It's all about small business

I just read in this morning's edition of The Times of India something that I've suspected for awhile: India doesn't support small business the way it should, and that fact is costly for individual and national economic welfare.

The World Bank produces rankings, judging countries by the amount governmental support is given to budding entrepreneurs. The US, a nation that has built up its economy largely on the success of small business, ranked third, after Singapore and New Zealand. Also in the top 5 are Canada and Hong Kong. India ranked 46th out of just 53 countries...China was not much better, placed at 42.

Surprised?

What is this ranking all about? Does it have anything to do with economic prowess? We are always talking about the two up-and-coming nations in Asia, China and India. How can these countries be so low on this indicator, lower on the list than Latvia, Peru and Uganda?

It's not that you don't find entrepreneurship in India. Lining every street are entrepreneurs, whether they're peddling chai, paan, AA batteries or dyed fabrics. The problem is that they are not given the financial support from the public sector to make their businesses grow. As a result, the lower-class shop/stall/booth-owner on the street is perenially unstable. Instead of moving up in life through his business, he continues to live with his family in a shack made of metal scraps, plastic sheeting and flattened cardboard boxes. He might sleep on the floor of his shop, and you'll have to wake him up in the morning if you want service. It's obvious that he isn't getting significant tax breaks, write-offs, or any other appreciable incentive to make his business (and his living standards) grow.

Why should the government care about this? Because it has no middle class whatsoever. As with everything else in this country, a multi-sectoral approach is desperately needed. If we touch one part of society/economics/politics without a comprehensive stakeholder analysis, it could have disastrous consequences. But what the World Bank rankings on country support for entrepreneurship tells me is that another element of socioeconomic well-being has been singled out, and that is small business.

Also on the news front in India: more rains, more hectares of land diverted for special economic zones (SEZs), more accidental deaths (boy falls in crack between escalator and railing; bus crashes into cars, killing child; 14 die in monsoon floods), more friction in the Gulf (although ideological brothers Iran and Venezuela are apparently cozying up over their common enemy, the US); and more attention sickeningly diverted from actual news to trashy news, all over the world (Bollywood takes precedence over public health, Paris Hilton replaces Michael Moore on Larry King Live...I think I can leave it at that).

Also interesting, but not directly related to India, is Iran's new position on rationing petrol, and the ensuing riots at gas stations. Citizens were shocked by the announcement that petrol would suddenly now be rationed before anyone, even the rich, could stock up. We fight over nuclear weapons that may or may not exist (does it even matter, given our current world issues???). I cannot imagine what chaos will ensue when we start to fight over fuel. Eventually, some good will come from it, including more rapid conversion to biofuel and other eco-friendly energy alternatives.