Theory

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 CHAPTER II THEORETICAL PERSPECTIVES THE CONCEPT OF ENTERPRENEUR AND ENTERPRENEUSHIP INTRODUCTION  The concept of entrepreneur emerged some centuries ago. The word

”entrepreneur” has an interesting history. It was first coined in the French language, and dates back to the emergence of the concept of an entrepreneurial function. In the early 16th century it was first applied to those who were engaged in military expeditions. After about 1700 AD, the term came into wider usage and applied to architects and contractors of public works like roads, bridges, harbors and fortification.  The Oxford English Dictionary :( in 1897) defined Entrepreneur as the

Director or Manager of Public Musical institution, one who ‘gets up’ entertainment, especially musical performance. H. Cole defines entrepreneurship as the purposeful activity of an individual or A group of associated individuals, undertaken to initiate, maintain or aggrandize profit by production or distribution of economic goods and services”  Entrepreneurship is the attempt to create value through

recognition of business opportunity, the management of risktaking appropriate to the opportunity, and through the communicative and management skills to mobilize human, financial and material resources necessary to bring a project into fruition. The Concise Oxford Dictionary defines entrepreneurship as “readiness, initiative and daring for an undertaking”

2  The concept of Entrepreneurship un the analysis of economic

development first appeared in the 18th century. Since then the concept ha been analyses and defined by economists, Psychologists, Sociologists, Social Psychologists, Anthropologists and historians, from their respective points of view, but no consensus has so far emerged and it still remains controversial elusive and vague. ENTREPRENEURIAL THEORIES; Entrepreneurial theories have been advanced by different social scientists. They naturally differ from one another in their print of view. They may be broadly classified into i) Economic ii) Sociological and iii) Psychological. FUNCTIONS OF AN ENTREPRENEUR  From the foregoing account of entrepreneurial theories, it is obvious

that the different theorists have defined entrepreneurship in terms of entrepreneurial functions. And hence a detailed analysis of entrepreneurial functions would provide a better insight into the nature of entrepreneurship. Some writers have thought of the entrepreneur as owner of the business and ‘co-ordinate’ economists like Canutillo, J.B say and others stress risk-taking as has specific function.  Prof. Knight regards entrepreneurship as a dual function of risktaking and control.  J.S Mill lists superintendence control and direction as entrepreneurial functions.  Schumpeter said innovation is the sole function of an entrepreneur.  To Alfred Marshal, organization and superintendence are the main functions of an entrepreneur and organization building capacity is the

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most essential skill expected of him. He also assigns to the entrepreneur the functions of risk-bearing innovation and management. REDDISH MAKES A THREE TOLD DIVISION OF FUNCTIONS 1.

Capitalist – employing factors and buying raw material, setting up the organization:

2.

Managerial – innovation, supervision and organization of productive activity: and Entrepreneurial decision- making.

3.

 B.C Tandon lists the functions of an entrepreneur in a developing economy in the context of its economic, legal, political and cultural environment. According to him the entrepreneur must posses. 1. 2. 3. 4.

Capacity to take risks and self-confidence, Technological knowledge, alertness to discern opportunities, willingness to accept change, and ability to initiate, Ability to Marshal resources, and Ability for organization and administration. Tandom views the entrepreneur as an ‘Ideal – Type’ rather than a ‘social type’

Modern economics recognize that the entrepreneur today has to perform multiple functions to operate successfully an enterprise. They include provision of capital, taking-risks, strategic administration and day to day technical management. Peter Killby has drawn up the following long list of the several functions. 1. 2. 3.

Perception of market opportunities (novel or imitative) Gaining command over scarce resources: Purchasing inputs

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4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Marketing of the product and responding to competition; Dealing with the public and bureaucracy concessions, licenses, taxes; Management of human relations within the firm; Management of customer and supplier relations. Financial management.; Production management (Control by written records, supervision, co-coordinating input flows with order, maintenance); Acquiring and overseeing assembly of the factory; Industrial engineering. (Minimizing input with a given production process) Upgrading process and production quality; and Introduction lf new production Techniques and product. Modern writers on entrepreneurship outline broadly these functions of the entrepreneur 1. Innovation 2. Risk taking and 3. Organization and management of business so as to have leadership and control over it.

