Business Hitches: Braking Indian Economic Growth Author :  CA  A. K. Jain A vibrant business environment is essential for sustained economic growth, job creation, and innovation. Enterprises drive investment, productivity, and competitiveness, forming the backbone of a modern economy. In India, however, persistent business hitches-structural, regulatory, financial, and operational-continue to brake economic growth. Despite policy reforms and improvements in ease of doing business rankings, deep-rooted challenges still constrain enterprise expansion and efficiency. One of the most significant business hitches lies in regulatory complexity and uncertainty. Although many procedures have been streamlined, businesses continue to face overlapping regulations, frequent policy changes, and inconsistent enforcement across jurisdictions. Compliance requirements vary across states and sectors, creating confusion and increasing transaction costs. For small and medium enterprises, limited administrative capacity magnifies these burdens, discouraging formalization and growth. Access to finance remains another major constraint. While India has a large banking system and expanding capital markets, credit flow to productive enterprises is uneven. Risk aversion among banks, high collateral requirements, and prolonged approval processes limit financing for startups and small businesses. Non-performing assets have further constrained lending capacity. As a result, many firms rely on informal financing at higher costs, reducing profitability and investment potential. Infrastructure deficiencies also disrupt business operations. Inadequate transport connectivity, unreliable power supply, congested urban logistics, and limited digital infrastructure increase operational costs and reduce efficiency. Delays in infrastructure projects exacerbate these challenges, particularly for manufacturing and logistics-intensive industries. High logistics costs weaken export competitiveness and discourage integration into global value chains. Labour market constraints further complicate business expansion. Rigid labour regulations, skill shortages, and limited workforce flexibility increase compliance risk and reduce productivity. Firms often hesitate to expand their workforce formally, relying instead on informal arrangements that limit skill development and efficiency. This undermines both job quality and long-term competitiveness. Another critical hurdle is slow contract enforcement and dispute resolution. Lengthy legal processes, judicial backlogs, and uncertainty in outcomes discourage investment and innovation. Businesses face difficulties in recovering dues, enforcing contracts, or resolving commercial disputes in a timely manner. This raises the cost of doing business and weakens trust in formal institutions. Supply chain inefficiencies and market fragmentation also brake growth. Variations in state-level regulations, taxes, and standards disrupt seamless movement of goods and services. Despite progress toward market integration, logistical bottlenecks persist. Small firms struggle to access wider markets, limiting economies of scale and productivity gains. Technological adoption gaps represent an additional business hitch. While large firms increasingly adopt digital tools and automation, many smaller enterprises lag behind due to cost, skill, and awareness constraints. Limited technological integration reduces efficiency, data-driven decision-making, and innovation. This widens productivity gaps within the economy and limits overall growth. The cumulative effect of these business hitches is subdued investment, slow job creation, and modest productivity growth. Entrepreneurs face high uncertainty and risk, discouraging long-term planning and expansion. Foreign investors, while attracted by India’s market potential, remain cautious due to operational complexities. The economy’s growth trajectory thus remains below its potential. Addressing business hitches requires a holistic and sustained reform agenda. Regulatory simplification and stability are critical. Clear, predictable rules reduce compliance costs and encourage investment. Strengthening access to finance through improved credit assessment, alternative financing channels, and fintech solutions can support enterprise growth. Infrastructure development must prioritize reliability, connectivity, and efficiency. Labour reforms should balance flexibility with protection, enabling firms to grow while safeguarding workers. Judicial reforms aimed at faster dispute resolution and contract enforcement can significantly improve business confidence. Promoting technology adoption among small enterprises through incentives, training, and digital platforms can boost productivity and competitiveness. Equally important is fostering a supportive business culture. Collaboration between government, industry, and academia can drive innovation and skill development. Transparent governance and reduced discretionary power can minimize corruption and build trust. In conclusion, business hitches continue to brake Indian economic growth not due to lack of entrepreneurial spirit, but because of systemic bottlenecks. Unlocking growth potential requires removing these obstacles through coordinated reforms that enhance efficiency, reduce uncertainty, and support enterprise dynamism. A business-friendly ecosystem is not just desirable-it is essential for sustained and inclusive economic development. ---------------------------------------------------- Author of this article, C.A. Anil K. Jain( caindia@hotmail.com ) is a highly acclaimed Chartered Accountant with over four decades of professional experience. He is widely recognized for his expertise in financial and asset planning, taxation, international investments, and business growth strategies. Beyond advisory work. He actively contributes to national economic discourse through policy representations to the Government of India, frequent appearances on television and radio, and extensive writing. He is also the author of the acclaimed books Bharat: The Development Dilemma and River Water Recharge Wells, reflecting his commitment to India’s economic development and sustainable water solutions.