New Delhi: India’s entrepreneurial culture has become the strongest among G-20 nations with a substantial decline in costs and time for starting new businesses in the country, a global study by Ernst & Young said on Thursday.
The report, however, said that efforts were still needed to lower the business costs, for further simplification of procedures and to make India even more favourable business destination.
Ernst & Young (E&Y) said that the report, prepared on the basis of a survey of 1,000 entrepreneurs across the G-20 nations, has substantiated India’s premier position as an emerging hub for entrepreneurial activity and innovation.
It said that 98% of the entrepreneurs surveyed believed that Indian culture encourages entrepreneurship, as compared to 80% for the rapid growth markets and 72% for the mature economies.
The study has been released ahead of a G-20 Summit in Cannes, France, to be attended by the leaders of the G-20 nations, including Prime Minister Manmohan Singh.
The G-20 is a block of the world’s 20 leading economies including the US, UK, France, Germany, Japan, China, Russia and India.
The report, released at the G-20 Young Entrepreneurs Summit in France, found that the costs of starting a business in India has declined by 5.5% since 2005.
Besides, time to start a business in India has fallen from 56.5 days in 2005 to 29 days in 2010. However, 71% of the respondents from India recommended a further simplification of procedures to start a business.
In the survey, 80% of Indian entrepreneurs reported improved access to funding, including bank loans. However, it cautions that steadily rising interest rates could weigh on lending growth in the future.
A large majority (80%) opined that funding from private equity has improved by over 500% since 2005, while about two-third of respondents (67%) said that initial public offerings have improved the access to funds.
The report also said that an active role of media and direct involvement of families have also had a strong impact in improving the perception of entrepreneurship in India in the last five years.
“We have always known India to be a hotbed of entrepreneurship, despite the hurdles in its business and regulatory environment.
“Indian entrepreneurs have made their mark both in India as also at a global level,” Farokh Balsara, partner and national leader at Ernst & Young Entrepreneur of the year programme said.