TYPES OF ENTREPRENEURS Clarence Danhof, on the basis of his study of the American Agriculture, classified entrepreneurs in the manner that at the initial stage of economic development, entrepreneurs have less initiative and drive and as economic development proceeds, they become more innovating and enthusiastic. Basing on this, he classified entrepreneurs into four types. These are discussed in seriatim. 1. INNOVATING ENTREPRENEURS:

An innovating entrepreneur is one who introduces new goods, inaugurates new method of production, discovers new markets and reorganizes the enterprise. It is important to note that such entrepreneurs can work only when a certain level of development is already achieved, and people look forward to change and improvement.

2. IMITATIVE ENTREPRENEURS:

These are characterized by readiness to adopt successful innovations inaugurated by innovating entrepreneurs. Imitative entrepreneurs do not innovate the change

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themselves, they only imitate techniques and technology innovated by others. Such types of entrepreneurs are particularly suitable for the under-developed regions for bringing a mushroom drive of imitation of new combinations of factors of production already available in developed regions. 3. FABIAN ENTREPRENEURS;

Fabian entrepreneurs are characterized by very great caution and skepticism in experimenting any change in their enterprises. They imitate only when it becomes perfectly clear that failure to do so would result in a loss of the relative position in the enterprise.

4. DRONE ENTREPRENEURS: These are characterized by a refusal to adopt opportunities to make changes in production formulae even at the cost of severely reduced returns relative to other like producers. Such entrepreneurs may suffer from losses but they do not make changes in their existing productions methods. Following are some more types of entrepreneurs listed by some other behavioral scientists: 1. SOLO OPERATORS: These are the entrepreneurs who essentially work alone and, if needed at all, employ the beginning, most of the entrepreneurs start their enterprises like them. 2. ACTIVE PARTNERS: Active partners are those entrepreneurs who start carry on an enterprise as a joint venture. It is important that all of them actively participate in the operations of the business, Entrepreneurs who only contribute funds to the enterprise but do not actively participate in business activity are called simply ‘partners’ 3. INVENTORS: Such entrepreneurs with their competence and inventiveness invent new products. Their basic interest lies in research and innovative activities 4. CHALLENGERS: These are the entrepreneurs who plunge into industry because of the challenges it presents. When one challenge seems to be met, they begin to look for new challenges.

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5. BUYERS: These are those entrepreneurs who do not like to bear much risk. Hence in order to reduce risk involved in setting up a new enterprise, they like to buy the on going one. 6. LIFE TIMER: These entrepreneurs take business as an integral part of their life. Usually the family enterprise and business, which mainly depend on exercise of personal skill, fall in this type/category of entrepreneurs.

PROBLEMS IN ENTREPRENEURSHIP: The many complexities involved in the starting on an entrepreneurial career and the problems faced by the existing entrepreneurs demotivate and discourage the unemployed from taking up an entrepreneurial career. They would rather prefer waged salary employment to entrepreneurship There is a common belief that all business risky and there is much truth in it. Because the entrepreneur has to take countless decisions from among several possible alternatives in performing his task successfully. If his planning or estimation about the future were to go wrong he will surely land in trouble. In developing entrepreneurship, we are faced with several problems, which are of individuals, groups, and institutional nature. However, ultimately it rests on the individuals because it is he who has to take the initiative to take a decision to start and manage his enterprise. Both he also needs the approval and support of his kin, group or community. Some of the problems he is likely to encounter are lack of motivation. Slyness and institution on his past, lack of finance for initial investment, lack of support from his family and community, lack of confidence in one’s own abilities, ignorance of opportunities that he can avail himself of lack of requisite managerial and technical skills to start and manage his enterprise. Similarly, he may have to face some problems from the group to which he belongs such as preferences for traditional occupations an professions, lack of awareness

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or ignorance of alternatives avocations; lack of freedom to choose an account of the influence of the local elite of the dominant caste. The problems listed above are varied and many and belong to related fields. And therefore, a multi-pronged and interdisciplinary approach is required to find solutions to them. There is abundant scope for entrepreneurial development in India today. The four important factors, which matter in entrepreneurial development, are: 1. 2.

3. 4.

Resources material and human Organization concerned with entrepreneurial development. Infrastructure; and Entrepreneurs

In entrepreneurial development mass should be the focus. There are around him several opportunities and alternatives for his enterprises. We should try to build up the necessary machinery to promote and accelerate the growth of entrepreneurship among people today.

