Why is it HARD to do Business in India? | Harsh reality of Ease of Doing Business | Abhi and Niyu

Summary

India, often referred to as a 'golden bird,' faces significant challenges in fostering business growth due to bureaucratic inefficiencies, corruption, credit delays, and a lack of supportive infrastructure. This transcript highlights the struggles of business owners, from navigating complex regulations and corruption to dealing with delayed payments and lack of family support. Despite these hurdles, the spirit of entrepreneurship remains strong, with a call for reforms in policies, corruption reduction, and increased support for businesses to unlock India's potential and economic growth.

Takeaways

• 🦅 India is referred to as a golden bird but is trapped in a poverty trap.
• 💼 Starting and running a business in India is challenging, requiring significant time and effort.
• 🛠 India needs to create 20 million new jobs annually but is only generating 5 million.
• ⚖️ Business in India is burdened by corruption, bureaucratic hurdles, and outdated policies.
• 🗂 Odoo offers a solution to optimize business processes and reduce expenses.
• 🚀 Business in India is hindered by lengthy approval processes for licenses and permits.
• 🔋 Power shortages and unreliable infrastructure further complicate doing business in India.
• 🛑 High taxes and complex compliance requirements discourage business growth and investment.
• 👨‍👩‍👧‍👦 Middle-class families often do not support entrepreneurial ventures due to fear of financial instability.
• 🤝 There is a need for a supportive ecosystem for startups and small businesses to thrive.

Q & A

Why is India referred to as a 'golden bird' in the context of the video?

The term 'golden bird' is used metaphorically to describe India's potential and wealth, but the video suggests that this potential is trapped in a cycle of poverty and challenges, preventing the country from fully realizing its economic and social potential.

What is the primary challenge highlighted in the video regarding business in India?

The video highlights that starting and running a business in India is extremely challenging, akin to climbing Mount Everest, due to various obstacles such as bureaucratic red tape, corruption, and a lack of support systems.

How does the video describe the role of Odoo in business management?

Odoo is presented as an all-in-one management software that can help businesses manage all departments efficiently. It offers features like document management, online signing, and real-time tracking, which can optimize business processes and reduce expenses.

What is the significance of the time it takes to get a FSSAI license in India compared to Singapore?

The video points out that obtaining a FSSAI license in India takes significantly longer than in Singapore, illustrating the bureaucratic inefficiencies and delays that hinder business startups and growth in India.

How does corruption impact the ease of doing business in India according to the video?

Corruption is depicted as an inseparable part of doing business in India, where bribes and 'greasing palms' are often necessary to move files forward or expedite processes, adding an additional layer of complexity and cost to business operations.

What are the implications of the credit period issues mentioned in the video?

The video discusses how delayed payments and non-payment of bills by customers create financial strain on businesses, particularly MSMEs, leading to cash flow problems and hindering business growth and sustainability.

Why is finding good staff a challenge in India despite high unemployment rates?

The video suggests a mismatch between the skills of the unemployed and the requirements of businesses, indicating a need for better alignment between education, skills development, and industry needs.

How does the video characterize the middle-class family's attitude towards entrepreneurship?

The video portrays middle-class families as generally unsupportive of entrepreneurship, preferring the stability of traditional jobs and discouraging risk-taking, which can stifle innovation and business growth.

What is the impact of high taxes on the Indian middle class and businesses?

The video argues that high taxes burden the middle class and businesses, reducing disposable income and stifling business growth. It also questions the value received in return for these taxes, such as infrastructure and public services.

What solutions does the video propose to improve the business environment in India?

The video suggests solutions such as simplifying and updating policies, reducing bureaucratic corruption, improving infrastructure like roads and electricity, and encouraging a culture that supports entrepreneurship and innovation.

How does the video address the issue of bureaucracy and its impact on businesses?

The video criticizes the bureaucratic system for being outdated and complicated, creating an environment where businesses are constantly at risk of making mistakes and being exploited by officials for bribes.

Outlines

00:00

🐦 India's Golden Bird Trapped in Poverty

The video explores the paradox of India being termed a 'golden bird' while being ensnared in poverty. It highlights the difficulties of doing business in India by interviewing various business owners. The narrative delves into the necessity of job creation, the energy-draining nature of business, and the inseparability of business and corruption. The struggles of business owners are compared to climbing Mount Everest, emphasizing the challenges they face daily. The solution proposed is optimizing business processes and using technology like Odoo's management software to reduce expenses and increase profits.

