Sarkar aur Vyapar

Recently Modi ji has given a statement that he is Gujarati & being Gujarati he has Business DNA in his blood. Yes, I agree with his statement. But is not question of Business. It is question of “Business Atmosphere”. It is not a question present government or past government but it is question of governmental attitude towards business and especially towards small business.

It is result of government attitude which has posed a question mark over small businessmen. Due to government pathetic attitude a small businessman is being treated as beggar & thief.

I have heard that parts of cars & machines are manufactured in houses by very small units in Chine & Japan. Can we ever have such atmosphere in our country too? Yes, we can, provided government does away blood sucking “Inspector Raj” and create such friendly atmosphere in banking system where a small businessman finds solace.

The above statement from Modi ji has inspired to write this post. Remember Modi ji talks about being Gujarati. Remember, even an ordinary Gujarati has business sense & business DNA in his blood. The same way, the government officers/officials there understand business very well as most of them have someone close is in business. They understand the nitty-gritty & nuances of business. A businessman not only nurtures his family but provided employment to many persons. At the same time, he helps many other businessmen to run their business. Gujarati businessman, like Marwari, hardly goes to Bank for loan because he knows that Banks rarely understand his business necessities & problems. He prefers to take loan from his other business friends who not only provide him necessary loan but given him practical advice which help him to run his business smoothly.

Rest of India hardly has Gujarat type business atmosphere. There businessmen have to go to the Banks to cater their business needs. Now let us have a look on behavior of Bank employees. They are just other employees who have no business experience. Their sole motto, sole purpose is that 1. The undeserving candidates should not be granted loan. 2. Bank money should remain safe and 3. It should earn maximum dividend.

What is the effect of such Bank atmosphere? If you need even lakhs of Rupees for costliest car, loan is readily available. If you need loan for consumer products like Fridge, AC, House hold equipment, Computers, Laptops, even for Mobiles, loans are available without much verification. You can get loan for a house too at very cheap rate 10-11%. There is nothing wrong for such loans because they help in running many manufacturing unit. But Banks & Government should remember a golden rule “You can purchase a house, if your shop is doing good business. But you can’t get a shop even if you have good house” (“दुकान से घर बन सकता है, घर से दुकान नहीं.”)

Let us examine business loan situation. If you want a business loan to purchase a shop or business plot or want to start a new business or want to augment the running business, there is always BIG-BIG NO. First the Bank Manager would refuse to listen your business proposal. If fortunately he pays attention, the moment you say business loan, he will look at you with such anguish as if you have asked for his “Kidney”. Then he will start questions. Do you have project report? Do you have your own property or FD worth much higher than loan for mortgage? O Mister! If I have so much money or property why I would come to leak your boot to get loan. If you manage “Jugad” for all this then loan can be extended with 18% interest that too starts from next month irrespective of position of your business. In a country where GDP never touched 10%, how you can expect a business to survive with a loan at 18% interest?

The government has to understand fully that only few thousand big houses don’t run business in this country but small businessmen are back bone of business like they are in Gujarat. In comparison to big business house, these small businessmen employ more number of people that too from lower category and less educated lot. If Banks have view that loans pertaining to small businessmen have more chances to become NPA then they must know that even if few lakh-crore small businessmen fail to return loan, the total loss man not be more than one Mallya or some other business houses turning defaulter.

Remember, a small businessman is more eager to return Bank loans so that he may avail maximum Banking facilities. Hence the Modi government should ensure that.

The small businessmen are provided mortgage free loan at 5% interest as GDP is less than 11% & also businessman pays many Taxes too. More business means more tax money to government.
Government should ensure such a friendly atmosphere in the Bank where Bank Manager is not under constant fear of being punished in case a loan becomes NPA.
Plus government must see that Banks provide professional advice from experienced professional who are running successful business. I am not against MBA but mere bookish knowledge is not enough. What advice can be provided by a person who never dared to open even a “Pan-Bidi Shop”.

Yes there is risk in this decision. But this risk is worth taking. If government can provide relief worth many lakh crores, if government can run “MNERGA” worth thousands lakh crores, then it can take this risks too. Should Modi government takes this risk & announces such decision; the face of Indian business would change with GDP taking a quantum leap.

Please read this post in Hindi