India is gaining in its ranking of ease of doing business, but practicality defers from theory.
India, one of the world’s largest democracy with a significant majority of middle class population is gaining momentum in its ability to stand up for its entrepreneurial spirit. Education, literacy, bureaucratic support, ease of securing finance and venture capital or private equity investors, and a perpetual rise in the number of start-up investors are adding fuel to the spirit of entrepreneurs. India has moved up 4 levels to 130 from 134 in 2015 in the doing business list, a satisfactory sight for Indian government but not magnanimous when mirrored to that fact that the total number of counties in the list are 189. This upward movement is essential for India if it has to attract foreign and domestic capital for facilitating promising start-ups. In comparison, India’s close ally and global competitor, China sits at the 84th position in the list, clearly indicating a lead over multiple conditions under which a business starts up and persists.
China is ahead in skill development, especially due to its large share of manufacturing sector accounting for 28% of its economy, as against 15% in case of India. This infers that as the manufacturing sector captures a larger market share of the total GDP, there is an automatic push, or even a forced one, to enhance skill development. Skill development growth is paramount with the manufacturing sector as addition of new technology is never without learning a new set of skills, thus fuelling the core that fulfils the desire of growth with equity. India is yet to internalise the idea that skill development is key to the growth of manufacturing sector, and not vice versa which will possibly create ill-equipped skill learners. India needs major reforms in financial inclusion, because entrepreneurs have no fixed basis, as many of them are stashed in rural regions where the reach of finance is scarce. In addition, facilitation of linking the capitalist investor and the entrepreneur is weak, often seen sporadically in exhibitions and competitions.
The government’s role in moving up this rank is to facilitate, regulate, and enforce strict laws that govern the flourishing of business, which when solidified can make real change possible.
While the country has moved up 4 ranks in the ease of doing business list, it has gone down 6 levels in the area of getting credit and one level in paying taxes, reflecting immense amount of modification the government must undertake. To India’s surprise, a country like Rwanda, once mired under a great genocide, secures the 62nd position in the list, offering much to contemplate on.
Having said that, practical application of what statistics and theory display is rather increasingly delinked from what the report depicts. This is because the report is conceived after measuring the broader stages of starting a business, but India, being of a tolerant culture, has multiple incidents where new start-ups flourish within the family, or with friends support, or even with community support if the end is to resolve an issue of the community. Hence, while continuing to build up broader conditions and factors measured for doing business, allowing facilitation of socially and culturally supported start-ups must increase.