Context

• Atmanirbhar Bharat, or a self-reliant India, is among the most prominent stated goals of the present government.
• Recently a report was released by Capital Group which highlighted nine factors that made “India appealing compared with other emerging markets.”
• Amidst all these reports and government’s policies it is imperative to understand the correct employment picture. 

The Vision of Atmanirbhar Bharat (Self-Reliant India)

• The idea is that the country will achieve self-reliance in a whole host of economic activities.
• An associated idea, pushed forward by the government, has been to convince people that they should not look towards the government for an official job.
• The Indian government has long sought to boost domestic entrepreneurship.
• The current dispensation has consistently pushed for the private sector to take the lead in creating jobs.
• A necessary corollary of such growth would be the rise of entrepreneurship in India.

Select Government Schemes to Support Entrepreneurship in India

• Startup India Scheme
  • This scheme was launched to promote and support startups in India by providing them with funding, tax benefits, and other incentives.
  • It also provides legal and regulatory support and helps startups to network and collaborate with investors, mentors, and other entrepreneurs.
• Mudra Yojana Scheme
  • This scheme provides financial assistance to small and micro enterprises, including startups, through loans of up to INR 10 lakhs.
  • The scheme has been designed to cater to the financial requirements of startups and small businesses in the country.
• Stand-Up India Scheme
  • This scheme was launched to promote entrepreneurship among women and SC/ST entrepreneurs.
  • Under this scheme, loans of up to INR 1 crore are provided to eligible entrepreneurs to start or expand their businesses.
• Atal Innovation Mission (AIM)
  • AIM is a government initiative that aims to promote innovation and entrepreneurship in the country.
  • The mission provides funding, mentorship, and other support to startups and entrepreneurs working on innovative ideas.
• Electronic Development Fund (EDF)
  • The EDF is a fund set up by the government to provide financial assistance to startups and small businesses working in the electronics and IT sectors.
  • The fund provides equity, debt, and other forms of funding to eligible companies.

Current Employment Picture

• The government has argued that due to key reforms, India is witnessing a surge in domestic entrepreneurs.
• However, reports suggests that India’s labour market experiences considerable joblessness and a general lack of employment opportunities despite a significant GDP growth rate.
• The Centre for Monitoring Indian Economy (CMIE) released data that suggests most of the new jobs created in the form of self-employment.

Where and How Indians Work?

• According to CMIE, the total employment in India in January-April 2023 stood at 412.9 million.
• This is 8.6 million more than what it was before the pandemic (that is, during January-April 2019).
• The total employed people can be further categorised into several other categories.
• However, there are four main categories; business; salaried; small traders & wage labourers; and farmers.
• The bulk of Indians work either as farmers or as wage labourers or small traders. The third biggest category is the salaried class. The fourth-biggest category is the so-called “business” class or “entrepreneurs”.
• Moreover, there is only one category that has actually recovered to the pre-pandemic level. That is those employed in “business” of some kind.
• All other types of employment are still below the pre-pandemic number.
• The number of people categorised under “business” grew by 8.4 million between the last four years.

Is the Entrepreneurship on the Rise?

• At one level, the fact that employment is soaring within the “business” category can be seen as heartening news.
• It can give a sense that India’s economy is creating the right kind of incentives for the private sector to come out and reach for their dreams — that India is the new land of opportunities for entrepreneurs.
• However, a detailed examination of the data within the “business” category is necessary to present the correct picture. 

Detailed Examination of the Data Within the Business Category

• Businessmen
  • This includes those people who set up large businesses that leverage capital and humans to run them.
  • They manage some fixed premises such as an office, shop, workshop, factory, etc.
• Qualified self-employed professionals: This category includes people who run their own professional enterprises and leverage their own expertise, such as doctors, lawyers, consultants, professional chartered accountants, etc.
• Self-employed
• This category refers to those “entrepreneurs” who run their own business enterprises but these enterprises do not leverage much financial capital, human capital, or even professional skills.
• For example, taxi drivers, barbers, beauticians, estate agents, brokers, insurance agents, models, astrologers, etc.

Reality of the Rise in Entrepreneurship

• Self-employed entrepreneurs accounted for the largest share, at around 70-80 per cent of all the entrepreneurs in India.
• The second largest share was that of businessmen, comprising around 15-20 per cent of the total business persons in the country.
• Qualified self-employed professionals accounted for a mere 1-2 per cent.
• According to CMIE, this composition has changed considerably since 2016, from when CMIE started releasing its employment data.
• The share of businessmen fell substantially and was offset by an equal rise in the share of self-employed entrepreneurs.
• Data shows that at the macro level, what is often considered to be the business class — the well-to-do entrepreneur — has seen a decline.
• More importantly, the actual rise of Indian entrepreneurs is happening in the self-employment category, which reflects poorly on the economic conditions.

Conclusion

• It is likely that this shift in the composition of employment in India does not indicate an increase in real entrepreneurship but is merely a reflection of poor employment opportunities in the economy.
• Reforms and policies brought in by the government has set the stage for the growth. But as of now, the reality appears to be different from expectations and various reports.