UNIT II

Entrepreneurial Opportunities and

selection process

2.1.1 Product/Servie Selection Process.

A product is anything that can be offered to a marker for
acquisition, use or consumption.

It is often good to identify a number of criteria upon

which product selection is based.

There are three basic stages/steps involved in

product/venture selection. These are idea
generation, evaluation, and choice.

A) Idea Generation:
Product ideas or investment opportunities come from
different sources such as business/financial
newspapers, research institutes, consulting firms,
natural resources, universities, competitors.

The starting point for idea generation could be a simple

analysis of the business’s strengths and weaknesses. Ideas
could also be generated through brainstorming, desk
research, and various types of management consensus
procedures.

B) Evaluation:
 Screening of the product ideas is the first step ill
evaluation. Such criteria as the potential value of the
product, time money, and equipment required, fitting of
potential product into the business’s long-range sales
plan, and availability of qualified people to handle its
marketability need be thoroughly considered.

Each identified product/investment opportunity needs to

be adequately evaluated. A pre-feasibility study of the
product market, technical and financial aspects is necessary
at this stage to have a clear picture of the associated cost
and benefits.
A pre-feasibility is a preliminary version of a feasibility study.
It is similar to a feasibility study except that it is less detailed.
It is usually carried out for large and complex product/project
to determine whether to proceed to the more elaborate
feasibility study.

C) Choice:
A choice is made of a product that has been found to be
commercially viable, technically feasible, and economically
desirable. At this stage, necessary machinery is set in motion.

Factors to Consider in Product Selection

In selecting a product for your business venture, the following

factors must be taken into consideration:
1. Supply-gap: The size of the unsatisfied market demand
which constitutes a source of business opportunity will
dictate, to a great extent the need to select a particular
product. The product with the highest chances of
success as reflected in its demand will be selected. In
 essence, there must be an existing obvious demand for
the selected product.

2. Fund: The size of the funds that can be mobilized is

another important factor. The adequate fund is needed
to develop, produce, promote, sell and distribute the
product selected.

3. Availability of and Access to Raw Materials: Different

products require different raw materials. The source
quality and quantity of the raw materials needed are
factors to be seriously considered, Are the raw materials
available in sufficient quantities?
Where are the sources of raw materials located? Are they
accessible? Could they be sources locally or imported?
Satisfactory answers should be provided to these and many
other relevant questions.
4. Technical Implications: The production process for the
product needs to be considered. There is a need to
know the technical implications of the selected product
on the existing production line, available technology, and
even the labor force.
The choice of a particular product may require either
acquisition of the machinery or refurbishing of the old ones.
The product itself must be technically satisfactory and
acceptable to the user.
5. Profitability/Marketability: Most often, the product that
has the highest profit potential is often selected.
However, a product may be selected on the basis of its
ability to utilize idle capacity or complement the sale of
the existing products. The product must be marketable.
6. Availability of Qualified Personnel: Qualified
personnel to handle the production and marketing of the
 product must be available. The cost of producing the
product must be kept to the minimum by reducing
wastages. This is achievable through competent hands.
7. Government Policies: This is quite often an
uncontrollable factor. The focuses of government
policies can significantly influence the selection of the
product.
For instance, a package of incentives from the government
for a product with 100% local input contents can change the
direction of the business’s R & D and hence the product
selected.
8. Government objectives: The contributions of the
product to the realization of the company’s short and
long-range objectives must be considered before
selection. For instance, the company goal maybe the
achievement of sale growth, sales stability or
enhancement of the company’s social value
2.1.2 CORE COMPETENCE

What Are Core Competencies?

Core competencies are the resources and capabilities
that comprise the strategic advantages of a business.
Core competence is the collective learning in the
organization, especially the capacity to coordinate diverse
production skills and integrate streams of technologies.