CHARACTERISTICS OF AN ENTREPRENEUR If we go through the business history of India, we come across the names of persons who have emerged as successful entrepreneurs in the country who started their business enterprises with small size and made good fortunes. Success or otherwise of a small enterprise is, to a great extent, attributed to the success or otherwise of the entrepreneur himself / herself. Then the question is : What makes the entrepreneurs successful? Whether they had anything common in their personal characteristic? The scanning of their personal characteristics shows that there are certain characteristics of entrepreneurs, which are fond usually prominent in them. 1. 2. 3. 4.

Hard work Desire for high achievement Highly optimistic Independence

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5. 6. 7.

Foresight Good organizer Innovative

GENESIS OF PMRY; Unemployment is considered as a bane of India’s developments. The educated unemployed youth who become unproductive and frustrated are to be paid special attention. The small-scale sector includes villages and cottage sectors are found out to be the best means to solve the growing un-employment problem. Self-employment is the only solution to the un-employment problem. Policy makers and economists studied the problem and arrived at new conclusion that setting up a small-scale unit with a moderate investment has got the potential to provide employment to about 4to5people directly and indirectly. The satisfaction of self-employment and the contentment of contributing to the National income and proving livelihood to few unemployed can have positive multiplier effect. Adding to it the SSI sector has got the inherent advantage if utilizing the local resources, technologies for productive purposes and at the same time could satisfy the needs of the local people and exploit the local market at micro level. Taking all the these into consideration the central government initially launched self-employment scheme for educated unemployed Youth (SEEUY) Popularly known as Gramodaya Scheme introduced by Government of India in 1985 where in financial assistance of not more than Rs.35000 was provided for industries, Rs.25000 for service units and RS.15000 for business ventures by way of composite loans to eligible educated unemployed Youth to start their small enterprises. District Industries Centre (DIC) operated this central scheme at this district level, where 25% of the sanctioned loans amount was granted as subsidy by Central Government to be deposited as fixed deposit in the name of the candidate. This scheme could not be continued successfully. It was estimated that more than 70% of the units became sick and subsequently closed down.

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Honorable Prime Minister of India, announced a new scheme the Prime Minister’s Rozgar Yojana (PMRY) on 15th August 1993. The scheme was launched on the auspicious day of 2nd October 1993 the birth anniversary of “Mahatma Gandhi” all over the country the main objective of the PMRY scheme was to provide easy subsidized financial assistance to educated unemployed Youth for starting their own enterprises in manufacturing, business service and trade sectors. Initially the scheme was aimed at providing self-employment to one million educated unemployed Youth in the country by setting up 7 lakhs micro enterprises through inducting services and business ventures over a period of 2 years. The scheme was a stupendous success and caught the imagination of the youth. Overwhelmed with the response and ever-increasing need, the Government has decided to make it a permanent scheme and framed modalities & guidelines for its successful and to fulfill the purpose for which it is designed. SALIENT FEATURES OF PMRY SCHEME:  This is a centrally sponsored scheme  The Development Commissioner (small-scale industries) under ministry of small scale, Rural and Agro, industries Government of India is the apex body for this scheme.  The respective Commissioner/Director of industries implements the scheme at the state level except the four metropolitan cities with an overall monitoring by the concerned secretaries of industries.  The implementation agencies at the grass root level are District industries Centre (DIC) who would be instrumental for the grounding of the units.  Small industries services institute (SISI) located in the four Metropolitan citied of Delhi, Kolkata, Mumbai and Chennai are the implementing agencies of this scheme.  The DCSSI has set up a special PMRY division in the headquarters under the able guidance of an IAS officer. DCSSI formulates the rules, regulations and guideline instructions and

