1.   
INTRODUCTION

India is well-known for its
civilization and culture. The Indus valley civilization is the first economic
growth of India. The citizens near Indus valley practised agriculture, cattle farming,
and export tools and weapons made of copper, bronze, and tin to the Middle East
Countries. Agriculture was the main economic source for the people of India. The
gross domestic product of India was estimated to be 25.1% of the world economy
during the 16th century. During the British rule, the English East
India Company was established which exported fine cotton and silk to the
European and African counties. According to the British economist during 17th
century India’s GDP increased 3% compared to 16th century. After the
Independence India economic growth was rapid by investing hugely in large scale
industries, construction of infrastructures. Now India is one of the fastest
growing economic countries in the world.

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2.   
ROLE OF
INSTITUTIONS IN ENTREPRENEURSHIP

Institutions are set of rules and
procedures that matters in the social realm. Institutions are of two type’s
formal and informal institutions. Formal institutions are rules enforced by the
authorities of the state like laws, policies, and rights. Informal institutions
are culture, traditions, and social norms.

2.1 Formal Institutions

India has the largest youth
population compare to the other countries in the world. Almost 12million youth
enters to the workforce every year out of which only 2.3% of the total
workforce is skilled and trained, and remaining workforce enters into the
informal sector due to the huge competition in the formal sector. In order to
increase the formal sectors in India, the Government of India has started
programmes like Skilling India Mission Operation (SIMO) where the workforce
gets trained before they get into their jobs and Start-up India where the
entrepreneurs are given opportunity and funded by the government for the
start-ups.

In Skilling India Mission Operation
around 400million people are going to get trained by 2020. In order to support
this mission, the World Bank has released 250million USD to help Indian young
workforce gain knowledge about market-relevant skills which is required for today’s competitive market world. The
program especially focuses on the women in urban and rural areas, and encourage
them to enter the labour market. By the end of this program (2023), it is
estimated that around 8.8 million youth will get market relevant training which
will help them to get better job opportunities in formal sectors.

 

By Start-up India Program the Government of India encourages
new entrepreneurs by guiding, encouraging and by providing all the facilities
to the entrepreneurs throughout their life cycle. In start-up India program the
entrepreneurs will learn about patent filling, relaxed procurement norms, Easy
compliance norms, Innovation focused programmes for the students, funding
supports, tax benefits and regulatory issues which will help them to withstand
the market competition and know the policies, taxation rules of the government.

 

According to Sierdjan Kosater and Shailendra Kumar Rai (2008)
in developing countries like India entrepreneurship is a necessity-based
because all other options to work is either absent or unsatisfactory to the
people. The authors also mentioned necessity-based entrepreneurship have early
development stage of the economy but a great loss in the future to the
government. They suggest in order to develop informal sector the government
should spend more on providing good education, laws, orders and making a
fundamental change in the structure of the government and policy.

2.2 Informal
Institutions

India is home to 1.324 billion people
out of which 84% of the population is                              involved in the
informal sector. Around 65% of population among the informal sector are engaged
in agriculture activities.  The informal
sector is considered as workforce engaged in agriculture, family business,
vegetable vendors, NGO’S and all the unregistered firms by the government, and
using the income for the individual concerned. In India, the percentage of
informal entrepreneurship is more because lack of the employment opportunities,
culture, lack of funds and policies making by the government. 

The informal sector contributes 60%
of its share to the Net Domestic Product. The shares of the informal sector in
India are 30 percent of the national income. The informal sector has a great
impact on GDP of the country because the income from this sector is used only
for the personal savings also called as black or grey market. The informal
economy is not taxed or monitored by the government which creates a loss in
budget revenue, therefore the availability of funds is less to improve the
infrastructure, policies, and services of the country.

Informal Employment
In India

Source:- World Bank data

According to the World Bank data
(2014), the above graph clearly shows that 84.71% out of total population are
engaged in the informal sector in India. This indicates the lack of employment
opportunities in formal sectors due to the poor human base (like education,
skills, and training), so the urban and rural people in India started their own
business or continued with their family business for their living.

 

According to Muna Kalyani (2016), informal
sector In India plays a major role in economic development because in the
developing countries like India the one-third of the national income arises
from the informal sectors. Informal sectors provide great employment
opportunities to the people by creating jobs to the unskilled labour and
reducing the poverty of the country.

