| Corruption is one of the biggest problems of India and that is why it is at the forefront of all the problems suffered by Indians as of now. It has also turned out to be a hot topic for Indian Elections 2014 as most of the political parties are trying to communicate that they would remove corruption from the country. So, it can be said that corruption is having an impact on all the people living in India. Even all the businesses of India are influenced by corruption, be it a multinational corporation or an SME. All the companies have to deal with a government department at one time or the other and so they have to face corruption on a regular basis. Though there are many harmful effects of corruption on a regular business but for an SME, the challenges are much more complex. Some of the ways in which an SMB can be impacted by Corruption are: A businessman may have to bribe the government officials in order to get his tasks done and this may harm his budget. He may have to cut down on his profit levels in order to bribe the govt. officials on a regular basis. As per Transparency International, an organization aimed at tracking and recording corruption, 54% of Indians say they paid a bribe in the last year. If a SMB owner decides not to bribe then the work that is to be approved generally gets postponed again & again. The consequences may vary from losing expansion opportunities or precious clients due to the inability to deliver promised goods or services to them. · Bad Economic Environment: Another external factor that hampers growth of a small business is that corruption creates a bad economic environment in the country. A lot of money is spent on corruption activities and that money drains out to the economy and thus leaves the country to face shortage of cash flow. This point is reinstated by the fact that most of the Indian Black money is said to be in the Swiss Bank and thus is out of the economy. · Lack of FDI’s: If a country is perceived to be corrupt, then the foreign investors also hesitate to invest in that country as they will require additional money to bribe the “babus”. Thus it would be more difficult for the SMB’s and budding Entrepreneurs to get loans and may hamper their development. Lack of FDI in the Indian economy can be seen by the fact that though the FDI rules have been eased by the Indian Govt. in the recent past but we are yet to see its benefits for Indian Economy on a large scale. · Scarcity of Resources: Corruption can also lead to the funneling of scarce public resources to uneconomic high profile projects rather than necessary projects such as infrastructure development or development of rural India. This hampers the overall development of society and often crushes innovation of budding entrepreneurs as they face much more hindrances in executing their business ideas. For example: If an entrepreneur does not have access to proper roads to transport his goods in a cheap manner then he may drop the idea of initiate a business. · So it can be said that yes, corruption does have many harmful effects in the society and economy as a whole and SME’s are also not saved from its harmful effects. Corruption is a curse for the overall development of SME and Entrepreneurial Enterprises and an SMB Owner or Entrepreneur has to constantly struggle with this evil of society to boost their development and growth. We can only hope that the new government that will form in India would succeed in fighting as well as removing this evil from our country in an effective manner. SMB Connect is India’s largest integrated solution platform which links small and medium sized enterprises and entrepreneurs across the nation. Our mission is to build supportive communities by using effective solutions to connect with customers, providing advisory solutions, leveraging training programs and sharing the experiences of other businesses, so that SMBs can overcome all odds and succeed. Because we believe, Small Can Be Big! We work on three fundamental principles- Connect, Knowledge and Growth to empower SMEs and to act as catalyst in their development process. Small and medium enterprises in India & Small business Services are in full swing. SMBConnect provides India’s largest integrated solution platform which links SME company, Business advisory services and entrepreneurs. Grow your small and micro enterprises & small business services in India with the help of business services and startup events. Learn to focus on creative small business ideas and Solution by analyzing roadmap of successful entrepreneurs in India and also enhance entrepreneurship development skills with large amount of educate small and medium enterprises & small business in india. |