Concordia University Chicago

MA in innovation and entrepreneurship Program

Student: Mohammed Arbaan Malik

m.arbaanmalik786@gmail.com
Q1032516

Assignment Title: Economic and political factors in the foreign country

Date of Submission: August/28/2022

Course: MA in innovation and entrepreneurship

Section Number: 6003-BR1

Course Instructor: DR. Farshad Badie

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 Economic and Political factors in the foreign country
Mohammed Arbaan Malik

Concordia University Chicago

Course-MA in innovation and entrepreneurship

Dr. Farshad Badie

Assignment #3

Introduction

India has one of the largest and most diverse economies in the world, but due to its massive

population, it is one of the world's poorest nations in terms of income and gross national product

(GNP) per capita. Since gaining independence, India has pushed for a mixed economy in which

the legally classified as "socialist" government has a significant role as the central planner,

regulator, investor, manager, and producer. Beginning in 1951, the government used a series of

five-year plans influenced by the Soviet model as the foundation for its economic planning. The

initial goal was to increase domestic savings rates, which more than quadrupled in the 50 years

after the First Five-Year Plan (1951–55). With the Second Five-Year Plan (1956–1961), the

emphasis started to move to industrialization that replaces imports with a concentration on

capital goods. An extensive and varied industrial base grew. But after the Soviet system fell apart

in the early 1990s, India implemented a number of free-market reforms that accelerated the

development of its middle class. Additionally, thanks to its highly educated and skilled workforce,
India became one of the world's hubs for the high-technology boom that started in the late 20th

century and resulted in significant annual growth rates. Although it still employs the majority of

the workforce (about 50%), the agriculture sector is no longer the greatest contributor to the

nation's gross domestic product (GDP), contributing just around 15% of the GDP. Manufacturing

is still a significant contributor to GDP. Trade, banking, and other services, which make up the

vast majority of GDP as a whole, have had the greatest rise.

Many of the government's choices are quite political, especially when it comes to making

investments that are distributed fairly across the many states of the union. Despite the

government's widespread economic role, massive corporate endeavors rule many sectors of

modern economic activity, while the vast majority of jobs are provided by tens of millions of often

modest agricultural holdings and minor commercial, service, and craft businesses. From the most

basic to the most advanced, technology spans the whole spectrum.

There aren't many things that India can't make, but a lot of what it does produce wouldn't be

economically viable without the protection provided by import tariffs, which have stayed high

throughout liberalization. Foreign commerce has historically been modest, both in terms of

absolute value and in percentage to GDP. Even though government restriction remained strong

in many industries and persisted, commerce significantly increased starting in the 1990s.

Three viable possibilities for financing the new venture in the country.

1.Government Funds.

2. Investment thru Shareholders.

3.Loan from Bank

1. Government’s Funds:

India is making progress toward its goal of creating a strong startup environment. The

government has established a ministry (department) that is devoted to assisting start-up firms in

order to encourage and support entrepreneurs. The Indian Central Government has also

launched a number of programs to support startups and encourage entrepreneurship in India.

List of Indian Government Programs to Support Startups

1. Aatmanirbhar Bharat App Innovation Challenge

2. SAMRIDH Scheme

3. Startup India Seed Fund

4. Startup India Initiative

5. Startup Leadership Program

6. ASPIRE

7. Pradhan Mantri Mudra Yojana (PMMY)

8. Chunauti

9. Qualcomm Semiconductor Mentorship Program (QSMP)

10. Digital India Bhashini

11. Digital India GENESIS

12. India Water Pitch-Pilot-Scale Startup Challenge

13. Ministry of Skill Development and Entrepreneurship

14. ATAL Innovation Mission

15. eBiz Portal

16. Dairy Processing and Infrastructure Development Fund (DIDF)

17. Support for International Patent Protection in Electronics & Information Technology

(SIP-EIT)

18. Multiplier Grants Scheme (MGS)

19. Credit Guarantee Fund Trust for Micro and Small Entreprises (CGTMSE)

20. Software Technology Park (STP) Scheme

21. The Venture Capital Assistance Scheme (VCA)

22. Loan For Rooftop Solar Pv Power Projects

23. NewGen Innovation and Entrepreneurship Development Centre (NewGen IEDC)

24. Single Point Registration Scheme

25. Modified Special Incentive Package Scheme (M-SIPS)

26. Stand Up India Scheme

27. High Risk - High Reward Research

28. IREDA-NCEF Refinance Scheme

29. Dairy Entrepreneurship Development Scheme

30. Drone Shakti

31. Zero Defect Zero Effect (ZED) Certification Scheme

32. Sub-Mission on Agricultural Mechanization (SMAM)

33. Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)

34. Design Clinic Scheme for Design Expertise

2. Investment thru Shareholders:

There is one big possibilities to take financing in India Shareholders are not immediately involved

in a company's daily operations. In other words, no one will ask you to monitor the budget or

serve on the board of directors if you purchase 100 shares of Microsoft stock. However,

stockholders can still influence the direction and operations of the organization. Companies have

regular shareholder meetings where a range of concerns and subjects are debated and voted on.

