Nurses and midwives will go on strike on January 30 for 24 hours. The Irish Nurses and Midwives Organisation has warned that if the dispute over pay and staffing levels remains unresolved there will be further 24 hour strikes on February 5 and February 7 and then February 12, 13 and 14. The strike will see INMO members withdraw their labour for the 24 hours providing only life-saving care and emergency response teams. âThe HSE simply cannot recruit enough nurses and midwives on these wages. Until that changes, the health service will continue to go understaffed and patient care will be compromised.
Steps for development of small-scale and cottage industries were initiated immediately after Independence. That the Government has attracted great importance to the development of the small-scale sector in the successive five-year plans can be had from glancing at the plan outlays for the small sector. In the first five year Plan, Rs. 48 crores ( Constituting 47.8% of total plan expenditure on the industry) was spent in small sector alone. By the end of the first plan, there were a total of six boards, i.e., All Indian handloom board, All India handicrafts board, All India Khadi and village industries board, established, thus covering the entire field of small-scale and cottage industries.
Following the recommendations of Karve committee, the second five-year plan focused on dispersal of industries. Accordingly, as many as 60 industrial estates were established for providing basic facilities like power, water, transport, etc., at one place. Certain items were reserved for exclusive production in small-scale industries. The total plan outlay of the second plan reached Rs. 187 cores.
The third plan especially stressed on the extension of the coverage of small-scale industries. As against a total plan outlay of Rs. 24 crores for the development of small-scale and cottage industries, only Rs. 240. 7 crores were actually incurred in the third plan. The programs adopted in the first three plans were extended in the fourth plan also.
As a result of various development programs, the small sector witnessed significant diversification and expansion during the fourth plan period. On the eve of the fourth plan, for example, as many as 346 industrial estates had been completed and the small industries units set up in these estates provided employment to about 82,700 persons. Their annual production was estimated at Rs. 99.25crores. Like the third plan, the fourth plan could use only Rs.250 crores out of the total allocated outlay of Rs. 293 crores.
The fifth plan outlay was kept Rs. 592 crores. The main thrust of the plan was to develop small-scale industries to remove poverty and inequality stalking the land. On account of massive development programs initiated for the development of promising small sector, the actual plan expenditure (Rs. 1945crores) surpassed the plan outlay of Rs. 1780crores in the Sixth Plan. Among the important programs of the sixth plan were.
i) Increase in the number of items reserved for exclusive production in small sector reaching 836.
ii) Reservation of 409 items for exclusive purchase from small-scale industries.
iii) provision of consultancy services in technical, managerial and marketing through SIDO.
iv) Established of the council for Advancement of rural technology (CART) in October 1982 for providing necessary technical input to rural industries.
By the end of the sixth plan, production from small and cottage industries increased to Rs. 65,730crores. Export touched to Rs. 4,557.4 crores and employment reached to 315lakh persons by the end of the sixth plan 1984-85. This accounted for 80 percent of the total indusial employment which comes after agriculture as the biggest purveyor of employment.
The main thrust of the seventh plan was the upgradation of technology to increase the competitiveness of the small sector. The new watch ward, therefore, was ” competition” and “not reservation” Like the sixth plan, the actual expenditure of Rs. 3,249crores was well above the plan outlay of Rs. 2,752.74 crores in the seventh plan. On account of various development programs, the small sector witnessed from significant development in all fronts. To quote, the number of small-scale units increased from 13.56 lakh persons 18.27 lakh person during the Eight plan period. The value of production increased from Rs. 57,100 crores to Rs. 91,681crores during the same period. Employment also increased substantially from 96lakh persons to 1119.6 lakh persons during the seventh plan period.
The main advocating of the eight plan has been employment generation as the motive force for economic growth. In order to fulfill this objective, small and village industries have been assigned an extremely important role. The important plan proposals include.
1. The plan has reiterated that timely and adequate availability of credit is of more importance than concessional credit. From this point of view, with the establishment of SIDBI, certain new initiatives like sanction of composite loans under, single window concept, concessional loans yo State Corporations for infrastructure development and provision of factoring services have been introduced.
