MODULE III

ENTREPRENEURIAL SUPPORT SYSTEM

Entrepreneurial Support System in India – Role of Various agencies
The institutional support system for entrepreneurship development in India has been designed at four
levels, viz., (i) Central Government, (ii) State Government, (iii) Non-Government Support System,
and (iv) District Industries Centres. Following sections outline brief description of the role of
institutions each level.
I. Central Government Institutions
The Government of India formulated the Micro, Small and Medium Enterprises Development Act,
2006 and established the National Board for Micro, Small and Medium Enterprises (NBMSME)
and made rules there under in 2006. This Board examines the factors affecting promotion and
development of MSMEs and reviews policies and programs related to these enterprises from time
to time and makes recommendations to the Government in formulating policies for the growth of
MSMEs.
 Micro enterprises: Investment of up to Rs 1 crore and turnover of less than Rs 5 crore
 Small enterprises: Investment of up to Rs 10 crore and turnover of over Rs 5 crore, but under
Rs 50 crore
 Medium enterprises: Investment of over Rs 10 crore but less than Rs 50 crore and turnover
of Rs 50 crore to Rs 250 crore
The government offers support measures to MSMEs, such as business loans, policy steps to
facilitate growth, and easy credit facilities.
MSMEs are a critical part of India's economic environment. As of March 2024, there were
4,00,42,875 MSMEs registered on the Udyam portal.
The various Central Government Institutions include:-
1.1 Small Scale Industries Board (SSIB)
SSIB was established in 1954 to provide effective coordination and inter-institutional linkages for
the benefit of small-scale sector.
1.2 National Bank for Agriculture and Rural Development (NABARD)
NABARD is designated as an apex development bank in the country. It was established in 1982 by
a Special Act of the Parliament with a mandate to uplift rural India by facilitating credit flow in
agriculture, cottage and village industries, handicrafts, and small-scale industries.
The services offered by NABARD include: (i) attracting youth to rural non-farm sector, (ii)
preparing district industries rural project (DRIP), and rural entrepreneurship development program
(REDP).
1.3 Small Industries Development Organization (SIDO)
Small Industries Development Organization (SIDO) was constituted in 1954 to develop support
services for promotion of small-scale sector enterprises. It is an apex body and nodal agency for
formulating, coordinating, and monitoring the policies and programs for promotion and
development of small-scale industries in India.
Main objectives of SIDO are: (i) to formulate policy for promotion of SSIs, (ii) to provide
coordination of policies of state government, (iii) to collect and disseminate information,
(iv) to provide wide range of extension services through allied institutions, (v) to promote facilities
for technology upgradation, and (vi) to offer consultancy services.
1.4 National Small Industries Corporation Ltd. (NSIC)
NSIC, an ISO 9000 certified company established in 1955 is working to fulfill its mission of
promoting, aiding, and fostering the growth of SSIs and other small-scale services/ businesses in the
country and abroad. It is promoting modernization, technology up- gradation, quality strengthening,
establishing linkages with large and medium enterprises and enhancing export projects and products
from small-scale enterprises.
1.5 Small Industries Development Bank of India (SIDBI)
SIDBI, a Subsidiary of IDBI and was setup as an act of parliament for ensuring larger flow of
financial and non-financial assistance to the small-scale sector. It has taken over the outstanding
portfolio of the IDBI relating to the small-scale sector for promotion, financing and development of
the SSI sector and for coordinating the activities of other institutions. It is the principal financial
institution for the promotion, financing, and development of industries in the small, tiny and cottage
sectors and for coordinating the functions of the institutions engaged in similar activities.
SIDBI has devised tailor-made schemes for direct lending to small scale sector so as to supplement
the efforts of Primary Lending Institutions, which includes: (i) State Financial Corporation’s (SFCs),
(ii) State Industrial Development Corporations (SIDCs), (iii) Scheduled Commercial Banks (SCBs)
both in the public and the private sector, (iv) State Cooperative Banks, (v) Scheduled Urban
