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(GIST OF KURUKSHETRA) Encouraging Micro-Entrepreneurship

(NOVEMBER-2023)

Encouraging Micro-Entrepreneurship

Introduction

In India more than 60% of the population has been dependent on agriculture. But it is a well-established fact that overdependence on agriculture is producing more problems than solutions from a livelihood point of view. More people are depending on shrinking cultivable areas, which has resulted in smaller holdings. This situation has given rise to a number of structural bottlenecks that are plaguing Indian agriculture, e.g., limited scope of use of machines and technology in the fields, loss of bargain power due to less production volume, increased production cost, etc.

Scope of Micro-Entrepreneurship:

By definition, micro enterprises are those that involve investment in plant and machinery or equipment worth not more than Rs. 1 crore and an annual turnover of not more than Rs. 5 crore. A microenterprise is a small company that caters to the community or a local market by selling products and/or services. Typically, it has less than 10 employees and a limited geographic scope.

Flexibility: Micro-business owners are able to quickly adjust to changing conditions and determine their own schedules. People who have other commitments, such as family obligations or parttime jobs, may find this flexibility to be extremely useful. Micro-entrepreneurs have the flexibility to adapt to changing market conditions quickly. They can make decisions and implement changes without the bureaucratic processes common in larger organisations.
Low Barriers to Entry: Since starting a microbusiness frequently only demands a small amount of
resources and capital up front, more people can pursue entrepreneurship. People can pursue their business goals without taking on a big financial risk because of the low entrance barrier. Micro-entrepreneurs often require minimal initial capital to start their businesses. This low barrier to entry allows individuals with limited financial resources to pursue their entrepreneurial aspirations.
Job Creation: Micro-business owners that hire staff members or take on contract work help to create jobs. This, in turn, promotes local economic growth and aids in the reduction of unemployment. Microenterprises collectively contribute to job creation, which can be especially important in regions with high unemployment rates. They can help stimulate economic growth at the grassroots level.
Innovation: New goods, services, and concepts are frequently introduced to the market by small firms. Micro-business owners are more nimble and can test out new ideas more rapidly, which encourages innovation in their specialised market. Micro-entrepreneurs are often more agile and innovative than larger companies. They can quickly experiment with new ideas and adapt to
changing market demands.
Local Economic Growth: Micro-businesses frequently help the community's economy by utilising area vendors for supplies, services, and labour, as well as by employing citizens as employees. Additionally, they produce tax revenue that can be used to improve the neighborhood. Microenterprises often serve local communities, contributing to the local economy by creating jobs and providing goods and services. They can also help revitalise neighborhoods and contribute to community development.
Self-reliance: Micro-business owners have more influence over their companies' and their financial destinies. They are less reliant on big businesses or conventional job frameworks, which can foster a feeling of empowerment and independence.
Diverse Offerings: Micro-firms frequently target specific markets and provide specialised goods or services that may not be provided by larger companies. The increased customer choice and competitiveness that result from this diverse micro-entrepreneurship encompass a wide range of industries and business models. Individuals can explore various niches and markets, finding opportunities that match their skills and interests.
Economic Resilience can be facilitated through a varied ecosystem of micro-businesses. Smaller companies can adjust more quickly and contribute to the stabilization of the economy when larger industries experience downturns. Microenterprises can be more resilient during economic downturns because of their small size and adaptability. They can pivot and adjust their offerings to meet changing customer needs.

Steps taken by the Government:

ASPIRE: A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship: This programme was created to create a network of technology centres and incubation centres across India with the goal of encouraging innovation for unmet social needs in the agri-business sector and speeding entrepreneurship. It provides financial support for the construction of livelihood business incubators and/or technology business incubators by way of a one-time grant of 100% of the cost of equipment and machinery (apart from land and infrastructure), whichever is smaller.
Pradhan Mantri Mudra Yojana: A non-banking financial institution called Micro Units Development and Refinance Agency Ltd. (‘MUDRA’) supports the expansion of the micro enterprise market in India through this scheme. For banks and/or microfinance organisations to lend to microunits with loan requirements up to Rs. 10 lakhs, MUDRA offers refinancing assistance. The loans have been divided into the categories of Tarun, Kishore, and Shishu depending on the stage of development, the demand for finance, the age of the company, and the amount of loan that may be received by these enterprises. These assets do not require collateral security, and small businesses that are neither corporations nor farms are qualified to apply for loans up to Rs. 10 lakh.
Support for International Patent Protection in Electronics and Information Technology (SIP-EIT): The SIP-EIT programme was launched by the Department of Electronics and Information Technology (‘DeiTY’) with the goal of providing government support to Indian micro, small, and medium-sized businesses (‘MSME’) and technology startups for filing foreign patent applications.
Multiplier Grants Scheme (MGS): DeitY developed this initiative once more with the goal of encouraging companies to collaborate with leading governmental and academic R&D groups to develop products and packages.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): To implement the Credit Guarantee Fund Scheme for Micro and Small Enterprises (‘MSE’), the Ministry of MSME, the Government of India, and the Small Industries Development Bank of India (‘SIDBI’) established the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This programme strengthens the loan delivery system while facilitating credit flow to the MSE sector.
Single Point Registration Scheme (SPRS): The National Small Industries Corporation (NSIC) oversees SPRS, a development programme that supports MSE. Without a doubt, the Indian Government is the biggest single buyer of a wide range of commodities. This plan was designed to boost the number of purchases made in the small-scale sector.
Extra Mural Research or Core Research Grant (CRG): Earlier known as the Extramural Research Financing System, CRG, even though it was started more than 40 years ago, following the creation of the Science and Engineering Research Board (‘SERB’), is still one of the most important and practical programmes. The goal of CRG is to assist academic institutions, research labs, and other R&D organisations in conducting research in all cutting-edge areas of science and engineering. As a result, it motivates both established and up-and-coming researchers to use a competitive, individual-centric funding model.
High Risk and High Reward Research: This programme aims to encourage and support fresh concepts and initiatives that have the potential to affect many areas of science and technology. It places a focus on bold, daring suggestions that, if they succeed, might have enormous benefits for science.
Design Clinic Scheme: The Indian Government declared that every MSME and startup should develop a design-centric approach for igniting their startup after realising the significance of innovation and design in the growth of any brand. The Ministry of MSME launched the Design Clinic scheme to create a sustainable design ecosystem through continual training and skill development in order to encourage small firms to experiment with new and inventive designs for their products.
Zero Defect Zero Effect (ZED) Scheme: As the name implies, this aims to inspire manufacturers to produce better goods that are high-quality, defect-free, and reliable. It is a handholding programme that offers MSMEs the chance to adopt cutting-edge production techniques, utilise cutting-edge technology, and continually enhance their goods. To ensure that their products have no faults, the programme offers startups and MSMEs resources, technology, and financial help. Additionally, ZED provides a comprehensive certification, evaluates businesses for ZED, and aids companies in moving along the maturity evaluation model of the programme.

Way forward:

With these and many more schemes, the Government of India's flagship programme, Startup India, aims to actively encourage startups and business owners. The programme's main goal is to build a robust environment in India that supports and fosters innovation and entrepreneurs, ultimately creating a huge number of job opportunities and fostering the nation's sustainable economic growth.
The Aatmanirbhar Bharat mission and the ‘Make in India’ programme were subsequently introduced by the Indian Government with the goal of establishing India as a hub for international manufacturing and design exports. Supporting the efforts with encouraging micro-entrepreneurship, the Government has successfully accelerated the process.