2. In order to upgrade technology, the Eighth plan proposes to establish appropriate tool rooms and training institutes.
3. The Growth center approach has been accepted as a suitable measure for industrial dispersal and is under implementation l. During the Eighth Plan, Establishment of functional industrial estates with substantial agricultural vegetables and horticulture products was also proposed.
4. Like Growth centers, the Eighth plan also envisaged to set up integrated infrastructure development centers, for tiny units. For this, the centers, the state Government industry associations were to be involved.
Incentives, Subsidies, and Policies at State Level: The State Government formulate their respective policies for the development of industries in general and small-scale industries in particular and also implement the incentive scheme through the District Industries Centre (DIC) and other Departments and Corporation, set up for this purpose. They provide technical and other support services to SSIs. All these concessions are not uniform in all the States/UTs; their nature, content, quantum and periodically vary from State to State.
There are some that are offered by the Central Government through the Office of the Development Commissioner for the Small-Scale Industries sector and they are as follows:
1. National Manufacturing Competitiveness Program: The Government announced the formulation of National Competitiveness Programme in 2005 with an objective to support the Small and Medium Enterprises (SMEs) in their endeavour to become competitive and adjust the competitive pressure caused by liberalization and moderation of tariff rates.
2. Micro & Small Enterprises Cluster Development Program: DC (MSME) launched MSE-CDP for bolistic development of selected MSEs clusters through value chain and supply chain management on Co-operation basis, which is mentioned above.
3. Scheme for Capacity Building: It refers to the strengthening of database and advocacy by industry/ enterprise associations, as envisaged in the promotional package for Micro and Small Enterprises (MSEs).
4. Credit Linked Capital Subsidy Scheme for Technology Up gradation: This scheme aims at facilitating Technology Up gradation of Micro and Small Enterprises by providing 15% capital subsidy on institutional finance availed by them for induction of well established and improved technology in approved sub-sectors/products.
5. Credit Guarantee Scheme: Collateral free loans up to a limit of Rs. 50 Lakhs are offered by the Banks under the guidance of the RBI for the entrepreneur who runs MSME.
6. ISO 9000/ISO 14001 Certification Reimbursement Scheme: It Refers to incentive Scheme of Reimbursement of expenses for acquiring Quality Management System (QMS) ISO 9000 certification/environment management (EMS) ISO 14001 certification to the extent of 75% or Rs. 75,000/- whichever is lower.
7. Mini Tool Rooms: Refers to financial assistance up to 90% or Rs. 9.00crores, whichever is less for setting up new Mini Tool Rooms. For up gradation of existing Tool Rooms, the assistance is 75% or Rs. 7.5 crores.
8. Assistance to Entrepreneurship Development Institutes: For strengthening training infrastructure in EDIs, assistance up to 50% or Rs. 50 Lakhs whichever is less will be made available.
9. Scheme of Micro Finance Programme: This scheme relates to the Micro Financing which can be achieved by creating self-employment opportunities. This is one of the ways of attacking poverty and solving the problems of unemployment.
10. Scheme of National Award: In order to boost the entrepreneurs, the Central Government has instituted a National Award to business men running the micro, small and medium enterprises.
An adequate infrastructural facility is very important because it contributes to the economic development both by increasing productivity and by providing amenities which will enhance the quality of life and the services which will lead to growth in production. Infrastructure adequacy helps determined success in diversifying production, expanding trade, coping with a supply of various inputs and improving environmental conditions for the small-scale sector. In this context, the following infrastructural support schemes have been formulated.
1. The Integrated Infrastructural Development Scheme (IID): It is meant for augmenting infrastructural facilities in the rural and backward areas with a special emphasis on the linkages between the agriculture and industry. The criteria to be followed for the selection of a site for IID centers are preceded by a comprehensive industrial potential survey, indicating the potentialities for SSIs and tiny units.
2. The Small Industry cluster: It may be defined as a sectoral and geographical concentration of enterprises. It may be a local agglomeration of enterprises, which produce and sell a range of related and complementary products and services. These clusters enable the SSLs to derive their strength through a unique state of togetherness.
3. Industrial Growth Centre Scheme: It was launched in 1980 for the promotion of industries in the backward areas. The main objective of this growth center is to provide the best possible infrastructural facilities, to avail institutional finance etc for their overall development.
