMG.in/wellnessprofile

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Entrepreneurship Through Online Grocery Stores
*Dr. A. Kanakadurga, **Syamala Devi Challa,
* Assistant Professor, Dept of Commerce & Business Administration,
** Research Scholar, Acharya Nagarjuna University, Guntur
Abstract : “Entrepreneurship” is the dream of many people. It gives the power to create our own money. It furnishes the
opportunity to use our knowledge, to give employment and helps to grow in the society. But due to lack of capital and courage
most of the people are tapping in the float of jobs. In this aspect, social media is the best opportunity to reach the masses. Today
internet connects more than two billion people worldwide and India has about 120 million people are in online shows as a
salient example of the Internet’s growth. The Entrepreneurship through online Grocery Store is one of the leading businesses. The
long working hours of both the partners and the huge capital to start a large store are leading so many people to start Online
Grocery Store. This article gives an overview about how to start an online grocery store, its merits, challenges and its future.
Key words: Entrepreneurship, online grocery store, business model

1. India-A prime growth driver for online grocery retailing


Online grocer means a grocery store that permits individuals and businesses to purchase groceries
and grocery products online. Usually there are delivery charges for the services. Online grocery delivery
services are available throughout Asia, Europe and North America, mostly in urban areas. The online
grocery ordering is done through e-commerce websites or mobile apps.
One of the basic needs of everyone’s life is groceries. Every human being needs a healthy and proper
food. Until a decade back the grocery needs in India was full filled by local kirana stores, supermarkets or
hyper markets. The other needs like restaurant services, milk, medicines etc are served by local merchants
only. As India has started living in the internet based world, everything is available in online including
groceries, medicines, food from restaurant and even saloon services would be done at home. The sales of
online grocery market in India are going to reach $1 billion in 2017. The online annual transactions of
grocery players have increased from 35 million in 2016 to 46 million in 2017. The average order value
has grown by 20% from 2016 to 2017. The top online grocery stores in India are BigBasket, Grofers,
Zopnow, LocalBanya, Jungoo, Peppertap etc.
In Indian retail industry, 92% of the market is unorganized, whereas 8-10% is organized (i.e.
around $60 billion) of total industry. From this analysis it is evident that there is a huge potential
for organized retail and it is also proved from the growth rate in last 5 years. According to the Retail
Consultancy Technopak, in grocery sector, India is currently in sixth largest in the world and is expected
to rise from $383 billion to $1 trillion by 2020.
2. How to start an online grocery store?
Starting a new online grocery store is definitely an exigent task. More challenges arise due to the
perishable nature of grocery products comparing to other ecommerce stores for home décor, electronics,
apparels and other such products. The critical aspects to start an online grocery store are:
ŠŠ Should know the basics like an online market place to sell groceries and deliver them at the
doorsteps of customers.
ŠŠ Should make tie-ups with local grocery wholesalers/producers
ŠŠ Make the groceries to reach on time to the customers with the help of a strong delivery network
148 Entrepreneurship Through Online Grocery Stores

2.1 Possible Revenue Streams


Commission-based revenue: This model is straight forward and the retailer can directly implement
different commissions on different products in order to maximize profit margins.
Subscription-based revenue: This model provides some discounts and gives up some charges or better
service to customers over a period of time.
Service Charges: The online grocers who operate their business independently can make money from the
service charge which is the most feasible revenue model.
Secondary income flows : Revenue can be generated by using the secondary income ways such as doing
promotion for merchants or grocery sellers, publishing sponsored content by starting a blog or can sell
user data to market research forums. Entrepreneur has to select the right revenue model and stream
depending on the target market, size of the business operating, budget and age of the business.
2.2 Significant web site features for online grocery store
Web site is the main feature of online grocery store through which we interact with the buyers,
connect them and convert them into loyal customers. For attaining the target, the website should be easy
to use, quick to load, mobile friendly and should also have the following features.
ŠŠ Many times customers have to purchase same grocery items every month. If the website gives the
option of saving order to profile, it will become a way to the repeat purchase.
ŠŠ Different family members have different demands so it is always better to share the shopping cart
with other register user.
ŠŠ Website should have the feature of receive and process of discount coupons.
ŠŠ Try to attract friends of the customers by offering some discount to the referrals.
3. Business Models of Online Grocery Store
Online grocery retailers are currently using three different models in the country. They are -
Inventory model, Hyper-local model and Mixed model (mix of inventory and hyper-local).
Inventory Model : In inventory model, the firm purchases the groceries from local farmers, FMCG
companies, big distributors etc. This model needs a huge financial investment. Due to the requirement
o huge investment, ZopNow and LocalBanya shifted from inventory model to hypper-local model.
BigBasket (one of the leading grocery retailer) adopted this inventory model. It manages its own inventory
on every demand. The company promotes itself heavily and it hired Shahrukh Khan ( Famous Bollywood
Celebrity) to endorse its brand.
Hyper-Local Model: In hyper-local model, the firm does not store any inventory but when the demand
comes it procures the groceries directly from local kirana stores or hyper markets and collects them in one
place and delivers it to the consumer. Though it is less capital intensive, it has more operational challenges
compared to inventory based model. Companies such as ZopNow.com, Naturebasket.com, Grofers.com,
Grocer.com and Liscous.com are following this hyper-local model.
Mixed Model : In mixed model companies use a bit of both of the models. Companies like LocalBanya.
com employed this model. These companies generally maintain smaller inventory in size as compared to
companies that have adopted inventory based model.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Entrepreneurship Through Online Grocery Stores 149

3.1 Merits and Challenges of Business Models


Business Model Merits Challenges
Inventory Model Orders can be fulfilled accurately because Need large warehouses to store
customers know which products to order inventory
Start-ups with this model can have the advantage Risk of huge wastage due to
of higher margins due to economies of scale perishability of product
Having own inventory, requires least manpower
and gives the benefit of starting private labels
Hyper-Local Model As purchase of product is purely demand driven Unable to satisfy huge orders
no cost of storage and wastage of inventory Inventory mismatch between store
The retailer can provide any brand or product and application
of customer’s choice as long as it has the sources
of supply
Mixed Model The retailer can provide any brand or product Procurement management is more
of customer’s choice as long as it has the sources costly as it has to manage both
of supply inventory and delivery staff
Cost of inventory management is less as it stores
small inventory
4. Top retailers in online grocery stores

Source: your story-online-grocery –table (yourstory.com)


Interpretation:
Big Basket is the top player started in 2011 and followed inventory model with its own warehouses.
It is operating in 28 cities. The retailers Grofers, Pepertap, Jungoo and Zapnow are following Hyperlocal
model and operating in 27, 24, 40 and 15 cities respectively. The retailer Localbanya is following mix of
both the models and operating in 5 cities currently.
5. Merits of shopping in online grocery store
ŠŠ We can have more variety of products or brands comparing to the local kirana stores.
ŠŠ We can do shopping sitting at home and the online stores also promise timely delivery.
ŠŠ It is more convenient to order by using mobile apps or websites, as choose the desired product,
place an order, choose a time slot and done.
ŠŠ Shopping through online saves our time and energy.
6. Challenges in operating online grocery store
The major challenge associated with the online grocery store is perishable nature of products, its
delivery, low profit margins and assurance of quality. For other products wrong delivery, delays and returns
is not a problem, but for online groceries it is an impossible situation. To combat these challenges there
are certain steps to follow, like
ŠŠ Implement Just-In-Time (JIT) inventory system which automates the things and reduce storage
and inventory costs.
ŠŠ To reach the customer expectations partner with a reliable delivery service provider.
ŠŠ Fragment the delivery network into hyper-local model to manage them to reach on time.

ISBN: 978-93-5300-292-3 Technical Session - I


150 Entrepreneurship Through Online Grocery Stores

ŠŠ Buyers shop online not only for convenience but also expect lower prices than offline. To overcome
this problem add more non-pershiabble products such as packaged foods, beauty care product etc
whose storage and delivery costs are also less.
ŠŠ Should have online and offline presence to give better experience to the customers.
7. Future of online grocery store
In tier 1 cities like Bangalore, Mumbai, Chennai, Hyderabad and Delhi the concept of online
grocery store is continuous to be really popular. Some of the major players in this segment have been-Big
Basket, Grofers, Zapnow etc. Among the players, Big Basker is the market leader with its presence in all
major cities. According to the survey conducted by a retail consultancy, Technopark, in all top cities of
India, online grocery market is growing rapidly at a rate of 25-30% every year. As long as the technology
is growing and people are searching for convenience and better prices, definitely there should be a bright
future for online grocery stores.
8. Conclusion
Groceries are basic human needs and surely we need to purchase them for our survival. Due to
convenience of shopping and for getting better prices people are increasingly depend on online shopping.
Even though, it has some challenges but the online grocery business idea fits absolutely in the current
trends. Entrepreneurs who are planning to enter this sector are to be aware of these challenges and should
know how to select the right technology, business model and trend and tactics to survive and succeed.

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Entrepreneurship Through Online Grocery Stores 151

References
yy https://en.wikipedia.org/wiki/Online_grocer
yy https://www.entrepreneur.com/businessideas/online-grocery-store
yy Indian Express, All your needs Zip’ed’ in, 2015, http://www.newindianexpress.com/cities/hyderabad/All-your-
needsZip%E2%80%99ed%E2%80%99.in/2015/01/30/article2643534.ece
yy Grocery Wars, Taslima Khan, Goutam Das, Nevin John, 2015
yy https://www.entrepreneur.com/article/278382

ISBN: 978-93-5300-292-3 Technical Session - I


Ethical Entrepreneurs - Organizational Escalation in India
*Dr. T. Lokeswara Rao, **D. Poornima Devi
*Associate Professor & **Assistant Professor, Department of Management Studies
Sri Vatsavai Krishnam Raju College of Engineering & Technology. Bhimavaram,W.G.Dt.
Abstract: This paper aims to develop a conceptual framework that examines the Ethical Entrepreneurs –
Organizational Escalation in India. Entrepreneurship practitioners now face more ethical issues every day of their
working lives than ever. In addition, factors that influence of unethical behaviors are explored. It is therefore,
recommended that entrepreneurial organizations should endeavor to go for training on ethical rudiments irrespective of
the circumstances that led them to start business of their own. Majority of entrepreneurs are following unethical practices
in their organizations. Government should take serious steps for avoiding the unethical practices for public safety.
Key words: Ethics, Entrepreneurs, Ethical Consciousness, Govt., Unethical Practices.

Introduction
Earlier belief that entrepreneurs are a special creed and are born with special traits, entrepreneurship
can be cultivated through proper training and financial support. An entrepreneur is a channel who can
mobilize different resources and put them to effective use.
Interest in entrepreneurship as a phenomenon rests in the perceived contributions entrepreneurs
make to public policy goals such as economic growth, increased productivity, job creation, technological
innovation, deregulation and privatization, and structural adjustments or realignments (Gibb 1996; Shane
1996).
Entrepreneurship practitioners in organizations currently face more ethical issues than ever.
Whether they are engaged in planning, organizing, motivating, communicating, delegating or some other
management role, they face the matter of morality; right and wrong, fairness and unfairness, and justice
or injustice which creeps into their decisions, actions or behaviors. Virtually, issues of ethics always arise
in all the decision in contemporary organizational or business setting (Jamnik, 2011).
This study tries to look at the ethics and entrepreneurial growth of an organization in India. Ethics
and social responsibility are very important values in entrepreneurship; this is, particularly, essential in
decision making process. Ethical conscience guides entrepreneurs to make responsible, trustworthy and
profitable entrepreneurship outcomes. Entrepreneurs are trying to implement ethical decision making
approach in all business decisions.
Nowadays, entrepreneurship is considered as a growth and development force of organizations
and societies. An entrepreneur is a channel who can mobilize different resources and put them to effective
use.
Role of ethics in Entrepreneurship
Ethics have a huge role to play in business as they give a guideline as to which business practices
are socially and morally acceptable and which are not. In cases where there are no laid down rules as to the
right and wrong ways of doing business, Ethics fill in the gap and give the much needed direction.
It is through awareness of ethics that entrepreneurs desist from engaging in business practices that
lead to loss of human life and human rights, compromise the environment or bring about gain at the
unfair expense of other businesses, employees, consumers, etc, Sound business ethics benefit to consumer
as they strive to direct businesses to be open and honest to their customers about the product or service
that they offer.
Ethical Entrepreneurs - Organizational Escalation in India 153

Right versus right


Business ethics is not simply a philosophical concept – it is concerned with decisions. It is obviously
concerned with right and wrong. This is usually relatively easy to sort out. We know it is wrong to steal or
to kill. More importantly, business ethics seeks answers to real life problems which often involve conflicts
of “right versus right” and clashes of moral principles.
Considering the fact that entrepreneurial organization faces many challenges in upholding ethical
management practices, practitioners and managers are expected to embrace options such as accountability
and responsibility, revitalizing the culture of excellence, encouraging the establishment of ethical
organization, orientation and a host of others as good measures to forestall standard practices in India
Rule Breaking
Entrepreneurs are often characterized by traits such as innovation, independence, and high risk
taking. Invariably, a flair for breaking rules seems to be de rigueur to be innovative and successful in a
venture. Rule-breaking can pay dividends in contrast, the demonstration of independence that underlies
modest rule breaking may help individuals develop a habit of thinking “out of the box” and behave in
ways that are more innovative to solve problems. Entrepreneurs who frequently break rules might perceive
less danger in a risky decision-making situation with regard to ethical issues.
However, breaking rules does not necessarily have to be completely negative. Positive forms include
challenging established standards and practices, and bypassing obsolete norms to improve efficiency.
Unfair Trade Practices
Any company that participates in unfair trade, including but not limited to coercing partners,
suppliers, or distributors into signing exclusivity agreements, forcing customers or clients to use unwanted
company products or services, or underselling in the market in an attempt to starve out weaker competition,
shall be guilty of anticompetitive practices.
Rise of unethical practices in business
It is observed that non-ethical behavior occurs at all levels in business. Most cases, fortunately,
do not have the magnitude of the scandals seen in the press, but they exist in a range of forms. Somewhat
unfair attitudes are multiplying rapidly in business, especially when times are difficult. A danger is that
people do not even realize their behaviour is inappropriate. The fading away of norms has perfidious
effects. Some managers even believe that certain ‘dirty tricks’ are good management practices: delaying
payment to suppliers to improve the cash flow is seen as efficient, even if a different agreement was made.
A breed apart
Entrepreneurs have long been recognized as being “a breed apart,” in that some of their attitudes
and motivations are thought to differ from those of the population at large. Successful entrepreneurs have
a high propensity to make decisions on their own, to be action-oriented, to assume risk, and to persevere
in the face of uncertainty and adversity. In a word, they tend to exhibit a high degree of individualism.
Whistle-blowers
Employees who make allegations of illegality or indiscretion against a company are protected by
law and must not be harassed or made to suffer economically or psychologically for their actions.

ISBN: 978-93-5300-292-3 Technical Session - I


154 Ethical Entrepreneurs - Organizational Escalation in India

Ethical people make unethical choice


Most companies have ethics and compliance policies that get reviewed and signed annually by all
employees. “Employees are charged with conducting their business affairs in accordance with the highest
ethical standards,” reads one such example. “Moral as well as legal obligations will be fulfilled in a manner
which will reflect pride on the Company’s name.” Of course, that policy comes directly from Enron.
Clearly it takes more than a compliance policy or Values Statement to sustain a truly ethical workplace.
Corporate ethical failures have become painfully common, and they aren’t cheap. In the last decade,
billions of dollars have been paid in fines by companies charged with ethical breaches.
Entrepreneurship Development
Entrepreneurship Development is one of the key elements for promotion of micro and small
enterprises, particularly, the first generation entrepreneurs. Entrepreneurship and resultant creation of
employment and wealth is a major mean for inclusive development. Hence, entrepreneurship development
has been one of the priorities in countries, the world over. Entrepreneurship Development Programmes
(EDPs) are conducted through MSME-DIs, with focus on entrepreneurial development coupled with 4
Specific skills relating to trades like electronics, electrical, food processing, etc, which enables the trainees
to start their own ventures. The programmes covered include the following:
1. Industrial Motivation Campaigns (IMCs)
2. Entrepreneurship Development Programmes (EDPs)
3. Entrepreneurship Skill Development Programme (ESDPs)
4. Management Development Programmes (MDPs)
Supportive Government Policies
As government is in the lead of the establishment, sponsorship and administration of most support
programmes especially in the developing countries, a proclamation from the government as it relates to
entrepreneurship will go a long way to ensuring the sustainability and positive entrepreneurial practice.
Thus, it will bring economic development through SME development, job creation as well as wealth
creation.
Conclusion
Earlier belief that entrepreneurs are a special creed and are born with special traits, entrepreneurship
can be cultivated through proper training and financial support. Entrepreneurship practitioners in
organizations currently face more ethical issues. Business ethics seeks answers to real life problems which
often involve conflicts of “right versus right”. Entrepreneurs who frequently break rules might perceive
less danger in a risky decision-making situation with regard to ethical issues. It is observed that non-
ethical behavior occurs at all levels in business. Entrepreneurship Development is one of the key elements
for promotion enterprises, particularly, the first generation entrepreneurs. Majority of entrepreneurs are
following unethical practices in their organizations. Government should take serious steps for avoiding the
unethical practices for public safety.
References
yy Dr.T.Lokeswara Rao (2011).Viable development in India, Role and performance of MSME, National Conference on Issues and
Opportunities in producers Co-operatives organized by adikavi nannayya University, Rajahmundry ISBN – 978-93-5156-307-5.
yy Alessandra, A. and O’Connor M.J. (1996). The Platinum Rule; Discover the four Basic Business Personalities and how they can lead
you to Success. New York: Warner book. Andre, C. and Valesquez, M. (1990).

Technical Session - I UGC Sponsored National Seminar on Economy & Entrepreneurship


Ethical Entrepreneurs - Organizational Escalation in India 155

yy Babalola, S.S. (2005). Positive Leadership: Antidote of Fraud to Fraudulent Practice in Corporate Organizations. Quoted in Adebayo
Olukoshi, et al. (eds.) Beyond the State: India’s Search for Positive Leadership. Ibadan: University of lbadan Press.
yy Botes, A. (2000). A Comparison between the Ethics of Justice and the Ethics of Care. Journal of Advanced Nursing, 32, 5, 107-1075.
yy Burke, F (2005). Social Ethics. Theological Studies, 66, 137-158.
yy Kersey, C. (1998), Unstoppable: 45 Powerful stories of perseverance and Triumph from people, just like you. Naperville, Illinois:
Sourcebooks Inc. Landrum, N.E.; Howell, J.P.; and Paris, L. (2000). Leadership for Strategic Change. Leadership and Organization
Development Journal, 21, 150-56. 20
yy Wikipedia, (2007) “Business Ethics.” Free Encyclopedia. scu.edu/ethics/practicing/focusareas/business/ethics-human-resources.html
accessed on 21/1/2017.

ISBN: 978-93-5300-292-3 Technical Session - I


Role of Young Entrepreneurs
*Anilambica Kata, **N. Madhuri, ***Sk. Basheerunnisa
*Asst.prof, Aadi Kavi Nannaya University,
** MBA, II Year, AU, ***MBA, II Year, AU
Abstract: Entrepreneurship gives an opportunity to young for their personal and the professional escalation,
and in the process, creating self employment as well as for others. Encouraging young entrepreneurs plays a vital part in
harnessing their enthusiasm, energy and ambition for the overall economic development. It is generally accepted that
entrepreneurs “create jobs, increase innovation, raise competition and are responsive to changing economic opportunities
and trends. Young entrepreneurs can also act as role models for their peers and, encourage others to follow their example.
Young Entrepreneurs are no doubt, are the catalysts of change and innovation. Entrepreneurship stems from the need of
fulfilling a gap that exists in the market and this sets the entire process of development in motion. The entrepreneurial growth
in our country has triggered a host of economic benefits, together with new businesses, new jobs and new products and services.
The present monograph stretches on the role of government in encouraging and understanding the need and necessities of
the young and enthusiastic entrepreneurs who acts as the building block for sustainable development of the economy.
There by providing a chance not only to get educated but also to strengthen the entrepreneurial ecosystem in the country.
Key words: Entrepreneurship, Government, Entrepreneurial skills, , innovation, Economic Development.

Introduction
Entrepreneurs are frequently thought of as national assets to be cultivated, motivated and
remunerated to the greatest possible extent. Entrepreneurs can change the way we live and work. If
successful, their innovations may improve our standard of living. In short, in addition to creating wealth
from their entrepreneurial ventures, they also create jobs and the conditions for a prosperous society.
Many young fearless entrepreneurs have set the path for a wave of entrepreneurship in the country
and this entrepreneurial spirit has resulted in not just innovation but also in entrepreneurship being
recognized as the driving force of the market. Innovation is crucial for a thriving economy and especially
in today’s increasingly competitive world. In India, entrepreneurship is accelerating innovative areas like
Education, IT, Health Care etc and generating solutions to many such problem areas. India has witnessed
several innovative ideas and businesses driven by start-ups thus leading to entrepreneurship emerging as a
valuable input to the economic growth of the country.
Economic slowdown is one of the reasons that have led to a downturn in employment opportunities
in the country. Unemployment amongst the youth is on the rise and in this regard entrepreneurship is
playing a key role in creating jobs. An entrepreneur is not just creating self employment but also building
a structure for small to large scale employment. As these enterprises grow, the employment opportunities
increase. In India, many start-ups that started out as home based ventures are today employers to hundreds
of individuals. A company/entrepreneur with an innovative-idea has the power to build employment and
in turn stimulate the economy.
In the coming years, developing countries must rebalance their economies towards greater
domestic consumption, import demand and higher value business activity and hence, entrepreneurship is
vital to the future of developing countries.
How to Encourage Them
ŠŠ In order to engage young people to choose entrepreneurship as a safe career choice, the perception
of entrepreneurs in the media is very important especially in the digital media. Media should
display high-profile programs showcasing entrepreneur’s success stories more frequently to
motivate these youngsters as they are the driving force for any nation to grow. We need flexible
Role of Young Entrepreneurs 157

policy environments and funding to stimulate and build the framework of an entrepreneurial
ecosystem and more importantly, a ‘culture’ of interaction and collaboration.
ŠŠ Government can play a major role in bringing together stakeholders to create an ecosystem which
gives boost to entrepreneurship at the national, regional and local levels.
As per reports shared by Accenture, Young entrepreneurs are the driving force behind job creation
in the G20 countries like India, Australia, China, Indonesia, Japan, Saudi Arabia, United Kingdom, and
United States amongst others. Indeed, new Accenture research concludes that 10 million more youth jobs
could be created in G20 countries if existing barriers to entrepreneurship were lifted.
‘Open Innovation’, the term coined by Henry Chesbrough in 2003 which means as technology
elaborates and develops, companies began involving more parties as part of their innovation efforts and
hence, because of technology the whole world is connected. Bridge makers play a key role in today’s open
innovation ecosystem. They help entrepreneurs to convert their idea from concept to reality which brings
them profitability. Large companies and Business incubators are the two types of bridge makers which
help entrepreneurs in the above process.
In a broader sense, innovation is important to the advancement of society around the world. New
and innovative products can increase the standard of living and provide people with opportunities to
improve their lives If you can’t compete on price, you’ll need innovative products and ideas to make your
business stand out from the crowd
How They can Drive Economic Development
1. Investing in products and services people need.
Entrepreneurs create new businesses in response to unmet needs and demands in the market.
That is, there is an opportunity to provide a product or service that is not currently in existence, or
otherwise available.
2. Providing employment opportunities.
New businesses need to hire employees. They create jobs and these economic opportunities uplift
and support communities through increasing the quality of life and overall standard of living.
3. Commerce and regional economic integration
Technology has made it possible for small, young entrepreneur-led businesses to expand into
regional and global markets. When new businesses export goods and services to nearby regions, these
enterprises contribute directly to a region’s productivity and earnings.
4. New technologies promote efficiency.
The ability to turn ideas into new products and services that people need is the fount of prosperity
for any developed country. Economic growth, generally speaking, is driven by new technologies and their
creative applications.
5. Addressing environmental challenges.
Innovation is crucial when it comes to addressing the enormous environmental challenges we face
today: combating climate change, lowering global greenhouse gas emissions, and preserving biodiversity
in the environment.

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158 Role of Young Entrepreneurs

6. Innovation happens where there is competition.


In essence, there is a positive feedback loop among innovation, entrepreneurship, and economic
development. New and growing businesses represent the principal sources of job creation and innovative
activity in an economy, two factors that generally result in the rising standards of living for all.
Following are some of the Measures Undertaken by the Present Government towards Boosting the Entre-
preneurship in India and Especially the Start-Ups

● Mudra Bank
Micro Units Development and Refinance Agency Bank (or MUDRA Bank) is a public sector
financial institution in India. It provides loans at low rates to micro-finance institutions and non-banking
financial institutions which then provide credit to MSMEs. It was launched by Prime Minister Narendra
Modi on 8 April 2015.
● Ministry of Skill Development and Entrepreneurship
It is first time that MoS (Minister of State) has been given the responsibility of developing
entrepreneurship in the country, though this task has been undertaken previously by multiple departments
and agencies. UPA government witnessed entrepreneurship skill development with the departments of
MSME (Ministry of Micro, Small & Medium Enterprises), NDA is doing under the scope of National
Skill Development Agency.
● District level Incubation and Accelerator Programme
“District level Incubation and Accelerator Programme” across the nation will be a good start to
generate new ideas and promote entrepreneurship with all the necessary support. Though, it is a positive
program, but incubators are not a uniform beast. Several ventures are provided services through different
kind of incubators. Hence, a broad and nationally-accepted classification is needed to comprehend the
unique demands of resources from each set of incubators, to tackle difficulties they encounter, and their
paths for success
● SETU
The government is building up an approach to be known as SETU (Self-Employment and
Talent Utilization) which will strengthen all prospects of startups, and other self-employment initiatives,
especially in technology-driven areas. By the time a great idea gets approval and the funds arrive, the
people behind the ideas move on to accept high-package jobs in multinational companies, now this big
boost from the government will help the budding entrepreneurs in making big.
● AIM Platform: ATAL Innovation Mission (AIM)
Government has also established the AIM Platform or ATAL Innovation Mission . AIM is
established within National Institution for Transforming India (NITI) “to provide innovation promotion
platform involving academicians, and drawing upon national and international experiences to foster a
culture of innovation, research and development”.
● eBiz Portal for Starting a Business Easy
Government has put forward the creation of “an expert committee to examine the possibility and
prepare draft legislation where the need for multiple prior permissions can be replaced by a pre-existing
regulatory mechanism. This will facilitate India becoming an investment destination” by facilitating the
regulatory mechanisms. Further, the 2015 Budget also talks about strengthening the EBiz Portal to make
starting a business easy in India.

