Entrepreneurship in India refers to the process of creating, developing, and scaling innovative business ventures that contribute to the nation’s economic growth, job creation, and social transformation. It involves identifying market opportunities, mobilising resources, managing risks, and delivering value through new or improved products, services, or processes.
Table of Contents
- Make in India
- Stand up India
- Startup India
- Skill India & National Skill Development Corporation
- Investment in Physical Infrastructure
- Need for Entrepreneurship in India
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1. Make in India
- Make in India is a major national programme of the Government of India.
- It has been designed to:
- facilitate investment
- foster innovation
- enhance skill development
- protect intellectual property and
- build best in class manufacturing infrastructure in the country.
- The ‘Make in India’ programme was launched in September 2014 soon after the Modi Government came to power.
- The primary objective of this initiative is to attract investments from across the globe and strengthen India’s manufacturing sector.
- It is being led by:
- Department for Promotion of Industry and Internal Trade (DPIIT)
- Ministry of Commerce and Industry, Government of India.
- The Make in India programme is very important for the economic growth of India.
- With this scheme, the government has increased the FDI limit in various industries to attract foreign investment and participation.
- The Government has established an investor facilitation center to assist foreign businesses to locate partners and sites, while a slew of measures have been initiated for domestic companies, which were revealed after Modi Government unveiled the ‘Stand Up India’ initiative in his Independence Day address in 2015.
- The Make in India initiatives is aimed at transforming India into a global manufacturing hub, and contained a raft of proposals to attract investments from both local and foreign corporate houses in 25 key areas it has identified, such as:
- Automobile
- Automobile components
- Aviation
- Biotechnology
- Chemicals
- Construction
- Defence Manufacturing
- Electrical Machinery
- Electronic Systems
- Food Processing
- IT and BPM
- Leather
- Media & Entertainment
- Mining
- Oil and Gas
- Pharmaceuticals
- Ports and Shipping
- Railways
- Renewable Energy
- Roads and Highways
- Space
- Textile and Garments
- Thermal Power
- Tourism and Hospitality
- Wellness
- Several supportive schemes were also launched to assist the Make in India initiative like:
- Skill India
- Digital India
- Startup India
- Smart Cities
- Pradhan Mantri Jan Dhan Yojana
- Atal Mission for Rejuvenation and Urban Transformation
- Sagarmala
- Swachh Bharat Abhiyan
- International Solar Alliance
- Accelerating Growth of New India’s Innovation
2. Stand up India
The following are the key elements of the Stand-Up India scheme:
(1) Title of the Scheme – Stand-Up India Scheme for financing SC/ST and /or Women Entrepreneurs.
(2) Objective
- To facilitate bank loans between INR 10 Lakh and INR 1 Crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower per bank branch for setting up a greenfield enterprise.
- This enterprise may be in manufacturing, services, Agriallied activities or the trading sector in case of non-individual enterprises at least 51% of the shareholding and controlling stake should be either an SC/ST or woman entrepreneur.
(3) Eligibility
(a) SC/ST and/or woman entrepreneurs, above 18 years of age.
(b) Loans under the scheme is available for only greenfield project. Greenfield signifies, in this context, the first-time venture of the beneficiary in the manufacturing or services or trading sector.
(c) In case of non-individual enterprises, 51% of the shareholding and controlling stakes should be held by either SC/ST and/or Women Entrepreneur.
(d) Borrower should not be in default to any bank or financial institution.
(4) Nature of loan – Composite loan (inclusive of term loan and working capital) between INR 10 Lakh upto INR 100 Lakh.
(5) Purpose of loan – For setting up a new enterprise in manufacturing, services, Agri-allied activities or the trading sector by SC/ST women entrepreneur.
(6) Size of loan – Composite loan of 85% of the project cost inclusive of term loan and working capital. The stipulation of the loan being expected to cover 85% of the project cost would not apply if the borrower’s contribution along with convergence support from any other schemes exceeds 15% of the project cost.
(7) Interest rate – The rate of interest would be lowest applicable rate of the bank for that category (rating category) not to exceed (base rate (MCLR) + 3% + tenor premium).
(8) Security – Besides primary security, the loan may be secured by collateral security or guarantee of Credit Guarantee Fund Scheme for Stand-Up India (CGFSIL) as decided by the banks.
(9) Repayment – The loan is repayable in 7 years with a maximum moratorium period of 18 months.
(10) Working Capital – For drawl of working capital upto INR 10 Lakh, the same may be sanctioned by way of overdraft. Working capital limit above INR 10 Lakh to be sanctioned by way of Cash Credit limit.
