Hirasugar Institute of Technology, Nidasoshi

1. Department of Computer Science & Engineering Hirasugar Institute of Technology, Nidasoshi ICT [Information and Communication Technology] Material on Management & Entrepreneurships for IT Industry (15CS51) 2018-19 Odd Semester Dr.ParashuramBaraki Professor & HOD Dept of CS&E

2. Module 5 Micro and Small Enterprises • Definition of MSE • Characteristics and Advantages of MSE • Steps in establishing MSE • Government of India Industrial Policy 2007 on MSE • Case Study (Microsoft) • Case Study ( Captain G R Gopinath) • Case Study ( N R Narayana Murthy & Infosys)

3. Definition of MSE/SSI An industrial undertaking in which an investment in fixed assets, plant and machinery doesn’t cross Rs 10 million is treated as SSI unit, this is irrespective of whether the assets are held on ownership terms, on lease on hire purchase - Indian industry Law in 1999

4. Examples of SSI • Ice Creams • Bread • Biscuits • Oil extracts • Rice mills • Garments • Health services • Legal services

5. Characteristics of SSI • Personal character • Labor intensive • Independent Management • Simple Organization • Capital Investment will be less • Mainly engaged in manufacturing of parts, components

6. Contd…. • Use local resources • Setup in rural and semi-urban areas • Do not obey standards • Market share will be very small • Division and specialization of labor is low

7. Why We Need SSI ? • Need of Employment • Need for equality • Need for Decentralization • Need for More Entrepreneurs • Need to improve economy of the nation

8. Contd.. • To mobilize the country’s untapped capital and human resources • To improve the standard of living • To encourage small entrepreneurs to grow and realize their dreams • To improve the life style of BPL

9. Scope of small scale industry: Activities • Manufacturing activities • Construction activities • Public utilities • Service or repairing activities • Financial activities • Retailing activities • Wholesale business.

10. Role of SSI in Economic Development • Providing employment • Mobilization of local resources • Feeding large scale industries • Promotion of Exports • Equitable distribution of wealth • Promoting Regional Development • Inspiring new entrepreneurs

11. Advantages of SSI • Self Employment Opportunities • Do not Require High end Technology • Location Independent • Use Local resources • They help earn and foreign exchange • Opportunity for young entrepreneurs • Promotes local craftsmanship and handicrafts • Require simple technology and low managerial skills • Helps to large industry by acting as ancillaries

12. Disadvantages of SSI • Raw Material: scarcity, poor quality • Marketing • Outdated Technology • Over Protection by Government • Lack of Research and Development activities • Lack of efficient successors

13. Steps in establishing SSI • Project and Product Identification • Selecting the form of ownership • Location of the unit • Preparation of project report • Registration of Project report • Arrangement of finance • Procuring of licenses and getting NOC • Creating physical infrastructure

14. Contd… • Recruitment of staff • Procuring raw materials • Electrification procedures and water facilities • Starting production • Marketing the product

15. Government of India Industrial Policy

18. Government Policy Towards SSI To promote industrial activities, the government brought resolution.1948-2003 those are called as Industrial Policy Resolutions

19. IPR 1948 Need to protect and promote Cottage Industries, it was made to solve problems of small scale industry segment with respect to raw -material, labors, capital, transportation and marketing.

20. IPR 1956 • Aimed at “ Protection plus development” • Resolution initiated the modern SSI India • 128 Products were reserved for exclusive production in small sector • After1948 industrial policy resolution, significant development Took place in India, economic planning proceeded in an organized basis and the first five-year plan was completed

21. IPR 1977 • Aimed at :Protection plus development plus Promotion • Three Categories • Cottage and household • industries • Tiny sector • Small Scale industry

22. IPR 1980 Higher employment generation; Increase in the investment ceilings from Rs 1 Lakh to Rs 2 Lakhs, from 10 to 20 lakhs, 15-20 lakhs • Correction of regional imbalances; • Strengthening of the agricultural base through agro based industries and promotion of optimum inter-sectoral relationship; • Promotion of export-oriented industries; • Consumer protection against high prices and bad quality

23. IPR 1990 • Investment ceilings for SSI raised from 35 to 60 lakhs • For ancillary units 45 to 75 lakhs • Around 800 items were reserved for exclusive manufacture in small sector. • The government started SIDO; Small scale industries development organization

24. IPR 1991 “ The New Small Enterprise Policy 1991” • Objective was to promote small scale sectors to improve the economy of the nation • Reduced the complexities in acquiring licenses • Tiny industries were come up anywhere in India • Partnership act was amended to suit SSI • Labor will be made an equal partner in progress and prosperity • Foreign Technology Agreements[FTA]

25. Government Policy Resolution in 1999 • Steps taken to improve investment limits • Steps taken to promote exports • Announced incentives to improve quality • Turnover limit for SSI was enhanced from 4 to 5 Crores • A new union ministry for SSI • A national program to promote industrialization was announced, with a target of 100 rural clusters every

