Day 47 – Q 1.Examine the significance of entrepreneurial spirit for the development of a middle income country like India. What is your assessment of the prevailing policy environment aimed at promoting entrepreneurship?
1. Examine the significance of entrepreneurial spirit for the development of a middle income country like India. What is your assessment of the prevailing policy environment aimed at promoting entrepreneurship?
भारत जैसे मध्यम आय वाले देश के विकास के लिए उद्यमशीलता की भावना को परखें। उद्यमशीलता को बढ़ावा देने के उद्देश्य से प्रचलित नीति वातावरण का आपका मूल्यांकन क्या है?
Entrepreneurship is the act of creating a business or businesses while building and scaling it to generate a profit. With a target of $5 trillion economy by 2024, entrepreneurship is a buzzword which can help India to be in a trajectory to achieve the same and helps developing countries to achieve sustainable development.
Significance of entrepreneurial spirit:
As our prime minister observed “India need more job creators than job seekers”. This is especially significant for developing countries like India for the reasons:
- Employment: World bank report states that India needs to generate at least 2 million jobs every year. Unemployment rate has been a 4-decade high at 6.1% as per the NSSO survey. Entrepreneurship is significant in this context generating new jobs.
- Utility of demographic dividend: Mean age of working population in India is around 27 years. New business and entrepreneurship will help utilize the demography productively in developing countries which usually have young working population.
- Secondary and tertiary sector development: Most developing countries depend on primary sector for employment (e.g. India – around 50% in agriculture) and entrepreneurship helps them to move in to manufacturing and services sector which more profit and employment opportunities.
- Development of global level industries: the GAFA (Google, Apple, Amazon, Facebook) companies were started by small entrepreneurs and have contributed/contributing enormously to the development of their parent countries. The same applies to developing countries as well which can be possible only by promoting entrepreneurship.
- Research and innovation: Entrepreneurship thrive in innovative ideas and this promote research, development of new technologies and so on. This in turn will help utilize the natural and human resources of the developing countries more productively.
- Global presence: Entrepreneurship helps in increasing the global presence of Indian entities and also helps in addressing fiscal deficit, reserves etc., by increasing domestic production and increasing exports.
- Mobilization of resource: especially capital where in small savings can be mobilized and productively used investing in new businesses.
- Reduces brain drain which helps in more innovation, research development in India.
Prevailing policy environment:
India was ranked 69/137 countries in the previous Global entrepreneurship index which is a reflection of entrepreneurship support by the government though policies.
- The government has supported by providing finance to MSME entrepreneurs through schemes like Mudra loans, SHG promotion through NABARD-SHG-Bank linkage, PSBloanin59min etc.,
- Hand-held support to the new entrepreneurs is done by schemes like Skill India mission with sub-missions which includes launching of incubation centers, skill development schemes etc.,
- Concessions to entrepreneurs though schemes like start-up India, Stand up India which includes tax remissions, streamlining in labour laws, audit procedure etc., E.g. Relaxation in Angel tax, corporate tax reduction, GST.
- Government is promoting innovation through various schemes like Atal Innovation mission, IPR policy guidelines, patent filing procedure streamlining etc., which drives entrepreneurship.
- The international collaborations like the recently signed MOU between Atal innovation mission and Russian Sirius programme etc., are helping in global collaborations and innovations.
- The state wise ranking of EODB, organizing state wise investor summits, Global entrepreneur summits etc., is promoting competitive federalism and is helping entrepreneurs.
Though government is determined to use entrepreneurship as a vehicle of development, there are some issues as well as challenges like
- Issues in government schemes has caused problems for sustenance of business or even availing the benefits available. E.g. in the first 2-3 years, only around 10 companies were able to get the benefits under start-up India.
- The credit needed for the entrepreneurs is still inadequate and mostly cornered by big entrepreneurs/companies than new entrants in the field.
- In the recent global innovation Index report – Corruption, tax terrorism and red-tapism are listed as the biggest hurdles to entrepreneurship/start-ups in India.
- Entrepreneurs still face issues in some of the areas like getting electricity, land acquisition, prolonged court litigations etc., hampering the business environment.
As world Bank observed “India is falling into a middle-income trap” and with the turbulent global economic scenario, domestic reliance with entrepreneurship promotion is prudent also recognized by the government. A conducive entrepreneurship environment in the long run improves the domestic economy and eventually brings in human development. Thus, the government has to take short and long-term measures to address the issues.