New Delhi: India may have entered into the top league of world economies on the back of robust economic growth and booming stock markets, but it ranks among the bottom ten when it comes to promoting small businesses.
The country has been ranked 46 among 53 countries in a list compiled by global media conglomerate CNN-Time Warner group’s Fortune Small Business (FSB) magazine for their friendliness to small businesses.
The less-friendly approach toward small businesses is reflected by the performance of small-size companies, whose financial progression pales in comparison to their blue-chip counterparts.
Analysis of the performances of publicly-listed small and large-cap firms in India shows the small-caps have posted a lower growth rate in their collective turnover in the latest fiscal than the blue-chip giants.
This is despite the fact smaller firms are considered to have better growth prospects due to a lower base.
As many as 57 small-cap companies (12%) saw their turnover declining and 112 companies (23%) recorded a dip in their net profit.
Hero Honda, another Indian company saw a decline in its net profit in its latest fiscal ended 31 March, 2007. A total of 31 small-caps posted a decline in both turnover and net profit in their latest annual results.
The poorer financial performance comes despite a stronger show put out by these small-cap companies on the bourses in comparison to their blue-chip counterparts.
India is doing poorly than not only the giants like the US, UK, Singapore and
Hong Kong, known for promoting businesses, but even countries like Iceland, Finland, Jamaica, Latvia, Peru and Uganda also enjoy higher positions.
“India, despite its move into the big leagues of global economies, lags far behind in entrepreneurship,” FSB said.
Making it easy to launch a new enterprise is one of the many ways in which the US has led the world in fostering a dynamic entrepreneurial class, it noted.
With excerpts from a PTI report
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