MBA Semester II · ED Notes
Entrepreneurship Development
Unit 3 & Unit 4 – Quick Notes
P.R. Pote Patil College · Amravati | Easy Language · Real Examples
📌 Institutional Support
🚀 New Age Business
✅ Exam Ready
UNIT 3
Institutional Support to Entrepreneurship
Why Institutions Are Needed?
The Big Picture
- Entrepreneurs need money, land, training, raw material, and market – but most small entrepreneurs can't get these alone.
- Government set up special institutions to fill this gap – like a "big brother" for small businesses.
- These institutions create jobs, reduce poverty, and grow the economy through entrepreneurs.
3.1 Directorate of Industries (DI)
State Level · Policy Making Body
- Present in every state of India – the main government body for industrial development.
- Prepares industrial policies and helps entrepreneurs get licenses and permissions.
- Coordinates with DICs, SFCs, and banks – works as the "principal" of industrial development.
- Organizes industrial fairs, exhibitions and helps with land allotment in industrial areas.
- Promotes development of small and medium industries.
💡 Real Example
Maharashtra's DI launched the 'Make in Maharashtra' initiative. It provided single-window clearance to companies like Tata Motors and Mahindra – so they could set up factories without visiting 20 different offices.
3.2 District Industries Centers (DICs)
District Level · One-Stop Shop
- Set up in 1978 – the most important grassroots institution for entrepreneurs.
- Like a "one-stop shop" – provides all services (loan, training, raw material, marketing) at the district level.
- Headed by a General Manager (GM) with separate functional managers.
Economic Survey
SSI Registration
Credit Help
Raw Material
Marketing
EDP Training
💡 Amravati DIC Example
DIC Amravati trained rural women to make agarbatti, papad, pickles through EDP programs and helped them get Mudra Loans for working capital.
3.3 Industrial Development Corporation (IDC)
State Level · Infrastructure Builder
- State-level organization that develops industrial infrastructure – roads, electricity, water, factory sheds.
- Creates industrial estates where industries can set up at affordable rates.
- Provides Standard Design Factories (SDFs) – ready-made factory buildings on rent for small businesses.
- Also gives term loans and technical guidance to industries.
💡 MIDC Example
MIDC (Maharashtra's IDC) has 280+ industrial areas. Tata Motors, Bajaj Auto, Cipla all have plants in MIDC areas. Special zones: Automotive (Chakan), Pharma (Navi Mumbai), Textile (Solapur).
3.4 State Financial Corporations (SFCs)
State Level · Long-Term Loans
- Set up under SFC Act, 1951 – like banks but only for industries.
- Give medium (3–7 yrs) and long-term loans (up to 20 yrs) which commercial banks usually avoid.
- Lower interest rates than normal banks.
- Also underwrite shares of companies and provide loan guarantees.
- Problem: High NPAs (many borrowers don't repay loans).
💡 MSFC Example
A young entrepreneur in Amravati wanted Rs. 50L for an ice-cream unit. Banks rejected him. MSFC sanctioned the loan after evaluating his business plan. Today he employs 25 people across Vidarbha.
3.5 Commercial Banks
National Level · Day-to-Day Finance
- Most accessible source of finance – SBI, PNB, HDFC, ICICI, Bank of Baroda etc.
- Give working capital loans (short-term) for daily operations.
- Give project finance and term loans for machinery.
- Provide Bank Guarantee, Letter of Credit for tenders and imports.
🪙 MUDRA Loan (up to ₹10L)
💼 Stand-Up India (₹10L–₹1Cr)
🛒 PM SVANidhi (₹50K)
🔒 CGTMSE (No Collateral)
💡 Mudra Yojana Example
Rashmi from Amravati started a tiffin service with a Shishu Mudra Loan (₹30,000) – no collateral needed. She now serves 80 tiffins/day, earns ₹25,000/month, and later took a Kishore loan of ₹2L to expand.
3.6 SSIDCs – Small Scale Industries Dev. Corp.
State Level · Raw Material + Marketing
- State-level corporations (e.g. MSSIDC in Maharashtra) that help small industries.
- Buy raw materials in bulk at lower prices and supply to small industries – saving them money.
- Provide Hire-Purchase scheme – small industries can use machinery and pay in installments.
- Help small industries get government orders and export assistance.
💡 Vidarbha Handloom Example
MSSIDC supplied yarn directly to Vidarbha handloom weavers at cost price, eliminating middlemen. Weavers' income increased by 30–40%.
3.7 KVIC – Khadi & Village Industries Commission
National · Rural Artisans & Cottage Industry
- Statutory body under KVIC Act, 1956 – inspired by Mahatma Gandhi's vision of village self-reliance.
