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BUSINESS ENVIRONMENT PROJECT

TOPICBusiness Environment and Entrepreneurship

SUBMITTED TO Ms! "an#ha$ %upta

SUBMITTED B& Raveesh Jasu'a ()*BBS*+,-. Ni/hi$ Mano#ha ()*BBS*+,-(

Acknowledgement

We would like to acknowledge our teacher Ms. Aanchal gupta, our parents and friends for their constant support and guidelines because of which this project has been successful.

Raveesh Jasuja 0 !""#!$%&'

(ikhil Manocha 0 !""#!$%&0

Inde0
Introdu#tion Ease o1 Startin2 and Operatin2 Business Ta0ation 3e2a$ S4stem In1rastru#ture Entrepreneurship Edu#ation 5ithin India6s 7i2her Edu#ation S4stem Current Status8 Cha$$en2es and 3essons Creatin2 an Entrepreneurship Environment Reasons 1or the $a#/ o1 entrepreneurship in India So#ia$ Entrepreneurship in India Does the State 1a#i$itate Entrepreneurship9 Bi:$io2raph4 Re1eren#es

Introdu#tion
It is e0treme$4 important 1or entrepreneurs to understand the :usiness environment i!e! the :ureau#rati# set up8 2ro5th prospe#ts8 po$iti#a$ sta:i$it48 'udi#iar4 e11e#tiveness et# in their re2ion o1 :usiness! This arti#$e 1o#uses on India 1rom this perspe#tive and 5i$$ provide an overvie5 o1 some pertinent 1a#tors! In the $ast 1e5 4ears8 India has #onsistent$4 re2istered impressive %DP 2ro5th rates and is touted to :e one o1 the $ar2est e#onomies o1 the 5or$d in the #omin2 de#ades! "part 1rom providin2 a poo$ o1 5e$$ trained and hi2h s/i$$ed 5or/ 1or#e8 India a$so houses a -;( mi$$ion stron2 midd$e #$ass 5hi#h #ommands a 1ormida:$e spendin2 po5er! The in#reasin2 a11$uen#e < it has the 1ourth $ar2est :i$$ionaire popu$ation in the 5or$d < ma/es it even more attra#tive as a hi2h end produ#ts and $u0ur4 2oods mar/et! In addition8 than/s to a vi:rant demo#ra#48 it has en'o4ed re$ative$4 hi2her sta:i$it4 than other re2ions in its nei2h:orhood! =rom an entrepreneur>s perspe#tive8 :ureau#rati# issues $i/e #ompan4 re2istration period8 paper 5or/8 $i#ensin2 issues and ta0 and other in#entives a$so assume importan#e! The pro#edures 1or in#orporation o1 a #ompan4 in India $isted :rie1$4 #an :e 1ound here! It ta/es a:out ,, steps and on an avera2e a:out -; da4s 1or in#orporation in India! To #ir#umvent #ertain :ureau#rati# pro#edures8 sin2$e 5indo5 #$earan#es are a$so avai$a:$e 1or #ertain industries! The pro#edures are not ver4 di11erent 1or 1orei2n #iti?ens $oo/in2 to esta:$ish :usiness in India! 7o5ever8 there mi2ht :e a #ap on the amount o1 >1orei2n investment> in #ertain se#tors! "s a mar/et8 India>s spendin2 po5er ma/es it easi$4 one o1 the most $u#rative "sian mar/ets and even 2$o:a$$4 it remains an attra#tive mar/et! It has on$4 re#ent$4 'oined the >tri$$ion do$$ar %DP> #$u:! 7o5ever8 i1 PPP

@pur#hasin2 po5er parit4A is #onsidered it has :een a mem:er o1 this #$u: 1or a $on2 time no5! Its 2ro5th rate has :een hoverin2 at around )!;B over the past 1e5 4ears and man4 se#tors o1 the e#onom4 are no5 openin2 up! This openin2 up o1 se#tors traditiona$$4 o##upied :4 2overnment o5ned monopo$ies has #reated a void 5hi#h #an :e 1i$$ed :4 entrepreneurs! Man4 se#tors $i/e retai$8 in1rastru#ture8 :an/in28 insuran#e et# are no5 :ein2 hot$4 pursued! "part 1rom these se#tors8 opportunities a$so e0ist 1or sma$$ to medium entrepreneurs operatin2 in a ni#he! The Indian 'udi#iar4 has an unimpressive re#ord o1 $a5 en1or#ement! Contra#t en1or#ement and $e2a$ re#ourse is usua$$4 #um:ersome and the pro#edures are $on2 5inded and p$a2ued :4 red tape and #orruption! "$thou2h po$iti#a$ 5i$$ is :ein2 2arnered to over#ome these issues and set up #ourts e0#$usive$4 #aterin2 to #onsumer #on#erns and :usiness issues it ma4 :e $on2 :e1ore these set ups :e#ome 1un#tiona$! Entrepreneurs 5ou$d :e advised to redu#e their re$ian#e on #ontra#ts i1 dama2es 1rom vio$ation are e0pe#ted to :e ver4 hi2h! "s 1ar as inte$$e#tua$ propert4 is #on#erned8 the s#ope o1 re#o2nition o1 patents is restri#ted! Thus8 entrepreneurs ma4 have to use other $e2a$ resour#es to prote#t their innovation! On the :ri2hter side8 the $iti2ation #osts < insuran#e and $ia:i$it4 #osts < in India are e0treme$4 $o5 as #onsumer #ourts do not usua$$4 a5ard ridi#u$ous dama2es there:4 redu#in2 the >#ost o1 doin2 :usiness>! Entrepreneurs a$so need to :e a5are o1 the vast $in2ua$ and #u$tura$ diversit4 in India 5hi#h one needs to :e a5are o1 in order to e0pand! Various #omparative studies on :usiness re2u$ations in India8 as 5e$$ as in other #ountries are a$so Cuite revea$in2!,D. Ehi$e these studies re#o2ni?e India6s #omparative advanta2e in human resour#es8 s/i$$s8 demo2raphi# pro1i$e and 2ro5in2 domesti# demand8 India 1ares poor$4 vis-F-vis its :usiness environment! =or instan#e8 in the GDoin2 Business H(()6 report @See Bo0 I!,A8 5hi#h is pu:$ished :4 Eor$d Ban/ and the Internationa$ =inan#e Corporation8 India ran/s ,H(th out o1 ,+) #ountries < even :ehind #ountries su#h as The Ma$dives @I(thA8 Pa/istan @+IthA8 Sri 3an/a @,(,stA8 Ban2$adesh @,(+thA8 and Nepa$ @,,,thA! The OECD dra1t report on re2u$ator4 1rame5or/ in mar/et 1or 2oods and servi#es p$a#es India :ehind various

#ountries8 in#$udin2 Chi$e and Bra?i$!,;( The %$o:a$ Competitiveness Report H((+-() o1 the Eor$d E#onomi# =orum p$a#es India in the D)th position amon2 ,-, #ountries!,;, C$ear$48 there appears to :e need 1or Cua$itative improvement in the :usiness 1a#i$itation environment!

Ease o1 Startin2 and Operatin2 Business


Di11i#u$t4 and de$a4s in meetin2 various 2overnment reCuirements su#h as re2istration o1 #ompan48 o:tainin2 $i#en#es and re2isterin2 propert4 sti$$ #on1ront entrepreneurs! The Eor$d Ban/ report8 GDoin2 Business in South "sia H((+6 sa4s that8 it ta/es -; da4s @in Mum:aiA to ;H da4s @in Ne5 De$hiA to start a :usiness in India! The o11i#ia$ #osts o1 startin2 a :usiness are hi2h and the pro#ess Cuite #omp$e08 invo$vin2 no $ess than ,- pro#edures!,;) " $ar2e num:er o1 separate re2istrations < Ta0 "##ount Num:er @T"NA8 Permanent "##ount Num:er @P"NA8 Va$ue "dded Ta0 @V"TA8 Emp$o4ees Provident =und Or2ani?ation @EP=OA8 Emp$o4ees State Insuran#e Corporation @ESICA8 amon2 others < are reCuired 1or an4 :usiness to start operations! Re2isterin2 propert4 itse$1 reCuires si0 pro#edures and an avera2e o1 IH da4s!,;. Di11erent rates o1 stamp dut4 and trans1er #har2es e0ist a#ross states! "part 1rom these initia$ pro#edura$ hurd$es8 an entrepreneur a$so has to o:tain other permits and #$earan#es8 :oth at the #entra$ and state $eve$s! These in#$ude $and use approva$s8 :ui$din2 permits8 po5er #onne#tions8

5ater and se5era2e #onne#tions8 and so on! Even in states 5here the Sin2$e Eindo5 S4stem has :een put in p$a#e8 most entrepreneurs do not 1ind them satis1a#tor4J Gthere is a sin2$e 5indo5 :ut man4 venti$ators68 as an entrepreneur 1rom 74dera:ad apt$4 put it!,I( ":out ;(B o1 the entrepreneurs intervie5ed #$aimed to have pro:$ems 5hi$e app$4in2 1or and o:tainin2 various #$earan#es and $i#en#es! 7o5ever8 the per#eption re2ardin2 $i#en#es has 2radua$$4 improved over the 4ears! )orruption "$most I(B o1 the entrepreneurs intervie5ed said the4 1a#ed #orruption at some time durin2 their entrepreneuria$ 'ourne4 5hi$e dea$in2 5ith 2overnmenta$ pro#edures and o11i#ia$s! That is a ver4 distur:in2 statisti#. *nitiatives Alread+ ,nderwa+-M)A-.%/ One o1 the /e4 re1orms underta/en to ease the pro#ess o1 startin2 a :usiness in India in#$udes MC"-H,8 the e-2overnan#e pro'e#t o1 the Ministr4 o1 Compan4 "11airs aims to 1u$$4 automate pro#esses o1 #omp$ian#e and en1or#ement! The o:'e#tive o1 this initiative is to ma/e servi#es su#h as re2istration o1 #ompanies transparent! The /e4 :ene1its o1 this pro'e#t are e0pe#ted to in#$ude on$ine in#orporation o1 #ompaniesJ simp$i14in2 the pro#esses o1 1i$in2 o1 1orms and returnsJ re2istration as 5e$$ as veri1i#ation o1 #har2es 1rom an4 $o#ationJ inspe#tion o1 pu:$i# do#uments o1 #ompaniesJ and esta:$ishin2 a #entra$i?ed data:ase repositor4 o1 #ompanies! #ingle ,ni0ue )ompan+ (umber/ "nother idea that needs to :e e0p$ored is the proposa$ o1 a Sin2$e UniCue Compan4 Num:er that a ne5 :usiness #an use 1or #ompan48 ta0 and so#ia$ se#urit4 re2istrations! This has a$so :een su22ested :4 the Eor$d Ban/ Report8 GDoin2 Business in South "sia H((+!6 On#e su#h a num:er is adopted8 the re$evant re2istration in1ormation #ou$d :e 1or5arded dire#t$4 :4 the re2istr4 o1 #ompanies to the ta0 administration o11i#es8 the EP=O and the ESIC. Window #+stem: In order to 1a#i$itate the pro#ess o1 o:tainin2 #$earan#es8 man4 states have introdu#ed the Gsin2$e 5indo5 #$earan#e6 pro#edure! 7o5ever8 the po5er to a##ord approva$s is sti$$ vested 5ith various departments and a2en#ies under their separate statutes

and noti1i#ations! The e0istin2 $e2a$ 1rame5or/ does not a$$o5 one #onso$idated department or a2en#4 to a##ord a$$ reCuisite #$earan#es! Neverthe$ess8 some state 2overnments have ta/en initiatives to over#ome this pro:$em! =or instan#e8 in Ra'asthan8 the ru$es o1 :usiness have :een amended 1or spe#ia$$4 empo5ered :odies to a##ord approva$s 1or su:'e#ts under di11erent departmentsJ si2ni1i#ant$48 the amendments disa$$o5 an4 department to revie5 the de#isions o1 these empo5ered :odies! Other simi$ar $e2is$ations in#$ude the G"ndhra Pradesh In1rastru#ture Deve$opment Ena:$in2 "#t8 H((,68 the GChhattis2arh "ud4o2i/ Nivesh Protsahan "dhii4am8 H((H6 and the GOrissa Industries =a#i$itation "#t8 H((D6!

