Entrepreneurship development program is designed to help a person in strengthening and fulfilling his entrepreneurship motive and in acquiring skills and capabilities necessary for playing his entrepreneurship role effectively. Towards this end it is necessary to promote his understanding of motives, motivation patterns, their impact on behaviour and entrepreneurship value. A programme, which seeks to do this, can qualify to be called as EDP.

Entrepreneurship Development Programmes means a programme designed to help a person in strengthening his entrepreneurship motive and in acquiring skills and capabilities necessary for playing his entrepreneurship role effectively. A programme which seeks to do this can be called as entrepreneurship Development Programmes.

EDP is a programme designed to help a person in strengthening his entrepreneurship motive and in acquiring skills and abilities necessary for playing his entrepreneurship role effectively.

Entrepreneurship Development Programme (EDP)

Entrepreneurship Development Programme means a programme conducted to help a person in strengthening his entrepreneurship motive and in acquiring skill and capabilities required for promoting and running an enterprise efficiently. A programme which is conducted with a motive to promote potential entrepreneurs, understanding of motives, motivational pattern, their impact on behaviour and entrepreneurship value is termed as entrepreneurship development programme.


There are a number of programmes which give information to the prospective entrepreneurs regarding new business ideas, how to set up a new venture, how to prepare a project report, sources of finance etc. These programmes should not be confused with EDP; these are all a part of EDP. EDP is primarily concerned with developing, motivating entrepreneurship talent and understanding the impact of motivation on behaviour.

A well designed EDP envisages three tiered approach:

  1. Developing achievement motivation and sharpening entrepreneurship traits and behaviour.
  2. Guidance on industrial opportunities, incentives, facilities, rules and regulations.
  3. Developing managerial and operational capabilities.

Meaning of Entrepreneurship Development Programme (EPD)

Entrepreneurship development programme is designed to help a person in strengthening and fulfilling his entrepreneurship motive and in acquiring skills and capabilities necessary for playing his entrepreneurship role effectively. Towards this end it is necessary to promote his understanding of motives, motivation patterns, their impact on behaviour and entrepreneurship value. A programme, which seeks to do this, can qualify to be called as EDP.

EDP is a programme designed to help a person in strengthening his entrepreneurship motive and in acquiring skills and abilities necessary for playing his entrepreneurship role effectively.


EDP is defined as a programme designed to help an individual in strengthening his entrepreneurship motive and in acquiring skills and capabilities necessary for playing his entrepreneurship role effectively.

EDP is defined as a process which instils entrepreneurship behaviour in the minds of entrepreneurs in their day-to-day activities.

Definitions of Entrepreneurship Development Programme 

According to Joseph E. Schumpeter, “Intelligence, motivation, knowledge and Opportunities are the perquisites of entrepreneurship Development.”

According to other Experts, “A programme designed to help an individual in strengthening his entrepreneurship motive and acquiring skills and capacities necessary for playing his entrepreneurship role effectively.”


Entrepreneurship Development Programme is designed to identify persons who have entrepreneurship spirits and capabilities. These persons are trained and motivated to venture into business activities. An entrepreneurship Development Programme is based on the belief that individuals can be developed, their outlook can be changed and their ideas can be converted into action through organised and systematic programmes.

The entrepreneurship Development Programme is not merely a timing programme. It is a process of enhancing the motivation, knowledge and skills of the potential entrepreneurs or arousing the entrepreneurship behaviour of their day to day activities. These are necessary to promote this understanding of motives and their impact on entrepreneurship values and behaviour for this purpose.

Despite several facilities and concessions, the desired target group could not be attracted towards self-employment. Lack of proper integration between person, project and policy was the main cause of failure. In that situation the entrepreneurship development programmes play a crucial role.

What is Entrepreneurship Development Programme (EDP)

Entrepreneurship Development Programmes means a programme designed to help a person in strengthening his entrepreneurship motive and in acquiring skills and capabilities necessary for playing his entrepreneurship role effectively. A programme which seeks to do this can be called as entrepreneurship Development Programmes.

Entrepreneurship Development Programmes aim at developing entrepreneurship motives, skills and helping to play his/her role & as an entrepreneur effectively, entrepreneurship Development Programmes are primarily concerned with developing and motivating entrepreneurship talent and grooming him to be an effective entrepreneur.

Features of Entrepreneurship Development Programme (EDP)

The basic features of the entrepreneurship development programme  has gone through several modifications over time as:

  1. Identification and careful selection of entrepreneurs for training;
  2. Developing the entrepreneurship capabilities of the trainee;
  3. Equipping the trainee with the basic managerial understanding and strategies;
  4. Ensuring a viable industrial project for each potential entrepreneur;
  5. Helping him to secure the necessary financial, infrastructural and related assistance; and
  6. Training cost is highly subsidised and only a token fee is charged. A deposit is, however, taken to ensure commitment of participants.

Need of Entrepreneurship Development Programme 

Entrepreneurship Development Programme means a programme conducted to help a person in strengthening his entrepreneurship motive and in acquiring skill and capabilities required for promoting and running an enterprise efficiently. It is a programme which is conducted with a motive to promote potential entrepreneurs, understanding of motives, motivational pattern, their impact on behaviour and entrepreneurship value is termed as entrepreneurship development programme.

