SUBSIDIES FOR INDIAN ENTREPRENEURS

Updated on : 2021-Jun-14 15:22:18 | Author :

ENTREPRENEURSHIP & SUBSIDIES

 

INTRODUCTION:

The term “entrepreneurship” derives from the French verb “entreprendre” and thus the German word “Unternehmen”, both means to “undertake”. Bygrave and Hofer in 1891 defined the entrepreneurial process as "involving all the functions, activities, and actions related to perceiving of opportunities and creation of organizations to pursue them‟. In simple, entrepreneurship is that the act of being an entrepreneur, which may be defined as "one who undertakes innovations, finance and business acumen in an attempt to rework innovations into economic goods".

 

Being an entrepreneur isn't just starting a business, it's about having an attitude and therefore the drive to achieve business. All successful Entrepreneurs have an identical way of thinking and possess several key personal qualities that make them so successful in business. Successful entrepreneurs just like the ambitious Richard Branson have an inner drive to succeed and grow their business, instead of having a Harvard Business degree or technical knowledge during a particular field.

 

The entrepreneurs always search for opportunities within the environment. They maximize the opportunities of governmental concessions, subsidies and facilities to line up their enterprises in undeveloped areas. The fixing of a still plant at Tata Nagar, Reliance Petrochemicals at Jamnagar (Gujarat) has resulted within the development of excellent Township and peripheral regional development. Thus, entrepreneurs cut back the imbalances and disparities in development among regions.

 

Lack of finance available to rural entrepreneurs is one among the most important problems which entrepreneur is bearing now days especially thanks to the global recession. Major difficulties faced by entrepreneurs include a low level of buying power of rural consumer so sales volume is insufficient, lack of finance to start a business, reduced profits thanks to competition, pricing of products and services, financial statements are difficult to be maintained by rural entrepreneur, stringent tax laws, lack of guarantees for raising from loans, difficulty in raising capital through equity, dependence on small money lenders for loans that they charge discriminating interest rates and large rent and property cost.

 

These problems create an issue in raising money through loans. landlords in Punjab proved to be a major source of finance for rural entrepreneurs but the rates of land are reduced thanks to the global recession so that they also lack cash nowadays. Some banks haven't ventured bent serve rural customers because banks are expensive to be reached by rural customers and, once reached, are often too poor to afford bank products. Government is providing subsidies to rural areas but thanks to the high cost of finance, these subsidies aren't giving fruitful results.

 

Major sources of finance in rural areas are loans from regional rural banks or zamindars but their rate of interest is usually very high. Government has various institutions for this purpose but the results aren't up to the extent expected. Industrial Finance Corporation of India (IFCI), Industrial development bank of India, Industrial Credit and Investment Corporation of India (ICICI), Small Scale Industry development bank of India (SIDBI) are a number of the national level (SFC) institutions that are helping out rural entrepreneurs. Some state-level institutions also are working like State Financial Corporation and State Industrial Development Corporation (SIDC). These institutions are providing assistance for fixing of latest ventures and side by side for modernization and expansion of existing ones but their terms and conditions are very strict to be handled. Numerous schemes like composite loan scheme, small unit scheme, scheme for technical entrepreneurs etc. had started but they're unable to satisfy the expectation of rural entrepreneur. So, starting new SHG is simple as compared to hitch existing one. NGO’s also played an important role in rural development. These NGO’s square measure sometimes registered as societies and trust. . they need fewer capital resources as they cannot raise equity capital.

 

The government provides them with funds through various schemes like tax incentives, loans etc. This scheme helps in providing incentives to the people who are willing to invest in the projects. It is very easy for them to get started and start their own business. There are many schemes that help in raising funds for their projects but most of them are not effective. Some of them are:

· Private sector-this is the largest sector which has a huge amount of funding available. It is a good source for start-ups to raise money from the government.

· Public sector-this is the biggest sector which has a large number of investors and is highly competitive. It is also a great source for start-ups to raise capital.

The main reason why these schemes are so successful is that they have a lot of support from the government which helps in raising funds for their projects.

 

Subsidies for Entrepreneurs

 

Start-up India Initiative

The Prime Minister of India launched the Start-up India Initiative within the year 2016. It changed the definition of a start-up in terms of the size and therefore the horizon. the thought is to extend wealth and employability by giving wings to the entrepreneurial spirit. the govt gave start-ups tax benefit under this scheme and 798 applicants made use of the tax break. The Department of commercial Policy and Promotion is maintaining this initiative and is treating it as an extended-term project. Moreover, the general regulation for start-ups has increased from two years to seven years. And for biotechnology firms, the regulation is ten years from the date of incorporation. it's one among the simplest Indian government start-up schemes for entrepreneurs because it is providing several policies for entrepreneurship programs.

 

Multiplier Grants Scheme (MGS)

Department of Electronics and knowledge Technology (DeitY) started the Multiplier Grants Scheme (MGS). The scheme aims to encourage collaborative Research & Development (R&D) between industry and academics or R&D institutions for the development of products and packages. Under the scheme, if the industry supports R&D for development of products which will be commercialized at the institution level, then government also will support them financially which can be up to twice the quantity provided by industry. MGS promotes and expedites the advancement of aboriginal merchandise and packages. the govt grants would be limited to a maximum amount of Rs. 2 Crores per project and therefore the duration of every project could considerably be but 2 years. it might be Rs. 4.0 Crores and three years for industry associations.

 

Ministry of Skill Development and Entrepreneurship

This task of promoting entrepreneurship was earlier given to different departments and government agencies. In 2014, the Prime Minister decided to dedicate a whole ministry to create this sector as he felt that skill development required more push from the government's side to market and encourage it among the people. Furthermore, the thought is to succeed in 500 million people by the year 2022 by providing gap funding and skill development initiatives.

 

These subsidies are more reliable and famous these days between the entrepreneurs, as they are from govt. side and can be trusted.

 

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