Cooperative Banks, (vi) Regional Rural Banks, and (viii) SIDBI – Venture Capital Ltd.
1.6 Khadi and Village Industries Commission (KVIC)
KVIC, established under the Khadi and Village Industries Commission Act, 1956, is a statutory
organization engaged in promotion and development of khadi and village industries for providing
employment opportunities in rural areas, thereby strengthening the rural economy.
Main objectives of its formation are: (i) The KVIC has been identified as one of the major
organizations in the decentralized sector for generating sustainable rural non-farm employment
opportunities at low per capita investment, (ii) It helps in checking migration of rural population to
urban areas in search of employment opportunities, (iii) New reform programs are undertaken which
aim at revitalizing the khadi sector for enhanced sustainability of khadi; increasing incomes for
spinners and weavers; increasing employment; enhancing artisan’s welfare and gradually enabling
khadi institutions to stand on their own feet.
1.7 Coir Board
The Coir Board is a statutory body established under the Coir Industry Act, 1953 for promoting
overall development of the coir industry and improving the living conditions of the workers engaged
in this traditional industry.
The activities of the board for development of coir industries include: (i) undertaking scientific,
technological and economic research and development activities, (ii) developing new products &
designs and marketing of coir and coir products in India and abroad, (iii) promoting cooperative
organizations among producers of husks, coir fibre, coir yarn and manufacturers of coir products;
ensuring remunerative returns to producers and manufacturers, and (iv) promoting two research
institutes namely, Central Coir Research Institute (CCRI), Kalavoor, Alleppey, and the Central
Institute of Coir Technology (CICT), Bengaluru for undertaking research activities on different
aspects of coir industry, which is one of the major agro-based rural industries in the country.
II. State Government Institutions
The State Governments also execute different promotional and developmental projects and schemes
to provide number of supporting incentives for development and promotion of MSMEs in their
respective states. These are executed through the State Directorate ofIndustries, which has District
Industries Centres (DICs) under it, for implementing the central/ state level schemes.
a. State Financial Corporation (SFC)
The main objectives of SFCs are (i) to provide term loans for the acquisition of land, building,
plant, and machinery, (ii) to promote of self-employment, (iii) to encourage women entrepreneurs,
(iv) to bring about expansion of industry, and (v) to provide seed capital assistance.
b. State Small Industries Development Corporation (SSIDC)
SSIDC were set up in various states under the companies act 1956 as state government
undertakings to cater to the primary developmental needs of small, tiny and village industries in
the state/ union territories under their jurisdiction. SSIDC perform several functions which
include:
(i) procurement and distribution of raw materials (ii) supply of machine on hire-purchase basis,
(iii) construction of industrial estates. And (iv) providing assistance for marketing of products of
SSIs.
 c. Technical Consultancy Organizations (TCO)
Services of TCOs include (i) preparation of project profiles, (ii) undertaking industrial potential
surveys, (iii) identification of potential entrepreneurs, (iv) undertaking market research (v) project
supervision and rendering technical and administrative assistance, and
(vi) conducting EDPs.
III. Non-Government Support System
Besides the central and the state government agencies, there are some non-government agencies
supporting the cause of small-scale industries in the country. These agencies include non- government
organizations and industry associations. They provide a common platform to voice SSI needs and
initiate cooperative efforts. Some of these associations are as follows.
3.1 Indian Council of Small Industries (ICSI)
It was established in 1979 to help tiny, cottage and small industries and artisans of rural areas.
Membership of ICSI constitutes about 1500 associations of the decentralized sector. Main functions
of ICSI are (i) information dissemination, (ii) consultancy and managerial support, (iii)
entrepreneurship development, and (iv) training and research.
3.2 Laghu Udyog Bharti (LUB)
Laghu Udyog Bharti (LUB) was established in 1995 to promote and safeguard the interest of tiny