The need of EDP is as follows:

  1. It helps in developing entrepreneurs
  2. It helps entrepreneurs in developing and improving their skills
  3. EDP is a tool of industrialisation and path to economic growth through entrepreneurship
  4. EDP helps in dispersal of economic activities in different regions by providing training and other support to local people
  5. It provides opportunities for self-employment and entrepreneurship careers
  6. EDP develops motivation, competence and skills necessary for successful launching, management and growth of the enterprise
  7. EDP, by inculcating entrepreneurship capabilities and skill in the trainees, creates a new generation of entrepreneurs

The urge to achieve is one of the most significant variables connected with economic development. People with high need for achievement tend to be more successful entrepreneurs as compared to people who are with low need for achievement.


The need of the hour is:

  1. To develop genuine entrepreneurs to accelerate the process of industrialisation
  2. To stimulate innovation and the entrepreneurship spirit to support the development of new ideas through new and mature enterprises.

Objectives of Entrepreneurship Development Programme

The objectives of an entrepreneurship development programme (EDP) are categorised into two types:

  1. Short-Term Objectives
  2. Long-Term Objectives

1. Short-Term Objectives:

These imply the objectives which are to be achieved immediately after the completion of the programme.

The short-term objectives are:

  1. Preparing a person mentally for the entrepreneurship venture
  2. Making him competent to scan the environment and situation within the existing regulatory framework
  3. Help a participant in the fixation of his/her goal of life as entrepreneur as an objective in general.

2. Long-Term Objectives:


An entrepreneurship development programme seeks to equip the participants with all the skills required for the establishment and smooth running of business ventures. The ultimate objective is that the participant under training should establish his/her own venture.

The objectives of an EDP are as follows:

  1. To enlarge the supply of entrepreneurs for rapid industrial development
  2. To develop small and medium scale sector which is necessary
  3. To industrialise rural and backward regions
  4. To provide gainful employment to educated young men and women
  5. To diversify the sources of entrepreneurship and
  6. To improve the performance of small industries by developing managerial skills among small entrepreneurs

EDP Programs

EDP programs are organised to address the needs of various types and levels of people. The EDP are directed at students, aspiring entrepreneurs, faculty, local entrepreneurs etc. The objective of the EDP would be to foster entrepreneurship spirit, quality, enable product design, help in project identification, report preparation, understand finance, compliance etc. Entrepreneurship being multi-disciplinary, the program should be structured to handle various subjects, domains and skills.

A typical program should cover:

  1. entrepreneurship motivation
  2. Business skills
  3. Industry Interactions
  4. Compliance and statutory aspects
  5. Venture Creation and Management
  6. Schemes, Grants, incentives and subsidies
  7. Support Systems


EDP is structured in three phases:

  1. Pre-training phase where participants are identified, program is designed and relevant tie-ups all achieved
  2. Training Phase – Execution of training
  3. Post training support.

Success of EDP is evaluated by looking at the number of participants who have turned into entrepreneurs. More recent measure is also to see how the participants assume other critical roles post the training to further the entrepreneurship ecosystem.

 Importance of Entrepreneurship Development Programme 

Entrepreneurs are considered as agents of economic growth. They create wealth, generate employment, provide new goods and services and raise the standard of living. EDP is an effective way to develop entrepreneurs which can help in accelerating the pace of socio-economic development, balanced regional growth, and exploitation of locally available resources. It can also create gainful self-employment.

An EDP equips entrepreneurs and makes them competent to anticipate and deal with a variety of problems that any entrepreneur may have to face. It gives confidence to the entrepreneur to face uncertainties and take profitable risks. It prepares them to deserve and make good use of various forms of assistance.

EDP can be beneficial in the following ways:

1. Economic Growth:


EDP is a tool of industrialisation and path to economic growth through entrepreneurship.

2. Balanced Regional Development:

EDP helps in dispersal of economic activities in different regions by providing training and other support to local people.

3. Eliminates Poverty and Unemployment:

EDPs provide opportunities for self-employment and entrepreneurship careers.

4. Optimum use of Local Resources:


The optimum use of natural, financial and human resources can be made in a country by training and educating the entrepreneurs.

5. Successful Launching of New Unit:

EDP develops motivation, competence and skills necessary for successful launching, management and growth of the enterprise.

6. Empowers New Generation Entrepreneurs:

EDP, by inculcating entrepreneurship capabilities and skill in the trainees, created a new generation of entrepreneurs who hitherto were not entrepreneurs.

Role of Entrepreneurship Development Programme (EDP) 

EDP is essential for first generation entrepreneurs because they may not become successful unless a proper training is received. It is a continuous process of motivating the entrepreneur. The potential entrepreneurs can solve many of their problems provided proper training is given to them.

1. Eliminates Poverty and Unemployment:

The basic problems of most of the developing countries like India are poverty and unemployment. Entrepreneurship development programmes can help the unemployed people to opt for self-employment and entrepreneurship as a career.


Several programmes like National Rural Employment Programme (NREP), Integrated Rural Development Programme (IRDP) etc., are in operation in India to help the potential entrepreneurs. All these special schemes intend to eliminate poverty and solve the problem of unemployment.

