March 18, 2016
Today, starting a new venture by an entrepreneur is a painful process. Since 2004, the number of procedures required to set up a startup is between 13 and 15 – which is inexcusable given that it takes less than half the number of procedures in developed economies.
Here is an example provided by a telecom entrepreneur – it took them 11 months after the award of their first licenses to roll out networks and cellular services. The need for approvals from 46 different government agencies, for instance, delayed the setting up of each base station/cell site. In the end, they had to seek over 4000 approvals – and this was just for one city. This shows how unfavorable the investment environment is and how complex the approvals processes are.
India’s economic and reform performance in 2015 has disappointed many. Despite outperforming its BRICS compatriots by being the fastest-growing economy in 2015 at 7.5%, domestic private investment saw a dip in 2015 and the recent Mid-Year Economic Analysis confirms this. The cause of this stall in private investment was driven by corporate India’s complex confusion of over-expansion, debt default and risk aversion in an unfavorable investment environment, and important bills being stalled in the Parliament.
Given all this, India still has the third-largest number of startups globally.