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Role of Young Entrepreneurs 159

● Formation of eBiz portal


The first Government to Business (G2B) portal launched by the current NDA government is
owned by DIPP under Ministry of Commerce and Industry integrates 14 regulatory permissions at a
single place and has announced various labour reforms to boost job creation and entrepreneurship. The
step by government is a part of facilitating the ease of doing business in India.
Problems Faced by Them
Although the potential rewards are great, starting a new business at any age is fraught with risk.
For younger people, however, the challenges are multiplied. Lack of experience, inadequate financial
resources, and a lack of self-confidence all contribute in one way or another to make it tougher for a
young entrepreneur than an older counterpart.
As a result, many young entrepreneurs fail to make the grade. But those that do succeed are those
who face the obstacles they encounter with determination and resolve. They know that their greatest
allies are the confidence to know that they will succeed against all odds, and the willingness to learn from
their mistakes. Here’s a look at some of the challenges young entrepreneurs face and how they can work
to overcome them.
1. Hiring staff
Rules need to be set up involving such aspects as working hours, vacation time, overtime pay and
work output. Salaries need to be negotiated, complaints against workers lodged, and people might even
need to be fired or laid off. That’s not even to speak of staff fitting the company culture or of employees
working together as a team.
Young entrepreneurs should make this process a little less onerous by being careful to hire people
who will not only have the right skills for the job, but will also fit in well with the company culture.
Take your time and consider each employee carefully; check all references and do not allow yourself to
be blindsided by glib talk. Get the smart dashboard that connects all your business apps to deliver new
insights. It’s Free.
2. Lack of capital
Almost all new ventures require seed capital i.e money that is available to see them through those
first rocky months or even years before they turn a profit. Some types of businesses need more money
than others. Almost all need money for marketing.
Older people who start their own ventures usually need less financing to do so than younger
entrepreneurs. The reason is that their experience in the field, knowledge of how the business world
works, and connections within the business world, some built up over many years, provide a great boost
to their start-up businesses. As a result, they generally are able to turn a profit sooner and need to rely on
financing for a shorter time. The lack of capital means that they have to struggle to survive while waiting
for the checks to come in. This can be extremely stressful.
3. Decisions, decisions, decisions
Whereas as an employee you generally did what you were told, now you are the one calling the
shots. Doing so involves making a lot of decisions. Even without employees, you are going to be called
upon to make decisions all day, from smaller ones to major judgments that could change the direction
and future of your company.

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160 Role of Young Entrepreneurs

Among the most important decisions are those that involve creativity and ideas. If an aspect of
your company is not working as it should, you will need to make a decision to discontinue it or amend
it. You will need to decide whether the company should embark on a whole new path in search of greater
profits — or, if it does not work, potentially great losses.
4. Criticism and self-doubt
As a young entrepreneur, you will find that not everyone will take you seriously. They will tell
you that you are too young to build a successful business. They will be quick to tell you just what they
think you are doing wrong. At times, the criticism and the self-doubt it fosters might get to you. As your
business struggles to get off the ground, you could start to doubt yourself. You might wonder whether you
should have started your business after all.
5. Lack of brand image
As a young entrepreneur builds a business, creating the right image is vital. Customers must come
to trust your brand. They must recognize that you know what you are doing and you know how to do it
well.

7 Important Roles an Entrepreneur Plays In the Economic Development of a Country


1. Wealth Creation and Sharing:
By establishing the business entity, entrepreneurs invest their own resources and attract
capital (in the form of debt, equity, etc.) from investors, lenders and the public. This mobilizes public
wealth and allows people to benefit from the success of entrepreneurs and growing businesses.

2. Create Jobs:
Entrepreneurs are by nature and definition job creators, as opposed to job seekers. The simple
translation is that when you become an entrepreneur, there is one less job seeker in the economy, and
then you provide employment for multiple other job seekers. This kind of job creation by new and
existing businesses is again is one of the basic goals of economic development.

Balanced Regional Development:


Entrepreneurs setting up new businesses and industrial units help with regional development
by locating in less developed and backward areas. Every new business that locates in a less developed
area will create both direct and indirect jobs, helping lift regional economies in many different
ways. Both central and state governments promote this kind of regional development by providing
registered MSME businesses various benefits and concessions.
3. GDP and Per Capita Income:
India’s MSME sector, comprised of 36 million units that provide employment for more than
80 million people, now accounts for over 37% of the country’s GDP. Each new addition to these 36
million units makes use of even more resources like land, labor and capital to develop products and
services that add to the national income, national product and per capita income of the country

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Role of Young Entrepreneurs 161

4. Standard of Living:
Increase in the standard of living of people in a community is yet another key goal of
economic development. Entrepreneurs again play a key role in increasing the standard of living in a
community. They do this not just by creating jobs, but also by developing and adopting innovations
that lead to improvements in the quality of life of their employees, customers, and other stakeholders
in the community.
5. Exports:
Every growing business has to get started up with exports to expand their business to foreign
markets. This is an important ingredient of economic development since it provides access to bigger
markets, and leads to currency inflows and access to the latest cutting-edge technologies and processes
being used in more developed foreign markets.
Community Development:
Economic development doesn’t always translate into community development. Community
development requires infrastructure for education and training, healthcare, and other public services. For
example, you need highly educated and skilled workers in a community to attract new businesses. If there
are educational institutions, technical training schools and internship opportunities, that will help build
the pool of educated and skilled workers.
A good example of how this kind of community development can be promoted is Azim Hashim
Premji, Chairman of Wipro Limited, who donated Rs. 27,514 crores for promoting education through
the Azim Premji Foundation. This foundation works with more than 3 50,000 schools in eight states
across India.
So, there is a very important role for entrepreneurs to spark economic development by starting
new businesses, creating jobs, and contributing to improvement in various key goals such as GDP, exports,
standard of living, skills development and community development.
“I’m convinced that about half of what separates the successful entrepreneurs from the nonsuccessful
ones is pure perseverance.”– Steve Jobs
Conclusion
In the era of globalization, it is vital to recognize the need of young entrepreneurs by the government
and has to create opportunities for the self development that paves path for the overall sustainable
development of the Indian economy. The venture capital should be provided by the government to
raise awareness on the various initiatives taken up by the government, and make them a part in the
new government initiatives like ‘Make In India’,’ The National Skill Development Corporation India’,
Startup India Campaign, ‘Pradhan Mantri Yuva Udyamita Vikas Abhiyana’ .
Innovation ecosystem plays a key role as it supports and helps entrepreneurs to translate their
ideas into marketable products and services fostered by business-friendly government policies which
bring these innovators profit and success.
Bibliography:
yy www.investopedia.com
yy www.entrepreneur.com
yy www.economictimes.com

ISBN: 978-93-5300-292-3 Technical Session - II


Health Care IT Entrepreneurship in India
*Challa Maruthy Subrahmanyam, **P. Srinivasa Reddy
*
Research Scholar, Department of Management Studies,
Vignan’s Foundation for Science, Technology and Research University, Guntur, A.P, India
**
Professor, Department of Management Studies,
Vignan’s Foundation for Science, Technology and Research University, Guntur, A.P, India

Abstract Health care IT entrepreneurs have done good amount of work in putting the steps towards digital health
care in India. They have addressed pieces of information in totality that can become part of Electronic Medical Record.
Majority of Health care IT entrepreneurs in India have chosen Hospital Information Management System (HIMS) OR
Patient Administrative System (PAS) as products. They are very successful in implementing these software applications in a
good number of hospitals in every state. The hospitals thus have taken the first steps in the digital hospital direction. Some
Health care IT entrepreneurs have introduced products which facilitate Mobile Application, Telemedicine, Remote Patient
Monitoring, Disease Management and Health care Analytics. This has made other departments in a hospital digital. Some
Health care IT entrepreneurs are doing Integration of different healthcare applications in a hospital. With the introduction of
EMR and the contribution of Health care IT entrepreneurs, India is marching towards Digital Health care.

Introduction
Healthcare IT entrepreneurs have set up start-ups in Health care IT that help health care providers
is India to automate their processes. Functions like Appointment scheduling have been automated. By
this people can book their appointment through an online software application, can amend their booked
appointment or cancel their appointment. This appointment scheduling application is also made available
on mobile giving people the flexibility to book their appointment anytime and anywhere. The only bottle
neck in the usage of mobile application is the availability of internet on mobile. These days one can
see the emergence of different schemes by mobile internet providers and the launch of infrastructure
for availability of signals or internet even in the rural segments of the country. These applications have
helped hospitals also in streamlining their process. For instance one can find more order in the way
the appointments are handled by the hospital. There is now a definite guideline for customers and also
hospital staff in case there happens a cancellation of appointments. This also has brought efficiency in
functioning of physicians. They get list of patients they are likely to see next day well in advance giving
ample space to plan their day. In case a patient or customer does not turn up for a booked appointment
called as no show, then a provision is made to accommodate someone needy. Most hospitals to avoid the
ambiguity of the needier patient have adopted a system of creating a wait list of patients for a day and for
a physician. The next in line in waiting list is the patient or customer who is given a chance if no show
happens. Some hospitals leave one or two appointment slots of physicians voluntarily to accommodate
patients in walk in who need to see the physician on that day.
One can find Health care IT start up in the areas of alternative medicine like Homeopathy or
Ayurveda. The functions involved in homeopathy or Ayurveda care are automated. For instance the
same appointment scheduling application is customized for homeopathy. Here the patient or customer
can book his appointment, amend his appointment and cancel his appointment. One more addition
specific to homeopathy is the integration with Skype a common video conferencing application. On
the appointment day the patient logs in the application having Skype functionality, does details video
conference with his homeopath and takes advice. This allows patients anywhere in India to interact with
a good and reputed homeopath. These days when homeopath experts are less in number, this application
Health Care IT Entrepreneurship in India 163

provides an opportunity to avail homeopath advice and popularize homeopathy as an alternative medicine.
Thus Health care IT entrepreneurs are changing the health care in India.
Review of Literature
Health care start-ups from entrepreneurs can the found in all areas that require automation in a
hospital. Some of the broad areas are
ŠŠ Reception: Entry of demographics of patient, registration for outpatient and admission for in
patients
ŠŠ Billing: Cash payment for in patient and out patient
ŠŠ Physician’s office: It captures physicians observation, diagnosis, laboratory tests, advises and
ePrescription.
ŠŠ Scheduling : It provides doctor appointment scheduling
ŠŠ Operation Theatres: Scheduling of operations, instructions for cleaning and notes during an
operation
ŠŠ Lab: integrated with laboratory to capture the tests advised, preparation of the tests, conducting
the tests and reporting results. Included R-PAC functionality
ŠŠ Pharmacy : It takes care of drug-drug interactions and honouring the prescription
ŠŠ Ward : It provides for doctors instructions, nurses notes and medical management
ŠŠ Document Management: It has the provision for providing the date, time and author for each
updates. Includes clinical documentation
ŠŠ Diet : Taking for patient diet and managing the delivery
● Purpose of Study
The purpose of study is to come out with role of Healthcare IT entrepreneurs in economic
development
● Scope of study
Research is focussed on the broad classification of Health care IT entrepreneurs and their
contributions in economic development
● Research Method
Study uses the secondary data collection method - information published in different articles
regarding Health care IT entrepreneurs in India
● Data Analysis and Interpretation
Health care IT start ups by entrepreneurs can be classified different ways. There is no one universe
way by which they can be classified. Attempt is made here to classify them as the one functional area they
address and the products they have for health care providers market.
Products
Hospital Information System (HIS) / Hospital Information and Management System (HIMS)
Health care IT start-ups have a product as HIS / HIMS. These address the administrative functions
in a Hospital like finance, marketing, reception, material management, pharmacies, operation theatres,
wards and management operations. There emerged a good number of start-ups in this area in India.
Health care IT start-ups focussing in one state initially. Then efforts were made to make the product

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164 Health Care IT Entrepreneurship in India

across India, but the first state they started initially remained their strong point. Since health care IT
market depends a lot on past health care experience, the first state a Healthcare start-up covered remained
their strong unique selling preposition. Large number of Healthcare IT entrepreneurs got involved with
this area; hence competition amongst healthcare IT start-ups came into play. Competition made the
companies more market oriented, each one tried to incorporate unique functionality and the prices
remained market driven. This gave healthy growth in this segment.
Electronic Medical Record (EMR)
Healthcare IT entrepreneurs have established start-ups with EMR as a product. These start-ups
have made EMR customised to Indian needs. They helped in making the hospitals digitized. EMR as
a concept is relatively new. It will take some time for country as a whole to go for EMR adoption. If a
hospital in looking out for an EMR, then they can choose amongst Indian start-ups. Some Healthcare IT
entrepreneurs are resellers for global brands of EMR. They help in customer acquisition, implementation
of the product, customization of the product and support. Similarly we have health care start-ups who
have gone promoting and selling their EMR product in other countries. One can find India EMR start-
ups doing business in Africa, Australia, New Zealand, Singapore, Malaysia to name a few.
Telemedicine
Health care IT entrepreneurs have made rural patients to access the medical advice from specialist
located at cities through Telemedicine. Healthcare IT entrepreneurs have made Telemedicine affordable
and accessible to Indian hospitals or healthcare providers.
Health care Analytics
Some of the health care IT entrepreneurs offer healthcare analytics as a product. It is usually given
as a package along with other products like EMR, HIS or HIMS. These help to analyse the process a
hospital has and the clues of improving them. Thus Analytics if properly used can improve customer or
patient satisfaction by improving the internal process.
Remote Patient Monitoring (RPM)
These are clubbed with instruments that can capture the vitals, passed through a channel and
monitored by a specialist or a physician at a tertiary care centre. Healthcare IT entrepreneurs have
revolutionised patient care through RPM. It is used for conditions that do not require hospitalization
but monitoring of vitals is required. These can be wearable devices. It can also be used for monitoring a
specific activity like cycling or swimming. This opens the door for wellness management. Thus Health
care IT entrepreneurs have made wellness management affordable in India.
Functional Area
Doctor’s discovery Platforms
Doctor’s discovery Platforms help in locating doctors with parameters like specialization,
experience, success rate, past experience and ratings from previous patients. They are very handy for a
person who is new to the city or a patient looking out for physicians with past reputation. Many Health
care IT entrepreneurs have start-ups meeting this requirement. These are usually region specific or state
specific. There is an effort to make these across India.
Integration
Some Health care IT entrepreneurs have start-ups that offer integration as a service. Most of
them do integration in health care across different systems using healthcare standards. The healthcare

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Health Care IT Entrepreneurship in India 165

standards for messaging commonly called as messaging standards like HL7 and coding standards like
ICD, SNOMED are used for integration in health care apart from technology. Some of them have
separate platforms for doing integration. Integration in healthcare is a very critical function and healthcare
IT entrepreneurs have made it affordable and possible in India.
Online Pharmacy
Health care IT entrepreneurs have start-ups that provide online pharmacy. Patients can share
ePrescription, can order online, make payments online and get the delivery in person or through courier.
It provides ease of use and convenience to patients.
Doctors Appointment Scheduling
Healthcare IT entrepreneurs offer mobile applications or online doctor’s appointment scheduling
applications. These have brought efficiency and have opened the doors for third party marketing in small
and medium beds hospital.
Home Healthcare
Healthcare at the door steps of one’s door is termed as Home Healthcare. These can include nurse
care, doctor care, paramedic care and pharmacy. They are many Healthcare IT entrepreneurs who offer
this service. It is a new way healthcare is delivered in India. Numerous applications including mobile
applications are part of the Home care.
Patient Education
These are an application that are used to educate patients in situations when he needs to be
operated, has disease on part of the body which is not visible or a surgical procedure. Mobile applications
are increasingly used for this purpose. Healthcare IT entrepreneurs have start-ups focussed in this area.
Conclusions
Healthcare IT entrepreneurs have start-ups covering almost all functional areas and products
in healthcare market. They have played a significant role in marching towards digital healthcare. They
also made IT in healthcare affordable. They brought the nuances like Remote Patient Monitoring and
customized it to meet the requirements of India. In a way they have brought in new technology in
Healthcare. They have made the usage of mobile by involving mobile applications in healthcare like
doctors appoint scheduling and patient education. Given the pace with which IT is getting adopted in
India and the breed of Healthcare IT entrepreneurs – Digital healthcare in India is not far away.
References
yy Quora Where can I find a list of healthcare startups in India? available at https://www.quora.com/Where-can-I-find-a-list-of-
healthcare-startups-in-India site accessed on 19 October 2017
yy Saying truth 10 Healthcare Startups in India (2017) that are changing the Entire Game available at https://www.sayingtruth.com/
indian-healthcare-startups/ site accessed on 19 October 2017
yy Medgenera 12 Artificial Intelligence Based Healthcare Startups in India available at https://news.medgenera.com/12-artificial-
intelligence-healthcare-startups-india-ai/ site accessed on 20 October 2017
yy India Healthcare stat up jobs available at https://angel.co/india/health-care/jobs accessed on 20 October 2017
yy BWdisrupt Swadeep Srivastava Healthcare Startups Revolutionizing Indian Healthcare? Available at http://bwdisrupt.businessworld.
in/article/Healthcare-Startups-Revolutionizing-Indian-Healthcare-/07-04-2017-115900/ accessed on 20 October 2017
yy Techcircle Most funded healthcare startups in India available at http://techcircle.vccircle.com/2016/09/22/most-funded-healthcare-
startups-in-india/ site accessed on 19 October 2017
yy PwC available at https://www.pwc.in/industries/healthcare.html site accessed on 20 October 2017
yy IBEF available at http://www.india-opportunities.es/archivos/publicaciones/Healthcare-January-2016.pdf site accessed on 20 October
2017

ISBN: 978-93-5300-292-3 Technical Session - II


Successful Young Entrepreneurs: The Case Studies of India

*Dr. J. Revathy, **Mr. S. Pratap


Principal, VRS & YRN College, Chirala – 523157 Andhra Pradesh.
Research Scholar, Commerce and Business Administration, Acharya Nagarjuna University, Guntur, Andhra Pradesh.

Abstract No doubt, entrepreneur creates the employment and the sky is not the limit for entrepreneurs. In this era,
entrepreneurs are like backbone of the nation’s development. In a recent research that India is about to reach its peak of 64
per cent by the year 2021 with most of the citizens lying in the age group of 25-30 years. Our country is now the third largest
nation in terms of startup to reach the top rank. There are bundle of opportunities to become an entrepreneur to meet the
society needs and simultaneously the organizational objectives. Therefore, in this study many young entrepreneurs have been
encouraged by Government of India and among them I selected on five (5) successful case studies of young entrepreneurs.
Key words: Young entrepreneurs, opportunities, organizational objectives.

Introduction
With definition of entrepreneurship there are often linked topics like self-employment, small
business management, stages of development models and family business issues (Davidsson, 2005).
Usually when we hear a term “entrepreneurship”, in the first moment it leads us to term “entrepreneur”,
who is not only the creator and main actor of business ideas but usually also honored with the greatest
hopes of the development and future of the business. Term “entrepreneur” is derived from the French verb
“entreprendre” which means to undertake, to attempt, to try in hand, to contract for; or, to adventure
(Girard, 1962). To understand entrepreneurs, who should look at three areas: namely how entrepreneurs
act (i.e., what it is they do); what happens when entrepreneurs act (i.e., what are the outcomes of their
actions); and why people choose to be entrepreneurs (i.e., what motivates them to be entrepreneurs)
(Douglas and Shepherd, 2002).
Review of literature
It provides new jobs to compensate for employment problems created by corporate restructuring
and downsizing; and to enhance economic flexibility and growth as said by Mueller and Thomas, (2000).
Considerable amount of literature is present where attempts have been made to understand the critical
factors responsible for entrepreneurial success. Studies on the relationship between such factors and
entrepreneurial success have been clearly explained in many current researches of Makhbul and Hasun,
2011; Pun (2011); Rusu et al. (2012). According to Casson, (2003); Fisher et al. (2014) entrepreneurial
success is a construct that is not defined properly, although there is a conformity that the society benefits
from successful entrepreneurship phenomenon, and hence it is important to understand the concept.
Entrepreneurs have been given a number of definitions by various authors due to their research
focus, such as the research aims, motivation, and stage of enterprise development (Misra & Kumar, 2009;
Nasution et al., 2011; Rusu et al., 2012). There are various reason why entrepreneurs exist including
economic freedom, personal development, family requirements, and environmental pressures (Langevang
et al., 2012; Perri & Chu, 2012), while age and the sizes of firm are important factors (Coombs et al.,
2009).
The development of the Slovak economy as well as countries that belong to Central and Eastern
Europe or even the entire European Union is below a tempo to ensure the desired growth of living standards.
The slow rate of economic growth is additionally accompanied by relatively high unemployment rate,
especially among young people (Eurostat, 2015). On this subject, there has been prepared many scientific
Successful Young Entrepreneurs: The Case Studies of India 167

studies and a variety of solutions have been proposed. The most important solution is the preparation
young people for their future careers.
One possibility how to face the economic challenges in the European Union is to support talented
students, young entrepreneurs and start-ups. This support will help to create new jobs, more competition
in the market, the emergence of innovative products and solutions to a greater growth. In addition to
these macroeconomic benefits it can help young people to develop their skills and personal qualities and
abilities that will be useful for them throughout their lives. Greater support for young entrepreneurs
is promoted by the European Commission, whether it is an internship for young entrepreneurs in the
foreign company through Erasmus program or COSME – support program for SMEs, or program for
promoting science and innovation, Horizon 2020 or the Enterprise Europe Network, which can help in
finding finance, business partners or acquire new technologies (Chrenek, 2014). There are projects and
initiatives to help young people like Youth Guarantee as new approach to tackling youth unemployment
which ensures that all young people under 25, whether registered with employment services or not,
get a good-quality, concrete offer within 4 months of them leaving formal education or becoming
unemployed. Or project I SEE YOU (Initiative to Foster Social Entrepreneurship Experience of Youth)
offers the opportunity for young unemployed people from seven European countries (also Slovakia) to
get an insight into the creation of their own business, developing a social enterprise and then apply this
knowledge in their own community (European Commission, 2015).
Need of the study
India is the second largest population country in the world and there is a huge possibility to meet
tremendous various demands to satisfy the consumer needs because of their increased income levels on a
continuous basis.
Objectives
ŠŠ To study the opportunities for young entrepreneurs
ŠŠ To know the successful young entrepreneurs
Scope of the study
“No entrepreneur no development” entrepreneurship activity is an important to develop the
nation’s economy. An entrepreneur plays an important role, making the country to move from creeping
state to walking stage towards the development state. This entrepreneurship activity fulfils the needs and
desires of society simultaneously to meet their organizational objective.
Methodology
The present study is a case method over selected five entrepreneurs’ cases. As the study largely
depends on secondary data, the required data was collected from Websites, Text books, Journals, etc.
Entrepreneurship: An Opportunity
Entrepreneurship gives young people an opportunity to work on their own skills and interests
and in the process, creating their own employment. Encouraging entrepreneurship in young people
is an important way of harnessing their enthusiasm, energy and ambition to contribute to economic
development. It is generally accepted that entrepreneurs “create jobs, increase innovation, raise competition
and are responsive to changing economic opportunities and trends. Young entrepreneurs can also act as
role models for their peers and, encourage others.

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168 Successful Young Entrepreneurs: The Case Studies of India

According to the World Bank’s World Development Report 2013, around 600 million new jobs
will be required in the next 15 years to support a growing workforce. It is important to note that in
most emerging economies, 9 out of 10 jobs are created by the private sector, which is the foundation
of any thriving economy. In the coming years, developing countries must rebalance their economies
towards greater domestic consumption, import demand and higher value business activity and hence,
entrepreneurship is vital to the future of developing countries.
Government of India must help the entrepreneurs to achieve their full potential as they hold the
key to solving our youth unemployment problem. Their key concern areas are, “they need training, need
help with access to funding and need innovative funding, and need their contribution to be recognized,
need society to tolerate failure, need a streamlined tax and regulatory system”. They also need a supportive
culture in which their contribution is properly recognized and their success is celebrated. Even if there are
failures, it should be considered as a valuable source of knowledge and learning.
We need a culture which is more inclusive, opening the door for everyone to come, explore,
and contribute. Of the young entrepreneurs surveyed in the EY G20 Entrepreneurship Barometer, 84%
believed that raising awareness of their role as job creators improves public attitudes, and it can encourage
others, from all walks of life.
In order to engage young people to choose entrepreneurship as a safe career choice, the perception
of entrepreneurs in the media is very important especially in the digital media. Media should display high-
profile programs showcasing entrepreneurs’ success stories more frequently to motivate these youngsters
as they are the driving force for any nation to grow. We need flexible policy environments and funding
to stimulate and build the framework of an entrepreneurial ecosystem and more importantly, a ‘culture’
of interaction and collaboration. Government can play a major role in bringing together stakeholders to
create an ecosystem which gives boost to entrepreneurship at the national, regional and local levels.
As per reports shared by Accenture, Young entrepreneurs are the driving force behind job creation
in the G20 countries like India, Australia, China, Indonesia, Japan, Saudi Arabia, United Kingdom, and
United States amongst others. Indeed, new Accenture research concludes that 10 million more youth jobs
could be created in G20 countries if existing barriers to entrepreneurship were lifted.
Entrepreneurship: an Innovation
In today’s competitive environment, Innovation is of utmost important to the long-term success
and survival of any business. In the absence of new ideas, an enterprise finds it difficult to grow and
eventually they do a persistent struggle to sustain in the business.
There are several reasons why innovation is critical to business success.  Innovation helps to discover
what opportunities exist now or will appear in future.  It will help you stay ahead of your competitors.
Innovation is not only about designing a new product or service but can also be implemented on existing
business practices to improve efficiency, cut down on waste and increase profits. If a company doesn’t
adapt to its changing environment by constant reinvention of its products & processes, it will soon be
surpassed by its competitors.
Innovation beyond being an engine of profitable growth for companies, it plays a pivotal role
in increasing the vitality of an industry and society by creating jobs and raising the standard of living.
Indeed, in Accenture’s survey of entrepreneurs across G20 countries, 83% said innovation is vital to grow
their business and create jobs.