05:02

💼 Challenges in Indian Business Operations

This section focuses on the bureaucratic and regulatory hurdles that businesses face in India, particularly in obtaining necessary licenses. It contrasts the lengthy process in India with the more efficient systems in places like Singapore. The narrative discusses various issues including HR problems, union problems, payment delays, and fraud. The text also points out that these issues lead to the prevalence of 'jugaad' or makeshift solutions. It concludes with a critique of the high costs and numerous obstacles that make starting and running a business in India exceedingly difficult.

10:02

📉 Corruption and Credit Issues in Business

Corruption is depicted as a pervasive issue in the Indian business environment, from bribing for police verification to navigating old and complicated rules. The systemic need for policy updates to reduce corruption is emphasized. Another major challenge is the issue of unpaid credits, with significant amounts owed to MSMEs. The narrative also highlights the difficulty in finding skilled labor despite high unemployment rates, and the lack of support for risk-taking in middle-class families. Comparisons are made with international support systems for entrepreneurs, suggesting the need for similar initiatives in India.

15:02

🌟 The Realities of Running a Business in India

The text delves into the personal sacrifices made by business owners, including the loss of family time and personal interests. It criticizes the heavy tax burden on middle-class business owners and the lack of supportive infrastructure in return. The high corporate tax rates in India are contrasted with lower rates in other countries. The narrative describes the extensive compliance requirements and the fear instilled by regulatory notices. The overarching message is that doing business in India is marred by an environment of fear and a cultural bias against entrepreneurs.

🔧 Hope for Business Reforms and Transparency

Despite the numerous challenges, the video concludes on a hopeful note, emphasizing the need for clean governance and transparency from the central to the municipal level. It advocates for educational reforms to support business growth and urges government officials to engage with ground realities. The narrative calls for a cultural shift in India, where the middle class encourages entrepreneurship over government jobs. The final message is a salute to the resilience of Indian entrepreneurs and a vision for a future where systemic issues are addressed, leading to a thriving business environment.

Keywords

💡Poverty trap

A poverty trap refers to a situation where individuals or communities are unable to escape poverty due to various economic and social factors. In the video's context, it is used to describe the persistent economic challenges faced by India, despite its potential. The script mentions that the 'golden bird' of India is trapped in a poverty trap, highlighting the country's struggle with widespread poverty.

💡Job creators

Job creators are individuals or entities that establish or expand businesses, thereby providing employment opportunities for others. The video emphasizes the need for job creators in India to address the issue of unemployment, as the country requires 20 million new jobs annually but is only generating 5 million.

💡Business optimization

Business optimization involves improving business processes to reduce costs and increase efficiency. The script introduces Odoo, an all-in-one management software, as a tool for business optimization. It allows for streamlined document management, which is crucial for reducing operational headaches and enhancing business performance.

💡Corruption

Corruption is the dishonest or fraudulent conduct by those in power, typically involving bribery or manipulation for personal gain. The video discusses the inseparable nature of business and corruption in India, where bribes are often demanded to expedite processes, such as passport issuance or police verification.

💡Compliance

Compliance refers to the act of conforming to rules, regulations, or requirements. In the script, compliance is portrayed as a significant challenge for businesses in India, with complex and outdated rules that can lead to confusion and opportunities for corruption.

💡Credit periods

Credit periods are the time frames allowed for the payment of goods or services on credit. The video highlights the issue of delayed payments and non-payment for orders or bills in India, which affects the cash flow and financial stability of businesses, especially MSMEs.

💡Jugaad

Jugaad is an Indian term referring to an innovative workaround or temporary solution to a problem, often born out of necessity. The script mentions jugaad as a result of the numerous challenges faced by businesses in India, such as compliance issues, HR problems, and union disputes.

💡Middle-class family

The term 'middle-class family' typically refers to a social and economic group that is neither poor nor wealthy. In the video, it is mentioned that such families in India often do not support entrepreneurial ventures due to their preference for secure 9-to-5 jobs and their lack of understanding of the struggles faced by business owners.

💡Tax burden

Tax burden refers to the total amount of taxes paid by individuals or businesses, which can impact their financial health. The script discusses the high tax rates in India and the challenges they pose to businesses, including the need for multiple accountants and the stress of dealing with tax notices and errors.

💡Transparency

Transparency in governance refers to the openness and clarity with which public officials conduct their duties, making information accessible to the public. The video calls for transparency in governance and among officers as a means to reduce corruption and improve the ease of doing business in India.

💡Fear

Fear, in the context of the video, represents the apprehension and anxiety experienced by business owners due to various challenges, such as crime, tax notices, and bureaucratic interference. It is portrayed as a pervasive state that hinders the growth and confidence of Indian businesses.

