Why is it HARD to do Business in India? | Harsh reality of Ease of Doing Business | Abhi and Niyu
Summary
TLDRIndia, 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
- đŠ India is referred to as a golden bird but is trapped in a poverty trap.
- đŒ Starting and running a business in India is challenging, requiring significant time and effort.
- đ India needs to create 20 million new jobs annually but is only generating 5 million.
- âïž Business in India is burdened by corruption, bureaucratic hurdles, and outdated policies.
- đ Odoo offers a solution to optimize business processes and reduce expenses.
- đ Business in India is hindered by lengthy approval processes for licenses and permits.
- đ Power shortages and unreliable infrastructure further complicate doing business in India.
- đ High taxes and complex compliance requirements discourage business growth and investment.
- đšâđ©âđ§âđŠ Middle-class families often do not support entrepreneurial ventures due to fear of financial instability.
- đ€ 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
đŠ 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.
đŒ 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.
đ 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.
đ 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.
đ§ 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.
Mindmap
Keywords
đĄPoverty trap
đĄJob creators
đĄBusiness optimization
đĄCorruption
đĄCompliance
đĄCredit periods
đĄJugaad
đĄMiddle-class family
đĄTax burden
đĄTransparency
đĄFear
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.
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