Sunday, August 28, 2011

How Corruption affects Start-ups in India

I am re-surfacing on the blog scene after a really long time and mainly because I got some inspiration to write this post after the Anna Hazare anti corruption movement. We all know how corruption is the root cause of most problems in our society. From an Indian start-ups point of view here is the gist of how corruption can be a huge pain :

Consider a startup has to be incorporated as a Partnership Firm or Proprietorship Firm or Private Ltd. Company. It all starts with the NAME that you choose for your start-up. If you want your chosen name to be incorporated, the Govt. sometimes reject the name even if it is unique without providing any valid reason as to why it was rejected. There is no transparency right from the start!

To register as commercial entity, dont even bother entering the Govt. office without a bulging wallet if you are not willing to wait for long periods of time, nobody will listen to you unless you start slipping money into their hands , starting from the attender till the officer.

The worst part is probably selling your product to the Govt. If you are a Rich Dad's kid, then consider it done. They wont even look at the product, you can even by-pass the tender process. They wont even call other companies for tender. They will only form new companies which have no existence except on the letterhead that is signed by random people.

An Indian Start-up is almost expected to consider bribe as a part of their investment and then develop a business plan.
I am not just cribbing about our system, I am just happy that there is something happening in the country, A great movement that we all are a part of and actively participating in. I am dead against corruption after facing tricky situations in government offices and I am glad to see kids and adults alike getting involved in the anti corruption movement and eager to learn about the steps that can be taken to curb it.

I am sure there are a few non-corrupt Govt Officials, but they all are interconnected with people who are corrupt. With LokPal Bill being passed, we are atleast at the liberty to sue anyone directly with no intervention whatsoever and with a fair hearing and trial if they are found to be against the law.

Hoping for better times ahead -  communities,entities and individuals receiving funds and benefits which they are entitled to!

LokPal Bill