UNIVERSITY INSTITUTE OF LEGAL STUDIES,

PANJAB UNIVERSITY,
CHANDIGARH

PROJECT WORK ON:

Entrepreneurship Development in India

SUBMITTED TO: SUBMITTED BY:

Mr. Inderjeet VIVEK KUMER BANSAL
B.COM. LL.B. SEM.-4
ROLL NUMBER 154/18
SESSION - 2019-20
 CERTIFICATE

This is to certify that Mr. Vivek Bansal, student of B.com

LL.B. (H), has successfully completed the project on
Entrepreneurship and Small scale business prescribed by Mr.
Inderjeet, for the academic session 2019-20 as per the
guidelines issued and prescribed. This is a record of bonafide
work carried out by him under my guidance and supervision.

Mr. Inderjeet Vivek Kumar Bansal

 Acknowledgement

I have taken great efforts with this project. However, it would not have been
possible without the kind support of many individuals. First of all, I am highly
thankful to our teacher Mr. Inderjeet for giving me this opportunity to prove my
capability and who has always been very sweet and supportive towards all our
endeavours. I am also very thankful to the librarian of UILS, PU for helping us
find the right and appropriate material pertaining to our course of study and this
project requirement. Next, I want to thank my parents for always being
supportive in all my decisions and letting me work as I please without being
overbearing and providing me with support whenever I required.
 CONTENTS

1. Introduction
2. Evolution of Entrepreneurship
3. Importance of Entrepreneurship
4. Small Scale Enterprise in India
5. Nature of unemployment in India
6. Webliography
 1.Introduction
There are so many institutes and organizations which are involved in
entrepreneurship development activities and there are people who join these
programmes as a stepping stone to become entrepreneur. It is a known fact that
so many management institutes are coming up to cater to the growing need of
industries by supplying traditional managers/corporate managers. The scope of
this study is to find out the perception of management students about the
entrepreneurship and compare it with those people who have become
entrepreneur.
A manager is one who manages all the resources to match with the
organizational needs. In the managerial role resources are allocated to solve
problems and improve the administrative efficiency.
The entrepreneurship is very a old concept according to which any one who
runs business is called an entrepreneur. The more precise meaning of
entrepreneur is; one who perceives 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 it as an opportunity.
Entrepreneurship is the dynamic process of creating incremental wealth
and innovating things of value that have a bearing on the welfare of an
entrepreneur.It provides civilization with an enormous amount of goods
and services and enhances the growth of social welfare.

The man behind the entrepreneurship is an action-oriented and highly

motivated individual who is ready to achieve goals.

According to M. Kirzner; “entrepreneurs as one who perceives what

others have not seen and acts upon that perception”.

Thus, entrepreneurs take the economy and the society that is the whole
civilization to the state of progress and prosperity. Taking this into
consideration we can describe the significance or importance of
entrepreneurship which is stated below.
 2. The Evolution of Entrepreneurship

The word “entrepreneur” is derived from the French verb “enterprendre” It

means “to undertake”.
Around 1700 A.D. the term was used for architects and contractor of public
works. In many countries, the term entrepreneur is often associated with a
person who starts his own new business. Business encompasses manufacturing,
transport, trade and all other self employed vocation in the service sector.
Entrepreneurship has been considered as the propensity of mind to take
calculated risk with confidence to achieve predetermined business objectives.
There are many views and opinions on the concept of entrepreneurship
forwarded by some of the world famous management gurus and economists
as mentioned below which will help in understanding this concept.

Drucker’s Views on Entrepreneurship

“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”

Richard Cantillo
“A person who pays certain price for a product to resell it at an uncertain
price thereby making decision about obtaining and using resources while
assuming the risk of enterprise”
 3. Importance of Entrepreneurship
1. Growth of Entrepreneurship

Entrepreneurship the advent of new venture particularly small ventures to

materialize the innovative ideas of the entrepreneurs.

Thus, the growth or establishment of small enterprises is the specific

contribution of entrepreneurship in every economy of the world.

The statistics reveal that in USA economy nearly half a million small enterprise
is established every year. Our country is not an exception in this regard.

2. Creation of job opportunities

Entrepreneurship firms contributed a large share of new jobs. It provides entry-

level jobs so necessary fur training or gaining experience for unskilled workers.

The small enterprises are the only sector that generates a large portion of total
employment every year.

Moreover, entrepreneurial ventures prepare and supply experienced labor to

large industries.

3. Innovation

Entrepreneurship is the incubator of innovation. Innovation creates disequilibria

in the present state of order. It goes beyond discovery and does implementation
and commercialization, of innovations. “Leapfrog” innovation, research, and
development are being contributed by entrepreneurship. Thus, entrepreneurship
nurses innovation that provides new ventures, products, technology, market,
quality of good, etc. to the economy that increases Gross Domestic Products and
standard of living of the people.
4. Impact on community development

A community is better off if its employment base is diversified among many

small entrepreneurial firms. It promotes abundant retail facilities, a higher level
of homeownership, fewer slums, better, sanitation standards and higher
expenditure on education, recreation, and religious activities.

