Why Chief Economic Adviser spoke about Anushka Sharma-starrer ‘Band Baaja Baaraat’
Chief economic adviser Krishnamurthy V Subramanian finds wealth creators at grassroots in people such as Shruti Kakkar, the protagonists of Bollywood romantic comedy ‘Band Baaja Baaraat’ who aspired to be India’s best wedding planner.
Subramanian, who authored the Economic Survey tabled in Parliament just a few hours earlier, underlined at a Press conference that Indians at district levels have ambitions similar to the one characterised by Shruti - the character played by Anushka Sharma - in the 2010 movie Band Baaja Baaraat’ or its Tamil remake ‘Aaha Kalyanam’.
They are the wealth creators at grassroots, he said.
Explaining the data captured by the Survey through the example of the movie, he said new firms are being created at the district levels.
“It looks like from the map that there are many-many Shrutis like that all over the districts in India ...,” he said. The analysis is based on comprehensive data of the Ministry of Corporate Affairs (MCA)-21 database on new firm creation in the formal sector across over 500 districts.
“These entrepreneurs at the grassroot level are also helping the local economy because an improvement in new firm creation also leads to GDP growth. An increase in 10% new firm creation translates into an increase of 1.8% in the GDP growth in the district,” he said.
According to the survey, the impact of new firm creation on district-level GDP demonstrates that grassroots entrepreneurship is not just driven by necessity and demonstrates that entrepreneurship is dispersed across India and is not restricted to just a few metropolitan cities.
Taking a cue from the World Bank’s entrepreneurship data, the Survey says that new firm creation has gone up dramatically since 2014. “While the number of new firms grew at a cumulative annual growth rate of 3.8 per cent from 2006-2014, the growth rate from 2014 to 2018 has been 12.2 per cent. As a result, from about 70,000 new firms created in 2014, the number has grown by about 80 per cent to about 1,24,000 new firms in 2018,’ it said.
It said equal opportunity for new entrants in entrepreneurship enables efficient resource allocation and utilization, facilitates job growth, promotes trade growth and consumer surplus through greater product variety, and increases the overall boundaries of economic activity.
The Survey, however, says that the entrepreneurial intensity is significantly higher for the developed economies compared to India.
“On a per-capita basis, India has low rates of entrepreneurship in the formal economy. Between 2006 and 2016, the mean (median) number of new firms registered per year per 1000 workers was 0.10 (0.11). In contrast, the mean (median) entrepreneurial intensity for the United Kingdom and the United States was 12.22 (11.84) and 12.12 (11.81) respectively,” it said.
Vikas Vasal, partner & leader-Tax, Grant Thornton India LLP said the Economic Survey had been presented at a time when the economy is “hoping for a booster dose” to put it back on the growth trajectory.
“Rightly so, it comes with the theme of wealth creation and promise to nurture wealth creators at the grassroots level to make India a USD 5 trillion economy. It lays emphasis on the need to promote ‘pro-business’ policies, judicious and limited government intervention in markets, with thrust on exports for employment generation. It has set the tone for a ‘pro-business and pro-employment’ theme for Budget 2020,” Vishal Vasal said.