… core competencies, … meet these three requirements:

1. they provide potential access to a wide variety of markets,

2. make a contribution to the customer benefits of the
product, and
3. are difficult for competitors to imitate.
2.1.3. PRODUCT/SERVICE LIFE CYCLE

THE 4 STAGES OF THE PRODUCT LIFE CYCLE

1. INTRODUCTION
Profits are low in this stage because things such as research
and development, production and marketing costs are high.
Prices are set high on the product or service to recoup some
of the development and introduction costs (but may also be
low as a way to more quickly build market share).
For example, microwave ovens that can now be purchased
for $50 were priced between $2,000 and $3,000 when they
were first introduced. In this stage, you’ll want to keep a
close watch on the market’s reaction to your products and
services and be ready to make changes. It sometimes helps
to experiment with several different product and service
configurations to see what resonates most strongly with
customers, especially in the early stage.
2. GROWTH
Sales generally increase with the demand for the product.
Cash flow improves and profits are at their peak.
Although competition may be minimal in this stage, it’s
important to continually make refinements and stay ahead
of the competitive curve. Build product and service
development capabilities with the cash you get from
increasing sales.

3. MATURITY
Sales may continue to increase or level off. Profits decrease
since prices are continually lowered to compete. Still, a
great amount of cash flow is generated through sales.
Conduct market research to determine trends. Adapt your
product or service to meet the coming trends — this is the
stage in which differentiation is more important than ever.
If you don’t look for new opportunities in new markets and
new products, the coming decline stage will leave you with
products and services that no longer sell.
4. DECLINE
Sales drop even though prices continue to fall. Profits are
extremely low at this stage, but the product or service has
generated sufficient cash flow during its life.
When a product or service hits this stage, many
entrepreneurs reintroduce it with a new feature or create a
new benefit. Simply increasing the size of a candy bar by 33
percent can re-start its life cycle.
Consider making changes to your product or service and/or
the way you market it. You may decide to discontinue your
product or service before losses eat into the cash flow
generated by sales.

2.1.4 New product development process

 Eight major steps in the new product development

process.
2.1.5 Mortality curve of product.
2.1.6 Creativity and innovation in product
development/modification

2.2 Process selection

2.2.1 Technology life cycle
The 4 stages of Technology Life Cycle :
1) Research and Development Phase
2) Ascent Phase
3) Maturity Phase
4) Decline phase

1) Research and Development Phase

The research and development are also called as the bleeding edge
as the income from the inputs being put in making the technology
are negative in nature and the chances of failure of technology are
quite high in nature. As the revenues are quite, the money for
developing the technology is poured from your own pocket. At this
stage, it is very important to take the feedback on the technology
developed from the industry experts and tweak it to match as per
the industry standards and to give it an edge of innovation and
novelty.

2) Ascent Phase
The ascent phase of the Technology Life Cycle is also called as the
leading edge as the company starts to recover the costs and
expenses that have been incurred and plus the technology
developed begins to gather strength and goes beyond the initial
point of development to get accepted in the market. The company
creates all the hype and promotion of the innovation and newness of
the technology grabbing the attention from all the quarters.

3) Maturity Phase
The maturity stage arrives when the gains from the technology are
high and stable but there is also a point of saturation. The technology
developed is well accepted by the public but as the competitors are
well aware and have caught with the realms of the technology
developed, the market has reached the point of saturation. The
revenues start to get slow down as the technology developed starts
to become yet another commodity in the market. In order to stay
relevant in the market, it is very important to make the incremental
and innovative changes in the technology considering the changing
dynamics of the markets and the evolving tastes of the customers.
Keeping an eye on the competition is also very important at this
stage.

4) Decline Phase
The decline phase is inevitable in nature most of the times and here
is when the companies witness the decrease in sales of its products
and there is a need or an emergence of the new and replacement of
the technology. Many a time, the companies reach the point where
there are no returns at all and further developments are not
profitable at all. The best possible step that the company can initiate
is to move out of the current technology and plant its resources on
the new project that is sure to yield more profits.

Example of the Technology Life Cycle

1) Nokia

In the early 2000’s the mobile brand Nokia was one of the best of the
crops and was much loved and adored by its loyal customers. The
Symbian technology used in its mobile phones was an instant hit
with the customers and the brand was the market leader for a very
long time until the onset of IOS and Android technologies
by Apple and Google that were high on the levels of futuristic
ideation and innovation leading to the decline stage of Nokia and its
technologies.

