India's entrepreneurial culture has become the strongest among G-20 nations with a substantial decline in costs and time for starting new businesses in the country, a global study by Ernst & Young said on Thursday.
The report, however, said that efforts were still needed to lower the business costs, for further simplification of procedures and to make India even more favourable business destination.
Ernst & Young said that the report, prepared on the basis of a survey of 1,000 entrepreneurs across the G-20 nations, has substantiated India's premier position as an emerging hub for entrepreneurial activity and innovation.
It said that 98 per cent of the entrepreneurs surveyed believed that Indian culture encourages entrepreneurship, as compared to 80 per cent for the rapid growth markets and 72 per cent for the mature economies.
The study has been released ahead of a G-20 Summit in Cannes, France, to be attended by the leaders of the G-20 nations, including Indian Prime Minister Manmohan Singh.
The G-20 is a block of the world's 20 leading economies, including the US, UK, France, Germany, Japan, China, Russia and India.
The report, released at the G-20 Young Entrepreneurs Summit in France, found that the costs of starting a business in India has declined by 5.5 per cent since 2005.
Besides, time to start a business in India has fallen from 56.5 days in 2005 to 29 days in 2010. However, 71 per cent of the respondents from India recommended a further simplification of procedures to start a business.
In the survey, 80 per cent of Indian entrepreneurs reported improved access to funding, including bank loans.
However, it cautions that steadily rising interest rates could weigh on lending growth in the future.
A large majority (80 per cent) opined that funding from private equity has improved by over 500 per cent since 2005, while about two-third of respondents (67 per cent) said that initial public offerings have improved the access to funds.
The report also said that an active role of media and direct involvement of families have also had a strong impact in improving the perception of entrepreneurship in India in the last five years.
"We have always known India to be a hotbed of entrepreneurship, despite the hurdles in its business and regulatory environment.
"Indian entrepreneurs have made their mark both in India as also at a global level," Farokh Balsara, Partner and National Leader at Ernst & Young Entrepreneur of the year programme said.
However, E&Y said India's potential is still to be fully grasped, with only a third of the respondents rating the country as the most favourable business environment out of the G20 countries.
The report said that the implementation of the twin tax policy initiatives -- the direct taxes code and the goods and services tax -- would be significant in removing the current complexities and bringing simplicity, efficiency and greater certainty in the tax laws for businesses.
These reforms would rationalise the tax structure, reduce transaction and compliance costs and would be instrumental in reducing the litigation and controversies that presently surround the tax system in India, it said.
The report noted that the key requirements to build a successful enterprise environment in India and the G20 were entrepreneurship culture, education and training, access to funding, regulation and taxation, and coordinated support between different public agencies.