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Genesis of the Entrepreneurship Development Activities in Gujarat |
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| 1. |
PREAMBLE |
| 2. |
Positive Environment to achieve initial Growth in light of above. |
| 3. |
Strategy Adopted. |
| 4. |
Recrystilised phase of Entrepreneurship Development. |
| 5. |
Issues and Learning from experience. |
| 6. |
CED’s Role. |
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| 1. |
PREAMBLE |
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The process of socio economic change in positive direction is the intrinsic part of human civilization. The human efforts were put to unearth the treasures of resources of Mother Nature by inbuilt curiosity and further augment them to generate value added products or services to offer man kind the peaceful, conformable and rich life with better living conditions. The intangible human assets in form of creativity and knowledge become driving force in the entire mechanism. |
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If above efforts are supported by proper inputs like finance, infrastructure, technology and better communication and logistic systems they ultimately yield the industrialization as an ongoing process which is must for acceleration of economic growth and induction of social changes. This is the relevant definition of entrepreneurship which focuses mainly on change management. The faster rate of such change can only be achieved by genuine industrial policies and innovative entrepreneurship. Entrepreneurial density innovative propensity and management capability with newer and newer managerial skill in the society in a particular period determines the character and future of economic development of that particular society/State/Country. |
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As separate State Gujarat started with following focal points to accelerate the industrial development which did not attained the expected level in sixties. |
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Dispersed industrial growth |
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Utilization of resources with mobilization of capital from financial institution to exploit emerging opportunities for rapid industrial growth. |
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To create more jobs |
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Involving youth by imparting skills |
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To create entrepreneurs. |
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| 2. |
Positive Environment to achieve initial Growth in light of above. |
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Initial expansion industrialization started between Bombay – Surat. In district Valsad, Vapi became focal point is close to Bombay. GIDC set up a large industrial area to welcome industrialists from Bombay. Same phenomenon was observed at Baroda which was then having considerable growth in basic drugs and formulation packaging and packing industry where small industries were started by families having sound basis in cash crop cultivation. Baroda became a Petrochemical industry centre with IOC – Oil Refinery, IPCL, Gujarat Fertilizer and Nandesari GIDC down with stream industrial area along with spread effect took place. Pockets where capital formation arising from agricultural and related activities plus better activities and communication network was existent places became potential growth Centers. At such centers synchronized efforts were to be made to encourage entrepreneurial activities with promoting participation of local entrepreneurs. |
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Natural resources were available as minerals in the areas namely Panchmahals, Kachchh, Sabarkantha where agriculture was not rich. The major minerals and minor minerals exploitation was negligible leaving the huge deposits to be exploited like Bauxite, Quartz, Bentonite, China clay, Limestone Dolomite, Feldspar. This had potentiality of creating local employment. |
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Gujarat longest costal area offered potential from Salt and Marine Chemicals Production, Cement Industry to deep sea fishing and processing of fish manufacturing and traditional business of small vessels manufacturing and repairing got revived. |
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White revolution was making rural economy stronger with increasing rural milk co operative and district dairies for processing milk. In the year 1970-71 there were 1738 such societies having 330000 members selling produce worth Rs.314.7 million with 13.9 million worth profit which was ploughed back or got absorbed either in rural economic activities or rural savings. That growth rate was 5 times more compared to 1960-61 when state was separated. This was the indication of strong fundamentals of rural economy of Gujarat which could further build diverse economic activities including industry or micro enterprise. |
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Triggered by efforts of Union Agricultural Ministry in 1965 and research by Agricultural Universities and I.A.R.I., the green revolution started in Gujarat with increasing use of Fertilizers, pesticides, improved seeds and better cultivation and harvesting equipment’s. Gujarat was forth in using better inputs and in productivity. Horticultural activities were strengthened in South Gujarat, Kheda and Junagadh with respect to mangoes, sapotas, Bananas, Guavas. Production of Vegetables, Cereals, pulses and oil seeds increased. This offered potential for processing industry manufacturing of harvesting equipment’s and servicing units. |