2. Balanced Regional Development:

Successful entrepreneurship development programmes help in fostering industrialization and reduce the concentration of economic power. It is because small-scale entrepreneurs can set up their units in remote areas with little financial resources which can help in achieving balanced regional development.

The medium and large enterprises do not help in reducing the disparities in income and wealth of the people. Thus, entrepreneurship development programmes help in balanced regional development by spreading industrial units in each, and every part of the country.

3. Prevents Industrial Slums:

The urban cities are highly congested and leading to industrial slums. Decentralisation of industries is very much required by relocating the industries.

entrepreneurship development programmes help in removal of industrial slums as the entrepreneurs are provided with various schemes, incentives, subsidies and infrastructural facilities to set up their own enterprises in all the non-industrialized areas.


This will control the industrial slums and also reduce the pollution, traffic congestion, overcrowding in cities etc.

4. Harnessing Locally Available Resources:

Since abundant resources are available locally, proper use of these resources will help to carve out a health base for sound economic and rapid industrialization.

The entrepreneurship development programmes can help in harnessing these resources by training and educating the entrepreneurs.

5. Defuses Social Tension:

Every young person feels frustrated if he does not get employment after completing his education. The talent of the youth must be diverted to self-employment careers to help the country in defusing social tension and unrest among youth which is possible by entrepreneurship development programmes.

6. Capital Formation:

The various development banks like ICICI, IDBI, IFCI, SFC, SIDC and SIDBI take initiative in promoting entrepreneurship through assistance to various agencies involved in EDP and by providing financial help to new entrepreneurs. It is impossible to start a new enterprise without sufficient funds.

Entrepreneurs are the organisers of factors of production who employ their own and borrowed money for setting up new ventures. This all results in the process of capital formation.

7. Economic Independence:

Entrepreneurs develop and produce substituted products of imported goods and prevent the over-dependence on other countries.

They also enable the country to produce a variety of better quality goods and services at competitive prices of imported goods which help in promoting the economic independence of the country.

8. Improvement in per Capita Income:

Entrepreneurs always explore and exploit the new opportunities which lead to productive use of factors of production for more output, employment and generation of wealth.

The overall increase in productivity and income help in improvement in per capita income. EDPs play a significant role in setting up more industrial units to generate more employment opportunities and to secure improved per capita income.

9. Facilitating Overall Development:

Entrepreneurs act as agents of proper use of various limited resources such as men, money, material, machines etc., which leads to overall development of an area, an industry.

The successful entrepreneurs set a motivating example for others to adopt entrepreneurship as a career. Thus entrepreneurs create a motivating environment for economic development of a country.

Some of the other role of EDP are as follows:

  1. Selection of project and product
  2. To analyse the environment regarding the small industry/business
  3. To know the process and procedure regarding the establishment of new business
  4. Helpful in preparation of the project
  5. Helpful to learn the primary stage of managerial skill
  6. To know the essential resources for establishing a new venture
  7. Giving assistance in appreciating the quality of an entrepreneur
  8. To identify the feasible entrepreneur
  9. To provide training & education to feasible entrepreneurs
  10. To know the EDPs obstacles and their measures
  11. Helpful in searching for the incentives subsidy and financial assistance resources

Phases of Entrepreneurship Development Programme 

After deciding on course contents and curriculum on EDP, the next important task is to decide various phases of EDP.

There are three different phases of EDP like:

Phase1 – Pre-Training Phase:

Pre-training phase consists of all activities and preparation to launch the training programme.

Pre-training phase of EDP consists of the following activities:

  1. Selection of entrepreneurs for the training programme
  2. Arrangements of infrastructure are for the programme like selection of place of training
  3. Deciding guest faculty for the programme from the education industry and banks
  4. Taking necessary steps for the inauguration of the programme
  5. Formation of selection committee to select trainees from the programme
  6. Making provision with regard to publicity and campaigning for the programme

Phase 2 – Training Phase:

The primary objective of the training programme is to develop motivation and skill or competency amongst the potential entrepreneurs. Care should be taken to impart both theoretical and practical knowledge to various trainees.

The training phase of EDP will be so designed that it will answer the following questions:

  1. Whether the attitude of the entrepreneur has been tuned towards the proposed project or not
  2. Whether the trainee has been motivated to accept entrepreneurship as a career
  3. How the trainee behaves like an entrepreneur
  4. Whether the trainee has sufficient knowledge on resources and technology or not
  5. What kind of entrepreneurship traits he lacks and what steps should be taken to set it

Phase3 – Follow-up Phase:

Follow up phase of EDP has been termed as the post-training phase. The ultimate objective is to develop competent entrepreneurs.

So that they can start their project. Post-training phase is a review phase of a training programme.

It consists of reviewing of work in the following manner:

  1. Review of pre-training work
  2. Review of actual training programme
  3. Review of the post training programme so that the cost effectiveness of the present programme can be evaluated.