4. Export Processing Zones (EPZs ): These are industrial areas which from enclaves from the nation’s customs territory of a country. Normally, they are developed in the nearby
area of seaports or airports. These zones are under obligation to export the entire production of its units. Each zone is provided with the basic infrastructural facilities at reduced rates and includes other incentives provided by the State Government as well.
5. Integrated Industrial Parks (IIPs): These may be defined as self-contained islands providing high-quality infrastructure facilities. They include the specialized industrial clusters both for the domestic and the export market. These parks are an ideal vehicle for providing integrated infrastructural facilities and are an essential requirement for industrialization in developing countries. They are usually targeted at small and medium scale industries with a focus on high value-added output.
Government Incentives: The following are the incentives available to the small units:
1. Subsidy relating to Investment: Government has initiated a different scheme of investment subsidy for the benefits of entrepreneurs so that they many be encouraged to establish more and more SSI units. These schemes are capital investment subsidy, transport subsidy, power generations subsidy, special investment scheme for women entrepreneurs, provision for seed capital, subsidy for technical/feasibility study etc. SIDBI, besides being an apex bank for the SSI sector, is also arranging equity type assistance, venture capital scheme etc. to accelerate the pace of investment in the small-scale sector.
2. Export/Import Subsidies and Bounties: 100% export-oriented units (EOUs) and units in the export processing zones (EPZs) enjoy a package of incentives and facilities, which include duty-free imports of all types of capital goods, raw materials, and consumables in addition to tax holidays against exports.
3. Subsidy relating to Research and Development: To encourage continuous research and development activities in the small-scale sector, the government provides subsidy by keeping aside a certain amount of money toward research so that more encouragement is given to small-scale entrepreneurs.
4. Subsidy relating to Taxes: The Central Government, as well as the State Government, is trying to encourage entrepreneurs through tax subsidy schemes enabling them to accelerate the pace of establishment of industrial units. These 115 are an exemption from estate duty, tax relief to NRIs, rebate in income-tax, interest-free sales tax loan, sales tax subsidy, exemption from sales tax etc.
5. Subsidy relating to Resources: small industries are given a lot of subsidies relating to resources such as purchase of testing tools, subsidy for industrial estates and parks, allotment of land and buildings at concessional rates, supply of water at concession rates, arrangement of developed or constructed production sheds, arrangement of raw materials at concessional/ controlled rates etc.
6. Capital Subsidy Scheme for Technology Up gradation: This scheme facilities technology by induction of proven technologies in respect of specified products/sub-sectors. This would apply to the introduction of the latest technology, improvement of productivity, quality of production and environmental conditions and installation of improved techniques as well as anti-pollution measures and energy conservation. However, for availing this scheme, the entrepreneur has to fulfill certain conditions such as the replacement of the existing equipment/technology with a new one. The same equipment or technology would not qualify for the scheme and it is also not applicable to units going for the up gradation with second-hand machinery
The Government of India has been trying to provide incentives to the Small-Scale Industries in order to support their existence. The assistance provided by the Central Government is discussed below.
1. Technical Assistance: The Technical assistance and guidance are provided by various organizations such as NSIC, through TTC, SIDO, through Small Industries Services Institutes and Extension Centers. These institutes are manned by experts in different fields/ trades/ industries. These experts visit these industries, study their problems on the spot and give technical assistance and guidance.
2. Assistance for obtaining Raw Materials: Every registered small unit, on obtaining the registration certificate is required to submit all the requirements to the Directorate of Industries (DOI) for procuring essential raw materials. Many organizations are also lending a helping hand in his regards such as NSIC and others.
3. Cash Assistance: Government provides cash assistance under the self-employment scheme to the rural youth (entrepreneurs). Similarly, it is also made available to scheduled castes/tribes and women entrepreneurs.
4. Supply of Plant and Machinery on Hire-purchase basis: These are organizations like National Small Industries Corporation (NSIC) or State level Small Industries Corporations who give financial assistance to purchase plant and machinery to the entrepreneurs on their own or on hire-purchase basis. They also provide 100% finance to facilitate SSIs in diversification and technology up gradation. Entrepreneurs can also avail a tax rebate on full-year rentals.
