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  • UGC NET MBA Unit-10 MCQs

    Entrepreneurship Development, Innovation and Small Business Management

    🔹 SECTION A – ENTREPRENEURSHIP CONCEPTS & CHARACTERISTICS

    1. Entrepreneurship is best described as:
    A. Routine management activity
    B. Innovation and risk-bearing for value creation
    C. Financial accounting practice
    D. Wage employment
    Answer: B
    Explanation: Entrepreneurship involves innovating, taking risks, and organizing resources to create value.*

    2. The word entrepreneur is derived from:
    A. Latin
    B. French
    C. Greek
    D. German
    Answer: B
    Explanation: From French entreprendre meaning “to undertake.”*

    3. According to Schumpeter, the entrepreneur is:
    A. A risk-taker
    B. An innovator introducing new combinations
    C. A manager of a firm
    D. A financier
    Answer: B

    4. Which of the following is not a characteristic of entrepreneurship?
    A. Innovation
    B. Risk-taking
    C. Imitation only
    D. Proactiveness
    Answer: C

    5. Entrepreneurship contributes to economic growth primarily by:
    A. Creating employment and innovation
    B. Increasing imports
    C. Reducing production
    D. None
    Answer: A

    6. Entrepreneurs differ from managers because they:
    A. Create and own the business
    B. Only supervise operations
    C. Work for wages
    D. Have limited risk exposure
    Answer: A

    7. Which of the following statements is true?
    A. All entrepreneurs are innovators
    B. All innovators are entrepreneurs
    C. Entrepreneurship requires both innovation and organization
    D. None
    Answer: C

    8. Entrepreneurship is a:
    A. Process
    B. One-time activity
    C. Government scheme
    D. None
    Answer: A

    9. The core element of entrepreneurship is:
    A. Value creation through opportunity exploitation
    B. Routine job performance
    C. Bureaucratic control
    D. None
    Answer: A

    10. Intrapreneurship occurs:
    A. Within an existing organization
    B. In new startups only
    C. Among government employees only
    D. None
    Answer: A

    🔹 SECTION B – THEORIES OF ENTREPRENEURSHIP

    11. The Risk-Bearing Theory of entrepreneurship was proposed by:
    A. Cantillon
    B. Schumpeter
    C. Knight
    D. Weber
    Answer: A

    12. According to Knight, profits arise due to:
    A. Uncertainty-bearing
    B. Risk-sharing
    C. Innovation
    D. Monopolies
    Answer: A

    13. J.B. Say considered the entrepreneur as:
    A. Organizer of production
    B. Innovator
    C. Capitalist
    D. Worker
    Answer: A

    14. Schumpeter’s innovation theory describes entrepreneurs as:
    A. Agents of creative destruction
    B. Wage earners
    C. Capital owners only
    D. None
    Answer: A

    15. According to McClelland, entrepreneurship is driven by:
    A. Need for achievement (nAch)
    B. Need for affiliation
    C. Need for power
    D. Risk aversion
    Answer: A

    16. Hagen’s Status Withdrawal theory relates entrepreneurship to:
    A. Social frustration and displacement
    B. Economic resources
    C. Innovation
    D. None
    Answer: A

    17. Max Weber emphasized entrepreneurship arises from:
    A. Protestant work ethic and cultural values
    B. Government subsidies
    C. Luck
    D. None
    Answer: A

    18. According to Kirzner, entrepreneurs identify:
    A. Market disequilibria and arbitrage opportunities
    B. Government policies
    C. Technology only
    D. None
    Answer: A

    19. Economic theory of entrepreneurship focuses on:
    A. Capital and resource allocation
    B. Psychological motivation
    C. Cultural beliefs
    D. None
    Answer: A

    20. McClelland’s theory is primarily:
    A. Psychological
    B. Economic
    C. Sociological
    D. None
    Answer: A

    🔹 SECTION C – ENTREPRENEURIAL PROCESS & COMPETENCIES

    21. The first step in the entrepreneurial process is:
    A. Opportunity identification
    B. Business registration
    C. Resource mobilization
    D. None
    Answer: A