#ingle )omposite Application 1orm/ Other simp$i14in2 a#tions in#$ude the introdu#tion o1 a Sin2$e Composite "pp$i#ation =orm @SC"=A 5hi#h a$$o5s an entrepreneur to su:mit a sin2$e app$i#ation 1orm 1or o:tainin2 di11erent #$earan#es and approva$s 1rom various departments and 2overnment authorities! States that have introdu#ed this initiative in#$ude "ndhra Pradesh8 %u'arat8 Karnata/a8 Kera$a8 Orissa8 Pun'a:8 Ra'asthan8 Tami$ Nadu and Uttar Pradesh! *llustrative *nternational "est 2ractices/ Me0i#o8 Thai$and and 3atvia have su##eeded in $imitin2 inspe#tions to ,(B8 ,;B and H(B o1 shipments respe#tive$48 :4 1o$$o5in2 a ris/ assessment po$i#4 that #a$#u$ates the pro:a:i$it4 o1 inspe#tions :ased on pro1i$es o1 :usinesses!,ID Eith the introdu#tion o1 e$e#troni# 1i$in2 o1 do#uments 1or tradin2 @import8 e0port and trans-shipment permit app$i#ationsA8 the time 1or #ar2o #$earan#es in Sin2apore 1e$$ 1rom 1our da4s to -( minutesJ the num:er o1 shipments pro#essed rose three-1o$d and #ost to :usinesses o1 hand$in2 trade do#uments 1e$$ :4 a third!,I; Mauritius has $aun#hed a virtua$ one-stop shop $in/in2 the #ommer#ia$ re2istr4 and ta08 and $o#a$ authorities throu2h a #entra$ e$e#troni# data:ase! *llustrative (ational "est 2ractices The Eor$d Ban/-I=C Report8 GDoin2 Business in South "sia H((+68 mentions some Indian #ities

/no5n 1or their respe#tive :est pra#ti#es @see Bo0 I!HA! E0amp$es in#$ude Jaipur @1or startin2 :usinessA8 Bhu:anes5ar @1or o:tainin2 #onstru#tion #$earan#esA8 Ban2a$ore @1or o:tainin2 :ui$din2 permitsA and 74dera:ad @1or o:tainin2 $and use approva$s and re2isterin2 propert4A! Maharashtra and Karnata/a have ta/en steps to ease the pro#ess o1 re2isterin2 propert4! Ehi$e Maharashtra has ta/en steps to $o5er stamp duties8 Karnata/a has redu#ed the time ta/en in the mutation and e0e#ution o1 sa$e deeds! =urther8 re2ardin2 mode o1 pa4ment o1 stamp dut48 Karnata/a has dis#ontinued the use o1 stamp paper and ena:$ed pa4ment throu2h :an/ dra1t! Chennai has a HD-hour on$ine #ontainer tra#/in2 s4stem 5hi$e Ban2a$ore has an e-pa4ment 2ate5a4 1or #ustom duties! The Mum:ai Port Trust has a$so started an On$ine Port Communit4 S4stem!,I+ In 1a#t8 the GDoin2 Business in South "sia H((+6 report states that India #an 'ump ;; p$a#es 1rom its #urrent ran/ i1 some o1 the $o#a$ :est pra#ti#es are adopted nation5ide!

Ta0ation
Entrepreneurs a$so 1a#ed pro:$ems re$atin2 to #um:ersome ta0 pro#edures as 5e$$ as mu$tip$i#it4 o1 ta0es! "##ordin2 to the Eor$d Ban/-I=C Report8 GDoin2 Business H(()68 India6s ta0 re2ime reCuires I( separate pa4ments ever4 4ear!,I) Co$$e#tion o1 ta0es throu2h di11erent 2overnment a2en#ies a$so in#reases the pro:$ems o1 #omp$4in2 5ith ta0 re2u$ation! There a$so e0ists a mu$tip$i#it4 o1 ta0es! In addition to servi#e ta08 CENV"T and #ustom duties that are imposed :4 the #entra$ 2overnment8 state and $o#a$ $eve$s o1 2overnments $ev4 respe#tive state V"T*sa$es ta08 entertainment ta0 and entr4 ta0!,I. "s seen in =i2ure I!D :e$o58 H+B o1 entrepreneurs intervie5ed said the4 had 1a#ed pro:$ems :e#ause o1 mu$tip$i#it4 o1 ta0es a$oneJ ,-B 1a#ed a pro:$em 5ith #omp$e0it4 o1 pro#edures a$one and HIB 1a#ed pro:$ems 5ith :oth! In other 5ords8 IIB o1 the entrepreneurs intervie5ed8 i!e! t5o out o1 ever4 three entrepreneurs8 1a#ed di11i#u$ties 5ith re2ard to some aspe#t o1 ta0ation - the mu$tip$i#it4 o1 ta0es or the #omp$e0it4 o1 1i$in2 pro#edures8 or :oth! 2rocess Re-engineering in 3-governance Entrepreneurs 5ere a$so o1 the opinion that 5hi$e on$ine 1i$in2 o1 ta0es had :een introdu#ed8 ta0 #omp$ian#e 5as sti$$ not eas4 sin#e 1orms and pro#edures are

sti$$ #omp$i#ated! =or instan#e8 an entrepreneur 1rom Ko$/ata said that a$most one-third o1 his time 5as spent in doin2 paper5or/ and #omp$4in2 5ith mu$tip$e ta0 reCuirements! This #on1irms NKC6s ear$ier re#ommendations that e-2overnan#e initiatives shou$d :e more a:out re-en2ineerin2 2overnment pro#esses rather than on$4 a:out 1ront-end #omputeri?ation 4e+ *nitiatives in 5a6ation/ The introdu#tion o1 Va$ue "dded Ta0 @V"TA in "pri$ H((; 5as a si2ni1i#ant measure! Eith the V"T s4stem in operation8 it has a$so :een re#ent$4 reported that Indian states have8 in prin#ip$e8 a2reed to move to5ards a #ommon #$assi1i#ation o1 a$$ mer#handise so$d 5ithin the #ountr4 - the G7armoni?ed S4stem o1 Nomen#$ature6 @7SNA!,+, Current$48 the same produ#t #an :e ta0ed at di11erent rates a#ross states $eadin2 to pro:$ems o1 #ost un#ertaint4 1or entrepreneurs! " #ommon #$assi1i#ation o1 a$$ mer#handise so$d throu2hout the #ountr48 #oup$ed 5ith 1i0ation o1 ta0 rates 1or a$$ #$assi1i#ations8 is a move to5ards 2reater uni1ormit4 and there:48 $ess #ost un#ertaint4 1or entrepreneurs!,+H " sin2$e 7SN #ode 1or a$$ the produ#ts under V"T a#ross the #ountr4 #ou$d a$so he$p states in ma/in2 operationa$ the Ta0 In1ormation Net5or/ @TINL&SA8 an on$ine net5or/ intended to :rin2 transparen#4 to inter-state transa#tions There are a$so state-$eve$ initiatives to he$p entrepreneurs! Maharashtra has8 1or instan#e8 #omputeri?ed re2istration pro#edures 1or sa$es ta0* V"T8 5hi#h drasti#a$$4 redu#es the time ta/en in 1i$in2 ta0 returns! "nother re1orm measure 5hose 1easi:i$it4 needs to :e e0p$ored is redu#in2 the 1reCuen#4 o1 pa4ments :4 entrepreneurs 1rom month$4 to a Cuarter$4 :asis!,+D The issue o1 #onso$idation o1 ta0 1orms a$so needs to :e e0amined in detai$! =or e0amp$e8 an entrepreneur in S5eden #an 1i$e mu$tip$e ta0es < #orporate in#ome ta08 va$ue added ta08 $a:our #ontri:utions as 5e$$ as propert4 ta0 < in a sin2$e 1orm!

3e2a$ S4stem
O1 the entrepreneurs intervie5ed8 D-B said the4 1ind the #urrent $e2a$ pro#edures and reCuirements to :e either Ge0treme$4 unsatis1a#tor46 or Gsome5hat unsatis1a#tor46 @see =i2ure I!;A! Their #omp$aints $ar2e$4 re$ate to pro#edures o1 $a5 su#h as the s$o5 pa#e o1 en1or#in2 #ontra#ts

