With the friendly policy initiatives and the funding mechanism, the Gujarat government may be moving in the right direction to promote entrepreneurship. However, India remains a tough place to be an entrepreneur, according to a report by KPMG India and The Indus Entrepreneurs (TiE).
The report states that governments in six India states namely Punjab, Gujarat, Delhi, Tamil Nadu, Karnataka and Maharashtra have the right policies and programmes to promote entrepreneurship. In some cases, the governments across these states are increasingly adopting newer approaches. However, implementation of some of the programmes is either limited or focused at larger enterprises.
The paper, 'Entrepreneurial India: Sculpting the landscape' states that the emergence of opportunities in many sectors and the lack of opportunity in others have driven many young people to strike out on their own. Many are leaving their well paying jobs to establish their own small ventures. However, despite the great initiatives undertaken by many Indian entrepreneurs, India remains a tough place to be an entrepreneur.
Jehil Thakkar, executive director, KPMG in India, says, "Governments–central, state and local, their policies, incentives and programmes play a substantial role in influencing entrepreneurs. In many cases, governments are moving towards friendlier policies but more rapid change is necessary. The white paper endeavours to assess the initiatives of select Indian states to encourage entrepreneurial growth and put forth best practices, raise the profile of discussions on entrepreneurship development and contribute to shaping policy."
While entrepreneurs in Gujarat and Karnataka are extremely satisfied with their government's quick policy decisions, they however, are hopeful of their quicker implementations. Entrepreneurs in Punjab desire more focused attention and will, from the political establishments, which they hope will steer investments in small scale industries.
However they appreciate their government's policy initiatives in agro and IT/ ITES sector.
The report further states that a government initiated funding mechanism or seed fund, as available for entrepreneurs in Gujarat and Punjab is desired by their counterparts in states like Delhi, Tamil Nadu and Maharashtra.
The wish list also includes need to fill the gap between academia and industry and industry-ready professionals, apart from a requirement for increased focus on vocational training and skills-based education especially in states like Punjab and Gujarat. While Gujarat tops the list in providing single window clearance, easy land transfer and land bank for small players as key motivation factors, entrepreneurs pointed out that to a large extent this is true only for select marquee projects and not all projects receive the same treatment.
The paper while highlighting the views of entrepreneurs reported that while different state governments are taking proactive policy decisions or framing innovative industrial strategies, awareness of the same is low among entrepreneurs in several states.
Similarly, in many areas, policies need to be made more current with today's environment. For example, in Delhi, the basic policy framework has not been revised for the last 27 years. Hence, many entrepreneurs are not aware of the policies and perhaps were not able to harness the benefits while starting their entrepreneurial journey.
According to entrepreneurs in Tamil Nadu, the government through Tamil Nadu Small Industries Development Corporation Limited (TANSIDCO) has also played a catalytic role in the promotion and development of small scale industries and hastening the industrial dispersal throughout the state. The state has also been one of the first in the country to specifically focus on promoting industry and business growth in Tier II and Tier III cities thus aiming for the holistic development of the state.
The report also brings to light the set of challenges faced by the governments. With more than 30 per cent of country's population below poverty line, the state's priorities are often clear and may not fit with the priorities of some entrepreneurs and that sometimes limits opportunities.
KPMG is the global network of professional services firms of KPMG International.
