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NIOS Class 10 Entrepreneurship Chapter 3 Importance of Entrepreneurship
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Importance of Entrepreneurship
Chapter: 3
Intext Questions 3.1
State whether the following are economic variables or social variables:
(i) Finance.
Ans: Economic variable.
(ii) Religious Beliefs.
Ans: Social variable.
(iii) Methods of Production.
Ans: Economic variable.
(iv) Cultural Values.
Ans: Social variable.
(v) Stock of Capital.
Ans: Economic variable.
(vi) Prestige.
Ans: Social variable.
Intext Questions 3.2
State whether the following statements are true or false:
(i) SIDBI stands for Small Industries Development Bank of India.
Ans: True.
(ii) Family background is not a social factor in India.
Ans: False.
(iii) Entrepreneurs can take risks.
Ans: True.
(iv) Entrepreneurs create new innovations and technologies.
Ans: True.
(v) The government does not help entrepreneurs in India.
Ans: False.
Intext Questions 3.3
Fill in the Blanks:
(i) National Bank for …………………. and Rural Development.
Ans: Agriculture.
(ii) National ……………. Industries Corporation.
Ans: Small.
(iii) Rural and ……………. Entrepreneurship Development.
Ans: Women.
(iv) Small ……………… Development Bank of India.
Ans: Industries.
(v) Trade Related ………………………. Assistance And Development Scheme for Women (TREAD).
Ans: Entrepreneurship.
Intext Questions 3.4
Fill in the banks:
(i) Entrepreneurs help in ………………… use of resources.
Ans: Optimum.
(ii) Entrepreneurs create ……………………. opportunities.
Ans: Employment.
(iii) Employment helps in Balanced …………………. Development.
Ans: Regional.
(iv) Entrepreneurs create forward and ……………… linkages.
Ans: Backward.
(v) Entrepreneurs help in equal distribution of ……………. power.
Ans: Economic.
| Terminal Questions |
1. Explain all social factors related to entrepreneurship.
Ans: These three factors have been discussed below. Social factors are basically related to social construct and structure of the country.
A few social factors are:
(i) Social Motive.
(ii) Prestige and Self-Esteem.
(iii) Cultural Values.
(iv) Customs and Taboo.
(v) Ethnic Values.
(vi) Child Rearing Practices.
(vii) Nationalist Attitude.
(viii) Patriotic Inculcations.
(ix) Religious Beliefs.
2. Explain all economic factors related to entrepreneurship.
Ans: The main aim of entrepreneurs is the maximisation of economic welfare. Economic factors are related to finance and structure of the economy of the country.
A few economic factors are:
(i) Factors of Production.
(ii) Market Incentives.
(iii) Stock of Capital.
(iv) Finance.
(v) Banks and Financial Institutions.
(vi) Introduction of New Goods.
(vii) Introduction of new Markets.
(viii) Methods of Production.
3. Why are entrepreneurs important in socio-economic development?
Ans: Entrepreneurs have played a big role in the development of today’s India. In all fields like art, culture, science, health, food, fashion, and entertainment, entrepreneurs have shown their excellence. Entrepreneurs have spurred on the speedy development of our economy. Factors like Production, Career Option, Distribution of Economic Power, Creating Competition, Innovation, etc make entrepreneurship important in socio-economic development. Entrepreneurs play a big role in socio-economic growth through Mobilisation of Capital, Generation of Employment, Forward and Backward Linkages, Balanced Regional Development, Equal distribution of Economic Power, Increase in Per Capita Income, Better Standard of Living, Import Substitution and Export Promotion, etc. India is an emerging economy. It is growing at a fast pace but still, wage employment is limited in terms of employment generation. Entrepreneurship provides unlimited career options. Enterprises create employment opportunities in the country. The contribution of houses like Tata Sons and Reliance Industries are undeniable. Entrepreneurs create new technologies and products that help to save costs and generate wealth for an economy. This helps the economy establish itself at an international level.
4. How did entrepreneurs originate in India?
Ans: Entrepreneurship in India has a rich history that dates back centuries. The origins of entrepreneurship in India can be traced to various factors, including historical, cultural, and economic developments. India has a long tradition of commerce and trade dating back to ancient times. The Indus Valley Civilization, one of the world’s earliest urban civilizations, engaged in extensive trade with Mesopotamia and other regions.India’s diverse cultural heritage and traditions have also played a significant role in shaping entrepreneurship.After gaining independence from British rule in 1947, India embarked on a path of economic development and industrialization. The government introduced policies aimed at promoting entrepreneurship, such as the establishment of public sector enterprises, industrial licensing, and the creation of financial institutions to provide credit to small and medium enterprises (SMEs).
5. Elaborate the role of entrepreneurs in socio-economic development.
Ans: The role of Entrepreneurs in socio – economic development are listed below:
(i) Production: Production involves the involvement of national resources like land, labour, capital and technology. Entrepreneurs have utilised them in the best and effective way to produce goods and provide services to generate national income.
