Do We Have A Business Environment For Start-Ups?

Startups have gained popularity around the world as well as in India. Now increasingly recognised as vital engines for growth and job creation, their numbers are rising and are creating a manufacturing boom. 

Startups can offer practical solutions through innovation and scalable technology, driving socio-economic development and transformation. For two decades, the Indian startup ecosystem has expanded rapidly. 

In the 2000s, a few entrepreneurs emerged with a few active investors and support organisations like incubators and accelerators, but the ecosystem was still young. 

There is always a lot of entrepreneurial talent here, and this energy is slowly being released through the appearance of investors, mentors, and incubation infrastructure. India has already developed the world’s third-largest startup ecosystem with these resources. 

What Do We Understand by a Startup

There is not much difference between a startup and other businesses on the exterior except for how they are built. In a startup, either a solo-founder or co-founders exist, aiming to address a particular issue and solve it. To develop and affirm the idea, the founders execute interviews for the problem and the solution, and produce a prototype, called the minimal viable product (MVP). Startups can use seed cash to fund research and the development of their business strategies. As part of a thorough business plan, market research is used to assess whether or not a product or service is on demand, which may then be incorporated into the project. 

On the contrary, regular businesses follow the already existing path of a company’s operations. A startup aspires to build an entirely new template. 

The role of new enterprises in employment and wealth creation and the diffusion of innovation within a region justifies government engagement in encouraging entrepreneurship.

Do We Have A Business Environment For Start-Ups?

Following the victory in the 2014 general elections, India’s Prime Minister (PM) urged his people, particularly the youth, to prepare for a manufacturing boom. He also encouraged at least one young person in each household to start a manufacturing business, regardless of its size. In his Independence Day speech, the Prime Minister also unveiled a new program called “Start-Up India, Stand Up India,” which aims to promote bank financing for start-up businesses and, as a result, entrepreneurship, which will help create jobs with flexible labour laws.

Brief Of Projects Induced By Government And Its Effects

The country’s most pressing concern is to provide productive employment to millions of young people who enter the workforce each year. Because agriculture is already overwhelmed with labour, it must generate additional jobs in the industrial and service sectors. The government depends on a two-pronged strategy to stimulate manufacturing activity in India. On one side, the ‘Make in India’ campaign encourages foreign countries to set up a manufacturing boom in India, while the ‘Start-Up India, Stand Up India’ campaign enables Indians to start businesses.

But the procedural hurdles in India are so severe that any potential entrepreneur may become discouraged even before beginning a business and seek employment with someone who has completed all of the necessary processes. 

Nonetheless, the government has taken some small initiatives to instil a sense of competitiveness among various states to foster a business-friendly climate. The Department of Industrial Policy and Promotion (DIPP) has assessed and compiled a list of best practices that all states are encouraged to follow, including initiatives by some states to improve the business environment. 

For example, Madhya Pradesh’s efforts to stream construction permits, Gujarat, Maharashtra, Delhi’s inspection reforms, and Punjab’s single-window clearance system. 

With a score of 71.14 per cent, Gujarat topped the list of India’s ease-of-doing-business rankings.

Punjab received the best score of 81.4 percent for establishing a business by launching an online single-window system for registrations and licence that covers most of the country’s regulatory services. 

Gujarat received a perfect score for following environmental processes, while Jharkhand received an excellent grade for following labour standards. 

According to the DIPP report, only 32% of planned changes have been implemented in India on average.

A Country’s Need For Manufacturing Boom

The federal government and the states are responsible for creating a business-friendly climate and manufacturing boom. Tax reforms that include the rollover of the Goods and Service Tax (GST) are critical for businesses because they eliminate the need to file numerous indirect taxes with the federal and state governments. For that matter, it is important to expand the country’s manufacturing boom. It can achieve compound growth in the secondary and tertiary sectors by creating an enabling environment, facilitating credit, and improving infrastructure. 

India has a lot of room to improve on these fronts.

Conclusion

In India, the start-up ecosystem has multiplied in the last decade. Several projects like flexible labour laws for hiring employees for startups have been launched to give a platform for young entrepreneurs to flourish. 

The government wants to establish a conducive environment and eco-space for future entrepreneurs, and they will be able to conceive concepts and turn them into viable business offers.