- Promotes Khadi, handloom, pottery, bee-keeping, leather, soap, agarbatti, food processing etc.
- Key Scheme: PMEGP – up to ₹25L loan for manufacturing, ₹10L for service units with 15–35% govt. subsidy.
- Has 'Khadi India' stores + e-commerce (Amazon, Flipkart) for selling products.
💡 PMEGP Success
Suresh (28 yrs, village near Amravati) got ₹15L loan + ₹5.25L subsidy under PMEGP for a honey processing unit. Sells 'Vidarbha Natural Honey' on Amazon and KVIC stores. Employs 12 people.
3.8 NSIC – National Small Industries Corporation
National Level · Govt. Tenders + Raw Material
- Established 1955 under Ministry of MSME – supports small industries with machinery, raw material, marketing, credit.
- Marketing Support Scheme: Registered SSIs are EXEMPTED from EMD and Security Deposit in govt. tenders – saves a lot of money.
- SPRS (Single Point Registration): Register once, supply to all govt. departments and PSUs.
- Supplies raw materials on credit (pay after 30 days) – improves cash flow.
- Has 15 Software Technology Parks for IT small businesses.
💡 Pune Workshop Example
A small engineering workshop in Pune needed steel for Bajaj Auto components. NSIC supplied steel at market rate with 30-day deferred payment – no advance needed. Helped him take large orders.
3.9 SIDBI – Small Industries Development Bank of India
Apex National Institution · MSMEs & Startups
- Established April 2, 1990 – the apex financial institution for MSMEs in India.
- Think of it as a "bank for banks" – gives money to commercial banks + SFCs at low rates, who then lend to MSMEs.
- Also directly funds startups through SIDBI Venture Capital Ltd (SVCL).
- Promotes industrial clusters – textile (Surat), leather (Agra), gems (Jaipur).
- Runs SMILE scheme – soft loans for MSMEs; STAR scheme – credit to microfinance institutions.
- Partners with 'Startup India' – seed funding for innovative startups.
💡 Startup Funding Example
An IIT Bombay student built an agricultural drone. No bank would fund this early-stage startup. SIDBI Venture Capital invested ₹1.5 crores in equity. The startup now operates in 8 states serving farmers.
3.10 Quick Comparison – All Institutions
Remember for Exam!
| Institution | Main Work | Level |
|---|---|---|
| Directorate of Industries | Policy making, coordination, registration | State |
| DIC | One-stop services: loan, training, raw material | District |
| IDC / MIDC | Industrial area development, infrastructure | State |
| SFC / MSFC | Medium & long-term loans | State |
| Commercial Banks | Short-term loans, working capital, credit | National |
| SSIDC | Raw material supply, marketing, hire-purchase | State |
| KVIC | Khadi & village industries, PMEGP loans | National |
| NSIC | Govt. tenders, raw material, machinery | National |
| SIDBI | Refinancing banks, MSME loans, startup funding | National (Apex) |
🧠 Exam Trick – Acronym
D · D · I · S · C · S · K · N · S
Directorate → DIC → IDC → SFC → Commercial Banks → SSIDC → KVIC → NSIC → SIDBI
UNIT 4
Types of New Age Business
What is a New Age Business?
Key Concept
- Uses technology as backbone – internet, AI, mobile, cloud.
- Scalable – can grow rapidly without huge cost increase.
- Solves a real problem in an innovative way – creates a new category.
- Examples: Ola (new-age taxi), BYJU'S (new-age education), Paytm (new-age banking).
4.1 FinTech – Financial Technology
Tech-based Financial Services
- Using technology to provide faster, cheaper, and more accessible financial services.
- India is the world's 2nd largest FinTech market (after USA).
- Growth drivers: Jio cheap internet + Smartphone explosion + Demonetization (2016).
- UPI – India's biggest FinTech achievement. 10,000+ crore transactions in 2023. Now used in Singapore, UAE, France.
🇮🇳 Indian Examples
- Paytm – payments, banking, loans, insurance
- PhonePe – India's top UPI app
- Zerodha – online stock broker, 10M+ users
- Razorpay – payment gateway
- PolicyBazaar – insurance marketplace
⚠️ Challenges
- Cybersecurity threats & UPI frauds
- Strict RBI regulations
- Digital illiteracy in rural areas
- Competition from traditional PSU banks
4.2 EdTech – Education Technology
Online Learning Platforms
- Using technology to deliver education online – school, competitive exams, higher education, upskilling.
- COVID-19 (2020) was the biggest boost – schools closed, millions moved online.
- India has 250M+ school students and 37M+ college students – huge market.
- EdTech makes the best teachers accessible to a student in a remote village at affordable prices.
