Maharashtra HSC Small Industries & Self-Employment flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

MSME classification criteria

Enterprises are classified as micro, small or medium using two combined criteria: investment in plant and machinery or equipment, and annual turnover, as notified under the MSMED Act, 2006.

Micro enterprise limits

A micro enterprise has investment in plant and machinery or equipment up to ₹1 crore and annual turnover up to ₹5 crore, with the same limits applying to manufacturing and services units.

Ancillary industrial undertaking

An industrial unit that supplies at least 50% of its production or services to one or more parent units, a category recognised before the MSMED Act, 2006 replaced it with the MSME framework.

Cottage industry

A traditional, labour-intensive enterprise run by artisans at home or in small workshops, using local raw material and simple tools, such as handloom, khadi, coir and handicraft units.

MSME employment share

The MSME sector is estimated to employ over 11 crore persons in India, making it the second-largest source of employment after agriculture and a major absorber of rural labour.

Ancillarisation

A linkage in which small units manufacture components, sub-assemblies or provide job work for large parent companies, reducing the latters' costs and spreading industrial activity regionally.

Nursery for entrepreneurship

The role of small industry in allowing first-generation entrepreneurs to enter business with low capital, learn management skills and later grow into larger enterprises.

Balanced regional development

The contribution of small industries to spreading economic activity into semi-urban and rural areas, since they need little capital and can use locally available raw material and labour.

Limited Liability Partnership

A body corporate registered under the LLP Act, 2008, with perpetual succession, where partners' liability is limited to their agreed contribution and no partner is liable for another's wrongful acts.

One Person Company

A private company with a single member and a nominated successor, offering limited liability; it must convert to a private or public company when prescribed thresholds are crossed.

Private limited company limits

A company with between 2 and 200 members, at least 2 directors, restricted share transfer, and a name ending in 'Private Limited', registered under the Companies Act, 2013.

Udyam registration

A free, online, paperless registration based on Aadhaar and PAN that replaces Udyog Aadhaar and is the gateway for MSMEs to claim scheme benefits and delayed-payment protection.

Break-even point formula

Break-even point in units equals fixed cost divided by the difference between selling price per unit and variable cost per unit; at this volume total revenue equals total cost.

Technical feasibility

The part of a feasibility study examining location, plant capacity, machinery, production process, raw material availability, utilities, layout and manpower needed for the proposed project.

Demand forecasting methods

Techniques used to estimate future sales, including trend projection, moving averages, regression analysis, the Delphi method, expert opinion and test marketing of the product.

Project report contents

A document covering promoter details, product description, market analysis, technical plan, financial projections and implementation schedule, used for loan appraisal and internal planning.

Working capital cycle

Inventory days plus receivable days minus payable days; a shorter cycle lowers the funds locked in operations and reduces the working capital the enterprise must arrange.

Mudra loan categories

Shishu covers loans up to ₹50,000, Kishore ₹50,001 to ₹5 lakh, Tarun ₹5 lakh to ₹10 lakh, and Tarun Plus up to ₹20 lakh for non-farm micro enterprises.

Fixed versus working capital

Fixed capital funds land, building, plant and machinery for the long term, while working capital funds raw material, wages, stock and day-to-day expenses for the short term.

Credit guarantee cover

Protection offered by the Credit Guarantee Fund Trust for Micro and Small Enterprises, which guarantees eligible collateral-free loans so lenders can advance funds without security.

Public procurement policy share

Central ministries and public sector enterprises must buy at least 25% of annual purchases from MSEs, including 4% from SC/ST-owned and 3% from women-owned enterprises.

Stand-Up India scheme

A scheme providing bank loans of ₹10 lakh to ₹1 crore to at least one SC/ST and one woman entrepreneur per bank branch for setting up greenfield enterprises.

District Industries Centre

The district-level agency that guides entrepreneurs on Udyam registration, subsidy applications, scheme eligibility and coordination with banks and technical institutions.

SIDBI role

The Small Industries Development Bank of India is the principal financial institution for MSME promotion, refinancing banks and providing direct and indirect credit assistance.

Plant layout types

Process layout groups similar machines for varied products, product layout arranges machines by sequence for mass production, and fixed-position layout keeps the product stationary.

Marketing mix four Ps

Product, price, place and promotion; service businesses add people, process and physical evidence, forming the extended seven-P framework for services marketing.

Market segmentation

Dividing a market into groups of buyers with similar needs by geography, demographics, psychographics or behaviour, so that a target segment can be chosen and positioned.

Entrepreneurship defined

The process of identifying a business opportunity, arranging resources, bearing the associated risk and creating value through a new or expanded enterprise.

Entrepreneurship development programme

Structured training covering motivation, business planning, project preparation, finance and marketing, delivered by institutions such as MSME-DIs, DICs, EDII and NIESBUD.

MSMED Act payment rule

A buyer must pay a registered MSME supplier within 45 days of acceptance of goods or services; delayed payment attracts compound interest at three times the RBI bank rate.

Factories Act coverage

The Factories Act, 1948 applies to premises using power with 10 or more workers, or 20 or more without power, and governs safety, health and welfare of workers.

GST input tax credit

Credit for GST paid on business purchases, set off against output GST, available only with a valid tax invoice and matching return filing by the supplier and buyer.