(ii) Career Option/Opportunities: India is an emerging economy. It is growing at a fast pace but still, wage employment is limited in terms of employment generation. Entrepreneurship provides unlimited career options. Entrepreneurs not only create a livelihood for themselves. They generate thousands of employment opportunities.
(iii) Distribution of Economic Power: Entrepreneurs generally start on a small scale and then grow their businesses. In this process, they distribute power and create a balance of economic powers.
(iv) Creating Competition: Entrepreneurs not only create new products and services but also create competition in the market. This helps customers with better products and services at less prices.
(v) Innovation: Entrepreneurs create new technologies and products that help to save costs and generate wealth for an economy. This helps the economy establish itself at an international level.
(vi) Employment Generation: Enterprises create employment opportunities in the country. The contribution of houses like Tata Sons and Reliance Industries are undeniable.
6. Explain the role of the government in encouraging entrepreneurs.
Ans: Some of the government support measures and institutes for entrepreneurial growth are:
(i) National Bank for Agriculture and Rural Development (NABARD): The basic goal of this bank is rural development through rural business, agricultural support, development of small industries, cottage and village industries, and other related issues.
(ii) Rural Small Business Development Centre (RSBDC): It assists small and medium enterprises and socially and economically disadvantaged individuals and groups.
(iii) National Small Industries Corporation (NSIC): Its basic aim is the growth of small business units. It helps to procure, supply and distribute indigenous and imported raw materials. It also helps to develop software technology parks and create awareness about technology upgradation.
(iv) Small Industries Development Bank of India (SIDBI): It provides financial assistance to small entrepreneurs and business organisations to meet their credit requirements.
(v) The National Commission for Enterprises in the Unorganized Sector (NCEUS): It helps in generating more employment opportunities in rural areas and also to enhance the competitiveness of the sector in the changing world.
7. Define women entrepreneurs. How does the government help women entrepreneurs?
Ans: Women entrepreneurs may be defined as the women or a group of women who set up and operate her own enterprise. In other words women entrepreneurs are self employed individuals who establish their enterprise and involve themselves in economic activities. Earlier women were confined in the four walls of houses and their activities were mainly related to household work, without any socio-economic independence.
The government help the woman entrepreneurs in the following ways:
(i) Mudra Yojna: The Government of India launched the Pradhan Mantri Mudra Yojana (PMMY) in 2015. It provides financial support to aspiring entrepreneurs looking to start their own businesses. Financial institutions also extend Mudra loans for women to encourage women entrepreneurs.
(ii) Stand-Up India Scheme: The Stand-Up India Scheme is a government scheme that aims to promote entrepreneurship among women and other marginalised communities. It provides bank loans to at least one scheduled caste (SC) or scheduled tribe borrower and at least one woman per bank branch for the establishment of a greenfield business.
(iii) Mahila Coir Yojana: Mahila Coir Yojana (MCY) intends to empower women by providing spinning equipment at reduced prices following proper skill development training. Under this scheme, women entrepreneurs can get a subsidy of up to 75% of the cost of equipment and machinery for coir processing. The scheme also provides a margin money subsidy of up to 25% of the project cost.
(iv) Dena Shakti Scheme: This govt scheme for women’s businesses is limited only to those in the fields of agriculture, retail, manufacturing, small enterprises, or microcredit organisations. As per RBI limits, the maximum ceiling limits for women beneficiaries are also provided according to the sector they are expanding or planning to open a business.
(v) Mahila Udyam Nidhi Scheme: This women’s loan scheme aims to meet the gap in equity. It promotes MSMEs and small sector investments in different industries to grow and excel in their areas. This also encourages the reconstruction of SSI units that are deemed incapable but are actually viable to save.
8. List out various sources of finance for a new enterprise.
Ans: Some sources of new startup financing are:
(i) Sweat Equity.
(ii) Personal Financing.
(iii) Personal Credit Lines.
(iv) Friends and Family.
(v) Bank Loans.
(vi) Peer-to-peer Lending.
(vii) Microloans.
(viii) Purchase Order Financing.
(ix) Factoring Accounts Receivables.
(x) Angel Investors.
(xi) Crowdfunding.
(xii) Venture Capital.
(xiii) Corporate Partners.
(xiv) Mergers and Acquisitions.
(xv) Initial Public Offering.
9. Why do regional disparities occur? What is the need for Balanced Regional Development?
Ans: Regional disparities occur due to a combination of economic, social, historical, and geographical factors. These disparities can manifest in various forms, including differences in income levels, employment opportunities, infrastructure development, access to education and healthcare, and overall quality of life. Here are several key reasons why regional disparities occur:
(i) Geographical Factors: Some areas have abundance of natural resources while others lack it. Different geographical areas are suitable for different types of businesses. This leads to disparities.
(ii) Location preferences: Some regions are preferred due to their locational advantages. Generally, regions with better infrastructure facilities are preferred when an enterprise is being set up.
(iii) Unequal Distribution of Population: The quality and size of population in one region defines its worth and makes it unique.
