Who holds the future in India

Institutional Entrepreneurship or Free-Market Entrepreneurship

INSTITUTIONAL ENTREPRENEURSHIP
It is the review of two different streams of literature: Institutions, and Entrepreneurship.

WHAT ARE INSTITUTIONS

Institutions are commonly defined as rules, norms, and beliefs that describe reality for the organization, explaining what is and is not, what can be acted upon and what cannot

WHAT IS ENTREPRENEURSHIP
Entrepreneurship is the professional application of knowledge, skills and competencies and/or of monetizing a new idea, by an individual or a set of people by launching an enterprise de novo or diversifying from an existing one (distinct from seeking self employment as in a profession or trade), thus to pursue growth while generating wealth, employment and social good. Three crucial characteristics of entrepreneurial activity are : risk taking, innovation and venturing into new business activities for profit.

INSTITUTIONAL ENTREPRENEURSHIP
Activities of actors who have an interest in particular institutional arrangements and who leverage resources to create new institutions or to transform existing ones. Institutional entrepreneurs create a whole new system of meaning that ties the functioning of disparate sets of institutions together. Institutional entrepreneurship is therefore a concept that reintroduces agency, interests and power into institutional analyses of organizations.

INSTITUTIONAL ENTREPRENEURSHIP
It thus offers promise to researchers seeking to bridge what have come to be called the old and new institutionalisms in organizational analysis. Institutional entrepreneurship in Indian Micro- finance institutions. Emergence of NBFCs-MFI through transformation of NGO within the given context of Indian Micro-Finance

Propositions of Institutional Entrepreneurship

Proposition 1: The new venture engaged in institutional entrepreneurship creates legitimacy for its industry by creating standards for the industry. Proposition 2: The new venture engaged in institutional entrepreneurship creates legitimacy for its industry by creating a dominant design for that industry. Proposition 3: The new venture engaged in institutional entrepreneurship creates legitimacy for its industry by forming linkages with other established firms. Proposition 4: The new venture engaged in institutional entrepreneurship will demonstrate superior performance in the growth stage if it does not lose its first mover advantage.

FREE MARKET ENTREPRENEURSHIP

A free market system is one in which individuals, not the government, make decisions about how to use most of the economy's resources. It provides entrepreneurs one of the best environments to flourish. In a free market, the potential to make a profit supplies a huge incentive for entrepreneurs to come up with new and better ideas.

FREE MARKET ENTREPRENEURSHIP  The distinguishing feature of a free-market system is its lack of direct governmental intervention.  Such intervention takes the form of price ceilings and floors, patent, certificates of convenience and necessity, licenses, tariffs, and import restrictions

FREE MARKET ENTREPRENEURSHIP The free market demands that people be accountable for their actions The beauty of the free market is that entrepreneurs will only earn a profit if they do something that other people value.

FREE MARKET ENTREPRENEURSHIP

Small-Scale Industries- handloom industry, textile industry, jute industry Wow! Momos by Sagar J. Daryani & Binod K. Homagai. Kaushalaya Foundation by Kaushlendra MBA sabziwala in Bihar.

ENTREPRENEURSHIP IN INDIA PRE 1990s Indias environment of regulated economic development led to use of price ceilings, in which prices are set below their equilibrium level to make products and services affordable to relatively poorer sections of the society.

DEMAND-SUPPLY IMBALANCES Specifically, when prices are kept artificially low, demand outstrips supply. To alleviate the resulting shortage of products and services, the government can either help to increase the supply or help to decrease demand for those products and services. Considering the supply side options first, the government had the following choices:
increase the price of the product; subsidize production of existing suppliers so they will produce and sell more; encourage new businesses to enter the line of production and selling; or permit imports to reduce or eliminate the shortage.

FAILURE TO INCREASE SUPPLY In India, none of these options was seen as satisfactory. First, the government certainly did not wish to increase prices, because price ceilings appealed to a majority of the vote bank. Second, although the government did subsidize production in several sectors considered essential, the resulting increased production was not sufficient to eliminate the large shortages. Third, the government decided to restrict rather than increase the entry of new producers under the pretext of directing scarce resources into their efficient uses.