Highlights

India is described as a golden bird trapped in a poverty trap, raising the question of why business is challenging in the country.

India requires 20 million new jobs annually but is only generating 5 million, emphasizing the need for job creators and businesses.

The transcript discusses the energy, money, and time sucked into running a business in India, including the inseparable link between business and corruption.

Fear of crime, IT department, and customs are highlighted as burdens for job creators in India.

Starting a business in India is likened to climbing Mount Everest, fraught with daily challenges and pitfalls.

Odoo is introduced as an all-in-one management software to optimize business processes and reduce expenses, potentially increasing profits.

The comparison of starting a restaurant in India versus Singapore shows the significantly longer time required for licensing in India.

Corruption is identified as a major issue in business, with examples of bribes and the systemic nature of the problem.

Outdated and complicated rules are criticized for encouraging corruption and creating opportunities for bribes.

Credit periods and the non-payment of bills on time are highlighted as significant issues for businesses in India.

The difficulty of finding good staff in India is discussed, despite high unemployment rates.

The lack of support for entrepreneurs from middle-class families and the preference for secure jobs is critiqued.

The potential for a support system like Hong Kong's SMA fund is suggested for encouraging new business development in India.

Electricity issues are raised as a critical problem for businesses, with examples of non-payment and the impact on power companies.

High costs of doing business in India, including taxes and the need for multiple accountants, are discussed.

The transcript criticizes the Indian mindset towards businessmen, viewing them as villains rather than job creators.

A call for change at the ground level, including education and transparency in governance, is made to improve the business environment.

The transcript concludes with a hopeful outlook, suggesting that a new generation and mindset could transform India's business landscape.

Transcripts

We call India a golden bird

But this golden bird is

trapped in a poverty trap.

But why?

We went on ground with

the same question.

And we talked to business

owners who earn 100 rupees

a day to those who earn 1 lakh

rupees a day.

How easy is it to

do business in India?

Maybe this was a mistake.

India needs 20 million new

jobs every year.

And we are generating 5

million new jobs.

India needs job creators.

India needs businesses.

Business sucks everything

your energy, your money, your time

Middle class families don't support you

Business and corruption are inseparable

Fear of crime.

Fear of the IT department.

Fear of the customs.

Your burdens are like

nails hammered in your body

What is the real pain

of a job creator?

Let's understand.

We talked to people.

We read their tweets, DMs,

and comments.

And we realized that starting

a business in India is

not just a problem.

It's a challenge like climbing

Mount Everest.

Storms can come at any time

There may be an unseen chasm

at any time.

And you have to fight

these pitfalls every day.

But there is a way

to reduce the headache of

business.

That way is to

optimize your business processes.

Reduce expenses so that profits increase

And one way to do

that is with the sponsor

of today's video, Odoo.

In the future, only those

businesses will survive that will

adopt technology.

Odoo is an all-in

-one management software.

Where you can manage all

the departments of your business.

Managing documents in every business.

Taking signatures on them.

Tracking their progress is an

important task.

With Odoo's Sign Application, you

can easily review documents.

You can also sign and

send them online.

You can also personalize documents.

Fields can be easily dragged

and dropped.

Is data is mandatory or not.

Who has to fill in

what data in the document

You can decide these things

You can make contracts between

multiple parties.

And you can also decide

in which order it should

be signed.

And it also has real

-time document tracking.

To make sure all parties

sign the document and get

an overview.

Your first app on Odoo

is lifetime free for use

For unlimited users.

Whenever your business needs them

you can also add other apps.

Starting with just Rs 580,

you can access all these apps

As a business owner, Odoo

gives you unlimited customer support

and hosting.

Which fulfills all your needs.

You can check Odoo's Sign

App with the link in

our description.

So do make sure to

check it out.

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?

Look at this table.

You can see how much

time it takes for different

licenses in India and Singapore.

It's hard to believe that

it takes 2 months to

get a FSSAI license.

Time is money.

Of course, GST registration is

relatively simpler in India.

Which is commendable.

But it takes so much

time to get a FSSAI license

In Singapore, you can start

a restaurant business in 1-2 months

Whereas in India, it will

take 6-9 months to

complete all the process.

Who will wait so long?

They'll put up a roadside stall right?

