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Rise of Indian Entrepreneurs

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August 02, 2023

Why in news?

Centre for Monitoring Indian Economy data 2023 suggests that Indians are increasingly in self-employment.

What is Entrepreneurship?

  • Entrepreneur- It is an individual creating a new enterprise and bearing the risks and the rewards of the establishment. The process of establishing a business is known as entrepreneurship.
  • They play a key role in the economy as they use their skills to study the market and bring new products according to the market.
  • Entrepreneurs combine capital, labour and natural resources to provide services and manufacture goods.
  • Sub category- There are 3 sub categories of Business class.
    • Businessmen- It includes those people who set up large businesses that leverage capital and humans to run them.
    • They manage some fixed premises such as an office, shop, workshop, factory, etc.
    • Qualified self-employed professionals- It includes people who run their own professional enterprises and leverage their own expertise.
    • Example-Doctors, Lawyers etc.,
    • Self-employed-It includes those “entrepreneurs” who run their own business enterprises but these enterprises do not leverage much financial capital, human capital or even professional skills.
    • Example- Taxi drivers, barbers, beauticians etc.,

Status of entrepreneurship in India

  • According to CMIE, the total employment in India in January-April 2023 stood at 412.9 million.
  • Employment status-In descending order
    • Farmers,
    • Wage labourers or small traders,
    • Salaried class
    • Business class or entrepreneurship- Fourth biggest category of employment.
  • Business is the only category that has actually recovered to the pre-pandemic level.
  • The number of people categorised under “business” grew by 8.4 million between the last four years.
  • In the business class category self-employed entrepreneurs accounted for the largest share, at around 70-80 % of all the entrepreneurs in India.
  • This shiftdoes not indicate an increase in real entrepreneurship but is merely a reflection of poor employment opportunities in the economy.

What are the benefits of entrepreneurship?

  • Money flow in the economy- Enterprises help in the flow of money in the market by creating employment and increasing production and consumption.
  • Infrastructure development- When an entrepreneurial ecosystem is formed in a particular area, there is an increase in the infrastructure in that area. Example- Chennai, Hyderabad etc.,
  • Employment generation– Both direct and indirect employment is fostered by the growth of entrepreneurship.
  • Economic development- It helps in increasing the GDP of the country through the development of new markets and creation of new wealth.
  • Social change- It breaks with tradition and reduces reliance on outdated systems by providing unique products and services.
  • Foster innovation- It creates market ease, new opportunities and encourages consumption, which will be a roadmap for economic development.
  • Increase standard of living- The standard of living is directly proportional to employment.
  • Research and development- It is due to the progress of innovation that would result in technological advancement.

Steps taken by India to Promote Entrepreneurship

  • Progressive Industrial Policies- The central government declared industrial policies in 1948, 1956, 1980, 1986, and 1991 to promote economy growth and entrepreneurship in country.
  • Invest India- It was launched in 2009 to promote foreign investment in the country.
  • Startup India- It was launched in 2015 to promote innovation and entrepreneurship in India.
  • Standup India- It was launched in 2016 to promote entrepreneurship among women and SC/ST communities.
  • Atal Innovation Mission- It was launched in 2016 to promote an innovative culture and the development of the spirit of entrepreneurship across India.
  • E-biz portal- It is the first online platform that was founded in 2013 that allows government-to-business (G2B) communication.
  • ASPIRE scheme- A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE) was launched to set up incubation centres and network of technology centres to to promote startups for innovation in agro-industry.
  • Pradhan Mantri MUDRA Yojana- It aims to develop micro units and helps in refinancing micro finance institutions.
  • Institutional support- National Industrial Entrepreneurship Development Centre, National Entrepreneurial and Small Business Development Institute etc., provide guidance, training, and facilities to the entrepreneurs.
  • National Awards- The government has established National Entrepreneur Awards of India to promote entrepreneurship.

What lies ahead?

  • IMF Data- It forecasted India to be the third largest economy in 2027.
  • So, India must use the opportunity and create a positive impact in entrepreneurship.
  • G20 Presidency- India holds the presidency of G20 in 2023 with the theme of One Earth One Family One Future”.
  • India led the G20’s Startup engagement group which focuses on the policy recommendations on entrepreneurship and innovation.

 

References

  1. Indian Express| Explained rise of entrepreneurs reality check
  2. PIB| Stand up India and Startup India

 

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