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


Successful Young Entrepreneurs: The Case Studies of India 169

Government Initiatives
Indian government recently launched “Startup-India” campaign with a scooping amount of INR
2000 crores allotted to the same. Under the leadership of our honorable Prime Minister Mr. Narendra
Modi, the Indian government also plans to render the budding entrepreneurs different benefits such as
rendering legal advice for filling patents, low cost for filling patents fee etc. All these have been provided
to encourage the entrepreneurship spirit in India.
With government supporting startups at this scale, idea makers of India should really grab this
opportunity to mark their presence in this yet to be discovered sea of innovation and passion.
Just imagine if our government is so supportive and is encouraging startups and entrepreneurship
at this scale, how many more successful startups can emerge in the coming five years or so. Sky is the limit.
Successful Case studies
Case 1: Name: King Siddharta , Age:22 Popular As: An Entrepreneur, Artist, Designer and Public Speaker.
The Journey: King Siddharta was creative since childhood. At an early age of 11, he used to organize
events at his locality. He identified with entrepreneurship and the passion kept growing. During his 10th
standard, he came up with the idea of an online magazine – Friends that brought together like-minded
people at one place. In no time, he developed interest in film making, and he pursued this hobby by
shooting videos along with his friends. By the time he reached the 11th standard, he got well-acquainted
with development and designing of websites. Presently, is an author, speaker and a magazine publisher,
and organizes ‘Createens’ – a conference that aims at teaching young students about entrepreneurship
and blogging. His e-magazine, Friends is extremely popular among teens. Also, he has written a book,
‘Bhagvad Gita and The Law of attraction’ that explains the connection between science and spirituality.
In the year 2010, he was listed among World’s Top 25 Young Entrepreneurs.
Case 2: Name: Ritesh Agarwal, Age: 21 Popular As: Founder and CEO of OYO Rooms The Journey:
Ritesh is known to be one of the youngest CEO in the Indian hotel industry, besides; he is also the first
resident Indian to be awarded with Thiel Fellowship. His dream of getting into the entrepreneurial world
started at the tender age of 17. After his 12th standard, he enrolled in Indian School of Business and
Finance, Delhi, but after a little while, he dropped out of the college to start his own venture. He formed
Oravel Stays at the age of 18, which eventually led to the creation of OYO Rooms, the largest network
of Indian branded hotels. Today, his business operates in more than 100 Indian cities and for the same;
he has been presented numerous awards, one out of which is the ‘Business World Young Entrepreneur
Award’. He is often seen attending various institutes and entrepreneurial conferences as a guest speaker.
Case: 3 Name: Arjun Rai, Age: 22 Popular As: COO of Odyssey Ads The Journey: When kids’ lives
center on toys and mischief at 7, this boy started showcasing his entrepreneur skills. He started his garage
sale, and started selling the gears that he found around his house. Later, he set up his shop where he sold
wedding leftover wildflower necklaces. By 2010, he became the COO of an online advertising company,
and later he set up his own venture, odyssey Ads.
Case: 4 Name: Farrhad Acidwalla, Age: 21 Popular As: CEO of Rockstah Media The Journey: At an early
age of 16 years, he borrowed $10 from his father and bought an internet domain name. Using this, he
built a web community dedicated to aero-modeling and aviation. Once it became successful, he sold the
community for higher returns. Today, he is the CEO of Rockstah Media, an advertising, branding and
marketing company. Also, he has been listed as ‘The Most promising young Indian entrepreneurs of 2012
by India TV.

ISBN: 978-93-5300-292-3 Technical Session - II


170 Successful Young Entrepreneurs: The Case Studies of India

Case: 5 Name: Sabirul Islam, Age: 25 Popular As: Entrepreneur, motivational speaker, author
The Journey: He spent his early years in a crime-ridden borough of London. His cousin let him knew
what entrepreneurship was all about, when at an early age of 13, he offered him a job. Few weeks later,
Sabirul’s cousin was fired, and this was when he decided to run the operations all by himself. When he
was all of 14, he along with 6 of his friends, started a website design company – Veyron Technology, and
earned around $1000 within the first 2 weeks of the company’s inception. By the time he was 17, he
published his first book, ‘The World at Your Feet’, which got sold out at a rapid pace. Next, he launched
‘Teen-Trepreneur’, a board game, started his own publishing company and now attends a number of
events as an eminent guest speaker.
For some people a 9-to-5 job is satisfying, while some realize that the only way they can become
happy is by being their own boss. However, true potential cannot be bound by age, and these young
entrepreneurs have certainly proved the same.
Conclusion
Entrepreneurship is an activity. It is through entrepreneurship we can put new business ideas
into practice. In doing so, it creates jobs that facilitate personal development and economic growth. It’s
a worthy pursuit to consider pass it to the next generation. Innovation ecosystem plays a key role as it
supports and helps entrepreneurs to translate their ideas into marketable products and services fostered
by business-friendly government policies which bring these innovators profit and success. Moreover, it is
the responsibility of entrepreneurs to sustain the atmosphere to future generation also while producing
the product and rendering the services.
References
yy Entrepreneurship Development, Prof. A. Shankaraiah, Rudra saibaba and ponagati, Kalyan publishers.
yy Entrepreneurship; Robart, Michael and Dean A shepherd, 6th edition; Mc Graw Hill.
yy https://in.thehackerstreet.com/india-needs-successful-entrepreneurs
yy https://www.researchgate.net/publication/265397271_Entrepreneurship_and_entrepreneur_A_review_of_literature_concepts
yy http://ac.els-cdn.com/S2212567115016627/1-s2.0-S2212567115016627-main.pdf?_tid=6c917f92-9b52-11e7-8dfa-00000aab0f27
&acdnat=1505616577_3f1bc5bbb3f256114fc31f74a2694851
yy http://www.youngindians.net/entrepreneurship_n_innovation.php

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


Challenges of Youth Entrepreneur in India: Role of Entrepreneurship Education for
the Aspirant Entrepreneur
*Dr. Radhika Naidu, **L. Jyotshna Reddy
*Head of the Department, MBA Sri Vatsavai Krishnam Raju College of Engineering & Technology, Bhimavaram
**Research scholar, DCMA, A.U

Abstract: An Entrepreneur is one who envisions and brings aspirations into reality with change and innovation, gathers
resources, labour, materials, and other assets converts it into a product of value greater than before with a order. He is
driven by certain forces like the need to obtain or attain something, to experiment, to accomplish, or be in his own authority.
Entrepreneurship is the process of creating incremental assets. The assets thus created by individuals who presume the major risks in
terms of equity, time or career commitment or provide value for some product or service. The product or service new or unique, value
must somehow be induced by the entrepreneur by acquiring and allocating necessary skills and resources efficiently and effectively.
Aspirant Entrepreneurship is the key factor to fight against the challenges like unemployment, poverty and
to prepare ourselves for globalization and in this paper we shall discuss Youth entrepreneurship, their role in
choosing a career the factors in the Entrepreneurship that make them successful Entrepreneurs challenges and
road blocks during the process and the role of Entrepreneurship education, Organizations support ,Media and
The Government in India for the overall economic progress achieving sustainable entrepreneurship development.
Key words: Entrepreneur, Innovation, Sustainable Entrepreneurship, Skills, Organizations

1. Introduction:
Entrepreneurship is the key factor to fight against unemployment, poverty and to prepare
ourselves for globalization in order to achieve overall Indian economic progress. Encouraging Youth
entrepreneurship is particularly important to face challenges related to high youth unemployment
rates and offer pathways for young people to emerge from unemployment and gives young people an
opportunity to work on their own skills and interests and in the process, creating their own employment.
Encouraging entrepreneurship in young people is an important way of harnessing their enthusiasm,
energy and ambition to contribute to economic development
For years, economists viewed entrepreneurship as a small part of economic activity. But in the
1800s, the Austrian School of Economics was the first to recognize the entrepreneur as the person having
the central role in all economic activity. Because of factors like entrepreneurial energy, creativity and
motivation that trigger the production and sale of new products and services. It is the entrepreneur who
undertakes the risk of the enterprise in search of profit and who seeks opportunities to profit by satisfying
as yet unsatisfied needs.
Entrepreneurship gained a greater significance at global level under changing economic scenario.
The scope of entrepreneurship development in our country is tremendous. Since there is a widespread
concern that the acceleration in GDP growth in the post reforms period.
The rising unemployment rate in India has resulted growing frustration in among the youth.
In addition there is always problem of unemployment in India. As a result, increasing the entrepreneur
activities in the country is the only solution left with government. Entrepreneurship is not simply adoption
new activities but it is transformation of a person from tradition to modern.
2. Objectives:
ŠŠ To elicit the reason that motivates the young people choosing entrepreneurship
ŠŠ To discuss the role of actors that contributing to the promotion of youth entrepreneurship
ŠŠ To study the Barriers of youth entrepreneurship.
172 Challenges of Youth Entrepreneur in India: Role of Entrepreneurship Education for the Aspirant Entrepreneur

3. Youth entrepreneurship
Youth entrepreneurship has gained more importance in recent years in many countries, with
increased interest in entrepreneurship as a way of boosting economic competitiveness and promoting
regional development.
Youth entrepreneurship defined by Francis Chigunta from the University of Oxford: “the
practical application of enterprising qualities, such as initiative, innovation, creativity, and risk-taking
into the work environment (either in self-employment or employment in small start-up firms), using the
appropriate skills necessary for success in that environment and culture.”
3.1 Youth choosing entrepreneurship as a career
Many people opt for entrepreneurship as their career because of many reasons. Some develop
the industry because they would want to run their own business, answering to no one and setting
all the rules and protocols by themselves. Others jump into entrepreneurship because they have seen
that most successful people in the world own a successful business. There are also others that make
entrepreneurship as a second career because their current jobs are not earning enough for them. Some
chose entrepreneurship as a career because they have the desire to be independent; some want to earn
more money and have to manage their family business. Young people are often facing worse working
conditions like longer working hours, no social protection or lower wages than their older colleagues.
Those three main conditions - high level of youth unemployment, youth underemployment and worse
working conditions are interconnected, but also influence in negative way not only lives of young people
but also current and future economy.
Young people facing those conditions are not only burden for their relatives or social systems,
create less value then possible (in case of underemployment) or create lower consumption. Prolonged
exposure to those factors can have devastating effect on their future life and career choices, or even cause
mental health issues taking into account the scale of problem and its global character youth unemployment
and underemployment is causing grievous socioeconomic consequences that can affect not only current
situation but also future development. Youth entrepreneurship is one of the ways that can be addressing
these problems.
4. Barriers of youth entrepreneurship
Lack of mentorship or Support: As it present individual must both feel ready and have will to become
entrepreneur. But even when being ready and wanting to become entrepreneur he can still need some
support services like mentoring or networking.
Fear of failure: The youth are more worried about the fear of failure. They are more concerned about
their failure rather on their success and it inhibits their entrepreneurship zeal and enthusiasm. They are
more concerned about the society rather than on themselves. As in entrepreneurship risk taking is a major
factor and failure is always around.
Lack of entrepreneurship education: Today India requires the strong empowerment of youth and their
transformation from job seekers to job creators, by channelizing their creative skill and energy towards
successful business ventures. Youth must be groomed at their higher education levels with the thought
of entrepreneurship and must be thought entrepreneurial skills. The educational institutions need to
encourage entrepreneur skills right from the curriculum itself.

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


Challenges of Youth Entrepreneur in India: Role of Entrepreneurship Education for the Aspirant Entrepreneur 173

Lack of finance: One of the severe problems faced by the young entrepreneurs is non availability of
adequate finance to carry out their operations. Banks also do not lend money without adequate collateral
security or guarantees and margin money which many of them are not in a position to provide
Problems with affordable financing: Lack personal savings and resources, or securities and debt credibility,
complex credit/financing documentation procedures with long waiting periods for decisions, lack of
(successful) micro lending/-finance and seed funding and lack of knowledge of financing possibilities are
standing as barriers to youth entrepreneurship.
Poor administration: un supportive tax regimes, unfavorable bankruptcy laws and property rights,
business registration procedures and costs, as well as lack of transparency, ineffective competition law and
often regulatory framework changes
Lack of Relevant networks: business contacts, suppliers, suitable partners and networks, lack of business
development service, lack of knowledge of available business support services, lack of counselling and
training, lack of mentoring services, and lack of exchange networks, forums and meeting places or lack
of workspace.
5.0 Empower youth Entrepreneurship in India
There are ample opportunities in small businesses is there in India, Such opportunities will
transform India in the coming future. For such transformation to happen there needs to be Empower
and supporting youth Entrepreneurship both at the governmental and societal level.
5.1 Role of Media:
In order to engage young people to choose entrepreneurship as a safe career choice, the perception
of entrepreneurs in the media is very important especially in the digital media. Media should display high-
profile programs showcasing entrepreneur’s success stories more frequently to motivate these youngsters
as they are the driving force for any nation to grow.
5.2 Role of Government
Governments and local communities across the world have recognized that key to building
prosperity and stimulate regional growth is fostering entrepreneurship among their people especially
youth. Youth entrepreneurship has become a subject of major concern for the Government.
They need flexible policy environments and funding to stimulate and build the framework of an
entrepreneurial ecosystem and more importantly, a ‘culture’ of interaction and collaboration. Government
can play a major role in bringing together stakeholders to create an ecosystem which gives boost to
entrepreneurship at the national, regional and local levels. Government must help the entrepreneurs
to achieve their full potential as they hold the key to solving our youth unemployment problem. Their
key concern areas are they need training, need help with access to funding, innovative funding, their
contribution to be recognized, need society to tolerate failure, a streamlined tax and regulatory system.
They also need a supportive culture in which their contribution is properly recognized and their success
is celebrated. Even if there are failures, it should be considered as a valuable source of knowledge and
learning.
5.3 Role of Organizations:
The emergence of entrepreneurs and their contribution to the national economy is quite visible
in India. In order to harness their potential and sustain development, it is essential to devise apposite

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174 Challenges of Youth Entrepreneur in India: Role of Entrepreneurship Education for the Aspirant Entrepreneur

strategies for supporting and executing their efforts towards the entrepreneurial cause. And several
organizations need be lauded for their contribution in this direction.
Several organizations have moved into setting up Entrepreneurship developing programs in India
that not only empower the youth but also encourage them to come up with innovative solutions. They are
also involved in revitalizing Industrial Training Institutes (ITRs) with various state governments. They see
this initiative, in a couple of years, creating entrepreneurial enthusiasm among the rural youth. Partnering
with state and central governments, along with likeminded organizations to foster entrepreneurship, will
be the cornerstone to empower rural India, he asserts.
6. Conclusion:
With increasing interest in youth entrepreneurship, Career guidance services should be made
compulsory and should be provided for all levels of education to help students in making their career
choices which transform into a reality. Efforts taken by the organizations in career guidance will not only
enhance but also help in the overall development of the nation along with the individual early in their life
and becomes a way of thinking.
The Indian government should ensure that the policy measures be strictly adhered to by
encouraging the various financial institutions to grant aid to the prospective youth entrepreneurs by
promoting Entrepreneurship courses
Entrepreneurship courses and education should be incorporated at all levels of educations and
institutes for the uplift of the youth making them social aware and independent and self-sufficient
citizens, helping the development of the country’s economy.
The Indian government should therefore insist and recommend Organizations, Institutions and
Industries to provide new entrepreneurial opportunities for the youth with the onward development of
Global modern Information, Communication and Technological advancement.
7. Reference:
yy Dr. C.B Gupta & Dr. N.P. Srinivasan 2001 Entrepreneurship Development in India Sultan Chand & Sons
yy EY Report 2014 on “Avoiding a lost generation: Ten key recommendations to support youth entrepreneurship across the G20”
yy Agarwal, K.K .and Upadhyay, R.K. (2009), “Attitude of Youth Towards Entrepreneurship: A Case Study of Varanasi”, The ICFAI
University Press
yy Baker K (2008), “Fostering a Global Spirit of Youth Enterprise”, Preparatory Briefing of the Global Forum on Youth Entrepreneurship.
yy http://toostep.com/insight/youth-entrepreneurship-the-ultimate-key-to-self-reliance

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


Exogenous Determinants of Entrepreneurial Intuition & the Mediatory
Role of Psychological Capital among Potential Youth Entrepreneurs – A Study
*Dr. V. Venkateswara Rao, **D. Pushpa Sri
Director of EDP, PACE Institute of Technology & Sciences: Ongole Email: venkat.pacemba2010@gmail.com
Assistant Professor, Department of MBA, PACE Institute of Technology & Sciences: Ongole. Email: pushpasri_d@pace.ac.in

Abstract: Some of the researchers argue that intuition should be given more importance in scholarly research,
but not many researchers have investigated intuition in entrepreneurial settings. The study therefore investigated the
influence of career adoptability, ambiguity tolerance, achievement need and mentioning support on entrepreneurial
institution and the mediatory role of psychological capital. The study was designed in a bid to enhance the intuitive
capacity of potential entrepreneurs who needs a comprehensive entrepreneurs training that include modules
of career adaptability, need for achievement should be incorporated in all categories of territory institutions
Key words: Career adoptability, psychological capital etc.

Introduction:
Entrepreneurship is n outcome of complex balancing of opportunity initiatives, risks and rewards.
It is a process by which people pursue opportunities, fulfilling needs and wants through innovations with
regard to the resources they currently cant role. Through the process of entrepreneurship, it is possible
to augment the scope of capital formation, job creation and facilitate industrialization in a country.
Entrepreneurship also acts as a powerful tool for raising productivity through innovation, facilitating
transfer of technology, playing a key role in commercializing new products, redistribution of wealth
and income, earning foreign exchanges, promoting economic welfare in the country. However, while
entrepreneurship may be deemed beneficial in the areas of job creation, its success depends on the
intuition capacity of entrepreneurs to make business decisions under fast paced and saturated market
conditions. Theoretical influences have identified roles of various psychological constructs on different
types of entrepreneurship behavior. This study attempts to establish an empirical basis for the influence of
career adoptability, ambiguity tolerance, need for achievement and mentoring support on entrepreneurial
intuition.
Entrepreneurial intuition is defined as instinctive and instanious capacity to recognize and
respond to business related cues. It describes a set of intrinsic traits that can prompt a deposition towards
patters of effective entrepreneurial activities. Lapira and Gillian defines entrepreneurial intuition as a part
of entrepreneurial decision and action that is not based on the reason of extrapolations, but it is based on
feeling of rightness.
Entrepreneurship and Economic Growth:
The joint production of entrepreneurs and workers where former provide, both entrepreneurial
(strategic) and managerial (coordination and motivation) services whilst management services are shared
with individual workers in such a way that output is maximized. The static equilibrium determines the
endogenous share of the entrepreneurs in the economy. The time dynamics of the solution imply that a
given growth rate in the quality of entrepreneurial services contributes to the productivity growth rate in
proportion to the share of entrepreneurs at the time period to improve the quality of the entrepreneurial
services is convergence enhancing. The improvement in the quality of entrepreneurial services can make
a substantial contribution to the economic growth by means of more effective management function
performance. The growing interest in the entrepreneurship among academic and in public policy justifies
176 Role of Psychological Capital among Potential Youth Entrepreneurs – A Study

a broader perspective on the functions of entrepreneurs in economic activity and on how efficiency in
performance translates to productivity over a period of time. Higher quality entrepreneurial services affect
output in two ways. Better strategic decisions that increase the productivity of the organization as a whole
and better managerial decision that improve efficiency through improved coordination and supervision
direct workers. Profit maximization behavior of the firms and equilibrium conditions in the supply and
demand of the labor determines the equilibrium share of entrepreneurs in the economy.
It is explained that the countries with a broader base of entrepreneurs gin relatively greater benefits
from improvements in the quality of entrepreneurial services over a period of time. Developments in
entrepreneurship, in theory as well as in practice will feel its growth. Given that more practice would
mean instances of introspection adding to existing knowledge base and simultaneous development of
periodical precision should be automatic. The framework works at both ends by pushing entrepreneurial
intuitions and pulling higher levels of knowledge creation to support the needs of a core business activity.
The synergies of entrepreneurship, as a field of study with other fundamental business management
courses, such as marketing, necessitate a framework for developing an entrepreneurship to the students, of
business management to ensure an integrated learning platform. A Framework for building this effective
entrepreneurship education eco-system is surely the need of the how ever and it requires a greater focus
on knowledge creation to support the framework.
Significances of MSME in Indian Economy:
In recent years, particularly since adoption of the economic reforms in India there has been a
decisive switch of emphasis from the capital intensive to MSME with immense potential for developing
domestic linkages for rapid. Sustainable industrial development apart from their potential for ensuring a
self-reliant industrialization in terms of ability to rely largely on local raw materials, SME’s are also in a
better position to boost employment guarantee more even distribution of industrial development in the
country.
Objectives of the Study:
ŠŠ To identify the determined exigent factors in influencing SME in India.
ŠŠ To assess the role of micro and small enterprises in employment generation and entrepreneurial
development.
ŠŠ To assess the extent of poor financing has affected SME operations.
ŠŠ To recommend appropriate measures through SME’s can be more effectively developed in India.
Literature Review:
Economic development depends to large extent on the active and enthusiastic participation of
intellectual entrepreneurs in the economic process. It is exclusively as a process of technological change
which is brought in by the creativity of the entrepreneurs. In modern India, the SME’s have emerged
vibrantly in the face of raising threats from the large scale sectors inside the country of multinational
abroad. There are various factors such as need for independence, improving financial position self-
fulfillment, desire to be own boss etc., motivates an entrepreneur. The factors such as age, gender and
individual background such as education and framework experience have an impact on entrepreneurial
intuition and endeavor. It is found that human capital or human resource such as age, gender, education
and experience is further influence on the decision to become self-employed.

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Psychological Capital among Potential Youth Entrepreneurs – A Study 177

The Impact of Entrepreneurship on Economic Growth:


More recently a series of studies has identified a change in the determinants underlying the
industry structure that has reversed the trend. The most salient point of this change is that technological
change globalization, deregulation, and shifts in the labor supply, variety in demand and the resulting
higher levels of uncertainty have rendered a shift in the industry structure away from greater concentration
and centralization towards less concentration and decentralization. A series of empirical studies have
uncovered two systematic findings regarding the response of industry structure to changes to underlying
determinants. The first is that industry structure is generally shifting towards an increased role for small
firms. The second is that the extent and timing of this shift is anything but identical across countries.
Apparently, institutions and policies in certain countries have facilitated a greater and more rapid response
to technological change and globalization along with other lying factors, by shifting to a less centralized
and more dispersed industry structure.
Significance of Determinants of Entrepreneurial Intuition- A Methodology:
The conceptual work on opportunity identification suggests that intuition may be one of the
cognitive processes responsible for enabling entrepreneurs to leverage their vast knowledge and
complex mental frameworks to enhance their opportunity identification ability. The outcome of the
processing is a major determinant of how they feel, interpret events, make decisions and behave.
Psychological Capital:
The psychological capital questionnaire was used to assess the PSQ draws from widely recognizes
published standard measures for each of the positive cap as follows. 1. Hope, 2. Optimism, 3. Self-
efficacy, 4. Resilience.
Conclusion:
An interesting line of future research would be to provide an explanation of the dynamics
of management technology that determine the evolution of the share of entrepreneurs over time, as
well as looking at the determinants of differences in the quality of entrepreneurial services in different
countries over time. Differences in the entrepreneurial abilities of individuals in different countries would
explain the dispersion of different sized firms within a country. The effects of scale economies as a result of
quality in strategic decisions would imply a more than proportional effect of the differences in ability
on the size differences of firms. Therefore, dispersion in the sizes of firms within countries would be
expected to be a relevant variable for explaining productivity and growth.
Future research should also extend the results to situations where liquidity constraints can
limit access to becoming an entrepreneur – where the entrepreneur is also the capitalist. In this situation,
entrepreneurs manage both direct labor and capital and the model of optimal allocation of entrepreneurial
time would have to determine the allocation of this time in the two inputs. Unfortunately, data on the
number and share of entrepreneurs in different countries is highly incomplete and compiled according
to differing criteria in different countries. Moreover, we only have data on R&D and capital
inputs for a limited time period and for a limited set of countries, so labor productivity growth has to be
modeled without allowing for growth in the capital per employed person of the countries in the sample.
Finally, our data does not distinguish between entrepreneurs with or without salaried employees. The fact
that the main conclusions from the estimated models (in terms of the importance of improvements in
quality of entrepreneurial services to productivity growth) are robust to longer or shorter time estimation

ISBN: 978-93-5300-292-3 Technical Session - II


178 The Role of Young Entrepreneurship in India

periods and to estimations from the reduced sample with capend R&D data, suggests that the rest of the
control variables avoid potential biases in the estimated coefficients although further research with more
refined data is clearly required. Finally, future research should aim to confirm the results of this study
by using more complete databases and thereby contributing to the resolution of some puzzling results,
such as the particularly high estimated value of the rate of improvement in the quality of entrepreneurial
services in the nineties – a period of shake out with a generalized spread of information technologies.
The effort would be worthwhile, this is especially true if we take into account how little we know about
entrepreneurship and economic growth, the importance of entrepreneurship in economic policy actions
and what are, in our opinion, the important insights gained from this study.
References:
yy Acs, Z.J. and D.B. Audretsch. (1990). Innovation and Small Firms. Cambridge, MA: MIT Press.
yy dics, Z. J., D. Audretsch and D. Evans .(1994). The Determinants of Variations in the
yy Self- Employed Rates Across Countries and over Time. Mimeo.
yy Acs, Z. J. and D. Storey. (2004). “Introduction: Entrepreneurship and Economic
yy Development”. Regional Studies. Vol. 38, pp. 871-877.
yy Alchian, A. and H. Demsetz. (1972). “Production, Information and Economic
yy Organization”. American Economic Review. Vol. 62, pp. 777-795.
yy Audretsch, D. B., and M.P. Feldman. (1996). “R&D Spillovers and the Geography of
yy Innovation and Production”. American Economic Review. 86(3), pp. 630-640.
yy Audretsch, D. B. and M. Keilbach. (2004a). “Entrepreneurship Capital and EconomicAcs, Z.J. and D.B. Audretsch. (1990).
Innovation and Small Firms. Cambridge, MA: MIT Press.