You can do anything on the roads

But to start a canteen

You want 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 we send a parcel from here

Just to send items from India

It can take anywhere from 8-10 days

We submit an excel sheet in one format

They tell us this is not correct

Make it in a different format

Now we will hold your parcel

On one hand you have compliances

You have HR problems

The third hand has union problems

The fourth hand has payment problems

The fifth hand has fraud problems

In the sixth hand, you have

payment delays

and no relief from courts

There are so many problems

it seems like a joke

And these problems are the

birthplace of jugaad

We have a vehicle problem

The BMC vehicle comes every day

The vehicle comes every day

at 6-7 pm.

It waits for 1 hour then leaves

We start our stalls after an hour

Why is it tough to

do business in India?

Reason is corruption.

Have you ever got a

passport made?

My friend 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,

you have to grease many palms

Corruption is an inseparable part

of business.

You have to accept it.

I met someone.

I won't say his name.

I said, sir, you take

so much money.

It's not good what you're doing

He said, we have to

distribute it further.

He said this.

I heard this and I'm telling you

Rules are old.

Rules are complicated.

Rules have been made in

such a way that you

don't understand.

And Babus are waiting

for you to make a mistake.

And how they can take a

bribe from you to hide

your mistake.

The biggest cause of corruption

is the policy.

The policy should also change

according to the time.

And the government should pay

attention to it and make

it change.

If they change, it will

be easy for people to

do business.

The system is such that

it waits for you to

make a mistake.

Rather than telling you what

to do.

Why is it tough to

do business in India?

The reason is credit periods

You must have seen this

sign in the shops around you

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, bills are

not paid on time.

This Hindustan Times report

says that 10.7 lakh

crores are pending.

Which big companies owe to

MSME companies

Even though such rules have

been made that micro, small

and medium enterprises.

That is, MSMEs should get

the payment in 45 days.

Still, it is not followed practically

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 huge shortage of labour

On one hand, the government

says that this is unemployment.

I have never seen it

sitting here.

Look at anyone here, there

will still be a requirement.

This is the biggest problem

of the entire manufacturing industry.

We will pay money for the machine

and install it.

The infrastructure will be built.

Who will work?

Business is tough in India

because there is no one

to encourage.

We are running as a

traditional family.

Where 9 to 5 job

is where you are safe

and secure.

And your future is very

safe and secure.

Taking a risk in an

Indian middle-class family.

Your family won't be supportive

unless and until they see

a good result or money.

Middle-class family, they don't

support.

They'll be like, oh, you

are struggling.

Oh, you are in loss.

I think you should stop.

It was a wrong decision.

You are facing problems because

of you.

The pain, the struggle that

you are facing day to day

You know what you are facing

You can't explain it to

your family.

No one can tell you.

You can't expect anyone to

understand your problems.

The promising entrepreneurs.

Who have good ideas, a

good plan, 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 you spent on new

business development.

Easy to apply.

They have a BUD fund.

7 crore rupees are allotted

in the BUD Fund

7 crore rupees.

You come there and do

business.

Grow your business.

The government will give you

half the money.

And sir, we have got it

I am a resident Indian.

Still, I have a company

in Hong Kong.

Which is my legal subsidiary

of India.

And from that subsidiary

Despite being a subsidiary there

we have also got an SMA fund

Why shouldn't there be something

like this in India?

This can become India's new power

Electricity is needed to run

every machine.

But there are very few

cities in the country where

there is no problem of electricity

If you want to develop

the country, then power is

key.

But power companies are struggling.

How will they get funds

to work if people don't

pay their electricity bills?

Look at this data.

1 crore people in UP

don't pay their electricity bills.

Everyone suffered from demonetization.

Except for the electricity companies.

Why?

Because the government said that

you can pay off the

electricity bill with old notes.

People who didn't pay their

electricity bills for years

now settled

all the accounts.

Think about it.

Despite having money, people don't

pay their electricity bills.

It is difficult to do

business in India.

Because it is expensive to

do business in India

In fact, when we were

looking for a place for

the studio, the rates of

a popular co-working space

were 33,000 plus GST

per seat.

Which is insane.

As I come from a

middle class family, I didn't

have that much capital with me

I had an investor who

raised me and helped me

to start a business.

It's actually very tough.

You need to have a

good credit.

And it's been two and

a half years and I

can say that I'm still

in a survival stage right now

And running a business in

India is very difficult.

If the family is not

in the business, then it's

a problem.

And if the family is

in the business, then it's

a problem too.

I have never celebrated Diwali

or any big festival with

my family or my dad.

Because whenever it's Diwali, it's

bumper business time for shops

So for us, Diwali means

good sales at the shop

Dad comes home happy at night

That's it.

Our Diwali is over.

