UNIT – 3 Ritu Singh (Assistant Professor –GIBS)

UNIT 3 –NOTES

TOPICS COVERED
(1) What is EDP
(2) Roles
(3) Relevance
(4) Objective
(5) Phases of EDP
(6) Role of govt in EDP
(7) Reasons of slow progress of EDP’S

Q- 1What is meant by Entrepreneurial Development // Programme (EDP)?

 Entrepreneurship Development Programme (EDP) is a programme which helps in
developing the entrepreneurial abilities.
 The skills that are required to run a business successfully is developed among the people
through this programme. Sometimes, people may have skills but it requires polishing and
incubation. This programme is perfect for them.
 This programme consists of a structured training process to develop an individual as an
entrepreneur.
 It helps the person to acquire skills and necessary capabilities to play the role of an
entrepreneur effectively. A
 As per National Institute of Small Industry Extension Training, Hyderabad, an EDP is an
effort of converting a person to an entrepreneur by passing him through a thoroughly
structured training. An entrepreneur is required to respond appropriately to the market
and he/she is also required to understand the business needs. The skills needed are varied
and they need to be taken care in the best possible way.
 EDP is not just a training programme but it is a complete process to make the possible
transformation of an individual into an entrepreneur.
 This programme also guides the individuals on how to start the business and effective
ways to sustain it successfully.

Q-2 Discuss the objectives of entrepreneurial development programme.

Short-term objectives: These objectives can be achieved immediately. In the short-term, the
individuals are trained to be an entrepreneur and made competent enough to scan existing market
situation and environment. The person, who would be the future entrepreneur, should first set the
goal as an entrepreneur. The information related to the existing rules and regulations is essential
at this stage.
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Long-term objectives: The ultimate objective is that the trained individuals successfully
establish their own business and they should be equipped with all the required skills to run their
business smoothly.

The overall objectives of EDP are mainly to help in rapid industrialisation by supplying skilled
entrepreneurs. At the same time, it also industrialises underdeveloped areas. The performance of
small and medium scale industries are expected to improve by this and therefore providing a
huge scope of employment generation in these sectors. This programme primarily aims at
providing self-employment to the young generation.

In general : -
1) Promotion of Cottage and Small Scale Industries : The main objective of EDP is to provide,
in the rural areas, special programmers’ designed to stimulate new ventures and encourage
expansion of existing activities of small and medium scale industries.

(2) Generation of Employment Opportunities : EDP aims to encourage self-employment among

potential entrepreneurs. It generates employment and self-employment opportunities in
the processing of indigenous raw materials for local consumption and for exports.

(3) Promotion of First-Generation Businessmen : One of the main objective of EDP is to

encourage first generation entrepreneurs who do not have any business background.

(4) TO Create Awareness about Availability of the Resources : i.e about the available
resources„ such raw material, technology etc.

(5) To import Training : The main objective of EDP is to in donut and train potential
entrepreneurs. It impart training in mnnngorinl understanding and skills. It also provide post
training assistance and monitoring facilities.

(6) To Develop a Broad Vision : One of the objective of EDP is to doyolop n broad vision to see
the business as a whole and to integrate his functions with it

(7) To Remove Doubts of Entrepreneurs and to give solutionlion to their Problems : New
entrepreneurs have to face many problems in the establishment and operation of business. To
remove doubts of entrepreneurs and to give solution to their problem is one of the main aim of
EDP. It helps the entrepreneurs to set or reset the
objectives of their business and work individually and along with his group for their realisation.
 UNIT – 3 Ritu Singh (Assistant Professor –GIBS)

(8) To create a successful entrepreneur : One of the main aim of EDP is to create the successful
entrepreneurs. It provides constructive direction for those who choose a career path different
from traditional roles.

(9) Creation of Conductive and healthy environment for the growth of entrepreneurs : The
process of entrepreneurial development focuses on training, education, reorientation and creation
of conductive and healthy environment for the growth of enterprises.

Q-3 Role of EDP

An Entrepreneurship Development Programme primarily plays four roles to help an individual to

become an entrepreneur.
1. Stimulatory Role:
It aims at influencing people in large number to be the entrepreneur.
This includes:
 developing managerial, technical, financial, and marketing skill
 inculcating personality traits
 promotes and reforms entrepreneurial behaviour and values
 identifying potential entrepreneur applying scientific methods
 motivational training and building proper attitude
 strengthening the motive of a person and giving recognition
 the valuable know-how of the local products and the processes help in selection of
products, preparation of project reports

2. Supportive Role:
It helps in the following ways:
 registration of the business
 procurement of fund
 arrangement of land, power, water, shed etc.
 support in purchase of right kind of machinery and equipment
 supply of raw materials and common facilities
 Providing tax relief, subsidy etc.
 guidance in product marketing
 support for management consultancy

