Proactive govt. can drive entrepreneurism

1: It is true the the biggest hindrance of India Inc growth is its widespread corruption and unfriendly mindset of Govt. machinery at every level. The true reason is that the field fence (of society) has become the crops eater as depicted in our mythology " The famous Yaksh Prasnotry"
And the wild growth of this mind set is the basic failure of oversight and lack of accountability of all who responsible for any system to function. Here in America this aspect is a way of life for everyone and that's why the system is healthy and functional.
I remember an incident of my village Dhanesh Chhapra in Baniapur Block of Chhapra( Saran) district in north Bihar. There is no electricity supply in the village even today. After lot of efforts of some good minded people people of the area the work started of laying wires and poles in the village in early eighties (probably in 1982)but the power line was never energized because the local functionary were not willing to energize the line unless their hands were heavily greased and the villagers were not willing to meet their unethical demand and denied to succumb to their pressure tactics. As such the fate was sealed of a prospering village which was pushed into the darkness indefinitely.
Then started the 'Lalu' period of non-growth non-people government and everything was standstill. Now again, in last few years the Govt. has come out with a fresh intention to start power supply in the village. But the local machinery again has the same approach. They took the application for power connection from the villagers quite some time back but to start the work the local officials of electricity department are demanding Rs. 40,000/-as greasing money for their rusted machinery to become work worthy through their agents (touts) from each applicant to get the power connection. The poor villagers are not in a position to meet their this unethical demand again and this way the power line to the village which has not been energized for last 27 years, again facing the same fate and only the God knows when this waiting period of the poor villagers for getting power supply to their household and irrigation pump sets will be completed.
Now the question arises who is responsible for this callousness and how to fix it. can anybody find an answer or is there any responsible agency to investigate this episode and suggest a solution to start moving on the path of growth?

Posted by: B P Rai - 16 Dec, 2009

2:You must meet the Chief Minister Shri Nitish Kumar to request for a sponsorship to tour villages in Gujarat. Preferable include many people from your village and invite Mr. Nitis Kumar also.

 Utpal replied to: B P Rai 
 post - 17 Dec, 2009

3: Corruption cannot be cleaned with out change in peoples mind set. People are more used to corruption, would like to continue with it. Today most of driving licenses are issued without proper test. Like this, we have many more practices which become part of our life. People are comfortable with this they doesn't want change.

Today, I see so many pay extra to get a PAN Card. As per my knowledge Government has provided all necessary information through online and offline(PAN Card Center)but still they want to pay someone to do their job.

Nothing will change, unless people have change in mindset.

Posted by: Karthik - 15 Dec, 2009

4: i stress on requirement of (A) cleaning up corruption. & (B) government more business-friendly.. the (B) factor is not at expense of leaving some essential things like agriculture, irrigation But still we can provide a platform for entrepreneurs to reach the free skies to enable India on globe..

Posted by: uday  - 15 Dec, 2009

5: I agree with the views expressed.

In an article,” Government's Positive Role in Kick-Starting Entrepreneurship” Josh Lerner wrote:


Silicon Valley is the poster child for capitalism, the synergistic geography where smart private money supports cool ideas, creates jobs, boosts national productivity, and provides a handsome return for investors.

Less well understood about the area's development was the role played by the U.S. government in making it a success. "Particularly during the early years, the government played a critical role in shaping Silicon Valley," especially spending and funding from the U.S. Department of Defense, writes HBS professor Josh Lerner in his new book, Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed—and What to Do about It.

Government has played similar catalytic roles in creating hubs of innovation is places such as Tel Aviv and Singapore. Such success stories often get lost against the common perception that government just bungles things when it wades into the private sector.

Lerner's book studies where public efforts to spur entrepreneurial activity have gone right and wrong—there are many more of the latter, the author acknowledges—and offers policy prescriptions to guide government actions in the future.

Entrepreneurship is a business in which there are increasing returns. To put the point another way, it is far easier to found a start-up if there are 10 other entrepreneurs nearby. In many respects, founders and venture capitalists benefit from their peers.
For instance, if entrepreneurs are already active in the market, then investors, employees, intermediaries such as law firms and data providers, and the wider capital markets are likely to be knowledgeable about the venturing process and the strategies, financing, support, and exit mechanisms that are required. In the activities associated with entrepreneurship and venture capital, the actions of any one group are likely to have positive spillovers—or, in the language of economics, "externalities"—for their peers. It is in these types of settings that the government can often play a very positive role as a catalyst.

This observation is supported by numerous examples of government intervention that has triggered the growth of a venture capital sector. For instance, the Small Business Investment Company [SBIC] program in the United States led to the formation of the infrastructure for much of the modern venture capital industry. Many of the early venture capital funds and leading intermediaries in the industry—such as law firms and data providers—began as organizations oriented to the SBIC funds, and then gradually shifted their focus to independent venture capitalists. Similarly, public programs played an important role in triggering the explosive growth of virtually every other major venture market around the globe.

Yet for every successful public intervention spurring entrepreneurial activity there are many failed efforts, wasting untold billions in taxpayer dollars.
Policies that governments employ to encourage venture capital and entrepreneurial activity take two broad forms: those that ensure that the economic environment is conducive to entrepreneurial activity and venture capital investments, and those that directly invest in companies and funds.

First, it is necessary to ensure that entrepreneurship itself is an attractive option. Often, in their eagerness to get to the "fun stuff" of handing out money, public leaders neglect the importance of setting the table, or creating a favorable environment. Such efforts to create the right climate for entrepreneurship are likely to have several dimensions. Ensuring that creative ideas can move easily from universities and government laboratories is critically important. However, many entrepreneurs come from corporate positions, not from academia. Studies have documented that, for these individuals, the attractiveness of entrepreneurial activity is very sensitive to tax policy. Also important is ensuring that the law allows firms to enter into the needed contracts—for instance, with a potential financier or a source of technology—and that these contracts can be enforced.

A second important—though very challenging—role for government is to intervene directly in the entrepreneurial process. But these programs must be executed carefully to be effective. Among the key avenues to success are

• Being sure to let the market provide direction when offering subsidies to stimulate entrepreneurial and venture activity.

• Understanding the need for, and active encouragement of, strong interconnections with entrepreneurs and investors overseas, rather than solely focusing on domestic activity.

• Recognizing that the temptation for individuals and organizations to take steps that benefit themselves, rather than the broader social good, is universal and minimizing that danger.

Our Government can emulate the suggestions made by Josh Lerner

Dr.A.Jagadeesh Nellore (AP)

Posted by: Dr.A.Jagadeesh - 15 Dec, 2009

6: It is very important for govt. to be more business-friendly if more entrepreneurs need to be created, which can fuel the growth of the overall economy.

Posted by: Chandan - 15 Dec, 2009

7:Its the best thing to be done in India bcz India have very good talent.

 Bikramjeet replied to: Chandan 
 post - 15 Dec, 2009