5. Marketing Assistance: This assistance is very important for a small scale unit. For availing this, the units have to be registered with the NSIC under the single point registration scheme. The Objectives of this programme are to ensure fair margin to producers of goods, to maintain standardization and quality control with testing facilities, to market products under the common brand name, to provide publicity to SSI products etc.
6. Assistance to Small Entrepreneurs: The NSIC has developed five financial centers at New Delhi, Mumbai, Ahmedabad, Bangalore and Goa to provide finance to small entrepreneurs for activities related to marketing, bills discounting, raw materials, purchases, and exports. To train and equip the entrepreneurs, the government has developed various training institutes in the field of entrepreneurial activities/entrepreneurship. The NISIET (Hyderabad), NIESBUD (New Delhi), Integrated Training Centers (Nilokheri) are the main training institutes which function under the administrative control of SIDO.
7. Rural Industrial Project Assistance: The Rural Industrial programme (RIP) of SIDBI provides a cohesive and integrated package of basic inputs like information, motivation, training, and credit, backed by appropriate technology and market linkages. For these purposes, SIDBI has identified implementing agencies such as NGOs, development professionals, and technical consultancy organizations (TCO), and these agencies are assigned the task of developing RIP at a fee given by the bank.
Small-scale industries are characterized by their small and shy resources/ capital. These make them sensitive. In the beginning, small industries have to incur more expenses, but the returns are either nil or nominal. Therefore, they need to be provided support and assistance to tide over the crucial initial stage to enable them to survive. Hence, the government has come forward with various benefits to offers to small-scale industries in the country. One way to support the development of small-scale industries by the government is to provide the tax benefits. The government either exempts them from tax or provides them a concession in tax liability. This helps small industries accumulate capital, on the one hand, and plough back profits in business, on the other. The various tax benefits available to small-scale industries are now enumerated and discussed ane by one.
Tax Holiday: Under section 80J of the Income Tax Act, 1961, new industrial undertakings, including small-scale industries, are exempted from the payment of income-tax on their profits subject to a maximum of 6% per annum of their capital employed. This exemption in tax is allowed for a period of five years from the commencement of production. A small-scale industry has to satisfy the following two conditions to avail of this tax exemption facility.
i) The unit should not have been formed by the splitting or reconstitution of an existing unit.
ii) The unit should employ 10 or more workers in a manufacturing process with power or at least 20 workers power.
Depreciation: Under section 32 of the income tax Act, 1961, a small-scale industry is entitled to a deducted on depreciation account on the block of assets at the prescribed rate. In the case of small-scale industry, deduction from the actual cost of plant and machinery is allowed subject to a maximum of Rs. 20 Lakhs. The amount of depreciation is calculated on the diminishing balance method. In the case of an asset acquired before the accounting period, depreciation is calculated on its written down value. For plant and machinery that are used in manufacturing in the double triple shift, an additional allowance called Extra shift Allowance is available.
Rehabilitation Allowance: A rehabilitation allowance granted to small-scale industries under section 33-B of the income tax Act, 1961 whose business is discontinued on account of the following reasons.
i) Flood, typhoon, hurricane, cyclone, earthquake, or other natural upheavals.
ii) Riot or evil disturbance;
iii) Accidental fire or explosion; and
iv) Action by an enemy or action taken in combating an enemy.
Investment Allowance: The investment allowance was introduced way back in 1976 to replace the initial depreciation allowance. The investment allowance under section 31A of the income tax Act 1961 is allowed at the rate of 25 percent of the acquisition of new plant or machinery installed.
A small-scale industry can avail of investment allowance provide it has put to use machinery or plant either in the year of installation or in the immediately following year failing which the benefit will be forfeited.
Expenditure on Scientific research: Under section 35 of the income tax Act 1961, the following deductions in respect of expenditure on scientific research are allowed.
i) Any revenue expenditure incurred on scientific research related to the business of the assesse in the previous year.
ii) Any sum paid to a scientific research association or a university, college, institution or to a public company which has as its object, the undertaking of scientific research.
iii) Any capital expenditure incurred on scientific research related to the business of the assessee
Amortization of certain preliminary expenses: The Indian companies and resident persons, under section 35D of the income tax Act, 1961, are allowed to write off the preliminary and development expenses incurred by them in connection with the setting up of a new industrial unit or expansion of an existing industrials unit. The example of preliminary expenses is:
i) Expenses incurred in connection with the preparation of a feasibility report necessary for their business;
ii) Engineering expenses related to the business; and
iii) Legal charges if any for drafting agreements.