(11) Margin Money – The scheme envisages 15% margin money which can be provided in convergence with eligible Central/State schemes. While such schemes can be drawn upon for availing admissible subsidies or for meeting margin money requirements, in all cases, the borrower shall be required to bring in minimum of 10% of the project cost as own contribution.
3. Startup India
- Startup India was launched by Prime Minister Shri Narendra Modi on 16th January 2016.
- This Scheme is an initiative by the Government of India for generation of employment and wealth creation.
- The goal of Startup India is the development and innovation of products and services and to increase the employment rate in India.
- Startup India Hub is a one-stop platform for all stakeholders in the Startup ecosystem to interact amongst each other, exchange knowledge and form successful partnerships in a highly dynamic environment.
- The benefits of the Start-up India Scheme are Simplification of Work, finance support, Government tenders, Networking opportunities.
3.1 Benefits of Start-up India
(1) Financial benefits
- Most of the start-ups are patent-based.
- Under Start-up:
- There is 80% rebate on the patent costs (cost of registering the patent).
- The process of patent registration and related is faster.
- The government pays the fees of the facilitator to obtain the patent.
(2) Income Tax Benefits
- There is exemption of 3 years income tax post the incorporation year.
- For this exemption, a certificate from the Inter-Ministerial Board is required.
- There is exemption from tax on Capital Gains if they invest money in specified funds.
(3) Registration Benefits
- A single application will facilitate registration.
- A single meeting is arranged at the Start-up India hub.
- There is a single doubt and problem-solving window.
(4) Government Tenders
- The start-ups get priority in getting government tenders.
- No prior experience is required.
(5) Huge Networking Opportunities
- Networking Opportunities means the opportunity to meet with various start-up stakeholders at a particular place and time.
- The government conducts 2 start-up fests annually (both at the domestic as well as international level).
- Start-up India scheme also provides Intellectual Property awareness workshop and awareness.
Some vital points pertaining to Start-up India:
(a) Start-up India Hub: It is a one-stop platform for all stakeholders in the Start-up ecosystem to interact amongst each other, exchange knowledge and form successful partnerships in a highly dynamic environment.
(b) Investors adding value to the Start-ups – Investors particularly Venture Capitalists (VCs) add value to start-ups in a lot of ways:
(i) Stakeholder Management – Investors manage the company board and leadership to facilitate smooth operations of the startup. Their functional experience and domain knowledge of working and investing with startups imparts vision and direction to the company.
(ii) Raising Funds – Investors are best guides for the start-up to raise subsequent rounds of funding on the basis of stage, maturity, sector focus etc.
(iii) Recruiting Talent – The investors, with their extensive network can help bridge the talent gap by recruiting the right set of people at the right time.
(iv) Marketing – VCs assist with marketing strategy for your product/service.
(v) M&A Activity – VCs take care of merger and acquisition opportunities in the local entrepreneurial ecosystem to enable greater value addition to the business through inorganic growth.
(vi) Organisational Restructuring – VCs help with the right organisational structuring and introduce processes to increase capital efficiency, lower costs and scale efficiently.
(c) Investors investing in Startups – Investing in start-ups is a risky proposition, but the low requirement for overhead capital combined with high upside potential, makes it lucrative for investors to put their bets on start-ups.
(d) Foreign company registering in registering under Start-up India hub – Any entity having at least one registered office in India is welcome to register on the hub as location preferences, for the time being are only created for Indian states.
3.2 Registration of the Start-up
The registration can be done only from following types of companies:
- Partnership Firm
- Limited Liability Partnership Firm
- Private Limited Company.
4. Skill India & National Skill Development Corporation
- Skill India campaign was launched by Prime Minister Narendra Modi on 15 July 2015 to train over 30 crore people in India in different skills by 2022.
- National Skill Development Corporation (NSDC) is a not-for-profit public limited company incorporated on July 31, 2008 under section 25 of the Companies Act, 1956 (corresponding to section 8 of the Companies Act, 2013). NSDC was set up by Ministry of Finance as Public Private Partnership (PPP) model.
- The Government of India through Ministry of Skill Development & Entrepreneurship (MSDE) holds 49% of the share capital of NSDC, while the private sector has a balance 51% of the share capital.
