GROWTH OF ENTREPRENEURSHIP IN INDIA
INTRODUCTION
Entrepreneurship is the practice of starting new organizations or revitalizing mature
organizations, particularly new businesses generally in response to identified opportunities.
Entrepreneurship is a creative human act involving the mobilization of resources from one
level of productive use to a higher level of use. "It is the process by which the individual
pursue opportunities without regard to resources currently controlled." Entrepreneurship
involves a willingness to take responsibility and ability to put mind to a task and see it
through from inception to completion. Another ingredient of entrepreneurship is sensing
opportunities, while others see chaos, contradiction, and confusion. Essence of
Entrepreneurship is going against time with maturity and serving as a change agent.
Entrepreneurship is considered to be a significant determinant of economic
development. New entrepreneurial activities play a vital part in the process of creative
destruction that fosters innovation, employment, and growth. While India has traditionally
been an entrepreneurial country, it fares poorly in numerous global studies exploring the
entrepreneurial and business potential of countries but, on the other hand on the most
conservative basis, our domestic consumption, in virtually any sector, has the potential to at
least double, or treble, from current levels perhaps, just to catch up with a country like
China. Then, there is the entire global opportunity, across diverse sectors internationally, the
"Made in India" tag is now an increasingly respected brand, valued for quality, reliability, and
competitiveness. Truly, with economic reforms in the country, and with the virtual removal of
all trade barriers, the world is now our market and our opportunity.
The pursuit of these opportunities requires an indomitable spirit of entrepreneurship.
Entrepreneurship is often a difficult undertaking, as a vast majority of new businesses fail.
Entrepreneurial activities are substantially different depending on the type of organization
that is being started. Entrepreneurship ranges in scale from solo projects (even involving the
entrepreneur only part-time) to major undertakings creating many job opportunities. Many
"high-profile" entrepreneurial ventures seek venture capital or angel funding in order to raise
capital to build the business. Angel investors generally seek returns of 20-30% and more
extensive involvement in the business
GROWTH OF ENTREPRENEURSHIP IN INDIA
The proper understanding of the growth of entrepreneurship of any country would
evolve within the context of the economic history of the particular country becomes the
subject matter of this section. The growth of entrepreneurship in India is, therefore, presented
into two sections viz.
Entrepreneurship during Pre-Independence
Entrepreneurship during Post-Independence
ENTREPRENEURSHIP DURING PRE-INDEPENDENCE
The evolution of the Indian entrepreneurship can be traced back to even as early as
Rigveda, when metal handicrafts existed in the society. This would bring the point home that
handicrafts entrepreneurship in India was as old as the human civilization itself, and was
nurtured by the craftsman as a part of their duty towards the society. Before India came into
contact with west, people were organized in a particular type of economic and social system
of the village community. Then, the village community featured the economic scene in India.
The Indian towns were mostly religious and aloof from the general life of country. The
elaborated cast based diversion of workers consisted of farmers, artisans and religious priests.
The majority of the artisans were treated as village servants. Such compact system of village
community effectively protecting village artisans from the onslaughts of external competition
was one of the important contributing factors to the absence of localization of industry in
ancient India.
Evidently, organized industrial activity was observable among the India artisans in a
few recognizable products in the cities of Banaras, Allahabad, Gaya, Puri & Mirzapur which
were established on their river basins. Very possibly this was because the rivers served as a
means of transportation facilities. These artisan industries flourished over the period because
the Royal patronage was to them to support them. The workshops called kharkhanas came
into existence. The craftsmen were brought into an association pronounced as guild system.
On the whole, perfection in art, durability beyond doubt and appeal to the eye of the
individual were the distinguishing qualities inherent in the Indian craftsmanship that brought
much everlasting laurels of name and fame of the illustrious India in the past.
CURRENT SCENARIO OF ENTREPRENEURSHIP IN INDIA
According to the Global Entrepreneurship Monitor (2007) report, Indias HighGrowth Expectation Early-Stage Entrepreneurship (HEA) rate is only one-fifth of that of
China. Further, among medium and low income countries, while Chinas nascent and new
entrepreneurs appear to be the most growth-oriented, with more than 10 per cent of them
anticipating high growth. Early-stage entrepreneurial activity in India is marked by low levels
of growth expectation. This is despite the extremely high levels of potential entrepreneurial
activity as perceived by the non-entrepreneurially active population in the country. While data
on entrepreneurship is hard to come by, the following numbers are telling. According to the
NSS 62nd round, in rural India, almost 50 per cent of all workers are self-employed 57 per
cent among males and nearly 62 per cent among females, while the corresponding figures in
urban India are 42 for males and 44 for females.