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provide clarification an all the matters pertaining to PMRY scheme. It has also devised complete feedback information by the means of getting monthly, quarterly and annual progress reports from all the states to closely monitor the implementation and progress of the scheme.  Similarly at the state level, A state level PMRY committee meeting monitors the progress of the scheme every quarter.  The yearly targets for number of beneficiaries for each state is fixed by DCSSI. PARAMETERS OF PMRY: AGE: For all educated unemployed between the age group of 18-40 years, in general with a 10 years relaxation for SC/ST s, ex-servicemen, physically handicapped and woman. EDUCATIONAL QALIFICATION: 8th passed. Preference will be given to those who have been trained for any trade in Government recognized/approved institutions for duration of at least six months. FAMILY INCOME: Neither the income of the beneficiary along with the spouse nor the income of parents for the beneficiaries shall exceed RS.40000pa. RESIDENCE: Permanents resident of the area for at least 3 years. DEFAULTER: Should not be a defaulter to any nationalized bank/financial institution /cooperative bank. Further a person already assisted under other subsidy linked government schemes would not be eligible under this scheme. ACTIVITIES COVERED: All economically viable activities including agriculture and allied activities but excluding direct agricultural operation like raising crop, PROJECT COST:

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RS.1.00 lakh for business sector. Rs.2.00 lakhs for other activities. Loan to be of composite nature. If two or more eligible persons join together in a partnership, project upto Rs10.00lakhs are covered. Assistance shall be limited to individual admissibility. SUBSIDY AND MARGIN MONEY: Subsidy will be limited to 15%of the project cost subject of ceiling of Rs755 per entrepreneur. Bank will be allowed to take margin money from the entrepreneur varying for 5% to 16.25% of the project costs as to make the total of the subsidy and the margin money equal to 20% of the project cost. COLLATERAL: No collateral for project up to Rs1 lakh. Exemption from collateral in case of partnership project will also be limited to an amount of Rs.1 lakh per person participating in the project. RATE OF INTEREST AND REPAYMENT SCHEDULE: Normal bank rate of interest shall be charged. Repayment schedule may range between 3to7 years after an initial moratorium as may be prescribed. TRAINING AND OTHER ASSISTANCE: The training expenses and operational expenditure to be covered within the ceiling of Rs. 2000 per case the existing system of revising the scale of expenditure in consultation with the finance for various activities and flexibility would be available to the implementing agencies of the state and central levels subjects to condition that over all training and operating expenses remain within the ceiling of Rs.2000 per case sanctioned. IMPLEMENTING AGENCY: The district industries centers and the directorate of industries shall mainly be responsible for scheme implementation along with banks. LINKAGES OF TARGETS WITH RECOVERY: Basic minimum targets based on the population and the number of educated unemployed, Additional targets would be linked to the recovery of

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loans sanctioned, past performance of sanctions special circumstances prevailing in the state/ UT/. RESERVATION: Preference should be given to weaker sections including women. The scheme envisages 22.5% reservation for SC/ST and 27% for other backward class (OBCS).In case SC/ST/OBC candidates are not available, States/ UTs Government will be competent to consider other categories of candidates under PMRY.

HOW THE SCHEME IS IMPLEMENTED: FIXING OF TARGETS: Basically these targets are given for a year staring form April to March. These largest are fixed by DCSSI after carefully taking into consideration the important factors like population, unemployment and backwardness of the areas. The targets fixed for a year would be regularly monitored and may also be revised taking into consideration the recovery of loans and performance for the year. The state of Andhra Pradesh was allotted the basic target of achieving of 16900 additional targets of 16900 nos. Totaling to 33800 beneficiaries to AP state for the year 2000-2001. Commissioner/Director of Industries , AP state Govt is the implementing agency of the PMRY scheme in Andhra Pradesh. ALLOCATION OF TARGETS BY STATES: The state Government reallocates the states targets to all District Industries Centers (DIC) of the district where the scheme is in vogue. Andhra Pradesh is implementing the PMRY scheme in its entire 23 district including the twin cities if Hyderabad and Secunderabad. ALLOCATION OF FINANCIAL TARGETS TO BANK: Along with DICs the banks also form apart of the implementing agencies for sanction of loans. The chief General Manager RPCE of reserve bank of India is intimated about the targets allocated to the states, they intern