- The following are the schemes and initiatives:
- Pradhan Mantri Kaushal Kendra
- International Skill Training
- Technical Intern Training Program
National Policy on Skill Development and Entrepreneurship 2015:
- The objective of this Policy is to meet the challenge of skilling at scale with speed and standard (quality). It aims to provide an umbrella framework to all skilling activities being carried out within the country, to align them to common standards and link the skilling with demand centres. In addition to laying down the objectives and expected outcomes, the effort also involves to identify the various institutional frameworks which can act as the vehicle to reach the expected outcomes.
- The Vision, Mission and Objectives of the National Policy on Skill Development and Entrepreneurship 2015 are:
- Vision – “To create an ecosystem of empowerment by Skilling on a large Scale at Speed with high Standards and to promote a culture of innovation-based entrepreneurship which can generate wealth and employment so as to ensure Sustainable livelihoods for all citizens in the country.”
- Mission – The mission is to Create a demand for skilling across the country; Correct and align skilling with required competencies; Connect the supply of skilled human resources with sectoral demands; Certify and assess in alignment with global and national standards; and Catalyse an ecosystem wherein productive and innovative entrepreneurship germinates, sustains and grows leading to creation of a more dynamic entrepreneurial economy and more formal wage employment.
- Objectives – The core objective of the Policy is to empower the individual, by enabling her/him to realise their full potential through a process of lifelong learning where competencies are accumulated via instruments such as credible certifications, credit accumulation and transfer, etc. As individuals grow, society and the nation also benefit from their productivity and growth.
Pre-Departure Orientation Training (PDOT):
- Given the need to orient potential migrant workers with regards to language, culture, do’s and don’ts in the destination country, the emigration process and welfare measures.
- PDOT program has been launched. Ministry of External Affairs (MEA) in collaboration with Ministry of Skill Development and Entrepreneurship (MSDE) is conducting the PDOT program.
- NSDC is the implementing agency for this program.
- A longer variant of PDOT i.e. 160 hours was offered at all IISCs which consisted of country orientation, language and digital literacy.
- A shorter variant of PDOT program i.e. 1 Day (ongoing) is offered to all migrant workers who are likely to depart soon and register for the training through registered recruitment agents.
5. Investment in Physical Infrastructure
- Infrastructure sector is a key driver for the Indian economy.
- The sector is highly responsible for propelling India’s overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country.
- Infrastructure sector includes power, bridges, dams, roads and urban infrastructure development.
Major initiatives of the Government of India (Union Budget 2022):
- Under PM GatiShakti the seven engines that have been identified:
- Roads
- Railways
- Airports
- Ports
- Mass Transport
- Waterways and Logistics Infrastructure
- The projects pertaining to these 7 engines in the National Infrastructure Pipeline will be aligned with PM GatiShakti framework.
(1) Road Transport
(a) National Highways Network to be expanded by 25,000 Km in 2022-23.
(b) ` 20,000 crore to be mobilised for National Highways Network expansion.
(2) Multimodal Logistics Parks
Contracts to be awarded through PPP mode in 2022-23 for im-plementation of Multimodal Logistics Parks at four locations.
(3) Railways
(a) One Station One Product concept to help local businesses & supply chains.
(b) 2000 Km of railway network to be brought under Kavach, the indigenous world class technology and capacity augmentation in 2022-23.
(c) 400 new generation Vande Bharat Trains to be manufactured during the next three years.
(d) 100 PM GatiShakti Cargo terminals for multimodal logistics to be developed during the next three years.
(4) Prime Minister’s Development Initiative for North-East Region (PM-DevINE)
(a) New scheme PM-DevINE launched to fund infrastructure and social development projects in the North-East.
(b) An initial allocation of ` 1,500 crore made to enable livelihood activities for youth and women under the scheme.
(5) Vibrant Village Programmes
Vibrant Villages Programme for development of Border villages with sparse population, limited connectivity and infrastructure on the northern border.
(6) Mobilising Resources
Data Centres and Energy Storage Systems to be given infrastructure status.
(7) Green Infrastructure
Sovereign Green Bonds to be issued for mobilising resources for green infrastructure.
6. Need for Entrepreneurship in India
- The entrepreneurs are considered ‘change agents’ in the process of industrial and economic development of an economy.
- It is a dynamic process that not only increases wealth and but can also create value that results in improved well-being.
- Entrepreneurship plays an important role in changing society, so it makes sense to cultivate, motivate, and remunerate this greatest asset to the greatest extent possible.
- Entrepreneurship is important as it:
- Accelerates Economic Growth
- Promotes Innovation
- Can Promote Social Changes
The post Entrepreneurship in India – Key Government Initiatives appeared first on Taxmann Blog.