2.2.2 forms and costs of transformation

5 types of Transformation of business processes
1. Organizational transformation

This is the starting point for all changes in a company and involves
redesigning an organization’s structure, mode of operation, and
professional practices to enable it to work differently and more
efficiently

2. Management transformation

Control, discipline and excellent responsiveness have long been a

benchmark for management

3. Cultural transformation

Cultural transformation involves changing ways of thinking,

organizing and behaving

4. Information Systems Transformation

technologies, processes and people. It is the result of

developments in digital technology combined with the explosion
in both available data and data storage capacity.

5. Transformation of business processes

The transformation of a business process consists of moving

from a function-oriented vertical vision to a business-oriented
transversal vision.

Which processes will help you save time, speed up return on

investment, streamline an action or save resources

Organizational transformation
This is the starting point for all changes in a company and involves
redesigning an organization’s structure, mode of operation, and
professional practices to enable it to work differently and more
efficiently. Driven by general management, organizational
transformation is a continuous and evolving process where the
focus is on the employees: they must be supportive and committed
to ensure success.

For example, in the distribution sector, the introduction of

versatility and the development of new services means creating
different work processes, a more collaborative and autonomous
way of working. In other words, an in-depth transformation of the
activity’s organization.

Management transformation

Control, discipline and excellent responsiveness have long been a

benchmark for management. Companies must now adapt to
complex societal and environmental challenges in order to align
with today’s reality. New generations have indeed rewritten the
rules of hierarchy and internal relations. Hierarchical structures are
weakening, validation circuits are being shortened, the number of
middlemen has reduced and management functions and methods
are being re-assessed: managers are moving from a – rather rigid
and one-sided – system, based on the organization and
management of their team, to a leadership model that requires
them to unlearn their old ways of behaving and functioning at work.
As well as encouraging communication, collaboration, and
empowerment, today’s managers must also, for example, detect and
retain talent and encourage growth, while acting as a source of
inspiration in order to develop and maintain commitment.
Management transformation is therefore a prerequisite based on
sharing information, explaining and persuading, with the aim of
ensuring a more comprehensive change within the company.

It can take the form of a Lean approach, a strategy developed with

employees, letting them set their own objectives, holding meetings
to express their doubts, frustrations, fears, mistakes, etc. The
common goal is to promote trust, commitment, accountability, fun
and well-being at work.
Cultural transformation

Cultural transformation involves changing ways of thinking,

organizing and behaving. It is a source and consequence of the rules
that govern the life of the company, both in its structure and in its
operation or its expertise, and therefore introduces a notion of
separation from recurrent everyday behavior. Today, changing
corporate culture means changing the individual and collective
state of mind, to achieve well-being, and combine freedom with
sustainable performance. Since implementing such changes is a
delicate process, it can take up to 5 years.

The process can only succeed if managerial transformation has

already taken place, driven by a vision and values that make sense:
as a result, the action, reaction, confrontation and cooperation
involved will result in a restructuring of the organization towards
increased accountability, greater scope, and meaning and values,
rather than hierarchical lists of tasks to be performed. Managerial
maturity and the current company culture must first be assessed,
after which the new vision and values should be presented – what
remains is for the company to follow a path that leads to the
acquisition of new relational models, new reasoning processes and
new collective capabilities. This path is the perfect illustration of
the transformation process itself!

Cultural transformation comes into its own when a merger takes

place between two companies with different cultures, as the two
cultures must be assessed in such a way as to promote cooperation
and thereby resolve differences and together find a new way of
thinking.