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


The Role of Young Entrepreneurship in India
*Dr. Krishna Banana, **V. Veeranjaneya Kumar. P, ***V Rama Krishna Rao Chepuri
*Asst. Professor., Head of the Department Department of Business Administration, Acharya Nagarjuna University Ongole Campus
**Research Scholar, Acharya Nagarjuna University-Guntur Asst. Professor, Department of Business Administration
St. Ann’s College of Engineering & Technology, Chirala
***Research Scholar, Acharya Nagarjuna University, Asst. Professor, Department of Business Administration, St. Ann’s College of
Engineering & Technology, Chirala

Abstract: Recently, interest in youth entrepreneurship has been fuelled due to high levels of unemployment amongst
young people and as a way to foster employment opportunities or to address social exclusion. Youth entrepreneurship
has gained more importance in recent years in many countries, with increased interest in entrepreneurship as a way of
boosting economic competitiveness and promoting regional development. Today’s youth are keen to experiment and take
risks. At present, many young fearless entrepreneurs have set the path for a wave of entrepreneurship in the country. This
entrepreneurial spirit has resulted in not just innovation but also in entrepreneurship being recognized as the driving
force of the market. Also, with government actively endorsing startups and small businesses, the wheel of entrepreneur-
driven innovation has started rolling. One of the major challenges faced by most of the countries in the world today is
to do with Youth unemployment. The overall unemployment rate is growing at an alarming speed. Amongst the
unemployed, the unemployment of youth seems to be alarming. The current global youth population is estimated to be
at 1.5 billion of which 620 million are employable and ninety percent of this population live in developing countries.
Countries like India and China have a fast increasing youth population and the rate of unemployment too is rising rapidly
Key words: Youth entrepreneurship; Economic development; Unemployment, experiment

Youth Entrepreneurship - An Overview


Youth is the Future of every nation & inheritors of the earth tomorrow. This statement stands
true in every sense. When a country has a healthy youth population, you will find the country making
headway in terms of overall development and progress. A country with high aging population and lower
youth population has a lot of problems to content with that can slow its growth. The world today
has transited into a ‘Technology Era’. Technology has enabled progress in all fields and all societies.
Technological revolution has changed the face of lives of people bringing healthcare, information and
connectivity to even the most remote areas that were hereto isolated.
Globalization has brought countries together and created entire world market. We are seeing a lot
of changes in the international political map of the world. Countries are beginning to show determination
to move from the old age monarchies and dictatorial regimes towards democracy. Progress and challenges
go hand in hand. One of the major challenges faced by most of the countries in the world today is to do
with Youth unemployment. The overall unemployment rate is growing at an alarming speed. Amongst the
unemployed, the unemployment of youth seems to be alarming. The current global youth population is
estimated to be at 1.5 billion of which 620 million are employable and ninety percent of this population
live in developing countries. Countries like India and China have a fast increasing youth population and
the rate of unemployment too is rising rapidly. As per ILO’s prediction approximately 660 million youth
will be seeking employment by 2015. The youth unemployment is higher measuring up to 50-60% in
Asia.
The above figures stand to reveal the fact that Global youth unemployment could boomerang
to become a global crises causing social and economical impact on all countries besides pushing the
economies and progress backward. Though every government as well as world Organizations do frame
180 The Role of Young Entrepreneurship in India

policies and promote schemes as well as funds to promote youth employment programs, the quantum of
such effort is negligible when compared to the huge numbers.
Governments are focused on looking at framework and strategies to creating new jobs and
increasing employment rates. However there is an urgent need for the policy makers to look specifically
at the Youth unemployment and related issues. In some of the countries youth entrepreneurship is being
recognized as a promising alternative and is being actively promoted by various agencies. If promoted
actively, Youth entrepreneurship can help sustain growing economies; integrate youth into the workforce
besides leading to overall development of society.
Entrepreneurship in any society is a sign of progress. The IT business in US has been the bedrock
for youth entrepreneurship and created stars and multi-millionaires in Bill Gates, Steve Jobs to Google’s
SergyBrin and Larry Page and many more. There are similar such stories in other countries too. However,
the need of the day is to create many more stars and make available the opportunities for every youth to
dream big and try their hands at entrepreneurship.
Objectives:
ŠŠ To investigate particular challenges that prevents expansion in youth entrepreneurial ventures.
ŠŠ To analyze and describe the possibilities of youth entrepreneurship development
ŠŠ To study the factors contributing to the promotion of young entrepreneurs to start up their own
enterprise.
Literature Review -Entrepreneurship
Venkataraman (1997) described that the “Entrepreneurship is an activity that involves the
discovery, evaluation and exploitation of opportunities to introduce new goods and services, ways of
organizing, markets process and raw material through organizing efforts that previously had not existed”
Shane and Venkataraman (2000) observed that the “Entrepreneurship is an important process by
which new knowledge is converted into products and services”
In (2000), Timmons suggested that entrepreneurship is a process of creating or seizing and
pursuing an opportunity, irrespective of the available controlled resources
Nafukho, Kobia et al. (2010) argue that the reason for not having a universal definition is because
entrepreneurship has been studied in many disciplines, which has resulted in the rise of many opinions
regarding its meaning.
Kelley, Singer et al. (2012) suggested that perhaps entrepreneurship has practical appeal but less
visibility in many countries.
Gwija (2014) analyzed that the Entrepreneurship is the process where an entrepreneur’s forms a
venture by seeing the opportunity in the market, undertake the risk by the help of effective innovative
idea or process and collect profit from the business. Numerous researchers in the field of entrepreneurship
have not come up with single and unanimously acceptable definition for entrepreneurship
Youth Entrepreneurship:
The entrepreneurs are one of the essential pillars of economic growth, job creation, empowerment
and innovations gaining ground in India. It’s an important facet of unleashing individual creativity and
energy for the purpose of greater common good.

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The Role of Young Entrepreneurship in India 181

Increase in Job Scenario: Entrepreneurship benefits the economy as more jobs get created, the
nation reaps benefit of innovation and society progresses. Our recent study of young entrepreneurs in
Gurgaon reveal, on average an entrepreneur creates five jobs in two years, but if the venture survives for five
years, this increases to 50 jobs. The reason why Bangalore or Gurgaon are hot beds for entrepreneurship is
that higher the density of small business in a city, greater propensity for new venture creation.
Entrepreneurship in School & College: Launching entrepreneurship awareness programmes in
schools and colleges can ignite youth to the infinite possibilities of entrepreneurship — ranging from
self employed to high technology entrepreneurship. Prof. Paul Reynolds’ research on entrepreneurial
dynamics finds strong linkage between education in entrepreneurship and new entrepreneurship efforts.
Most countries and policy makers have recognised this fact and are working towards building an
entrepreneurial ecosystem through focused youth entrepreneurship programmes. The question is how
do you build this? Building and promoting entrepreneurial ecosystem for youth requires multi pronged
strategy of encouraging entrepreneurial culture in school and colleges, celebrating entrepreneurship by
providing role models in schools and colleges, introducing entrepreneurship developmental courses,
setting up localized mentoring networks and making available early stage funding through banking
system.
Building Entrepreneurial Culture:
A recent study on entrepreneurship in India by Gallup states that India has abundant entrepreneurial
talent, but, Indians lack in risk taking. Building entrepreneurial culture is a long term prescription. This
can happen when academia and Government work with business to start bringing local entrepreneurs
into classrooms.
Entrepreneurship is usually associated with new ideas, new ventures, disruptive technologies, quick
prosperity of entrepreneurs and hence, people believe that there should be a strong link with economic
growth. Essentially there are three main elements of entrepreneurship — an innovative idea, risk taking
behavior of people and perception of presence of economic opportunities that can be exploited. To do
this, India needs to introduce innovation and entrepreneurship courses that will allows process of inquiry
and risk taking. The curriculum should take care to build students competence, confidence, courage and
passion for the inventiveness and teach them to put theory into action. Every university in India must
have a Centre for Entrepreneurship. These centers should identify and recognize local entrepreneur role
models and involve them in educating people. University professors must open up their guards to actively
engage with local small business community. University level business and technology incubators should
be in a position to crack this code. Provided these incubators are run like a business. This can happen only
when we create a pool of teachers who could teach entrepreneurship. America has an excellent system of
Network For Teaching Entrepreneurship (NFTE) which could provide us the framework.
The culture of startup weekends need to penetrate to tier 2/3/4/5 cities. Since Indian academia
lacks ‘how to do this’ vision, Government has to play a key role by providing grants, encouraging
investors by providing incentives for investment in innovative student ideas and solutions to fast track
the realization of true potential.
Academia has to play a key role in this. We must document the success stories coming university
labs. This can be enabled by making the commercialization process out of university labs and incubators
smooth. There are ambiguities surrounding intellectual property rights coming out of Government
funded university research. This should be cleared with most commercial benefits loaded towards the
researcher. This can unleash commercialization of R&D. No less important are taxes— we should create

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182 The Role of Young Entrepreneurship in India

capital gains tax exemptions for startup investments held for a period of years and offer tax incentives for
startup operating capital.
A time-bound, purposeful policy with clear near term, medium term and long term goals shall go
a long way in building entrepreneurial ecosystem in India.
Why Young Entrepreneurs are so Important
Thousands of young entrepreneurs from 43 countries across the world took part in a series of
online and onsite dialogues as part of the Road to Lima 2015 activities. The inclusion of youth in such
an important process was possible thanks to the World Bank Group and the Young Americas Business
Trust (YABT).During this global consultation, young entrepreneurs mentioned that they still face
challenges when starting their own businesses, such as access to funding, education and trainings, better
infrastructure, and networking opportunities. However, young people did also share with us life-learning
lessons as entrepreneurs and explained us how entrepreneurship has evolved over the past years in their
home countries. Today, we are proud to share an overview of the #youthbiz global campaign where 2
million young people across the globe were engaged.
The World Bank and YABT have worked together over the past months to provide a
global platform to voice young people´s recommendations and experiences through their own
stories about their opportunities; government programs; and entrepreneurship philosophy.
In doing so, we aimed to raise awareness about young entrepreneurs´ increasing role in
guaranteeing sustainable growth and shared prosperity in their countries and worldwide.
For the global consultation, we included three channels to facilitate significant participation from every
continent. These channels consisted of 3 global dialogues in three languages (English, Spanish and
French); thirteen national dialogues (Latin America, Africa and the Caribbean); and 3 virtual consultations
(English, Spanish and French).
Their participation in this global consultation demonstrated that entrepreneurs are drivers of
innovation, economic growth, and keen to make a positive change in their societies. By dismantling
monopolies, creating new demands, and tackling old problems with new technology, young entrepreneurs
prove to foster more competitive economies and are enablers of shared prosperity, while adapting more
rapidly to ever more globalized societies. They are also the source of innovative solutions that governments
and private sector need to address current and future development challenges, especially since the
international community is enforcing the new Sustainable Development Goals in January, 2016.
Regardless of their language, level of education or nationality, young people see entrepreneurship
as a means to achieve social and economic development. In order to succeed their start-ups, create jobs,
and have a significant impact in their home countries, the serious commitment from their governments,
and the private and financial sector in their home countries is a must. In the upcoming Annual Meetings
of the World Bank and the International Monetary Fund in Lima, Peru, a flagship event “Young
entrepreneurs as Drivers of Sustainable Growth” led by World Bank President Jim Jong King will address
these and other issues.
Entrepreneurship Skills:
Entrepreneurship skills involve recognizing economic opportunities and acting effectively on
them. McClelland (1986) acknowledged the following entrepreneurial skills to successfully start-up and
advance the business ventures.
ŠŠ Inner discipline

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The Role of Young Entrepreneurship in India 183

ŠŠ Ability to take risk


ŠŠ Innovative
ŠŠ Change oriented
ŠŠ Persistent
ŠŠ Proactiveness
ŠŠ Committed
Management Skills:
Management skills consist of those skills which are essential for day to day operation and
management skills. Even though the business venture differ in size, type and structure, generally business
venture usually has marketing, finance, general management, operation, administration and external
affairs functions within. An individual needs to have following management skills to be successful in
entrepreneurial career.
ŠŠ Planning
ŠŠ Decision making
ŠŠ Motivating
ŠŠ Marketing
ŠŠ Finance
ŠŠ Selling
Technical skills:
In setting up new business venture, entrepreneur should decide to divide major tasks into smaller
manageable projects, which require technical to plan and control entrepreneurial process. Entrepreneurs
should use project management techniques to plan and control the project. An individual needs to have
following technical and project management skills in order to be successfully run the business venture
ŠŠ Communication
ŠŠ Design
ŠŠ Research and development
ŠŠ Environmental observation
ŠŠ Critical path method
ŠŠ Work break down structure
ŠŠ Quality control plan
ŠŠ Organizational breakdown structure
ŠŠ Configuration management
ŠŠ Document control
The Role of The Entrepreneur
Entrepreneurs occupy a central position in a market economy. For it’s the entrepreneurs who
serve as the spark plug in the economy’s engine, activating and stimulating all economic activity. The
economic success of nations worldwide is the result of encouraging and rewarding the entrepreneurial
instinct. A society is prosperous only to the degree to which it rewards and encourages entrepreneurial

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184 The Role of Young Entrepreneurship in India

activity because it is the entrepreneurs and their activities that are the critical determinant of the level of
success, prosperity, growth and opportunity in any economy. The most dynamic societies in the world
are the ones that have the most entrepreneurs, plus the economic and legal structure to encourage and
motivate entrepreneurs to greater activities.
For years, economists viewed entrepreneurship as a small part of economic activity. But in the
1800s, the Austrian School of Economics was the first to recognize the entrepreneur as the person having
the central role in all economic activity. Why is that? Because it’s entrepreneurial energy, creativity and
motivation that trigger the production and sale of new products and services. It is the entrepreneur who
undertakes the risk of the enterprise in search of profit and who seeks opportunities to profit by satisfying
as yet unsatisfied needs.
Entrepreneurs seek disequilibrium--a gap between the wants and needs of customers and the
products and services that are currently available. The entrepreneur then brings together the factors of
production necessary to produce, offer and sell desired products and services. They invest and risk their
money--and other people’s money--to produce a product or service that can be sold at a profit. More
than any other member of our society, entrepreneurs are unique because they’re capable of bringing
together the money, raw materials, manufacturing facilities, skilled labor and land or buildings required
to produce a product or service. And they’re capable of arranging the marketing, sales and distribution of
that product or service.
Entrepreneurs are optimistic and future oriented; they believe that success is possible and are
willing to risk their resources in the pursuit of profit. They’re fast moving, willing to try many different
strategies to achieve their goals of profits. And they’re flexible, willing to change quickly when they get
new information. Entrepreneurs are skilled at selling against the competition by creating perceptions of
difference and uniqueness in their products and services. They continually seek out customer needs that
the competition is not satisfying and find ways to offer their products and services in such a way that what
they’re offering is more attractive than anything else available.
Entrepreneurs are a national treasure, and should be protected, nourished, encouraged and
rewarded as much as possible. They create all wealth, all jobs, all opportunities, and all prosperity in the
nation. They’re the most important people in a market economy--and there are never enough of them.
As an entrepreneur, you are extremely important to your world. Your success is vital to the success
of the nation. To help you develop a better business, one that contributes to the health of the economy,
I’m going to suggest that you take some time to sit down, answer the following questions, and implement
the following actions:
What opportunities exist today for you to create or bring new products or services to your market
that people want, need and are willing to pay for? What are your three best opportunities?
ŠŠ Identify the steps you could take immediately to operate your business more efficiently, especially
regarding internal operating systems.
ŠŠ Tell yourself continually “Failure is not an option.” Be willing to move out of your comfort zone,
to take risks if necessary to build your business.
ŠŠ Use your creativity rather than your money to find new, better, cheaper ways to sell your products
or reduce your costs of operation. What could you do immediately in one or both of these areas?
ŠŠ Imagine starting over. Is there anything you’re doing today that, knowing what you now know,
you wouldn’t get into or start up again?

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The Role of Young Entrepreneurship in India 185

ŠŠ Imagine reinventing your business. If your business burned to the ground today, and you had to
start over, what would you not get into again? What would you do differently?
Factors responsible for the emergence of entrepreneurship
There are number of factors that motivate a young person to pursue a career in entrepreneurship.
These factors can be outlined as follows:
Background factors
ŠŠ Education
ŠŠ Family role
ŠŠ Financial condition
Motivational Factors:
ŠŠ Need for achievement
ŠŠ Locus of control
ŠŠ Need for independence
Economic Factors:
ŠŠ Government policies
ŠŠ Business environment
ŠŠ Availability of financial assistance
Factors Affecting Entry to Entrepreneurship

There are number of factors that can drive an individual to become an entrepreneur (Nieman and
Nieuwenhuizen 2009). These authors categorize them as push (necessity) and pull (opportunity) factors.
The figure below presents the influence that result in entrepreneurship.

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186 The Role of Young Entrepreneurship in India

Youth Unemployment and Causes


Youth entrepreneurship has an impact on social as well as cultural and economic progress of the
society. Building an environment that promotes creatively and provides opportunities for entrepreneurship
calls for multi pronged strategies implementation and involvement at all levels including Government,
industry, political, social as well as educational sectors. Working towards Youth Entrepreneurship programs
can help solve as well as avoid a lot of problems that are currently staring at the countries and pave way
for a better future and progressive societies world over.
Youth unemployment is being recognised as one of the problems that could grow into global
proportions in the coming years causing social and economical problems for the societies. Youth
entrepreneurship is being look at as an alternative besides other methods of creating employment
opportunities. However, there is a need for global recognition and promotion of Youth entrepreneurship
on sustained long term basis for this field certainly holds a promising future.
Revolution in technology and the resultant growth in all fields and globalisation has impacted
the World. Developing countries like India and China are growing rapidly both in terms of economic
development as well as population. Growing economies provide ample opportunities for services and
provide opportunities for entrepreneurs to set up small enterprises in different fields. There are huge
opportunities for individual enterprise in IT Services, Financial services, Travel and Tourism, Food, Supply
chain, Health care services and many more fields. While some country’s economies are not growing and
the unemployment is growing, in the developing countries which are registering higher economic growth,
there is no impetus for growth of youth entrepreneurship.
Reasons and Causes:
1. Socio-Cultural Factors as Inhibitors to Entrepreneurship:
In some of the countries the social and cultural outlook of the societies may not encourage
initiatives and entrepreneurship. Many societies expect the youth to obtain education that enables them
to get a job and earn salary to support the family. Economic compulsions too can push the families to
encourage youth to look for jobs and not look at opportunities. In some cases certain caste or class of
people are habituated to practicing certain occupations and thus entrepreneurship becomes a prerogative
of certain sections of the society. Some other societies are risk averse and tend to play safe, while
many communities believe in their children pursuing defense services opportunities or social service
opportunities and so on. In societies where the incidence youth rebellion, revolt and violence is very high
due to economic situation as well as due to the cultural outlook, youth may be wasting their time neither
pursuing education that helps them gain employment nor trying their hands at hands at entrepreneurship
in the face of too many obstacles and hurdles in the society.
2. Economic & Political Factors:
Economies which are not growing are grappling with huge unemployment problems and this is
affecting the youth too. When the economy is down and the business is not doing well, there will be no
opportunities for small entrepreneurs to provide services to support the economy and business. Political
will and focus to focus on youth in the country and to create a positive environment that encourages
youth to dream and work towards realising their dream is very much necessary in any society. It is the
political will that can spearhead the Youth revolution. Absence of stability in the political situation of the
country and the political party’s outlook towards this area can make or break the youth entrepreneurship’s
growth.

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The Role of Young Entrepreneurship in India 187

3. Policy framework:
Government policy and framework in the country helps identify and build the base for youth
entrepreneurship. The policies need to encourage and provide opportunities as well as assistance and
environment to give impetus to youth entrepreneurship and have got to be implemented at national,
regional and local levels. Policy directives will need to engage the business, banking, educational and
other sectors to be able to deliver definitive steps to encouraging and aiding youth entrepreneurship. Lack
of such policy framework can hinder the growth and initiative in the youth.
4. Industry Support & Patronage;
In any industry, it is largely the business sector that provides opportunities for support services
and creating new networks of business enterprises. Similar to their role in social responsibility, Industry
can create a very strong platform to help develop the youth and give them the support and guidance as
well as opportunities to the youth. In society where the industry enterprise is not very significant or not
very active, there can be no encouragement for youth entrepreneurship.
5. Education System & Orientation;
In most of the countries today the education system is geared to enabling the youth to pass
out with their qualifications based on academic knowledge and prepare for seeking a job. There is little
or no focus on building and equipping the students with leadership, building awareness and giving
them training for entrepreneurship. Of late there is a trend to introduce specialised courses and training
modules on entrepreneurship in many of the universities. In most cases the students do not attempt to
think out of the box as they are not equipped with the necessary skills.
6. Finance & Business Support;
One other biggest hurdle faced by each and every entrepreneur is the lack of financial backup
and funding as well as guidance required to incubate new business. Most often those who attempt to
start any enterprise do so borrowing from family and friends and dipping into their saving. After a
while the business starts to suffer due to lack of funds and they end up in a debt trap. Banking and
financial assistance should be made available easily and this can happen only with the active support and
engagement by the Government. Nowadays venture capitalists are funding new enterprises. However this
is available to very few and not to the larger sections of the society.
Conclusion:
Most of the young entrepreneurs in Orissa suffer from the problem of deficiency of working
capital; tax regulations and lack of adequate encouragement by the society. These have been the bane
for poor performance in the state, contrary to the belief that Orissa does not have indigenous, dynamic
and committed entrepreneurs. Today, youth is more daring and hardworking and career oriented,
and can be easily transformed if proper training and knowledge in entrepreneurship can be provided..
Entrepreneurship can be more acclaimed if we can capitulate the transformation process of the youth
which had started in our nation and could live long and citizens of tomorrow. A few decades ago, people
were not very keen to leave a high-paying job to apply their skills and challenge their destiny in a startup.
Entrepreneurship was not so prevalent. If you were an entrepreneur or part of a startup, it was likely a
family endeavor or enterprise. However, the present scenario is entirely different. Today’s youth are keen
to experiment and take risks. At present, many young fearless entrepreneurs have set the path for a wave
of entrepreneurship in the country. This entrepreneurial spirit has resulted in not just innovation but also

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188 The Role of Young Entrepreneurship in India

in entrepreneurship being recognised as the driving force of the market. Also, with government actively
endorsing startups and small businesses, the wheel of entrepreneur-driven innovation has started rolling.
References
yy Agarwal, K.K “Attitude of Youth towards Entrepreneurship: A Case Study of Varanasi”, the ICFAI University Press.
yy Baker K (2008), “Fostering a Global Spirit of Youth Enterprise”, Preparatory Briefing of the Global
yy Forum on Youth Entrepreneurship.
yy Blanchflower, D.G. and Oswald, A. J. (2007), “What Makes a Young Entrepreneur?”, IZA Discussion
yy Goel A, Vohra N, Zhang L and Arora B (2007), “Attitudes of the Youth Towards Entrepreneurs
yy Entrepreneurship: A Cross-Cultural Comparison of India and China”, The Indian Institute of Management
yy Greene, F.J. (2005), “Evaluating Youth Entrepreneurship: The Case of the Prince’s Trust”,
yy htwww.youthbusiness.org/pdf/RecommendationsforAction.pdf
yy http://www.cacci.org.tw/Journal/2009Vol1/Youth2009Vol1.pdf

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


Education Reforms in India
K. Sivaiah, Ch. Yashoda Rao
Research scholars, A.N.U campus, Guntur

Abstract: India has emerged as a global leader and a strong nation. Education is the key to the task of nation building as
well as to provide requisite knowledge and skills required for sustained growth of the economy and to ensure overall progress.
According to the Census Data 2011, India is overpopulated with a population of 121,01,93,422 which means India today
is a powerhouse of talent of 121,01,93,422 plus. In order to convert the population from a challenge to an opportunity, the
area that requires immediate attention is education and training. 25% of Indian population is still illiterate and out of the
total population of 1.21 billion in India, 220 million children go to school. India’s GER (Gross Enrolment Ratio) is 12.4
percent. The GER in developed countries is between 50 percent to 70 percent. Our current education system selectively discards
talented students with inquisitiveness, ability to ask questions and dream to do something challenging, something better for
the society. This paper is an attempt to evaluate India’s efforts at reforming educational sector, analyses the growth of education
in India during last two decades and suggests ways to ensure that education remains both affordable and accessible to all.
Key words: Achievements, Education, Literacy, Training.

Introduction
Education starts with us when we start our life journey. From the very first moment, a baby
steps into this world, she/he starts to learn. She/he learns to cry, to show any sort of discomfort, smiles
to show his/her happiness and also learns to identify his/her mother’s touch. This process continues
throughout his/her life because she/he learns something new every moment of his/her life. John Dewey
said: “Education is not preparation for life, education is life itself.”
Demographic Dividend
India is a Nation of young people - out of a population of above 1.2 billion, 0.672 billion people
are in theage-group of 15-64 years, which is usually treated as the “working age population”. It is predicted
that India will see a sharp decline in the dependency ratio over the next 30 years, which will constitute
a major demographic dividend for India. This large population should be considered as an invaluable
human resource and should be provided the necessary skills so as to empower them to lead a purposeful
life and contribute to our national economy.
Indian Education System
Until the late 1970s, school education had been on the State List of the Indian Constitution,
which meant that States had the final say in the management of their respective education systems.
However, in 1976, education was transferred to the Concurrent list through a constitutional amendment,
the objective being to promote meaningful educational partnerships between the Central and State
Governments. Today, the Central Government makes the national policies and the States have to follow
it. The National Policy on Education (NPE) was formulated in 1968 and the National Policy Resolution
of 1986, which was later, updated in 1992, where specific responsibilities for organizing, implementing
and financing its proposals were assigned. About 80% of the funding for higher education is provided
by the states and 20% by the center through various bodies such as the University Grants Commission
(UGC).The Central Advisory Board of Education (CABE) maintains the coordination between the
central and state governments.
190 Education Reforms in India

Present Education in India


Education has been identified as a critical input for economic development and for human
resource development. India’s education system is divided into different levels such as pre-primary level,
primary level, elementary education, secondary education, undergraduate level and postgraduate level.
Achievements in Education Sector
By the end of the 10th Plan period, National Literacy Mission (NLM) which was launched in
1988, covering the age group 15-35 years), had made 127.45million persons literate, of which, 60%
were females, 23% belonged to Scheduled Castes (SCs) and 12% to Scheduled Tribes (STs). It led to an
increase of 12.63% in literacy - the highest increase in any decade. Female literacy increased by 14.38%,
SC literacy by 17.28% and ST literacy by 17.50%.In a special lecture organized by National Literacy
Mission Authority (NLMA), Nobel Laureate Prof. Amartya Sen, emphasized the importance of literacy
citing examples of developed countries. He said that the lack of proper education is the root cause of
many problems in India and hailed the Right to Education as a very important step.
Eradication of Illiteracy
Post-independence India inherited a system of education which was characterized by large scale
inter and intra-regional imbalances. The country’s literacy rate in 1947 was only 14 per cent and female
literacy was very badly low at 8 per cent. As per recently concluded census 2011, Literacy rate in India
has significantly increased from 18.33% in the year 1951 to 74.04% in the year 2011 (Table No.1). More
women literates added in the recent decade compared to men literates, so gap between men literates and
women literates also reduced from 24.82 in 1991 to 16.68 in the year 2011(Table No.1).
Table no.1: Literacy rate in india

Census Year Persons Male Female Gender Gap


1951 18.33 27.16 8.86 18.30
1961 28.30 40.40 15.35 25.05
1971 34.45 45.96 21.97 23.98
1981 43.57 56.38 29.76 26.62
1991 52.21 64.13 39.29 24.82
2001 64.83 75.26 53.67 21.59
2011 74.04 82.14 65.46 16.68
Source: Census of India - 1951 to 2011.