as 5e$$ as the #urrent :an/rupt#4 and $a:our $a5 pro#edures! ,.B o1 the entrepreneurs intervie5ed said the4 1ee$ #onstrained :4 $a:our $a5s @see =i2ure I!,A! "##ordin2 to the Eor$d Ban/-I=C6s GDoin2 Business H(()6 report8 it ta/es on an avera2e8 ,( 4ears to #omp$ete :an/rupt#4 pro#eedin2s in India! =urther8 #$aimants #an e0pe#t to re#over an avera2e o1 $ess than ,,!I #ents on the do$$ar! Ehi$e o11i#ia$ $iCuidators are appointed to #arr4 out $iCuidations8 the pro#edures are o1ten $on2 dra5n! "nother $e2a$ issue is that o1 un$imited $ia:i$it4 1or promoters in partnership #on#erns and proprietorship :usinesses due to the a:sen#e o1 3imited 3ia:i$it4 Partnerships @33PsA as a $e2a$ entit4 in India! #uggested *mprovements Some o1 the $e2a$ re1orms that 5ou$d 1a#i$itate a :etter environment 1or Entrepreneurship are as 1o$$o5s a. Specialized Commercial Courts/ Sin#e the de:t re#over4 tri:una$s in India have 'urisdi#tion to entertain on$4 de:t re$ated issues8 a possi:$e re1orm 1or speed4 en1or#ement o1 #ontra#ts 5ou$d :e the esta:$ishment o1 separate spe#ia$i?ed #ommer#ia$ #ourts8 5hi#h 5ou$d dea$ 5ith a$$ t4pes o1 #ommer#ia$ disputes. b. Undertake Reforms in Bankruptcy Laws/ Dis#ussions are a$so under5a4 to #han2e India6s :an/rupt#4 $a5s! The dra1t Companies Bi$$ H((+ is e0pe#ted to simp$i14 ru$es and pro#edures! Esta:$ishment o1 institutions su#h as the Nationa$ Compan4 3a5 Tri:una$ @NC3TA and Nationa$ Compan4 3a5 "ppe$$ate Tri:una$ @NC"3TA are a$so e0pe#ted to :rin2 a:out improvements in dea$in2 5ith #ases re$atin2 to inso$ven#48 reha:i$itation and $iCuidation and 5indin2 up pro#eedin2s! RBI6s "dvisor4 %roup on Ban/rupt#4 3a5s has a$so re#ommended the ena#tment o1 a ne5 :an/rupt#4 #ode to dea$ more Cui#/$4 5ith $iCuidations! c. One Person Company/LLPs/ The dra1t Companies Bi$$ H((+ is a$so e0pe#ted to propose a ne5 entit4 #a$$ed a one-person #ompan4 @OPCA that 5ou$d provide individua$ entrepreneurs the 1$e0i:i$it4 and $o5 #ost o1 1ormin2 a proprietorship*partnership #on#ern 5hi$e restri#tin2 their persona$ $ia:i$ities to that o1 a private $imited #ompan4!,+) Simi$ar$48 the 2overnment is a$so e0pe#ted to ena#t a $a5 on 3imited 3ia:i$it4 Partnerships soon!

In1rastru#ture
The re$ia:i$it4 and avai$a:i$it4 o1 5or$d-#$ass in1rastru#ture servi#es is #riti#a$ 1or the 2ro5th o1 Entrepreneurship! India6s ph4si#a$ in1rastru#ture < roads*hi2h5a4s8 rai$5a4s8 ports8 airports8 po5er8 te$e#om < is seen as a :ott$ene#/ to the smooth operation o1 a$$ e#onomi# a#tivit4! The hi2h transport and supp$4-#hain #osts that poor in1rastru#ture entai$s are si2ni1i#ant8 parti#u$ar$4 1or a sma$$ entrepreneur! Enterprises surve4ed in the %$o:a$ Competitiveness Report H((+-()8 rated inadeCuate in1rastru#ture as Gthe most pro:$emati# 1a#tor6 1or doin2 :usiness in India!,)( In this report8 5hi$e India s#ores 5e$$ on Gso1t6 parameters su#h as hi2her edu#ation8 the ru$e o1 $a5 and po$iti#a$ $e2is$ation8 it $oses out on the adeCua#4 o1 in1rastru#ture 1a#i$ities! "##ordin2 to another re#ent surve48 D(B o1 Indian CEOs are 5orried a:out the Cua$it4 o1 in1rastru#ture in the #ountr4 Availabilit+ of Work #pace "nother #ru#ia$ in1rastru#ture issue 1or a ne5 entrepreneur is the avai$a:i$it4 o1 adeCuate 5or/ spa#e! There are interestin2 di11eren#es :ased on 1ami$4 :a#/2rounds as seen in =i2ure I!+ :e$o5! "mon2 1irst 2eneration entrepreneurs8 on$4 ,;B reported a$read4 havin2 5or/ spa#e at the start-up sta2e! " ma'orit4 o1 se#ond 2eneration entrepreneurs in the same :usiness @I.BA a$read4 had 5or/ spa#e to start operations! 7o5ever8 this 1i2ure dips si2ni1i#ant$4 1or se#ond 2eneration entrepreneurs8 5ho pursue a di11erent :usiness @--BA! "nother pattern o:served is that $easin2 o1 5or/ spa#e is more preva$ent amon2 1irst 2eneration and se#ond 2eneration entrepreneurs pursuin2 a :usiness di11erent 1rom that o1 their 1ami$4! O1 the 1irst 2eneration entrepreneurs8 H.B $eased 5or/ spa#e #ompared to ,+B amon2 se#ond 2eneration entrepreneurs in a di11erent :usiness! #ome Recent *nitiatives/ Sin#e inadeCuate in1rastru#ture is seen as a #riti#a$ :ott$ene#/ to e#onomi# 2ro5th8 the 2overnment has 2iven

hi2h priorit4 to Cua$it4 in1rastru#ture deve$opment8 in#orporatin2 various de$iver4 me#hanisms su#h as PPPs @see Bo0 I!-A! The tota$ investment in in1rastru#ture in H((I-(+ is estimated to :e around ;B o1 %DP! The tota$ investment in in1rastru#ture in the E$eventh =ive &ear P$an is pro'e#ted at Rs! H(8 I(8 ,.- #rore or +!I;B o1 %DP!,)"mon2 the /e4 in1rastru#ture deve$opment pro'e#ts are the Nationa$ 7i2h5a4s Deve$opment Pro'e#t @N7DPA8 Pradhan Mantri %ram Sada/ &o'ana @PM%S&A8 Nationa$ Maritime Deve$opment Pro2ramme8 Bharat Nirman 1or rura$ in1rastru#ture8 Ja5ahar$a$ Nehru Nationa$ Ur:an Rene5a$ Mission @JNNURMA8 and Inte2rated Deve$opment o1 Sma$$ and Medium To5ns @IDSMTA! "t the same time8 the private se#tor6s share 1or investment in in1rastru#ture is e0pe#ted to in#rease 1rom H(B to -(B durin2 the #urrent P$an period!

Entrepreneurship Edu#ation 5ithin India6s 7i2her Edu#ation S4stem


*ntroduction/ "ackground In the ,..(s8 India e0erted 2reater e11ort to promote and nurture entrepreneurship! "ttempts at various $eve$s have ta/en p$a#e to dire#t$4 or indire#t$4 promote entrepreneurship! The attempts 1a$$ under three main #ate2ories remova$ o1 state-imposed :arriers 1or startin2 :usinessesJ avai$a:i$it4 o1 1inan#esJ edu#ation and nurturin2! =irst8 entrepreneurship has :een en#oura2ed in India :4 s4stemati# attempts at remova$ o1 state-imposed stru#tura$ and re2u$ator4 road:$o#/s! The 2rantin2 o1 $i#enses and po$i#ies on #ontro$s and ta0ation has :een #ited as one o1 the ma'or hurd$es in settin2 up and runnin2 ne5 :usinesses! More pro2ressive 2overnments have tried to ma/e it easier 1or entrepreneurs to set up :usinesses! The 2ro5th o1 Ban2a$ore and 74dera:ad as hu:s 1or IT #ompanies is a dire#t out#ome o1 2overnment support in the 1orm o1 ta0 ho$ida4s 1or start-ups and se#tor-re2ion spe#i1i# sops to start ne5 ventures! Se#ond8 there are attempts to ma/e 1inan#es avai$a:$e to :usinesses! In the #urrent :an/in2 paradi2m8 it is eas4 1or an esta:$ished :usinessperson to 2et $oans 1or startin2 ne5 ventures or e0pand #urrent :usinesses! 7o5ever8 a ne5 entrepreneur 5ishin2 to start a ne5 :usiness 1inds it ver4 di11i#u$t to pro#ure :asi# 1unds to set up and run a :usiness! The Reserve Ban/ o1 India has ur2ed :an/s to provide 1unds to sma$$ and ne5 :usinesses @Indian E0press8 -, De#em:er8 H((HA! The 2overnment o1 India is a$so in#reasin2 its

e11orts in this dire#tion! The Sma$$ Enterprise Deve$opment Bi$$ o1 H((in#$uded 2uide$ines 1or :an/s and other 2overnment a2en#ies to ensure the eas4 dis:ursement o1 $oans 1or ne5 ventures! Su:seCuent$48 the $o5erin2 o1 :orro5in2 rates 1rom the :an/s has a$so made it 5orth the 5hi$e o1 entrepreneurs to run pro1ita:$e :usinesses! " third 1orm o1 support is the deve$opment o1 entrepreneuria$ ta$ent in edu#ationa$ institutions! India6s hi2her edu#ation s4stem 2enerates a $ar2e num:er o1 2raduates ever4 4ear! 7o5ever8 its e#onom4 is not in a position to a:sor: the 2raduates passin2 out8 $eadin2 to an in#rease in the edu#ated unemp$o4ed! In re#ent 4ears8 India6s popu$ation has 2ro5n ver4 1ast! Be#ause o1 the histor4 o1 India and its mu$ti-#u$tura$ #omposition8 it seems impossi:$e to have a =ami$4 P$annin2 po$i#4 $i/e that o1 China in the near 1uture! It is $i/e$4 that India6s popu$ation 5i$$ #ontinue to 2ro58 5hi#h 5i$$ #onseCuent$4 5orsen the emp$o4ment situation! In India8 most entrepreneurs 5ere sin2$e o5ners8 ni$ emp$o4ees8 and one-person sho5s 5ith $itt$e 2ro5th prospe#ts! The so-#a$$ed entrepreneurs do :usiness main$4 1or se$1emp$o4ment and are not the Mrea$N entrepreneurs! In order to #at#h up 5ith the pa#e o1 deve$oped #ountries8 India needs man4 entrepreneurs 5i$$in2 to ma/e their :usinesses :i22er! I1 the universit4 students 5ith hi2h entrepreneuria$ potentia$s 2et proper trainin28 the4 5i$$ have the :est prospe#ts 1or :e#omin2 Mrea$N entrepreneurs! Entrepreneurship is a matter that invo$ves ever4oneOthe 2overnment8 so#iet48 and the edu#ationa$ institutions! I1 Entrepreneurship Edu#ation @EEA in India6s hi2her edu#ation s4stem #annot #omp$ete$4 address ma'or o:sta#$es in the pursuit o1 nationa$ e#onomi# deve$opment and emp$o4ment8 at $east it #an o11er a start 3ntrepreneur, 3ntrepreneurship, and 3ntrepreneurship 3ducation The #ore o1 EE amon2 the edu#ationa$ institutions is entrepreneur trainin2! The 1o$$o5in2 5ords are usua$$4 as#ri:ed to an entrepreneur innovation @Kir?ner8 ,.+-J S#humpeter8 ,.-DJ Bo$ton8 E!K!8 ,.)IJ Timmons8 ,.+)AJ moderated ris/-ta/in2 @Timmons8 ,.+)J 34ns/e48 H((HAJ a$ertness @Kir?ner8 ,.+-AJ de#ision-ma/in2 and responsi:i$ities- see/in2 @Bro#/haus and 7or5it?8 ,.)IJ Sutton8 ,.;DJ Ee$sh and Ehite8 ,.),AJ am:ition8 desire 1or independen#e8 responsi:i$it4 and se$1-#on1iden#e @%orman8 7an$on8 and Kin28 ,..+J Timmons8 ,.+)J Se0ton8 ,.)(J Dun/e$:er2 and Cooper8 ,.)HAJ

need 1or po5er @Dun/e$:er2 and Cooper8 ,.)HAJ and persona$ va$ue orientation @%asse8 ,.++J Timmons8 ,.+)A! =or the purpose o1 this stud48 5e de1ine an entrepreneur as Man individua$ 5ho esta:$ishes and mana2es a :usiness 1or pro1it and 2ro5th!N Bein2 an entrepreneur8 he*she is perhaps des#ri:ed as a mi0 o1 these attri:utes8 a$thou2h it is di11i#u$t to identi14 5hi#h trait is stron2er8 in 5hat situation it is stron2er8 et#! Entrepreneurship is a mu$ti-1a#eted phenomenon! De1initions o1 entrepreneurship 1o#us on di11erent aspe#ts o1 the phenomenon @Davidson8 H((-A and ori2inate 1rom di11erent dis#ip$ines! Shane and Ven/ataraman @H(((A used the 5ord Mhod2e-pod2eN to des#ri:e the situation o1 #urrent studies on entrepreneurship! Entrepreneurs do entrepreneurship! =rom the de1inition o1 an entrepreneur8 5e #an see that entrepreneurship is more than the mere #reation o1 :usiness! It is a d4nami# pro#ess o1 vision8 #han2e8 and #reation! It reCuires an app$i#ation o1 ener24 and passion to5ards the #reation and imp$ementation o1 ne5 ideas and #reative so$utions!

