Session 1 - Introduction to Small business Field Studies.pptx

Discuss about MSME sector in India

1. Introduction to Small Business Field Study Program

2. Course learning outcomes Analyze the importance of small business in their own community and in the Indian economy Evaluate current business issues and trends and their effect on local business opportunities Analyze entrepreneurial opportunities and the processes involved in creating an entrepreneurial venture Assess the role that problem solving and creativity play in the success of an entrepreneurial venture Describe the characteristics and skills needed to succeed in an entrepreneurial venture

3. Explain the relationship between effective financial management and profit Demonstrate the use of appropriate communication techniques for business activity Analyze the nature and importance of effective leadership in a small business environment Analyze the mechanics and processes of group dynamics Demonstrate an understanding of the laws and regulations that govern working conditions

4. Importance of small business in community Micro , Small and Medium Enterprises (MSME) are the backbone of the socio-economic development of our country. It also accounts for 45 % of total industrial production, 40% of total exports and contributes very significantly to the GDP. Manufacturing segment within the MSME contributes to 7.09% of GDP. MSMEs also contribute to 30.50% of services. The total contribution of MSMEs to the GDP is 37.54.

5. Employment Generation Regional development Export promotion Diversification Support for large industries

6. Problems faced by small business Difficult access to finance Lack of credit history Inadequate collateral High interest rates Lack of awareness about government schemes

7. Lack of skilled workforce Competition Access to technology Lack of infrastructure Lack of marketing and promotional support

8. Micro, Small and Medium Enterprises Development ( MSMED) Act, 2006 The MSMED Act, 2006, was enacted to provide E nabling policy environment for promotion and development of the sector by way of defining MSMEs Putting in place a framework for developing and enhancing competitiveness of the MSME enterprises E nsuring flow of credit to the sector and paving the way for preference in Government procurement to products and services of the MSEs A ddress the issue of delayed payments etc.

9. Earlier Classification Category Manufacturing Service Micro <25 L <10 L Small 25L-5C 10L-2C Medium 5C-10C 2C-5C

10. MSMEs are managed under the Ministry of MSME.  Earlier , MSMEs were  categorised based on the amount invested in plant and machinery/equipment . After 14 years since the MSME Development Act came into existence in 2006, a revision in MSME definition was announced in the Atamnirbhar Bharat package on 13th May, 2020. Revised regulations came effective from 1 st July 2020.

11. Changes Annual turnover has also been added as a criteria. Investment and turnover limit has increased for MSME . No difference in limit between manufacturing and service sectors.

12. Manufacturing & Service enterprise

13. comparison Category Manufacturing Service Micro <25 L <10 L Small 25L-5C 10L-2C Medium 5C-10C 2C-5C

14. The aim of the revised MSME classification was to help businesses avail various government benefits and access multiple government schemes . However, not all businesses are considered as MSMEs. 

15. Why Register as MSME??

16. Benefits: Collateral free cheaper bank loans Benefits in tax rebates Industrial promotion subsidy Protection against delayed payments – MSME Act 2006 (45-day credit period) Helps innovators - Govt. financing of 70-80% of the project cost Many government tenders - open only to the MSMEs. H igher preference for government license and certification Subsidy on patent registration   ISO Certification reimbursement

17. List of MSME Businesses Placement and Management Consultancy Services. Training and Educational Institute. Energy Efficient Pumps. Xeroxing. Beauty Parlour and crèches. Auto repair services, and garages. X-Ray Clinics. Tailoring. Equipment Rental & Leasing.

18. Photographic lab. Servicing of Agricultural Farm Equipment. Back Office Operation Relating to Computerised Data. STD/ISD booths. Retail Trade with low Capital. Multi Channels Dish cable T.V. with Dish Antenna. Laundry and Dry Cleaning. Toughened Metallic Ware. Automotive Electronic Component products. Electronic Surveillance and Security. Mechanical Engineering Excluding Transport Equipment.

19. Engineering and Fabrication. Recorders, VCRs, Radios, Transformer, Motors, Watches. Micronutrients For Plants. Active Pharmaceutical Ingredients and Ayurvedic Products. Khadi Products and Hosiery Products. Handicraft activities like Spinning, Weaving, Artisans. Printing and other products made of paper. Coir Industry. Furniture and wood products. Poultry Farm. Bicycle parts. Stationery Items.

20. Call centre. IT Solution Provider. Testing Labs for industries. Auto Parts Components. Ceramics and glass products include roofing tiles, glass flooring tiles, granite, etc . Rubber Products . Leather products. Moulding – This includes products like combs, umbrella frames, plastic toys, etc

21. On 2 July 2021, Union Minister, Nitin Gadkari , through an amendment announcement- revised the definition for MSME Under the new definition, both wholesalers and retailers are brought in under the classification of MSMEs.

22. All medical services, including those provided by clinics, hospitals, and nursing homes, are eligible for MSME registration 

23. Industries Not covered Gambling and betting activities Forestry and logging  Fishing and aquaculture  Trade/repair of motorcycles (wholesale and retail)  Retail trade except of vehicles and motor cycles  Activities of households for domestic personnel  Goods and services produced via private households for personal use  Activities of extraterritorial organization and bodies 

24. C ertain activities like craft hunting and animal production are also not included E xcept for: Production of eggs. Operation of poultry hatcheries. Beekeeping and production of honey and beeswax. Raising of silkworms, production of silkworm cocoons. Operation of Agricultural irrigation equipment. Support activities for animal production. Preparation of crops of primary markets. Cotton ginning, cleaning, ginning. Preparation of tobacco leaves. Other post-harvest crop activities. Seed processing for propagation.

25. Why Certain Businesses are not Covered in the MSME List? The Government notification,June 2017 But the trading companies are a link between a manufacturer and a customer. That is why it does not come under this scheme But a trader who creates different products/ additional service included For example, if the trader sells a brand’s TV and also offers repair services for it. He can get registered under MSME business as a service provider

26. register Offline Online -   https://udyogaadhaar.gov.in/.

27. Udyam registration/ MSME Certificate B usiness aadhar license which has a unique identification number issued to micro, small, and medium enterprises (MSMEs) in India . It serves as proof of the  MSME’s existence and eligibility for various government schemes , subsidies, and benefits. The certificate facilitates access to credit, promotes competitiveness, and encourages the growth of MSMEs in the country.

28. Udyam Registration certificate remains valid for a lifetime but it is essential to keep the information updated regularly. 

29. Registration process https:// www.youtube.com/watch?v=jcsMV-B20cA

30. NIC Code National Industrial Classification Code (NIC )  is a statistical standard for developing and maintaining a comparable data base for various economic activities . Used to analyse as to how each economic activity is contributing towards national wealth.   Classify and identify businesses according to their business activities.

31. It is an unique 5-digit code assigned to each business activity . The 5-digit NIC code represents the sector and sub-sector of the business activity.

32. Application: MSME registration Company/LLP registration