Information Systems Transformation

Information systems transformation is a core feature of the

transformation of any company and a key growth driver, impacting
all its information management resources, i.e. technologies,
processes and people. It is the result of developments in digital
technology combined with the explosion in both available data and
data storage capacity. These changes have led not only to the
creation of a whole raft of new services, but also to their
increasingly rapid design, development and distribution. The main
challenge here is to balance the needs of the company’s value
proposition with the resources required to achieve it as quickly as
possible – without losing sight of risk management priorities.
Information systems transformation enables companies to
differentiate themselves through a wide range of applications,
including digitalization of services, process security, data sharing
and information sharing. It also offers a key distribution channel,
comprising e-commerce, multi-channel, and web services. It is
important to prepare the company before introducing such major
changes to information systems, if staff are to understand and
accept them rather than seeing them simply as something they are
obliged to endure.

Improved customer relations (CRM), phygitalization of sales outlets

and digital workplaces for staff are just a few benefits that can be
brought about by the transformation of company information
systems.

Transformation of business processes

The transformation of a business process consists of moving from a

function-oriented vertical vision to a business-oriented transversal
vision. It involves automating and securing various repetitive, low
added value tasks – something that is most often achieved by
digitizing the relevant tools, so that the company can focus on its
core business and thereby increase productivity and
competitiveness.

Which processes will help you save time, speed up return on

investment, streamline an action or save resources? It is important
to identify the best options in order to select the right business
model, technology and implementation plan to support both your
business process transformation needs and your company strategy.

Example: the General Data Protection Regulation (GDPR) impacts

the entire data cycle, including data collection, use and storage. To
achieve compliance, which came into force in May 2018, all tasks
that involved data processing needed to be overhauled, including
the creation of a processing register, the appointment of a DPO, the
automation of rules, etc.: a ubiquitous new order that had to be
integrated into every business process that used personal data.

A company’s driving force today is movement, and there is no doubt

that this transformation is permanent. Whether responding to new
challenges in markets and competition, taking on board new
managerial modes of operation, developing new cultural norms, or
making the most of new technologies – both computing and digital
– the aim is to strengthen the company’s market competitiveness.

Whatever the target or nature of company transformation, the aim

is always to strengthen a company’s competitiveness in order to
ensure its survival. Since its success is closely linked to the
commitment, engagement and empowerment of the employees
involved, it is imperative that they are placed at the heart of the
transformation project. Employees must therefore receive personal
support and guidance, whether the transformation impacts the
organization, management, corporate culture, IS or business
processes. However, just as it is impossible to give each employee a
personal coach, it is equally impossible to industrialize and
personalize the process without the necessary tools for achieving
the required outcomes!

2.2.3 Factors affecting process selection

Seven factors affecting the outcomes of your selection process
 The recruitment campaign. ...
 The geographic location of candidates. ...
 The literacy skills of the candidates. ...
 The number of candidates applying for a position. ...
 The correct use of assessment. ...
 Attractiveness of the position. ...
 The selection process itself.

2.2.4 location for an industry and material handling

Material handling is the movement, protection,

storage and control of materials and products
throughout manufacturing, warehousing,
distribution, consumption and disposal

2.3 Market Study Procedures

2.3.1 Questionnaire Design

2.3.2 Sampling market survey

2.3.3 Data Analysis

2.4 Getting information from stakeholders such as

2.4.1 Maharashtra centre for entrepreneurship

Development (MCED)

Maharashtra Centre for Entrepreneurship Development (MCED) is a

training institute for common people, who always dream to become
an Entrepreneur , to add value to their lifestyle. MCED from the year
1988, created so many successful entrepreneurs in the society, the
entrepreneurs were proved such an asset to the society that they not
only developed themselves and their family but also they touched too
many life’s in the society by helping other to fulfill their dream either
by providing them employment or by selflessly motivating them to
become entrepreneurs like them. Maharashtra Centre for
Entrepreneurship Development not only provides the quality
entrepreneurship training but also provides the hand-holding support
to all the trainees unless and until their dreams become reality.
Now MCED has moved very drastically with the scenario, MCED
along with the offline training entered into Online Quality Training.
MCED currently working on Industry 4.0 which came in 2019 and
MCED is striving to set its mark on Industry 4.0.

VISION & MISSION

 To create & develop spirit of Entrepreneurship globally.

