Government policies are the largest hurdles on the road to entrepreneurship in India, according to the Delhi chapter of renowned Entrepreneurs’ Organisation (EO). The chapter conducted an online poll on Facebook in November, asking its members and their friends to select the biggest challenges faced by Indian entrepreneurs.
The options were: Government Policies, Financing and Human Resource. In response, almost 73 percent of the respondents selected ‘Government Policy’ as the biggest entrepreneurial challenge in India.
The sentiments of the EO members echoed those of Ratan Tata, the former chairman of Tata group who retired December 28, on his birthday. In an interview to Financial Times (FT) near the end of his tenure, Tata had lamented the lack of effective government policies and its adverse effect on Indian business scenario.
“Different agencies in the government have almost contradictory interpretations of the law, or interpretations of what should be done. These are things which by and large would drive investors away..” Tata told FT.
“If we had the same kind of encouragement to industry, I think India could compete definitely with China,” he added.
According to Tata, in the present state of administration in the country, it can take up several years to get a single steel plant commissioned. In comparison, it takes only one day, and a single official procedure to launch an enterprise in New Zealand, according to an Organization for Economic Cooperation and Development (OECD) report that came early last year.
The report named the top 10 countries for entrepreneurs with New Zealand taking the first rank and Chile coming tenth. Predictably, India was not on the list. In another report published by Wall Street Journal, the kiwi nation came as the fifth best country to start a new business. India ranked 53rd.
Besides policy paralysis, ‘Human Resource’ also remains a substantial challenge to the entrepreneurs with around 23 percent voters calling it their number one challenge. Surprisingly, money matters were not so important with only 4 percent of the voting EO members calling financing their biggest woe.