5 Things at Stake for Indian Entrepreneurs This Election Season
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Regardless of the heroic stories we read in media about entrepreneurs, (which is evidently selection bias in statistics), entrepreneurship is no way the close to fairy tales which people are used to hearing. The failure rate is pretty high while the failures themselves cease to be part of statistics at an astonishing pace which results in the biased statistics. Entrepreneurs are probably among the most vulnerable class especially during the initial stages of Startups. Entrepreneurs are probably the interest group most vulnerable to change as far as major policy decision changes are concerned as much as they may be beneficiaries of important reforms. While huge corporates have the size and connect to make their case to policymakers, the startups often small entrepreneurs don’t have the ways or means nor the inclination to reach out to the corridors of power. They are too engrossed with their work to even consider that. These elections like any other elections are very important to Entrepreneurs for the stakes are high for them in the light of huge changes in the start-up ecosystem over the term of the government.
For a long time in the Indian political system, meritocracy hasn’t exactly been a USP nor the focus area of governments. The last 5 years have been an exception to the point that lateral entry into the position of joint secretaries in the central government has happened. Even in the political sphere, the ability to perform has often trumped other political calculation which is a trend which entrepreneurs would cherish purely on ideological grounds. After all, Entrepreneurs especially upcoming startups with fresh innovative ideas without any background would need a system where merit in the product/person is applauded. The entrepreneur has everything to gain from a system where judgments will be purely based on the ideas/solutions the startup has to offer instead of any other consideration.
Formalization of Economy
Over the last 5 years, the Indian economy has seen a huge influx of activities from the unorganized sector to the organized sector. Demonetisation and Jan Dhan accounts have played no small role in this trend which resulted in financial inclusion as well as formalization at a rate never seen before. The much-mocked Aadhar linking has brought in the much-needed transparency which will be beneficial for a long time to come.
While Insolvency and bankruptcy code was an all-important law to formalize and dispose of failed ventures, a cross-border insolvency law which is under consideration might still be in pipeline and would be the best way forward for India.
Increasing Tax Base and Growing Middle Class
Strictly speaking, the increased tax base is nothing specific to entrepreneurs but the growing middle class it signifies should be music to their ears. The Indian middle class is not just growing but is also increasingly becoming part of the formal economy. The increased growth in vehicle sales is a testimony to the fact of the inherent strengths in the Indian economy. Consumption story of India is intact and is set to gain renewed impetus on the back of huge infrastructure investments which will see fruits well into the next tenure of this government. The huge pace of infrastructure development particularly the breakneck speed of construction of roads is something unimaginable which the government has pulled off.
The Digital India campaign is something which seeks to change the way technology will be used across the country. The country has seen giant leaps, as well as changes in the use of internet and this phenomenon of digitalization, is permanent which opens doors to many tech startups. It is noteworthy to see that this campaign has successfully improved India’s technological performance, enabling us to reach the 48th position on the 2018 International Institute for Management Development World Digital Competitiveness Rankings. The increasing digitalization opens up fresh avenues for Governments but also fresh challenges for tech-startups to solve and convert into opportunities. While digitalization was inevitable, the fast pace of it will be the key difference between the countries which have the technological edge and those who don’t.
Ease of Doing Business
This is by far the biggest stake for entrepreneurs which they simply can’t afford to lose. No government till date has been so sharply and aggressively focused on getting the needle down in the Ease of doing business rankings. India has met with huge success in this arena jumping places at a dizzying rate shocking many analysts. India has recorded a jump of 23 positions against its rank of 100 in 2017 to be placed now at 77th rank among 190 countries assessed by the World Bank. India's leap of 23 ranks in the Ease of Doing Business ranking is significant considering that last year India had improved its rank by 30 places, a rare feat for any large and diverse country of the size of India. As a result of continued efforts by the Government, India has improved its rank by 53 positions in the last two years and 65 positions in the last four years. The target has been to get into the Top 50 which doesn’t seem difficult going by the track record. If anything, we might be just there in a couple of years making India among the best places to do business. Entrepreneurs simply can’t afford to let go of this ranking which has improved and is set to improve even more.
There is a number of issues which dominate the headlines but very few core policy decisions which affects us all. Structural changes in the economy and forward-looking policies are something no right-thinking entrepreneurs can afford to give away and these things would weigh heavy in the mids of an entrepreneur. While these measures in itself don’t make entrepreneurship a fairy tale to pursue, it does remove a lot of needless obstacles along the way which otherwise would have to deal with. These 5 things will weigh in the minds of entrepreneurs when they go out to vote and rightly so because away from the national media limelight it is these key policies which determine the future of our entrepreneurs.