Amity Business School

Module 5

Project
Management
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SMALL SCALE Business
A small-scale business is typically characterized by:
• Limited capital investment: Lower financial input
• Fewer employees: Smaller workforce size.
• Lower production capacity: Reduced output levels.
• Localized operations: Serving specific regional or community markets.

In India, under the Micro, Small, and Medium Enterprises Development

(MSMED) Act, 2006, a small enterprise is defined as:
• Investment: Not more than ₹10 crore.
• Annual Turnover: Not more than ₹50 crore
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STEPS AND PROCEDURE FOR SETTING UP SMALL SCALE
• Module [Link]
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Role of Financial Institutions
• Financial institutions perform a critical role in the economy. The
central government organization controls banking and non-banking
financial institutions.
• Moreover, these institutions fill the gap between idle savings and
investment and its borrowers, i.e., from net savers to borrowers.
• The roles such as money supply regulation, banking services,
insurance services, capital formation, investment advice, brokerage
services, pension fund services, trust fund services, financing small
and medium-scale enterprises, and acting as a government agent
for economic growth are played by the financial institutions.
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E-commerce (electronic commerce) is the buying and selling of goods and services, or the
transmitting of funds or data, over an electronic network, primarily the internet.

These e-commerce transactions typically fall within four types: business-to-business (B2B),
business-to-consumer (B2C), consumer-to-consumer or consumer-to-business.
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E Auction
• An eAuction is a transaction between sellers
(the auctioneers) and bidders (suppliers in the
business-to-business scenarios) in an electronic
marketplace.
• It can occur business-to-business, business-to-
consumer, or consumer-to-consumer, and
allows suppliers to bid online against each
other for contracts against a published
specification.
• This kind of environment encourages
 Definition Amity Business School

• E-auction is the process of buying and selling products or

services online through an auction platform.

• The first e-auction was held in 1995 by the U.S. Department

of Treasury and since then, online auctions have become a
popular way to buy and sell everything from gadgets to real
estate.

• E-auctions are conducted in real-time and usually last for a

set period of time, during which buyers can place bids. The
highest bidder at the end of the auction wins the product or
service.
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• E-auctions are online auctions where buyers can bid on items and
purchase them electronically. The terms of the auction are
typically set by the seller, and the highest bidder at the end of the
auction wins the item. E-auctions can be used for a variety of
items, including goods, services, and even real estate.

• E-auctions have become increasingly popular in recent years as a

way to sell items quickly and efficiently. They are often used by
businesses to dispose of surplus inventory or unsold
merchandise. E-auctions are also sometimes used by
government agencies to sell surplus property or assets.
 Types of E Auction Amity Business School

1. Forward Auction
Definition: A seller offers goods or services, and
multiple buyers place competitive bids to purchase
them. The highest bidder wins.
• Example:
An online art platform conducts a forward auction
where a painting is listed, and interested buyers place
bids. The buyer who offers the highest price within the
auction period wins the painting.
 Types of E Auction Amity Business School

2. Reverse Auction
Definition: A buyer posts a requirement, and multiple
sellers bid to offer the lowest price. The lowest bid
usually wins.
• Example:
A government department needs 1,000 office chairs. It
posts the requirement on a procurement portal.
Multiple vendors place decreasing bids. The vendor
offering the lowest price gets the contract.
 Types of E Auction Amity Business School

3. Sealed Bid Auction

Definition: All participants submit their bids
confidentially. The highest or lowest (depending on
auction type) wins, without knowing others' bids.
• Example:
A company invites contractors to bid for a project.
Each contractor submits a sealed bid online. The
company opens all bids after the deadline and selects
the most favorable one.
 Types of E Auction Amity Business School

4. Dutch Auction
Definition: A Dutch Auction is a type of auction where the price starts high and keeps
going lower and lower until someone is ready to buy.
1. The seller sets a high starting price.
2. The price keeps decreasing over time (every few seconds or minutes).
3. As soon as one buyer accepts the current price, the auction stops, and that buyer
wins the item.
A company wants to sell 100 phones.
• The auction starts at ₹50,000 per phone.
• Every 2 minutes, the price drops by ₹1,000.
• At ₹42,000, a buyer says, "I’ll buy!"
• The auction ends, and the buyer gets the phone at ₹42,000.
 Advantages Amity Business School

•Saves Time and Money

•No need to travel or attend physical auctions.
•Everything happens online, which saves time and cost.

