Why is the Indian Business Sector Struggling to Soar? The Realities of Business in India’s Complex Environment 

Why Is the Indian Business Sector Trapped In A Poverty Cycle?

India was called a golden bird, but this golden bird is trapped in a poverty trap. But why? Indian Business needs 20 million new jobs every year. And it is only generating 5 million new jobs. India needs job creators. India needs businesses. Business is inaccessible; it requires everything from energy to money to time investment.

What is the real pain of a job creator?

Let’s understand.

A survey was conducted by reading people’s tweets and comments; it was realized that starting a business in India is not just a problem but a big challenge. The environment is dynamic, and disruptions can occur at any time. There may be an unseen uncertainty at any time. And a business owner has to fight these pitfalls every day.

But there is a way to reduce the headache for businesses. That way to optimize the business processes. Reduce expenses so that profits increase. Why is it tough to do business in India?

The reason is time. Let’s do a comparison.

If you want to start a restaurant, will it be fast in India or Singapore?

Applying for licenses in Singapore is not as time-consuming as in India. It’s hard to believe that it takes two months to get an FSSAI licence. Time is money; it’s a quote I’ve heard many times. Of course, GST registration is relatively more straightforward in India, which is commendable. But it takes so much time to get an FSSAI license. You can start a restaurant business in Singapore in 1-2 months. It will take 6-9 months in India to complete the process.

Who will wait so long? Businesses will put up a roadside stall, right?

People can do anything on the roads. But to start a canteen, it is necessary to serve hygienic food to people. Even that has so many issues, and it’s not just about food. Gold also has a similar problem; if a parcel is sent from India, to send items from India, it can take anywhere from 8-10 days.

• Businesses, on one hand, have compliances,
• It has HR problems
• The third hand has union problems
• The fourth hand has payment problems
• The fifth hand has fraud problems
• On the other hand, you have
• payment delays
• and no relief from the courts

There are many problems, and it seems like a joke, but these problems are the birthplace of jugaad (experimental inventions).

Why is it tough to do business in India?

The reason is corruption.

A case study,

Have you ever got a passport? A person paid Rs 2,000 to get a passport made. But for police verification, the police asked for a bribe of Rs 3,000. To move a file forward, he has to grease many palms. Corruption is an inseparable part of business. No one can reject it.

An officer was asked, you take so much money. It’s not good what you’re doing. He said, “We have to distribute it further.” He said this.

Rules are complicated. Rules have been made in a complicated way to understand. Authorities are waiting for people to make a mistake so that they can take a bribe from them to hide their mistake. The most significant cause of corruption is the policy. The policy needs to be changed according to the time. The government must pay attention to this and make changes.

If policies change with time, according to the changing environment, it will be easy for people to do business. The system is such that it waits for victims to make a mistake. Rather than telling them what to do.

Again, Why is it tough to do business in India?

Another reason is credit periods. A sign is mainly seen in the shops around where it is written, ‘Credit is banned here.’ This is not only in small shops but also in businesses too. People don’t pay the money for orders or bills that they owe. Not only that but bills are also not paid on time.

A Hindustan Times report says that 10.7 lakh crores are pending, and big companies owe them to MSME companies. Even though such rules have been made for micro, small, and medium enterprises, MSMEs should get the payment in 45 days. Still, it is not followed practically. The rule remains a rule. It is tough to do business in India because it is tough to find good staff.

On the one hand, there is unemployment in India. And on the other hand, there is a shortage of good employees. How is this possible?

There is a massive shortage of labour. The government says that this is unemployment. This is the biggest problem of the entire manufacturing industry.

A business will pay money for the machine and install it. The infrastructure will be built. Who will work?

Business is tricky in India because there is no one to encourage. Businesses are run as a traditional family, where 9 to 5 jobs are where everyone is safe and secure. And their future is very safe and secure. Taking a risk in an Indian middle-class family, the family won’t be supportive until they see a good result or money. Middle-class families don’t support them.

They’ll be like, “oh, you are struggling. Oh, you are at a loss. I think you should stop. It was a wrong decision. You are facing problems because of you.”The daily pain and struggle that a business faces, they know what they are facing. It can’t be explained to the family. No one can expect anyone to understand the business’s problems. The promising entrepreneurs. Who has good ideas, a good plan, and a good team? Can’t there be a support system for them?