    22. Feasibility analysis includes:
    A. Technical, financial, and market analysis
    B. Advertising
    C. Customer service
    D. None
    Answer: A

    23. Entrepreneurial competencies can be developed through:
    A. Training and experience
    B. Family background only
    C. Luck
    D. None
    Answer: A

    24. Key entrepreneurial competency includes:
    A. Initiative
    B. Procrastination
    C. Avoidance
    D. None
    Answer: A

    25. An entrepreneur who innovates within an existing organization is known as:
    A. Intrapreneur
    B. Manager
    C. Contractor
    D. None
    Answer: A

    26. Risk in entrepreneurship is:
    A. Uncertain but manageable
    B. Fully predictable
    C. Always avoidable
    D. None
    Answer: A

    27. Opportunity recognition requires:
    A. Creativity and environmental scanning
    B. Routine operations
    C. Accounting skills only
    D. None
    Answer: A

    28. Entrepreneurial motivation refers to:
    A. Internal and external forces that stimulate entrepreneurial behavior
    B. Legal obligations
    C. Tax incentives only
    D. None
    Answer: A

    29. A key determinant of entrepreneurial success is:
    A. Competence and adaptability
    B. Heredity
    C. Political affiliation
    D. None
    Answer: A

    30. Entrepreneurial decision-making is generally:
    A. Unstructured and uncertain
    B. Routine
    C. Fixed
    D. None
    Answer: A

    🔹 SECTION D – WOMEN & RURAL ENTREPRENEURSHIP

    31. Women entrepreneur is one who:
    A. Owns and manages an enterprise wholly or partly
    B. Works in government
    C. Manages only home-based work
    D. None
    Answer: A

    32. A major problem faced by women entrepreneurs in India is:
    A. Lack of finance and mobility
    B. Too much government support
    C. Excess labor
    D. None
    Answer: A

    33. STEP Scheme relates to:
    A. Training and employment for women
    B. Startup grants
    C. Infrastructure finance
    D. None
    Answer: A

    34. Rural entrepreneurship is based primarily on:
    A. Local resources and traditional skills
    B. Imports
    C. Urban markets
    D. None
    Answer: A

    35. Major constraint in rural entrepreneurship:
    A. Lack of infrastructure and market access
    B. Excess investment
    C. Skilled labor surplus
    D. None
    Answer: A

    36. PMEGP scheme promotes:
    A. Employment generation through micro enterprises
    B. Only export industries
    C. Urban malls
    D. None
    Answer: A

    37. Mahila Coir Yojana aims at:
    A. Promoting women-led coir industry
    B. Dairy farming
    C. Export training
    D. None
    Answer: A

    38. Rural entrepreneurship contributes mainly to:
    A. Balanced regional development
    B. Urban congestion
    C. Inflation
    D. None
    Answer: A

    39. TREAD scheme supports:
    A. Trade Related Entrepreneurship Assistance and Development for women
    B. Technology research
    C. Rural tourism
    D. None
    Answer: A

    40. Self-Help Groups (SHGs) are a major tool for:
    A. Microfinance and rural entrepreneurship
    B. Export financing
    C. Import subsidies
    D. None
    Answer: A

    🔹 SECTION E – INNOVATION AND BUSINESS IDEAS

    41. Innovation in business refers to:
    A. Commercial application of new ideas
    B. Copying competitors
    C. Routine activity
    D. None
    Answer: A

    42. Schumpeter’s view of innovation includes:
    A. New products, processes, markets, or organizations
    B. Government policies
    C. Social media
    D. None
    Answer: A

    43. Process innovation focuses on:
    A. Improving methods of production or delivery
    B. Launching new products
    C. Advertising
    D. None
    Answer: A

    44. Business opportunity identification involves:
    A. Matching market needs with entrepreneur’s strengths
    B. Random guessing
    C. Copying competitors
    D. None
    Answer: A