💡 Indian EdTech Giants
BYJU'S – world's most valued EdTech at $22B | Unacademy – live classes for competitive exams | Physics Wallah (PW) – JEE/NEET prep at just ₹5,000/year vs ₹1.5L at institutes | UpGrad – degree programs online
✅ Business Models
- Subscription (monthly/yearly fee)
- Freemium (basic free, premium paid)
- Live Classes
- Offline + Online Hybrid
⚠️ Challenges
- High customer acquisition cost
- Students stop using after few months
- Quality control of courses
- Post-pandemic – students returned offline
4.3 HealthTech – Healthcare Technology
Tech-Enabled Healthcare Delivery
- Technology used for telemedicine, diagnosis, digital pharmacy, health monitoring.
- India's problem: Only 1 doctor per 1,500 patients (WHO norm: 1:1,000). HealthTech bridges this gap.
- Govt. launched Ayushman Bharat Digital Mission (ABDM) – health ID (ABHA Number) for every Indian.
- 70% of India's population is rural – HealthTech can reach them through mobile.
💡 Indian HealthTech Examples
Practo – book doctors, consult online (20M patients) | Pharmeasy – India's largest online pharmacy | 1mg – pharmacy + lab tests (now Tata Health) | Niramai – AI-based breast cancer detection without radiation
4.4 AgriTech – Agricultural Technology
Modernizing Indian Farming
- 58% of India's population depends on agriculture – AgriTech modernizes this sector.
- Includes: Precision farming, drone spraying, farm marketplace apps, soil analytics, post-harvest cold storage.
- Solves key problems: Price discovery, input access, crop credit, and insurance claims.
💡 Indian AgriTech Examples
AgriBazaar – farmers sell produce directly to buyers | DeHaat – seeds + fertilizers + market linkage | Fasal – IoT sensors for precise advice (reduces water use 30%, increases yield 20%) | Ninjacart – connects farmers directly with grocery stores in cities
4.5 Defence Technology Entrepreneurship
Make in India for Defence Sector
- India is one of the world's largest defence importers – govt. wants to reduce this through 'Atmanirbhar Bharat'.
- iDEX scheme: Invites startups to solve defence challenges – gives funding up to ₹1.5 crore.
- Two Defence Corridors in UP and Tamil Nadu – dedicated zones for defence manufacturing.
- Target: ₹1.75 lakh crore defence production by 2025 (Defence Production Policy 2020).
💡 Indian Defence Startups
ideaForge – drones for Indian Army, BSF border surveillance | Zen Technologies – VR training simulators for soldiers (trains without real ammunition) | Tonbo Imaging – targeting systems for tanks
4.6 IT Entrepreneurship – Information Technology
Software Products, SaaS, AI, Cloud
- India's IT sector – TCS, Infosys, Wipro made India a global IT powerhouse.
- New generation: building product-based companies – SaaS, Mobile Apps, AI, Cybersecurity.
- India's advantage: largest English-speaking tech talent pool, low cost, strong engineering institutes (IITs, NITs).
- Major hubs: Bangalore, Hyderabad, Pune, Chennai, Mumbai.
💡 Inspiring Indian IT Entrepreneurs
Zoho (Sridhar Vembu) – business software used by 80M users in 150 countries, bootstrapped (no outside investment) | Freshworks (Girish Mathrubootham) – India's first software product unicorn on NASDAQ | Postman – API testing tool used by 20M developers worldwide
4.7 Agropreneurship
Agriculture + Entrepreneurship = Value Addition
A farmer grows wheat and sells it to a trader → earns ₹10/kg. An agropreneur makes flour, pasta, and bread from that wheat → earns ₹50/kg from the same crop!
- Treats agriculture as a business – adds branding, processing, and direct marketing.
- Types: Organic farming, Food processing, Agro-tourism, Floriculture, Mushroom farming, Beekeeping.
- India wastes 40% of agricultural produce every year – agropreneurs reduce this waste and earn profits.
- Support: NABARD, APEDA, PM Kisan Sampada Yojana, FPO Scheme.
💡 Amravati Agropreneur
Shubham Kapse (Amravati) – MBA graduate, started 'Vidarbha Organic' brand. Convinced 50 farmers to switch to organic farming, sells on Amazon and Pune supermarkets. Revenue crossed ₹1 crore in 3 years!
4.8 Women Entrepreneurship
Businesses Owned & Run by Women
- Women own about 20% of all registered enterprises in India – growing rapidly.
- When women earn, 90% of income goes back to family (food, children's education, healthcare) – most powerful tool for poverty reduction.
🌟 Famous Examples
- Kiran Mazumdar-Shaw – Biocon, started with ₹10,000
- Falguni Nayar – Nykaa, $7B valuation
- Lijjat Papad – 7 women → ₹1,600 crore cooperative!