Current Status C!allen"es and Lessons


)urrent #tatus Courses in entrepreneurship are the #ore a#tivit4 o1 EE in India! Over ,(( di11erent departments o1 universities o11er #ourses in entrepreneurship! =or instan#e8 NMIMS #ondu#ts a t5o-4ear8 1u$$time pro2ram on 1ami$4 :usiness mana2ement! Most o1 the #ourses #over the $e2a$ and mana2eria$ aspe#ts o1 entrepreneurship! But the motivationa$ aspe#t tau2ht at NMIMS is eCua$$4 important8 sin#e it #reates an aspiration and improves #on1iden#e $eve$s! This pro2ram has eCuipped students 5ith the s/i$$s8 /no5$ed2e8 and mind-set to run their 1ami$4 :usiness! ISB in 74dera:ad a11i$iated to non-pro1it or2ani?ation Eadh5ani =oundation @#ommitted to promotin2 entrepreneurshipA8 o11ers entrepreneuria$ and in#u:ation assistan#e! ISB has /no5$ed2ea:$e instru#tors eCuipped 5ith :usiness e0perien#e! In India8 man4 entrepreneurship #enters have :een 1ounded to #oordinate the :road arra4 o1 a#tivities8 pro2rams8 and resour#es 5ithin the edu#ationa$ institutions! =or e0amp$e8 the NS Ra2havan Center 1or Entrepreneuria$

3earnin2 in IIM Ban2a$ore @NSRCE3OIIMBA #arries out internationa$ #o$$a:oration pro'e#ts! The %$o:a$ Entrepreneurship Monitor @%EMA Pro'e#t 5ith the 3ondon Business S#hoo$8 the E5in2 Marion Kau1mann =oundation8 and Ba:son Co$$e2e has :een a ma'or pro'e#t 1or the $ast three 4ears! In the #ase o1 IIM Ca$#utta8 a#tivities on innovation and entrepreneurship are more pra#ti#a$ and driven :4 students8 a$on2 5ith the 1a#u$t4 advisors! The IIMC6s entrepreneurship #e$$ ho$ds one o1 the :i22est :usiness p$an #ontest in "sia8 iHIOideas to imp$ementation 5ith &a$e Universit46s &a$e Entrepreneuria$ So#iet4 @&ESA! These partnerships and #enters are a$so happenin2 in the te#hni#a$ s#hoo$s as mu#h as in the :usiness s#hoo$s! The nota:$e names in#$ude the Te#hno$o24 Business In#u:ation Unit De$hi8 the SIDBI Innovation and In#u:ation Centre in IIT Kanpur8 and the So#iet4 1or Innovation and Deve$opment @SIDA at the India Institute o1 S#ien#e Ban2a$ore8 one o1 the o$dest #enters in India! In 1a#t SID-IIS#6s nota:$e a#hievement is a pro'e#t #a$$ed SUTR"-Sustaina:$e Trans1ormation o1 Rura$ "reas--5hi#h uses non-edi:$e oi$s 1rom indi2enous neem trees as a su:stitute 1or 1ue$ 2eneration! Man4 ideas are 1o#used on so$vin2 the pro:$ems o1 rura$ povert48 sin#e Minnovation is 2ettin2 #ompassionate8 too!N The Entrepreneurship Deve$opment Pro2ram @EDPA in India has a $on2 histor4! It is desi2ned to he$p an individua$ in stren2thenin2 his*her entrepreneuria$ motivation and in a#Cuirin2 s/i$$s and #apa:i$ities ne#essar4 1or p$a4in2 his*her entrepreneuria$ ro$e e11e#tive$4! In the ear$4 ,.I(s8 an idea #a$$ed the Industria$ Campai2n too/ shape8 en$ar2in2 itse$1 throu2h the 4ears to :e#ome a #ountr45ide movement present$4 /no5n as the EDP! Entrepreneurship deve$opment and sma$$-s#a$e industries are inter-re$ated! Most provin#es have Sma$$ Industries Servi#e Institutes that provide EDPs! The trainees are provided 5ith 1inan#ia$ support to start their :usinesses! The4 a$so re#eive e0emptions 1rom ta0es and are prote#ted 1rom undue #ompetition 1rom :i2 :usiness! " variet4 o1 trade asso#iations8 in addition to the Nationa$ Sma$$ Industries Corporation and Sma$$ S#a$e Deve$opment Or2ani?ation8 promote and $o::4 1or sma$$ :usiness interests!

C!allen"es for ## in $ndia


)ultural barriers Entrepreneurship #an deve$op on$4 in a so#iet4 in 5hi#h #u$tura$ norms permit varia:i$it4 in the #hoi#e o1 paths o1 $i1e! Un1ortunate$48 the Indian #u$ture #onsists o1 a net5or/ o1 :ene1its that in man4 5a4s run #ounter to entrepreneurship @3eo Pau$ Dana8 H(((A! =or e0amp$e8 Indians :e$ieve that :ein2 passive and #ontent 5ith the status Cuo is hea$thier 1or the inner sou$ than strivin2 to improve one6s situation! The4 :e$ieve that pea#e o1 mind #an :e a#hieved 1rom spiritua$ #a$m rather than 1rom materia$ism! Peop$e in India are more sensitive to emotiona$ a11init4 in the 5or/p$a#e than to 5or/ and produ#tivit4! Moreover8 the #aste s4stem has impeded #$ass mo:i$it4 1or #enturies! The #aste s4stem and its series o1 o:$i2ations rein1or#e the pra#ti#e o1 1o$$o5in2 a 1ami$4 o##upation rather than $aun#hin2 a ne5 venture! "n entrepreneur needs to 5or/ around the #$o#/ and this has /ept some peop$e a5a4 1rom their o5n start-ups! "1ter a$$8 #ompared 5ith other #ountries8 1ami$4 $i1e in India is more important! Peop$e8 even toda48 thin/ that ta/in2 up a 'o: is mu#h :etter than ta/in2 a ris/ and startin2 a venture! I1 a 'o: is ta/en up a1ter #o$$e2e8 the person 5i$$ soon have a #om1orta:$e e0isten#e! The other s#enario #ou$d :e startin2 a venture a1ter 5or/in2 1or 1our to 1ive 4ears! This reCuires a $ot o1 #ommitment and #oura2e to $eave the present 'o:! "s time passes :48 the ris/-ta/in2 #apa#it4 2oes do5n! 7ifficulties towards #tart-ups Startin2 a :usiness in India is #ost$4 in terms o1 the time reCuired and the #ost invo$ved! Ehi$e it ta/es 'ust 1ive da4s to start a :usiness in the United States and 'ust t5o da4s in "ustra$ia8 in India it ta/es as $on2 as ). da4s! Ehat rea$$4 hurts is that even in nei2h:ors Pa/istan8 Nepa$8 and Ban2$adesh8

it ta/es 'ust HD8 H,8 and -; da4s respe#tive$4 to do so! The reason 1or su#h de$a4 is :ureau#rati#--too man4 ru$es and re2u$ations8 and too mu#h paper5or/ @"shish %upta8 H((DA! On avera2e8 it 5ou$d #ost an entrepreneur near$4 ha$1 o1 his*her tota$ in#ome @D.!;B o1 the 2ross nationa$ in#ome per #apitaA to set up a :usiness8 5hi#h is ,(( times more than 5hat is needed to set up a :usiness in the United States! "2ain poorer #ousins Bhutan8 Pa/istan8 and Sri 3an/a are :etter o11! Doin2 :usiness in India is an e0treme$4 di11i#u$t proposition @"shish %upta8 H((DA! The a:sen#e o1 an appropriate entrepreneuria$ #$imate8 the $a#/ o1 reCuired in1rastru#ture 1a#i$ities8 and the $a#/ o1 a##ess to re$evant te#hno$o24 hinder rapid industria$ deve$opment! Most o1 the time8 the Indian entrepreneurs have to ta#/$e e$e#tri#it48 transportation8 5ater8 and $i#ensin2 pro:$ems! *ncomplete 3ntrepreneurship 3ducation " surve4 done :4 the Entrepreneurship Deve$opment Institute8 India @EDIIA in H((- sho5s that 4oun2 peop$e are a1raid to start their o5n :usiness :e#ause the4 are not #on1ident8 not #apa:$e8 and $a#/ /no5$ed2e in startin2 a :usiness! Man4 peop$e have the opportunit4 to #han2e 'o:s or :e#ome an entrepreneur i1 the4 are proper$4 trained! The students in India are not satis1ied 5ith the Mhands-onN support o1 their universit4 in the 1oundin2 pro#ess! The EE in the hi2her edu#ation s4stem shou$d8 there1ore8 satis14 the need 1or entrepreneurship :4 se$e#tin2 P motivatin2 P trainin2 P supportin2! Un1ortunate$48 the present EE in India 'ust #on#entrates on re$ated #ourses! Moreover8 the so-#a$$ed entrepreneurship #ourses are simi$ar to the 2enera$ :usiness #ourses! But 2enera$ :usiness mana2ement edu#ation has no si2ni1i#ant in1$uen#e on entrepreneuria$ propensit4 @7osta2er and De#/er ,...A! The 1indin2s o1 a surve4 on :usiness o5ners in India su22est that mana2ement edu#ation is not an important driver o1 entrepreneuria$ attitudes @%upta ,..HA! There is a demand 1or edu#ation pro2rams spe#i1i#a$$4 desi2ned to e0pand students6 /no5$ed2e and e0perien#e in entrepreneurship!