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Discovery of natural oil and gas reserves triggered setting up of Oil Refinery followed by Petrochemical and fertilizers complex, refineries and heavy chemical projects around Baroda provided avenues for forward integration to down stream products in addition to scope for Engineering Fabrication repairing and servicing units. This coupled with synthetic dyes and intermediates for textiles units at Ahmedabad attained growth. |
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It was good mix of potentiality with respect to industrial opportunities, natural resources, geographical placement backed by steadily improving rural economy. |
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| 3. |
Strategy Adopted. |
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In the early seventies Gujarat Govt. launched major thrust on industrialization on the backdrop of an environment in institutional support and infrastructure need for the set up of industries for the entrepreneurs. |
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One of the strategic outcomes was to develop strong entrepreneurs. They were provided systematic information, guidance and managerial inputs package followed by need based technical training orientation and financial assistance. Initial results were encouraging. The package was further formalized in the form well defined training programme. Motivational inputs were also carefully included to improve their risk taking abilities, decision making process, problem solving attitude, planning abilities, clarity of goal etc., and this was done initially by Entrepreneurship Development Programme Cell in GIIC supported by GSFC-GSIC-GIDC and Govt. of Gujarat which later on separated as Centre for Entrepreneurship Development. |
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Added to this, a well structured support system was evolved to provide necessary physical inputs for enterprise launching. |
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GIDC constructed small sheds in its industrial estates to accommodate all types of entrepreneurs in geographically dispersed way. Trained entrepreneur had easy access to it. GIDC played important role by providing sheds on hire purchase basis for the first time in the country. It provided moratorium for two years for young Entrepreneurs. |
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A new entrepreneur scheme for financial assistance was formulated to finance entrepreneur with liberal terms with respect to margin, debt equity ratio, moratorium period and repayment period by Gujarat Industrial Investment Corporation (GIIC) and Gujarat State Financial Corporation (GSFC). New organization called Gujarat Industrial Technical Consultancy Organization Limited (GITCO) was created to assist for Project Formulation and Guidance for persons seeking to make investment. |
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Emerging opportunities available in areas were identified and made available in areas like exploration of minerals, development of agricultural and horticultural activities, establishment of large projects offering backward and forward linkages, ancillary down stream projects, newer raw materials especially in polymers and alloys, strong knowledge and technology base existing in textiles, dyes, pigments and auxiliaries etc., areas. This with the introduction of all over the States like Seminars, publication, single window approach in addition to input in training programmes at local level. |
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Traditional business skills in items and jewellary were encouraged. International exposure prompted to take diamond polishing on job work basis from industrial centers like Netherland and Belgium. This led to start need based functional informal training programmes which were formalized later on by I.T.Is, Polytechnics and some N.G.Os which also updated the skills of self trained workers by exposure in emerging industrial clusters to the exact need of unit. This had direct bearing on economy of Surat, Valsad, Bhavnagar, Amreli and Banaskantha districts rural economy. |
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To strengthen micro enterprise in rural areas in early seventies rural industrial project was implemented which played due role and was carried further and boosted by Bankable credit scheme for cottage sector in late seventies. |
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| 4. |
Recrystilised phase of Entrepreneurship Development. |
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Entrepreneurship Development Strategy was successful in objectives in its initial phase of seventies as can be seen from the studies conducted by G K Chawlas Research of five selected industrial clusters geographically dispersed in Gujarat between 1971-81 as sample namely Halol, Pardi, Kalol, Vadhvan and Ankleshwar. Local rural entrepreneurs with agriculture as former occupation was emerging as potential source of entrepreneurs which were motivated by environment created by systematic efforts of financial and infrastructure agencies which shows 6.10% increased share in finance from GSFC from 6.10% in 1972 to 23.74% in 1982. Similarly growth of functioning units in GIDC was from 9.5% in 1971 to 14.72% in 1982.
