Small Business Administrations: Essay, Article, Notes
Introduction (Essay on Small Business Administrations)
Can a drop contribute to an ocean? Yes, they do. Every inch in a meter matters. That is what the small businesses do to the Indian economy. ‘United we stand, divided we fall.’ It is a prominent phrase which describes the situation of our country perfectly. India has an abundant workforce which can be a boon to our nation only when utilized correctly. Despite education being offered as a fundamental right, there are yet more than 287 million illiterates. More than 40 percent of India’s children drop out of elementary school and thus a major proportion of the population does not get nourished with proper resources. Since India is at its developing stage, competing with countries like China and Japan which are two of the fastest growing economies in the world, it is the need of the hour for every being to come together and walk on a common path of development. India, being an agrarian-based nation where the heart of population lies in the rural areas, small business administration plays a vital role in their development. It encourages the people with a lesser education qualification but wonderful skills which could help them grow, become self-reliant and contribute to the economy.
What do we mean by small businesses?
The government of India has fixed some capital investment limits for a business to qualify as a small-scale industry. As defined on December 21, 1999, any industrial unit can be regarded as a small-scale industry if the investment in fixed assets like machinery and equipment should not be more than a crore. Whereas Micro Small and Medium Enterprises Development (MSMED) Act 20016 uses the criteria of capital investment limits to categorize small businesses as micro, small and medium.
Small business administration are usually labor intensive as the capital invested is not so huge and thus the gestation period is comparatively less for small industries.They use traditional methods of production involving operations by hand and skills of a laborer. This has an adverse effect on the supply as the production process becomes time-consuming.
Role of small business administration in Indian economy
India, with a population strength of more than 1.34 billion where about 30 percent of the population lives Below Poverty Line (BPL), employment generation is the necessity of the generation. Small-scale industries encourage self-employment in rural areas, employing people with significant handicraft skills but are not really educated to qualify for the white collar jobs. Since the industrialization began, the disparities between the rich and the poor are growing. Small businesses bridge the gap between those who are walking towards a mutual goal, but diversely, and encourages an equitable distribution of National Income. Setting up of small-scale industries also help people to grow the entrepreneurship skills and become self-sufficient especially in the backward areas. It is a medium which connects the people with the developed world, giving them a chance to shine.
Problems faced by small business in today’s world
There are always two sides of a coin. With every pro comes a con. Due to the growing competition, it has become difficult for the small business administration to sustain. They are not able to fulfill the growing needs and demands of consumers and match to the quality standards set by the rapidly developing industries. Low capital investments create numerous problems ranging from infrastructure, raw material to marketing. The technology which they use is outdated which is troublesome in the expansion of a business. Due to lack of finances, they are not able to advertise their products and reach a larger target market, resulting in lack of knowledge among the consumers.
Government initiatives in the field of small business administration
The government of India has taken major steps in the field of small business administration by launching different programs and schemes. These programs are in the areas of financial, marketing and technical support. Since the 8th Five Year Plan, the central government has formulated a scheme for setting up Integrated Infrastructural Development centers providing aids in the form of grants up to 2 crores in rural and backward areas. Financial assistance for small businesses has been provided by the schemes like Small Industries Development Fund, National Equity Fund, and Single Window Scheme. Ministry of Agro and Rural Industries have introduced coordinated programs with agencies and institutions like Small Industries Development Bank of India and National Bank for Agricultural and Rural Development. An organization called Mahila Bachat Gat also plays a significant role in self-development of women.
Conclusion on Small Business Administrations
Small businesses have an emerging scope in India. Due to the variation in its climatic condition, businesses like fisheries, horticulture, sericulture, jute, tea, and rubber can widen easily. The small business administration is a part of business and industry which can create a drastic change in the economy if its functioning and execution are monitored correctly. In the past, the government have taken needful measure to develop the small businesses and will be taking in future as well. Small business administration can change the entire scenario, nullifying the alarming problems of poor health care conditions, poverty, and unemployment with active participation and awareness of the people. With these measures, the day where India shall be proclaimed as the fastest growing economy in the world won’t be beyond our imagination.