The #ontents and tea#hin2 methods have to :e di11erentiated :et5een entrepreneurship and traditiona$ :usiness #ourses! Besides o11erin2 the #ourses in entrepreneurship8 some edu#ationa$ institutions a$so or2ani?e entrepreneurship re$ated a#tivities! But these a#tivities are not mu#h di11erent 1rom ea#h other and are not supportive o1 their edu#ationa$ pro2rams! =or e0amp$e8 a$most ever4 IIM has its o5n in#u:ator8 :ut those in#u:ators are main$4 desi2ned 1or outside entrepreneurs!

Lessons Learned
8essons from the 372 "$thou2h the EDP is main$4 desi2ned 1or se$1-emp$o4ed peop$e8 some $essons ma4 a$so :e $earned 1rom Indian and Chinese universities! Sin#e not ever4one has the potentia$ to :e#ome an entrepreneur8 the proper identi1i#ation and se$e#tion o1 potentia$ entrepreneurs is the 1irst step in the EDP! Those 5ith hi2h entrepreneuria$ potentia$s are se$e#ted throu2h parti#u$ar$4 desi2ned pro#edures! Tests8 2roup dis#ussions8 and intervie5s ma4 :e used in the se$e#tion o1 entrepreneurs! Empiri#a$ 1indin2s indi#ate that the #onvi#tion to start up a ne5 venture is to some e0tent a Cuestion o1 persona$it4 stru#ture and attitude to5ards entrepreneurship @Bro#/haus and 7or5it? ,.)IJ Shaver and S#ott ,..,J 3Qth'e and =ran/e H((,A! =or se$e#ted #andidates8 deve$opment o1 a#hievement motives is essentia$ in the EDP! " motivation deve$opment pro2ram ma4 #reate se$1-a5areness and se$1-#on1iden#e amon2 the parti#ipants and ena:$e them to thin/ positive$4 and rea$isti#a$$4! Eithout a#hievement motivation trainin28 entrepreneurship edu#ation :e#omes an ordinar4 e0e#utive deve$opment edu#ation! Care1u$$4 desi2ned pro2rams 5i$$ :e o11ered :ased on the situation o1 the trainees! "1ter the proper trainin2 o1 the se$e#ted #andidates8 essentia$ me#hanisms su#h as 1inan#ia$ assistan#e 5i$$ :e o11ered to he$p them su##eed! 3i/e5ise8 the EE tea#hin2 sta11 shou$d a$so :e se$e#ted #are1u$$4! In theor48 a $e#turer o1 entrepreneurship edu#ation8 1irst o1 a$$8 must :e a su##ess1u$ or e0perien#ed entrepreneur! " Cua$i1ied EE tea#her shou$d a$so have some

entrepreneuria$ pra#ti#es espe#ia$$4 in ris/ ta/in2 and opportunit4 per#eivin2 as 5e$$ as entrepreneuria$ Cua$ities su#h as 2ood #ommuni#ations s/i$$s! Other5ise8 tea#hin2 Cua$it4 #annot :e 2uaranteed! " pro2ram in spe#ia$i?ed trainin2 and pro1essiona$ deve$opment in entrepreneurship 5i$$ :e needed! In 1a#t8 EE needs a 2roup o1 tea#hers 5ho have di11erent :a#/2rounds and e0pertise! " va$ua:$e e0perien#e 1or the EDP in India is its tea#hers*trainers 5ho are Cua$i1ied and 5ho #ome 1rom di11erent universities8 industries8 2overnment a2en#ies8 et#! Those tea#hers*trainers are 5e$$ or2ani?ed :4 the trainin2 institutes! 8essons from the ,33 in )hina In the $ate ,..(s8 the Chinese 2overnment started to pa4 attention to the deve$opment o1 sma$$ and medium si?ed enterprises @SMEsA! Some resear#h has :een done on this topi#! "n MB" edu#ation is #urrent$4 popu$ar in China! Some MB" $e#turers 5ho 5ere trained a:road #ame into #onta#t 5ith EE in the deve$oped #ountries! Ba#/ in China8 the4 tau2ht simi$ar #ourses in the MB" pro2rams! 3ater8 5ith the in#rease o1 emp$o4ment pressure on universit4 2raduates8 entrepreneurship edu#ation 2re5 in popu$arit4 amon2 the under2raduates! One #an $earn man4 $essons 1rom China6s UEE! The 1irst $esson is the dire#t support o1 the 2overnment! %overnment paid mu#h attention to the UEE in China! =or e0amp$e8 the $o#a$ and #entra$ 2overnments have 2iven some in#entives to student entrepreneurs8 e!2! ta0 dedu#tions and other 1orms o1 1inan#ia$ support! The "nnua$ Nationa$ Business P$an Competition 5i$$ :e he$d this 4ear! This #ompetition is or2ani?ed :4 a universit4 @di11erent ea#h 4earA :ut #o-or2ani?ed :4 the Ministr4 o1 S#ien#e and Te#hno$o24 o1 China and other re$ated 2overnment or2ani?ations! This #ompetition starts at the universit4 $eve$8 and then 2oes on to the provin#ia$ $eve$8 and 1ina$$48 the nationa$ $eve$! Students 1rom a$most a$$ re$evant universities in China 'oin this #ompetition! In China8 man4 universities have their o5n in#u:ator 1or the students6 startups! In ea#h #it48 in#u:ators are a$so avai$a:$e to other 4oun2 peop$e! These

in#u:ators are main$4 set up :4 2overnment or2ani?ations and o11er servi#es to entrepreneurs at 1avora:$e pri#es! Man4 intermediar4 1irms 1a#i$itate the entrepreneurs6 a#tivities! The se#ond $esson is China6s 1avora:$e entrepreneurship environment! In the past8 4oun2 peop$e sti#/ to their ori2ina$ 'o:s :ut toda48 it is a$read4 #ommon 1or them to move 1rom one 'o: to another! Parents have a$so :e#ome :road-minded! Un$i/e :e1ore8 the4 no $on2er o:'e#t to their #hi$dren startin2 their o5n :usiness! Moreover8 parents tr4 to support their #hi$dren 1inan#ia$$48 su#h as providin2 the seed 1und8 and throu2h other means su#h as sharin2 their :usiness e0perien#es and net5or/! Even i1 their #hi$dren do not su##eed at 1irst8 the parents sti$$ thin/ it is a 2ood e0perien#e that 5i$$ he$p their #hi$dren in their 1uture #areers! "$$ o1 these 5ou$d #reate demand 1or a 2ood universit4 entrepreneurship edu#ation! Compared 5ith the Indian entrepreneuria$ #u$ture8 that o1 the Chinese is 2enera$$4 more open to ris/-ta/in2 and advo#ates an entrepreneuria$ spirit! Entrepreneurs are respe#ted in Chinese so#iet4! The modern private :usiness has a histor4 o1 on$4 a:out H( 4ears in ChinaJ the 4oun2 entrepreneurs usua$$4 have no 1ami$4 :usiness :a#/2round8 5hi#h means there are a :i22er num:er o1 peop$e 5ho are the 1irst in the 1ami$4 to esta:$ish a :usiness!

Conclusions and Su""estions


Entrepreneurship edu#ation 1or the edu#ated 4oun2 peop$e has a histor4 o1 on$4 severa$ 4ears8 :ut it has a$read4 deve$oped 1ast! Emp$o4ment pressure has made EE in India6s hi2her edu#ation s4stem a:so$ute$4 important8 :ut the #u$tura$ :arriers and the di11i#u$ties to5ards start-ups prevent EE 1rom :ein2 su##ess1u$! The 1o$$o5in2 are re#ommended 1or the deve$opment o1 EE in India6s hi2her edu#ation s4stem 1ostering 3ntrepreneurship )ulture The 1ormation o1 an entrepreneurship #u$ture is the prereCuisite o1 a su##ess1u$ EE in India6s hi2her edu#ation s4stem! Students and 1a#u$t4 mem:ers 5i$$ parti#ipate in EE more a#tive$4 on$4 i1 the 5ho$e so#iet4 advo#ates entrepreneurship and ris/-ta/in28 and entrepreneurs are respe#ted!

The 1ormation o1 an entrepreneurship #u$ture #an :e done throu2h a host o1 interventions $i/e the use o1 media8 the #reation o1 $iterature 1or in#u$#atin2 entrepreneuria$ va$ues8 do#umentation o1 #ases8 su##ess stories8 video 1i$ms8 and :ehaviora$ e0er#ises8 et#! Sin#e the 1ormation o1 an entrepreneurship #u$ture a#ts in a##ordan#e 5ith the deve$opment o1 the nationa$ e#onom48 it 5i$$ :e a $on2 and hard pro#ess in India! )reating an 3ntrepreneurship 3nvironment In India8 a$thou2h man4 :usiness re2u$ations 5ere removed durin2 the ,..(s8 man4 o1 the o$d :ureau#rats remain! The improvement o1 in1rastru#ture in India 5i$$ ta/e a $on2 time :e#ause o1 its $ess deve$oped e#onom4! But at $east the state po$i#ies @:oth #entra$ and state 2overnmentsA #an :e made more entrepreneurship 1riend$4! =or e0amp$e8 the Msin2$e 5indo5 s#hemeN needs to :e imp$emented! Eith the deepenin2 o1 re1orm8 a 1avora:$e entrepreneurship environment 5i$$ :e 1ormed8 and this in turn 5i$$ :ene1it EE in the hi2her edu#ation s4stem! Refining 5echni0ues of 3ntrepreneurship 3ducation Entrepreneurship edu#ation is di11erent 1rom a t4pi#a$ :usiness edu#ation! Business entr4 is a 1undamenta$$4 di11erent a#tivit4 1rom mana2in2 a :usiness! EE must address the eCuivo#a$ nature o1 :usiness entr4! To this end8 the EE must in#$ude s/i$$-:ui$din2 #ourses in ne2otiation8 $eadership8 ne5 produ#t deve$opment8 #reative thin/in2 and e0posure to te#hno$o24 innovation! Other areas identi1ied as important 1or EE in#$ude an a5areness o1 entrepreneur #areer optionsJ sour#es o1 venture #apita$J idea prote#tionJ am:i2uit4 to$eran#e! These are #hara#teristi#s that de1ine the entrepreneuria$ persona$it4 1rom 5hi#h one dra5s 5hen 1a#ed 5ith the #ha$$en2es asso#iated 5ith ea#h sta2e o1 venture deve$opment! The 1o$$o5in2 $earnin2 too$s are use1u$ in EE :usiness p$ansJ student :usiness start-upsJ #onsu$tation 5ith pra#ti#in2 entrepreneursJ #omputer simu$ationsJ :ehaviora$ simu$ationsJ intervie5s 5ith entrepreneurs8 environmenta$ s#ansJ M$iveN #asesJ 1ie$d trips8 and the use o1 video and 1i$ms! Di11erent edu#ationa$ institutions have di11erent situationsJ a su##ess1u$ mode$ in one institution ma4 not :e avai$a:$e in other institutions! EE in the

di11erent institutions ma4 have #hara#teristi#s pe#u$iar to ea#h institution8 :ut some /e4 e$ements must :e #onsidered #ompu$sor4! Student se$e#tion is the 1irst step8 and then those se$e#ted students need to :e motivated! "1ter the motivation phase8 the4 shou$d :e 2iven spe#ia$ entrepreneurship trainin2! "nd 1ina$$48 students have to :e provided 5ith proper and adeCuate support! "t present8 :esides the spe#ia$ entrepreneurship trainin28 EE in Indian edu#ationa$ institutions a$so needs to insti$$ #ertain :asi# ideas in doin2 :usiness! =or instan#e8 in doin2 :usiness8 :ein2 pun#tua$ is ver4 important! Universit4 students need to :e reminded o1 the importan#e o1 this :asi# trait!