For instance, a business in which you have stock may propose a number of fresh elections for

directors to be added to the board. You could have a vote as a shareholder on whether to approve

or disapprove those elections. Shareholders can gain certain financial benefits, such as dividend

payments, in addition to voting rights. A dividend is a portion of a company's earnings. Not every

business distributes dividends to investors. However, if you own shares in one or more of those

firms, those dividends might represent a significant source of passive income.

Shareholders gain from rising stock values as well. Let's say you invest $100 in a firm, and six

months later, the stock price soars to $40. You could make $30 more on each share if you sold.

Of course, the drawback is that if the stock's value drops, your shares may wind up being worth

less than you paid for them initially.

3. Make Loan easier:

Due to the inherent safety nets present in traditional banking, business loans from banks are

among the most popular types of funding for small firms. Banks, and the majority of their goods,

offer guarantees that many atypical and internet banking lessors don't since they are backed by

the federal government. Furthermore, compared to loans from internet lenders, bank loans often
have cheaper interest rates. You have a wide range of alternatives as a small business owner

when it comes to the many forms of business finance. One loan type may be a better fit for your

financial status and repayment capacity than another because each sort of loan has its own set

of conditions, demands, and other needs.

Argument on the first possible viability 1. Government funding

India is the largest country in asia and the 7th largest in the whole world it has a very global market

and lots of capital circulation. It is not a stupidity to put out that india has lots of capital in

abundance due to the government but there are different reasons that makes it very difficult for

one to get

Firstly, the Indian government has worked rigorously to develop funding policies for small

business, ventures and all sorts of programs and sectors too. Now the main question is even

though we have a number of funding schemes but why is it still becomes impossible to get funded

The answer is simple because of the tremendous amount of paperwork and time it takes to get

everything in action. The government officials don’t work on time and keeps on procrastinating

and giving dates. By the time a business that should have been flourished fairly is dead because

of the complexity of not getting funding on time. In India there are many entrepreneurs who all

have great ideas but the only sad part is about funding. India is a very big country it has a good

economy but there is need of more visionary entrepreneurs to grow that’s how the government

is also profited, infrastructural and economic strengthening leads to growth in GDP and because

of the quality of life, it is beneficial aspect for not only the public but even for the government .
Solutions

• to make government funding easier

• Reduction in need of unnecessary documents.

• Government officials should work proactive

• Being willing to assume the risk of starting a business is not a characteristic that many

Indians possess.

However, the poll found that India has a sizable pool of entrepreneurial potential. It was

discovered that business thinking, optimism, and persistence—all qualities crucial for

entrepreneurs—are shared by Indians. However, it was shown that the majority of

Indians lack the common attribute of being ready to face the risk of owning a business.

• Honest and effective government institutions must consistently provide support.

The poll indicates that over 46% of Indians believe that the government is the main

obstacle to establishing a business. More than seven in ten individuals said they thought

government corruption was pervasive. More than six out of ten people concurred that

commercial corruption is pervasive. According to the study, this attitude was particularly

strong among current company owners (72%) and those who planned to launch a firm

within the next 12 months (80%).

• At the beginning, entrepreneurs require more varied, localized funding.

The most beneficial aspect of starting a business in India is having access to capital.

However, "Finding the correct kind of finance seems to be more of an issue for

entrepreneurs than the availability of capital. The bulk of startup venture capital funding

now available are concentrated on IT or mobile solutions that are geared for export, "This
 survey found. Few people appear to support companies that provide the in-demand

goods and services in the energy or healthcare sectors in India's sizable domestic market.

• Indian business culture must be understood by foreign investors.

The gap in communication between investment funds and regional business owners is

another issue with funding. This occurs as a result of foreign investors ignoring the

distinct market demands, skill pool, and business culture of India. Instead, according to

the report, they frequently base their ideas on what has been successful in their own

nations and other rising economies.

Another barrier is the absence of angel or seed finance as well as investor involvement

in managing start-ups in India. Indian venture capitalists favor backing the growth of

already-established companies than starting new ones from scratch.

• Finding dependable partners is still another major issue.

According to the report, just 16 percent of Indian individuals believe a non-relative may

be a reliable business partner. The trusting connection between business owners and

clients or business partners is not well protected by the absence of judicial infrastructure

on enforcement.

Conclusion

India is making progress toward its goal of creating a strong startup environment.

The government has established a ministry (department) that is devoted to assisting

start-up firms in order to encourage and support entrepreneurs. The Indian Central
Government has also launched a number of programs to support startups and encourage

entrepreneurship in India.
 References

• Ashwini, banarjee, July 4 2022, List of Government Schemes to Support Startups in

India, startup talky

Retrieved from https://startuptalky.com/list-of-government-initiatives-for-startups/

• Anonymous, August 02, 2012, 5 reasons why India is the worst Asian country for

entrepreneurs, first post

Retrieved from https://www.firstpost.com/business/5-reasons-why-india-is-the-worst-

asian-country-for-entrepreneurs-401858.html

• Luchsinger, 23 September 2019, Want your government to increase funding for

research? Here is what you can do, nature.com

Retrieved from https://www.nature.com/articles/d41586-019-02889-7