Facilitating creation of entrepreneurial and

managerial capabilities in individuals &
organization by achieving total customer
satisfaction, using emerging technologies, ethics &
values, be financially strong & globally excellent
organization opportunity matching with employee's
aspiration.

MCED gives training for

1. Bakery product
2. Masala product
3. Fruit processing
4. Garment and Textile Industry
5. Dairy, Goat, Poultry Fishry etc
6. Business opportunity in todays days
7. Import export

MCED Runs entrepreneurship development

programme
Entrepreneurship Development Programme(EDP) Cell
This programme aims to help, guide, support selected
generation entrepreneurs to:
 Strengthen their entrepreneurial abilities / motivation.
 Analysis environment related to small & medium industry /
business.
 Select project / products. Formulate project.
 Understand the process & procedure of setting up of small /
medium industry / business.
 Know & can influence the sources of help / guidance /
support needed for launching enterprise.
 Acquire the management skills to manage the unit.
 Acquainting and appreciating social responsibility and
entrepreneurial disciplines

ED cell
More than 1600 Educational Institutes tie-up for ED Cell
Activities.
* One Day Entrepreneurship Awareness Programme for
mass awareness on Entrepreneurship.
* Two weeks Entrepreneurship Development Programme
for converting 30 % educated youth towards entrepreneurship
as career chose.
* ED cell will work as an instrument for creating
entrepreneurial culture in educational Institutes.
It organises different types of seminars and
workshops
2.4.2 National Institute for micro, small and
medium entreprises (NI-MSME)

CIETI-SIET
ni-msme was originally set up as Central Industrial
Extension Training Institute (CIETI) in New Delhi in 1960
as a Department under the Ministry of Industry and
Commerce, Government of India. It was decided to keep
it free from the tardy and impeding administrative controls
and procedures, so that the Institute can play a pivotal
role in the promotion of small enterprise. Therefore the
Institute was shifted to Hyderabad in 1962, and was
renamed as Small Industry Extension Training (SIET)
Institute.
NISIET
SIET was conferred the status of national institute by the
Government of India with the charter of assisting in the
promotion of Small Enterprises mainly by creating a pro-
business environment. In 1984, the UNIDO had
recognised SIET as an institute of meritorious
performance under its Centres of Excellence Scheme
subsequently, it was also accorded the national status in
the same year and SIET Institute became nisiet. Since
then the institute has come a long way, carving a place of
distinction for itself in the domain of entrepreneurship
promotion, achieving recognition both at the national level
and in the international arena.
NI-MSME
To cope with the pressure of globalisation, the
Government of India had enacted the Micro, Small and
Medium Enterprises Development Act, 2006 in the
Parliament, which became effective from 2nd October
2006. Accordingly, the Institute, in order to reflect the
expanded focus of its objectives with name was
rechristened as ni-msme from 11th April 2007 and re-
designed its structure and organisation. It is an
organisation of the Ministry of Micro, Small and Medium
Enterprises (formerly Ministry of SSI & ARI), Government
of India. The ni-msme (formerly as SIET) was registered
at Hyderabad in Andhra Pradesh under Public Societies
Registration Act I of 1350 Fasli with effective from 1st July
1962.

Shri Nitin Jairam Gadkari, Hon'ble Union Minister

for MSME, Govt. of India is the President of
the Society and Chairman of the Governing Copuncil
of ni-msme.

Pioneer Training Programme

ni-msme has initiated several specialised and tailor-made training
programmes, the first of their kind in the cream of MSME. A few of
them are
 Management Development Programmes.
 Programme on Area Development.
 Programme on Feasibility Survey and Analysis.
 Programme on Industrial Estates.
 Programme for Young Engineers and Technocrats.
 Vertically Integrated Course on Orientation through Small
Industry Development for IAS / IES Officers.
 Effective Development Programmes for Rationalised Employees
of State and Central PSUs.
 Exclusive Programmes for International Executives of Various
Themes on Regular Basis.
 Enterprise Development and Government Effectiveness (EDGE)
Programme for Srilankan Administrative Officials.
 Sensitivity Training in Production Planning and Control.
  Faculty Development Programmes.
 Programmes on Cluster Development.
 Programmes on Focused Themes for Executives of North East