At the same time CED which was separated from an independent agency in 1979 started penetrating the rural areas including Zero Industrialized talukas and started conducting Entrepreneurship Development Programmes with geographical dispersal also conducted survey to study source of entrepreneurs and background of trained entrepreneurs
As can be seen from table 59% of the entrepreneurs were hailing from same taluka followed by 16% from the same district which is indicative of 75% local entrepreneurs participation.
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12% entrepreneurs were from rural and 20% from semi urban background out of which 4% were from agricultural occupation in case of untrained entrepreneurs followed by 26%. While collar workman and 19% unemployed. Only 6% and 8% were from rural and semi urban background indicative of lesser appeal to them by only exposure of industrial environment. However it showed the good automatic initiation of an automatic growth process at rural and semi urban level. |
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Survey separately conducted by T C Trivedi and Shirish Shah of CED reveled the participation of 13% present agriculturist as ED trainees and 26% had Agriculture as family occupation which means 13% participants had exist or diversification from agriculture and opted for entrepreneurship.
The analysis is just indicative of objective achieved for dispersed entrepreneurial growth by local entrepreneurs and increased sensitization of rural entrepreneurial source having backing of improving rural economy. It provided clue to entrepreneurial development at grass root level. |
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Micro Enterprise as precursor to Entrepreneurial Development. |
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Micro Entrepreneurship and rural economic activities were not playing a significant role other than the milk production and agriculture activities though Gujarat natured 2454 primary Non Agricultural Credit Societies with 1785000 primary members with share capital of Rs.524.04 million up to 1981/82. Equally Central Co-operative Banks numbering 18 with 789 branches having geographical spared and share capital worth Rs.3.2 million (Govt.) Rs.69.00 million others plus deposits of Rs.4464.7 million was financing figures kept (1981/82) which could have provided strong credit delivery system and financing to diverse rural economic activities especially non farm sector or agro linked peripheral activities. It was not matching the expected levels to changing needs. |
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S.F.D.A. scheme which was made more effective was merged with other schemes to form. Integrated Rural Development Programme (IRDP) in 1978-79 which onwards 2nd October 1980 proliferated in country. Gujarat took the due advantage of the scheme to boost meaningful economic activities in rural areas which had favorable ground. It took training for self employment (TRYSEM) seriously and trained rural youth in skills and provided trades for tool kits, shops
and like. It improve scheme by using the Cottage Industries Credit Schemes. In this sector it introduced Bankable scheme of 365 types and provided seed capital by subsidy and basic trades of Rs.1,00,000/-. This type of informal integration has completed the spectrum of rural economic activities especially involving the youth suffocated by over burdening agriculture as only means of living to take complementary non farm productive or servicing activities. |
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Formal Technical Training as Synergetic Factor. |
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Number of I.T.I.s and Polytechnic formulated and appropriated their training courses to complement the industrial growth by providing skilled manpower which at later stage proved to be one of the potential sources of an entrepreneur. In some of N.G.O offered informal technical training in plastic processing, ceramic and diamond cutting polishing which later on formalized by I.T.Is which contributed a great deal to the phenomenal growth of skill specific industries. It is provided skilled manpower for industries but also made available young persons for taking to Micro Enterprises which related repair on apart from tiny manufacturing units. |
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| 5. |
Issues and Learning from experience. |
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Entrepreneurship Development especially in rural areas requires to synchronized efforts of all related agencies. However it necessitates the thoughtful planning and faithful implementation for optimum use of resources and objective assessment to learn from feed back. |
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Integrated administrative support is necessary to achieve the above. Gujarat EDP Model developed by EDP, GIIC and then adopted by CED which was replicated by CED and EDP in other state could only become effective because if industries commissioner as Chairman of ED Cell and CED. |
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Innovative N.E.Scheme launched by GIIC, GSFC jointly contributed lot to industrial growth by increasing participation of First Generation Entrepreneur in all areas including rural. That shows any innovative scheme with Softer Components like margin money, seed capital and capitalization of interest during gestation period. Similar innovative schemes should be involved to facilitate the target group in question. |
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Strong rural economic activities becomes of the dynamics of entrepreneurial development. Present well structured Credit delivery system at grass root should be integrated in proper way to accelerate the process. |
