We have entered a golden age of Indian entrepreneurship. The number of active companies has risen by more than half a million in 3 years, from 1.6 mn to 2.2 mn.
Many of these are new companies. At the same time, several are likely informal businesses registering formally as companies. For decades, surveys showed that barriers to formalisation were mainly a high regulatory burden (high formalisation costs), particularly for smaller firms, and limited gains from formalisation because cost and access to capital were challenges. This is changing.