    45. Screening of business ideas ensures:
    A. Viability and feasibility
    B. Imitation
    C. Market monopoly
    D. None
    Answer: A

    46. Product innovation example:
    A. Introduction of electric cars
    B. Recruitment of staff
    C. Cost accounting
    D. None
    Answer: A

    47. Business model innovation example:
    A. Uber’s ride-sharing platform
    B. Discount sales
    C. New warehouse
    D. None
    Answer: A

    48. Innovation is essential for:
    A. Sustaining competitive advantage
    B. Bureaucracy
    C. Stabilizing monopolies
    D. None
    Answer: A

    49. Incremental innovation refers to:
    A. Small improvements in existing products or processes
    B. Radical new inventions
    C. Imitation
    D. None
    Answer: A

    50. Disruptive innovation example:
    A. Netflix replacing DVD rentals
    B. Traditional retail expansion
    C. Luxury hotel marketing
    D. None
    Answer: A

    UGC NET Management – Unit X

    Entrepreneurship Development, Innovation & Small Business Management

    🔹 SECTION F – BUSINESS PLAN & FEASIBILITY ANALYSIS

    51. A business plan is:
    A. A written document describing business objectives, strategy, and resources
    B. A government policy paper
    C. A legal contract
    D. A budget report
    Answer: A
    Explanation: A business plan outlines an entrepreneur’s goals, market, operations, and financial projections.*

    52. The first part of a business plan is the:
    A. Executive Summary
    B. Appendix
    C. Financial Statement
    D. Product Description
    Answer: A

    53. A business plan is primarily used to:
    A. Attract investors and guide management decisions
    B. Replace accounting records
    C. Avoid marketing
    D. None
    Answer: A

    54. The feasibility study is conducted:
    A. Before preparing a business plan
    B. After launching the business
    C. After one year of operations
    D. None
    Answer: A

    55. Market feasibility focuses on:
    A. Demand, competition, and market potential
    B. Factory layout
    C. Labour laws
    D. None
    Answer: A

    56. Technical feasibility examines:
    A. Production methods and resource availability
    B. Marketing cost
    C. Taxes
    D. None
    Answer: A

    57. Financial feasibility evaluates:
    A. Cost, investment, and profitability
    B. Product design
    C. Employee morale
    D. None
    Answer: A

    58. The main purpose of feasibility analysis is to:
    A. Evaluate project viability before investment
    B. File taxes
    C. Hire labour
    D. None
    Answer: A

    59. Sensitivity analysis in financial feasibility tests:
    A. How results change with key variable changes
    B. Employee satisfaction
    C. Fixed cost only
    D. None
    Answer: A

    60. A good business plan should be:
    A. Clear, realistic, and flexible
    B. Overly optimistic
    C. Lengthy and technical
    D. None
    Answer: A

    🔹 SECTION G – MICRO, SMALL & MEDIUM ENTERPRISES (MSMEs)

    61. MSMEs in India are classified based on:
    A. Investment and annual turnover
    B. Number of employees
    C. Export volume
    D. None
    Answer: A

    62. As per the MSME classification (2020):
    A. Micro – ₹1 Cr investment, ₹5 Cr turnover
    B. Small – ₹10 Cr investment, ₹50 Cr turnover
    C. Medium – ₹50 Cr investment, ₹250 Cr turnover
    D. All of the above
    Answer: D

    63. MSMEs contribute approximately what percentage to India’s GDP?
    A. 30%
    B. 10%
    C. 60%
    D. 45%
    Answer: A

    64. MSMEs employ around:
    A. 11 crore people
    B. 50 lakh people
    C. 3 crore people
    D. None
    Answer: A

    65. Major government initiative promoting MSMEs:
    A. Make in India
    B. Startup India
    C. Atmanirbhar Bharat
    D. All of the above
    Answer: D

    66. The nodal agency for MSME development in India is:
    A. Ministry of MSME
    B. NITI Aayog
    C. Ministry of Finance
    D. None
    Answer: A

    67. Udyam Registration replaced:
    A. Udyog Aadhaar system
    B. DGFT registration
    C. Import license
    D. None
    Answer: A

