State least preferred biz hub

State least preferred biz hub
DH News Service,Bangalore:
Urban infrastructure, poor power supply, development limited to just around the Bangalore-Mysore corridor, unfriendly governance and regulations... the list can go on, for Karnataka is being voted as the least preferred destination for entrepreneurs according to a study done by consulting firm KPMG.



The TiE (The Indus Entrepreneurs) and KPMG jointly conducted the “Entrepreneurial India” survey to develop the Indian Entrepreneurial Confidence Index.

Presenting the study report at the TiE Entrepreneurial Summit 2008 here on Tuesday, KPMG India Head (Markets) Pradip Kanakia said: “Only 4 per cent of entrepreneurs preferred Karnataka for their new venture, whereas 23 per cent voted for Gujarat as the most preferred destination, followed by Maharashtra (13.4 per cent) and Haryana (7.5 per cent).” (See chart)

Speaking to Deccan Herald, Kanakia said: “Looking at how well the fundamental factors are being catered to by each state, Karnataka indeed has some major issues listed out by the entrepreneurs who were interviewed.”
Mr Kanakia listed out the reasons: Bulk of the development is around Bangalore and Mysore corridor and not enough development done in rest of the State to promote industrial production; power is more expensive and availability is poor; inadequate urban infrastructure that hampers movement of goods and people and lack of funding and support from the government for startup companies. On manpower, entrepreneurs said productivity of the local people can be improved. It is low when compared to the immigrants.

Governance

Unstable government in the recent past is another major hindrance for setting up new businesses. “Karnataka seems to be lacking the ability to attract big business. The government is not proactive to create employment generation. The State has huge potential and entrepreneurs feel that not enough is being done to attract business.”

“Going ahead, I think Karnataka should replicate the already identified best practices and implemented in other states. The e-seva programme and express power feeder initiative by Andhra Pradesh are among the best practices that need to be implemented in Karnataka,” he added.

The study aims to create awareness on issues relevant to entrepreneurs, explore the approach of individual states to address these issues, advocate the changes necessary and assist them to capitalise on opportunities better by leveraging the ecosystem.

Over 1,000 entrepreneurs across 15 states were evaluated to gauge their perception of the ecosystem in their respective states. The ecosystem was evaluated on parameters such as infrastructure, finance, manpower, local environment and ecosystem, regulation and governance.

The KPMG study also presents a state-level confidence index with responses restricted to the home state. AP was considered to be most conducive by its entrepreneurs with the highest confidence score of 4.14 (on a scale of 5). This was followed by Goa, Rajasthan, Maharashtra, Gujarat, TN and Punjab. Whereas Karnataka, Chandigarh, MP, UP, Haryana, Kerala, WB and Delhi have been rated below the national average.


SOME RECOMMENDATIONS

Infrastructure: Speedy access to industrial and commercial land; Provide dedicated uninterrupted power supply through express feeders like Andhra Pradesh
Finance: Change the lending guidelines; Replicate angel network models such as Mumbai Angels
Governance and Regulation: Single window clearance; Broaden the use of initiatives like Andhra Pradesh E-Seva
Manpower development: Include entrepreneurial education at school and college level; Replicate National Skills Development mission
Local Environment and ecosystem: Increase visibility of incubator