3. Sustaining Role:
It aims at providing an effective safeguard to businesses to sustain against the cut-throat market
competition.
This includes:
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 help in modernisation, expansion, and diversification

 additional financing for further development
 deferring interest payment
 creating new marketing processes
 helping access to improved services and facility centres

4. Socio-economic Role: It aims at upgrading the socio-economic status of the public and
includes:
 identifying entrepreneurial qualities in practicality
 creating employment opportunities in micro, small, and medium industries on an
immediate basis
 arresting concentration of industries by supporting regional development in a balanced
manner
 focusing on the equal distribution of income and wealth of the nation
 channelizing the latent resources for building an enterprise

Q-4 Relevance of Entrepreneurial Development Programme in India

EDP is essential for first generation entrepreneurs because they may not become successful
unless a proper training is received. It is a continuous process of motivating the entrepreneur.
The potential entrepreneurs can solve many of their problems provided proper training is given
to them.it can help the country in the following ways:
1. Eliminates poverty and unemployment:
 Entrepreneurship development programmes can help the unemployed people to opt for
self-employment and entrepreneurial as a career.
 Several programmes like National Rural Employment Programme (NREP), Integrated
Rural Development Programme (IRDP) etc. are in operation in India to help the potential
entrepreneurs.
 All these special schemes intend to eliminate the poverty and solve the problem of
unemployment.
2. Balanced regional development:
 Successful Entrepreneurial development programmes help in foster the industrialization
and reduces the concentration of economic power.
 It is because the small-scale entrepreneurs can set-up their units in remote areas with little
financial resources which can help in achieving balanced regional development.
 the medium and large enterprises do not help in reducing the disparities in income and
wealth of the people. Thus, Entrepreneurial development programmes help in balanced
regional development by spreading industrial units in each, and every part of the country.
 UNIT – 3 Ritu Singh (Assistant Professor –GIBS)

3. Prevents industrial slums:

 The urban cities are highly congested and leading to industrial slums. Decentralization of
industries is very much required by relocating the industries.
 Entrepreneurial development programmes help in removal of industrial slums as the
entrepreneurs are provided with various schemes, incentives, subsidies and infrastructural
facilities to set up their own enterprises in all the non-industrialized areas.
 This will control the industrial slums and also reduce the pollution, traffic congestion,
overcrowding in cities etc.
4. Harnessing locally available resources:
 Since abundant resources are available locally, proper use of these resources will help to
carve out a health base for sound economic and rapid industrialization.
 The entrepreneurial development programmes can help in harnessing these resources by
training and educating the entrepreneurs.
5. Defuses social tension:
 Every young person feels frustrated if he does not get employment after completing his
education.
 The talent of the youth must be diverted to self-employment careers to help the country in
defusing social tension and unrest among youth which is possible by entrepreneurial
development programmes.
6. Capital formation:
 The various development banks like ICICI, IDBI, IFCI, SFC, SIDC and SIDBI take
initiative in promoting entrepreneurship through assistance to various agencies involved
in EDP and by providing financial help to ne entrepreneurs. It is impossible to start a new
enterprise without sufficient funds.
 Entrepreneurs are the organizers of factors of production who employ their own and
borrowered money for setting up of new ventures. This all results in the process of capital
formation.
7. Economic independence:
 Entrepreneurs develop and produce substituted products of imported goods and prevent
the over-dependence on other countries.
 They also enable the country to produce different variety of better quality goods and
services at competitive prices of imported goods which help in promoting the economic
independence of the country.
8. Improvement in per capita income:
 Entrepreneurs always explore and exploit the new opportunities which lead to productive
use of factors of production for more output, employment and generation of wealth.
 The overall increase in productivity and income help in improvement in per capita
income. EDPs play a significant role in setting up of more industrial units to generate
more employment opportunity and to secure improved per capital income.
9. Facilitating overall development:
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 Entrepreneurs act as agents of proper use of various limited resources such as men,
money, material, machines etc. which leads to overall development of an area, an
industry.
 The successful entrepreneurs set a motivating example for others to adopt
entrepreneurship as a career. Thus entrepreneurs create a motivating environment for
economic development of a country.