From the table No.2, it was evident that the number of literates increased by 117% , Male 94%
and Female 158% during the reforming period from 1991 to 2011. Effective Literacy rate has been
increased by 21.83 points, Male 18.01points and 26.17 points (Table No.3) in 2011 when compared to
1991. Eradication of illiteracy has been one of the major national concerns of the Government of India
since Independence. A number of significant programmes have been taken up since Independence to
eradicate illiteracy.

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Education Reforms in India 191

Table No.2: Literates In India (Reform Period)


1991 2001 2011 Difference % Growth
Population 84,63,02,688 1,02,87,37,436 1,21,01,93,422 36,38,90,734 43
Persons 35,84,02,626 56,07,53,179 77,84,54,120 42,00,51,494 117
Male 228,983,134 33,65,71,822 44,42,03,762 21,52,20,628 94
Female 129,419,492 22,41,81,357 33,42,50,358 20,48,30,866 158
Year 1991 is taken as base year for calculation of Difference and percentage of growth
Source: Census of India - 1991, 2001 and 2011.
Table No.3: Effective Literacy Rate (%)(Reform Period)
1991 2001 2011 Increase /Decrease
Persons 52.21 64.83 74.04 +21.83
Male 64.13 75.26 82.14 +18.01
+26.17
Female 39.29 53.67 65.46

Year 1991 is taken as base year for calculation of Points of Increase/Decrease.


Source: Census of India — 1991, 2001 and 2011.

From the Table No.4, it was evident that number of Literates has been increased from 358.40 Million
in 1991 to 778.45 (more than doubled) Million in 2011 and the number of illiterates reduced from 328.16
Million to 272.95 Million (nearly 17%) during the same period.
Table No.4: Number of Literates and Illiterates (Reform Period)

Year Population Illiterates Literates


(in Millions)

1991 846.30 328.16 358.40


2001 1028.73 304.14 560.75
2011 1210.19 272.95 778.45
Population is taken Aged 7 and above.
Source: Census of India — 1991, 2001 and 2011.
Universal Elementary (Primary) Education
India is committed to the goal of universal elementary education for all children. This goal is part
of the Education for All (EFA) goals adopted at the World Education Forum, Dakar in April 2000. The
EFA goals include, inter alia achieving universal elementary education by the year 2015, ensuring equitable
access to appropriate learning and life skill programmes for young people and adults, achieving 80%
improvement in adult literacy by 2015, achieving gender equality in education by 2015 and improving
all aspects of quality of education. The Indian government lays emphasis to primary education up to the
age of fourteen years (referred to as Elementary Education in India.) 80% of all recognized schools at the
Elementary Stage are government run or supported.

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192 Education Reforms in India

The Sarva Shiksha Abhiyan (SSA)


The SarvaShikshaAbhiyan (SSA) is intended for the enlargement and growth mainly in the
primary education. The aim of this flagship program was to attain universalization of primary schooling
at an acceptable level by 2010. SSA is being implemented in partnership with State Governments to cover
the entire country and address the needs of 192 million children in 1.2 million habitations. The present
rules of SSA have been modified recently by putting into practice the “Right of Children to free and
Compulsory Education” which has been enforced from April 1, 2010 onwards.
Table No.5 Progress Overview Under SSA
99% of the rural population has a primary school within 1 km. 366559 new
Access
schools opened till September, 2010.
GER increased in 6-14 age groups to 114.37 in 2008-09 from 96.3 in 2001-02
Gross Enrolment Ratio at the primary level and to 76.23 in 2008-09 from 60.2 in 2001-02 at the upper
primary level.
Improved from 0.83 in 2001-02 to 1.00 in 2008-09 at primary level &from 0.77
Gender Parity Index (GPI)
to 0.96 at upper primary level.
Dropout Rate at the Reduced by 14.10% to 24.93% in 2008-09 from 39.03% in 2001-02. Dropout
primary level rate for girls declined by 16.98% points during same period.
In 2008-09 the PTR at the national level was 44:1 for primary and 34:1 for
Pupil-Teacher Ratio
upper primary level. 11.13 lakh teachers recruited by December, 2010.
Source: Annual Report 2010-11, Department of School Education & Literacy and Department of Higher Education,
Ministry of Human Resource Development, Government of India.
As for the year 2011-2012, the Union budget ministry has put forward to apportion an amount
of Rs 21,000 crore, which is almost 40% higher than the last year for SSA.
Other Schemes for Primary Education
Scheme of Infrastructure Development in Minority Institutions (DMI) has been operationalized
to augment infrastructure in private aided/unaided minority schools/ institutions in order to enhance
quality of education to minority children. Programme for Nutritional Support to Primary Education
(NP-NSPE) commonly known as the Mid-Day Meal Scheme (MDMS) was launched as a Centrally
Sponsored Scheme on 15th August 1995 covering all children studying in Classes I-VHI. The District
Education Revitalization Programme (DERP) was launched in 1994 with an aim to universalize primary
education in India by reforming and vitalizing the existing primary education system. This primary
education scheme has also shown a high Gross Enrollment Ratio of 93-95% for the last three years in
some states. Significant improvement in staffing and enrollment of girls has also been made as a part of
this scheme.
Adult and Women Education
SAAKSHAR BHARAT was launched in 8th September, 2009 aiming to accelerate Adult
Education, especially for women in the age group of 15 years and above. It targets to raise literacy rate to
80% by 2012 and reduce gender gap to half by the same period. National Programme for Education of
Girls at Elementary Level (NPEGEL) is implemented in educationally backward blocks (EBB).Kasturba
Gandhi Balika Vidyalaya (KGBV) provides for setting up residential upper primary schools for girls
from SC, ST, OBC and Muslim communities. The Mahila Samakhya scheme was started in 1989 to
translate the goals enshrined in the NPE into a concrete programme for the education and empowerment
of women in rural areas particularly those from socially and economically marginalized groups. Scheme

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Education Reforms in India 193

for Providing Quality Education in Madras (SPQEM) seeks to bring about qualitative improvement
in Madaras as to enable Muslim children attains standards of the national education system in formal
education subjects. There has been a phenomenal growth in enrolment of women students in higher
education in the country. The share of girl’s enrolment which was less than 10% of the total enrolment
on the eve of independence has been increased to 41.60% in the beginning of the academic year 2010-11.
National Policy on Education, 1986 (as modified in 1992) lays special emphasis on education
of Persons with Disability. 29.72 lakh children with special needs have been identified by the household
surveys 90% of them have been covered through various strategies. The Persons with Disabilities Act
1995 indicates that differently-able persons should have access to education at all levels.
Secondary Education
Secondary education covers children with age of 14-18 years. One of the feature of India’s
secondary school system is its emphasis on profession based vocational training to help students attain
skills for finding a vocation of his/her choosing.
Rashtriya Madhyamik Shiksha Abhiyan (RMSA) launched in March, 2009 is the flagship
programme in secondary education for universalizing access to secondary education and improving
its quality, while ensuring equity. The Information and Communication Technology (ICT) in Schools
Scheme was launched in December, 2004 to provide opportunities to build their capacity on ICT skills.A
Centrally Sponsored Scheme called “Incentive to Girls for Secondary Education” was launched in 2008-09.
The Centrally Sponsored Scheme of Vocationalisation of Secondary Education provides for diversification
of educational opportunities so as to enhance individual employability, reduce the mismatch between
demand and supply of skilled manpower and provides an alternative for those pursuing higher education.
The scheme of Kendriya Vidyalaya Sangathan (KVS)was approved by Government of India in November
1962 to provide uninterrupted education to the wardsof the transferable Central Government employees.
Residential Navodayaschools were setup with an aim of providing excellence coupled with equity and
social justice. The Central Board of Secondary Education (CBSE) is an autonomous body working under
the aegis of the Ministry of 1-11RD. There are 11500 schools affiliated with CBSE as on 31.12.2010
which include KVs, Government, Independent and JNV schools located in India and 24 other countries
of the world.
National Institute of Open Schooling (NIOS) was initiated as a project in 1979 under the
Central Board of Secondary Education. It has approximately 1.6 million Learners on roll emerged as the
largest Open Schooling organization in the world. 14 lakh students are enrolled at the secondary and
higher secondary level through open and distance learning. At higher education level, Indira Gandhi
National Open University (IGNOU) co-ordinates distance learning. The Distance Education Council
(DEC), an authority of IGNOU is co-coordinating 13 State Open Universities and 119 institutions
of correspondence courses in conventional universities. The National Council of Educational Research
and Training (NCERT) is an apex resource organization to assist and advise the Central and the State
Governments on academic matters related to school education.
Higher Education
India’s higher education system is the third largest in the world, after China and the United States.
The main governing body at the tertiary level is the University Grants Commission (UGC), which enforces
its standards, advises the government, and helps coordinate between the center and the state. The other
important policy initiatives in higher education are programmes for general development of universities
and colleges; special grants for the construction of hostels for women; scholarships to students, scheme

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194 Education Reforms in India

to provide interest subsidy on educational loans for professional courses to ensure that nobody is denied
professional education because he or she is poor and making interventions to attract and retain talent in
the teaching profession in the higher and technical education.
Table No.6: List of University Level Educational Institutions (As On 31.12.2010)

Central Universities 42
Institutions Deemed to be Universities 130
State Universities 261
Private Universities 73
Institutions of National importance 33
Institutions Established under State Legislature Acts 5
Total Number of institutions 544
Number of Colleges 31,324
Women Colleges 3432
Faculty Strength in Universities (at the beginning of the
academic year 2010-11) (in Universities 1 Lakh (14%) 6.99 Lakhs
and in Colleges 5.99 Lakhs (86%)
Source: Annual Report 2010-11, Department of School Education & Literacy and Department of Higher
Education, Ministry of Human Resource Development, Government of India
As per Report of the Higher education in India, Issues related to Expansion, Inclusiveness, Quality
and Finance, the access to higher education measured in term of gross enrolment ratio increased from
0.7% in 1950/51 to 1.4% in 1960-61. By 2006-07 the GER increased to 12 percent. By 2012, (the end
of 11th plan objective) is to increase it to 15%.
Distance Education System
Realizing the important role of education in the overall development of individual as well as the
nation, the Ministry has taken several initiatives to promote distance education. As on date(2009-10)
there are more than 200 distance education institutions in the dual mode universities and institutions
which are either offering programmes through distance mode or are in the process of seeking approval of
Distance Education Council to start offering programmes through distance mode.
Technical Education
Technical Education plays a vital role in human resource development of the country by creating
skilled manpower, enhancing industrial productivity and improving the quality of life. All India Council
for Technical Education (AICTE) was set-up in November 1945 as a national level Apex Advisory Body
to conduct survey on the facilities on technical education. In 2010-11 there were 79 centrally funded
Institutions in the country which are as follows:
Table No. 7: List Of Institutes Of Technical& Science Education (As On 31.12.2010)

Indian Institute of Technology (IITs) 15


Indian Institute of Management (IIMs) 11

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Education Reforms in India 195

Indian Institute of Science (IISc.) 1


Indian Institutes of Science Education & Research (IISERs) 5
National Institutes of Technology (NITs) 30
Indian Institutes of Information Technology (IIITs) 4
National Institutes of Technical Teachers Training & Research (NITTTRs) 4
Others 9
Total 79
Source: Annual Report 2010-11, Department of School Education & Literacy and Department of Higher Education,
Ministry of Human Resource Development, Government of India
Several new measures have been taken to implement the Government vision of providing
increased access with equity and excellence. Eight (8) new IITs, five (5) new IlMs and ten (10) new NITs
have been set up and are functional. 20 new IIITs will be set up in Private Public Partnership (PPP)
mode. Technical Education Quality Improvement Programme envisages on focus in strengthening the
Institutions to produce high quality engineers for better employability, establish centres of excellence for
focused applicable research, Training of faculty for effective teaching, enhancing Institutional; and system
Management effectiveness.
Financial Assistance
To provide financial assistance to meritorious students from weaker section for pursuing higher
studies and professional courses, the Ministry has started Central Sector Scholarship Scheme for College
and University Students. The Ministry has also launched a new Central Scheme to provide full interest
subsidy during the period of moratorium on educational loans for students belonging to economically
weaker section. Central Government has also approved an outlay of Rs.2,31,233 crore for implementation
of the combined RTE-SSA programme for the five year period of 2010-11 to 2014-15. The outlay for
XI Plan for education is more than 9 times higher than X Plan which shows the commitment of the
Government to provide education to all.
The Unfinished Tasks
Literacy Level
According to the Census Data 2011, India is heavily overpopulated with a population of
121,01,93,422 which means India today is a powerhouse of talent of 121,01,93,422 plus. But this
tremendous powerhouse can be compared to rocks, which need to be polished to be transformed
into diamonds. At the time of Independence, India’s literacy rate stood at 14% and in 1991 it was
52.21%According to Census 2001, it was 64.8% and presently (2011) it is 74.04% (Table No.1). So,
apparently we have come a long way. But when we compare this to China’s literacy rate of 94%, we surely
have a long road ahead. If we see the current scenario there is a rampant corruption, crime, unlawful
activities, and exploitation taking a toll on India.
Elementary / Primary Education
Every year the Union Budget makes an attempt as to broaden the education standards in the (1
country. As per the current Union Budget (2010-11) allocation, an amount of Rs.52,057 Crores is set
aside for the education. This is a huge amount, even though a disappointment struck when the increment
hike is significantly less than anticipated for the execution of acts like Right to Education. Due to shortage
of resources and lack of political will, this system suffers from massive gaps including high pupil to teacher

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196 Education Reforms in India

ratios, shortage of infrastructure and poor levels of teacher training. Enrollment has been enhanced, but
the levels of quality remain low.
In spite of the claims of fair work done by the states with regard to improving access and enrolment
in elementary education, any progress made has been overshadowed by high dropout and wastage rates
which, in turn, were the result of shortfalls in other related elements of elementary education. Unless
something is done to drastically reduce drop-out rates, by the year 2016, there would be approximately
500 million people in the country with less than five years of schooling, and another 300 million that
will not have completed high school. In other words, about two-thirds of the population will lack the
minimum level of education needed to keep pace with and take advantage of the social changes occurring
within the country and worldwide. The target before India at this stage is not only to eradicate illiteracy
and bring every child within the fold of school education but also to ensure good quality in school
education.
To improve the quality of education by reducing the class size would require a further 20 per
cent increase in the number of classrooms. Together, this will necessitate increasing the total number of
classrooms by 65 per cent within 20 years. An enormous increase in the number of teachers will also be
required to achieve the alternative scenario, i.e., eliminating primary school drop outs and reducing the
teacher-pupil ratio from the present high level of 1:42 down to around 1:20, which is the UMI reference
level. Together, this will require an additional three million primary school teachers, more than twice the
number currently employed. Similar increases will be required at middle and secondary school levels
Education in Private Sector
According to current estimates, 80% of all schools are government schools making the government
the major provider of education. However, because of poor quality of public education, 27% of Indian
children are privately educated. The pupil teacher ratios are much better in private schools (1:31 to 1:37
for government schools) and more teachers in private schools are female.
Secondary Education
We will need to expand the supply of secondary school teachers very significantly, invest large
resources in school buildings and in the preparation and distribution of education materials. Great
innovation is needed in thinking about how all this is to be done, and how the large resources needed will
be generated and invested efficiently and responsibly.
Higher Education
The opportunities for higher education, in terms of the number of places in universities, are
simply not adequate, in relation to our needs. The objectives of reform and change, in our higher
education system, must be expansion, excellence and inclusion. The higher education system needs a
massive expansion of opportunities, to around 1500 universities (currently only about 350) nationwide,
which would enable India to attain a gross enrolment ratio (GER) of at least 15 per cent, by 2015.
To generate quality, there is a need for reform of existing universities, to ensure frequent
curriculum revisions, introduction of the course credit system, enhancing reliance on internal assessment,
encouraging research and reforming the governance of institutions. Presently, accreditation is voluntary as
a result of which less than one-fifth of the colleges and less than one-third of all universities have obtained
accreditation. Mandatory accreditation in the higher education would enable the higher education system
in the country to become a part of the global quality assurance system. Legislation has been introduced

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Education Reforms in India 197

in Parliament (3rd May, 2010) to provide for mandatory accreditation and creation of an institutional
structure for the purpose.
Technical & Professional Education
The major challenges before the technical education system are one of access, equity and inclusion.
Another area of concern is the inadequate availability of faculty both in terms of quality and in numbers.
Promotion of R&D efforts, improvement in employability of trained graduates and postgraduates coming
out of the technical institutes, are some of the areas where efforts are required.
The professional education streams are plagued by problems similar to the higher education
system. Rapid reforms are still required in professional streams like the Legal, Management, Medical and
Engineering streams, etc.
Vocational Education And Training
In India, only 7% of the country’s labour force works in the organized sector and hence Vocational
Education and Training (VET) is an important element of the nation’s education initiative. There is an
urgent need to redefine the critical elements of imparting vocational education to make them flexible,
contemporary, relevant, inclusive and creative. Also the existing Industrial Training Institutes (ITIs) and
Industrial Training Centres (ITCs) are widely seen facing problems, such as poor quality trainers, lack
of flexibility and outdated infrastructure. The Government needs to take rapid steps, to strengthen the
structure of these institutes.
Women’s Education
Women have a much lower literacy rate than men. Far fewer girls are enrolled in the schools,
and many of them drop out. According to a 1998 report by U.S. Department of Commerce, the chief
barrier to female education in India are inadequate school facilities (such as sanitary facilities), shortage of
female teachers and gender bias in curriculum (majority of the female characters being depicted as weak
and helpless). A survey that was conducted in India showed results which support the fact that infant
mortality rate was inversely related to female literacy rate and educational level. The survey also suggests
a correlation between education and economic growth.
Rural Education
The government continued to view rural education as an agenda that could be relatively free from
bureaucratic backlog and general stagnation. However, in some cases lack of financing balanced the gains
made by rural education institutes of India.
Public Expenditure On Education In India
As a part of the tenth Five year Plan (2002-2007), the central government of India outlined
an expenditure of 65.6% of its total education budget of 438.25 billion (US$8.33 billion). According
to UNESCO, India has the lowest public expenditure on higher education per student in the world.
Although the country targeted towards devoting 6% share of the GDP towards the educational sector,
the performance has definitely fallen short of expectations.
Other Issues
One study found out that 25% of public sector teachers and 40% of public sector medical
workers were absent during the survey. Among teachers who were paid to teach, absence rates ranged
from 15% in Maharashtra to 30% in Bihar. Only 1 in nearly 3000 public school head teachers had ever
dismissed a teacher for repeated absence. A study on teachers by Kremer etc. found that ‘only about half

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198 Education Reforms in India

were teaching, during unannounced visits to a nationally representative sample of government primary
schools in India.’ A study of 188 government-run primary schools found that 59% of the schools had no
drinking water and 89% had no toilets. Modern education in India is often criticized for being based on
rote learning rather than problem solving.
Conclusion
All the positive steps taken till now are welcome. However, implementation of the initiatives is
a key to success. These are some points that the nation will have to consider upon. And the path ahead
isn’t that easy. Walls, windows, doors and teachers will not make a school, till we have hungry children
wanting to be in the fields and factories, to earn their meals. The Vision and Mission of Education for
all will have to inculcate and imbibe in one and all, leaders and followers that for every child born poor
and needy, there will have to be a well-drawn plan, to ensure that s/he doesn’t remain so — for if we
fail in providing the basic needs of food and shelter to a child, she/he will never see the light of the day,
through education — at least. A healthy mind comes in a healthy body. The nation should strive towards
total health of children, education will follow. Education for the masses is a massive task. It would need a
single minded focus of the State, to implement this programme in a country, which is the 7th largest in
the world in terms of size and the 2nd most populated of all. Reform in education is a cultural, political,
financial and administrative challenge. The children of today are to be the citizens of tomorrow. We as a
citizen of today will able to provide a slate to every child and a pen to write his/her own future. And we
will achieve this at least in the coming decade.
Reference
yy 50 Years of Education, (1997), viewed on 16th January 2012, http://www.education.nic.in/cd5Oyears/y/3T/9U/3T9U0101.
htm
yy Adult and Youth Literacy, (2011), viewed on 17th January 2012, http://www.uis.unesco.org/FactSheets/Pages/default.aspx
yy Annual Reports, 2008-09, (2009) National Council of Educational Research and Training, Government of India.
yy Annual Reports, 2010-11, (2011) Department of School Education & Literacy and Department of Higher
yy Barro, Robert and Jong-Wha Lee, (2010), “A New Data Set of Educational Attainment in the World, 1950-2010.” NBER Working
Paper No. 15902.
yy Census of India (2011), viewed on 15th January 2012, http://wwvv.censusindia.gov.in/2011-prov results/prov_results_paperl
yy Dept. of Higher Education, (2011), viewed on 16th January 2012, http://education.nic.in/secondary.htm
yy Dept. of School Education and Literacy, (2011), viewed on 14th January 2012, http://education.nic.in/Elementary/elementary
yy Education Expenditure (2010), viewed on 15th January 2012, http://www.indexmundi.com/world/education_expenditures
yy Education in India, (2012), viewed on 12th January 2012, www.en.wikipedia.org/wiki/Education_in_India.
yy Economic Survey, 2010-11 (2011), Ministry of Finance, Government of India, New Delhi.
yy National Knowledge Commission Report 2006-10, (2010), Government of India, New Delhi.
yy Higher Education in India, (2003), viewed on 12th January 2012, www.ugc.ac.in/pub/heindia.pd
yy Kothari, V.N. (1992), Issues in Human Capital Theory and Human Resource Development, Himalaya Publication, Mumbai
yy Outcome Budget, (2011), Dept. of Higher Education, viewed on 15th January 2012, http://education.nic.in/planbudget/
OutcomeBgt-2011-12-HE-E.pdf
yy UNDP, (2007), Human Development Report 2007-2008, New York.

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


Role of Young Entrepreneurship in Economic Development Introduction
B. Ravi Kumar
Research Scholar, Acharya Nagarjuna University
Entrepreneurship is the process of starting a business, a startup company or other organization.
The entrepreneur develops a business plan, acquires the human and other required resources, and is fully
responsible for its success or failure. Entrepreneurship operates within an ecosystem as per the domain
of his business. Entrepreneurs are leaders willing to take risk and exercise initiative, taking advantage
of market opportunities by planning, organizing, and employing resources, often by innovating new
or improving existing products. Entrepreneurial activities differ substantially depending on the type of
organization and creativity involved. Entrepreneurship ranges in scale from solo, part-time projects to
large-scale undertakings that create many jobs.
While Competition brings with it challenges, risks and failures, the young entrepreneurs are
not deterred by failures. In fact it is very important to experience some failure, as it broadens your
comfort zone and you realize that failure is not all that bad. You become a lot bolder in terms of taking
risks. An young entrepreneur will continuously enhance his skills in all areas, will keep looking for new
opportunities to provide better value to his customers and will do more than what is expected, providing
help out of the way. He will continuously expand his network by providing additional help, not only
through himself, but through his network as well. His relationships with the manufacturers, suppliers
and customers will be flexible with a view to provide convenience, and a higher value for their money
to them. As against a normal businessman who uses opportunities, entrepreneurs not only use existing
opportunities but create opportunities, through expanding in value chain, and/or generating new ideas,
to get better value.
Here are important roles an entrepreneur plays in the economic development of a country
1. Wealth Creation and Sharing: By establishing the business entity, entrepreneurs invest their own
resources and attract capital (in the form of debt, equity, etc.) from investors, lenders and the public.
This mobilizes public wealth and allows people to benefit from the success of entrepreneurs and growing
businesses. This kind of pooled capital that results in wealth creation and distribution is one of the basic
imperatives and goals of economic development.
2. Create Jobs: Entrepreneurs are by nature and definition job creators, as opposed to job seekers. The
simple translation is that when you become an entrepreneur, there is one less job seeker in the economy,
and then you provide employment for multiple other job seekers. This kind of job creation by new and
existing businesses is again is one of the basic goals of economic development. This is why the Govt. of
India has launched initiatives such as Startup India to promote and support new startups, and also others
like the Make in India initiative to attract foreign companies and their FDI into the Indian economy. All
this in turn creates a lot of job opportunities, and is helping in augmenting our standards to a global level.
3. Balanced Regional Development: Entrepreneurs setting up new businesses and industrial units help
with regional development by locating in less developed and backward areas. The growth of industries
and business in these areas leads to infrastructure improvements like better roads and rail links, airports,
stable electricity and water supply, schools, hospitals, shopping malls and other public and private services
that would not otherwise be available.
Every new business that locates in a less developed area will create both direct and indirect jobs,
helping lift regional economies in many different ways. The combined spending by all the new employees
200 Role of Young Entrepreneurship in Economic Development Introduction

of the new businesses and the supporting jobs in other businesses adds to the local and regional economic
output. Both central and state governments promote this kind of regional development by providing
registered MSME businesses various benefits and concessions.
4. GDP and Per Capita Income: India’s MSME sector, comprised of 36 million units that provide
employment for more than 80 million people, now accounts for over 37% of the country’s GDP. Each
new addition to these 36 million units makes use of even more resources like land, labor and capital to
develop products and services that add to the national income, national product and per capita income
of the country. This growth in GDP and per capita income is again one of the essential goals of economic
development.
5. Standard of Living: Increase in the standard of living of people in a community is yet another key goal
of economic development. Entrepreneurs again play a key role in increasing the standard of living in a
community. They do this not just by creating jobs, but also by developing and adopting innovations that
lead to improvements in the quality of life of their employees, customers, and other stakeholders in the
community. For example, automation that reduces production costs and enables faster production will
make a business unit more productive, while also providing its customers with the same goods at lower
prices.
6. Exports: Any growing business will eventually want to get started with exports to expand their business
to foreign markets. This is an important ingredient of economic development since it provides access
to bigger markets, and leads to currency inflows and access to the latest cutting-edge technologies and
processes being used in more developed foreign markets. Another key benefit is that this expansion that
leads to more stable business revenue during economic downturns in the local economy.
7. Community Development: Economic development doesn’t always translate into community
development. Community development requires infrastructure for education and training, healthcare,
and other public services. For example, you need highly educated and skilled workers in a community
to attract new businesses. If there are educational institutions, technical training schools and internship
opportunities, that will help build the pool of educated and skilled workers.
A good example of how this kind of community development can be promoted is Azim Hashim
Premji, Chairman of Wipro Limited, who donated Rs. 27,514 crores for promoting education through
the Azim Premji Foundation. This foundation works with more than 350,000 schools in eight states
across India.
So, there is a very important role for entrepreneurs to spark economic development by starting
new business, creating jobs, and contributing to improvement in various key goals such as GDP, exports,
standard of living, skills development and community development.
The Difference between Start Up and SME
The legal definition of a startup in India means an entity registered in India that has been in
existence for not more than seven years, and has an annual turnover not exceeding Rs. 25 crore in any
preceding financial year. The startup must also have been working towards innovation, development or
improvement of products or processes or services, or it is a scalable business model with a high potential
of employment generation or wealth creation.
Small and medium-sized enterprises (SMEs) are defined as small-scale units with an investment
up to Rs 1 crore in plant and machinery, provided it is not owned by or controlled by a subsidiary of any