and small-scale industries. It has been given representation on the national and the state level
government bodies responsible for the development of SSIs. It is also responsible for undertaking
entrepreneurial training, providing support for technologyupgradation and marketing services. The
main functions of Laghu Udyog Bharti are: (i) entrepreneurial training, (ii) technology up
gradation, and (iii) marketing services.
3.3 India SME Technology Services Ltd. (ISTSL)
The objective of ISTSL is to render professional services for technology transfer and support
services to enhance market competitiveness of micro, small and medium enterprises, and promote
sustainable development. It provides a platform where micro, small and medium enterprises can
tap opportunities at the global level for acquisition of new and emerging technology or establish
business collaboration.
3.4 World Association of Small and Medium Enterprises (WASME)
WASME was established in 1981 to ensure business cooperation among its members. Its
membership represents chamber of commerce, small industries development corporations,
financial institutions and commercial banks, and other State Government agencies of developing
countries. It facilitates: (i) technology transfer, (ii) manpower training, (iii)
 maintaining register of experts/ consultants for organizing seminars, conferences, and providing
consultancy services, and (iv) acts as a clearing house of information and marketing services.
3.5 Federation of Indian Chambers of Commerce and Industry (FICCI)
FICCI was established in 1927 as the national agency through which the chambers of commerce and
trade association in India could crystallize their views on current economic problems. It serves as the
coordinating agency for the commercial and industrial interests.
IV. District Industries Centres
4.1 District Industries Centres (DIC)
The government has set-up District Industries Centres in each district to deal with all requirements of
small and village Industries. These centres undertake various programs for investment promotion at
the grassroot level by organizing seminars and workshops, extending support for trade fairs and
exhibitions organized by various Industry associations. DICs provide all the services and support to
MSME units under single roof, and through separate wing to look after the special needs of cottage
and household industries. DICs are headed by a General Manager who is of Joint/ Deputy
Commissioner level. The General Manager is assisted by senior officers, such as Managers, Officers
of diverse fields.
Objectives: Objectives of District Industries Centres (DIC) are to:
 Identify prospective entrepreneurs to take up viable projects.
 Identify viable projects and make demand survey on the available resources of the district and
plan for promotion of viable industries in the area.
 Prepare viable and feasible project reports.
 Strengthen the guidance cell to solve the problems of the entrepreneurs.
 Maintain up to date data on SSI sector.
 Recommend financial proposals to state financial corporation, financial institutions, and banks.
 Allot government land/ shed in industrial estates.
 Recommend for power connection.
 Arrange for EDP training.
 Arrange exhibition, fairs, publicity and visit of industrialists to trade fairs and industrialestates of
other states.
 Solve the problems of industrial units at the district level.
 Monitor the health of existing SSI units and the progress of those in the pipeline.
 Provide necessary marketing assistance.
 Monitor the implementation of the Prime Minister Rozgar Yojana.
 Assist revival of sick SSI units.
 Update the library in different DICs by procuring handbooks relating to industries.
5
4.2 Industrial Estates
Industrial estate is a cluster of well-constructed factories that are offered to entrepreneurs for
establishing their enterprises. It is normally established in the industrially backward areas so as to
minimize the regional imbalances. It provides all infrastructural facilities such as power, transport,
communication, finance, water, lighting and security at a reasonable cost.
The main objectives of industrial estates are: (i) to minimize congestion of industries in the cities, (ii)
to dispense/ decentralize industries in different regions in order to eliminate regional imbalances, (iii)
to encourage small entrepreneurs to establish their industries in specified areas by offering various
incentives and other facilities, (iv) to create a favorable atmosphere for the healthy growth of SSI, and
(v) to accelerate employment opportunities.

