Corruption rules

For young Indians, reaping benefits of high economic growth gets embroiled in high corruption and poor finance from the banks, reports Chetan Chauhan.

Updated on: Jul 25, 2008, 01:21:08 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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For young Indians, reaping benefits of high economic growth gets embroiled in high corruption and poor finance from the banks.

A National Knowledge Commission (NKC) survey has found that about 60 per cent of entrepreneurs faced corruption when they tried to open a new business venture. “Another hurdle was in accessing reliable information on registration procedures, finance and other schemes,” the survey report submitted to the Prime Minister’s Office recently said.

The respondents, who had opened business between 2000-2007, also elaborated on the bribes they had to give to get government clearances. The study also states that a newcomer is required to clear 13 procedures, which takes minimum of 33 days. To get a license, 20 procedures are required taking 224 days. Registering property has six procedures taking 62 days. To overcome some of these problems, NKC has recommended a unique company number to get all the clearances at one go.

As many as 61 per cent of respondents interviewed in Delhi, Mumbai, Ahmedabad, Pune, Kolkata, Bangalore, Hyderabad and Chennai said that they did not receive bank loan when they planned their new venture. “There was a high perception among entrepreneurs that it is very difficult to get bank loans at the start-up stage while it become comparatively easy to the growth stage,” the survey said.

As a result, 63 per cent of the interviewees had to start their ventures on their own finances whereas only 22 per cent got bank loans. Only 20 per cent of respondents said that banks loans at the start-up stage was easy.

Once the projects starts, the entrepreneurs find that finding skilled manpower was the biggest problem. In India, only five per cent of existing workforce has received skilled training as compared to 96 per cent in Korea, 75 per cent in Germany, 80 per cent in Japan and 68 per cent in United Kingdom. To tackle this problem, the commission has recommended the government to have a policy to improve skills of the existing policy.

What even surprised the commission was the finding that 98 per cent of respondents, who ventured into new projects, were undergraduates, underlining the fact that ability to think different is key for starting new projects, rather than just high education. Only two per cent had a Ph.D degree.

However, 95 per cent of the respondents felt that education was important for a new project to succeed. It also reflected with a steady increase in MBAs and those, with higher educational qualification, starting new ventures, the survey said.

The biggest motivating factor found for becoming an entrepreneur was the willingness to be independent of the family and a job. Even though in most cases, entrepreneurs took help of the family to start the business enterprise, the survey said.

The survey, which formed basis of a set of recommendations to the PMO on attracting more talent for business, found that most of the entrepreneurs’ projects were in the knowledge sector, infrastructure and telecommunications.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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