•More Buyers and Sellers

•People from anywhere can join, so there is more competition.
•This often results in better prices.

•Transparent Process
•Everyone can see how the bidding is going.
•It is fair, and reduces chances of corruption.

•Quick Results
•Bidding happens fast and ends quickly.
•Buyers and sellers get results immediately.

•24/7 Availability
•Can be done anytime, from anywhere with internet access.
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Disadvantages
Needs Internet and Tech Knowledge
People must have a good internet connection and know how to use computers or
mobile phones.
Risk of Fake Bidders or Fraud
Sometimes people may misuse the system or place fake bids.
No Physical Inspection
You can't touch or see the product in person before buying.
Technical Issues
If there is a power cut or internet problem, you may miss the auction.
May Feel Impersonal
No face-to-face interaction, which some people prefer for trust and negotiation.
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How to Participate in E Auction

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SEZ
• A Special Economic Zone or SEZ is a specially marked
territory or enclave within the national borders of a country
that has more liberal economic laws than the rest of the
country.
• An SEZ is an enclave within a country that is typically duty-
free and has different business and commercial laws chiefly
to encourage investment and create employment.
• Apart from generating employment opportunities and
promoting investment, SEZs are created also to better
administer these areas, thereby increasing the ease of doing
business.
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SEZ Background
• An SEZ Policy was announced for the very first time in 2000 in order to overcome the obstacles
businesses faced.

• There were multiple controls and many clearances to be obtained before starting a venture.
• Infrastructure facilities were shoddy and well below world standards in India.
• The fiscal regime was unstable as well.
• In order to attract huge foreign investments into the country, the government announced the
Policy.
• The Parliament passed the Special Economic Zones Act in 2005 after many consultations and
deliberations.
• The Act came into force along with the SEZ Rules in 2006.
• However, SEZs were operational in India from 2000 to 2006 (under the Foreign Trade Policy).
• Note:- A precursor to the SEZs, the Export Processing Zones were set up in India well before.
The first EPZ came up in Kandla in 1965 to promote exports. This was the first EPZ not only in
India but in all of Asia as well.
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SEZs Facilities & Incentives
• The government offers many incentives for companies and businesses established in SEZs. some of the
important ones are:

• Duty-free import or domestic procurement of goods for developing, operating and maintaining SEZ units.
• 100% Income tax exemption on export income for SEZ units under the Income Tax Act for first 5 years,
50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years. (Sunset
Clause for Units will become effective from 2020).
• Units are exempted from Minimum Alternate Tax (MAT).
• They were exempted from Central Sales Tax, Service Tax and State sales tax. These have now
subsumed into GST and supplies to SEZs are zero-rated under the IGST Act, 2017.
• Single window clearance for Central and State level approvals.
• There is no need for a license for import.
• In the manufacturing sector, barring a few segments, 100% FDI is allowed.
• Profits earned are permitted to be repatriated freely with no need for any dividend balancing.
• There is no need for separate documentation for customs and export-import policy.
• Many SEZs offer developed plots and ready-to-use space.
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Cluster Development
• Cluster as a critical mass of enterprises located in
geographical proximity to each other.
• There is no universally accepted way of establishing the exact
boundaries of a cluster. What is perceived as close in one
location may represent an insurmountable distance in others;
distance can be influenced by the availability of transport
facilities, as well as by cultural identity and social values.
• Moreover, the number of enterprises necessary to be
considered as constituting a cluster can vary depending on
the size of a country.
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• Enterprises within clusters share many common features. Cluster-

based enterprises share one or more of the following characteristics:
• First, they may use the same suppliers of raw materials and other
inputs, especially when they are active in the same industrial sector.
• Second, they may cater to the same markets and clients (e.g. the
local handicraft market), even when producing different goods.
• Finally, all enterprises share the same territory, its infrastructure,
services and, in many cases, a common cultural identity. Enterprises
within a cluster also often face common obstacles and challenges
including, for example, a lack of infrastructure or limited access to
capital.
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• Besides enterprises, clusters also include support

institutions, such as:
• Business associations;
• Business development service (BDS) providers;
• Financial service providers, including banks;
• Public authorities such as local, regional and national
governments and regulatory agencies;
• Training agencies such as vocational schools,
universities, etc.
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• How does cluster development work?

• According to experts, cluster development is
the economic development of business clusters
or residential areas to permanently protect
open spaces and environmental resources.
Under this scheme, houses are built closer
together on a part of land rather than spread
evenly on large lots over the whole
development.
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