There is an SMA fund in Hong Kong. They give back half the money spent on new business development. Easy to apply. They have a BUD fund. Seven crore rupees are allotted in the BUD Fund 7 crore rupees. An entrepreneur can go there and do

business. Grow the business. The government will give them half the money. It is also possible to be an Indian resident and have a company in Hong Kong. Which can be India’s legal subsidiary. From that subsidiary, it is possible to get an SMA fund despite being a subsidiary there.

Why shouldn’t there be something like this in India? 

It can become India’s new power. Electricity is needed to run every machine. But there are very few cities in the country with no electricity problem. If there is a hope to develop the country, then power is critical. But power companies are struggling.

How will they get funds to work if people don’t pay their electricity bills?

Look at this data.

One crore people in UP didn’t pay their electricity bills. Everyone suffered from demonetization. Except for the electricity companies. Why?

Because the government said that people could pay off their electricity bills with old notes. People who didn’t pay their electricity bills for years have settled all their accounts. Despite having money, people didn’t pay their electricity bills. It isn’t easy to do business in India. Because it is expensive to do business in India. To start a business in India, one must have good credit. If the family is not in the business, then it’s a problem. And if the family is in the business, it’s a problem, too.

Most business owners have never celebrated Diwali or big festivals with their families. Because whenever it’s Diwali, it’s bumper business time for shops. So for them, Diwali means good sales at the shop. So business owners come home happy at night. That’s it. Their Diwali is over.

Business takes away everything from them: their time, their energy, their family time, their quality time, and their time. All the hobbies and all the interests have to be thrown away. Whatever problems owners have, or challenges must be left outside the door. They have to come inside and keep a smiling face. Business owners need to keep their minds very calm.

They need to keep it cold, like ice.  India is a rich country of poor people, Union Minister Nitin Gadkari has said this line. After facing so many challenges, if a business is set and earns little profit, there are taxes, right? Foreigners used to come to India. First, they used to buy things for their weddings and then leave.

But what is happening now? Dubai is a stopover. Why?

If Someone buys goods in India, then 15% is gold duty. But if they buy from Dubai, VAT and a refund are provided at the airport. There is no VAT or GST refund system in India.

Let’s consider that if Someone comes to India for marriage, they will at least spend 25,000 dollars on jewellery for themselves. They pay 15% on $25,000 i.e.$3,750 more. They pay more dollars because they are buying in India. Furthermore, no duty refund will be given.

Who will buy from India, then?

India’s middle class is being crushed under the burden of taxes. Those under the 30% tax bracket work for the government for four months a year, and high taxes are not a problem. The problem is, what do people get in return for that tax money?

• Good police?
• Good governance?
• Good Roads?
• Good Education?

These things are just a dream.

In Singapore, corporate tax is 17%, and 9% in UAE. The rate for Indian companies in India is 25%. And 40% for foreign companies. This tax is relatively high. Earlier, one accountant used to do the work. Now, several accountants are needed. Plus, a CA as well.

Notices have been issued to people that there is an error in the filing. Remove all the files and bills of that time. Could you go through it? It is a very time-consuming process. Notice after notice.  Questions like, Where did you get this from? Where did you get that from? How did this happen? There is always a challenge for a layman. An average citizen gets scared if they get a letter.

Today, if a business entrepreneur is honestly doing business and paying taxes, why is he scared of getting that letter?

Doing business in India is difficult because the view of a businessman is wrong. If Someone is earning money, doing legal work, making progress, or generating jobs, then instead of encouraging them, it is always thought of how to pull them down. India has glorified poverty and has made every business owner a villain. They have created an image that shows that Someone is earning money. It means that Someone is doing illegal work.

India cannot escape the poverty trap until it gets out of the poverty mindset. Today, the focus in India is only on how to discourage Someone. Today, business people are scared of growing in size because they don’t know which compliances will come to them.

• When will the income tax notice come?
• Fear of crime.
• Fear of the department.
• Fear of customs.

This is the state of 80% of the business.

Why is there an environment of FEAR?

If a clean person is sitting in power From Centre to State – From State to Municipal Corporation If there is no corruption, nothing like that will happen. A change is needed at the ground and educational levels, and it is necessary to teach things that will grow the business.

If the Indian middle class stops chasing their children for government jobs and encourages them to stand independently. If roads are built in the country if the problems of electricity, labour, and land are solved. Suppose India’s tax is not a burden. If bureaucrats stop blackmailing people and do their work honestly. Then, India can become a country where no one is afraid to take a step to start a business.