26. Government Policy Resolution in 2003 • Lendng rates to open SSI was reduced by 2% • More SIDBI branches were opened • All India SSI census was carried-out

27. Planning Commission; India • The PLANNING COMMISSION is an institution in the Government of India, which formulates India’s Five year plan. • Planning commission was set up on 15 MARCH 1950, with Prime minister JAWAHARLAL NEHRU as the chairman

28. Government Support to SSI during 5 year plan • Economic growth • Self Reliance • Creating Employment • opportunities • Elimination of poverty

29. Case Study Microsoft: Bill Gates Captain Gopinath (Air Deccan) Narayana Murthy : Infosys

30. KSFC (Karnataka State Finance Corporation) • Karnataka State Financial Corporation is a state level financial institution established by the State Government in the year of 1956 under the State Financial Corporation Act 1951 to meet mainly the long term financial needs of Small and Medium Entrepreneurs (SME’s) in the state of Karnataka.

31. Vision of KSFC To reach and covers the entire state of Karnataka. To suit the knowledge of each region in terms of infrastructure and natural resources industrialization and entrepreneurship. Specialization in the appraisal, monitoring a recovery of loans of SSI/MSI of other new fund and the based activities, A continuous journey towards the development of SSI and entrepreneurs. Mission of KSFC: To be a premier, self sustained financial institution for catalyzing creating and sustaining viable investment in the small scale and medium scale of Industry and services and the financial sectors in the state of Karnataka State.

32. Quality Policy: • To ensure satisfaction through team work and professional management. • To extend effective guidance through entrepreneurs for successful accomplishment of their business venture. • To provide good quality of service on a continued basis to the satisfaction of the customer. • To attain satisfied level of performance every year and to ensure compliance with statutory and regularly requirements. • To encourage everyone in the organization to upgrade and enhance their skill & knowledge with.

33. Objectives of KSFC: The corporation has been established with the basic objective of promoting industrial development in Karnataka. KSFC was desired to give particular emphasis to small & medium scale industries keeping in line with the SIDBI and either specialized institutions or the Government. It was felt that no industrial project which is due important should not perish due to lack of timely and adequate finance.

34. NSIC (National Small Industries Corporation) • It was established in 1955 to promote and develop micro and small scale industries and enterprises in the country. It was founded as a Government of India agency later made into a fully owned government cor • National Small Industries Corporation Ltd. (NSIC), is an ISO 9001-2015 certified Government of India Enterprise under Ministry of Micro, Small and Medium Enterprises (MSME).poration.

35. Objectives • To provide machinery on hire purchase basis and assisting and marketing in exports. • Providing training facilities centers and for providing assistance in modernizing the small industries. • It also helps in organizing supply of raw materials like coal, iron, steel and other materials and even machines needed by small scale private industries. • It also provides assistance right from financing, training, providing raw materials for manufacturing and marketing of finished products of small scale industries • It also helps SSI by mediating with government owned banks to provide cheap finance and loans to budding small private industries of India. • It is also providing assistance by setting up incubation centers in other continents and also international technology fairs to provide aspiring entrepreneurs and emerging small enterprises a platform to develop skills, identify appropriate technology, provide hands-on experience on the working projects, manage funds through banks, and practical knowledge on how to set up an enterprise.

36. DIC (District Industrial Centre) Industrial district concept was initially used by Alfred Marshall to describe some aspects of the industrial organization of nations. Industrial district (ID) is a place where workers and firms, specialized in a main industry and auxiliary industries, live and work. At the end of the 1990s the industrial districts in developed or developing countries had gained a recognized attention in international debates on industrialization and policies of regional development.

37. Objectives of District Industries Centre (DIC): i. Accelerate the overall efforts for industrialization of the district. ii. Rural industrialization and development of rural industries and handicrafts. iii. Attainment of economic equality in various regions of the district. iv. Providing the benefit of the government schemes to the new entrepreneurs. v. Centralization of procedures required to start a new industrial unit and minimization- of the efforts and time required to obtain various permissions, licenses, registrations, subsidies etc.

38. Functions of District Industries Centre (DIC): i. Acts as the focal point of the industrialization of the district. ii. Prepares the industrial profile of the district with respect to : iii. Statistics and information about existing industrial units in the district in the large, Medium, small as well as co-operative sectors. iv. Opportunity guidance to entrepreneurs. v. Compilation of information about local sources of raw materials and their availability. vi. Manpower assessment with respect to skilled, semi-skilled workers. vii. Assessment of availability of infrastructure facilities like quality testing, research and development, transport, prototype development, warehouse etc. viii. Organizes entrepreneurship development training programs. ix. Provides information about various government schemes, subsidies, grants and assistance available from the other corporations set up for promotion of industries. x. Gives SSI registration. xi. Prepares techno-economic feasibility report. xii. Advices the entrepreneurs on investments.