It takes a lot to be an entrepreneur in India. Do not think about what the big guns say but focus on the hurdles that are faced by everyone else—from street vendors to tech entrepreneurs. These capitalists have to wade through red tape, battle corruption and struggle to get bank finance.
It is well known that India is not a great place to do business, as the annual World Bank surveys repeatedly show. The latest shows that India is 133 in a list of 183 economies rated according to how easy it is to do business. Separate studies show that at least four out of five of New Delhi’s rickshaw pullers pay Rs8 crore of bribes a month. Street vendors in the Capital have to spend Rs40 crore every year to grease various palms.
Illustration: Jayachandran / Mint
This is unfortunate. Entrepreneurs renew economies and keep them dynamic, and particularly so in a country such as India where growth is led by the private sector rather than directed by the state, as it is in China. They also satisfy unmet demands. The restrictions we have put up to throttle entrepreneurship are a bit of a self-goal.
It is thus good to know that Indian entrepreneurs continue to be optimistic, as a survey of 1,100 of them conducted by the Legatum Institute shows. Mint has exclusively published the results of this survey in today’s edition. Of those surveyed, 84% say India is headed in the “right direction” and 87% believe “India will be in a stronger economic position in five years”.
The survey also shows that Indian entrepreneurs are street-smart folk who know how to work around an unhelpful system. They tackle the lack of access to official finance channels by using funds from social networks, especially family networks. They are masters of the art of jugaad, or the ability to improvise and step around restrictive controls.
What comes through most strongly from the Legatum survey is that India’s entrepreneurs believe that the country rewards hard work and that people can advance by working hard in India. This is undoubtedly good news. India has traditionally not been a good place for social mobility; the caste system is the worst example of how people were trapped in the circumstances of birth rather than rewarded for enterprise and hard work.
The more contemporary concern is crony capitalism, where a few powerful business groups use their access to the political class to dominate the economy. In this context, the belief that India rewards the hard work of its smallest entrepreneurs is good news.
How does India treat its entrepreneurs? Tell us at views@livemint.com