Major Relevance of EDP 

Relevance of EDP can be summarised as follows:

1. Creation of Employment Opportunities:

Unemployment is one of the most important problems confronting developing and underdevelopment countries, EDP’s enable prospective entrepreneurs in the setting up of their own units, thus enabling them to get self-employment. With the setting up of more and more units by entrepreneurs, both on a small and large scale, numerous job opportunities are created for the others.

Entrepreneurs in this way get an opportunity to lead an independent and honourable life and at the same time they enable others in getting gainful employment. Several schemes like Nehru Rozgar Yojna, National Rural Employment Programme (NREP), and Integrated Rural Development Programme (IRDP) etc., have been initiated by the government of India in this direction.

The thrust of all these schemes is to eliminate poverty and generate gainful employment opportunities for the unemployed. Thus entrepreneurs can play an effective role in reducing the problem of unemployment.

2. Capital Formation:

It is not possible to set up an enterprise without adequate funds. Entrepreneur as an organiser of factors of production employs his own as well as borrowed resources for the setting up of his enterprise. Entrepreneurs mobilise the idle savings of the public and put them to productive use.

In this way he helps in capital formation which is so essential for the industrial and economic development of a country. Various development banks like ICICI, IFCI, IDBI; SFCs, SIDCs take initiative in promoting entrepreneurship through assistance to various agencies involved in EDP and by providing financial assistance to new entrepreneurs.

3. Balanced Regional Development:

Small scale units can be set up in industrially backward and remote areas with limited financial resources. Successful EDP’s assist in accelerating the pace of industrialization in the backward areas and reduce the concentration of economic power in the hands of a few. Entrepreneurs feel like taking advantage of the various concessions and subsidies offered by the state and central government.

Success stories of entrepreneurs set the right example for others to follow and this accelerates the pace of industrialization in the backward areas. Setting up more units leads to more development of backward areas and balanced regional development.

4. Use of Local Resources:

In the absence of any initiative local resources are likely to remain unutilized. Proper use of these resources can result in the progress or development of the area and that too at lower cost. Alert entrepreneurs seize the opportunity and exploit it in the best interests of the area and industry. Effective EDPs can help in the proper use of local resources by providing guidance, assistance, education and training to the prospective entrepreneurs.

5. Improvement in Per Capita Income:

Entrepreneurs are always on the lookout for opportunities. They explore and exploit the opportunities. Entrepreneurs take the lead in organising various factors of production by putting them into productive use through the setting up of enterprises. More enterprises will lead to more production, employment and generation of wealth in the form of goods and services. It will result in the increase in the overall productivity and per capita income in the country. EDPs play a positive role in the setting of more units and thus help in generation of more employment and income.

6. Improvement in the Standard of Living:

Entrepreneurs by adopting latest innovations help in the production of a wide variety of goods & services. By making efficient use of the resources, they start producing more of better quality and that too at lower costs.

This enables them to ensure easy availability of better quality products at lower prices to the consumers which result in the improvement in the standard of living of the people. EDPs provide the necessary support to entrepreneurs by educating them about the latest innovations and market trends.

7. Economic Independence:

Entrepreneurs enable a country to produce a wide variety of better quality goods & services and that too at competitive prices. They develop substitutes of the goods being imported and thus prevent over-dependence on foreign countries and at the same time help in the saving of precious foreign exchange.

Through sale of their surplus products in foreign market entrepreneurs enable a country to earn foreign exchange, which is essential for meeting developmental needs of the economy. Export promotion and import substitution thus help in promoting economic independence of the economy.

8. Preventing Industrial Slums:

Industrially developed areas are faced with the problem of industrial slums, which result in over burdening of civic amenities and adverse impact on the health of people. Dispersal of industries can help in the overcoming of this grave problem.

EDPs can help in preventing spread of industrial slums by providing various incentives, subsidies and infrastructural support to entrepreneurs for setting up their enterprises in industrially backward areas. This will also help in reducing pollution and overtaxing of civic amenities.

9. Reducing Social Tension:

Unemployment amongst the young and educated people is emerging as the major cause of social unrest. People are bound to feel frustrated if they fail to get gainful employment after completion of their education.

EDPs can help in channelizing the talent of this section of society in the right direction by providing proper guidance, training and assistance for setting up their enterprises. This results in generation of self-employment and prevention of social tension, unrest etc.

10. Facilitating Overall Development:

An entrepreneur acts as a catalytic agent for change which results in chain reaction. With the setting up of an enterprise the process of industrialization is set in motion. This unit will generate demand for various types of inputs required by it and there will be so many other units which will require the output of this unit.

This leads to overall development of an area due to increase in demand and setting up of more and more units there. Moreover, the success of one entrepreneur sets the right type of example for others to follow. Entrepreneurs, thus, create an environment of enthusiasm and convey a sense of purpose. This gives future impetus to the overall development of that area.

Steps of Entrepreneurship Development Programme (EDP)

The steps of EDP are as follows: 

1. Outline the objectives of the program and focus on venture development:

Entrepreneurship development aims at individuals who want to start or possibly expand a business. The aims of a program have to be clearly explained otherwise the program will never reach its full potential.

2. Select educated people who have high entrepreneurship potential:

An entrepreneurship development program requires that various people be selected. However, most programs tend to look for a specific group of educated people rather than target everyone. Ideally, you have to look at the education and traits that you are looking for, in an entrepreneur, and match them with the people who have applied for the program.

