Intro: The Indian entrepreneurial spirit can only develop and grow if right steps are taken in creating a vibrant ecosystem which nurtures entrepreneurial growth.
The spirit of entrepreneurship and innovation has always been an Indian hallmark. It has motivated Indians to set up businesses, large and small, not just in India but all over the world. At a time when the country is undergoing historic transformation in its economy and society, powered by strong leadership and a young population, fuelling entrepreneurship has become even more important. Not only will it provide high quality products and services to all and generate employment for our youth, it will play a key role in making India ‘sone ki chidiya’ once again.
Although we’ve often read about the success stories of how start-ups such as Flipkart, RedBus or Snapdeal received funding, presenting only one side of their success stories is misleading. When India’s entrepreneurial success is compared with developed economies such as USA, UK or Singapore, or with fast-paced economies like China, or with an entrepreneurial economy like Israel, it is seen, it has far fewer successful entrepreneurial ventures. The number of start-ups which get institutional funding is about 200-300 per year in India, which is shockingly lower than USA’s number of around 6,000 ventures.
As per data from May 2014, India ranks 142 in the World Bank’s ‘Ease of Doing Business’ index. Marking its global presence, where China has ensured that it has champions such as Alibaba and Tencent in the sunrise industries; in comparison, India has no such massive success story to match, be it in the telecom, mobile, internet or solar industries. Further, since most Indian start-ups are restricted to few sectors and cities, a large part of India has still not benefitted from venture capital investing.
But we need not follow the footsteps of USA or China. Since we are in a demographic sweet-spot, led by a visionary and democratically elected central government, having immense potential on both the demand and supply sides–we are perfectly positioned for entrepreneurship to be the fuel for our own growth engine. The world agrees that today India is a land of opportunity, and it is now for all key players–the government, industries, investors, academic institutions and entrepreneurs, to ensure they take the right steps in creating a vibrant ecosystem which nurtures entrepreneurial growth in India.
The need for such entrepreneurial efforts is immense and multi-faceted. We have an aspiring lower-middle and middle class with impressive purchasing power for whom products and services should be developed in-order to spur consumption in the economy. This would help our economy become self-reliant, which in turn would also reduce our import bills.
With a sharp rise in labour force and lack of appropriate steps taken by the previous government to provide them with jobs, India has clearly been suffering from a huge gap in providing employment. To wrest this, our country needs to add over 10 crore new non-farm jobs over the next decade. The existing public and private sector ecosystem is not sufficient for creating jobs at the required rate.
As a solution, entrepreneurship can create many more jobs to sustain our requirements if it gets the right amount of support from investors and the government. It will bring prosperity not only in the lives of the entrepreneurs, but also the millions of people who would get employment. Innovative start-ups have the potential to provide solutions to our social problems, by improving sanitation, healthcare, education, the energy situation, etc.
The government has clearly demonstrated its appreciation towards the role start-ups play in the economy by taking landmark decisions such as creating a new Ministry of Skill development and Entrepreneurship and initiating a Rs 10,000-crore fund for early stage ventures. Several other steps taken by the government, such as setting up a network of incubators and accelerators to boost innovation, a Rs 200-crore fund for Dalit entrepreneurs, a Rs 100 crore fund for technology ventures efforts, developing an entrepreneur-friendly legal bankruptcy framework, encouraging rural youth to pursue entrepreneurship through a Start-up Village Entrepreneurship Programme, etc. will provide support and confidence to Indian entrepreneurs. The government needs to promote such efforts, improve the regulatory and business climate and make it easy to do business and raise capital. In long term these efforts will fuel entrepreneurial spirit and in turn, a flourishing entrepreneurial ecosystem will increase our productive capacity, and serve as an engine for job creation and growth.
Jayant Sinha (The writer is a BJP Lok Sabha Member of Parliament from Hazaribagh, Jharkhand)