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Appropriate infrastructure with timely availability at competitive price is also contributing to success. To create such infrastructure proper financial schemes should be involved to attract small entrepreneurs who can take such ventures as entrepreneurial activities in addition to Government agencies. |
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Sensitization of Rural Banks, Co-operatives, Credit Societies, and District Co-op. Banks is necessary to encourage the development of non farm activities in rural and semi urban areas. |
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Initial phase of industrialization perplexed the opportunities of sophistic nature like plastics, engineering, and ceramics to rural areas by proper campaigns. Now the material based opportunities which also should be percolated down for balanced growth and moderate the unplanned urbanization. |
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Training Programmes. |
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Size of structured monotonous and mono-functional programmes should be reduced/restricted and more and more short programme module should be involved to address the needs of present and future requirements and all the modules should be so designed as to preserve inter relation, continuity and still Functional intensity if taken as standalone module. By taking such modules during enterprise launching and managing at convenient stage entrepreneurs will understand more the applicability and relevance in managing the affairs. |
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There is no systematic method of evaluating the design and input of programmes. Outcome is measured numerically and not qualitatively. The qualitative evaluation of programme design, inputs and faculty is utmost necessary for continuous improvement of programmes. In absence of this any programme will have only academic values vis-à-vis application utility. |
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Consultancy Services. |
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After project is launched also assistance is needed for solving problems related to Marketing, Finance and Management issues including technical aspects. This requires State sponsored agencies support with good networking |
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| 6. |
CED’s Role.
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CED has played important role initially as ED Cell. In GIIC since 1970 and then as CED since 1979 in festering entrepreneurial growth by systematic train programmes in Urban, Semi Urban and Rural areas. However its role in rural entrepreneurship has remained noteworthy. In has conducted 1098 no. of training programmes in 332 different centers to train 28629 trainees who have successfully completed the training and have established 10285 units in cottage or Small Scale manufacturing servicing and trading units.
The training includes information; managerial and motivational inputs followed by personal guidance and need based follow up.
Looking to the present need some new dimensions are added to the activities which includes development of counseling Centres for existing and new entrepreneurs to assist in new venture. Counsel them for preparing survival or growth strategies. A diploma programme is also launched in Gujarat first time to train graduates from various facilities to take up entrepreneurial opportunities which requires considerable creativity and skills.
By improving the productivity, value addition and managements systems of existing cottage/small units through various counseling inputs or enhancing their financial base through more loan up gradation efforts are also undertaken schedule caste and tribe entrepreneurs and artisans practicing traditional craft are put on priorities for the purpose. The institute as pioneer is still contributing to the efforts with same magnitude with co-ordinate efforts if agency under chairmanship of industries commissioner, Gujarat.
In 1960-61 Gujarat had 2169 units meaning that these were local entrepreneurs which grew to 15849 in 1970. In the year 2000 Gujarat has 75 large units and 243000 Small units meaning that there are more than 200000 entrepreneurs. Even if take into account mortality of last 40 years which reveals that about 54000 units were closed down during that period. This means that approximately 150000 entrepreneurs are surviving and successful.
The role played by CED is catalytic but it has very crucial and even in late sixties entrepreneurship has confined to persons who had family wealth. It has not thought of that normal technical graduate or trader can run an enterprise with borrowed funds and supporting infrastructure and in early days of seventies. It has joint efforts of such organization like State Financial Corporation for capital
industry, Gujarat Industrial Development Corporation or ready shed with infrastructure on loan and Gujarat Small Industrial Corporation for providing controlled raw materials, new generation of Gujaratis took up to setting up of their own Enterprises.
The business spirit of Gujarat by supported by Collective action of Govt. organisation brought about this phenomenal growth. The charged Gujarat brought it up if irreverent of industrial development, a high income growing economy with a market basis of existing enterprises brought about all leading business houses of country and to locate their units in Gujarat. |
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