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Role of Young Entrepreneurship in Economic Development Introduction 201

other industrial undertaking. This latter condition ensures that larger corporate entities do not set up
subsidiaries to get the same benefits afforded to SMEs.
Ever since the onset of the financial crisis, the global economy has been struggling to revive itself
and achieve a healthy growth rate. The global growth rate for last year and this year are projected at 3.40%
and 3.80%.
But compared to this, India’s GDP continues to grow at a fast pace, outstripping major world
economies. According to IMF, India is projected to grow at 7.80% for this fiscal year. Source: Department
of Commerce, Govt. of India.
Without any dispute, SMEs are one of the key drivers behind this growth story. This sector,
comprising of manufacturing, infrastructure, service industry, food processing, packaging, chemicals, and
IT, has emerged as the most vibrant and dynamic engine of growth of Indian economy over the past few
decades.
These self-funded proprietary firms, private co-operatives, private self-help groups, Khadi, and
Village and Coir industries, not only provide huge employment opportunities but also ensure regional
balance by taking industrialization to rural and backward areas (about 20% of MSMEs operate out of
rural & backward areas – CII
To communicate the importance of the SME sector, I’m going to share with you some key SME
statistics, trends and reports. See for yourself what the numbers convey:
ŠŠ Number of SMEs in India: The number is estimated to be at 42.50 million, registered &
unregistered together. A staggering 95% of the total industrial units in the country.
ŠŠ SME & Employment opportunity: Employs about 106 million, 40% of India’s workforce. Next
only to the agricultural sector.
ŠŠ Products: produces more than 6000 products.
ŠŠ GDP Contribution: Currently around 6.11% of the manufacturing GDP and 24.63% of Service
sector GDP.
ŠŠ SME Output: 45% of the total Indian manufacturing output.
ŠŠ SME Exports: 40% of the total exports.
ŠŠ Bank Lending: Accounts for 16% of bank lending.
ŠŠ Fixed Assets: Current fixed assets at INR 1,471,912.94 crore.
ŠŠ SME Growth Rate: Has maintained an average growth rate of over 10%.
Factors that may predict entrepreneurial success include the following
Market
ŠŠ Business-to-business (B2B) model, not business-to-consumer (B2C)
ŠŠ High growth market
ŠŠ Target customer’s missed by others
Industry
ŠŠ Growing industry
ŠŠ High technology impact on the industry
ŠŠ Low capital intensity

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202 Role of Young Entrepreneurship in Economic Development Introduction

Team
ŠŠ Large, diverse venture team, not individual entrepreneurs
ŠŠ Employed full-time prior to new venture, as opposed to unemployed
ŠŠ Prior successful entrepreneurial experience
ŠŠ Full-time involvement in the new venture
ŠŠ Motivated by high profits, not independence
ŠŠ Number and diversity of individual’s social ties
Company
ŠŠ Written business plan
ŠŠ Activity focused on a single product or service
ŠŠ Competition based on a dimension other than price
ŠŠ Early, frequent and intense marketing
ŠŠ Tight financial controls
ŠŠ Start-up capital
Some of the Start Ups of A Young Entrepreneurs
Taxi for Sure
Started: 2011 Business: Aggregates car rentals and taxis Radhakrishna and Raghunandan
G, both IIM-Ahmedabad graduates, launched Taxiforsure in 2011 as an online platform through
which consumers can rent taxis. The company has partnered with around 25 cab operators
in Bangalore and around 15 in Delhi, including branded operators like Mega Cabs and Cell
Cabs. The company, which claims to have reached operational profitability in Bangalore, has
also done its own branding on about 550 cabs that are operated by small local operators. The past
couple of years has seen the launch of a number of online and mobile based taxi booking services.
The two cofounders expect their company to earn revenue of Rs 100 crore by fiscal 2015.
Red Bus
Phanindra Sama was 25 when he founded the pioneering venture together with his BITS Pilani
batchmates Charan Padmaraju and Sudhakar Pasupunuri. In June 2013, they sold red Bus to the Ibibo
Group for an estimated Rs 600-700 crore, the biggest overseas strategic acquisition of an Indian internet
asset. RedBus now sells over a million tickets a month, and the gross value of transactions on the site
last year was about Rs 600 crore, up from Rs 350 crore the year before. Given the operators’ wariness to
computerize, red Bus initially worked on the basis of seat quotas from operators, and returning unsold
seats within a defined time before the departure of the bus. Three and a half years later, they introduced
a bus ticketing software for the operators that could link to the redBus portal. To their utter surprise, it
was a phenomenal success!
Travel Triangle
It is a classic start-up story- two childhood buddies who graduate from the Indian Institute of
Technology and turn their backs on corporate careers to launch a venture of their own. TravelTriangle,
an online travel services company launched by Sankalp Agrawal and Sanchit Garg is clocking revenues
in crores.

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Role of Young Entrepreneurship in Economic Development Introduction 203

Both first generation entrepreneurs who quit plush postings at Adobe and Yahoo in the middle
of 2010, Agrawal and Garg took nearly a year to fine-tune their concept before launching their venture.
They started out in a garage in Noida with a business model that links customers with travel agents who
offer the best deals. These are value-added deals customized to specific needs of traveler. Each request by a
customer goes to at least three travel agents with operations in the area that is the client’s destination. The
agents compete among themselves to provide the best experience and price to the vacationer. Soon, they
roped in a third friend from school, Prabhat Gupta, who graduated from IIT Guwahati the same year, as
a core development member.
Snap deal
At 25, Wharton graduate Kunal Bahl quit his cushy Microsoft job based in Seattle and even
convinced his IIT Delhi alumni Rohit Bansal to take a leap of faith in 2007. Bahl originally launched
Snapdeal.com as a daily online deals site and was often touted as India’s answer to Groupon. The model
has, however, changed and is today one of India’s largest online marketplace.
The company boasts of 20 million members, 500+ product categories and 20000+ sellers. It is
backed by leading global investors such as eBay Inc, Intel Capital, Bessemer Venture Partners, Nexus
Venture Partners and IndoUS Venture Partners.
Knowlarity
Knowlarity, a cloud telephony company, was founded in 2009 by Ambarish Gupta and Pallav
Pandey. The two IIT-ians pooled in their experiences of working at global consulting firm McKinsey to
launch the new venture.They decided to address the need for technology for India’s small and medium
enterprises, creating a platform for voice application services hosted on the cloud or common servers.
Knowlarity hosts a number of telephony products that are sold through a common direct and channels
sales network. The company also plans to expand its sales force to reach a wider set of enterprise businesses
across India. As the start-up has grown, it has received multiple rounds of investment.
Bluegape
Till 2011, Ayush Varshney and co-founder Sahil Baghla, 23, were usual students at IIT Kanpur,
but then a thwarted wish to print a poster got them thinking about a potential business idea. So in August
the same year, they invested Rs 2 lakh to start Bluegape from their hostel rooms.Their venture began life
as a personalised poster company with a clientele limited to their campus. In the process, they pocketed
20% of the sale price as their profit. Convinced by their initial success, the duo decided to expand the
website to a national level in December 2011 by taking orders online. The business model was simple.
Anyone with a picture they had copyright to could send it across to Bluegape, mentioning the size of
the poster that they wanted. The portal would print and deliver it within 4-10 days. The company soon
started making coffee mugs, cushion covers, laptop skins and Tshirts. They also supplied merchandise to
various retailers across the country.
Flip kart
It has taken Sachin Bansal, 32, a mere six years to build Flipkart, the country’s best-known
online retail brand. The IIT-Delhi alumnus started off with college friend Binny Bansal in a small flat in
southeast Bangalore in 2007 with Rs 4 lakh. The two, who are not related to each other, had worked in
Amazon India for a few months before they launched Flipkart. Sachin, who leads the Bangalore-based
ecommerce venture as its CEO, has battled scepticism and regulatory constraints to build a company that
expects to post sales of $1 billion, or over Rs 6,200 crore, by 2015. Flipkart’s cash-on-delivery model has

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204 Role of Young Entrepreneurship in Economic Development Introduction

been copied by almost every other ecommerce company in the country and now accounts for a majority
of transactions across all online retail sites. Flipkart’s success has come not just from online retail, but
also from its focus on building technology services at the back end. It has set up a logistics arm that has
ensured quick deliveries to customers.
Report bee
Founders: Anantharaman Mani, Anjan T, Balaganesh S & Vinod Kumar (Alumni IIM-B) What
it does: It has revamped the report card into an interactive digital application. Teachers can track the
progress of a single student, see a class’ overall performance and compare classes on a single sheet.
Work with state: Report Bee is piloting in 64 government schools in Tamil Nadu. It is also
piloting in five Chennai Corporation schools. The startup has undertaken three data analysis projects for
Tamil Nadu Government Education Department.
Grey Orange Robotics
Tooling around with technology is a common pastime on campus but to turn a classroom project
into serious business is uncommon. That is exactly what Samay Kohli, 26, and Akash Gupta, 23, have
done. While still at the Birla Institute of Technology in Pilani, the two designed and built a robot that
waited at tables in the college cafeteria. Pushing the sci-fi button further, they programmed it to act as a
tour guide to guests during seminars and conferences in the college. Drawing on the learning from those
halcyon days, Kohli and Gupta have started a robot making company that is helping some of India’s
largest online retailers automate their warehouses. Grey Orange Robotics, set up in 2009, is a first -of-its-
kind venture for the Indian logistics industry. It builds robots that can move shelves stacked with various
products to a floor assistant who then scans a bar code to confirm the right items. The robot in turn moves
the chosen products to the shipping bay where workers seal the packages for final transport.
Exotel
Shivakumar Ganesan of BITS Pilani created a cloud-based mobile solution when call volume went
through the roof at his first venture, a consumer-to-consumer marketplace, Roopit. He soon realised that
other entrepreneurs needed a solution like this and so founded Exotel with Ishwar Sridharan, Siddharth
Ramesh and Vijay Sharma in February 2010 and launched the solution in June 2011. Exotel provides a
single mobile number that can be linked to a number of mobile phones. A company’s employees can log
into the system and calls get routed to those who are logged in. The system includes features for sales,
marketing and customer support teams making it an integrated solution, especially for small and medium
enterprises (SMEs). The product is aimed at SMEs that do not want to invest in servers and call centers
to handle calls.
Financial Institutions Who Support Young Entrepreneurs
ŠŠ IFCI
ŠŠ ICICI
ŠŠ IDBI
ŠŠ LIC
ŠŠ UTI
ŠŠ SIDBI
ŠŠ NSIC

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Role of Young Entrepreneurship in Economic Development Introduction 205

Comprehending the sector’s contribution towards employment numbers, towards GDP,


innovation and entrepreneurship, the Government of India has launched numerous initiatives to further
the cause of SMEs. Mentioned below, in a table form, are the performances of some of the key schemes:
Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE).
ŠŠ Objective: To make available collateral free credit facility to new and existing Micro & small
businesses subject to a limit of Rs.100 lakh per unit.
ŠŠ Performance during 2015-16 (up to 31/12/2015): 350056 Application approved with guarantee
coverage of Rs.14, 673 crore.
ŠŠ Performance since inception: 2160975 Application approved with coverage of Rs.103, 864 crore.
Export Promotion of Capital Goods (EPCG).
Objective: To allow import of capital goods on zero duty subject to meeting export obligations.
Performance during 2015-16: Number of authorization 22544 with FOB value of Rs.78,860
crore and duty savings of Rs.12619 crore.
ŠŠ Performance during 2016-17 (up to October 2016): Number of authorization 13,585 with FOB
value of Rs.50,359 crore and duty savings of Rs.8,668 crore.
Credit Linked Capital Subsidy Scheme (CLCSS).
ŠŠ Objective: To facilitate technology up-gradation. To enable beneficiary enterprises to avail
institutional credit towards the purchase of machinery and technologies.
ŠŠ Performance during 2015-16 (up to 31/12/2015): 3,142 benefited units with an expenditure of
Rs.203.76 crore.
ŠŠ Performance since inception: 22,380 benefited units with an expenditure of Rs. 1349.63 crore.
Lean Manufacturing (National Manufacturing Competitiveness Programme).
ŠŠ Objective: To make accessible the use of various Lean Manufacturing techniques to SMEs and
thus improve their manufacturing competitiveness.
ŠŠ Performance during 2015-16 (up to 31/12/2015): Benefits to 670 units with an expenditure of
Rs.11.26 crore.
ŠŠ Performance since inception: Benefits to 3041 units with an expenditure of Rs.45.26 crore.
Intellectual Property Rights.
ŠŠ Objective: To enhance competitiveness through increased awareness of IPR.
ŠŠ Performance during 2015-16 (up to 31/12/2015): Awareness programs held-26, Workshops-05,
and IPR Facilitation Centre-03. Expenditure Rs.1.73 crore.
ŠŠ Performance since inception: Awareness programs held-308, Workshops-95, and IPR Facilitation
Centre-31. Expenditure Rs.13.69 crore.
Marketing Development Assistance (MDA) Scheme.
ŠŠ Objective: To help & encourage SMEs to tap & develop overseas market.
ŠŠ Performance during 2015-16 (up to 31/12/2015): Units participated 233. Expenditure
Rs.4.77crore.
ŠŠ Performance since inception: Units participated 1476. Expenditure Rs.28.76 crore.
Source: MSME at a glance.

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206 Role of Young Entrepreneurship in Economic Development Introduction

Future Trends:
The future outlook looks very bullish for Indian SMEs, which are far more optimistic than their
Asian counterparts in China, Japan and other dynamic and large economies. Consider what this survey
result from American Express Global SME Pulse 2017 has to convey:
71% of the SME respondents hold an optimistic view about their domestic economy, followed
by Japan with 62% and Japan with 54%. IBEF.
The year 2017 has all the makings of an interesting year with GST following close on the heels
of demonetisation. Those who have survived the effects of demonetisation are more likely to see sunnier
days ahead.
The implementation of GST is generally expected to bring good tidings to this sector. Some key
points in favour of SMEs are:
ŠŠ Market Base: Set to grow as interstate sales complexities are a thing of the past. Since there is no
longer any tax burden on interstate sales, big corporate and manufacturers can procure materials
& components from small players from across any state borders.
ŠŠ Increased Competitiveness: Low-cost imports are no longer a cause for worry since tax levied on
imports goods and local manufacturers will be the same.
ŠŠ Freight Cost: Expected to come down by 1 to 2%, thus bringing down the cost of raw material
and finished products.
ŠŠ Cost of Raw Materials: Expected to come down with the disappearance of 2% CST on interstate
sales.
ŠŠ Sales & Service: Treatment of sales & services will be the same under GST means no additional
tax burden on SMEs with a business model of sales and service.
ŠŠ Transparency and Ease of Doing Business: The new indirect tax regime replaces multiple tax
rules. Physical interface of bureaucracy expected to be nonexistent or minimal since registration,
tax payment, input tax credit & tax liability adjustment, tax returns, and refunds will all happen
online electronically.
The same American Express Global SME Pulse 2017 was found stating that 37% of Indian SMEs
considered flexible lending and repayment and 49% high-interest rates as important factors affecting
business. Addressing these pain points will definitely make the road ahead much smoother.
With the Indian economy expected to touch $5 trillion by 2025, and with ground breaking
economic reforms kicking in, SMEs are expected and bound to play a much more important role. B2B
e-commerce, food processing, pharma, and homeland security and defense are the areas to watch out for.
Conclusion
The economic development is proven to be attained by the efforts of the young entrepreneurs in
Indian, the only thing to obtain from the Government and other financial institutions is support in the
terms of monetary as well as morally, the numbers and statistics are encouraging the young entrepreneurs
in contribution in economic development, by using all the available resources in terms of external and
internal factors any young entrepreneurs can reach his goal.

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


“The Role of young Entrepreneurs in Indian Economy Development”
Md Sohil Baba,
Assistant Professor in Malla Reddy Engineering College and Management Sciences , Hyderabad
Abstract: Entrepreneurship is an important engine of growth in the economy. Young entrepreneurship has an important
role to play in the development of Indian economy. Young entrepreneurship is now a days a major opportunity for the young
and dynamic people. Entrepreneurship is one of the key focus areas for the present generation to create a well balance eco-
system by bringing entrepreneurship at the center stage of both business and social growth, and to support the Entrepreneurship
promotion by identifying, discussing and evangelizing in this key focus area of education, healthcare, environment and the
likes.

Introduction:
Entrepreneurship gives young people an opportunity to work on their own skills and interests
and in the process, creating their own employment. Encouraging entrepreneurship in young people
is an important way of harnessing their enthusiasm, energy and ambition to contribute to economic
development. It is generally accepted that entrepreneurs “create jobs, increase innovation, raise competition
and are responsive to changing economic opportunities and trends. Young entrepreneurs can also act as
role models for their peers and, encourage others to follow their example.
According to the World Bank’s World Development Report 2013, around 600 million new jobs
will be required in the next 15 years to support a growing workforce. It is important to note that in
most emerging economies, 9 out of 10 jobs are created by the private sector, which is the foundation
of any thriving economy. In the coming years, developing countries must rebalance their economies
towards greater domestic consumption, import demand and higher value business activity and hence,
entrepreneurship is vital to the future of developing countries. As per reports shared by Accenture, Young
entrepreneurs are the driving force behind job creation in the G20 countries like India, Australia, China,
Indonesia, Japan, Saudi Arabia, United Kingdom, and United States amongst others.
Indeed, new Accenture research concludes that 10 million more youth jobs could be created in
G20 countries if existing barriers to entrepreneurship were lifted. It is through entrepreneurship we can
put new business ideas into practice. In doing so, it creates jobs that facilitate personal development and
economic growth. It’s a worthy pursuit to consider, but if it’s not for you, see how you can pass it your
next generation.
Objective:
(1) To generate new business and employment opportunities for the young Individuals. (2) To
analyze the challenges faced in growth of Young entrepreneurs in India. (3) To know the importance of
Young entrepreneurship in India.
Role of Young Entrepreneurs in India:
India today is growing with a vision of a “Developed Nation” striving its best with all the
economy, manufactures and products. But then dreaming of achieving great heights crossing every hurdle
also needs the most paramount vision of creating another 100 million employment for all the citizens of
India. The big question remains as to how those 100 million jobs to be created. Private, public, railway
sectors all scavenged wouldn’t come to make that myriad of jobs.
Hence entrepreneurship is one way out in finding the solution and reaching India’s destination.
Entrepreneurs and by that I mean people who are honed with a shimmer of talent and loads of confidence
and hard work to climb the ladder of success with a pose for the success magazines at a very young age.
208 “The Role of young Entrepreneurs in Indian Economy Development”

The normal belief of successful business magnates was broken off the monotony of 40 years, laying off
experience and wise grey hairs, the best examples internationally will be of Mark Zuckerberg, founder
of face book and Steve Jobs for Apple company. So let’s take vision for our Indian entrepreneurs who
maneuvered the skills of start-ups and made big in the business world questioning the very requirement
for the business tactics and grey hairs. So here are the few most successful entrepreneurs with their ideas
being the day starter for us.
Top 10 Young Entrepreneurs Of India:
(1). Shravan Kumaran and Sanjay Kumaran - Age 14 and 12 years Old Respectively At a tender
age of 14 and 12, most kids don’t even think of venturing into fields usually occupied but Shravan and
Sanjay thought out of box and became the youngest entrepreneurs. These techie kids are the founders
of Go Dimensions. (2) Farrhad Acidwala - Age 23,Farrhad bought a domain name at the age of 16 with
500 INR he had borrowed from his dad. He started a web community devoted to aviation and sold it at a
very good price when It became a hit. He is now CEO of his new company Rockstah Media. (3) Sameer
Gehlaut - Age 40, An IIT from Delhi, Sameer started India’s first online brokerage company in 2000,
Indiabulls Group. The combined net worth of his diversified company is $3.17 billion. (4) Arjun Rai -
Age 20, Arjun was highly inspired by TV shows like ‘The Oprah Show’ and ‘The Big Idea with Donny
Deutsch’. He started working towards his company in 2009. Today he is CEO of OdysseyAds.(5) Amir
Rao - Age 29, Amir is a studio director at Supergiant Games. He also a co-creator of role-playing action
video game Bastion which has won many awards and so far, as sold around 2.2 million copies. (6). Kavita
Shukla - Age 29, Kavita is the founder of FreshPaper which keeps the produces fresh for longer hours
than today’s conventional methods. She has patented her innovation. (7) Neil Mehta - Age 29, Neil is
the founder of Greenoaks Capital which is an investment firm. At present, he is managing around $600
million by investing in various industries ranging from insurance to e-commerce. (8)Pranav Yadav - Age
28, Pranav is the CEO of Neuro-Insight. It is a neuro-marketing firm that has designed and developed
brain mapping technology to understand and improve the quality of commercials on TV. Multi-talented
(9) Siddharth is an entrepreneur, artist, designer and public speaker. He dropped out of college to make
his name known in the world through his great work. He writes an e-magazine ‘Friendz’ and has written
books called ‘Law of Attraction’ and ‘Bhagvad Gita’. (10) Sandeep Maheshwari - Age 33, The founder
of image bazaar, Sandeep, is a leading entrepreneur in the field of collection of amazing images. His
company is the largest provider of images to various commercial companies. He also gives lectures in
renowned universities and colleges.
Need of young entrepreneurs in India:
“India needs more young entrepreneurs to create job opportunities” Nirmala Sitharaman, who
gave away certificates to the graduating students, said the young minds of this country must build business
houses and create more jobs. (PTI)India is looking for young entrepreneurs to build business houses and
create more jobs, Commerce and Industry Minister Nirmala Sitharaman said today, asking business
graduates to become fountainhead of commercially viable ideas. “India needs several entrepreneurs who
can become fountainheads of commercially viable ideas that will make a difference to the economy and
the country,” Sitharaman said while addressing the graduating students at the campus of Indian School of
Business (ISB) in Mohali, near here. “Develop your ideas. You should develop ideas … and that is what I
look up to graduates coming out of institutions like ISB,” she said. Sitharaman, who gave away certificates
to the graduating students, said the young minds of this country must build business houses and create
more jobs. “I would like the young minds of this country to build business houses and create more jobs,”
she said. She also touched upon the GST, saying with GST coming, India becoming one market and

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


“The Role of young Entrepreneurs in Indian Economy Development” 209

simplified taxation structure; it was also time for us to look into what exists in logistics. She said logistics
needs a lot of research. “Logistics is something on which India has to develop its own model … You have
logistics developed according to Western economies and their model, the Chinese have developed their
own but do we have an idea of how we are going to have efficient logistics in this country.
Role of Young Entrepreneurship in Economic Development
Entrepreneurship plays an influential role in the economic growth and standard of living of the
country. As a startup founder or small business owner, you may think that you are simply working hard to
build your own business and provide for yourself and your family. But you are actually doing a whole lot
more for your local community, state, region, and the country as a whole. Here are the top 7 important
roles an entrepreneur plays in the economic development of a country.
1.Wealth Creation and Sharing: By establishing the business entity, entrepreneurs invest their
own resources and attract capital (in the form of debt, equity, etc.) from investors, lenders and the public.
This mobilizes public wealth and allows people to benefit from the success of entrepreneurs and growing
businesses. This kind of pooled capital that results in wealth creation and distribution is one of the basic
imperatives and goals of economic development. (2) Create Jobs: Entrepreneurs are by nature and definition
job creators, as opposed to job seekers. The simple translation is that when you become an entrepreneur,
there is one less job seeker in the economy, and then you provide employment for multiple other job seekers.
This kind of job creation by new and existing businesses is again is one of the basic goals of economic
development. This is why the Govt. of India has launched initiatives such as Startup India to promote and
support new startups, and also others like the Make in India initiative to attract foreign companies and
their FDI into the Indian economy. All this in turn creates a lot of job opportunities, and is helping in
augmenting our standards to a global level.(3) 3. Balanced Regional Development: Entrepreneurs setting
up new businesses and industrial units help with regional development by locating in less developed and
backward areas. The growth of industries and business in these areas leads to infrastructure improvements
like better roads and rail links, airports, stable electricity and water supply, schools, hospitals, shopping
malls and other public and private services that would not otherwise be available. Every new business that
locates in a less developed area will create both direct and indirect jobs, helping lift regional economies
in many different ways. The combined spending by all the new employees of the new businesses and the
supporting jobs in other businesses adds to the local and regional economic output. Both central and
state governments promote this kind of regional development by providing registered MSME businesses
various benefits and concessions. (4) GDP and Per Capita Income: India’s MSME sector, comprised of
36 million units that provide employment for more than 80 million people, now accounts for over 37%
of the country’s GDP. Each new addition to these 36 million units makes use of even more resources
like land, labor and capital to develop products and services that add to the national income, national
product and per capita income of the country. This growth in GDP and per capita income is again one of
the essential goals of economic development. (5) Standard of Living: Increase in the standard of living of
people in a community is yet another key goal of economic development. Entrepreneurs again play a key
role in increasing the standard of living in a community. They do this not just by creating jobs, but also by
developing and adopting innovations that lead to improvements in the quality of life of their employees,
customers, and other stakeholders in the community. For example, automation that reduces production
costs and enables faster production will make a business unit more productive, while also providing its
customers with the same goods at lower prices. (6) Exports: Any growing business will eventually want
to get started with exports to expand their business to foreign markets. This is an important ingredient
of economic development since it provides access to bigger markets, and leads to currency inflows and

