Govt. Schemes Incentives For Promotion of Entrepreneurship

GOVT.
ROLE FOR PROMOTION OF ENTREPRENEURSHIP
Introduction
Government provides various incentives to entrepreneurs to-

● Encourage and support entrepreneurs
● Enhance their productivity, and
● Motivate entrepreneurs
● These incentives are given in the form of concession, subsidies and bounties.
● Subsidies are a one-time lump sum amount given to the entrepreneur by the
government. It is a financial help to cover the cost.
● Bounty is financial help provided to an industry so that it can compete with other
units of the country as well as any foreign industry in the same business.
Aims and Objectives of Incentives

1. Solving Economic Constraints: Entrepreneurs often encounter several problems
like-
● Lack of adequate infrastructure
● Locations of supporting offices for projects
● Lack of relevant information and knowledge e.g.
● Managerial skills and technical know how,
● Market intelligence, etc.
Provision of Government incentives like availability of power, concessional finance, capital
investment subsidies, transport subsidies, etc. aims at eliminating such constraints and
promote entrepreneurship.
2. Inculcate regional parity in development:Regional disparity is one of the

concerning features of the Indian economy. In order to inculcate equitable growth and
development that leads to regional parity i.e. there is equal development of all the
regions, the government provides special incentives for establishing entrepreneurs in
the backward regions.
3. To prepare entrepreneurs for competition: Small Scale Enterprises started by

entrepreneurs observe strong competition from big firms. To make them able to
thrive and survive in a competitive environment some sort of support is required. If
they are not provided appropriate support from the government then they can not
survive and grow. Thus certain incentives are required. e.g. reservation policy, price
preference, preferential purchase, etc., help to improve their competitive strength.
Entrepreneurs in the context of globalized market economy are the vehicles of
economic development. Small and medium enterprises carry strategic importance in
the national economy. Government helps enterprises including small and medium
ones by supporting entrepreneurs. It makes it possible to create new job positions,
increase gross domestic product (GDP) and raise the living standard of the population
Government Support to Entrepreneurs-
To protect, support and promote small enterprises and help them become self-supporting, the
Government has taken a number of protective and promotional measures. These measures
include-
● Industrial extension services (NIMSME)
● Institutional support in respect of credit facilities,
● Provision of developed sites for construction of sheds,
● Provision of training facilities,
● Supply of machinery on hire-purchase terms- (NSIC)
● Assistance for domestic marketing as well as exports,
● Special incentive for setting up enterprises in backward areas etc.
● Technical consultancy & financial assistance for technological upgradation.
Government provides support to entrepreneurs in the following ways-

Training: Training aims at improving entrepreneurial skills. Basic training varies from
product to product but will necessarily emphasise on sharpening of entrepreneurial skills.
● In this regard central and state government’s technical institutions provide need-based
technical training.
● Entrepreneurship development programmes are conducted by many government
organisations and non government institutions.
Marketing Assistance: Government and non government agencies provide marketing
assistance to entrepreneurs. Government promotes MSME products through exhibitions. The
National Small Industries Corporation ( NSIC) directly markets the MSME products in the
national and international markets. NSIC manages a single point registration scheme for
manufacturers for government purchases. Enterprises registered under this scheme obtain the
benefit of free tender documents and exemption from earnest money deposit and performance
guarantee.
Promotional schemes: MSMEs are accorded highest priority. For their development,
conducive policies and schemes are formulated and implemented. Government provides land
and sheds on an actual cost basis with appropriate infrastructure. The government has
designed the special schemes for- Quality upgradation, Common facilities, Entrepreneurship
development, and Consultancy services at minimal charges.
Excise duty Concessions: Government provides exemption to MSME units for a particular
level of annual turnover from paying excise duty. The limit of turnover is variable.
Credit Facility: Credit to the MSME sector is covered under priority sector lending by
banks. Small industries development bank of India (SIDBI) is mainly responsible for
implementing various schemes of providing financial support to small entrepreneurs. Loans
are also provided to small entrepreneurs by scheduled banks without collateral security. The
limit is variable.
The state governments also provide technical and other support services to MSME through
their directorate of industries and district industries centres. In general all the state
governments extend support of the following types:
a) Deferment/ suspension of sales tax.
b) Power subsidy
c) Capital investment subsidies to new enterprises established in some selected districts.
d) Margin money/seed capital assistance schemes.
e) Priority in providing power connection/water connection.
f) Technical and consultancy support.

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GOVT.

ROLE FOR PROMOTION OF ENTREPRENEURSHIP

Government provides various incentives to entrepreneurs to-

Aims and Objectives of Incentives

2. Inculcate regional parity in development:Regional disparity is one of the

3. To prepare entrepreneurs for competition: Small Scale Enterprises started by

Government provides support to entrepreneurs in the following ways-

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