    68. PMEGP stands for:
    A. Prime Minister’s Employment Generation Programme
    B. Public Manufacturing Enterprise Growth Plan
    C. Post-Manufacturing Entrepreneurship Grant Policy
    D. None
    Answer: A

    69. Cluster Development Programme is intended to:
    A. Support groups of similar small industries
    B. Promote individual trade
    C. Reduce export
    D. None
    Answer: A

    70. MSMEs are vital for:
    A. Balanced regional development and inclusive growth
    B. Import promotion
    C. Capital flight
    D. None
    Answer: A

    🔹 SECTION H – SICKNESS IN SMALL INDUSTRIES

    71. A small-scale unit is termed “sick” when:
    A. It cannot meet financial obligations or sustain operations
    B. It has high profit
    C. It pays all loans on time
    D. None
    Answer: A

    72. Major cause of industrial sickness:
    A. Poor management and marketing problems
    B. High productivity
    C. Government support
    D. None
    Answer: A

    73. Technological obsolescence refers to:
    A. Use of outdated technology causing inefficiency
    B. New technology adoption
    C. Cost reduction
    D. None
    Answer: A

    74. Internal cause of sickness:
    A. Poor working capital management
    B. Infrastructure shortage
    C. Policy changes
    D. None
    Answer: A

    75. External cause of sickness:
    A. Power shortage and delayed payments
    B. Inefficient labour
    C. Poor leadership
    D. None
    Answer: A

    76. Rehabilitation of sick units involves:
    A. Financial, technical, and managerial restructuring
    B. Liquidation
    C. Outsourcing
    D. None
    Answer: A

    77. Which institution is primarily responsible for assisting sick small units?
    A. SIDBI
    B. RBI
    C. SEBI
    D. None
    Answer: A

    78. Early detection of sickness is important because:
    A. Corrective actions are cheaper and more effective
    B. Government grants increase
    C. It ensures monopoly
    D. None
    Answer: A

    79. Industrial sickness can be reduced through:
    A. Improved financial discipline and training
    B. Ignoring market signals
    C. Cost escalation
    D. None
    Answer: A

    80. Rehabilitation of small industries focuses mainly on:
    A. Reviving production and profitability
    B. Selling assets
    C. Closing units
    D. None
    Answer: A

    🔹 SECTION I – INSTITUTIONAL FINANCE TO SMALL INDUSTRIES

    81. SIDBI stands for:
    A. Small Industries Development Bank of India
    B. State Investment Development Board of India
    C. Small Investors’ Development Bureau of India
    D. None
    Answer: A

    82. SIDBI was established in:
    A. 1990
    B. 1985
    C. 1995
    D. 1992
    Answer: A

    83. Primary function of SIDBI:
    A. Finance, promote, and develop MSMEs
    B. Manage public debt
    C. Regulate stock exchanges
    D. None
    Answer: A

    84. NSIC assists small industries in:
    A. Marketing and raw material procurement
    B. Tax management
    C. Employee recruitment
    D. None
    Answer: A

    85. NABARD supports:
    A. Rural industries and agricultural enterprises
    B. Stock market reforms
    C. Telecom industries
    D. None
    Answer: A

    86. KVIC promotes:
    A. Khadi and village industries
    B. Large corporate units
    C. Software exports
    D. None
    Answer: A

    87. Cooperative banks primarily serve:
    A. Rural and semi-urban entrepreneurs
    B. Large industries
    C. Exporters only
    D. None
    Answer: A

    88. Microfinance provides:
    A. Small, collateral-free loans to low-income entrepreneurs
    B. Large-scale industrial loans
    C. Foreign currency financing
    D. None
    Answer: A

    89. SHG–Bank linkage model refers to:
    A. Linking self-help groups with banks for microcredit
    B. Bank merger scheme
    C. Capital market integration
    D. None
    Answer: A

    90. Grameen Bank model was pioneered by:
    A. Muhammad Yunus (Bangladesh)
    B. Amartya Sen
    C. C.K. Prahalad
    D. None
    Answer: A