3.Select uneducated people who have high entrepreneurship potential: 

Even though many people are uneducated, they have great entrepreneurship potential because they have the right motivation. Such people need to be aided by assistance packages where training can be given on entrepreneurship. This will instil confidence and teach them the skills they need in order to provide for their family.

4. Identify the local market and search for people who have potential in it:

By concentrating on selecting local entrepreneurs, the effects of the program can be easily and quickly seen within the community.

5. Provide support through private sector based organisations: 

By concentrating on selecting local entrepreneurs, the effects of the program can be easily and quickly seen within the community. They help reduce the cost of the entrepreneurship development program and increase its effectiveness.

6. Provide a methodology that will help in improving the entrepreneurs in the short as well as long run:

Entrepreneur development training proves to be highly effective when finance, quality assurance, marketing and productivity are linked to the training program.

7. Implement measures to improve usefulness of trainers and facilitators:

Training facilitators can significantly improve their usefulness in tackling the needs of entrepreneurs.

8. Selection of areas for pilot program:

Selecting pilot target areas will usually depend on the ease at which support institutions are available. It will also depend on the interest people take in entrepreneurship development programs. These facts can never be the same for any two geographical locations and hence must be considered carefully.

9. Launch pilot ED programs:

Analysing pilot feasibility is an effective way of launching a major entrepreneurship development program. If the program shows signs of high promise, it can be launched on a national level.

10. Government policies:

Government policies usually have a substantial impact on the number of entrepreneurs in a country.

Different Types of EDP Courses Conducted by the SIDO

Entrepreneurship Development Programme is defined as a programme designed to help an individual in strengthening his entrepreneurship motive and in acquiring skills and capabilities necessary for playing his entrepreneurship role effectively. It is necessary to promote this understanding of motives and their impact on entrepreneurship values and behaviour for this purpose.

EDP means a programme designed to help a person in strengthening his entrepreneurship motive and in acquiring skills and capabilities necessary for playing his entrepreneurship role effectively. It is necessary to promote his understanding of motives, motivation patterns, their impact on behaviour and entrepreneurship value.

EDPs endeavour to change, educate and equip a person to become a successful entrepreneur.

The different types of EDP courses conducted by the SIDO for various categories of persons are:

  1. EDPs among non-engineers
  2. EDPs among self-employment beneficiaries
  3. Technical training courses (for workers of SSI, prospective entrepreneurs)
  4. Industrial management course (only for SSIs, their managerial personnel, prospective entrepreneur group)
  5. EDPs among women entrepreneurs
  6. EDPs for rural artisans, students, weaker sections of the society, physically handicapped persons etc

Role of Government in EDP

Small and Medium-sized Enterprises (SMEs) in market economies are the engine of economic development. Owing to their private ownership, entrepreneurship spirit, their flexibility and adaptability as well as their potential to react to challenges and changing environments, SMEs contribute to sustainable growth and employment generation in a significant manner.

SMEs have strategic importance for each national economy due a wide range of reasons. Logically, the government shows such an interest in supporting entrepreneurship and SMEs. There is no simpler way to create new job positions, increasing GDP and rising standard of population than supporting entrepreneurship and encouraging and supporting people who dare to start their own business. Every surviving and successful business means new jobs and growth of GDP.

Therefore, designing a comprehensive, coherent and consistent approach of Council of Ministers and entity governments to entrepreneurship and SMEs in the form of government support strategy to entrepreneurship and SMEs is an absolute priority.

A comprehensive government approach to entrepreneurship and SMEs would provide for a full coordination of activities of numerous governmental institutions (chambers of commerce, employment bureaus, etc.,) and NGOs dealing with entrepreneurship and SMEs.

With no pretension of defining the role of government in supporting entrepreneurship and SMEs, we believe that apart from designing a comprehensive entrepreneurship and SMEs strategy, the development of national SME support institutions and networks is one of key conditions for success.

There are no doubts that governments should create different types of support institutions:

i) To provide information on regulations, standards, taxation, customs duties, marketing issues

ii) To advise on business planning, marketing and accountancy, quality control and assurance

iii) To create incubator units providing the space and infrastructure for business beginners and innovative companies, and helping them to solve technological problems and to search for know-how and promote innovation

iv) To help in looking for partners. In order to stimulate entrepreneurship and improve the business environment for small enterprises

1. Training:

Basic training differs from product to product but will necessarily involve sharpening of entrepreneurship skills. Need based technical training is provided by the Govt., and State Govt. technical Institutions.

There are a number of Government organisations as well as NGOs who conduct EDPs and MDPs. These EDPs and MDPs are conducted by SMEs, NIESBUD, NSIC, IIE, NISIET, Entrepreneurship Development Institutes and other state government developmental agencies.

2. Marketing Assistance:

There are Governmental and non-governmental specialised agencies which provide marketing assistance. Besides promotion of MSME products through exhibitions, NSIC directly markets the MSME produce in the domestic and overseas market. NSIC also manages a single point registration scheme for manufacturers for Govt., purchase. Units registered under this scheme get the benefits of free tender documents and exemption from earnest money deposit and performance guarantee.