2.4.3 Prime Minister’s Employment

Generation Programme (PMEGP)

Related
Scheme Prime Minister Employment Generation Programme (PMEGP)

The scheme is implemented by Khadi and Village Industries Commission (KVIC)

functioning as the nodal agency at the national level. At the state level, the
scheme is implemented through State KVIC Directorates, State Khadi and Village
Industries Boards (KVIBs), District Industries Centres (DICs) and banks. In such
cases KVIC routes government subsidy through designated banks for eventual
Description disbursal to the beneficiaries / entrepreneurs directly into their bank accounts.

The maximum cost of the project/unit admissible in manufacturing sector is ₹ 25

lakhs and in the business/service sector, it is ₹ 10 lakhs.
Categories of Beneficiary’s Rate of subsidy under PMEGP (of project cost)
Area (location of project/unit) General category 15%(Urban), 25%(Rural), Special
25%(Urban), 35%(Rural)
(including SC/ ST/ OBC/ Minorities/Women, Ex-servicemen, Physically
handicapped, NER, Hill and Border areas, etc.)
Nature of The balance amount of the total project cost will be provided by the banks in the
assistance form of term loan and working capital.

Any individual, above 18 years of age. At least VIII standard

pass for projects costing above Rs.10 lakh in the manufacturing
sector and above Rs. 5 lakh in the business / service sector.
Who can
Only new projects are considered for sanction under PMEGP. Self Help Groups
apply?
(including those belonging to BPL provided that they have not availed benefits
 under any other Scheme), Institutions registered under Societies Registration
Act,1860; Production Co-operative Societies, and Charitable Trusts are also
eligible.
Existing Units (under PMRY, REGP or any other scheme of Government of India
or State Government) and the units that have already availed Government
Subsidy under any other scheme of Government of India or State Government are
NOT eligible.

The State/Divisional Directors of KVIC in consultation with KVIB and Director of

Industries of respective states (for DICs) will give advertisements locally through
print & electronic media inviting applications along with project proposals from
prospective beneficiaries desirous of establishing the enterprise/ starting of
service units under PMEGP.
The beneficiaries can also submit their application online
at https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp and take the
How to printout of the application and submit the same to respective offices along with
apply? Detailed Project Report and other required documents.

State Director, KVIC

Address available at http://www.kviconline.gov.in
Dy. CEO (PMEGP), KVIC, Mumbai
Whom to Ph: 022-26711017
contact Email: ykbaramatikar[dot]kvic[at]gov[dot]in
Bank of Baroda
Prime Minister’s Employment Generation Programme (PMEGP) is a credit
linked subsidy programme administered by the Ministry of Micro, Small
and Medium Enterprises, Government of India. Khadi & Village Industries
Commission (KVIC), is the nodal agency at national level for
implementation of the scheme. At state level the scheme is implemented
through KVIC, KVIB and District Industries center.

 Eligibility

 Interest Rates
& Charges
Objective
 To generate employment opportunities in rural as well as urban areas
through setting up of self employment ventures.
 To provide continuous and sustainable employment to a large segment of
traditional and prospective artisans and unemployed youth, so as to help
arrest migration of rural youth to urban areas.

Scope
 The scheme is applicable to all viable (technically as well as economically)
projects in rural as well as urban areas, under Micro enterprises sector.
 The maximum cost of the project admissible under manufacturing sector is
Rs.25 lakhs and business/services sector is RS.10 lakhs.
 Only one person from family is eligible for obtaining financial assistance
under the scheme.
 Assistance under the Scheme is available only for new projects
 The assistance under the scheme will not be available to activities
indicated in the negative list under the scheme.

Eligible Entrepreneurs / Borrowers

 Any individual, above 18 years of age
  The beneficiaries should have passed at least VIII standard, for setting up
of project costing above Rs.10 lacs in the Manufacturing Sector and above
Rs. 5 lacs in the business /Service Sector,
 Self Help Groups (including those belonging to BPL provided that they
have not availed benefits under any other Scheme).
 Institutions registered under Societies Registration Act,1860
 Production Co-operative Societies
 Charitable Trusts.