The NSSO defines a self-employed person as one who has worked in household
enterprises as own-account worker; worked in household enterprises as an employer or
worked in household enterprises as helper. The essential feature of the self-employed is that
they have autonomy (decide how, where and when to produce) and economic independence
(in respect of choice of market, scale of operation and finance) for carrying out their
operation. According to the 5th Economic Census conducted by the Central Statistical
Organisation (CSO), there are 41.83 million establishments in the country engaged in
different economic activities other than crop production and plantation. Five states viz. Tamil
Nadu (10.60 per cent), Maharashtra (10.10 per cent), West Bengal (10.05 per cent), Uttar
Pradesh (9.61 per cent) and Andhra Pradesh (9.56 per cent) together account for about 50
percent of the total establishments in the country. The same five states also have the
combined share of about 50 per cent of total employment.
ISSUES IN THE CURRENT FRAMEWORK
Finance: Access to credit is considered to be one of the key problems faced by entrepreneurs
in India. This problem is particularly acute at the start-up stage, where bank finance is hard to
obtain. Despite new sources of finance such as venture capital, angel funding and private
equity becoming increasingly popular, institutional finance is still not able to meet the current
entrepreneurial demands.
Regulation and governance: An entrepreneur has to deal with a host of regulatory and
compliance issues. These include registering ones business, obtaining government clearances
and licenses, paying taxes and complying with labour regulations. Cumbersome paperwork,
long delays and red tapism involved in such transactions create unnecessary burdens for
entrepreneurs, constraining their productivity and their ability to do business. As seen in the
Doing Business 2008 rankings, India performs poorly in these indicators. A study
investigating the effect of regulation on entrepreneurship using the GEM dataset shows India
to be having one of the worst regulatory indices. Moreover, lack of clarity on information
relating to legal and procedural aspects of starting an enterprise, as well as those relating to
clearances, licenses and government schemes further aggravates the problem.
Indias Ranking in Doing Business 2008
Starting a Business
-111
Dealing with Licenses -134
Employing Workers
-85
Registering Property
-112
Paying Taxes
-165
Trading Across Borders- 79
Enforcing Contracts
-177
Closing a Business
-137
(Source: Doing Business, World Bank, 2008)
Manpower: Availability of skilled manpower is another crucial issue for
entrepreneurs. For example, in a survey of entrepreneurs conducted by KPMG and TiE in
2008, skilled manpower emerged as the second most important factor for fostering
entrepreneurial growth. Further parameters reflecting labour market efficiency and flexibility
are dismal. In the Global Competitiveness Index, India ranks 102nd in hiring and f ring
practices and 85th in employing workers in the Doing Business 2008 report.
Infrastructure: Indias physical infrastructure roads, rail, ports, power, and telecom
is also considered to be a bottleneck to the smooth operation of entrepreneurial activity. The
high transport and supply chain costs that poor infrastructure entails can be affect
competitiveness to a great extent, particularly for a small and medium enterprise.
CONCLUSION
Enterprises surveyed in the Global Competitiveness Report 2007-08, rated inadequate
infrastructure as the most problematic factor for doing business in India. Education: While
the influence of education on entrepreneurship is considered debatable, increasingly
education is being seen as part of the larger ecosystem that impacts entreprene-urship and
entrepreneurial motivations. Greater practical exposure, critical analysis, entrepreneurship
curriculum, incubation and mentoring, industry-research linkages can help in fostering
entrepreneurship.
REFERENCES
http://www.f1gmat.com/entrepreneurship-development-india
http://www.cnbc.com/2016/11/16/india-entrepreneurship-is-at-an-all-time-
high.html
http://endeavor.org/?
gclid=Cj0KEQiAk5zEBRD9lfno2dek0tsBEiQAWVKyuMmzPw_CmfuU5G9
8ORyqBb_wMVMkETK6r4YM5bG4H4caAsks8P8HAQ
https://biomimicry.org/what-is-biomimicry/
https://www.quora.com/What-factors-are-responsible-for-growth-ofEntrepreneurship-in-India
