National Press Release – to be released across India [Word version]
20 September 2016 – for immediate release

Mr Sonawani, president of Swarna Bharat Party, India’s only liberal party, said that India’s small business sector is suffering from the ongoing chronic dysfunction of our governance system. 

India has a complex (and often irrational) regulatory regime, and insufficient or non-existent infrastructure. The inspector raj is still alive and well, 25 years after liberalisation; there is corruption at each step. And inadequate and costly finance is a huge impediment. Nationalized banks prefer to fund large companies instead of small businesses. These banks support corrupt politicians and businesses that are siphoning away vast amounts of taxpayer wealth. And the government has almost entirely choked private finance.

Hundreds of obstacles at every step make it difficult to start and operate a new business, specially in the manufacturing sector. India remains one of the world’s worst places to do business. The talk of “Make in India” is meaningless if even Indians are not allowed to make in India. The small scale sector is the engine of growth in all successful countries, but in India it is not allowed to even start. We need to empower Indian youth to start business and grow them. Instead, they are being blocked at every step. 

Businesses don’t need much from the government. All they need is an assurance of security, justice and the defence of property rights. The government must also facilitate (not necessarily supply) essential infrastructure. And the government should never distort price signals through administered prices. Likewise, mandatory requirements to declare a Maximum Retail Price should go. Businesses must be free to set their prices and compete in the open market.  

Unfortunately, the Indian government doesn’t perform its basic functions but directly competes with small businesses, such as by selling cigarettes and alcohol in duty free shops. And in a perverse attempt to mitigate the effects of its own dysfunction, the government doles out sops and reservations for small businesses, making things worse. Sops merely distort incentives and misallocate resources. 

The key to prosperity is freedom of occupation. Mr Sonawani said that India cannot grow unless its governance is totally reformed and India adopts policies of freedom. Mr Sonawani said that SBP’s policies will create a world-class governance system for India and unprecedented prosperity for all. 

In relation to small businesses, SBP will ensure accountability of the bureaucracy so that small businesses are not harassed by an army of inspectors; dramatic reduction in red tape; and eliminate any unreasonable restrictions on hiring and firing employees. We will make ESIS enrolment voluntary and allow workers to get health insurance from private companies until SBP’s broader health policy takes effect. We will also increase the level of revenues for presumptive tax till SBP’s broader tax policies take effect.

Mr Sonawani invited small businesses to review SBP’s manifesto and provide any suggestions for improvement.


Notes for Editors
SBP is India’s only liberal party, committed to defending liberty and promoting prosperity. 

Sanjay Sonawani (Pune), National President, +91 9860991205
Alok Kumar Singh (Ghaziabad), National Vice President and President UP State Unit, +91 9999755334