Thus, entrepreneurship leads to more stability and a higher quality of

community life.

5. The consequence of business failure

The collapse of the large industry almost has irresistible damage to the
development of the state and the state of the economy and the financial
condition of the relevant persons. The incumbents lost their jobs: suppliers and
financial institutions face a crisis of recovery.

Customers are deprived of goods, services, and government losses taxes. This
could not happen in the case of failure of entrepreneurship.

There shall be no measurable effect upon the economy and no political

repercussions too.

6. Political and economic integration of outsiders

Entrepreneurship is the most effective way of integrating those who feel

disposed of and alienated into the economy.

Minorities, migrants, and women are safely integrated into entrepreneurship that
will help to develop a well-composed plural society.

7. Enhances the standard of living

The standard of living is a concept built on an increase in the amount of

consumption of a variety of goods and services over a particular period by a
household.
So it depends on the availability of diversified products in the market.
Entrepreneurship provides enormous kinds of a product of various natures by
their innovation.

Besides, it increases the income of the people who are employed in

entrepreneurial enterprises.

That also capable employed persons to consume more goods and services. In
effect, entrepreneurship enhances the standard of living of the people of a
country.

8. Promotes research and development

Entrepreneurship is innovation and hence the innovated ideas of goods and

services have to be tested by experimentation.

Therefore, entrepreneurship provides funds for research and development with

universities and research institutions. This promotes the general development,
research, and development in the economy.

Entrepreneurship is the pioneering zeal that provides events in our civilization.

We are indebted to it for having prosperity in every arena of human life-

economic, technological and cultural.

The above discussion, in a nutshell, enumerates that tremendous’ contributions

of entrepreneurship.
 4.Small Scale Enterprises in India
A common classification is between traditional small industries and modem
small industries. Traditional small industries include khadi and handloom,
village industries, handicrafts, sericulture, coir, etc. Modern small-scale
industries produce wide range of goods from comparatively simple items to
sophisticated products such as television sets, electronics control system,
various engineering products, particularly as 33 ancillaries to the large
industries. The traditional small industries are highly labour intensive, while the
modem small-scale units make use of highly sophisticated machinery and
equipment. For instance, during 1979-80 traditional small industries accounted
for only 13 per cent of the total output but their share in total employment was
56 per cent. In that year, total output of traditional small industries came to be
Rs. 4,420 crores and this output was produced with the employment of 133 lakh
workers, the average output of labour in traditional small industries was roughly
Rs. 3,323.
As against this, the share of modem small industries in the total output of this
sector was 74 per cent in 197980 but their share in employment was only 33 per
cent. Obviously, these industrial units would be having higher labour
productivity. For instance, in 1979-80 a total output of Rs. 24,885 crores was
produced by 78 lakh workers in modem small-scale industries-the average
product of labour being Rs. 31,900.
One special characteristic of traditional village industries is that they cannot
provide full time employment to workers, but instead can provide only
subsidiary or part-term employment to agricultural labourers and artisans.
Among traditional village industries, handicrafts possess the highest labour
productivity; besides, handicrafts make a significant contribution to earning
foreign exchange for the country. Under these circumstances, active
encouragement of handicrafts is a must. On the other hand, traditional village
and small industries are largely carried on by labourers and artisans living
below the poverty line, while modem small industries can provide a good
source of livelihood. Hence, if with an expansion of employment, the number of
persons living below the poverty line has also to be reduced, then a rapid and
much larger expansion of the modem small sector will have to be planned.
Role of small-scale industries in Indian economy
The small-scale industrial sector which plays a pivotal role in the Indian
economy in terms of employment and growth has recorded a high rate of
growth since Independence in spite of stiff competition from the large sector
and not so encouraging support from the Government. This is evidenced by the
number of registered units which went up from 16,000 in 1950 to 36,000 units
in 1961 and to 33.7 1akh units in 2000 - 2001. During the last decade alone, the
small-scale sector 34 has progressed from the production of simple consumer
goods to the manufacture of many sophisticated and precision products like
electronics control systems, microwave components, electro-medical
equipment, T.V. sets, etc. The Government has been following a policy of
reservation of items for exclusive development in the small-scale sector.

