I strongly believe that India has a lot of latent entrepreneurial energy, which needs to be harnessed so that we become a nation of job givers, more than job seekers. – Narendra Modi
The NDA Government is focused on giving a boost to entrepreneurship. The ‘Make in India’ initiative is based on four pillars to boost entrepreneurship in India, not only in manufacturing but also in other sectors.
New Processes: ‘Make in India’ recognizes ‘ease of doing business’ as the single most important factor to promote entrepreneurship.
New Infrastructure: Availability of modern and facilitating infrastructure is a very important requirement for the growth of industry. Government intends to develop industrial corridors and smart cities to provide infrastructure based on state-of-the-art technology with modern high-speed communication and integrated logistic arrangements.
New Sectors: ‘Make in India’ has identified 25 sectors in manufacturing, infrastructure and service activities and detailed information is being shared on them with all stakeholders.
New Mindset: Industry is accustomed to see Government as a regulator. ‘Make in India’ intends to change this by bringing a paradigm shift in how Government interacts with industry. The Government’s approach will be that of a facilitator and not that of a regulator.
The Government is adopting a three pronged strategy to boost entrepreneurship. This is a 3 C Model being worked upon: Compliances, Capital & Contract Enforcement.
India made rapid strides in the ‘Ease of Doing Business’ rankings by the Worls Bank rising to 130th rank. Today, starting a new business is easier than ever before. Unnecessary compliances have been removed and a lot of permissions can be obtained online.
Process of applying for Industrial License (IL) and Industrial Entrepreneur Memorandum (IEM) has been made online and this service is now available to entrepreneurs on 24×7 basis. Around 20 services are integrated & will function as a single window portal for obtaining clearances from various governments and government agencies.
Government of India with support from World Bank group and KPMG carried out an assessment of implementation of business reforms by State Govts. These rankings will allow States to learn from one another and replicate success stories, thereby rapidly improving the regulatory environment for business nationwide.
The Government also liberalized India’s FDI rules across multiple sectors to facilitate investment in India.
Around 58 million non-corporate enterprises provided one 128 million jobs in India. 60% of them were in rural areas. Over 40% were owned by people from the Backward Classes and 15% by Scheduled Castes and Tribes. But bank credit accounted for a tiny share of their financing. Most of them never get any bank credit. In other words the most employment-intensive sector of the economy gets the least credit. To change this scenario, the Govt launched the Pradhan Mantri Mudra Yojana & the MUDRA Bank.
It has been started with the aim of availing collateral-free cheap credit to the small scale entrepreneurs who often have to pay exorbitant interest rates. In the brief period since its launch, it has already sanctioned about 1.18 crore loans amounting to almost 65,000 crores. The number of people getting a loan below Rs 50,000 registered a growth of 555% in April- September 2015 over the corresponding period of the previous year.
To achieve better contract enforceability, the Arbitration Law has been changed to make arbitrations cheaper & faster. The law would impose deadlines to resolve cases & empower tribunals to enforce decisions.
The Government has also come up with a modern bankruptcy code, which will make exiting business easier.