Entrepreneurs who are business leaders look for ideas and puts them into effect in nurturing economic growth and development. They play the most important role in the economic growth and development of Indian economy. An entrepreneur plays a pivotal role not only in the development of industrial sector of a country but also in the development of farm and service sector. The major roles played by an entrepreneur in the economic development of an economy are as follows:
• Promotes Capital Formation- Entrepreneurs promote capital formation by mobilizing the idle savings of our citizens. They employ resources for setting up their enterprises. Such types of entrepreneurial activities lead to value addition and creation of wealth, which is very essential for the industrial and economic development of India.
• Employment Generation- Entrepreneurs provide instant large-scale employment to the unemployed which is an unending problem of India. Small entrepreneurs provide self employment to artisans, technically qualified persons and professionals.
• Entrepreneurs promote development of industries- They help to remove regional disparities by industrializing rural and backward areas. The growth of industries and business in these areas lead to a large number of public benefits like road transport, health, education, entertainment, etc. They help to reduce the problems of congestion, slums and population in cities by providing employment and incomes to them. They help to improve the standard of living in sub-urban and rural areas.
• Reduces Concentration of Economic Power- Industrial development normally leads to concentration of economic power in the hands of a few individuals which results in the growth of monopolies. Entrepreneurs contribute towards the development of society by reducing concentration of income and wealth.
• Wealth Creation and Distribution- It stimulates impartial redistribution of wealth and income in the interest of the country to more people and geographic areas, thus giving benefit to larger sections of the society. Entrepreneurial activities also ensure equitable distribution of income and wealthy by inculcating the spirit of entrepreneurship amongst people thereby providing them self employment with limited resources.
• Increasing GDP and Per Capita Income- Entrepreneurs are always looking out for opportunities. They encourage effective resource mobilization of capital and skill, bring in new products and services and develops markets for growth of the economy. In this way, they help increasing gross national product as well as per capita income of the people in our nation.
• Improvement in the Standard of Living- Entrepreneurs adopt latest innovations in the production of wide variety of goods and services in large scale that too at a lower cost. This enables the people to avail better quality goods at lower prices which results in the improvement of their standard of living.
• Promotes Country’s Export Trade- Entrepreneurs earn valuable foreign exchange through increased exports. They produce goods and services in large scale for the purpose earning huge amount of foreign exchange from export. This ensures economic independence and development.
• Induces Backward and Forward Linkages- Entrepreneurs work in an environment of changing technology and try to maximize profits by innovation. This induces backward and forward linkages which stimulate the process of economic development in the country.
• Facilitates Overall Development- Entrepreneurs act as catalytic agent for change which results in chain reaction. Once an enterprise is established, the process of industrialization is set in motion. This unit will generate demand for various types of units required by it and there will be so many other units which require the output of this unit. This leads to overall development of an area due to increase in demand and setting up of more and more units.
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