q-5 ROLE OF GOVERNMENT IN ORGANISING ENTREPRENEURIAL

DEVELOPMENT PROGRAMMES
After independence of our country the Government of India decided to promote entrepreneurial
activity through various incentives in both industrially backward and rural areas, The thrust of
these programmes was to provide, technological, financial, market and morale support to the
potential entrepreneurs, who can act as a catalytic agents of change and development. There
are vari0US agencies and institutions engaged in entrepreneurial development activity and these
are as under.
INSTITUTE ESTABLISHED BY CENTRAL GOVERNMENT
(1) National Institute For Entrepreneurship and Small Business Development
(NIESBD)
The Delhi-based National Institute for Entrepreneurship and Small Business
Development (NIESBD) was established by the Government of India, as an apex body
for coordinating and overseeing the activities of various institutions and agencies
engaged in entrepreneurship development particularly in the area of small industry and
small business.
The Institute aims at creating an environment which is conductive to emergence of
entrepreneurship and in developing favorable response from the people to support
potential entrepreneurs.
The major activities of the Institute include
(i) evolving model syllabi for training various target group,
(ii) providing effective training strategies,
(iii) methodology, manuals and tools,
(iv) facilitating and supporting Centre/State Governments and other agencies in
executing programmes of entrepreneurship and small business development,
(v) maximizing benefit and accelerating the process of entrepreneurship
development,
(vi) conducting programmes for motivators, trainers and entrepreneurs which are
commonly not undertaken by other agencies and
 UNIT – 3 Ritu Singh (Assistant Professor –GIBS)

(vii) organizing those activities that help in developing entrepreneurial culture in

the society.
(2) Entrepreneurship Development Institute of India It is a national institute set up by
Public Financial (EDII) :
 Institutions and Government of Gujarat, in 1983.
 The EDII has been engaged in training people for self-employment for the last
twenty four years and has done pioneering work in this field.
 The EDP Department conducts regular training courses with the objective of
enabling people to become self employed.
 The courses are of 3-4 months duration and cater mostly to the needs of village
youth and school dropouts.
 The department imparts not only training but also enables the trainees to become
self-employed and endeavour to make their business venture a success.
 To achieve this PUrpose, the Dept. is engaged in various activities such as
establishing contacts with the banks for obtaining loan, helping trainees to draw
up a project proposal, and monitoring the programmes of extrainees trainees.
(3) Small Industries Development Organisation (SIDO) :
 This organisation was established in 1954 by the Central Government.
 SIDO has designed EDPs to identify persons with entrepreneurial abilities.
 The training programmes are designed for various groups like educated
unemployed, women, weaker sections, rural artisans, physically handicapped,
technocrats, entrepreneurs under self-employment scheme, etc.
 At present SIDO has 16 specialised institutes responsible for training, research
and development of product design and processes.
 It has designed programmes for various types of training.
 It offers following courses :
(i) Appreciation course in industrial management.
(ii) Specialised courses in such areas as production, marketing, materials, finance and export
management.
(iii) Ad hoc incentive courses on subjects like inspection and quality control, work study,
salesmanship etc.
(4) National Entrepreneurship Development Board The Department has constituted the
National (NEDB) .
 Entrepreneurship Development Board under the Chairmanship of the Union
Minister of State which acts as an apex body for entrepreneurship development.
 It devises and recommends to the Government schemes for promotion of
entrepreneurship for encouraging self-employment in small scale industries and
small business.
 The Board also recommends suitable facilities and incentives for entrepreneurship
training.
 UNIT – 3 Ritu Singh (Assistant Professor –GIBS)

(5) Indian Investment Centre (IIC) :

 This organisation is set up by the Government of India to promote joint entures
and to conduct EDPs.
 For this purpose, it has set up an Entrepreneurial Guidance Bureau to guide
entrepreneurs in establishment of new ventures.
 IIC performs the following functions :
(i) identification and selection of potential entrepreneurs; to perform skills
(ii) developing entrepreneurial entrepreneurialjob;
(iii) increasingtheirmanagerial knowledge; and
(iv) helpingthem to start their own projects.

(6) Technical Consultancy Organisations (TCOS) :

 Access to high quality consultancy services improves the operational efficiency of
entrepreneurs.
 All India financial institutions have set up 17 technical consultancy organizations to
provide industrial consultancy and training to entrepreneurs.
 These organizations provide a comprehensive package of services to
small entrepreneurs.
 The main functions ofTCOs are as follows :
(i) Identification of industrial potentials;
(ii) Conduct pre-investment studies and prepare project reports and feasibility studies;
(iii) Undertake techno-economic surveys;
(iv) Undertake market research; and
(v) Identify potential entrepreneurs and provide them with technical and managerial assistance.

(7) National Institute for Small Industry Extension and Training (NISIET) :
 It was established in 1960 under the direction of SIDO to provide extension and training
servicestlt imparts training to entrepreneurs, managers, various departments of
State Governments, financial institutions and other agencies.
 It organises about 45 national and 15 international level programmes every year. It is a
nodal agency.
 It is resource and information center for small units.
 It undertakes research and consultancy for small industry development.

8)Xavier Institute of Social Services, Ranchi :

 This institute provides training to rural entrepreneurs. It functions in close cooperation

with social organisation.
 It assists the trainees in drafting project proposals and on obtaining the required finance.
 It offers a six month programme to tribals for developing the entrepreneurial skills.
 UNIT – 3 Ritu Singh (Assistant Professor –GIBS)

 The programme consists of :

(i) identification and selection of candidates.
(ii) motivation and managerial training.
(iii) training of practical skills.
(iv) market survey and preparation of project report.