🏛️ Govt. Schemes
- Stand-Up India (₹10L–₹1Cr)
- Mudra Yojana (priority lending)
- Udyogini (₹3L for poor women)
- Mahila Udyam Nidhi (₹10L)
⚠️ Challenges
- Social & cultural barriers
- No collateral for bank loans
- Mobility restrictions
- Work-life balance difficulty
✨ Lijjat Papad Story
- Started 1959 by 7 women
- Initial capital: ₹80 (borrowed)
- Now: 45,000+ women members
- Annual revenue: ₹1,600 crores!
4.9 Family Run Business
Backbone of Indian Economy
- Business owned and managed by 2 or more family members.
- 67% of India's top 500 companies are family-controlled – Tata, Reliance, Mahindra, Bajaj, Birla, Wipro.
- Biggest challenge: Succession – only 30% survive to 2nd generation, 12% to 3rd, just 3% to 4th generation.
- Trend: Professionalization – family keeps ownership, professional managers run the business (e.g., Tata hired N. Chandrasekaran, not a Tata family member).
✅ Advantages
- High trust and loyalty
- Long-term thinking (50–100 years)
- Quick decision making
- Strong commitment
⚠️ Disadvantages
- Nepotism – unqualified family in key roles
- Family conflicts spill into business
- Succession problems
- Resistance to professionalism
4.10 MSME – Micro, Small & Medium Enterprises
Backbone of Indian Economy
- MSMEs contribute 30% of India's GDP, 45% of exports, and employ 110 million people.
- Second biggest employer after agriculture.
| Category | Investment (Plant & Machinery) | Annual Turnover |
|---|---|---|
| Micro Enterprise | Up to ₹1 crore | Up to ₹5 crore |
| Small Enterprise | Up to ₹10 crore | Up to ₹50 crore |
| Medium Enterprise | Up to ₹50 crore | Up to ₹250 crore |
🏛️ Govt. Support
- Udyam Registration (online)
- CGTMSE – loans up to ₹2Cr, no collateral
- GeM – sell to govt. online
- PM Vishwakarma – artisans support
⚠️ Challenges
- Difficult to get bank loans
- Outdated technology
- Lack of skilled labour
- Too many compliance regulations
💡 Tiruppur – MSME Success Story
Tiruppur (Tamil Nadu) has 10,000+ MSME units producing 50% of India's knitwear exports worth ₹30,000+ crores. Supplies to H&M, Zara, Walmart. Employs 5+ lakh workers!
4.11 Emerging Markets
Fast-Growing Developing Economies
- Economies between developed (USA, UK) and underdeveloped countries – growing rapidly.
- Key group: BRICS – Brazil, Russia, India, China, South Africa.
- India: 5th largest economy, expected to become 3rd largest by 2030.
- India's opportunity: 1.4B population, 400M middle class, 600M youth below 25 years.
🚀 Opportunities
- Infrastructure development
- Consumer goods brands
- Healthcare & hospitals
- EdTech and FinTech
- E-commerce & last-mile delivery
⚠️ Challenges
- Political instability
- Currency risk
- Corruption and bureaucracy
- Low purchasing power
💡 Indian Brands Going Global
Tata Motors – sells in Africa & SE Asia | BYJU'S – Middle East, Latin America | OYO Hotels – 35+ countries | Jio – sharing telecom expertise with Africa
4.12 Quick Summary – All New Age Businesses
Unit 4 Cheat Sheet
| Type | What It Does | Indian Example |
|---|---|---|
| FinTech | Tech-based financial services | Paytm, Zerodha, PhonePe |
| EdTech | Online education delivery | BYJU'S, PW, Unacademy |
| HealthTech | Tech-enabled healthcare | Practo, Pharmeasy, Niramai |
| AgriTech | Agriculture modernization | DeHaat, Ninjacart, Fasal |
| Defence Tech | Military technology | ideaForge, Zen Technologies |
| IT | Software & tech services | Zoho, Freshworks, TCS |
| Agropreneurship | Value-added farming | Organic farms, FPOs |
| Women Entrepreneurship | Women-led businesses | Nykaa, Lijjat Papad, Biocon |
| Family Business | Family-owned enterprises | Tata, Reliance, Bajaj |
| MSME | Micro, small, medium units | Tiruppur textiles |
| Emerging Markets | Rapidly developing economies | India, BRICS nations |
🎯 Exam Preparation Tips – Unit 4
For every new age business type, remember these 4 points:
(1) Definition → (2) 2-3 Indian Examples → (3) 3-4 Opportunities → (4) 3-4 Challenges
This structure will give you full marks in 10-mark answers!
Also revise MSME classification table, Women Entrepreneur schemes, and PMEGP details – frequently asked in exams.