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issue the necessary guidelines and funds to the lead banks of the states. Lead banks of the states issues the necessary instructions to their respective bank branches of each district for the disbursement to bed made in accordance with the fixed targets. CALLING FOR PMRY APPLICATIONS: The District industries centre (DIC) along with banks being the implementing agency at the grass root. Level of each district calls for people to apply for PMRY loans. The required applications forms are available at DICs with the local industry promotion officers of the concerned areas as well as local banks. The application form is a simple format seeing the basic details of the candidate (Application form enclosed). CONSTITUTING THE TASK FORCE COMMITTEE: The GM, DIC constitutes the task force committee and convenes meeting to conduct interview of the candidates. The members of the task force committee are Gm DIC, all the financing bankers, officials of all other developmental agencies like SISI The objective of the task force committee is to take interview of the applicants to assess their knowledge about the proposed project, aptitude, interest, and entrepreneur qualities so as to make the proposed project a success and to sincerely replay the proposed loan amount given under the PMRY scheme. The committee selects the candidates by the process of grading marks. Task force committee selects the candidate and allocate to the bank. The selected candidates, are duly intimated and directed to approach the selected bank branch for sanctions of the loan, with this the selection process is completed. PROVIDING TRAINING TO THE SELECTED CANDIDATES: As per the DCSSI guidelines all the selected candidates under PMRY have to undergo training. The GM, DIC’s have to provide the training to the candidates by making the necessary arrangements. They are provided with training materials, training schedule and good faculty and convenient training centers. The candidates get familiarized with the finer points of starting and successfully running their selective enterprises. The period of training is 15 to 20 working days for candidates setting up industry sector and 7 to 1 working days for business/service sectors.

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MONITORING AND REVIEWING OF PMRY: The DCSSI has devised a procedure to review and monitor the progress of PMRY Under this every district has to furnish the information on sanction, disbursements, training, grounding and recovery of loan sanctioned, and furnishes the same in a prescribed format giving monthly, quarterly and annual progress reports to the commissioner of industries for preparing the same reports for the state. These reports are submitted to the DCSSI and RPCD of RBI for review. The state level PMRY committee settings are convened under the chairmanship of chief secretary to state Government with secretaries of industries. Finance , commissioner of industries General Manager SLBC of banks lead bank managers general manager RPCD of RBI, Director , SISI as members and all the related organization as invitees to discuss the progress of PMRY category of unites benefited and suggestions for improvement. The District industries promotion committee (DIPC) meetings at the District level under the chairmanship of the District collector are convened every month by the DIC s to review the progress of the PMRY at the district level. All these measures are aimed to make the objectives of the scheme i.e. to provide employment to educated unemployed youth of the society for whom the scheme is formed. DIFFICULTIES EXPERIENCED BY DIC:

1) TRAINING: The important and nation wide scheme (viz) PMRY is being implemented by the District industries Center, with the active support of bank officials The application are received, in this are scrutinized and candidates are selected by Task Force Committee. The selected candidates are sent to banks for issue to sanction tickets for having sanctioned of loan amount. on receipt of sanction orders from banks PMRY training is imparting to the candidates through approved training institutions for imparting said PMRY Training m/s Trecstep, Trichy and thanthal hans roever college have been approved by the industries commissioner and director of industries and commerce , Chennai5. But one approved training institution M/s Trecstrep have expressed their

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inability to continue to conduct the training programmers entrusted to them due to certain administrative reasons. he another institution M/s Thanthai classes are nowadays not upto the entire arrangements for training classes are nowadays not upto the entire satisfaction, as they are not willing to conduct training at Ariyalur and hesitate to take up training programme. Moreover this is an educational institute involved in academic courses only. In view of the above one approved and interested training institute to take up training programmes entrusted to them is very essential for perambalur district for providing effective training to the PMRY beneficiaries. 2) SANCTION ORDERS: Bank officials are not issuing sanction orders to PMRY beneficiaries on prorate basis . They are issuing sanction orders in bulk only at the end of the financial year. Due to which it is find very difficult by this Department to organize training programme to PMRY beneficiaries and so also disbursement of sanctioned loan amount is affected, Reserve bank of India and our Department insists for achieving 100% target in sanction before 31st December if sponsored applications are sent by HOW TO APPLY FOR LOAN 1. Project ideas and preparation of a project Report: Candidate desiring to get loan should have complete knowledge about the project proposed to be set up. The entrepreneur is free to seek the advice of developmental agencies like SISI and DIC, which has specially prepared variable project profiles for PMRY beneficiaries. Guidance and clarifications regarding the selection of project are also provided by these organizations. The project idea is the most important step for availing PMRY loan. Based on the project idea the entrepreneur has to prepare a project report. A project report is a statement which contains the details of the proposed project like fixed assets, raw materials required, other contingencies like rent, wages/salaries, other expenditure etc., total cost of production, sales, profit, break-even analysis, profitability ratios, repayments schedules etc. This

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project report would reflect at a glance the details of capital required, cost of production, profit and various parameters of viability of the capital required, cost of production, profit and variu8s parameters of viability of the proposed project. SISIs and DICs have prepared project profiles for PMRY beneficiaries on various viable schemes, which can be adopted. Assistance, guidance can also be provided for new/updating of the project profile.