    🔹 SECTION J – GOVERNMENT SUPPORT & CONTEMPORARY ISSUES

    91. Startup India initiative was launched in:
    A. 2016
    B. 2014
    C. 2019
    D. 2020
    Answer: A

    92. The main aim of Startup India is to:
    A. Promote innovation and entrepreneurship through simplified regulation
    B. Reduce startup funding
    C. Promote monopolies
    D. None
    Answer: A

    93. Atal Innovation Mission focuses on:
    A. Fostering innovation and incubation in schools and research institutes
    B. Agriculture only
    C. Tourism
    D. None
    Answer: A

    94. Stand-Up India Scheme provides:
    A. Bank loans to women and SC/ST entrepreneurs
    B. Export subsidies
    C. Corporate tax benefits
    D. None
    Answer: A

    95. “Make in India” initiative aims to:
    A. Transform India into a global manufacturing hub
    B. Promote only imports
    C. Encourage outsourcing
    D. None
    Answer: A

    96. A key difference between entrepreneur and intrapreneur:
    A. Ownership and risk-bearing responsibility
    B. Education level
    C. Working hours
    D. None
    Answer: A

    97. Business incubators primarily provide:
    A. Mentoring, space, and support for new startups
    B. Fixed capital loans
    C. Tax collection services
    D. None
    Answer: A

    98. Entrepreneurship development programs (EDPs) aim at:
    A. Developing entrepreneurial competencies and motivation
    B. Teaching manual work
    C. Reducing competition
    D. None
    Answer: A

    99. The success of entrepreneurial ventures depends most on:
    A. Innovation, management, and adaptability
    B. Government bureaucracy
    C. Imitation
    D. None
    Answer: A

    100. Entrepreneurship contributes to sustainable development by:
    A. Promoting innovation, inclusivity, and responsible resource use
    B. Ignoring social issues
    C. Reducing employment
    D. None
    Answer: A

  • UGC NET MBA Unit-10

    Entrepreneurship Development, Innovation, and Small Business Management

    1. ENTREPRENEURSHIP DEVELOPMENT – CONCEPT & NATURE

    A. Concept

    Entrepreneurship is the process of identifying opportunities, mobilizing resources, and creating value through the establishment of new ventures or transformation of existing businesses.

    An Entrepreneur is a person who takes initiative, bears risk, and innovates to convert ideas into commercially viable activities.

    B. Characteristics of Entrepreneurship

    1. Innovation: Introduction of new products, processes, or markets.

    2. Risk-taking: Managing uncertainty for potential rewards.

    3. Proactiveness: Taking initiative before competitors.

    4. Decision-making: Rational yet creative judgment.

    5. Vision and leadership: Long-term strategic orientation.

    C. Importance of Entrepreneurship

    • Promotes economic growth and employment.

    • Encourages innovation and competitiveness.

    • Mobilizes savings and capital formation.

    • Reduces regional disparities through local enterprises.

    • Enhances exports and foreign exchange earnings.

    đźź© 2. TYPES OF ENTREPRENEURSHIP

    Type Meaning / Features
    Innovative Entrepreneur Introduces new ideas or technology.
    Imitative / Adoptive Entrepreneur

    Copies or adapts successful innovations.
    Fabian Entrepreneur

    Skeptical and changes only when necessary.
    Drone Entrepreneur Resists change despite losses.
    Social Entrepreneur

    Works for social goals using entrepreneurial methods.
    Serial Entrepreneur Starts multiple ventures sequentially.
    Intrapreneur

    Innovates within an existing organization.
    Women / Rural Entrepreneur Operates in specific demographic or regional contexts.

    đźź© 3. THEORIES OF ENTREPRENEURSHIP

    A. Economic Theories

    1. Richard Cantillon (Risk-Bearing Theory):
      Entrepreneur = risk-bearer who buys inputs at known costs and sells at uncertain prices.