Business takes away everything from you

Your time, your energy.

Your family time, your friends'

time, your personal time.

X, Y, Z.

All the hobbies, all the interests

have to throw them away.

Whatever problems you have in

life, whatever X, Y, Z

challenges you have, we have

to leave that outside the door

You just have to come

inside and keep a smiling face

You have to keep your

mind very calm.

You have to keep it

cold, like ice.

India is a rich country

of poor people.

Don't hate me after hearing

this line.

This line has been said

by our Union Minister Nitin Gadkari

After facing so many challenges,

if you set up a

business and earn a little

profit, there are taxes, right?

Foreigners used to come to

India first, they used to

buy for their weddings

and leave.

Do you know what is

happening now?

Dubai is a stopover.

Why?

If you buy goods in

India, then 15% is

gold duty.

But if you buy from

Dubai, then you give VAT

and refund it at the

airport.

There is no VAT or

GST refund system here.

And you tell me, if

you come to India for

marriage, then at least pay

25,000 dollars for jewelry

for yourself.

Pay 15% on $25,000

$3,750 more

Pay more dollars because you

are buying in India.

And you will not get

its duty back.

Who will buy from us?

India's middle class is being

crushed under the burden of taxes

Those who come under the

30% tax bracket, they

work for the government for

4 months a year.

And high taxes is not

a problem.

The problem is that what

do we get in return

for that tax money?

Good police,

good governance

Good Roads

Good Education

These things are just a dream

Let's talk about business.

In Singapore, corporate tax is

17%.

9% in UAE.

The rate for Indian companies

in India is 25%.

And 40% for foreign

companies.

This tax is quite high.

Earlier, one accountant used to

do the work.

Now, I have to hire

three accountants.

Plus, a CA as well

Suddenly, I get a notice

of 2018.

Or I get a notice

of 2020.

That this is a mistake.

There is an error in the filing

Remove all the files and

bills of that time.

Go through it.

It is a very time

-taking process.

Notice after notice.

Where did you get this

from?

Where did you get that

from?

How did this happen?

There is always a challenge

for a layman.

He gets scared if he

gets a letter.

Today, if a business entrepreneur

is honestly doing business

and is paying taxes, then

why is he scared of

getting that letter?

I am a businessman.

Let me do business.

To be really honest, doing

business in India is difficult

because our view of a

businessman is wrong.

If someone is earning money,

doing legal work, making progress,

generating jobs, then instead of

encouraging him, we think how

to pull him down.

India has glorified poverty.

And has made every business

owner a villain.

They have made such an

image that someone is earning

money.

This means that someone is

doing illegal work.

India cannot get out of

the poverty trap until we

get out of the poverty

mindset.

Today, the focus in India

is only on how to

discourage someone.

Today, a businessman is scared

of growing in size

Because he doesn't know which

compliances will come on him.

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?

In this entire video, we

talked about problems.

But, in our entire journey,

there was not a single

person who gave up hope.

If there is a clean person sitting in power

From Centre to State

From State to Municipal Corporation

If we can clean the corruption

nothing like that

We should bring change at

the ground level, at the

educational level.

And we should teach things

that will grow the business.

The minister of every industry

has to work on the

ground reality.

If it is a cotton

industry, how can he encourage it?

We have to work on this

When we have meetings with

Piyushji, Sitaramanji, we see pressure

on their faces.

They ask the officers, when

will this work be done?

Give me a date.

Today, they opened a facility

center in SEEPZ

For SEEPZ and out of SEEPZ

I remember, Piyushji asked at

that meeting, when will this

be done?

And I want a date.

The head of customs who

who usually delays for 6 months

months, said that it should

be done in 2 months.

And it was opened in 3 months

And governance with transparency.

Officers with transparency.

I am neither disappointed nor

hopeless.

But, I feel that one

day it will come.

A young generation will come.

A new thought will come.

It will take time.

Anil Kapoor's movie came out.

Nayak.

Whatever Anil Kapoor could do,

I would like to do it too

What do you think?

What are problems in doing business in India?

And how can we solve it

Do tell us in the comments

If the Indian middle class

stops chasing their children for

government jobs, and encourages them

to stand on their own feet

If roads are built in

the country, if the problem

of electricity, labour and land

is solved.

If India's tax is not

a burden.

If bureaucrats stop blackmailing people

and do their work honestly.

Then just imagine, where the

country can go from.

By not focusing on all

these problems, honestly, every day,

every hustling businessman who earns

his daily bread, we salute

them.

And that's the reason why

I love India.