INSTITUTIONS ESTABLISHED AT STATE LEVEL

Various institutions have also been established at State level to make the entrepreneurial
development programmes more organised and successful.
Some of the important institutions are as follows :
(1) Small Industries Service Institute(SISI),
(2) District Industry Centre (DIC),
(3) State Finance Corporation,
(4) State Small Industries Corporation (SSIC),
(5) State IndustrieS Corporation (SIC),
(6) Directorate of Industries,
(7) State lndustries Promotion Corporation.

Q- REASONS OF SLOW PROGRESS OF EDP’S

 There is lack of incentives and facilities provided by government of India to encourage
entrepreneurs.
 Bureaucracy and red tapism is also one of the reasons. The entrepreneurs face many
difficulties in getting facilities from the government because of slow movement in
government institutions, administration, corruption etc.
 The education and training provided in India for entrepreneur development is more of
theoretical in nature which has not much practical significance. The people engaged in
providing education given low remuneration due to which highly qualified and
experienced people are not interested to join these institutions.
 The EDP’s are of no use if prospective entrepreneurs are not properly selected. Most of
the institutions in India make the selection of the candidates just on the basis of interview.
No attention is paid on the scientific selection or procedure like psychological test,
mental ability test etc.
 Any organization conducting EDP’s must have full knowledge of its objectives and
aims. Such institutions are emerging like mushrooms in recent years in India which do
not know the basic objectives of EDP’s particularly in non government sectors. Their
only objective is to make money.
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 The institutions conducting entrepreneurial development programmes lay more emphasis

on increasing the number of participants than on quality due to which the able
entrepreneurs do not come up in the industry and face uncertainties and failures.
 Most of the EDP’s are organized for a period of 4 to 6 weeks which is not sufficient even
to provide basic qualities to run the enterprise.
 Pre-planned and basic facilities are must for conducting entrepreneurial development
programmes. There is lack of such facilities like proper place, environment, transport etc.
in rural areas due to which the basic purpose of these programmes is defeated.
 The financial institutions and banks may talk of providing financial help to potential
entrepreneurs in principle but in practice this does not happen. New entrepreneurs are not
in a position to give necessary securities for obtaining loans and as a result their dream of
establishing their own enterprise shatters down

Q- Phases of EDP

EDP pass through following three stages:

I. Initial or Pre-training phase

II. Training or Development phase
III. Post training or follow-up phase

Pre-Training
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Pre-training phase consists of all activities and preparation to launch training programme.

Pre-training phase of EDP consists of the following activities :

 Selection of entrepreneurs for the training protgramme.

 Arrangements of infrastructure are for the programme like selection of place of training.
 Deciding guest faculty for the programme from education industry and banks.
 Taking necessary steps for inauguration of programme.
 Formation of selection committee to select trainees from the programme.
 Making provision with regard to publicity and campaigning for the programme.
 Designing course-curriculum for training
 Selection of faculty
 Advertisement
 Selection of potential or perspective Entrepreneurs

II. Training phase

 The main objective of this phase is to bring desirable change in the behaviour of the
trainees AND to develop motivation and skill or competency amongst the potential
entrepreneurs.
 Care should be taken to impart both theoretical and practical knowledge to various
trainees.
 Accordingly, a trainer should see the following changes in the behavior of trainees:

 Is he or she attitudinally tuned very much towards his or her proposed project idea?
 Is the trainee motivated to plunge into entrepreneurial career and beer risks involved in
it?
 How should he or she behave like an entrepreneur?
 What kinds of entrepreneurial traits the trainee lacks the most?
 Does the trainees possess the required skill in selecting the viable project, mobilizing the
required resources at the right time?
 Whether the trainee has been motivated to accept entrepreneurship as a career.
 How the trainee behaves like an entrepreneur.
 Whether the trainee has sufficient knowledge on resources and technology or not.
 What kind of entrepreneurial traits he lacks and what steps should be taken to set

There are number of methods to provide Training:

1.Lecture method
2. Written instructions method
3. Demonstration or practical method:
4. Conferences:
5. Meetings
6. Individual training :
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7. Group training :

III. Post-training phase

 Follow up phase of EDP has been termed as post-training phase.
 The ultimate objective is to develop competent entrepreneurs.So that they can start their
project. Post-training phase is a review phase of training programme.
 It consists of reviewing of work in the following manner:

 Review of pre-training work

 Review of actual training programme
 Review of post training programme so that cost effectiveness of the present programme
can be evaluated
 If not what were the deviations, loopholes in the plan?
 Taking Corrective action to improve the weaknesses after identifying them?