The Indian Planning Commission has released a report on entrepreneurship in India. It is an extensive report covering various aspects of the Indian ecosystem including its role in shaping India’s future and the key gaps faced by entrepreneurs in India.
The Committee has made extensive recommendations that are relevant to a number of stakeholders both within the Governmental and Regulatory fold and those outside their immediate purview. The Committee believes however, that to build a vibrant entrepreneurial ecosystem leading to significant employment and wealth creation in the country, there has to be a sustained and continuous focus on the simultaneous and coordinated implementation of these measures.
According to the report, there are some promising signs for India, but it is going to be a daunting task to provide the youth of the country with gainful jobs.
The Promising Signs
The report projects promising figures for entrepreneurial growth in India for the next ten years. Here is an excerpt from the report:
“India is an entrepreneurial country, but its entrepreneurs have had to struggle to create and grow their business ventures. There is, however, a growing group of first-generation Indian entrepreneurs – the founders of companies such as HCL, Cognizant, Infosys, Bharti and others that have generated large scale employment and significant wealth. They and others such as IndiaBulls, Makemytrip and Naukri have also demonstrated value creation through a public listing. These successes have encouraged a new breed of entrepreneurs especially in the internet and e-commerce space.
India has the potential to build about 2,500 highly scalable businesses in the next 10 years – and given the probability of entrepreneurial success that means 10,000 start-ups will need to be spawned to get to 2,500 large-scale businesses. These businesses could generate revenues of Rs10 lakh crore ($200 billion)”
More entrepreneurs, more jobs
With a forecasted slow growth in the public sector, the country now heavily depends upon the entrepreneur ecosystem for employment. The report says:
“India needs to create 1- 1.5 crore (10-15 million) jobs per year for the next decade to provide gainful employment to its young population. Accelerating entrepreneurship and business creation is crucial for such large-scale employment generation. Moreover, entrepreneurship tends to be innovation-driven and will also help generate solutions to India’s myriad social problems including high-quality education, affordable health care, clean energy and waste management, and financial inclusion. Entrepreneurship-led economic growth is also more inclusive and typically does not involve exploitation of natural resources.
Large Indian businesses – both in the public and private sector – have not generated significant employment in the past few decades and are unlikely to do so in the coming decade or two. Public sector and government employment has declined in the last few years, and is expected to grow very slowly in the coming years. Large private sector firms have also been slow in generating employment, which is unlikely to change due to increasing automation, digitization, and productivity gains. For example, the banking sector in India has recorded almost no employment growth in the last two decades despite multifold growth in its revenue and assets. Agriculture employs nearly a half of India’s work force but employment is likely to decline in this sector, due to improvements in productivity.”
Read the full report here