Cover Story: Entrepreneurship Revolution
Intro: Government can and should play a big role in building the right ecosystem. It should refrain from planning on whims and fancies of individuals.
Till 17th Century India was the top economy of the World. It was an economy in which entrepreneurship had flourished. We had economic activity based and not birth or class based caste system. Different castes specialised in production of different goods and services. Such specialisation promoted entrepreneurship thorough mutual support, knowledge and skill transfer. Some are born with the entrepreneurial spirit; some acquire it as they are born in enterprising communities. But it is not something that can be thrust upon individuals. We have examples of individuals, communities, countries and places well known for entrepreneurship, which inspire the enterprising.
Isenberg however, warns that any effort to try to copy Silicon Valley can prove to be very frustrating. Instead we should observe the direction that entrepreneurs take and pave the footpath for them. That is about creating the most conducive environment or the favourable entrepreneurial ecosystem. That holds for indiscriminate government support, too easy venture capital and finance, incubators or clusters. The role of the government, private sector, NGOs, trade organisations, venture capitalists, banks, aid agencies, R&D should be that of facilitators and supporters.
We have a long post-independence history of socialistic type of planning and government schemes for poverty alleviation, food security, and job guarantee etc for protecting the interests and providing succour to the poor in villages and towns. For encouraging and promoting entrepreneurship however, we require different kind of approach. It requires ease of doing business.
Fortunately, Government of India is keen about entrepreneurial revolution. First it has set up a separate ministry for skill development and entrepreneurship with a national policy framework 2015 on its site. The nine pronged policy for entrepreneurial development aims at educating and equipping the entrepreneurs, mentoring them, supporting them through hubs, catalysing a cultural shift, encouraging underrepresented groups, and women, entrepreneurs improve ease of doing business and access to finance and fostering innovations. It is proposed to develop world class on line material for education which will be free. One national, 30 states, 50 Nodal and 3,000 colleges and 325 clusters based E-Hubs will be set up for classroom training.
Several steps have been envisaged to improve upon the ease of doing business. Online composite application form and unique enterprise number will greatly simplify the process of registration with various authorities and for all approvals and clearances. A panel has been formed on 7 April by the Department of Industrial Policy and Promotion to simplify regulations. National Skill Development Agency has been allotted a fund of Rs.10000 crores for funding equity, quasi equity, soft loan and other risk capital for micro, small and medium enterprises. Atal Innovation Mission under National Institute for Transforming India has been allotted Rs.150 crore to support innovations.
Micro Units Development Refinance Agency (MUDRA) bank has been setup in April this year to provide credit up to Rs. 10 lakhs to small enterprises. Rate of corporation tax is proposed to be brought down from 30 per cent to 25 per cent over the next four years. Ebis portal provides scope to apply for 14 regulatory permissions at one place.
We already have a well developed support system for small industries. For finance we have a whole range of specialised institutions other than the commercial banks.
Bring about aspiring and attitudinal change is important. Some business castes and communities already value entrepreneurship. But if we want to make it broad based and include in it women as also the underrepresented groups (We rank very high in respect of protecting minority interest), we must through all around efforts change people’s perception about skills and entrepreneurship visa vis higher education and government post. How many government jobs can we possibly create? Already we have 4.5 crore MSME employing 10 crore workers. With the number of farm workers coming down the number of people employed in MSME and construction is expected to increase quite substantially by 2022. This is where jobs can proliferate. Certain areas can be reserved for women entrepreneurs.
JP Dubey (The writer is senior columnist and having expertise on developmental issues)