Skip to main content

India's business entry density, indicator of entrepreneurial dynamism, is one of the poorest: World Bank report

By Our Representative
At a time when India’s rulers are basking in happiness that international consultants, Ernst and Young, have pointed to how India has overtaken China in foreign direct investment (FDI), considering this an indicator of the new business climate under the Modi government, a World Bank report has found that the country utterly lacks in dynamism in entrepreneurial activity.
The just-released World Bank report, “World Development Indicators 2016”, has found India’s business entry density, which calculates the number of newly registered limited liability corporations per 1,000 people in the age group 15–64, is one of the lowest in the world.
At just about 0.12 per 1000 people in the age group 15-59, the calculation shows that the world average of business entry density is 4.01. By way of comparison, the density in the United Kingdom is 12.90, in South Africa it is 6.54, in Russia it is 4.20, and in Brazil it is 2.88.
Of course, there is some consolation, as the neighbouring Pakistan’s business entry density is worse than India’s, at just 0.04, and Bangladesh’s 0.09, yet in Sri Lanka it is higher, at 0.51, in Nepal it is 0.69, and in Afghanistan it is 0.15.
A measurement which shows the rate at which new businesses are added to an economy, suggesting dynamism and entrepreneurial activity, the data on business entry density are from the World Bank’s 2015 Entrepreneurship Database, which includes indicators for more than 150 countries.
“Survey data are used to analyze firm creation, its relationship to economic growth and poverty reduction, and the impact of regulatory and institutional reforms”, the World Bank report points out.
Another World Bank source says that the new business entry density would show the number of newly registered firms, in which ownership liability is limited to its investment, per calendar year, normalized by population.
“This is a valuable indicator which quantifies the impact of regulatory, political, and macroeconomic institutional changes on new business registration, a vital component of a dynamic private sector”, it adds.
Data on India’s poor business entry density, significantly, has been revealed at a time when the manufacturing value added as a share of gross domestic product (GDP), claimed to capture the role of manufacturing in an economy, has been nearly stagnant in India.
While worldwide, the World Bank report shows, it is 16 percent, in East Asia and Pacific it is 22 percent, in China it is 32 percent, and in Thailand 28 percent. It says, “In South Asia the share has remained fairly constant since 1990; it was about 17 percent in 2014. Between 1990 and 2014 the share increased slightly, from 16 percent to 17 percent, in India, while Bangladesh registered a larger increase, from 13 percent to 17 percent.”
Coming to yet another measure, of innovation is the intensity of research and development, measured as expenditure on research and development as a percentage of GDP, the report says, “Worldwide, it increased slightly from 1.6 percent in 2007 to 1.7 percent in 2013, despite the period’s global financial crisis.”
It adds, “Asia was the first to recover; in particular China’s research and development intensity grew from 1.4 percent in 2007 to 2.0 percent in 2013. In other emerging economies the rise was slower — from 1.1 percent in 2007 to 1.2 percent in 2012 in Brazil — or stagnant — around 0.8 percent in 2007 and 2011 in India.”
---
Click HERE to download full report

Comments

TRENDING

Missed call drive for VVPAT verification follows online plea to "pressure" poll panel

By Our Representative
Several political activists have begun a new campaign, asking concerned citizens to give a missed call on 9667655855 to “support the demand that 2019 Loksabha elections must be declared only after verification of 50% electronic voting machines (EVMs) with Voter Verifiable Paper Audit Trail (VVPAT) receipts.” The effort, supported by civil society networks across India, is meant to "further pressure" India's election machinery to ensure that the poll outcome becomes more transparent.

Now, top Gujarat "litterateur" close to Modi says: Godse was patriot, so was Gandhi

By Rajiv Shah
A little over a week after Prime Minister Narendra Modi criticized BJP candidate from Bhopal Pragya Thakur for calling Nathuram Godse a patriot saying he would never forgive her for the remark, a top Sangh Parivar ideologue, known to close to Modi in Gujarat, has supported her, saying her statement should be seen “within a context.” Thakur won from Bhopal by more than 3.5 lakh votes defeating her nearest rival, veteran Congressman and ex-Madhya Pradesh chief minister Digvijay Singh.

Opposition refuses to legally challenge EVMs amidst plans of "back to ballot" protest

Counterview Desk
Even as opposition to the use of electronic voting machines (EVMs) allegedly to rig polls is growing, a group of prominent citizens who have come together to form the EVM Virodhi Rashtriya Jan Andolan has controversially called for a national protest against EVMs on May 30, demanding future elections should be held only on ballot paper.

When a Pak scribe said Modi has 'proved' Jinnah’s two nation theory right...

By Zafar Agha*
It was around nine in the morning on May 24, 2019, a day after Prime Minister Narendra Modi stormed the Lok Sabha with 300-plus MPs. It was a call from a journalist friend, Muzamal Suhrawardy, from Lahore, Pakistan. I ignored the call. We liberals had a depressing day the previous evening as the opposition to Modi and BJP collapsed. The results belied reports from the ground and even assessments made by colleagues.

It's now official: Akshay Kumar has not been conferred honorary Canadian citizenship

By Our Representative
It is now official. Super-star Akshay Kumar has not been conferred any honorary citizenship by Canadian authorities, as claimed by him ahead of the 2019 elections. In reply to a query by Roshan Shah, who is a Canadian citizen living in Waterloo, Ontario, and belongs to Ahmedabad, the country’s authorities dealing with issues related with immigration, refugees and citizenship in Canada have said that only six persons have so far been granted honorary citizenship.

Savarkar in Ahmedabad "declared support" to two-nation theory in 1937, followed by Jinnah three years later

By Our Representative
One of the top freedom fighters whom BJP and Prime Minister Narendra Modi revere the most, Vinayak Damodar Savarkar, was also a great supporter of the two nation theory for India, one for Hindus another for Muslims, claims a new expose on the man who is also known to be the original proponent of the concept of Hindutva.

If EC's credibility is under question, shouldn't one "assume" EVMs might be tampered?

Counterview Desk
Gauhar Raza, scientist, documentary film maker and poet; senior human rights activist Shabnam Hashmi of the Act Now for Harmony and Democracy (ANHAD); military veteran Major Priyadarshi Chowdhury (retd); and Sucheta De and Sandeep Saurav of the All India Students' Association (AISA), have asked “individuals, organisations and people's movements” to send their endorsement to an appeal they have prepared on Electronic Voting Machine (EVM).

Common thread of Modi, political Hinduism, nationalism? 'Contest' of ideas isn't over

By Salman Khurshid*
Losing the 2019 election and that too in a somewhat extreme manner has confronted us with unexpected challenges: Our leadership has naturally taken it very hard and to heart but with suggested options that we cannot imagine or contemplate. Hopefully the emotions will settle soon and give us the direction to pick up the pieces and march again.

Govt of India overestimated GDP by 2.5%, must restore reputational damage: Ex-CEA

By Rajiv Shah
Top economist Arvind Subramanian has said that changes brought about by the Government of India in data sources and methodology for estimating the country’s gross domestic product (GDP) since 2011-12 “has led to a significant overestimation of growth”. While official estimates place annual average GDP growth between 2011-12 and 2016-17 at about 7 percent, the actual growth may have been 4½ percent, ranging from 3 ½ to 5 ½ percent during the period, he adds.

Will minorities in India be 2nd class citizens? Wake up call: Be a 'communicating' Church

By Fr Cedric Prakash sj*
India today is at a defining moment of her history. There is so much that has taken place in the past five years (and particularly in the last ten days)- that several citizens of the country are genuinely concerned about the future of the country! Will democracy survive? Will key elements of the Constitution be changed?