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210 “The Role of young Entrepreneurs in Indian Economy Development”

access to the latest cutting-edge technologies and processes being used in more developed foreign markets.
Another key benefit is that this expansion that leads to more stable business revenue during economic
downturns in the local economy.(7) Community Development: Economic development doesn’t always
translate into community development. Community development requires infrastructure for education
and training, healthcare, and other public services. For example, you need highly educated and skilled
workers in a community to attract new businesses. If there are educational institutions, technical training
schools and internship opportunities, that will help build the pool of educated and skilled workers. A
good example of how this kind of community development can be promoted is Azim Hashim Premji,
Chairman of Wipro Limited, who donated Rs. 27,514 crores for promoting education through the Azim
Premji Foundation. This foundation works with more than 350,000 schools in eight states across India.
So, there is a very important role for entrepreneurs to spark economic development by starting new
businesses, creating jobs, and contributing to improvement in various key goals such as GDP, exports,
standard of living, skills development and community development.
Creating Young Role Models In Entrepreneurship:
“India’s biggest competitive advantage over countries likes the US, China and Japan is its young
population,” said Shashi Tharoor, Minister of State for Human Resource Development, few months
back over India’s youth power. A skilled and tech-enabled young India has its dynamic workforce
brimming with the spirits of entrepreneurship, ideas and innovation. This has leveraged the country
to a completely different ball-game where businesses and governments from the West are putting their
money on. One of them is Scotland-based social enterprise Power of Youth (POY), which along with the
Scottish Government, recently organised their fourth global summit in New Delhi. Focusing on bringing
together some of the best young minds in the world to boost entrepreneurship, the summit had around
30 enterprising individuals less than 35 years. Out of which, 18 were from India. POY had its previous
three summits in China in 2011, South Africa in 2012 and Scotland in 2013.
FOCUS ON INDIA: POY has their eyes set on BRICS nations – Brazil, Russia, India, China and South
Africa. When asked what makes India exciting for him and Scotland, Purvis says, “Out of BRICS, it is the
hardest by far for young people in India to start businesses because of the bureaucracy and the mindset.
So, we think that if can enable the change by encouraging entrepreneurial thinking here, we can make
it work anywhere else on the planet. This excites us to come to India.”Purvis like many other Indian
entrepreneurs believes that to make a difference in India, bureaucracy and traditional Indian mindset,
which pushes people towards being employees rather employers, needs to be changed.
“I hope that Indian Government will work with us and remove any red tape that might hold
anything back. Unfortunately, our biggest barrier to succeeding in India is the government, but it could
be our strongest ally,” adds Purvis. Among the 18 Indian entrepreneurs that attended the summit were Arif
Shafi Khanyari and a women entrepreneur Humeera Qayoom from Kashmir. The Scottish Government
supported both in their endeavours to set up small enterprises. Khanyari now runs Kashmir’s first jewellery
brand called D’ Ali’s while Humeera has ventured into his father’s carpet manufacturing business. “The
fund has been running for past many years and focuses on the South Asian countries like Pakistan,
Bangladesh and India,” says Yousaf.
Humeera’s story, on the other hand, is of getting mentoring and hand-holding. Always wanted to
be an entrepreneur, Humeera wanted to revive her father’s sinking carpet manufacturing business because
of conflicts in the state. However, she couldn’t find anyone supporting her dream because of orthodox
beliefs supporting government jobs. She had a stroke of luck finally when she applied for SKYE business

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


“The Role of young Entrepreneurs in Indian Economy Development” 211

plan competition and won that. The training and mentoring that she received from SKYE helped her
carpet business take off. SKYE had received £400,000 from the Scottish Government between 2010 and
2013 having 6000+ Kashmiri youth taking part. The project saw 170 new businesses coming out of it,
thereby creating jobs for 600 people.
“We have demonstrated our commitment in addressing the challenges faced by people in the
world by increasing our international development budget to £9 million. A small proportion of which has
supported Khanyari and Humeera to get their small business ideas off the ground,” Yousaf said earlier. He
added, “Today we extended that support, putting Khanyari and Humeera in touch with POY so that they
too could access invaluable advice and expertise from some of their world-leading young entrepreneurs.”
The Scottish Government also contributed £5,500 towards the summit that took place in Delhi. “In
POY, each of our members gets $30,000 in-kind consultancy from leading professional services company
Ernst & Young. POY is building similar relationships with some of the global banks like YES Bank and
companies like Oracle.
So, we are getting some of the biggest companies in the world to help these entrepreneurs succeed,”
says Purvis.
Young Entrepreneurs Celebrate `Startup India’ Action Plan:
The `Startup India’ action plan announced by Prime Minister Narendra Modi to encourage
startups with a incentive package including tax sops was met with enthusiasm by most first-generation
entrepreneurs, with some saying that it was a initiative long over-due and its success depended on how
the plan was implemented. “The tax sops and the fund for startups announced by the government will
help in funding a large number of startups throughout the country. It is a big boost for small like us who
could do with all help possible,” said Anoop Shukla from Eventweavers, an on-line company dealing in
e-cards. According to Sujai G Pillai, Founder & CEO, www.2tion.com, an online tutoring website, there
was just no help available for startups when he started out in 2006, and it was the first time that startups
were being celebrated.
“With the kind of financial support and handholding to first time entrepreneurs the action
plan seeks to provide, a large number of startups are sure to come up and the year 2016 will belong to
entrepreneurs,” Pillai, who also mentors other startups, said. Expressing similar sentiments, Manish Vij,
founder and CEO, SVG Media said that for the first time in 11 years of entrepreneurship, he had seen
the government support entrepreneurs. “The government’s action plan will inculcate the desire to become
entrepreneurs among our youth throughout the nation. It addresses a lot of pain points of entrepreneurs,”
he said. Premjit Prabhakaran and Preetha Premjit from Kerala-based Indian Homemade Toys are equally
jubilant with the ``recognition’’ for startups that the action plan provided. “The income tax exemption
on profits provided for the first three years is a very positive step. It is a visionary plan for startups that
the government has come up with which has recognized that startups are also important in creating
employment,” Prabhakaran said. Some entrepreneurs believe that startups have become successful in
India mainly because of the angel investors and the entrepreneurs themselves and it was natural for the
government to step in at this point. “Angel investors have played a vital role in giving a push to startups
and if all that the government has announced today is implemented, it would provide them a further
boost,” said Anuradha Acharya, CEO, Map My Genome.
Conclusion:
Young Entrepreneurship plays an important role for economic development in developing
countries such as that of India. It is evident from the study that Young entrepreneurs are ready to face

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212 “The Role of young Entrepreneurs in Indian Economy Development”

the challenges associated with setting up of business. Therefore, the Young entrepreneurs need to be
motivated to take up entrepreneurship as a career, with training and sustaining support systems providing
all necessary assistance
References:
yy EY Report 2014 on “Avoiding a lost generation: Ten key recommendations to support youth entrepreneurship across the G20”
yy Accenture Report 2014 on “The Promise of Digital Entrepreneurs: Creating 10 million youth jobs in the G20 countries”
yy https://successstory.com/lists/young-entrepreneurs-in-india
yy http://www.financialexpress.com
yy https://evoma.com/business-centre/7-roles-of-entrepreneurship-in-economic-development-of-a-country/
yy https://www.franchiseindia.com/entrepreneur/magazine/2013/december/Creating-Young-Role-Models-in-Entrepreneurship_15-1-2
yy http://www.thehindubusinessline.com/economy/young-entrepreneurs-celebrate-startup-india-action-plan/article8114456.ece

Technical Session - II UGC Sponsored National Seminar on Economy & Entrepreneurship


Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks
in Guntur District

*Dr. M. Aravind, ** Dr. T. Umamaheswara Rao


*Professor & Head, Department of Business Administration, Narasaraopeta Institute of Technology
Narasaraopet, Guntur, Andhra Pradesh,
**Registrar, K.L. University, Guntur, Andhra Pradesh

Nationalized banks have played a vital role in the development of industrial sector in the urban and rural areas of Guntur District. Commercial
banks are the main financial institutions financing the projects. More number of bank branches are established in the developed areas compared to
the undeveloped blocks. Indian bankers are still adverse in taking risks and do not lend without adequate tangible securities or guarantors. The
concept of looking into the merit of the women entrepreneurs and their business viability has not reached the banks yet; they do not fit into
the banks’ pre-contractual perceptions of entrepreneurs. The need of the hour is a nucleus center in each industrial area where all these services
are provided through it. Bank credit acts as a great support to women entrepreneurs in entering the new field of enterprise and also in facing
the problems related to finance.

Introduction
Nationalized banks have played a vital role in the development of the industrial sector in the
urban and rural areas of Guntur District . Since the district is basically village-oriented with a powerful
agrarian economy, it is but natural that the institutions set up to finance the rural needs have a
rural inclination. The commercial banks operating in the district have a wide network of branches
catering to the needs of the district.
Banks have granted loans to the industrial and commercial sectors, but did not trust the women
entrepreneurs who did not fit into the banks’ pre-contractual perceptions of entrepreneurs.
The fundamental aspects of a pre-contractual perception are taking for granted the social knowledge
and the attitude of stereotype. These aspects are constructed and reconstructed through social
interactions, and emerge in the relations of the loan applicant and the bank clerk. In order to be
trustworthy, the loan applicant, in this case, the entrepreneur, has to hold some hallmarks which fit
in with the clerk’s idea of an entrepreneur. These hallmarks are taken for granted. As bank finance
is an important aspect to support enterprises, the banks play an important role in supporting the
entrepreneurial activities; therefore the relation between the banks and the entrepreneurs is also
analyzed.
Without finance it is highly impossible to step in and settle in any business or industry. Honk
credit acts as a great support to women entrepreneurs in entering the new field of enterprise and
also in facing the problems related to finance.
Objectives of the Study
ŠŠ To study bank finance given to women entrepreneurs;
ŠŠ To study various loan facilities and schemes available to women entrepreneurs;
ŠŠ To analyze the repayment of loans and difficulties thereon;
ŠŠ To analyze the diversion of bank finance by women entrepreneurs; and
ŠŠ To offer suggestions for improvement in bank credit to women entrepreneurs.
214 Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District

Research Methodology
The study is based on both primary and secondary data. The required information is collected
through the following sources:
Primary Data
Informal Discussions
Togain deeper insights into the topics of investigation, the researcher has relied on informal
discussions with different bank officers, bank managers, women organizations, associations of women
entrepreneurs, district statistical officers, and Andhra Pradesh Industrial Development Corporation
(APIDC) and industrial estate area officers, regarding the problems faced by women entrepreneurs
in availing credit facilities.
Interview
The sample was initially drawn using a random sampling method. The researcher has collected
preliminary data from a number of entrepreneurs in Guntur District. An interview schedule was
prepared and administered on the sample respondents during the pre-testing; changes were incorporated
in the interview schedule to ensure the accuracy of data. The data was analyzed meticulously using
measurement tools.
The officials of the selected five banks—Andhra Bank (AB), State Bank of India (SBI), Central
Bank of India(CBI), Union Bank of India (UBI), and Industrial Development Bank of India(IDBI) were
interviewed and the banks’ ledgers were referred for the names, addresses and credit information of
the women beneficiaries.
Questionnaire
Two types of well-structured questionnaires were prepared by the researcher and provided to
women entrepreneurs and bank officials.
Secondary Data
For discussing the theoretical aspects of the topic under investigation, a number of books,
journals, periodicals and newspapers were used and acknowledged. A number of publications of SIDBI,
Southern Economist, Yojana, Pranjana, official records of banks, and annual reports banks were intensively
used.
Hypotheses of the Study
H1 - Women entrepreneurs who are less educated are prone to commit more defaults.
H2-Women entrepreneurs divert the bank credit and utilize it for unproductive purposes.
Scope of the Study
In Guntur district, 1,204 commercial bank branches are serving in different areas. The
study pertains to the select five banks which have a maximum number of branches compared to
other banks. Cooperative banks are not considered for the study. One of the major aims of the study
is to assess the development of women entrepreneurs with the help of bank credit in 14 blocks of
Guntur District.

Technical Session - III UGC Sponsored National Seminar on Economy & Entrepreneurship
Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District 215

Finance Schemes Offered by the Selected Banks to Women Entrepreneurs


Financing schemes of banks and their capital assets will bring economic progress. Commercial
banks have started several schemes and programs for entrepreneurship development: The role played by
the selected five banks and their schemes for women entrepreneurs are stated below.
Central Bank of India
Andhra Bank (AB) was established by Sir Sorabji N Pochkhanawala on December 21, 1911.
Sir Pherozesha Mehta was the first Chairman of the bank. It was the first bank to introduce a special
ladies department in 1924, in its Amaravathi office, to cater to the needs of the w o m e n customers.
The bank has introduced its Credit Card—‘Central Card’.
It is based in Mumbai which is the financial capital of India and capital city of state of
Maharashtra. The bank has 4730 branches, 5319 ATM’s and 4 extension counters across 27 Indian states
and three Union Territories.
ABis the ‘lead bank’ of Guntur District with 61 branches. It has launched a special whom called
‘Cent Kalyani’ for women, which offers financial assistance to women entrepreneurs to then economic
pursuits in industry, agriculture and allied activities, and for business or profession. The bank, with a
network of branches spread across the country, welcomes women entrepreneurs to avail financial assistance
for pursuing vocations of their choice.
Credit facilities are available to women entrepreneurs for the following: small business;
professional and self-employment; retail trade; village and cottage/tiny industries; and Small Scale
Industries (SSIs). Credit is also available to the entrepreneurs who are engaged in manufacturing,
processing, preservation and services such as handloom, weaving, handicraft, food-processing, garment
making, etc., in village and small towns with a population not exceeding 50,000 by utilizing the
locally available resources/skills.
Andhra Bank
“Andhra Bank” was founded by the eminent freedom  fighter and a multifaceted genius,  Dr.
Bhogaraju Pattabhi Sitaramayya. The Bank was registered on 20th November 1923 and commenced
business on 28th November 1923 with a paid up capital of Rs 1 lakh and an authorized capital of Rs 10
lakhs.
The bank has implemented a number of innovative schemes in addition to various programs
sponsored by the Government and RBI. Laghu Udyami Credit Card Scheme, Mahabank Swarojgar
Credit Card Scheme (MSCC), and Maha-Entrepreneur are some of theschemes of the bank.
Andhra Bank is a medium-sized public sector bank (PSB) of India, with a network of 2803
branches, 4 extension counters, 38 satellite offices and 3636 automated teller machines (ATMs) as of 31
Mar 2016.
Maha-Entrepreneur
Under this scheme, the bank provides finance up to Rs. 25 lakh to SSIs without any collateralsecurity
and/or third party guarantee.
Mahabank Shakti
This scheme is specially introduced to offer financial assistance to women entrepreneurs for their
economic pursuits in industry, agriculture and allied activities, and business or profession. The bank with

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216 Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District

a network of 1,292 branches spread across the country has come up with this scheme which enables
women entrepreneurs an opportunity to avail financial assistance for pursuing vocation of their choice.
State Bank of India
The State Bank of India (SBI) was born with a new sense of social purpose aided by its 24,000offices
comprising of branches, sub-offices and three local head offices inherited from the Imperial Bank. The
concept of banking as mere repositories of the community’s savings and lenders to creditworthy parties
has soon given way to the concept of purposeful banking.
In Guntur, SBI has 131 branches which include four urban, 45 semi-urban and 39rural branches.
As per the bank’s model, the entrepreneurial development programs consist of one month intensive
training in behavioral sciences, management aspects and field training and during this period the entire
cost of boarding and lodging is borne by the bank. The bank recognized the importance of SSIs in
industrial development and started financing them ona larger-scale. A package of schemes and programs
was formulated by the bank to cater tothe specific needs of the SSIs.
StreetSarthe Package
This is a special scheme offering loans to women entrepreneurs. It gives concessions in promoter’s
margin and rate of interest. The scheme inspires women to start new ventures and there is no security for
loans up to Rs.5lakh for industrial units.
Entrepreneurs’ Scheme
SBI entrepreneurs’ scheme was introduced in 1967 for technically qualified entrepreneurs,
without insisting on any equity from them. The scheme is specially designed to tap the considerable
potential available in the country. It provides financial assistance ranging between 87.5% and 100% to
meet the project cost, pre-operative expenses and also the entrepreneurs’ sustenance needs during the
start-up period. Normally, a ceiling of Rs.10 lakhis operative, but in deserving cases this is relax able.
Union Bank of India
Union Bank of India (UBI) was inaugurated by Mahatma Gandhi. It has traversed the long road of
successful banking of 85 years. Union Bank does not have many branches, but they are enough to manage
and handle all the activities. The bank is committed to maintain its identity as the leading innovative
commercial bank alive to the changing needs of the society. Today, the bank is providing different value-
added services to the society. The bank has a special scheme of loan named, ‘Viklang Mahila Vikas Yojana’
for handicapped women for starting their own vocations. Physically handicapped women are identified
and after providing vocational training according to their aptitude, financial assistance of Rs. 25,000
isoffered to start the new vocation.
The bank is a public sector unit with 55.43% share capital. It is one of the pioneer public sector
banks, which launched Core Banking Solution in 2002. As of September 2016, more than 4214 branches/
extension counters of the bank are networked under core banking solution. In Guntur, UBI has 27
branches, which includes ten urban, 13 semi-urban and 22 rural branches.
The United Western Bank Ltd. (IDBI Bank)
A technology savvy and value-based bank, it commenced its business on March 8, 1937. Ason
September 30, 2016, the bank has a network of 1926 branches, spread over in different states. It is
a leading private sector bank in India. The performance of the bank is appreciated by all the leading
financial magazines by giving high ranking.

Technical Session - III UGC Sponsored National Seminar on Economy & Entrepreneurship
Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District 217

The bank has set up a specialized SME Cell at strategic business centers to cater to the needs of
the small and medium enterprises. The bank has twenty urban, fifteen semi-urban and ten rural branches
working in Guntur District. It has no special scheme for women entrepreneurs.
An Analytical Study of Bank Finance to Women Entrepreneurs
Area-Wise Classification of Bank Branches in Guntur District
Narasaraopet is geographically the largest Mandalam in Guntur District, Andhra Pradesh.
Commercial banks operating in the district have a wide network of branches catering to the needs of the
district. Urban branches of the bank are located in Guntur city, semi-urban branches are at Villages and
rural branches are in villages. Area-wise classification of bank branches is shown in Table 1.
It is clear from Table 1 that,
ŠŠ AB, the lead bank of Guntur District, has the largest number of branches, i.e.,61 out of which 45
are rural, one is urban and 15 are semi-urban branches.
ŠŠ SBI has 31 branches, out of which 21 are rural, four are urban and six are semi-urban.
ŠŠ CBI has 35 branches which include 20 rural, 10 urban and five semi-urban branches.
ŠŠ UBI has 17 branches, out of which 12 are rural, two are urban, and three are semi-urban.
ŠŠ IDBI has live branches including two within two semi-urban and one rural brunch.
Table 1: Area-Wise Classification of Bank Branches in Guntur District
Number of Branches
S. No. Name of the Bank Total
Urban Semi-Uban Rural

1. AB 1 15 45 61 (42%)

2. SBI 4 6 21 31 (21%)

3. CBI 5 10 20 35 (23%)
4. UBI 2 3 12 17 (11%)
5. IDBI 2 2 1 5 (3%)

Total 14 36 99 149

Source: Credit Plan of Commercial Bank, 2015-16


The number of rural branches is double than that of urban and semi-urban branches.Nationalized
banks have done a good work in rural expansion of their branches. As ruralbranches mostly provide
agricultural loan, 50 branches of urban area are considered as therespondent branches.
Block-Wise Network of Commercial Banks in Guntur District
Guntur District has 14 blocks. The network of selected banks is working hard to developthe
industry. The block-wise network of commercial banks in Guntur is shown in Table 2.S. No. indicates
the selected five banks as per Table 1.

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218 Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District

Table 2: Block-Wise Network of Commercial Banks in Guntur District

Phirangipuram 

Pedanandipadu
Narasaraopet 
Chilakaluripet

Mangalagiri 
Sattenapalle

Vinukonda 
Amaravathi

Macherla 
Bapatla 

Repalle 
Guntur 

Ponnur
Tenali 

Total
S. No

1. 6 7 3 2 2 2 7 4 4 6 3 8 3 4 61
2. 7 3 2 1 1 1 3 2 3 1 2 2 1 2 31
3. 8 1 1 2 3 3 1 2 1 1 3 5 4 35
4. 2 4 1 3 3 1 1 2 17
5. 2 1 2 5
Total 25 11 6 9 7 9 11 8 8 12 8 11 12 12 149
Source: Central Bank of India — Credit Plan, 2015-16, pp. 21, 22, 25, 26

Total 149 branches of the selected five banks are established in Guntur District. Narasaraopet block
ranks first in number of branches i.e., 25, followed by 12 branches in Dondapadu Agraharam, Ravipadu
and Uppalapadu blocks. Eleven branches are situated in Ellamanda, Kondakavuru and Petlurivaripalem
blocks. Nine are in Tenali and Ponnur. Pedanandipadu , Sattenapalle and Repalle blocks have eight
branches each. Less number of branches are established in the undeveloped Phirangipuramblock. It is
observed that more number of branches arc established in developed areascompared to undeveloped areas.
Difficulties Encountered by Bank Managers While Sanctioning Loans
Ranking factors based on information pertaining to the different reasons for difficulties faced by
hunk managers while sanctioning loans to women entrepreneurs are presented in Table 3.
Table 3: Difficulties Encountered by Bank Managers While Sanctioning Loans

S. Ranking Factors Weighted Ranking


Difficulties Rank
No 1 2 3 4 5 6 Score (%)
1 Illiteracy 9 10 10 5 9 7 184 61.33 2
2 Unfamiliar about financial 10 8 10 7 6 9 242 80.66 1
aspect
3 Absence of self-confidence 9 10 7 6 8 10 176 58.66 4
4 Inadequate knowledge 5 9 10 10 7 9 168 56.00 6
5 Lack of entrepreneurial 9 8 7 8 10 8 182 60.66 3
skills
6 Lack of marketing talent 8 7 8 9 10 8 170 56.66 5
The analysis from Table 3 reveals that,
ŠŠ Unfamiliar about financial aspect ranked first with 80.66%;
ŠŠ Illiteracy ranked second with a weighted score of 61.33% followed by lack of entrepreneurial
skills with 60.66%;
ŠŠ Absence of self-confidence with 58.66% was ranked fourth.
Technical Session - III UGC Sponsored National Seminar on Economy & Entrepreneurship
Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District 219

ŠŠ Lack of marketing talent ranked fifth with 56.66%; and


ŠŠ Inadequate knowledge ranked last with a weighted score of 56%.
Experiences of Repayment
The experience of bank managers about repayment of loan by the women entrepreneurs is shown
in Table 4. The normal tendency of the borrower is to delay the repayment of bankInnis II has been
examined earlier that the commercial banks in Guntur District suffer11 on defaults. The statistical details
about repayment and defaulters are presented in Table 4.
Table 4: Experience of Bank Managers about Repayment

AB SBI CBI UBI IDBI Total


Not Paid in Time

Not Paid in Time

Not Paid in Time

Not Paid in Time

Not Paid in Time

Not Paid in Time


Paid in Time

Paid in Time

Paid in Time

Paid in Time

Paid in Time

Paid in Time
Type

Engineering 1 3 2 2 2 8 2
Chemical 1 1
Trading 3 1 2 1 2 1 3 1 10 4
Food Products 3 1 2 2 3 1 10
Stationery 1 1 1 1 2 1
Ready Garment 1 2 3
Service 2 3 2 1 2 1 1 9 3
Animal 2 3 2 3
Fabrication 1 1
Coach Education 1 1 1 3
Health 1 1 2
Printing 1 2 1 1 5
&Stationery
Leather 1 1 1 1
Total 14 2 14 5 15 1 10 2 8 2 61 12
Percentage 87.5 12.50 73.68 26.32 93.75 6.25 75 25 80 20 83.56 16.43

A glance at the bank-wise performance of recovery of loans reveals certain interesting features.
Overall performance shows that out of 73 borrowers, 61 (83.56%) are defaulters and only12
(16.43%) borrowers have paid their installments on time.
Bank-wise analysis reveals that AB defaulters are 87.50% and those who are punctual are only
12.50% SBI statistics show that 73.68% are defaulters and 26.32% borrowers have paid their installments
as per schedule. CBI experienced 93.75% defaulters and only 6.25% are punctual. 75% of the UBI

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220 Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District

borrowers are defaulters, while 25% paid on time and 80% of the IDBI borrowers are defaulters while
20% paid as per schedule.
These defaults have far-reaching implications and are the consequences of negative response of
the borrowing entrepreneurs.
Caste Background of Borrowers and Defaulters in Various Villages
Caste background of borrowers and defaulters has some relationship. Borrowers are divided into
two categories: forward caste and backward caste. The statistical data about caste background of borrowers
and defaulters in various Villages of Guntur is given in Table 5.
It is observed from Table 5 that,
ŠŠ Out of 73 sample borrowers, 44 (60.27%) belong to forward caste and 29 (39.73%)belong to
backward caste.
ŠŠ Out of these, 40.91% of the forward caste and 93.10% of the backward caste aredefaulters.
Table 5: Caste Background of Borrowers and Defaulters in Various Villages
Forward Caste Backward Caste Total
Villages
B D B D B D
Narasaraopeta 6 0 3 2 9 2
Ellamanda 1 1 1 1 2 2
Ikkurru 3 0 1 1 4 1
Jonnalagadda 1 1 3 3 4 4
Kakani 2 1 2 2 4 3
Kesanapalle 2 1 3 3 5 4
Kondakavuru 2 1 2 2 4 3
Lingamguntla Agraharam 1 2 2 3 2
Mulakalur 6 3 2 2 8 5
Dondapadu Agraharam 3 1 1 1 4 2
Pamidipadu Agraharam 5 3 3 8 5
Petlurivaripalem 2 1 2 2 4 3
Ravipadu 2 1 1 1 3 2
Uppalapadu 8 4 3 2 11 7
Total 44 18 29 27 73 45
Percentage 60.27 40.91 39.73 93.10 100 61.64
Note: B = No. of Borrowers; D = No of Defaulters.
The block-wise analysis shows the same trend. It presents a peculiar situation where in a few
blocks forward caste people also commit more defaults and in a few other blocks the opposite is true.
Hence, the relationship cannot be generalized.