Incubators and Accelerators

Incubators and accelerators are both programs that support startups, but they differ in the stage of the
business they focus on, their funding sources, and the length of their programs:
 Stage of business
Incubators support startups in the early stages, while accelerators support startups that are already
established and have a minimum viable product (MVP).
 Funding sources
Incubators are often supported by academic institutions and government entities, while accelerators are
usually run by venture capitalist firms.
 Program length
Incubator programs can last anywhere from six months to two years, while accelerator programs are
usually shorter, lasting between two weeks and six months.
 Application process
The application process for accelerators is open to anyone, but is highly competitive.
 Equity
Accelerators may charge a startup a small amount of equity in exchange for their support.
Incubators can help entrepreneurs turn their ideas into fully operational businesses. Accelerators can
help startups grow quickly by collaborating with existing companies.
Venture Capital Firms
Venture capital (VC) is a type of private equity financing provided by investors to startup companies
with high growth potential. Venture capital generally comes from investors, investment banks, and
financial institutions. It is typically provided by investors who expect to receive a high return on their
investment. Venture capital firms (VCs) invest in startups and companies at various stages of growth.

6
 Angel Investors
An angel investor provides initial seed money for startup businesses, usually in exchange for ownership
equity in the company. Angel investors are wealthy private investors focused on financing small business
ventures in exchange for equity. Unlike a venture capital firm that uses an investment fund, angels use
their own net worth.
Peter Thiel, co-founder of PayPal, has become an influential angel investor, providing early-stage
funding for companies like Facebook and Airbnb. Ron Conway, known as the “Godfather of Silicon
Valley,” has a vast portfolio of successful investments in companies such as Google, Twitter, and
Pinterest.
Startup Hubs and Clusters
Startup hubs are places that aim to provide the 'ideal' conditions for founders to quickly grow their
young businesses. Good ones can remove some of the risk and uncertainty involved in launching a
company. A startup hub is a physical space that provides resources and support for entrepreneurs to grow
their businesses:
 Networking: Startup hubs offer networking opportunities with other entrepreneurs and potential
investors.
 Office space: Some hubs offer subsidized office space.
 Mentorship: Startup hubs can provide access to mentors and other resources to help
entrepreneurs grow their businesses.
 Workshops and seminars: Startup hubs may offer workshops, seminars, and other skill
development programs.
 Accelerators and incubators: Startup hubs may include accelerators and incubators.

A business cluster is a geographic concentration of interconnected businesses, suppliers, and associated

institutions in a particular field. Clusters are considered to increase the productivity with which
companies can compete, nationally and globally. Clusters encompass an array of linked industries and
other entities important to competition.
They are defined as groups of firms, related economic actors, and institutions that are located near each
other and have reached a sufficient scale to develop specialised expertise, services, resources, suppliers
and skills. Certainly, clustering has its advantages such as increased productivity, lower operational
costs, and a competitive advantage on the market.
Role of Educational institutions
Educational institutions can play a vital role in building entrepreneurial capacity by providing training
and education, and by creating supportive environments. Entrepreneurship education through these
institutions can help in increasing awareness of entrepreneurship as a viable career option and the

7
support received through incubation can help student entrepreneurs overcome hurdles to starting and
growing their businesses.
Institutions offer education and training programs to enhance entrepreneurial skills and knowledge. They
provide workshops, courses, and mentoring opportunities to equip individuals with the necessary
business acumen, management techniques, and industry-specific expertise.
 Education and training
Educational institutions can offer courses, workshops, and mentoring to help individuals develop
business acumen, management skills, and industry expertise.
 Supportive environment
Educational institutions can create a supportive environment where aspiring entrepreneurs can access
resources, funding, networks, and mentorship to start and grow their businesses.
 Entrepreneurial mindset
The education system can help establish an entrepreneurial mindset in citizens by shaping their attitudes
and approaches to business.
 Technical skills
Education can help entrepreneurs gain the technical skills they need to run their businesses.
 Entrepreneurial consciousness
Entrepreneurship education can help train students' entrepreneurial consciousness, strategic choice, and
opportunity identification.
Role of Government and Private agencies in supporting entrepreneurs
The government and private agencies play a vital role in supporting entrepreneurs by providing
resources, training, and other assistance:
 Government
The government can support entrepreneurs through:
 Financial assistance: The government can provide financial assistance for startups
through schemes like Startup India Seed Fund Scheme.
 Training: The government can provide training to entrepreneurs.
 Technology assistance: The government can provide technology assistance to
entrepreneurs.
 Marketing support: The government can provide marketing support to entrepreneurs.
 Policy formulation: The government can formulate policies to support entrepreneurs.
 Creating an enabling environment: The government can create an enabling
environment for entrepreneurs by reducing bureaucratic red tape and creating a
supportive legal framework.
 Private agencies

8
Private agencies, such as non-governmental organizations (NGOs) and industry associations, can
support entrepreneurs in a number of ways, including:
 Financial assistance
Providing loans, grants, or investments to help entrepreneurs access finance
 Technical assistance
Offering training programs, mentorship, and access to business experts to help entrepreneurs develop
the skills they need to start and run a business
 Market access
Providing marketing support, networking opportunities, and access to distribution channels to help
entrepreneurs reach markets
 Infrastructure development
Helping to build infrastructure such as roads, electricity, and water supply to help entrepreneurs start and
grow their businesses
 Collaboration with local governments
Working with local governments to promote entrepreneurship
 Sub-contract exchanges
Establishing sub-contract exchanges to help entrepreneurs record their capacity and connect with buyers
 Technical consultancy
Providing services such as preparing project profiles, feasibility studies, and market research
 Setting up common facilities
Working with other agencies to set up common facilities and cooperative ventures in technology,
marketing, and other support systems
Kerala Startup Mission (KSUM)

