Government initiatives to foster entrepreneurship India notes-CSEET
Government initiatives to foster entrepreneurship India:
ICSI CSEET: The Council of the ICSI has released a notice regarding CSEET on the day of the inauguration of ICSI Golden Jubilee Celebrations on 4th Oct 2017.
The Gazette Notification on the Company Secretaries (Amendment) Regulations, 2020 has been published on 3rd February 2020 in the Official Gazette of India and the same shall be applicable from the said date of publication.
Now ICSI Published a notice regarding CSEET Test which going to start from 2020 May.
We are now going to discuss the details of CSEET Paper-3 Economics and Business Environment notes – Government initiatives to foster entrepreneurship India
Government initiatives to foster entrepreneurship India:
GOVERNMENT INITIATIVES TO FOSTER ENTREPRENEURSHIP
Initiatives taken by the Government of India to strengthen entrepreneurship in India are as under:
- Make in India : Businesses from across the globe, and not merely the Americas, consider Make in India as a breakthrough policy of the new India. The ‘Make in India’ programme was launched in September 2014 soon after the Modi Government came to power.
As a national programme, 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:
(c) Information Technology
With this scheme, the government has increased the FDI limit in various industries to attract foreign investment and participation
It has established an investor facilitation centre to assist foreign businesses 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.
- Stand Up India : The Stand up India scheme aims at promoting entrepreneurship among women and scheduled castes and tribes. The scheme is anchored by Department of Financial Services (DFS), Ministry of Finance, Government of India.
Stand-Up India Scheme facilitates bank loans between Rs 10 lakh and Rs 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 or the trading sector. In case of non-individual enterprises at least 51% of the shareholding and controlling stake should be held by either an SC/ST or woman entrepreneur.
- SC/ST and/or woman entrepreneurs, above 18 years of age.
- Loans under the scheme are available for only green field project. Green field signifies, in this context, the first time venture of the beneficiary in the manufacturing or services or trading sector.
- In case of non-individual enterprises, 51% of the shareholding and controlling stake should be held by either SC/ST and/or Women Entrepreneur.
- Borrower should not be in default to any bank/financial institution.
- Nature of Loan – Composite loan (inclusive of term loan and working capital) between 10 lakh and upto 100 lakh.
- Purpose of Loan – For setting up a new enterprise in manufacturing, trading or services sector by SC/ST/Women entrepreneur.
- Size of Loan – Composite loan of 75% of the project cost inclusive of term loan and working capital. The stipulation of the loan being expected to cover 75% of the project cost would not apply if the borrower’s contribution along with convergence support from any other schemes exceeds 25% of the project cost.
- 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).
- Security – Besides primary security, the loan may be secured by collateral security or guarantee of Credit Guarantee Fund Scheme for Stand-Up India Loans (CGFSIL) as decided by the banks.
- Repayment – The loan is repayable in 7 years with a maximum moratorium period of 18 months.
- Working Capital – For withdrawal of Working capital upto 10 lakh, the same may be sanctioned by way of overdraft. Rupay debit card to be issued for convenience of the borrower. Working capital limit above 10 lakh to be sanctioned by way of Cash Credit limit.
- Margin Money – The Scheme envisages 25% 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.
- Startup India : Startup India 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 increasing the employment rate in India. Benefits of Start-up India Scheme is Simplification of Work, Finance support, Government tenders, Networking opportunities. Startup India was launched by Prime Minister Shri. Narendra Modi on 16th January 2016.
Benefits of Startup India
(a) Financial benefits – Most of the start-ups are patent based. It means they produce or provide unique goods or services. In order to register their patents, they have to incur a heavy cost which is known as the Patent Cost.
Under this scheme, the government provides 80% rebate on the patent costs. Moreover, the process of patent registration and related is faster for them. Also, the government pays the fees of the facilitator to obtain the patent.
(b) Income Tax Benefits – Start-ups enjoy a good amount of benefits under the Income Tax head. The government exempts their 3 years income tax post the incorporation year. But they can avail it only after getting a certificate from the Inter-Ministerial Board. Also, they can claim exemption from tax on Capital Gains if they invest money in specified funds.
(c) Registration Benefits – Everyone believes that incorporation and registration of business are far more difficult than running it. It is because of the long and complex steps of registration. Under the Start-up India scheme, an application is there to facilitate registration. A single meeting is arranged to at the Start-up India hub. Also, there is a single doubt and problem-solving window for them.
(d) Government Tenders – Everyone seeks to acquire Government tenders because of high payments and large projects. But it is not easy to acquire the government tenders. Under this scheme, the start-ups get priority in getting government tenders. Also, they are not required to have any prior experience.
(e) Huge Networking Opportunities – Networking Opportunities means the opportunity to meet with various startup stakeholders at a particular place and time. The government provides this opportunity by conducting 2 startups fests annually (both at domestic as well as the international level). Startup India scheme also provides Intellectual Property awareness workshop and awareness.
Registration of the Start-up can be done only from following types of companies-
- Partnership Firm
- Limited Liability Partnership Firm
- Private Limited Company.
- Skill India
The contents on National Skill Development Corporation to be included at the end of the contents covered under the aforesaid point.
National Skill Development Corporation
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 the balance 51% of the share capital.