Technical Session - III UGC Sponsored National Seminar on Economy & Entrepreneurship
Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District 221

Changes Made in the Lending Policy by Bankers


Bank massacres have to face problems of default in repayment. Therefore, it becomes necessary
to makes change in the lending policies. Bank managers were asked to rank the changes made and as per
the weighted score method, rating and ranks are given.
Table 6 presents the changes made in the lending policies by the bank managers. The analysis of
the data reveals the following:
Table 6: Changes Made in the Lending Policy by the Bankers
Ranking Factors Weighted
S. No Difficulties Ranking Rank
1 2 3 4 5 6 7 Score
1. More easy 9 8 9 5 9 6 4 219 62.57 4
2. Special concession 8 10 8 4 6 7 7 223 60.71 7
3. Interest rate 10 11 7 6 6 6 4 229 65.42 1
4. Scientific Re-payment 11 9 6 7 6 7 4 225 64.28 2
schedule
5. Enterprise passbook 9 8 8 8 7 6 4 220 62.85 5
6. Provision of incentive to 10 10 7 6 4 10 3 224 64.00 3
prompt re-payers
7. Toning up quality supervision 9 10 8 4 5 9 5 217 62.00 6
ŠŠ Interest rate is ranked first with 65.42% followed by scientific repayment schedule with 64.28%.
ŠŠ Provision of incentive to prompt re-payers ranked third with 64%.
ŠŠ More easy lending policy with 62.57% was placed fourth.
ŠŠ Entrepreneurs pass book, a new concept in this area, ranked fifth with 62.85%
ŠŠ weighted score.
ŠŠ Toning up of quality supervision was placed in sixth position with 62.00%.
ŠŠ Last rank was given to special concession with 60.71%. Solvency position of the borrowers has a
greater bearing on credit recovery and lending policies of the banks.
Education Level of Borrowers and Defaulters in Different Blocks
It is generally believed that the honesty and integrity would increase with the increase in the level
of education. The society also expects a high level of integrity from the educated class.
Borrowers are divided as per their educational level. The data regarding the educational level of
the borrowers and defaulters in different blocks is given in Table 7.
Table 7 reveals the education level and defaulters in different blocks. The sample members (73)
are distributed on their level of education.
ŠŠ For the purpose of analysis of this hypothesis, the term ‘less educated’ is understood as women
who are educated up to SSC. Those who have taken education above SSC up to PG are considered
as ‘highly educated’.
ŠŠ Table 7 reveals that out of 73 sample borrowers, 41 (56.16%) are educated below SSC and 32
(43.84%) borrowers are above SSC or graduates, diploma holders or postgraduates.

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222 Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District

Table 7: Education Level of Borrowers and Defaulters in Different Blocks

Primary School Middle School Below HSC Post Graduate Total


Villages
B D B D B D B D B D
Narasaraopeta 1 1 - - 2 1 5 - 8 2
Ellamanda 1 1 1 1 - - - - 2 2
Ikkurru 1 1 2 1 - - 1 - 4 2
Jonnalagadda - - 2 2 - - 2 - 4 2
Kakani 1 - 1 1 2 1 - - 4 2
Kesanapalle - - 1 1 2 2 2 1 5 4
Kondakavuru 1 1 1 1 - - 2 1 4 3
Lingamguntla Agraharam 1 1 1 1 1 1 - - 3 3
Mulakalur 2 2 2 2 1 1 3 1 8 6
Dondapadu Agraharam - - - - 2 2 2 1 4 3
Pamidipadu Agraharam - - 2 2 2 1 4 2 8 5
Petlurivaripalem 1 1 - - 1 1 2 1 4 3
Ravipadu - - 1 1 1 1 1 1 3 3
Uppalapadu 2 1 1 1 1 1 8 2 12 5
Total 11 9 15 14 15 12 32 10 73 45
Percent 15.06 20.55 20.55 43.84
Note: B = No. of Borrowers; D = No of Defaulters.
ŠŠ Out of 41 borrowers who are less educated, 11 (15.06%) borrowers are educated upto second
standard, while 15 (20.55%) are educated up to secondary education and15 (20.55) below SSC.
ŠŠ The category of less educated women shows that out of 41 educated borrowers, 35(85.36%)
respondents are defaulters. Only 6 (14.64%) are paying their installments on time.
ŠŠ The borrowers who are highly educated are 32. Out of these, 10 (31.25%) borrowers are defaulters
and 22 (68.75%) paid their installments on time. Further, the data reveals that,
ŠŠ Out of 73 borrowers, 56.16% (41) are educated up to SSC, i.e., less educated category.
ŠŠ Of the 73 borrowers, 43.84% (32) are degree holders, diploma holders or double graduates.
ŠŠ Out of 41 less educated borrowers, 95.12% (39) are defaulters.
ŠŠ Out of 32 more educated borrowers, 43.75% (14) arc defaulters.
It seems that from less educated class, only 2 (4.88%) borrowers paid their installments on time.
On the contrary, 18 (56.25%) borrowers from more educated class did not divert their credit for other
purposes. Due to number of defaulters in less educated group, it is necessary to establish educational
institutions.
Reasons for Diversion of Credit as Reported by the Respondents
It is rather difficult to clearly ascertain the reasons for diversion of credit; most of the respondents
tried to evade the question regarding the reasons for diversion and did not come out with any specific
reason. The percentage of distribution of reasons for the diversion of credit is presented in Table 8a.
Table: Reasons for Diversion of Credit as Reported by the Respondents

Technical Session - III UGC Sponsored National Seminar on Economy & Entrepreneurship
Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District 223

S. No. Reasons for Diversion Total Percentage


1 Unavoidable needs 22 30.14
2 Urgent expenses on marriage, festivals, etc. 10 13.70
3 Under finance 8 10.96
4 Late receipt of loan 7 9.59
5 Repayment of old debts 4 5.48
6 Reasons not disclosed 2 2.74
7. Not diverted 20 27.40
Total 73 100.00
Table 8a reveals that,
ŠŠ Out of 73 borrowers, 72.60% (53) have diverted credit for other purposes. 27.40%i.e., 20
respondents did not divert their loans for any of the above.
ŠŠ 13.70% (10) of the borrowers have diverted their credit to meet urgent expenseson marriage
festivals, etc.
ŠŠ 30.14% (22) have diverted the credit to meet their household requirements.
ŠŠ 5.48% (4) of them availed bank credit to repay their private loans.
ŠŠ 10.96% (8) of the borrowers diverted due to under finance from banks and 9.59%(7) borrowers
diverted due to the late receipt of the bank loan.
ŠŠ 2.74% (2) of the borrowers did not disclose the reasons for diversion of credit. Thefield officer
of the bank feels that some of the borrowers may spend the money ongambling, consumption of
alcohol, etc. Perhaps, it would not be wrong to includethese under ‘undisclosed reasons.’
ŠŠ 27.40% (20) of them did not divert their loans for any other imposes.
The analysis shows the causes of poor credit recoveries In uoitiMeivial banks,
Block-Wise Reasons of Diversion of Credit
Guntur District has 14 blocks. Table 8b shows block-wise reasons of diversion of bank credit
which include unavoidable needs, urgent expenses, under finance, late receipt of loan, repayment of old
debts and reasons not disclosed.
Table 8b: Block-Wise Reasons for Diversion of Credit
Unavoidable Needs

Repayment of Old
Late Receipt of
Under Finance
Under Exps.

Reasons not
Disclosed
Debts
Loan

Total

Villages

Narasaraopeta 1 1 2
Ellamanda 2 2
Ikkurru 2 2
Jonnalagadda 2 1 3
Kakani 2 1 1 4

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224 Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District

Kesanapalle 1 1 1 1 4
Kondakavuru 1 1 1 3
Lingamguntla Agraharam 2 1 1 1 5
Mulakalur 1 1 1 3
Dondapadu Agraharam 2 2 1 1 6
Pamidipadu Agraharam 1 1 1 1 4
Petlurivaripalem 1 1 1 3
Ravipadu 3 1 1 1 1 7
Uppalapadu 1 2 1 1 5
Total 22 11 8 6 4 2 53
Percentage 41.51 20.75 15.10 11.32 07.55 03.77 100
Analysis of Table 8b reveals that
ŠŠ Out of 53 borrowers, 41.51% (22) diverted their credit for unavoidable needs ofconsumption.
ŠŠ 20.75% (11) of them diverted their credit for urgent expenses such as marriage,functions, and
festivals.
ŠŠ 15.10% (8) of the borrowers diverted due to under finance from banks.
ŠŠ 11.32% (6) of the respondent borrowers used the credit for some other purposes dueto late
receipt of loan from the bank.
ŠŠ 7.55% (4) of the borrowers used bank credit to repay their old debts.
ŠŠ 3.77% (2) of them did not disclose any reasons for diversion.
Guntur District is divided into two parts: forward block and lagging block (Table 8c). Forward
block consists of six blocks and lagging block consists of eight blocks. Categorization of blocks is presented
in Table 8c, and Table 8d reveals block-wise reasons for diversion of credit.
Table 8c: Forward and Lagging Blocks of Guntur District

Forward Block Lagging Block


Narasaraopeta Kondakavuru
Ellamanda Lingamguntla Agraharam
Ikkurru Mulakalur
Jonnalagadda Dondapadu Agraharam
Kakani Pamidipadu Agraharam
Kesanapalle Petlurivaripalem
Ravipadu
Uppalapadu
The block-wise diversion of credit shows that forward block and lagging blocks have equally
shared (50%-50%) all the reasons for diversion of credit except late receipt of loan (forward block:
57.14% and lagging block: 42.86%).
Table 8d: Reasons for Diversion: Forward and Lagging Blocks
Reasons Blocks I II III IV V VI
Forward 11 5 4 4 2 1

Technical Session - III UGC Sponsored National Seminar on Economy & Entrepreneurship
Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District 225

Lagging 11 5 4 3 2 1
Total 22 10 8 7 4 2
Note: Reasons of diversion (in Roman numerals) correspond to Table 8a.

Block-Wise Diversion of Credit by Women Entrepreneurs


Total 73 respondent borrowers are categorized in 14 blocks of Guntur District. Block wise
borrowers and defaulters are classified in Tables 9a and 9b.
Table 9a: Block-Wise Borrowers and Defaulters

Undeveloped
Developed Area Borrowers Defaulters Percent Borrowers Defaulters Percent
Area

Narasaraopeta 8 2 24 Kondakavuru 2 2 100


Ellamanda 4 4 100 L Agraharam 4 2 50
Ikkurru 8 5 60 Mulakalur 4 3 75
Jonnalagadda 4 3 75 D Agraharam 4 4 100
Kakani 8 6 72 P Agraharam 3 3 100
Kesanapalle 12 7 55 Petlurivaripalem 4 4 100
  44 27 52.27 Ravipadu 3 3 100
        Uppalapadu 5 5 100
          29  26 75.86
Table 9b: Block-Wise Diversion of Credit by Women Entrepreneurs
Lingamguntla Agraharam

Pamidipadu Agraharam
Dondapadu Agraharam

Petlurivaripalem
Narasaraopeta

Jonnalagadda

Kondakavuru

Uppalapadu
Kesanapalle

Mulakalur

Ravipadu
Ellamanda

Ikkurru

Kakani
Type /
Block

Total

B D B D B D B D B D B D B D B D B D B D B D B D B D B D
Engineering 10 5 1 1 1 0 1 1 2 1
Chemical 1 1
Trading 14 1 1 1 1 2 2 3 3 3 1 2 2 2 2
Food 12 1 1 1 2 2 1 1 1 1 1 1 2 1 3 2
Stationery 3 1 1 1 1 1 1
Garment 3 1 1 2 2
Service 12 1 1 1 1 1 1 1 1 1 1 1 1 1 5 3
Animal 5 2 2 1 1 1 1 1 1
Fabrication 1 1 1
Coach 3 1 1 1 1
Health 2 1 1 1

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226 Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District

Printing a 5 1 1 1 1 1 1 1 1 1
Leather 2 1 1 1 1
Total 73 8 2 2 2 4 2 4 3 4 4 5 5 4 4 3 3 8 5 4 3 8 6 4 4 3 3 12 7
Note: B = No. of Borrowers; D = No of Defaulters.
ŠŠ Out of 73 borrowers, 53 have diverted their credit and 20 have not diverted.
ŠŠ 60.27% respondents are from forward blocks and 39.73% are from lagging blocks.
ŠŠ Out of 44 respondents from forward blocks, 52.27% have diverted their credit.
ŠŠ Out of 29 borrowers, 75.86% from lagging blocks have diverted their credit forother purposes.
Impact of Bank Credit on Rural Women Entrepreneurs
As mentioned earlier, industrialization of rural areas is essential for the development of rural sector.
For ensuring industrialization of rural areas, various measures have been initiated by the government
from time to time. For the growth of industrialization, financial institutions have been created by the
government to meet their credit needs. Credit is the key input for accelerating the development in the
rural industries. Among the financial institutions, commercial banks have a prominent and unique place.
All the selected banks are catering to the credit needs of rural entrepreneurs in all the Villages of Guntur
District. An effort has been made to analyze the role of the banks in financing rural and urban enterprises.
After analyzing the banker’s role, it becomes imperative to evaluate:
ŠŠ The impact of bank loan on the socioeconomic life of entrepreneurs;
ŠŠ To judge as to what extent the bank loan has helped the entrepreneurs’ to improve their living
conditions; and
ŠŠ Whether the bank loan has proved helpful in increasing their income or not.
Around 55% of the respondents reported that there was no increase in their income. Forget
about the increase, it even became difficult for them to repay the bank loans. But 45% of the respondents
reported an increase in their income and showed an inclination to set up their enterprises in urban
areas. It is sad to say that the bank loan has failed to ameliorate the existing socioeconomic status of
rural entrepreneurs. There are very few entrepreneurs who are interested to stay in rural areas. They are
reluctant about this. Only those respondents who have no land to their credit are ready to stay in the
rural areas.
Testing of Hypotheses
Women Entrepreneurs Who Are Less Educated Are Prone to Commit More Defaults
ŠŠ For the purpose of analysis of this hypothesis, the term ‘less educated’ is understood as ‘women
who are educated up to SSC.’
ŠŠ Out of 73 sample borrowers, 41 (56.16%) are educated below SSC and 32(43.84%) borrowers
are either graduates or diploma holders or postgraduates.
ŠŠ Out of 41 borrowers who are less educated, 11 (15,06%) ire educated up to second standard, 15
(20.55%) are educated up to savontiory eilucluion and 15(20,55) below SSC
ŠŠ The category of less educated women shows that out of 41 educated borrowers,35 (85.36%)
respondents are defaulters. Only 6 (14.64%) are paying their installments on time.
ŠŠ The borrowers who are highly educated are 32. Out of these, 10 (31.25%)borrowers are defaulters
and 22 (68.75%) are paying installments on time.

Technical Session - III UGC Sponsored National Seminar on Economy & Entrepreneurship
Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District 227

The above analysis proves the hypothesis; Women entrepreneurs who are less educated are prone
to commit more defaults.
Women Entrepreneurs Divert the Bank Credit and Utilize It for Other Unproductive
Purposes
Banks in India mostly provide loans for productive purposes, i.e., for activities which would add
to more production. The concept of consumption loan is still new to the Indian banks.
ŠŠ For the purpose of analysis, the term ‘unproductive purpose’ is understood as “the borrower uses
the loan amount for other purposes than the one stated • in their loan proposal.”
ŠŠ Out of 73 borrowers, 53 (72.60%) have diverted their credit for unproductive purposes and 20
(27.40%) have not diverted their loan and are paying installments as per schedule.
ŠŠ Out of 53 borrowers,
»» 22 (30.14%) used the credit for unavoidable needs.
»» 10 (13.70%) borrowers diverted for urgent expenses like marriage, festivals, etc.
»» 8 (10.96%) diverted their credit because of under finance from the bank.
»» 7 (9.59%) borrowers diverted due to late receipt of the loan.
»» 4 (5.48%) borrowers availed bank credit to repay their private loans.
»» 2 (2.74%) respondents have not disclosed the reasons for the diversion of credit.
ŠŠ Regarding block-wise diversion of credit, 60.27% are from developed areas and the percentages
of defaulters are 52.27%; and 39.73% are from undeveloped areas and the defaulters are 75.86%.
From the block-wise information about the diversion of credit, it is clear that women entrepreneurs
from both developed as well as undeveloped areas divert their credit.
The reasons for diversifying the credit do not depend upon the areas to which the borrowers belong,
whether it is forward block or lagging block. This analysis proves the hypothesis, Women entrepreneurs
divert the bank credit and utilize it for other unproductive purposes.
Conclusion
India is one of the very few countries in the world, which has developed a wide range of banks and
supporting agencies aimed at developing entrepreneurship. These agencies have certainly filled a vital gap
in the industrial development program of India. Commercial banks are the main financial institutions
which look into the financing of projects. More number of bank branches are established in developed
areas compared to the undeveloped areas.
Block-wise analysis reveals that all the borrowers from the lagging blocks have diverted bank
credit for other purposes. It is observed that borrowers from less educated class have not paid their
installments on time. On the contrary, borrowers from more educated class did not divert their credit
for other purposes. Due to more number of defaulters in less educated group, it is necessary to establish
educational institutions.
Indian bankers are still adverse in taking risks and do not lend without adequate tangible securities
or guarantors. The concept of looking into the merit of the women entrepreneurs and their business
viability has not reached the banks yet. The need of the hour is a nucleus center in each industrial area
where all these services are provided through it. The numbers of rural branches are more than that of

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228 Analytical Study of Bank Finance to Women Entrepreneurs in Selected Five Banks in Guntur District

urban and semi-urban branches. Nationalized banks have done a good work in the rural expansion of
their branches.
Entrepreneurial development is to be attuned to economic needs. It is therefore, necessary to
recognize the importance of entrepreneurship as an aspect of social life. Similarly, entrepreneurship
education should be made more socially utilitarian. It is, nevertheless, imperative to restructure the entire
curriculum and identify the areas of entrepreneurship and motivate young people to start their own
business at an early age in their chosen field of interest. This will generate self-employment, which is
always more satisfying than working for others.
Bibliography
Books
yy Census of India (2001), Government of India, New Delhi, p. 27.
yy Helle Nurgaard and John P Ulaoi (Eds.) (2006), Handbook of Qualitative Research in Entrepreneurship, The Aarhus School of
Business, Denmark.
yy “Mahabank Mahashakti”, A Handbook of Andhra Bank, September 16, 2005.
yy Moharana Samson and Jena R (1985), “Preventing Industrial Sickness in the SmallScale Sector: The Role of Commercial Banks”,
Indian Journal of Commerce, Vol. XXXVIII, Part-I, No. 142, January-March, pp. 51-59.
yy Per Davidsson, Frederic Delmar and Johan Wiklund (2006), Entrepreneurship and the Growth of Firms, Edward Elgar Publishing.
yy Prabhakar Rao J V (Ed.) (2000), Entrepreneurship and Economic Development,Kanishka Publishers, New Delhi.
yy Surya Rao V and Srinivasa Rao K (2000), J V Nabluskur Itao (1(d, ), Ride ol Commercial Banks’ in Economic Development, pp.
186- 190, Kanishka Publishek, New Delhi.
Reports
yy Annual Credit Plan (2005), Guntur District.
yy Annual Report, Andhra Bank (2003-04).
yy Economic Survey of Maharashtra (2003-04), Table 6.2, p. 161.
yy Government of India Publication, 9th Five Year Plan, Government of India, Delhi.
yy Potential Linked Credit Plan (2002-03 to 2006-07), NABARD, Regional Office, Pune.
Articles
yy “E-Commerce Boon to Rural Small Entrepreneurs”, SEDME Journal, p. 69, June 2001.
yy “NABARD Plans Vs. Funds”, The Economic Times, p. 10, July 14, 2005.
yy Prof. Jadhav S B (2004), Yojana (Marathi), December, p. 21.
yy “Women Entrepreneurs in Co-operative Banking Sector”, Southern Economist Journal,
yy Vol. 42, No. 19, pp. 7-10.

Technical Session - III UGC Sponsored National Seminar on Economy & Entrepreneurship
A Study on Socio Cultural Factors Influencing Women Entrepreneurs At Association
of Lady Entrepreneurs of Andhra Pradesh (ALEAP)

*Ms. Syamala Devi Bhoganadam, **Dr. Dasaraju Srinivasa Rao


*Research Scholar, Department of Management, K L University, Vaddeswaram, Guntur, AP.
**Professor, Department of Management, K L University, Vaddeswaram, Guntur, AP.
Abstract: Women entrepreneurship is a roaring area of research, business and nation’s development. Women are facing
environmental factors to achieve entrepreneurial success. Hence this paper focuses majorly on macro environmental factors
which influence their success. Here in this study only socio cultural factors were considered as in developing countries these factors
impact highly. This study takes five major socio cultural factors as education, family background, social networks, religion and
caste, which are tested with success using chi square test. From the literature it is tested that age of company is associated with
success. the study adopts descriptive type of research design using stratified simple random sampling of 55 entrepreneurs taken at
Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP) using structured questionnaire. The findings of the study reveal
that all the factors five socio cultural factors and age of company are having significant relation with women entrepreneurial success.
Key words: Women entrepreneurship, socio cultural factors, entrepreneurial success, ALEAP, entrepreneurs
Abbreviations: ALEAP : Association of Lady Entrepreneurs of Andhra Pradesh

Introduction:
Entrepreneurship is defined as in terms of profit driven, economy driven, market driven, person
driven etc. But in developing countries it is hard to define entrepreneurship as their economical changes
are heavy and uncertain. Moreover major of the researchers, academicians consider entrepreneurs as profit
oriented hence in this paper entrepreneur is defined as a person who owns her enterprise and works hard
to developing and maintaining of enterprise and to achieve higher and higher success rate.
As environmental changes are uncertain with developing countries the macro and micro
environmental changes are happens. Hence the present attains socio cultural factors influencing Indian
women entrepreneurs with entrepreneurial success. Shardha Shivani et.al, (2006) say that socio cultural
factors are important on developing countries like India Association of Lady Entrepreneurs of Andhra
Pradesh (ALEAP) is a lady entrepreneur’s hub for promoting women entrepreneurs with an area of 30
acres having more than 300sheds occupied at present.
Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP) contains different sectoral
business like food and processing, manufacturing, electrical, electronics, handlooms, paper and printing,
pharmaceuticals etc. Data was collected from each and every sector at Association of Lady Entrepreneurs
of Andhra Pradesh (ALEAP). It is observed that ALEAP is providing friendly built on infrastructure.
Objectives of the study:
ŠŠ To study socio cultural factors influencing women entrepreneurship
ŠŠ To examine significant association between socio cultural factors and entrepreneurial performance
ŠŠ To examine significant association between age of company and entrepreneurial performance
ŠŠ To bring out some suggestions to women entrepreneurs at ALEAP.
Review of literature:
Akpor - Robaro, M. O. (2012) says that socio cultural environment theoretical base which study
variables as level of education of entrepreneur, poverty, values of economic power and independence,
gender role values, and taken Hofstede’s cultural values. Debanjan Nag & Niladri Das (2014) identifies four
230 A Study on Socio Cultural Factors Influencing Women Entrepreneurs At Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP)

factors as education, prior experience, leadership skills and communication influencing entrepreneurship
and results show that all these factors are significant role in developing entrepreneurship.
Shardha Shivani et.al, (2006) say that socio cultural factors are important on developing countries
like India. They had taken religion, caste, family support and education are variables under socio cultural
environment. Their findings indicate that caste does not influence entrepreneurial success but influence on
supply and survival of enterprise. Family support and education are significant factors identified. Religion
does not a relationship with entrepreneurship success but all the entrepreneurs are highly religious.
Kumar, D. (2014) says that in social values, family support, religion, education are influencing
factors for entrepreneurship. Levent Altinay &Catherine L. Wang (2011) research recognized some of
socio cultural factors influencing entrepreneurial orientation are education, prior experience and religion.
From this literature it is identified that four major factors which influence entrepreneurship success are
education, work experience, trust among social networks and quality of work force.
Hypothesis for the study:
H11: To examine significant association between education and entrepreneurial performance
H12: To examine significant association between family background and entrepreneurial performance
H13: To examine significant association between social networks and entrepreneurial performance
H14: To examine significant association between religion and entrepreneurial performance
H15: To examine significant association between caste and entrepreneurial performance
H16: To examine significant association between age of company and entrepreneurial performance
Model for the study:
From review of literature it is identified that five major socio cultural factors will impact women
entrepreneurial success as education, family background, social networks, religion and caste. Level
of education increases simultaneously the percentage of entrepreneurial success increases. As level of
family background support towards women entrepreneur increases simultaneously the percentage
of entrepreneurial success increases. Density of social networks to women entrepreneurs increases
simultaneously the percentage of entrepreneurial success increases. Level of religious participation of
women entrepreneurs increases simultaneously the percentage of entrepreneurial success increases. Level
of caste increases simultaneously the percentage of entrepreneurial success increases. Here these socio
cultural factors were measured using individual opinion scaling statements and were combined to each
variables using summation technique.
Women entrepreneurial success is measures using three parameters like financial performance,
production performance and marketing performance. Financial performance is measured using return
on sales, return on assets and profitability. Production performance is measured using production
cost, production quantity and quality. Marketing performance is measured using total sales, customer
satisfaction and market share. These nine statements were combined to women entrepreneurial success
variable using summation technique.

Technical Session - III UGC Sponsored National Seminar on Economy & Entrepreneurship
A Study on Socio Cultural Factors Influencing Women Entrepreneurs At Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP) 231

Education

H11

Family Background
H12
Socio cultural factors
influencing women Social Networks H13 Women Entrepreneurial
entrepreneurial success Success
H14
Religion

H15
Caste

Figure 5.1: Model for the study


Research Methodology:
The study finds out impact of socio cultural factors on women entrepreneurial success using
descriptive type of research design. To attain objectives defined for the study and for testing of defined
hypothesis 55 women entrepreneurs data gathered using stratified simple random technique at Association
of Lady Entrepreneurs of Andhra Pradesh (ALEAP) located at surrampally village, Krishna district.
The identified variables were measured using five point Likert scale in a structured questionnaire
format. This questionnaire distributed among 80 women entrepreneurs on June 2017 only 55 valid
questionnaires were found with an error ratio of 31%. These valid 55 women entrepreneurs’ data analysed
using SPSS software. Tests like chi square, percentages, etc were adopted.
Data Analysis and Interpretation:
Table 1: Sample profile of respondents

Std.
N Minimum Maximum Mean Skewness
Deviation
Std.
Statistic Statistic Statistic Statistic Statistic Statistic
Error
Entrepreneurs
55 1 5 2.75 1.004 .769 .322
qualification
Age of company 55 1 5 3.73 1.627 -.611 .322
Category of company 55 1 3 1.78 .498 -.416 .322
Type of business 55 1 2 1.05 .229 4.034 .322
Type of manufacturing
55 1 9 6.93 2.567 -1.110 .322
sector belongs to

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232 A Study on Socio Cultural Factors Influencing Women Entrepreneurs At Association of Lady Entrepreneurs of Andhra Pradesh (ALEAP)

Std.
N Minimum Maximum Mean Skewness
Deviation
Std.
Statistic Statistic Statistic Statistic Statistic Statistic
Error
Present legal status of
55 1 4 1.71 1.286 1.276 .322
company
Sources of finance 55 2