Village and small industries in the ninth and tenth plan

The Ninth Plan mentions that during the last few years “the growth of SSI
Sector in the nonreserved areas has been higher than in the reserved categories
which is proof of their inherent strength and resilience of the small scale sector
and its ability to respond to the challenge of the market forces.” To increase the
flow of credit, the Government has started setting up specialised branches of
banks exclusively meant for providing credit to SSIs. To improve technology of
SSIs, SIDBl has already set up a Technology Development and Modernisation
Fund with a corpus of Rs. 200 crores. The Government has also setup
Technology Trust Funds with contributions from State Governments and
industry associations for transfer and acquisition of the latest technologies.
Under the scheme of Integrated Infrastructure Development Centres (IIDCs),
infrastructure facilities are being developed in backward rural areas. 50 such
IIDCs were to be set up during the Eighth Plan pen out of which 22 have been
approved. This scheme was continued during the Ninth Plan with more
incentives and financial assistance in hilly areas and North Eastern States. To
provide technological support and training to small scale sector, tool rooms with
German, Danish and Italian assistance are being set up at Indore, Ahmadabad,
Bhubneshwar, Jamshedpur and Aurangabad. The credit provided to the SSI
sector by the financial institutions is considered credit to 'priority sector'. By
March 1996, the total credit provided by public sector banks stood at Rs. 29,842
crores. This has risen to Rs. 65,855 crores in 2003-04.
 5.Nature of Unemployment in India
India is a developing economy, the nature of unemployment, therefore, sharply
differs from the one that prevails in industrially advanced countries. Lord
Keynes diagnosed unemployment in advanced economies to be the result of a
deficiency of effective demand. It implied that in such economies machines
becomes idle and demand for labour falls because the demand for the products
of industry is no longer there. Thus Keynesian remedies of unemployment
concentrated on measures to keep the level of effective demand sufficiently
high so that the economic machine does not slacken the production of goods
and services.
This type of unemployment caused by economic fluctuations did arise in India
during the depression in the 1930’s which caused untold misery. But with the
growth of Keynesian remedies, it has been possible to mitigate cyclical
unemployment. Similarly, after the Second World War, when war-time
industries were being closed, 27 there was a good deal of frictional
unemployment caused by retrenchment in the army, ordnance factories, etc.
These workers were to be absorbed in peacetime industries. Similarly, the
process of rationalization which started in India since 1950, also caused
displacement of labour. The flexibility of an economy can be judge from the
speed with which it heals frictional unemployment.
But more serious than cyclical unemployment or frictional unemployment in a
developing economy like India is the prevalence of chronic under- employment
or disguised unemployment in the rural sector and the existence of urban
unemployment among the educated classes. It would be worthwhile to
emphasize here that unemployment in developing economies like India is not
the result of deficiency of effective demand in the Keynesian sense, but a
consequence of shortage of capital equipment of other complementary
resources.

Employment policy of the eleventh plan

Scenario of employment and unemployment on the eve of the 11th Plan
The Approach Paper of the 11th Plan has highlighted the following issues:
1. Average daily status unemployment rate, which had increased from 6.1% in
1993-94 to 7.3% in 1999-00 increased further to 8.3% in 2004-05.
 2. Agricultural employment has increased at less than 1% per annum, slower
than the growth in non-agricultural employment
. 3. Among agricultural labour households which represent the poorest groups,
there was a sharp increase in unemployment from 9.3%in 199-94 to a high level
of 15.3% in 2004-05.
4. Non-agricultural employment expanded robustly at an annual rate of 4.7%
during 1999-2005 but this growth was entirely in the unorganized sector and
mainly in low productivity self-employment.
5. Employment in the organized sector actually declined by 0.38% per annum
during 1994-2000, despite fairly healthy GDP growth. This is a cause for
frustration among the educated youth who have rising expectations.
6. According to Annual Survey of industries, real wages stagnated or declined
even for workers in the organized sector although managerial and technical staff
did secure large increase.

Employment Requirements during the Eleventh Plan

(2007-2012)
On account of the increasing participation of females, the total increase in
labour force will be around 65 million during the 11th Plan. To this may be
added the present backlog of about 35 million. Thus, the total job requirements
of the 11th Plan work out be 100 million.
The planners aim to provide 65 million additional employment opportunities.
As a consequence, the Approach Paper states: "This will not create full
employment, but it will at least ensure that the unemployment rate falls
somewhat." However, even this modest goal implies that the rate of growth of
non-agricultural employment would need to accelerate to 5.8% per annum from
4.7% in 1999-2005. In other words, a 32 massive reversal is required from the
negative employment growth in the organized sector witnessed during the last
decade.

Critique of employment policy

Keeping in view the performance of the last decade of negative employment
growth in the organized sector, the Plan is over-ambitious about a huge reversal
in the form of 15 million jobs. It may noted that total employment in the
organized sector in 2004- was 26.4 million -18.2 million in the public sector and
8.2 million in the private sector. To hope to increase 10 million jobs in the
private organized sector as against the total of 8.24 million jobs at present
implies 121% addition to the existing job creating potential. The estimates are
thus highly over-optimistic and utterly unrealistic. Not only that, to expect
profitable public enterprises to increase job potential in the face of loss making
units reducing jobs by about 2 million is also unrealistic. The total job potential
of Central Public Sector Enterprises in 2005-06 was of the order of 1.65 million.
Again to think of an expansion in their employment by 2.0 million in the next 5
years appears to be improbable, more so in view of the fact that state level
public sector undertakings are mostly incurring huge losses year after year and
would not be able to contribute to increase in employment.
 Webliography

WEBSITES REFERRED

www.businessmanagementideas.com
www. shodhganga.inflibnet.ac.in
www.iveybusinessjournal.com