Reasons for t!e lack of entrepreneurs!ip in $ndia


8ack of funding/ Is $a#/ o1 1undin2 that mu#h o1 a :i2 dea$ rea$$4 9 The #ost to do a te#hno$o24 startup has 2one do5n drasti#a$$4! Redu#ed hard5are #osts8 :and5idth #osts have dropped8 #$oud #omputin2 and open sour#e te#hno$o2ies ma/e it rea$$4 #heap to $aun#h a te#hno$o24 startup! Un$ess 4ou are $aun#hin2 a #apita$ intensive :usiness8 5h4 shou$d 4ou rea$$4 need outside 1undin2 1or doin2 a startup 9 3oo/ at the Com:inator4 mode$ < R;/ < R,(K per startup8 5hi#h is $itera$$4 peanuts i1 4ou need to survive in Si$i#on Va$$e4! Eh4 #ant Indian entrepreneurs :e #heap in a simi$ar 5a4 9 Eh4 not :ootstrap 9 (o 3cos+stem/ I1 4ou 5ou$d have made this ar2ument ; 4ears :a#/8 I6d pro:a:$4 have a2reed! But over the $ast 1e5 4ears8 the startup e#os4stem has improved :4 $eaps and :ounds! VC6s have entered the Indian mar/et8 events and #on1eren#es are he$pin2 the startup #ommunit4 to net5or/ and #onver2e8 Bp$an #ompetitions on various #ampuses are raisin2 a5areness8 an a#tive and vi:rant #ommunit4 is 1ormin2 around entrepreneurship! "ureaucratic red-tape/ Ehi$e I a2ree that some thin2s in this aspe#t are not as smooth as in other #ountries! 7o5ever8 most o1 the entrepreneurs I ta$/ed to did not #ite this as a ma'or hindran#e as part o1 their entrepreneuria$ 'ourne4! 7ire a #hartered

a##ountant and he 5i$$ ta/e #are o1 ma'orit4 o1 the initia$ pro#ess o1 in#orporation8 ta0ation and other $e2a$ities! (o 2roduct )ompanies/ I 1or one dont rea$$4 :u4 into this ar2ument! Ehi$e I a2ree that produ#t #ompanies ma4 o11er $on2 term sustainen#e va$ue @5hi$e #urrent outsour#in2 1o#used servi#es #ompanies are simp$4 :ene1itin2 1rom the #ost advanta2eA8 :ut then entrepreneurship is sti$$ entrepreneurship < :e it a servi#es or a produ#t #ompan4! Be$o5 are some o1 the reasons that I persona$$4 thin/ have a stron2 impa#t on entrepreneurship in India Revamping 3ducation/ I1 4ou $oo/ at the su##ess o1 Si$i#on Va$$e48 one o1 the /e4 1a#tors that 5as instrumenta$ in shapin2 it 5as Stan1ord S UC Ber/e$e4! Ditto is the #ase 5ith Israe$6s Te#hnion! I stron2$4 :e$ieve that edu#ation8 innovation and entrepreneurship 2o hand in hand < espe#ia$$4 te#hno$o24 innovation! Ehi$e the IIT6s have immense$4 su##ess1u$ a$umni8 the IIT6s have not :een a:$e to #reate a 1erti$e hot:ed o1 innovation S entrepreneurship in their o5n :a#/4ard! "t the same time8 5e need to en#oura2e out o1 the :o0 thin/in2 as part o1 our edu#ation s4stem! Rote $earnin2 #an on$4 2et us so 1ar! Ee need to ramp up #ourse5or/ so that student s/i$$s remain in s4n# 5ith the rest o1 the mar/et! Ehen Stan1ord and other universities are tea#hin2 iPhone and =a#e:oo/ app re$ated #ourses8 tea#hin2 Co:o$ S =ortran to Indian students 5ou$d :e stupid in toda46s a2e! Students shou$d :e en#oura2ed to #onsider entrepreneurship as a via:$e #areer option! I :e$ieve this to :e the sin2$e :i22est 1a#tor that #ou$d 1oster entrepreneurship in India! &oun2 #o$$e2e 2raduates are at an a2e 5hen their inherent ris/ is at the $east to :e#omin2 an entrepreneur! Edu#atin2 them ear$4 enou2h 5ou$d a$so 2ive them amp$e time to shape up their s/i$$s and e0perien#e that #an prepare them 1or their entrepreneuria$ 'ourne4! Ee a$so shou$d ma/e it eas4 and a##epta:$e 1or students to ta/e sa::ati#a$s 1rom their de2ree #ourse5or/! Current$48 this i1 1ro5ned upon in Indian so#iet4 O 5e shou$d tr4 to ma/e peop$e more a##eptin2 o1 it!

The NEN =oundation has done a 2ood 'o: at in#reasin2 entrepreneurship a5areness a#ross various #ampuses! 7o5ever8 5hen 4ou ta/e a Cui#/ pee/ at some o1 the Cuestions that are as/ed :4 some o1 the student parti#ipants8 it 'ust :o22$es 4our mind! =e5 are reCuestin2 ideas8 severa$ reCuestin2 1undin2 even :e1ore doin2 an4 ana$4sis o1 the idea and severa$ others simp$4 $eave 4ou in sheer dis:e$ie1! One #ommon aspe#t a#ross most o1 the Cuestions is that the4 are $oo/in2 1or handho$din2! "nd I thin/ that rea$$4 needs to #han2e! I6m not sure i1 5e6re @in#$udin2 mainstream media that has 2$amouri?ed stories a:out entrepreneurship and VC 1undin2sA sendin2 them the 5ron2 si2na$s < :ut i1 4ou thin/ a$$ in1ormation8 mar/et resear#h and other in1o 5i$$ :e served to 4ou on a si$ver p$atter8 then pro:a:$4 :ein2 an entrepreneur is not in 4our :est interests! Ee missed out on the te#hno$o24 innovation :us8 :ut i1 5e dont rea$$4 ramp up our edu#ation s4stem and asso#iated RSD < innovation8 5e mi2ht end up sittin2 on the side$ines o1 the #$eante#h 5a2on as 5e$$! 8ack of 9ood Mentors/ India does not have a $ar2e poo$ o1 su##ess1u$ entrepreneurs 5ho have :ui$t 2$o:a$ $eve$ #ompanies and are /een on mentorin2 the ne0t 2eneration o1 entrepreneurs! =rom a $ot o1 entrepreneurs that I6ve ta$/ed to O the4 5ere more desperate$4 see/in2 2ood mentors as opposed to 1undin2! Ee pro:a:$4 need someone to $ead S pave the 5a4 'ust $i/e 5hat &ossi Vardi did to Israe$ and 5hat NR Murth4 did to the outsour#in2 mar/et in India! 8ack of M:A activit+/ This I sa4 'ust 1rom the te#hno$o24 mar/et! MS" is 'ust not happenin2 in the Indian mar/et! ConseCuent$48 the a$read4 e0istin2 porta$s8 ne5s sites 2et a #han#e to $aun#h their o5n servi#es 5ithout an4 stron2 startup 2ettin2 an opportunit4 to esta:$ish itse$1! These are the three thin2s that I thin/ have the :i22est impa#t O :ut then8 there6s a 2ood #han#e that 4ou mi2ht disa2ree! This is a hi2h$4 su:'e#tive topi# and ever4one has their o5n #onvi#tions a:out it! I thin/ 5hen it #omes to te#hno$o24 entrepreneurship8 5e shou$d tr4 and do a detai$ed #ase stud4 o1 Israe$! The #ountr4 has 'ust a popu$ation o1 + mi$$ion8 hosti$e nei2h:ors and hi2h ta0es! &et it :oasts o1 the Hnd hi2hest #on#entration o1 startups 'ust

a1ter the US! The46re de1inite$4 doin2 somethin2 ri2ht! "nd that6s 5hat 5e shou$d tr4 S emu$ate!

Social #ntrepreneurs!ip in $ndia


The ma'or :oost in so#ia$ entrepreneurship 5as 2iven :4 the No:e$ Pri?e 5inner Dr! Mohammad &unus 5hen his :rain-#hi$d %rameen :an/ :e#ame su##ess1u$ in he$pin2 peop$e $i1t themse$ves out o1 povert4 in rura$ Ban2$adesh :4 providin2 them 5ith #redit 5ithout reCuirin2 #o$$atera$! &unus deve$oped his revo$utionar4 mi#ro-#redit s4stem 5ith the :e$ie1 that it 5ou$d :e a #ost-e11e#tive and s#a$a:$e 5eapon to 1i2ht povert4! It 5as soon rea$i?ed that pro1its #an :e made a$on2 5ith servin2 the so#iet48 provided 4ou treat pro1its as a means and not the end resu$t! The impa#t o1 su#h enterprise $ar2e$4 depend on its su##ess1u$ imp$ementation to those that need it the most8 those at the Bottom o1 the P4ramid! "nd o1 #ourse a dis#ussion a:out the BOP 5ou$dn6t :e #omp$ete 5ithout mention o1 IndiaJ 5here hundreds o1 mi$$ions #riti#a$$4 need a #ompe$$in2 movement in so#ia$ entrepreneurship to improve their 5e$1are! There is a natura$ predi$e#tion to5ards rura$ areas as +(B o1 the popu$ation $ives in the hinter$and! Re#ent$48 the rura$ s#enario in the #ountr4 has emer2ed as a $u#rative option 1or the mainstream e#onom4! Various or2ani?ations are vie5in2 rura$ areas as potentia$ mar/ets8 resu$tin2 in a 2amut o1 innovative so$utions 5ithin the so#ia$ entrepreneurship spa#e that 1o#uses on and emer2es 1rom rura$ areas! The popu$arit4 o1 SE is 2ro5in2 at a ver4 hi2h pa#e in India even throu2h the #urrent e#onomi# do5nturn! In the $ast three 4ears more and more 4outh are deve$opin2 interest in this 1ie$d in#$udin2 those 1rom presti2ious Stan1ord8 MIT and O01ord! This ne5 evo$vin2 1ie$d has a$so 2ot ear$4 venture #apita$ist interested in 1undin2 5ith man4 see/in2 out su#h enterprises that ho$d out hu2e potentia$! Ear$ier8 or2ani?ations so$vin2 so#ia$ pro:$ems 5ere o1ten assumed to :e idea$isti#8 phi$anthropi# and $a#/in2 :usiness a#umen or the a:i$it4 to :e entrepreneuria$! 7o5ever8 as the so#ia$ se#tor has :een #omin2 in tou#h 5ith the private se#tor8 :oth have :e2un to rea$i?e that 'ust one approa#h either pure phi$anthropi# or pure #apita$ist is inadeCuate to :ui$d sustaina:$e institutions!