Note
Existing units (Under PMRY,REGP or any other scheme of Government of
India or State Government) and the units that have already availed
Government Subsidy under any other scheme of Government of India or
State Government are not eligible.

Selection of beneficiaries
The beneficiaries will be identified & selected at the district level by a Task
Force consisting of representatives from KVIC/State KVIB/ State DICs and
Banks and headed by the District Magistrate / Deputy Commissioner /
Collector concerned.

Subsidy Entitlement & Bank Finance

Subsidy from KVIC and the bank finance depends on the cost of project as
per details given below :

Subsidy from KVIC

Bank Urban Rural Promoter's

finance area area contribution

General Category beneficiary /

institution 90% 15% 25% 10%

Special category
beneficiary/institution 95% 25% 35% 5%
Security
 Assets created out of the bank's finance.
 Personal guarantee of the proprietor / promoter.
 No collateral security up to Rs. 5 lakhs.
 Eligible units will be covered under Credit Guarantee Fund scheme for Micro & small
Enterprises – CGMSE. (excluding Margin Money / subsidy component)

2.4.4 Directorate of industries (DI)

Overview
Directorate of Industries, Govt. of Maharashtra (GoM) is an
executive arm of the Industries Department of Government of
Maharashtra and is engaged in implementation of government
policies for all round development of industries in the state by
seeking coordination amongst the state level promotional
corporations like MIDC, MSSIDC, KVIB etc. and other
department of the government relating to industries.
The Directorate of Industries has been established to monitor,
implement and develop various schemes including Incentive
Schemes for promotion of industries in Maharashtra. It also
assists the State Government in the formulation of various
industry related policies and promotional schemes viz.
Industrial policy, SEZ policy, IT Policy, Package Scheme of
Incentives etc.
The Directorate of Industries implements various schemes and
incentives for promotion of industries in Maharashtra. Most
notable among all the schemes is the Package Scheme of
Incentives 2013, the latest one announced along with the latest
Industrial Policy 2013 of the State.
The Directorate is supported by six Regional Offices, a sub
regional office at Nanded and DIC (District Industries Center) at
every district. The powers to implement the schemes are
decentralised to maximum extent and are vested with the DIC
for effective delivery mechanism at district level.

Objectives
The Directorate of Industries implement, develop and monitor
various schemes and impart incentives for promotion of
industries in Maharashtra. It also assists the State Government
in the formulation of various industry related policies and
promotional schemes viz. Industrial policy, SEZ policy, IT
Policy, Package Scheme of Incentives etc.
2.4.5. Khadi and Village Industries Commission (KVIC)
The Khadi and Village Industries Commission is a
statutory body formed in April 1957 by the Government of
India, under the Act of Parliament, 'Khadi and Village
Industries Commission Act of 1956'. Wikipedia
Founded: 1956
Purpose: To plan, promote, facilitate, organise and assist
in the establishment and development of khadi and village
industries
Headquarters: Mumbai
Agency executive: Vinai Kumar Saxena (Chairperson)
Parent agency: Ministry of Micro, Small and Medium
Enterprises
Type: Statutory corporation
Objectives of the Commission[edit]
The commission has three main objectives[5] which guide
its functioning. These are -
 The Social Objective - Providing employment in
rural areas
 The Economic Objective - Providing saleable

articles
 The Wider Objective - Creating self-reliance
amongst people and building up a strong rural
community spirit.
The commission seeks to achieve these objectives by
implementing and monitoring various schemes and
programs.