A small-scale unit established in a backward area, under section 80-HH, is allowed a deduction of 20 percent on its profits and gains provided the unit satisfies the following conditions.
i) The unit began its production after 31st December 1970 in any backward area of the country;
ii) It is the newly-established unit in a backward area. It is neither spilled nor reconstituted out of a business already in existence in any backward area;
iii) It has not been formed by the transfer to a new business plant or machinery which was previously used by the transfer to a new business plant or machinery which was previously used for any purpose in any backward area; and
iv) It employs 10 or more workers in a manufacturing process with power or 20 or more workers without power.
With the gradual liberalization of the 1956 Industrial policy in the mid-eighties, the tempo of industrial development started picking up. But the industry was still feeling the burden of many controls and regulations. For a faster growth of the industry, it was necessary that even these impediments should be removed. The new government by Shri Narasimha Rao, which took office in June 1991, announced a package of liberalization measures under its Industrial Policy on July 24, 1991. Major Objectives of India’s New Industrial Policy 1991 are as follows
Objectives: The New Industrial Policy, 1991 seeks to liberate the industry from the shackles of the licensing system Drastically reduce the role of the public sector and encourage foreign participation in India’s industrial development. The broad objectives of New Industrial Policy are as follows:
i) Liberalising the industry from the regulatory devices such as licenses and controls.
ii) Enhancing support to the small-scale sector.
iii) Increasing the competitiveness of industries for the benefit of the common man.
iv) Ensuring running of public enterprises on business lines and thus cutting their losses.
v) Providing more incentives for industrialization of the backward areas, and
vi) Ensuring rapid industrial development in a competitive environment.
Entrepreneur and professional managers are the two sides of the coin. Their individual path will make the differences between success and failure for the enterprise.
An effective entrepreneurial strategy should be an integral part of an enterprises competitive positioning. The progressive development in the size of business and the separation of ownership and management in enterprises has made management a distinct profession. Although both strive to achieve the similar goals they are said to distinguish themselves in varied measures.
Entrepreneur: Entrepreneur is one who searches for change, responds to it and exploits opportunities, and the innovation is the specific tool of an entrepreneur.
Professional Manager: A Professional manager is one who specializes in the work of planning, organizing leading and controlling the efforts of others by the systematic used of classified knowledge and principles. He subscribes to the standards of practice and code of ethic established by a recognized body.
Differences between Entrepreneur and Professional Manger:
|1. Motive||The main motive of an|
entrepreneur is to start a
venture by setting up on
enterprise. He understands
the venture for his
|The main motive of a|
professional manager is
to render his service in
an enterprise already set
up by someone else.
|2. Status||An entrepreneur is the|
owner of the enterprise
|A professional manager |
is a servant in the
enterprise owned by the
|3. Risk bearing||An entrepreneur being the |
owner of the enterprise
assumes all risks and
uncertainly involved in
running the enterprise.
|A professional manager|
as a servant does not
bear ant risk involved in
|4. Rewards||The reward entrepreneur|
gets for bearing risks
involves in the enterprise
is profit which is highly
|A manager gets a salary|
as a reward for the
services rendered by
him in the enterprise.
Salary of a manager is
certain and fixed.
|5. Innovation||Entrepreneur himself|
thinks over what and how
to produce goods to meet
the changing demands of
the customers. Hence he
acts as an innovator also
called a ‘change-agent’.
|But what a manager|
does is simply to
execute the plans
prepared by the
entrepreneur. Thus, a
manager simply translates
the entrepreneurs ideas
|6. Qualifications||An entrepreneur needs to|
posses qualities and
qualifications like high
originality in thinking,
foresight, risk bearing
ability and so on.
|On the contrary, a |
manager needs to
qualifications in terms
of sound knowledge in
management theory and