As the PMRY facilitates to provide loans under manufacturing, service and business ventures, a prospective entrepreneur has to first prepare a project proposal. While deciding the ventures the following factors should be carefully considered. a.

the marketability of the product by market survey

b.

the demand and supply position of raw materials required if any

c.

The availability of infrastructure facilities like power, water and other Government Clearances.

d.

Technology and know how of manufacturing/business/service procedures to be adopted and where to set up the unit.

2. Applying for PMRY Loan Applying finalizing the project idea, along with the project profile the applicant has to fill the form and duly submit it enclosing the necessary documents and photographs at the DIC and/or at the local bank. All the applications received at DICs and banks are thoroughly scrutinized and selected applicants are called for interview. In order to facilitate the applicants, the interviews are planned at places that are near to their place of residence.

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It has been observed that most of the prospective entrepreneurs desiring to avail the benefits of this scheme fail to utilize it, due to lack of proper guidance and awareness about the modalities and formalities to be followed to avail the scheme. With an aim to fill this void a step-by-step guidelines are explained about the eligibility relation to age, minimum educational qualifications, family income, resident proof and cast certificate for SC/ST/BC either by DIC/SISI/local banks. A person willing to apply for PMRY should checkout all these aspects and should produce proof for all these parameters while applying for the scheme. One can apply any time during the year. But the best time would be between April to June of the year. The normal practice is to hold PMRY interviews in three phases in a year in all the districts. The task force committee conducts the interview and selects the candidates for the bank loan. 3. Bank clearance for the project. After receiving the intimation letter of selection and allotment of bank, the applicant is advised to discuss the viability of the proposed project with the allotted banker regarding the aspect of the proposed project like alterations, changes and other financial aspects. After complying with all the required formalities with the banker the applicant can start the implementation of the project.

4. Training: Selected applicants are called for training. After the successful completion of the training the candidates are awarded

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certificates that they; have to produce to the bank to get the sanctioned loan. The DIC and bankers helps in the grounding of the project and supports for success of the project. 5. Grounding of the unit: Now the applicant is financially prepared for grounding the proposed project. Before grounding the unit certain statutory and mandatory formalities are to be complied with which are as follows.

 Arranging for the margin money as per the PMRY guidelines that could be 5% to 16.25% of the project cost.  Arranging for collateral security if required by the bankers and for projects costing more then Rs one lakh per person.  Taking permission form the local body like Panchayat or Municipality as the base may be for starting the unit.  Getting the Pollution Control Board clearance if required.  Getting the Sales tax registration  Registering with DIC as a tiny sector unit to avail the State Government incentives.  Getting other statutory clearances like Factories Act, Labour Act, Boilers Act and Central excise if the unit is covered under these legislation. In order to facilitate the Small entrepreneurs to gets all the required clearances the District Industries Centre (DIC) has started the single window system where DIC would get all theses clearances on behalf of the entrepreneur. The entrepreneur can would

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get all these clearances on behalf of the entrepreneur. The entrepreneur can avail these facilities. 6. Repayment of Loan: After the unit is grounded and the unit starts its commercial production the repayment schedule is worked out by the banker and intimated to the applicant that depends on the PMRY guidelines for repayment that are between 3 to 7 years with initial moratorium worked out as the case may be. THE ENTREPRENEUR HAS TO FURTHER REMEMVER THAT HE HAS BEEN PROVIDED WITH A LOAN THAT HAS TO BE REPAID WITH INTEREST PROMPTLY IN TIME. IN CASE OF DEFAULT, THE BANK ALONG WITH THE DIC HAS BEEN PROVIDED POWERS TO RECOVER THE OUTSTANDING LOAN ALONG WITH INTEREST DUE BY SEEKING THE ASSISTANCE OF REVENUE DEPARTMENT AND POLICE DEPARTMENT. Efforts are ton tie cover this loan under Revenue Recovery Act, as was the case with CMEY programme. Hence sincere efforts are to be made by the entrepreneur to ground the unit and make all out efforts for repayment of the loan with interest in time. SOME OBSERVATIONS ABOUT PMRY  In the year 1993 - 94 for 6 months the target was fixed for 3355 number of beneficiary. The year of 1994 - 95 the target was increased to 18,200. The target for the year 2000 – 01 is fixed at 33,800, no. of beneficiary an increase of 85.7% over 5 years.  The Number of applications recommended to the banks were 108% of the target of 1994 – 95, whereas it is 17.5% less than target of 1999 – 2000 (as on 30-09-2000). The excess of