In re#ent 4ears8 Gnot-1or-pro1it6 has :een pushed to the :a#/ part$4 :e#ause o1 responsi:$e $enders and so#ia$ enterprises are :ein2 run more $i/e :usinesses toda4! The 1o#us is on enterprisin2 mi#ro 2roups 5hi#h 5ant to trans1orm their o5n8 and the #ommunit46s8 #ir#umstan#es :ut #an6t a##ess an4 1inan#e! =ast #ompan4 in their Mar#h H(,( $isted Mtop ,( :4 Industr4N! "nd 1our o1 the top ,( most innovative #ompanies in India 5ere standa$one so#ia$ enterprises or have so#ia$$4 entrepreneuria$ initiatives! In India a$one so#ia$ entrepreneurship spa#e has a #ount$ess mi0ture o1 mode$s 5ith a one :i$$ion thin/in2 stru#ture! One :i$$ion thin/in2 reCuires #ost-e11e#tive mode$s invo$vin2 the :ottom o1 the p4ramid! The ma'orit4 o1 these mode$s are s#a$a:$e and rep$i#a:$e!

1ew for-profit #ocial "usiness Models Compan4 "#tivities Ma/es te$e#om eCuipment that he$ps mo:i$e operators rea#h rura$ mar/ets pro1ita:$4 Impa#t =uture P$an

VN3

+( station in Ra'asthan

Rep$i#atin2 and s#a$in2 it 5or$d5ide

De$iverin2 ;((( :ed 1a#i$it4 7ea$th #it4 5ith Nara4an a11orda:$e #omp$eted in -(8((( :ed 7ospita$ India hea$th#are to the phase , 1a#i$it4 :4 H(,I masses 5or$d5ide Tou#h a :i$$ion Empo5erin2 mi#ro Customer :ase peop$e throu2h " $itt$e 5or$d :usiness throu2h #rosses - mi$$ion innovative mi#ro :an/in2 te#hno$o2ies so$ar ener248 5ater8 edu#ation8 hea$th #are8 rura$ handi#ra1ts8 peop$e6s a#tion8 #ommuni#ation8 5omen6s empo5erment and 5aste$and deve$opment

Bare1oot Co$$e2e

,8((( Bare1oot e0perts in ,8((( vi$$a2es8 rea#hes ;((8((( peop$e ,(8((8((( peop$e 5ith :asi# :4 the end o1 servi#es su#h as H(,I drin/in2 5ater8 hea$th #are8 and edu#ation

Chi$d$ine

Countr46s 1irst to$$- .!I mi$$ion #a$$s8 I(( P distri#ts :4 1ree te$e-he$p$ine - mi$$ion H(,1or street #hi$dren #hi$dren8 +-

in distress

#ities8 ,( 4ears

Sustaina:$e Over a mi$$ion $ive$ihoods to the B"SIL India and a ha$1 rura$ poor and #ustomer 5omen " :rid2e :et5een #ustomers 5or$d5ide and N*" #ra1ts persons8 desi2ners

Cra1tsBrid2e

To tap I mi$$ion vi$$a2e peop$e asso#iated 5ith the handi#ra1ts se#tor

"rvind E4e 7ospita$

E$iminatin2 need$ess :$indness :4 ta/in2 its servi#es to rura$ India

In $ast 4ear a$one H!; mi$$ion patients 5ere To rep$i#ate it in treated and over a$$ states o1 India - $a/h sur2eries 5ere per1ormed

COM"T

Empo5erin2 rura$ De$iver Citi?en #iti?ens :4 #reatin2 re#ords and $o#a$ %overnment +;8((( :4 the end e#onomies and :ene1its to over o1 H(,, ena:$in2 a##ess to ;(8((( rura$ in1ormation and #iti?ens ever4 servi#es da4 7i2h Cua$it4 so$utions 1or 1ami$ies $ivin2 5ithout re$ia:$e e$e#tri#it4

D $i2ht

,( mi$$ion

;( mi$$ion :4 H(,;

IDE India

Providin2 $on2term so$utions to povert48 hun2er and ma$nutrition

,. mi$$ion

Endin2 povert4 in the deve$opin2 5or$d

Ran2Sutra

Sustaina:$e $ive$ihoods 1or artisans and 1armers8 :4 "ppro0imate #reatin2 top Cua$it4 H;(( artisans hand-made produ#ts :ased on the prin#ip$es o1 1air trade Eomen Empo5erment DI(( 5omen emp$o4ed

Emp$o4 ;((( :4 H(,;

3i''at Papad

P$ans to emp$o4 I((( :4 H(,(

Se$#o So$ar India

Sustaina:$e ener24 so$utions and .;8((( vi$$a2es servi#es to under#overed served househo$ds and :usinesses! Ea#h o1 the "n2e$ investor and pro'e#ts has8 on in#u:ator 1or so#ia$ avera2e8 #reated entrepreneurs ,!I ne5 'o:s in the e#onom4

Brin2 do5n the #ost o1 so$ar eCuipment :4 +;B :4 H(,H Eor$d 5here individua$s ta/e a#tion to :rin2 a:out positive so#ia$ #han2e Ta/e Mi#ro 1inan#e to ever4 vi$$a2e

Un$td India

SKS Sma$$ $oans ;!- Mi$$ion Mi#ro1inan#e 5ithout #o$$atera$s Customers

Suminter India Or2ani#s

Internationa$$4 #erti1ied or2ani# a2ri#u$tura$ produ#e

Premium #rop pri#e to more than +((( 1armers

S#a$e this mode$ nationa$$4

Vorte0 En2ineerin2

Rura$ So$ar Po5ered "TMs

+;( "TM

One "TM* Vi$$a2e i!e I8;(8((( "TMs

The other nota:$e #han2e is the invo$vement o1 mainstream 1inan#ia$ institutions in so#ia$ entrepreneurship! Various venture #apita$ 1irms are investin2 in 1or-pro1it entities 5ith so#ia$ o:'e#tives! Interestin2$48 spe#ia$i?ed so#ia$ investors provide #apita$8 net5or/in28 mar/etin2 and :usiness e0pertise to su#h ventures! This trend 5as /i#/-started in the area o1 mi#ro1inan#e 5hen SeCuoia Capita$ invested in SKS Mi#ro1inan#e! So#ia$ venture 1unds measure their investments on so#ia$8 environmenta$ and the traditiona$ 1inan#ia$ returns! "#umen 1und e0pe#ts to ma/e an impa#t on mi$$ion peop$e 5ith ever4 investment in a 1ive-4ear time 1rame! The 1und measures returns in terms o1 1inan#ia$8 operationa$ @interna$ pro#esses and s4stemsA and so#ia$ impa#t @out#ome and outputA! Output is num:er o1 peop$e 5ho are impa#ted and out#ome is ho5 it has a11e#ted them! =or e0amp$e8 i1 ,8((( peop$e have had a##ess to #$ean drin/in2 5ater8 the investors a$so #he#/ i1 the rate o1 diarrhea has #ome do5n! More heartenin2 is the 1a#t that the mainstream venture #apita$ists are a$so re#o2ni?in2 this as a :usiness opportunit4! So 1ar8 VCs have invested RHH( mi$$ion in ++ so#ia$ :usinesses in India! But there hasn6t :een a sin2$e e0it! In #onventiona$ #ommer#ia$ ventures8 VCs 5or/ 5ith a ho$din2 period o1 --; 4ears! In so#ia$ :usinesses8 the ho$din2 period is $on2er O t4pi#a$$48 I-) 4ears! 1unds )urrentl+ Available "#umen =und It supports sustaina:$e enterprises providin2 the poor 5ith #riti#a$ 2oods and servi#es at an a11orda:$e pri#e! Primar4 1o#us on

hea$th#are8 housin28 5ater8 ener24 and a2ri#u$ture Companies invested in ,H =und si?e RD( mi$$ion @appro0A VenturEast It :ui$ds pro1ita:$e :usinesses that #ater to under-served mar/ets! =o#uses on meetin2 India6s domesti# needs @primari$4 rura$ and semi-ur:an mar/etsA :4 :a#/in2 ear$4-sta2e * rapid-2ro5th :usinesses Companies invested in Over ;( @in#$udin2 H; so#ia$ enterprisesA =und si?e RH;( mi$$ion Oasis =und It supports enterprises that deve$op innovative so$utions that provide the poor 5ith :etter a##ess to #riti#a$ 2oods and servi#es! Invests most$4 eCuit48 5ith some de:t! Investments 2enera$$4 ran2e :et5een R, mi$$ion to RI mi$$ion Companies invested in D =und si?e R-( mi$$ion @sti$$ raisin2A Son2 It supports entrepreneurs in hi2h-2ro5th se#tors $i/e edu#ation and trainin28 a2ri#u$ture and 1ood8 hea$th#are8 1inan#ia$ servi#es8 :asi# uti$ities @5aste8 5ater8 rura$ te$e#om8 a11orda:$e housin28 et#A that are a$i2ned 5ith in#$usive 2ro5th Companies invested in None =und si?e R,+ mi$$ion "avish/aar India Mi#ro Venture Capita$ It #reates sustaina:$e #han2e :4 in#reasin2 e#onomi# a#tivit4 at the :ottom o1 the p4ramid and :oostin2 the entrepreneuria$ spirit! Investments to date have 1o#used heavi$4 on the rura$ and a2ro te#hno$o24 se#tors Companies invested in ,+ =und si?e Rs I( #rore @appro0 R,D mi$$ionA %ra4 Matters Capita$ It invests in the in1ormation8 #ommuni#ation and te#hno$o24 spa#e to :rid2e the ur:an-rura$ di2ita$ 2ap Companies invested in D =und si?e R,H mi$$ion E$evar ECuit4 II It #reates mar/et-:ased so$utions 1or povert4 eradi#ation! =o#uses on se#tors $i/e hea$th#are8 edu#ation and in1ormation Companies invested in , @another t5o in mi#ro-1inan#e venturesA =und si?e RD( mi$$ion @additiona$ 1und-raisin2 onA The a:ove 1i2ures simp$4 state that there is an estimated R,(( mi$$ion @Rs D(( #roreA #hasin2 dea$s in India6s so#ia$ enterprise spa#e!

