Modi government dreams to transform India into a hub of start-up and innovation remains elusive as only 5% Indian adults establish own business, according to a survey. The survey conducted by Entrepreneurship Development Institute of India further highlighted that only 11 per cent of India’s adult population is engaged in “total early-stage entrepreneurial activity (TEA).”
Entitled Global Entrepreneurship Monitor (GEM) India Report 2016-17 says that the 5% rate is among the lowest rates in the world even as business discontinuation rate remains one of the highest in the globe at 26.4%. The survey had a sample size of 3,400 respondents aged between 18 and 64 years and was conducted primarily to gauge the level of entrepreneurial activity in the country.
According to its findings, just about 4 per cent of the population accounts for “nascent entrepreneurs,” who are actively engaged in setting up a business they will own or co-own. Interestingly, another 7 per cent are the entrepreneurs who are owner managers of businesses which are running for less than 3.5 years. The survey also compared India’s entrepreneurial activity with other emerging economies, especially the BRICS economies and found that Brazil has the highest rate of established business ownership (17 per cent) and South Africa has the lowest (3 per cent). Further, China has a slightly higher rate of 8 per cent, while it is 5 per cent in both Russia and India, according to the survey.
Of those engaged in “TEA” in (Total Early-stage Entrepreneurial Activity in India), more than half have low-growth expectation, as they “did not intend to expand their employee base,” the report says, adding that more than 44 per cent expect to hire between 1 to 5 employees, while a meagre 5% plan to hire more than 5 employees.
Laying emphasis on breeding homegrown entrepreneurs, the Narendra Modi-led government had launched a Startup India campaign in January 2016 which provided various incentives such as tax exemptions, patent reforms, and incubation programmes aimed at providing the much needed thrust to start-ups. However, the survey’s lacklustre numbers may serve as a wake-up call for the government.