Noida, India (PressExposure) February 18, 2014 -- Establishing a new business venture in a country having as diverse and complicated system like India is not an easy process. Most of the people who want to establish new business have to go through many obstacles placed by the system which should be largely single window and simple.
Being one of the fastest growing economies of the world India has become one of the most favourite choices for foreign investors. But there are still many formidable challenges out there for foreign investors eyeing up to do business in the country.
The complicated rules of the government and the prevalent red tapism in the system also play a big role in creating hurdles for the establishment of new business in the country. The way files move at a slower pace in government offices also make the establishment of a new business difficult.
Essay topics for MBA: System needs to be more transparent
Most of the times lack of transparency in the finance regulating system of the country, makes establishing a new business a troublesome process. There is always a need for greater disclosure of information on part of the regulatory authorities like Trade and Tax controlling departments. For successes of business and markets there is a dire need for openness and transparency of the regulating systems so that the business can run smoothly without facing any hurdle. Most of the times, the lack of transparency results into lack in acquiring enough resources to establish a successful and thriving business. The lack of transparency on part of the governing bodies creates an environment of uncertainty due to which the companies often shy away from doing long term planning leading them to a short term focus which ultimately leaves an adverse effect on the business. The lack of transparency in the system leaves the NRIs wanting to establish their business in India confused as they are not accustomed to the high level of red tapism and hurdles faced by the businesses in India.
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Corruption: Biggest obstacle in establishing a new business in India
Transparency International in its study on index of corrupt countries in 2012 placed India at 94th rank out of 176 countries while Somalia tops the list. Corruption in all walks of life in India is making it weak and has adverse impact on its growth. As per an estimate 80% of the public servants in India are corrupt because of which the wheel of growth is being pulled down. This also adversely affects setting up of new business in the country as to set up a new business one has to go through various levels of red tapism most of the times and still there is a culture of bribes in most of the government offices.
The people have to pay bribe to get a job done in a public office. As per an estimate more than Rs. 24,000 crores is paid in bribes. Government regulators and police share in bribe money. Various government officials, politicians in connivance with Criminals tend to create problems for anyone willing to establish a new business in the country. The connivance of politicians and criminals hampers the establishment of new business in the country.
Political and regulatory risks also pose a major challenge to the investors willing to set up their business in India. Apart from all that the foreign investors also have to face the challenge of facing rampant bureaucracy at various levels of the system. The procedure of filing various types of taxes and other fees is also very complicated which leaves many open loop holes for the officials to make money through bribes and commissions.
In India there is a need to make the process of establishment of a new business more easy and business friendly so that the foreign and local investors both are not faced with the complicated system which becomes the main reason behind their disillusionment with the Indian market.