3. Promotional Schemes:

Government accords the highest preference to development of MSME by framing and implementing suitable policies and promotional schemes. Besides providing developed land and sheds to the entrepreneurs on actual cost basis with appropriate infrastructure, special schemes have been designed for specific purposes like quality upgradation, common facilities, entrepreneurship development and consultancy services at nominal charges.

Government of India has been executing the incentive scheme for providing reimbursement of charges for acquiring ISO 9000 certification to the extent of 75% of the cost subject to a maximum of Rs. 75,000 in each case.

ISO 9000 is a mechanism to facilitate adoption of consistent management practices and production techniques as decided by the entrepreneur himself. This facilitates achievement of desired level of quality while keeping check on production process and management of the enterprise.

4. Concession on Excise Duty:

MSME units with a turnover of Rs. 1 crore or less per year have been exempted from payment of Excise Duty. Moreover there is a general scheme of excise exemption for MSME brought out by the Ministry of Finance which covers most of the items.

Under this, units having turnover of less than Rs. 3 crores are eligible for concessional rate of Excise Duty. Moreover, there is an exemption from Excise Duty for MSME units producing branded goods in rural areas.

5. Credit Facility to MSME:

Credit to the micro, small and medium scale sector has been covered under priority sector lending by banks. Small Industries Development Bank of India (SIDBI) has been established as the apex institution for financing the MSME. Specific schemes have been designed for implementation through SIDBI, SFCs, Scheduled Banks, SIDCs and NSIC etc.

Loans upto Rs. 5 lakhs are made available by the banks without insisting on collaterals. Further Credit Guarantee Fund for micro, small and medium enterprises has been set up to provide guarantee for loans to MSME upto Rs. 25 lakhs extended by Commercial Banks and some Regional Rural Bank.

Functions of National Level and State Level Institutions in EDP in Entrepreneurship 

Functions of National Level Institutions:

The following are the functions of national levels institutions for entrepreneurship development:

  1. To evolve standardised materials and processes for selection, training, support and sustenance of entrepreneurs, potential and existing
  2. To help/support and affiliate institutions/organisations in carrying out training and other entrepreneurship development related activities
  3. To train trainers, promoters and consultants in various areas of entrepreneurship development
  4. To provide national/international forums for interaction and exchange of experiences helpful for policy formulation and modification at various levels
  5. To offer consultancy nationally/internationally for promotion of entrepreneurship and small business development
  6. To share internationally, the experience and expertise in entrepreneurship development
  7. Creating a multiplier effect on opportunities for self-employment
  8. Augmenting the supply of competent entrepreneurs through training
  9. Inculcating the spirit of entrepreneurship in youth
  10. Developing new knowledge and insights in entrepreneurship theory and practise through research
  11. Facilitating corporate excellence through creating intrapreneurs
  12. Improving managerial capabilities of small scale industries
  13. Sensitising the support system to facilitate entrepreneurs establish and manage their enterprise
  14. Promote micro enterprise at rural level
  15. To set up state level entrepreneurship institutions
  16. Contribute to dispersal of business ownership

Functions of State Level Institutions:

State level institutions include the following along with their specific functions:

1. District Industries Centre:

The Government of Karnataka established the District Industries Center (DIC) in 1913 under the erstwhile Princely State of Mysore to oversee the Industrial Development in the State. This department works under the Commerce and Industries Department of Karnataka, at the state level through the Directorate of Industries and Commerce and at the District level through the network of District Industries Centres.

The following are some of the main functions of the DIC:

i) It monitors the registration of MSMEs

ii) It provides infrastructural assistance to entrepreneurs in form of grievance redressal through the District level clearance committee of Industries and commerce, allotment of KIADB’s land to SMEs in the District and recommendation for loans from financial institutions

iii) It assists in implementation of incentive schemes through sanction and disbursement of Investment Subsidy. It also inspects and recommends investment subsidies to food processing industries of India

iv) It is responsible for the implementation and Monitoring of the Prime Minister Employment Generation programme

v) It helps in the implementation and monitoring of the Special Component Plan and the Tribal Sub plans that provide assistance to SC & ST artisans in form of training, better toolkits, venture and equity capital etc

vi) DIC is also involved in conducting various entrepreneurship and vendor development and awareness programmes at Hobli, Taluk and District levels

vii) DIC helps in arranging buyer-seller meets

viii) Various other programmes are taken up by DIC such as Cluster Development Programmes and Sensitization Programmes

ix) DIC conducts various Industrial Exhibitions at District and Taluk levels where young entrepreneurs could showcase their products and services and artisans could showcase their work

x) DIC also follows-up the Industrial Approvals

2. State Financial Corporations:

They are established by respective states and are playing a significant role in providing financial assistance and other types of support to SSIs.

State Financial Corporation Act passed in 1951 provides long term finance for certain identified groups of items in manufacturing as well as service sectors.

3. SISI:

SISI has been established by GOI to help the SSI sector on different issues.