 Finally, it allowed only limited recourse to imports, in order to protect Indian producers, unless the shortage reached a stage of crisis. The overall result was that inadequate amounts of products and services were supplied to the market. If the government had decided instead to limit demand, it could have done so By increasing taxes, or By regulating the level of demand itself, usually by restricting how much an individual or a family could consume.

FAILURE TO RESTRICT DEMAND To ensure the availability of the scarce products and services to Indian consumers, albeit at less than desired levels, the Indian government in fact resorted to largescale rationing. This rationing was undertaken by government agencies themselves or by licensed private retailers. As might be expected, the rationing regulations required those licensed private retailers to follow government stipulations in their sale of the scarce products and services

PROBLEMS WITH REGULATED ENTREPRENEURSHIP The policy of price ceilings, along with the quantitative restrictions on production and consumption, led to an economic environment ripe for corruption. Also, the lure of higher profits led producers and sellers to have little concern for quality such that many deliberately produced and sold inferior quality products, and to resort to the creation of artificial shortages by not releasing to the market all of the products that were available for selling

FUTURE OF INDIA FREE MARKETS The Indian economy provides a revealing contrast between how individuals react under a governmentcontrolled environment and how they respond to a market-based environment. Evidence suggests that recent market reforms that encouraged individual enterprise have led to higher economic growth in that country. India can generate additional economic growth by fostering entrepreneurial activity within its borders.

FUTURE OF INDIA FREE MARKETS

To pursue further the entrepreneurial approach to economic growth, India must now provide opportunities for
education directed specifically at entrepreneurial skills, financing of entrepreneurial efforts, and networking among potential entrepreneurs and their experienced counterparts. and a well-defined, minimal role for the government.

Further, although the Indian government should establish policies supportive of entrepreneurial efforts, its role overall should be minimized so that the influence of the free market and individual self-interest can be fully realized.

FUTURE OF INDIA FREE MARKETS However, even though India has made substantial economic progress in recent years, it still has several areas in need of major free market-based reforms. Below, we identify three areas from Indias economy that reveal a restriction of the pursuit of individual selfinterest and a diversion of resources away from their most efficient use.
The first is the obstacle still presented by the Indian tax system, the second is the inefficiencies of the Indian civil service, and the third is the need for further land reform in India.

Entrepreneurship Pyramid in India

EXAMPLES OF FREE MARKET ENTREPRENEURSHIP

NURTURING GREEN: Business: To make gifting plants more fashionable than sweets or flowers. Started By: Annu Grover, 26, MBA from BIMTECH. Starting Capital: Rs. 5 lacs Stores at: Shipra Mall, Ghaziabad (2010), South Delhi, Gurgaon Price range: Rs.200 to Rs. 20,000

 RADIO TUK TUK: Business: Bridging the Cab Gap. It will go where no radio cab is willing to even if its just a 2km distance. Started By: Sulab Mehra and his friends in Gurgaon. Starting Capital: Rs.1.5 crore Launched the service in April 2010 with 50 Tuk Tuks. Charges: Rs. 50 for first 3 kms and Rs. 80 for subsequent one.

Contd
AKOSHA: Business: Mediator of Consumer Complaints. Started By: Ankur Singla, Graduate from National Law School Starting Capital: Rs. 13 lacs Offices at: Nehru Place, New Delhi and Noida, started in May 2010. Fee charged: Rs.450

 COCO LOCO: Business: Selling chilled coconut water as ideal isotonic drink and a alternative to colas and sports drinks Started By: Savinay Jain and Mayank Sethia Starting Capital: Rs. 4 lacs Set up Carts at various Malls starting with MGF Metropolitan Mall at gurgaon on April 11, 2010 Price: Rs. 30 for 200 ml and Rs. 60 for 500 ml.

Contd NEXTLEAP Business: Runs the website www.yournextleap.com, a recommendation engine and a virtual counsellor to help students make career decisions. Started By: Suruchi Wagh, Studied Computer Science at College of Engineering in Pune Starting Capital: Not Disclosed Uses Psychometric Evaluations and Math models on past admission patterns and also online Personality Test Fee charged: Rs. 300 750 per recommendation

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