The Kerala Startup Mission (KSUM) is the nodal agency of the government of Kerala for promoting
entrepreneurship in the state. It is also the implementing body for the Kerala Technology Startup Policy
that supports the state’s startup ecosystem through the various schemes and support programs. KSUM
was founded in 2006, with the goal to promote technology-based entrepreneurship activities and to create
the infrastructure and ecosystem required to support high-end technology-based startup businesses.
KSUM acts as a springboard for budding entrepreneurs who wish to launch themselves into the world
of technology-based careers and has helped develop several innovative products and solutions. Over the

9
past decade KSUM has been able to build a vibrant startup ecosystem allowing technology entrepreneurs
to pursue their goals and dreams by providing them complete support in the startup life cycle. Today
KSUM along with sector-specific partner organisations, boast of 2900 + registered startups, 10 Lakh +
sq. feet of incubation space, 40+ incubators and 300+ innovation centres across the state of Kerala.
Kerala provides the best startup ecosystem to start the business and [Link] Startup Mission
provides a ‘Unique ID’ for startups. Unique ID will help startups to get identified with a single code
which can be used in all correspondence of the startup. This ID will help startups to get identified from
the single search option provided in the KSUM portal. Any stake holder from the Startup Ecosystem
from across the world will be able to quickly go through the profile of the startup.

Here are some other key organizations in Kerala's startup ecosystem:

 Kerala Technology Innovation Zone (KTIZ): A global innovation incubator for multiple
technology sectors
 Super Fab Lab: Located in the Integrated Startup Complex at KTIZ in Eranakulam
 Future Technologies Lab: Located in the Integrated Startup Complex at KTIZ in Eranakulam
 CUSAT Fablab: Located at CIITIC - CUSAT, near University Guest House, CUSAT
 Maker Village: Located in the Kerala Technology Innovation Zone in Kinfra Hi-Tech Park,
Kalamassery, Kochi
 BIONEST: Located in HMT Colony, North Kalamassery, Kalamassery, Ernakulam
LEAP Kerala Mission
Kerala Startup Mission (KSUM) has been at the forefront of supporting startups and entrepreneurs in
Kerala through its incubation centers. Now, they are going to transform the incubation centres, partner
incubation centers, and Innovation and Entrepreneurship Development Centres (IEDC) owned
incubation centers into a vibrant coworking space called LEAP Coworks. LEAP, which stands for
Launch Empower Accelerate Prosper, embodies our commitment to fostering innovation, collaboration,
and success in the startup ecosystem.
Role of entrepreneur’s associations in Entrepreneurship Development
Entrepreneurs associations play a key role in entrepreneurship development by providing support to
entrepreneurs in a number of ways, including:
 Education
Entrepreneurship associations can educate students about entrepreneurship and help them map out their
path through the major.
 Networking
Entrepreneurship associations can provide opportunities for entrepreneurs to connect with other
entrepreneurs, investors, and industry experts.

10
  Funding
Entrepreneurship associations can provide access to funding for startups and small and medium-sized
enterprises (SMEs).
 Business development
Entrepreneurship associations can provide business development support, such as training, mentoring,
and coaching.
 Innovation resources
Entrepreneurship associations can provide access to innovation resources, such as research and
development facilities, innovation labs, and technology transfer offices.
 Policy advocacy
Entrepreneurship associations can advocate for policies and programs that support startups and SMEs.
 Market access
Entrepreneurship associations can help startups and SMEs access markets by providing information on
market opportunities and connecting them with potential buyers.
Role of Self-Help Groups in Entrepreneurship Development
Self-help groups (SHGs) play a significant role in entrepreneurship development by helping people start
businesses and generating income. SHGs also provide networking and support to their members.
Members can share their problems and concerns with each other and receive support and encouragement.
This helps to build confidence and motivation, which are important for entrepreneurship development.
 Financial support: SHGs provide collateral-free loans to people who may have difficulty getting
loans from banks. These loans are given at market-driven rates and with terms and conditions
decided by the group.
 Training and skill development: SHGs offer training programs to help people develop skills that
can lead to self-employment and business ownership.
 Capacity building: SHGs help people build the capacity to generate income and participate in the
development process.
 Collective leadership: SHGs resolve conflicts through mutual discussion and collective
leadership.
 Risk sharing: SHG members share risk collectively, which can boost confidence.
 Social safety net: SHGs have served as a social safety net, especially during the pandemic.
 Microfinance: SHGs are a key source of microfinance services for the poor.
 Banking services: SHGs act as a way for formal banking services to reach people in rural areas.
 Savings habits: SHGs encourage people to save money.
SHGs have been effective in empowering women and improving their economic condition

11