Its main activities include:

  1. Assistance/consultancy to prospective entrepreneurs
  2. Assistance/consultancy to existing units
  3. Publishing information pertaining to economic and industrial activities of the state
  4. Conducting surveys to identify emerging business opportunities
  5. Profiling various projects
  6. Undertaking Entrepreneurship Development Programmes (EDP)
  7. Publishing the data on the production index
  8. Quality control and Up gradation
  9. Export Promotion measures
  10. Setting up of ancillary industries
  11. Creation of common facility workshop
  12. Preparation of Directory of specific Industry
  13. Intensive Technical Assistance
  14. Co-ordinate with DICs in promoting industrial development
  15. Coordinate with various government functionaries
  16. Conducting market surveys on various products/services


SIDBI was established in 1990. This institution, through its five regional offices and about 33 branches, provides varied types of finance to SSIs. The types are – (i) Direct finance, (ii) Foreign currency loans (iii) Venture capital fund (iv) Refinancing and (v) Micro financing.


KSIIDC is another institution which extends financial support to SSIs in Karnataka. This organisation of Karnataka has no specific financial programme for adaptation of pollution control etc., but provides medium and long term loans, equipment financing and direct equity participation.

Institutes Conducting and Organising EDP

The work of entrepreneurship development is not very simple and closely related to the economic and social environment which is prevalent in society. Before independence, the private sector dominated all sectors of the Indian economy and that too was concentrated in a few hands only.

However, after independence, Govt. of India recognized the need and role of entrepreneurs in the process of rapid industrialization and economic deve­lopment.

The major institutes conducting & organising EDP are as follows in three parts:

  1. Govt. of India establish institution of all
  2. State Level Institutes
  3. National Level Institutes

The Govt. of India has established many institutions at all India level or central level in the field of EDP’s which are as follows:

1. Management Development Institute (MDI):

It is one of the institutes under central level in the field of EDP’s which was established in Gujarat in 1975 and sponsored by Industrial finance Corporation of India. Its main aim is to improve managerial effectiveness in the industry.

This institute organises or conducts several managerial development pro­gramme which are as follows:

  1. Indian Economic Services. (IES)
  2. Indian Administration Services (IAS)
  3. Oil & Natural Gas Commission (ONGC)
  4. Bharat and Heavy Electrical Ltd. (BHEL)
  5. Bharat Aluminum Company Ltd. (BALCO)
  6. Export Credit Guarantee Corporation of India (ECGCL)
  7. Bureau of Indian Standards (BIS)
  8. Hindustan Machine Tools (HMT)
  9. Indian Drugs and Pharmaceuticals Ltd. (IDPL)
  10. Uttar Pradesh State Industrial Development Corporation Ltd. (UPSIDC)
  11. Madhya Pradesh Financial Corporation (MPFC)

2. Entrepreneurship Development Institute of India (EDII):

It is one of the national institutes which was established by all Indian Financial Institutions and Govt. of Gujarat. It is also merged in entrepreneurship develop­ment. It provides training through a training programme for encouraging the participation of backward regions.

Its main functions are as follows:

  1. Selection of potential entrepreneurs
  2. Achievement, motivation & training
  3. Selection of product and preparation of project report
  4. Imparting business management training
  5. Rendering post training
  6. Evolving innovative training techniques for trainers

3. Small Industries Development Organization (SIDO):

It is one of the institutes which was established in 1954 by the central Govt. This organisation provides its services through 27 small industrial services Institution, 314 regional training centres, 20 local testing centres, 4 product co-process and centres, 2 shoe training centres and 4 production centres. It is also pro­viding training grounds for entrepreneurs.

4. Small Industries Services Institute (SISI):

It is also one of the institutes which provides technical, economical, and managerial assistance. Under EDP, this institute organises management training programmes.

5. All India Small Scale Industry Board (AISSIB):

This institute was established in 1954 determining the policies and programmes for the develop­ment of small industries.

It induces the representational of following organisations:

  1. Representatives of the Central organisation
  2. Representatives of the Central Government
  3. Representatives of Different organisations such as NSIC, SFC etc
  4. Representatives of RBI and SBI
  5. Non-Government members, such as members of public commission, Trade & Industries members

6. National Small Industries Corporation Limited (NSIC):

The main object of the Institution which was established in 1955 with the help of the Central Government is to assist the small industries in the government purchase programme. It provides a large market to small industries for their selling products and services.

7. National Institute for Entrepreneurship and Small Business Development (NIESBUD):

This institute was established by the Govt. of India in 1983 and started its functioning from 6th July 1983 under the Industries Ministry of India.

The main objectives and functions of this institute are as follows:

  1. Evolving effective training strategies and methodology
  2. Formulation of scientific selection procedure
  3. Standardising model syllabi for training various target groups
  4. Development of training aids, manuals and other tools
  5. Facilitating and supporting agencies which are engaged in entre­preneurship development
  6. Conducting such types of programmes which are not taken by other agencies
  7. Maximisation of benefits which leads to accelerate the process of entrepreneurship development
  8. Conducting workshops, seminars, conferences etc. for entrepreneurship development programmes
  9. Organising all those activities which develop entrepreneurship culture in society
  10. To assist in setting up of regional and state level training institutes for entrepreneurship and small business development

8. National Alliance of Young Entrepreneur (NAYE):

It has launched numerous schemes in collaboration with various public sector banks. The main aim of the scheme is to encourage young entrepreneurs to explore investment and self-employment opportunities. This scheme was set up by a women’s wing in 1975.