 

3.   
RELEVANT DRIVES FOR ENTREPRENEURSHIP

India is home to 65.2 core females which are 48.1% of the
total population of India. Indian society has been described as a
male-controlled one where family structures manifest and disseminate the
subordinate status of women. Women facing social restrictions tend to lose
their self-con?dence, which in turn creates employability barriers. In such a
scenario, entrepreneurship can empower women as it helps them to attain “the
ability to take action”.  The women
participation in entrepreneurship in India is only 27% this is because women in
India face a lot of problems to put their head into the work field because of
the discrimination of the women in India. To bring awareness about how
important women entrepreneurship in India the government of India has taken a step
to encourage women entrepreneurship and started a program called stand-up India
and empowering women through social entrepreneurship.

3.1 Stand-up
India

Indian caste system is the world’s oldest forms of surviving
social stratification. In India the caste system plays a major role in entrepreneurship,
the SC’s and ST’s are treated as a backward caste with low income (below
poverty line). This caste has a lot of advantages from the government but no
awareness to utilize them. The women’s from this castes have a lot of
restrictions like getting the education, exposure to the world, to work and
start-up business.

Stand-up India program is the government program which is
launched by the prime minister of India in 2015. This program mainly focuses on
providing knowledge and financial support to the women entrepreneurs from SC
and ST cast. The main objective of this program is providing bank loans to the
women entrepreneurs with less bank interest to empower them to participate in the
economic growth of the nation. This scheme provides bank loan of Rs10
lakhs-Rs100 lakhs. This program provides training to the women entrepreneur’s
by skill development program, providing information on financing, banking
sector and how to get digitalized. This program helps and motivates the women
entrepreneurs who dream is to start up a business and help in the economic
growth of the nation.

3.2 Social
Entrepreneurship

Women in India face a lot of problems to start up the
business it’s because they are women. The perception of the people in India
thinks investing on ventures ruined by females is of high risk. Culture plays a
major role in women life, the business success only depends on family member’s
interest towards encouraging the women. Social entrepreneurs are a private
organization like Schwab foundation for Social entrepreneurship in India, encourage
to innovate and overcome traditional practices.

 

Social enterprises can be classified as the for-profit and
not-for-profit organizations. The For-profit organization uses resources for
social issues and not-for-profit organization helps individuals to start up
small businesses, create employment and training opportunities. Social
entrepreneur’s main objective is to tackle major social issues and encourage
women entrepreneurs. The Government of India created a partnership with Social
entrepreneurship organization like Micro, small, and medium enterprise (MSMEs)
and released huge funds to develop MSMEs. Social enterprises work for equity
promotions for women in the society.

 

Women’s in India have a lot of obstacles in the path of
entrepreneurship because of short of self-confidence, socio-culture barriers,
mobility constraints, education, and financial assistance. In India only, 65.46%
of females are educated which clearly shows that the females are not encouraged
to get educated in the society. Social enterprises create awareness how
important girl education.

 

 

Census year

Persons

Male

Female

1951

18.33

27.16

8.86

1961

28.3

40.4

15.35

1971

34.45

45.96

21.97

1981

43.57

56.38

29.76

1991

52.21

64.13

39.29

2001

64.83

75.26

53.67

2011

74.04

82.14

65.46

Literacy rate in percentage

 

                                     

 

 

 

 

 

 

 

 

 

 

                                    Source:-
Census of India(2011)

The above table clearly explains the percentage of literacy
of females and males. The percentage of female education has been increased as
years passed by 2011 it is 62.46% of females got educated whereas the
percentage of male educated is 82.14%. The awareness of how important girl
education has to still reach few rural areas of India. Social enterprises
encourage female education and create a platform for women entrepreneurs.

 

4.   
INCENTIVES FOR ENTREPRENEURSHIP OF INDIA COMPARED TO BRAZIL

Brazil is a
fastest growing economy like India and has GDP per capita 8,649.95USD which is
more than India. The GDP of the Brazil is decreasing because the failure rate
of the business is high due to taxation policies, English proficiency, and
policies to start-up a business. According to the English Proficiency Index,
India is ranked 27 and Brazil 41 since the English is not the main language of
Brazil the foreign investors are facing problems to find labours. Comparing to
India the Brazil have a huge failure rate of entrepreneurship because of the
poor and unpredictable policies, unfavourable taxation system, lack of support
from the government and impacts of economic recessions. Brazil is having the most
difficult taxation system in the world. There is three level of taxation systems
in Brazil federal, state and municipal, under federal tax there are multiple
tax returns which creates a burden on the business sector. According to the
World Bank, Brazilian companies spend 2,038 hours to complete the tax reports
which puts Brazil in the 181st position out of 190countries. Due the
complex taxation system in Brazil doing business has become very challenging
and complicated than India.

