Travails of jobs a start-up

In 2007, when a young Vishwaprasad Alva submitted an application to a state agency to manufacture X-ray machines in Mysore, he had to survive obstacles of unimaginable magnitude in order to see his blueprint materialize. With almost 75 per cent of Indian medical equipment being imported and expensive, Alva’s dream was to sell world-class equipment to smaller clinics at half the price that prevailed in the market. Now even as his established Skanray Technologies is looking ahead, Alva admits that the journey has been and is still tough and a case of survival of the fittest.

India is not exactly the most fertile landscape for entrepreneurship. Even without external obstacles, negotiating the head-first plunge into business can be heavy on the nerves of a first generational entrepreneur. Throw in a few public sector banks, licenses, government procedures and tenders and most aspirants end up toggling between corporate cubicles and mission statements, never quite bringing their ideas to the drawing board. Since most young aspiring businessman are armed with a light wallet, their problems multiply with each step.

From registering the company to raising capital for operations and procuring space for a setup, one has to go through a labyrinthine of procedures and paperwork before the take-off.

To add to his woes, there is no single go-to source for required legal and governmental procedures. Even after shop is setup, the obstacle course seems never ending, with many public sector banks and government officials turning rogue on the way.

Ram Tulluri, CEO of Shrisinfotech, a Hyderabad-based entrepreneur, says there is little encouragement from the government. He acknowledges the policies put in place for rising entrepreneurs like special rebates and space allocations but laments that the budgets required to execute them are minimal and that he has to join a long line to avail of any of the benefits provided by the government.

“We applied for a power discount of 50 per cent, which we could have rightfully gained. But the process was so tiring, we felt we were better off without it”, says Tulluri, who could only procure a paltry discount in the rent for his office space. Also it is not easy to obtain loans from public sector banks, adds Tulluri.

Alva, who now exports his products to over 80 countries, still faces issues while procuring loans. “Try to apply for working capital enhancement and there would be demands for bribes. Also, the process would take a minimum of six months. That is valuable time for a company. It is quite disheartening”, he says.

The sorry state-of-affairs of public sector banks was made evident last year when Chairman-cum-Managing Director of Syndicate Bank SK Jain was arrested by the CBI for soliciting bribes of up to 50 lakh in return for credit extensions to some companies.

Also, the procurement of patents and licences is a complicated procedure mastered by only a few.

“Procuring any kind of licence would require you to pay bribes unless you are well versed with the procedures yourself. It is an open secret”, says a loan consultant, who processes business loans for SMEs.

Alva, however, disagrees that this is the only way to start a business in India. His company had reportedly used the power of RTI several times to contest unfair practices during tendering processes. “We have not paid a single penny in bribe and yet our company is doing well in India. Of course, in a country like China, we would have prospered five times as much.”

But after years of putting up a tough fight with government officials and thugs, the company has an export turnover that is touching Rs 200 crore.

“There are a handful of honest IAS officers and government employees who are willing to help a hardworking man,” is his advice to potential entrepreneurs.

The fear of a new idea

Vishal Balani, a Mumbai-based entrepreneur, says it is easy to start a service-based business in India as there is little to no scope for intervention from the governments or the banks. With little capital and a simple registration process, these businesses can flourish from a regular apartment. Providing web-based applications and delivery services is quite easy in India.

The real challenge, however, is to patent an innovation or procure investment for a unique idea.

“Angel investors and banks show little interest in investing in new ideas”, says Tulluri, who believes India as a country is not open to taking risks.

With companies like Skanray Technologies holding the beacon for aspiring entrepreneurs, it is now left to the ambitious young to find their feet in a country that has its obstacle courses firmly in place. But as Alva says, there is always a way out.