Still long way to go

India has recently moved up in the World Bank’s Ease of doing Business by a few ranks, managing to reverse a downward trend, though it ranks a dismal[diz-mul(depressing,निराशाजनक)] 130 out of 189 countries. The country can go even higher and may break into the top 100 if it introduces some structural management and change in outdated laws.

Fundamentally, we are a risk averse[u'vurs(unwilling,अनिच्छुक)] and failure allergic country. We cannot accept failure at any level, be it our kid’s performance in school, the Indian cricket team or any business. Entrenched[in'trencht(establish,स्थापित)] in our thought process is an absolute revulsion[ri'vúl-shun(dislike,घृणा)] to failure.

This gives rise to a culture of mediocrity[mee-dee'ó-kri-tee(ordinary,साधारण)] as we do not take any perils[pe-rul(risks,जोखिम)] that might backfire.

When an entrepreneur sets up a business, we throw all sorts of obstacles[ób-sti-kul(problem,बाधा)] in their path from official paperwork to a hostile[hós,tI(-u)l(unfriendly,विरोधी)] banking system.

For example, an entrepreneur cannot get a bank loan without a personal guarantee
The easy way out is a personal guarantee and collateral. It is a huge hindrance[hin-drun(t)s(obstacle)] for anyone to take up entrepreneurship knowing that not only will he lose his company if he makes a mistake but also most of his wealth.

There are people who have taken loans and used it for some other purposes or embezzled[em'be-zuld(misuse,गबन)] the funds so everyone gets hit with these onerous[ó-nu-rus(heavy,भारी)] rules. These few bad apples spoil the barrel due to lack of proper judicial remedies.

Another key issue due to judicial delays is not prosecuting IP violations fast enough. Employees, partners often start copycat companies with same products with impunity[im'pyoo-ni-tee(free from punishment,दण्डमुक्ति)] as they know that they will never get caught.

The third big obstacle is the power vested with state-level and multiple organisations to audit and shut down companies. For example, the IT department has a TDS audit, a Transfer Pricing audit, a regular audit for multiple years all going on at the same time and asking for the same information.

The solutions for these problems have to be tackled across all levels but the root lies in addressing the judicial process.

If that can be fixed through separate courts or something similar to lok adalats, we will end up addressing a lot of issues. Another suggestion is for government to step in as a guarantor for startups and other small and medium companies.

The bureaucratic nightmare can be solved by exempting companies of a certain size or certain years in existence from audits and holding the accounting firms that audit them responsible for any lapses taking the onus[ow-nus(load,भार)] away from entrepreneurs. Also, for companies that get picked for scrutiny[skroo-t(u-)nee(examine,जाँच)] let there be one audit across all departments so that the company can present all papers at one go and get on with running their business.

Finally a big change required is the attitude of people towards entrepreneurship and failure. We have to celebrate failure and stop treating business people with suspicion.

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