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applications over the target is done to give adequate provision for rejections.  The percentages of Number of sanctions of loan to the target for the year 1999 – 2000 (as on 30-09-2000) is 77.9% and 91.6% of the total applications recommended to the banks were sanctioned.  The amount of sanction has considerably increased from Rs. 1,152.83 lakhs in 1994 – 95 to Rs. 17,768 lakh in 1999 – 2000 (as on 30.09.2000), which can be viable projects for availing this benefit.  The important aspect of PMRY is the disbursement, which is only 44.24% for the target for the year 1999 – 2000 (as on 30.09.2000).  The percentage of disbursement to sanction is 74.3% in 19994 – 95 and 56.7% in 1999- 2000 (as on 30-09-2000).  The per capital disbursement has increased to Rs. 67,000 for the year 1999 – 2000 which was only Rs. 50,000 in 1994 – 95. Application should be submitted complete in all respects in duplicate along with attested copies of the following documents 1.

Proof of Date of Birth (SSC Certificate or T.C from school where studied)

2. Certificate of qualification academic and technical 3. Ration card or any other proof of residency for 3 years,. i.e. residential certificate issued by MRO. 4. Experiences certificate if applicable 5. Income certificate issued by MRO of concerned mandal. 6. Caste certificate issued by MRO if applicable. 7. Driving License in case of the candidate applying for motor vehicles.

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8. A copy of the proposed project profile. Guidelines to be adopted for means of finance: In this compendium, Promoter’s contribution has considered as 5% for easy in calculations. However, as the project cost increased beyond Rs. 50,000/- subsidy + Promoter’s contribution has to be calculated basing on individual project cost. For example: Project cost Project cost Bank cost Subsidy Promoter’s Contribution

Rs. 1,00,000 Rs. 80,000 Rs. 7,500 Rs. 12,500

(80%) (7.5%) (12.5%)

Bank loans in all the cases are 80% of the Project Cost.

In the vibrant Indian economy small scale sector plays a significant role that accounts for 40% of the industrial production and 35% of total Exports. The small-scale sector with more than 32 Lakh Units creating employment to about 167 Lakh persons has strongly emerged as a means to address the problem, of unemployment and selfsustenance. Adding to it the process of liberalization, economic reforms precipitated into competition and tremendous opportunities for the growth of small- scale sector with an objective to provide the basic imports, support to this vital sector and to address the requirements like credit, the Govt. of India haves launched the ambitions project of Prime Minister’s Rozar Yojana (PMRY) on 15th August 1993 to provide selfemployment to educated unemployment youth.

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This Novel scheme is being implemented and monitored by the office of the Development Commissioner (Small Scale Industries) Govt. of India, through its network of Small Industries Service Institute and District Industries Centre’s at state level. SISI, Hyderabad had embarked on the onerous task of preparing the compendium of project profiles for PMRY beneficiaries. These projects are carefully selected keeping in view all the relevant aspects of viability by the officers of this institute. These project profiles are aimed to help the prospective PMRY beneficiaries to select and launch for projects. The schemes inters – alias provides the information regarding machinery, raw materials, manufacturing process, investment etc., Conclusion The PMRY scheme is launched with an aim on self-reliance and utilizing the youth work force for productive purposes. This essence of the scheme is to be inculcated by all the implementing agencies and should strive to achieve it in its true sense. As the gap between targets and grounding are wide, strenuous efforts are to be made to reduce the gap and the true success of the PMRY would be only when number of targets of grounding of projects could be same.