    2. J.B. Say (Coordination Theory):
      Entrepreneur combines factors of production for productivity.

    3. Schumpeter (Innovation Theory):
      Entrepreneur as “creative destroyer” — introducing new combinations:

      • New product

      • New method

      • New market

      • New source of supply

      • New organization

    4. Knight (Uncertainty-Bearing Theory):
      Profit is a reward for bearing uninsurable uncertainty.

    5. Kirzner (Alertness Theory):
      Entrepreneur discovers unnoticed opportunities and arbitrage gaps.

    B. Sociological and Psychological Theories

    Theory Proponent Focus
    Need for Achievement Theory David McClelland High “nAch” motivates entrepreneurship.
    Status Withdrawal Theory Hagen

    Entrepreneurship as reaction to social frustration.
    Cultural Theory Max Weber Protestant work ethic promotes enterprise.

    C. Integrated Approach

    Entrepreneurship arises from the interaction of economic, social, psychological, and environmental factors — not one single determinant.

    đźź© 4. PROCESS OF ENTREPRENEURSHIP DEVELOPMENT

    1. Opportunity Identification:
      Spotting unmet needs, trends, and market gaps.

    2. Feasibility Analysis:
      Technical, financial, and market viability study.

    3. Business Plan Preparation:
      Structured plan for operations, marketing, finance, HR, and growth.

    4. Resource Mobilization:
      Arranging finance, manpower, and materials.

    5. Implementation:
      Establishing the enterprise and commencing operations.

    6. Growth and Sustainability:
      Scaling operations, diversification, innovation.

    Entrepreneurial Competencies

    A set of knowledge, skills, and behaviors enabling success:

    • Initiative & perseverance

    • Risk management

    • Goal orientation

    • Networking ability

    • Problem-solving

    • Self-confidence

    🟩 5. INTRAPRENEURSHIP – CONCEPT & PROCESS

    A. Concept

    Intrapreneurship = Entrepreneurship within an existing organization.
    It involves employees acting like entrepreneurs to develop new products, improve processes, or enter new markets — without owning the firm.

    B. Process

    1. Idea generation within firm.

    2. Top management support.

    3. Resource allocation & team formation.

    4. Pilot testing & commercialization.

    5. Reward and recognition.

    C. Barriers

    • Bureaucratic culture

    • Risk aversion

    • Lack of autonomy

    • Inadequate reward systems

    D. Advantages

    • Continuous innovation

    • Employee motivation

    • Competitive advantage

    • Organizational renewal

    đźź© 6. WOMEN ENTREPRENEURSHIP

    A. Concept

    A woman entrepreneur is one who individually or jointly owns and manages an enterprise.

    B. Challenges

    • Limited access to finance and training

    • Cultural and social barriers

    • Balancing family and work responsibilities

    • Market access issues

    C. Government Support Schemes

    • STEP: Support to Training and Employment Programme for Women

    • Mahila Coir Yojana

    • TREAD: Trade Related Entrepreneurship Assistance and Development

    • Stand-Up India Scheme (2016): Loans for women and SC/ST entrepreneurs.

    đźź© 7. RURAL ENTREPRENEURSHIP

    A. Concept

    Entrepreneurial activities in rural or semi-urban areas, utilizing local resources and skills.

    B. Features

    • Labour-intensive

    • Based on agriculture and handicrafts

    • Local market orientation

    C. Types

    1. Agro-based industries: Dairy, food processing.

    2. Handicrafts & village industries: Pottery, weaving.

    3. Service enterprises: Transport, repair shops.

    4. Social entrepreneurship: Rural healthcare, education.

    D. Challenges

    • Poor infrastructure

    • Lack of credit and training

    • Market access limitations

    E. Remedies

    • Rural industrial clusters

    • Government and NGO support

    • Cooperative models

    • Microfinance linkages

    đźź© 8. INNOVATION IN BUSINESS

    A. Concept

    Innovation = “Application of new ideas to improve products, processes, or services.”
    (As per Schumpeter — “creative destruction”).