(iv) Migration from rural to urban areas: The migration of people from rural to urban areas increases the physical size of the urban areas, whether vertically or horizontally. This leads to disparities.
(v) Seasonal Unemployment: Industries like tourism and farming faces seasonal unemployment, which leads to regional disparities.
(vi) Unequal Distribution of Wealth: This also leads to regional disparities as areas with richer people tend to develop faster than areas with poor population.
The need of Balanced regional development are as follows:
(i) Disparities of income and wealth get reduced.
(ii) To accelerate the development of an economy.
(iii) Removal of poverty.
(iv) Increase in the standard of living.
(v) Employment opportunities even in backward areas.
(vi) Optimum utilisation of natural resources.
(vi) Helps in maintaining sanitation problems as it avoids over-crowding in some areas.
10. What is balanced regional development? How do entrepreneurs contribute to balanced regional development?
Ans: Balanced regional development means giving due care to the growth of each and every sector of the economy so that opportunities to earn a livelihood can be created. Balanced regional development implies that each and every region/ state of country registers equitable growth in terms of employment generation and business ventures. Lopsided regional development can give rise to mass migration from regions of low development to high development.
The entrepreneur’s contribution in balanced regional development is:
(i) Knowledge of Market Conditions: Entrepreneurs search for the best market to set themselves up. They search for untapped markets, markets with various opportunities and favourable factors of production. This helps in balanced regional development.
(ii) Government Support System: In India, the government provides ample opportunities to entrepreneurs for balanced regional development like allotment of land at concessional rates, basic infrastructure, finance, subsidies, exemption from taxes, tax holidays, supply of updated technologies, power, and ease of doing licensing policy.
(iii) Optimum Use of Resources: In a country like India, which possesses abundant natural resources, it becomes necessary to use them with high efficiency and in the best way.
(iv) Reformative Social Structure: Entrepreneurs help bring modernity in traditional societies. Through their innovative ideas, they capture the need of the market and supply them with social needs like employment, health facilities and better sanitation.
(v) Improvement in Productivity: New ideas and innovations have led entrepreneurs to produce more at lower costs. More productivity leads to balanced regional development and increase in nation’s wealth.
(vi) Multi Dimensional Development: Entrepreneurs help in multi-dimensional development through their intelligence, far-sightedness, dedication, courage, knowledge of various new techniques, understanding the market, etc.
(vii) Self-Sufficient Society: Entrepreneurs help create a self-reliant and self sufficient society by producing goods and services as per their requirements. This leads to balanced regional development.
(viii) Removal of Regional Disparities: The government involves entrepreneurs to remove or at least reduce the regional disparities. For this, the government provides various incentives and benefits to entrepreneurs in setting up their business in backward areas.
11. How do entrepreneurs create employment opportunities?
Ans: As entrepreneurs create employment opportunities for different sections of society, they contribute to the nation’s growth. Setting up a new enterprise leads to creation of opportunities like labour supply, supply of inputs, requirement for industrial equipment, sales persons, communication facilities, power, infrastructure like machinery, furniture and fixtures, transportation, warehousing, insurance, etc.
Entrepreneurs help in the following ways to generate employment opportunities:
(i) Finance and Banking Services: Finance is the basis of any business. Entrepreneurs create jobs like cashiers, accountants, collection agents and security staff.
(ii) Insurance Services: With increasing uncertainty and crime rates, every entrepreneur wants to safeguard his goods and other materials and machinery from any sort of mis-happening. So, entrepreneurs take insurance policies for their godowns, factories, shops, goods in transit, etc.
(iii) Stock and Commodity Exchange: These platforms provide auxiliary services like sale and purchase of shares, debentures, commodities and securities.
(iv) Consultancy Services: It is one of the most emerging sectors in India. It includes Management Centres, Business Advisory, Insurance Advisory, Legal Consultancy, and Marriage Consultancy.
(v) Placement Services: Various institutes related to education, employment and technical skills are providing knowledge to students. These institutes not only give required skills and knowledge but also help their students in getting jobs.
(vi) Agency Services: Due to the growing legal and technical complexities along with growing business, it becomes difficult at times for an enterprise to handle everything on its own. So, activities like security and housekeeping may be outsourced to freelancers or to an organisation specialising in that task.
(vii) Distribution of Goods and Transport Services: Entrepreneurs search for the best market and cheapest production place for their goods. It is quite possible that their place of production and consumption of goods will be different.
(viii) Packing Services: Goods need to be packed safely so that they are not damaged in warehouses or in transit. This has paved way for more employment opportunities. Generally, no high technical knowledge is required for such work.
(ix) Warehousing Services: Entrepreneurs prefer to achieve economies of scale. They need warehouses to store their raw materials and finished goods. This helps in creating employment opportunities for several categories of workers including staff, labour, drivers and security personnel.
(x) Communication services: Communication is the key to any business house. The smoother and easier the communication in an organisation, the better will be its functioning. Entrepreneurs have helped in creating jobs for many skilled and unskilled people in this area.