Implementation of Schemes and

Programs[edit]
The process of Implementation of schemes and programs
starts at the Ministry of Micro, Small and Medium
Enterprises which is the administrative head of the
programs. The Ministry receives funds from the Central
Government of India, and routes these to the Khadi and
Village Industries Commission for the implementation of
programs and schemes related to Khadi and Village
Industries.[6]
The Khadi and Village Industries Commission then uses
these funds to implement its programs either directly -
Through its 29[7] state offices, by directly funding Khadi
and Village institutions and co-operatives, or indirectly
through 33[8] Khadi and Village Industries Boards, which
are statutory bodies formed by the state governments
within India, set up for the purpose of promoting Khadi
and Village Industries in their respective states. The Khadi
and Village Industries Boards, in turn, fund Khadi and
Village Institutions/Co-operatives/Entrepreneurs.
At present the developmental programmes of the
commission are executed through, 5600 registered
institutions, 30,138 Cooperative societies[9] and about
9,485,000 people.[10]

Schemes and Programs of the

Commission[edit]
Prime Ministers Employment Generation
Program (PMEGP)[edit]
The Prime Minister's Employment Generation Programme
(PMEGP) the result of the merger of two schemes - Prime
Minister's Rojgar Yojana (PMRY) and The Rural
Employment Generation Programme (REGP).
Rural beneficiaries receive up to a 25% margin
compensation in rural areas and 15% in urban areas for
the general category and 35% in rural areas and 25% in
urban areas for SCs, STs, OBCs, minorities and women
among other special categories.[11]
Interest Subsidy Eligibility Certification
Scheme (ISEC)[edit]
The Interest Subsidy Eligibility Certificate (ISEC) Scheme
is the major source of funding for the Khadi programme. It
was introduced in May 1977 to mobilise funds from
banking institutions to fill the gap in the actual fund
requirement and its availability from budgetary sources.
Under this scheme, loans [12] are provided by the banks to
the members to meet their working/fixed capital
requirements. These loans are provided at a concessional
interest rate of 4% p.a.[13] The difference between the
actual interest rate and the concessional rate is borne by
the commission under the 'grants' head of its budget.
However, only members producing Khadi or Polyvastra (a
type of Khadi) are eligible for this scheme.

Rebate Scheme[edit]
The rebate on sales of Khadi and Khadi products is made
available by the Government so as to make the price of
Khadi and Khadi products competitive with other textiles.
Normal rebate (10 per cent) all through the year and an
additional special rebate (10 per cent) for 108 days in a
year, is given to the customers.[14]
The rebate is allowed only on the sales made by the
institutions/centers run by the Commission/State Boards
and also at the sales centers run by the registered
institutions which are engaged in the production of Khadi
and polyvastra.
Recently, the finance ministry has asked the micro, small
and medium enterprises ministry to redraw its rebate
scheme for Khadi and village industries. Its view is that
the "ministry should approach the plan commission and
not seek year-to-year extension of the scheme.
Furthermore, it has asked the MSME ministry to redesign
the scheme in a manner that it should benefit the artisan
and not the seller, which (has been) the case so far" With
regard to this, A proposal received from the commission
for introducing Market Development Assistance as a
possible alternative to Rebate on Sale is being considered
by the Government.[15]

Budgetary Support to the

Commission[edit]
The Union Government through the Ministry of Micro,
Small and Medium Enterprises, provides funds to the
Commission under two heads: Plan and Non – Plan. The
funds provided under the 'Plan' Head are allocated by the
commission to its implementing agencies. The funds
provided under the 'Non – Plan' head are mainly for the
commission's administrative expenditure. Funds are
provided mainly by a way of Grants and Loans.
Grants[edit]
A major part of the Khadi grant is being utilised for the
payment of sales rebate, which is considered a
promotional expenditure. Other expenditures under this
head are: Training, Publicity, Marketing, Interest Subsidy
on bank loans under ISEC scheme
Loans[edit]
Expenditures under this head include: Working Capital
Expenditure and Fixed Capital Expenditure. Fixed Capital
expenditure further consists of expenditure on -
a) Machinery.....1000000 b) Implements....500000 c)
Work sheds....250000 d) Sales Outlets etc.250000

Sales of Khadi and Village Industry

Products[edit]
The products produced by the institutions are either sold
by them directly, through regovernment)
In total, there are 15431[9] sales outlets, out of which
7,050[16] are owned by the commission. These are spread
all over India.
The products are also sold internationally through
exhibitions arranged by the commission.