9. National Institute of Small Industries Extension Training (NISIET):

It was established in 1960. The prime objective of NISIET is to conduct training programmes and give managerial assistance and technical consultancy. It organises seminars and research workshops.

10. National Research Development Corporation (NRDC):

This institute was established in 1953 under the department of science and industries research. The main function of the corporation is to provide assistance to technological development functions. It also maintains Industrial relations with other technological development institutes. It constructs a large storage system for products which are manufactured by research and development institutes.

11. Risk Capital and Technological Finance Corporation Limited (RCTEC):

This institute was established in Feb. 1988 having authorised capital of Rs. 15 lakhs. The main aim is to provide capital assistance. Beside this, it also provides venture capital for technological promotion and development to highly technical projects.

The functions of the institutes are as follows:

a. Providing financial assistance in recognizing research centres for new technology, new production processes, marketing services, energy protection, technological promotion & development, environment protection

b. Conducting commercial research and development programmes

12. Centre for Entrepreneurship Development (CED):

It was adver­tised by the Govt. of Gujarat and public financial Institutions operating in the state. It conducts EDP at various centres.

The financial features of the training programme are:

  1. Conducting a training programme after a survey of opportunities was made
  2. Establishment of appropriate linkage with supporting agencies, applying finance, raw material etc. Covering theoretical and practical aspects of the training programme
  3. For selection of entrepreneurs, behavioural tests were conducted

13. Miscellaneous Institute of National Level and State Level:

a. National Level:

  1. Industrial Development Bank of India (IDBI)
  2. Industrial Finance Corporation of India (IFCI)
  3. Industrial Credit and Investment Corporation of India (ICICI)
  4. National Small Scale Industries Development Corporation. (NASIOC)
  5. Small Industries Development Bank of India. (SIDBI)
  6. Khadi & Village Industries Centre (KVIC)
  7. National Bank of Agriculture and Rural Development (NABARD)
  8. Science and Technology Entrepreneur Park (STEP)

b. State Level:

  1. District Industries Centre (DIC)
  2. State Finance Corporation (SFC)
  3. Technical Consultancy organisations. (TCOs)

Problems of EDP 

The various problems of entrepreneurship development programme are:

1. Non Availability of Competent Faculty:

There is a problem of non-availability of competent teachers and even when they are available, they are not prepared to take classes in small towns and backward areas. This naturally creates problems for the agencies conducting EDP.

2. Over Estimation of Trainees:

Under EDPs it is assumed that the trainees have aptitude for self-employment and training will motivate and enable the trainees in the successful setting up and managing of their enterprises. These agencies thus overestimate the aptitude and capabilities of the educated youth. Thus on one hand the EDPs do not impart sufficient training and on the other financial institutions are not prepared to finance these risky enterprises set up by the not so competent entrepreneurs.

3. Duration of EDPs:

An attempt is made during the conduct of EDPs to prepare prospective entrepreneurs thoroughly for the various problems they will be encountering during the setting up and running of their enterprises. Duration of most of these EDPs varies between 4 to 6 weeks, which is too short a period to instil basic managerial skills in the entrepreneurs. Thus the very objective to develop and strengthen entrepreneurship qualities and motivation is defeated.

4. No Policy at the National Level: 

Though the Government of India is fully aware-about the importance of entrepreneurship development, yet we do not have a national policy on entrepreneurship. It is expected that the government will formulate and enforce a policy aimed at promoting balanced regional development of various areas through promotion of entrepreneurship.

5. Non Availability of Infrastructural Facilities:

No prior planning is done for the conduct of EDPs. EDPs conducted in rural and backward areas lack infrastructural facilities like proper classroom suitable guest speakers, boarding and lodging etc.

6. Improper Methodology:

The course contents are not standardised and most of the agencies engaged in EDPs are themselves not fully clear about what they are supposed to do for the attainment of predetermined goals. This puts a question mark on the utility of these programmes.

7.  Mode of Selection:

There is no uniform procedure adopted by various agencies for the identification of prospective entrepreneurs. Organisations conducting EDPs prefer those persons who have some project ideas of their own and thus this opportunity is not provided to all the interested candidates.

8. Poor Response of Financial Institutions:

Entrepreneurs are not able to offer collateral security for the grant of loans. Banks are not prepared to play with the public money and hence they impose various conditions for the grant of loans. Those entrepreneurs who fail to comply with the conditions are not able to get loans and hence their dream of setting up their own enterprises is shattered. Helpful attitude of lending institutions will go a long way in stimulating the entrepreneurship climate.

Operational Problems of EDP

The operational problems of EDP are as follows:

  1. Inherent inability
  2. Inconsistent programme design
  3. Diverse opinions
  4. Perpetual ambiguity
  5. Lack of proper strategy (No clear-cut objective)
  6. Low institutional commitment
  7. Lack of clarity in approach
  8. Absence of local support
  9. Lack of creativity and commitment
  10. Non-availability of inputs
  11. Insufficient follow up
  12. Absence of research facilities
  13. Ill-planned training methodology