Tax revenue (%of GDP)

 

Source:-  world bank
data

The graph above clearly explains the declining of tax revenue in Brazil
due to complex tax system most of the entrepreneurs in Brazil are facing a lot
of problems to pay tax. The companies in Brazil have to pay 68% of their total
income as tax including profit tax, labour tax, and other taxes so which most
of the companies are paying less tax by showing less income so the tax revenue
in Brazil is declining compared to India. According to World Bank data, we can
say doing business in India is much easier by linking PAN (personal account
number) and TAN cards (tax account number) to the online firm registration
forms and taxation system is much easier than Brazil.

 

5.    CONSTRAINTS TO
ENTREPRENEURSHIP

People with
different caste and religion sees entrepreneurship in different views and aspects.
The influence of culture and religion on entrepreneurship has been practised in
India for decades.  According to Adam
Smith and Max Weber have debated that religion effects on the Individual choice
to involve in entrepreneurship activities. The main religions of India are
Hinduism, Buddhism, Sikhism, Islam, Jainism, and Christianity. Indian society
helps people to move forward by encouraging economic and community development,
cultural norms create a barrier to the goals. Although the government law does
not administrate the Varna (caste system) but the influence remains dominant in
the people.

 

The caste and
religion are interconnected with each other in developing countries. In India,
the caste system is obliterated in 1950 but it still affects the perception of
the people. The caste system strongly influenced backward classes like SCs and
STs who are less educated and believed more towards cultural norms. The work
path for the backward caste is reinforced with regional impacts and attitudes
of the people. A son or daughter of the modern Brahmin family is less
restricted from creating entrepreneurial venture or became a leader, while son
or daughter of the Dalit family is more likely to follow the traditions and
customs throughout the life of labour as an employee.

Source:-  IPAA 2009 International
Public Affairs Conference

The above graph
clearly explains that Hindus in India are 41.3 percent likely to be
self-employed compared to other religions. Muslims are 48.62%, Christians are
50.43% likely to pursue self-employed. Whereas Jains have highest self-employed
entrepreneurs which are 66.54% and other religions is 69.69%. Sikhism and
Buddhism have great historical links with Hinduism and this clearly explain all
three religions have created barriers to the individual’s decision making to
engage in entrepreneurship.

Source:-  IPAA 2009 International
Public Affairs Conference

After
comparison with entrepreneurship with caste, the finding suggests that
individuals who are Hindus and members of backward caste (SCs and STs) are
likely to be self-employed, where the schedule caste is 36.1% and schedule
tribe are 28.78% to pursue entrepreneur activities. The class structures
influence occupational choice, particularly to become an entrepreneur.

 

The Education
system in India plays a major role in entrepreneurship because due to lack of education
qualification the informal sector is boosting up in India. Millions of parents
are worried about education in India because to get a decent education it is
very expensive. Nationally 29% of children drop from their primary and only 43%
complete primary school in India. Over 1.4million age group of 6-11years are
not attending their primary education because of the lack of teachers,
facilities in the school and tuition fee cost. According to the survey done by
Annual State of Education Report revelled that only 20-25% of students are
passed out with good qualification and eligibility for higher education.

 

             Source:- National sample survey
office (2008-2014)

The above graph
shows the average expenditure for primary and professional education                                  in India. The
graph clearly explains the cost of professional education is been increased to
96% compared to 2008. This clearly explains the parents who are below the poverty
line cannot afford their children to get technically educated because of the
expenses and lack of support from the government. Due to lack of professional
and technical skills students are not placed in well-reputed companies during
the placements in higher education which lead them to continue their family
business or start-up informal sectors.

6.   
CONCLUSION

The analysis
seeks to explain the entrepreneurship in India. The government is concerned
about informal organisations because it creates potentially negative
competitiveness and growth, declining social rules and laws, and creating
economic loss due to private economic activities.  But the government concern is balanced that
the informal sectors are providing job source and a safety net for the poor and
unskilled labour. The government has taken steps to reduce unskilled labour in
order to reduce informal sectors by providing good education, training
programmes like start-up India and skilling India by funding 250million USD.

This study
explains the problems faced by the women to put their head into
entrepreneurship and support from the government and private sectors. The Government
of India has started stand-up India programme to support the SCs and STs Women
for their start-ups. Social entrepreneurship is a private organisations which
motivate women to come out of the cultural and traditional believes and start
working on their dream projects. Social entrepreneurs create awareness about
the importance of the girl education and work for equity for women in the
society.

In this study, we discussed constraints of the
entrepreneurship in India. The caste and the religion are the barriers to the
entrepreneurship in India. The education system also plays a key role in
entrepreneurship since the cost of education in India has become high where the
below poverty people cannot afford which increase in unskilled labour.
According to this study, the government of India has to take initial steps to
overcome the bottlenecks in entrepreneurship and create the platform for the women
entrepreneurs