    B. Types of Innovation

    Type Example
    Product Innovation New goods/services (smartphones)
    Process Innovation

    Improved production or delivery (automation)
    Marketing Innovation

    Novel pricing or packaging (Paytm cashback model)
    Organizational Innovation

    New management practices (flat hierarchy)
    Business Model Innovation Redefining value creation (Airbnb, Uber)

    C. Opportunity Identification

    • Market trends and customer pain points

    • Technological shifts

    • Government policies and incentives

    • Global best practices

    D. Screening of Business Ideas

    1. Assessing feasibility (technical, financial, legal).

    2. Evaluating risk and profitability.

    3. Considering fit with entrepreneur’s competencies.

    4. Selecting the most viable idea for business planning.

    đźź© 9. BUSINESS PLAN AND FEASIBILITY ANALYSIS

    A. Business Plan – Meaning

    A written document outlining the goals, strategies, target market, financial projections, and operations of a proposed business.

    B. Contents of a Business Plan

    1. Executive summary

    2. Product/service description

    3. Market analysis

    4. Marketing & sales strategy

    5. Management team

    6. Financial projections (income, cash flow, balance sheet)

    7. Risk assessment

    8. Funding requirements

    C. Feasibility Analysis

    Type Key Question Focus
    Technical Feasibility Can we make it? Technology, inputs, process
    Market Feasibility Can we sell it?

    Demand, competition, pricing
    Financial Feasibility Can we afford it? Cost, capital, profitability

    D. Importance

    • Reduces risk and uncertainty

    • Attracts investors and lenders

    • Guides implementation

    đźź© 10. MICRO, SMALL & MEDIUM ENTERPRISES (MSMEs) IN INDIA

    A. Definition (As per MSMED Act, 2006 – revised 2020)

    Category Investment + Turnover (â‚ą)
    Micro Enterprise Investment ≤ ₹1 Cr & Turnover ≤ ₹5 Cr
    Small Enterprise

    Investment ≤ ₹10 Cr & Turnover ≤ ₹50 Cr
    Medium Enterprise Investment ≤ ₹50 Cr & Turnover ≤ ₹250 Cr

    B. Role of MSMEs

    • Contribute ~30% to India’s GDP.

    • Employ ~11 crore people.

    • Account for ~40% of exports.

    • Encourage regional development.

    C. Government Initiatives

    • Udyam Registration Portal (replacing Udyog Aadhaar).

    • PMEGP: Prime Minister’s Employment Generation Programme.

    • Cluster Development Programme.

    • Make in India and Startup India initiatives.

    đźź© 11. SICKNESS IN SMALL INDUSTRIES

    A. Meaning

    A sick unit is one that fails to generate internal surplus and cannot meet financial obligations.

    B. Causes

    1. Poor management or planning

    2. Obsolete technology

    3. Delayed payments and credit crunch

    4. Marketing and raw material problems

    5. Infrastructure bottlenecks

    C. Rehabilitation Measures

    • Financial restructuring by banks

    • Technical modernization

    • Managerial and marketing assistance

    • Government revival packages (e.g., SIDBI schemes)

    đźź© 12. INSTITUTIONAL FINANCE TO SMALL INDUSTRIES

    A. Major Financial Institutions

    Institution Role / Function
    SIDBI (Small Industries Development Bank of India) Apex institution for financing and promoting MSMEs.
    NSIC (National Small Industries Corporation)

    Raw material support, marketing, and training.
    KVIC (Khadi and Village Industries Commission)

    Promotion of rural and traditional industries.
    NABARD Finances rural enterprises and agriculture-linked units.

    B. Role of Banks

    • Commercial Banks: Provide working capital, term loans, export finance.

    • Cooperative Banks: Serve rural entrepreneurs.

    • Regional Rural Banks (RRBs): Focus on micro and small enterprises.

    C. Microfinance Institutions (MFIs)

    Provide small collateral-free loans to low-income entrepreneurs, especially women and rural groups.

    Models:

    • Self-Help Group (SHG)–Bank Linkage

    • Grameen Model (group-based lending)