NSDC aims to promote skill development by catalyzing creation of large, quality and for-profit vocational institutions. Further, the organisation provides funding to build scalable and profitable vocational training initiatives. Its mandate is also to enable support system which focuses on quality assurance, information systems and train the trainer academies either directly or through partnerships. NSDC acts as a catalyst in skill development by providing funding to enterprises, companies and organizations that provide skill training. It also develops appropriate models to enhance, support and coordinate private sector initiatives. The differentiated focus on 21 sectors under NSDC’s purview and its understanding of their viability will make every sector attractive to private investment.
The details of various schemes and initiatives are provided below-
(a) Pradhan Mantri Kaushal Kendra : Vocational training needs to be made aspirational to transform India into the skill capital of the world. In line with the same, Ministry of Skill Development and Entrepreneurship ( MSDE ) intends to establish visible and aspirational Model Training Centres ( MTCs ) in every district of the country. NSDC is the implementation agency for the project.
The model training centres envisage to:
- Create benchmark institutions that demonstrate aspirational value for competency- based skill development training.
- Focus on elements of quality, sustainability and Connection with stakeholders in skills delivery process.
- Transform from a Mandate-driven footloose model to a sustainable institutional model.
NSDC will provide a concessional secured loan funding per centre, up to 75% of the project investment, to cover expenditure only related to:
- Training infrastructure including purchase of plant, machinery & equipment
- Training aid and other associated items
- Civil work including setting up prefabricated structures and retrofit existing structures
The sustainability of the centres will be assured against dedicated training numbers under Pradhan Mantri Kaushal Vikas Yojna (PMKVY) or its successor schemes (any other scheme under MSDE or NSDC). Each PMKK will be assured a training mandate for three years, under the PMKVY scheme, as per common norms, subject to capacity and utilization of the centre.
(b) International Skill Training : A country’s ability and potential for growth is determined by the size of its youth population. Youth today need to be harnessed, motivated, skilled and streamlined to bring rapid progress for a country.
India has the relative advantage at present over other countries in terms of distribution of youth population even when compared to large, fast growing Asian economies such as China and Indonesia, the two major countries other than India which determine the demographic features of Asia.
Skill Development and Entrepreneurship: Policy
Recognizing the imperative need for skill development, National Skill Development Policy was formulated in 2009. Given the vast paradigm shift in the skilling and entrepreneurship ecosystem in the country and the experience gained through implementation of various skill development programmes, a need was felt to revisit the existing policy to align the policy framework with the emerging trends in the national and international milieu. Accordingly, Government framed the National Policy for Skill Development and Entrepreneurship 2015. The primary objective of this policy was to meet the challenge of skilling at scale with speed, standard (quality) and sustainability.
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.
PDOT program is delivered by trainers who have undergone Training of Trainers (ToT) program organized by MEA. So far, 52 trainers from existing IISCs and NSDC Training Partners have undergone the PDOT (ToT).
- c) Technical Intern Training Program : The program promotes international collaboration through the transfer of skills, technology, and knowledge among the participating countries thereby, contributing towards the human resource development. It offers training to the workers for a specific period (3 – 5 years) in Japan’s industrial society.
The objective is to ensure that the most competent youth is selected and sent to Japan to participate in TITP.
Ministry of Skill Development & Entrepreneurship (MSDE), Government of India and the Ministry of Justice, Ministry of Foreign Affairs and Ministry of Health, Labour and Welfare of Japan signed a Memorandum of Cooperation initiating the Technical Intern Training Program (TITP) in India in October 2017.
5 . Investment in physical infrastructure
India’s infrastructure development has not kept pace with economic growth as it continues to be beleaguered by perennial problems. To name a few, these challenges revolve around poor project management practices, financing and regulation. The rising demand for infrastructure facilities, rapid growth in urbanisation, bulging of the middle class and an increasing working-age population would engender substantial increase in infrastructure investments during the next few years.
Sustained investment in infrastructure is one of the key imperatives for turning the “Make in India” vision into reality. Achieving a manufacturing-led transformation would necessitate addressing the bottlenecks across infrastructure.
The Government has started taking initiatives in this direction and rewards are being witnessed. To start with, public spending on infrastructure such as roads, railways, irrigation and urban infrastructure has received a significant fillip in the Budget. Many bottlenecks facing infrastructure projects have been eased, particularly in the area of procedurally complex environmental rules. The execution of planned infrastructure in a timely and high quality manner would provide the necessary boost to the manufacturing sector and help India realise her true potential in manufacturing.
Significant pick-up in infrastructure investments can be expected in the coming years given the various initiatives taken by the Government to address the infrastructure bottlenecks. The Government strategy to increase investment in infrastructure through a combination of public investment and public private partnership indicates an increased thrust on the sector. The Government has also emphasized the need for stepping up the scale and scope of private investment in infrastructure by allowing 100% FDI in some areas of railway infrastructure and by easing of FDI rules in construction. Development of smart cities is likely to bridge the gap in infrastructure development in the country.
Given the renewed emphasis on infrastructure sector by boosting infrastructure financing coupled with initiatives to enhance physical infrastructure such as roads, railways, urban infrastructure, the investment in physical infrastructure is expected to increase sharply. According to D&B’s estimates, physical infrastructure investment is expected to surge to 10.4% of GDP by FY25 from around 7.5% (Estimated) of GDP in FY15. Resolution of policy bottlenecks such as land acquisition and improvement in demand conditions would also stoke private infrastructure investment.