But there is a divide :et5een those that have a##ess to mainstream and*or #ommer#ia$ 1unds and those that re$4 on persona$ #onne#tions and 2rants*donations to raise mone4! The ratio is a:out ;(*;(! =orei2n 2rants )B Domesti# 2rants )B De:t @#redit $oansA ,,B %overnment =undin2 -B Charita:$e Or2ani?ation ;B Ban/ 3oan ,-B 3oan 1rom =ami$4 and 1riends H,B ECuit4 Investors H, B Others ,(B "s per Be4ond Pro1it surve48 =ort4-1ive per#ent o1 respondents o:tained 1unds 1rom #ommer#ia$ sour#es 5hereas H,B o1 respondents sour#e their 1unds 1rom persona$ #onne#tions su#h as 1ami$4 mem:ers and 1riendsJ another H,B re$4 on 2rants and donations 1rom #harita:$e or2ani?ations! "rran2in2 1inan#es 1or a so#ia$ enterprise in India is sti$$ ver4 di11i#u$t! "nd /no5in2 in 5hi#h se#tor to 1inan#e is even more di11i#u$t! In :ar dia2ram mentioned :e$o5 is a mention o1 pro1ita:$e se#tors and a trend 5hi#h #$ear$4 states areas to divert 1unds!

#ocial 3ntrepreneurship in *ndia ; 2rofitable #ectors Edu#ation Se#tor 5ith a tra#/ re#ord o1 pro1it The Edu#ation se#tor has sho5n a mar/ed de2ree o1 1inan#ia$ sta:i$it4 and 2ro5th potentia$! There are t5o /e4 e$ements! =irst8 the se#tor represents the hi2hest num:er o1 pro1itma/in2 enterprises @-)BA amon2 others8 and a$so has one o1 the $o5est num:ers o1 $oss-ma/in2 entities @HDBA! Se#ond8 the o:servation sa4s that there is a 2ood 2ro5th potentia$J -)B o1 edu#ation enterprises are :rea/in2 even O 5hi#h means the num:er o1 pro1it-ma/in2 enterprises in this se#tor #ou$d in#rease in the #omin2 4ears! 7ea$th Se#tor 5ith $ar2e 2ro5th potentia$ "$thou2h the se#tor #urrent$4 produ#es a ver4 sma$$ num:er o1 pro1it-ma/in2 entities8 it has the $o5est per#enta2e @,-BA o1 $oss-ma/in2 enterprises! Most important$48 at +-B8 the 7ea$th se#tor has the $ar2est se2ment o1 :rea/-even :usinesses! I1*5hen these enterprises :e2in to turn a pro1it8 the 7ea$th se#tor #ou$d sustain a mu$titude o1 su##ess1u$8 pro1it-ma/in2 enterprises! Rura$ Deve$opment Se#tor to 5at#h out 1or 1uture 2ro5th Despite the 1a#t that the $ar2est num:er o1 so#ia$ enterprises are in this 1ie$d8 it is the :i22est $oss-ma/in2 se#tor at the moment! 7o5ever8 Rura$ Deve$opment demonstrated the $ar2est revenue in#reases $ast 4ear8 so there #ou$d :e more surprises in store!

There are more enterprises that are $oss-ma/in2 @-DBA than those earnin2 a pro1it @H;BA! "nd D,B per#ent o1 enterprises are #urrent$4 :rea/in2 even! I1 4ou $oo/ at the pro1ita:i$it4 :4 measure o1 4ears in operation8 4ou #an #$ear$4 see that ma/in2 pro1it throu2h so#ia$ enterprise is no eas4 tas/!

It is true that the per#enta2e o1 $oss-ma/in2 enterprises steadi$4 2oes do5n as the #ompanies 2et o$der! But there is virtua$$4 no disparit4 in the num:er o1 pro1it-ma/in2 entities a#ross a2e #ate2ories! Man4 enterprises stop ma/in2 $osses as the4 2ro5 o$der :ut do not :e2in to turn a pro1itJ the4 mere$4 start :rea/in2 even! Surprisin2$48 even a1ter ,, 4ears or more o1 operations8 the per#enta2e o1 pro1it-ma/in2 enterprises is on$4 H+B! So#ia$ entrepreneurship in India is emer2in2 primari$4 :e#ause o1 5hat the 2overnment has not :een a:$e to do! The 2overnment is ver4 /een on promotin2 so#ia$ entrepreneurship < not ne#essari$4 :4 1undin2 it or :4 advisin2 on it or ena:$in2 it! Ehat the4 do do8 is not disa:$e it! =or e0amp$e8 in Mum:ai a$one8 non-pro1it or2ani?ations edu#ate more than H;(8((( #hi$dren on a dai$4 :asis! The 2overnment has not to$d these or2ani?ations not to do it! Ehereas in some #ountries8 5hen someone ta/es it into their o5n hands to start a 1a#i$it4 1or edu#ation or hea$th#are or

empo5erment8 the 2overnment o1ten puts in p$a#e :arriers to prevent this 1rom happenin2! Our #ountr4 does not have a homo2enous peop$e or 2eo2raph48 so the impa#t $ar2e$4 remains re2iona$! Eith the #urrent e#onomi# #$imate8 it is ver4 $i/e$4 that so#ia$ needs 5i$$ in#rease and8 #onseCuent$48 the num:er o1 peop$e #ommitted to addressin2 them 5i$$ in#rease! De1inition o1 so#ia$ entrepreneurship has #han2ed over time! =rom #orporate phi$anthrop4 to non-pro1it and no5 to se$1-sustaina:i$it48 So#ia$ Entrepreneurship has evo$ved and 5i$$ /eep evo$vin2 5ith time and needs o1 the 5or$d!

%oes t!e State facilitate #ntrepreneurs!ip&


9eneral 9overnment 1acilitation/ The NKC Stud4 1ound a si2ni1i#ant ma'orit4 o1 entrepreneurs sa4in2 that the 2overnment is 2enera$$4 Gnot he$p1u$6! In the intervie5s8 I,B o1 the entrepreneurs rated Ghe$p1u$ness o1 2overnment6 as Ge0treme$4 unsatis1a#tor46 or Gsome5hat unsatis1a#tor46 @see =i2ure I!)A! Some entrepreneurs said that 5hi$e the 2overnment has some ver4 si2ni1i#ant po$i#ies to he$p entrepreneurs8 the imp$ementation o1 these po$i#ies is e0treme$4 poor! Some 5ere o1 the vie5 that 2overnment s#hemes and initiatives are not pu:$i#i?ed adeCuate$4! Others said that #orruption and red-tapism resu$t in the s#hemes not rea#hin2 the tar2eted peop$e! Current$48 there are a num:er o1 po$i#ies and s#hemes in p$a#e to promote and assist entrepreneurs in India8 at #entra$ and state $eve$s!,)D The Ministr4 o1 Mi#ro8 Sma$$ and Medium Enterprises a$so provides a pa#/a2e o1 in#entives and su:sidies 1or the promotion o1 mi#ro and sma$$ enterprises @See Bo0 I!DA! The #ha$$en2e is to ma/e the po$i#ies into #ata$4sts 1or drivin2 Entrepreneurship in India!
ntrepreneurs, .00$
%. 8egislation/ The Mi#ro8 Sma$$ and Medium Enterprises Deve$opment

Bi$$8 H((I has :een ena#ted 1or the promotion and deve$opment o1 mi#ro8 sma$$ and medium enterprises! The %overnment is a$so e0pe#ted to ena#t re$evant $a5 on 3imited 3ia:i$it4 Partnerships!
.. )redit #upport RBI has issued 2uide$ines to the pu:$i# se#tor :an/s

to ensure H(B 4ear-on-4ear 2ro5th in #redit to the SME se#tor! The State Industria$ Deve$opment Ban/ o1 India @SIDBIA is e0pe#ted to ups#a$e its #redit operations 1or mi#ro enterprises and #over ;( $a/h additiona$

:ene1i#iaries over 1ive 4ears :e2innin2 H((I-(+! The Union %overnment to provide 2rants to SIDBI to au2ment its Port1o$io Ris/ =und and ena:$e it to #reate a Ris/ Capita$ =und! To stren2then the Credit %uarantee =und8 the #orpus o1 the 1und is e0pe#ted to :e raised 1rom Rs! ,,). #rore as o1 (, "pri$ H((I to Rs! H;(( #rore over a period o1 ; 4ears!
&. 1iscal #upport/ The %overnment is e0pe#ted to e0amine the 1easi:i$it4

o1 in#rease in the %enera$ E0#ise E0emption @%EEA $imit and the e0istin2 e$i2i:i$it4 $imit 1or %EEJ a$so #onsider e0tendin2 the time $imit 1or pa4ment o1 e0#ise dut4 :4 mi#ro and sma$$ enterprises and e0tendin2 the %EE :ene1its to sma$$ enterprises on their 2raduation to medium enterprises 1or a $imited period!
<. #upport for )luster "ased 7evelopment/ "##e$erate the ho$isti#

deve$opment o1 #$usters8 in#$udin2 provision o1 Common =a#i$it4 Centres8 deve$oped sites 1or ne5 enterprises8 up2radation o1 e0istin2 industria$ in1rastru#ture and provision o1 E0hi:ition %rounds*7a$$s and a$so 1or #reation and mana2ement o1 in1rastru#ture-re$ated assets in the pu:$i# private partnership mode! The #ei$in2 on pro'e#t #ost is e0pe#ted to :e raised to Rs! ,( #rore!
=. 5echnologies and >ualit+ ,pgradation #upport/ =our

Trainin2#umProdu#t Deve$opment Centres @TPDCsA 1or a2ro S 1ood pro#essin2 industries to :e set up! " Te#hno$o24 Mission to :e set up to assist MSMEs in te#hno$o24 up2radation8 ener24 #onservation and po$$ution miti2ation!
?. #upport for 3ntrepreneurial and Managerial 7evelopment

;(8((( entrepreneurs to :e trained in in1ormation te#hno$o248 #aterin28 a2ro and 1ood pro#essin28 pharma#euti#a$s8 :iote#hno$o248 et#!8 durin2 the E$eventh P$anJ a ne5 s#heme to :e 1ormu$ated to provide 1inan#ia$ assistan#e to se$e#t mana2ement*:usiness s#hoo$s and te#hni#a$ institutes8 to #ondu#t tai$or-made #ourses 1or ne5 as 5e$$ as e0istin2 mi#ro and sma$$ entrepreneursJ a ne5 s#heme to :e a$so :e 1ormu$ated to provide 1inan#ia$ assistan#e to 1ive se$e#t universities*#o$$e2es to run ,H(( entrepreneuria$ #$u:s!

Biblio"rap!y
http://www.gaebler.com/Business-Environment-India.htm

- "u2ust HI8

H(,(
http://www.asianscholarship.org/asf/ejourn/articles/zhang_l.pdf ugust !"# !$%$ http://&nowledge.insead.edu/contents/'urner.cfm - "u2ust H. 8 H(,( http://www.paggu.com/entrepreneurship/nurturing-entrepreneurshipin-india-entrepreneurship-and-india/ - ugust !"# !$%$

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