Pure competition is one of the market models found in a free market environment. It consists of many sellers and buyers who trade in standardized goods and services that are sold at prices set by forces of demand and supply. In addition, there is free flow of information between the buyers and sellers with the sellers having knowledge of products prices. Moreover, “New firms can freely enter and existing firms can freely leave purely competitive industries. No significant legal technological, financial, or other obstacles prohibit new firms selling their output in any competitive market” (McConnell,p 150). It bears noting that the firms do not have control over the prices that prevail in this market hence they are price takers rather than makers. Additionally, the products in this market are virtually identical and this makes it difficult for the firms to sell the products above the prices that prevail in the market. They also cannot sell below the market prices as this would lead to a loss of revenue and profits making them uncompetitive.
Monopoly power is a market environment that is characterized by one participating seller who dominates the entire market and influences the prices that prevail in the market. The existence of a monopoly is usually identified as a failure in the market as the seller is a price maker and influences price lay down by other firms irrespective of their location, number or size. A monopoly firm is identified as a seller who is able to provide a significantly large number of products into the market enabling it to control the entire market. Besides, the monopoly has the power to raise the prices of both goods as well as services and still be in a position to retain its customers. Consequently, buyers are left with the choice of either obtaining the products at that price or go without them.
Another form of imperfect competition is the monopolistic competition that is characterized by several small firms which produce and sell products that are differentiated from each other. The products in this market are close substitutes and it becomes very easy for the buyers to interchange them. It is note worthy that monopolistic competition is a hybrid of pure competition and monopoly power in that, there are many firms similar to the perfect competition but the firms have control similar to that of monopoly firms. The firms behave like monopolies though none of the firms have complete control over the market. “A pure monopolist has no immediate competitors because certain barriers keep potential competitors from entering the industry”(190) . The monopolistic competition differs from pure competition in that the sellers who exist in the market compete with each other while maintaining very high profits as they control the prices. Later as the market grows more sellers join the market and the competition grows leading to a reduction in prices. As a result, the demand for products in each of the firms reduces and the firms are subsequently able to retain their customers through brand loyalty. Furthermore, they can therefore raise their prices without loosing their customers.
Oligopoly refers to a market structure that is characterized by the existence of few but relatively large firms who dominate the market controlling the prices. “The same barriers to entry that create pure monopoly also contribute to the creation of Oligopoly”.(217) The large firms act together like a cartel when eliminating competition as they also compete with each other. It is worth mentioning that the market structure has very few sellers who are very large and they sell identical or highly differentiated products. Examples of companies that are considered to be oligopolies are those in the computer, television broadcasting and pharmaceutical industries.
In my opinion some of the market structures especially the monopoly market structure and the oligopoly are failures of the markets as they are not favorable to either the buyers or sellers in the market. Monopoly firms are considered to be illegal whereas the oligopolies are considered to be natural in the markets. When the goods in either of these markets are considered to be essential and necessities for the buyers it becomes unfavorable for the buyers as the prices set are not pocket friendly. The barriers that exist in these market structures are not favorable as they also tend to oppress the small firms that try to enter into the highly dominated markets. The firms involved in these structures tend to be inefficient since they do not face a lot of competition that make them cut down their costs and produce optimally.
Pure competition market structures are the best market conditions to have as they allow for fair competition and efficiency of the markets. The buyers also get prices that are friendly and they have different choices in the market since there are very many sellers producing the same products. They have the freedom to enter and exit the market as they do not experience high costs during entry and exit. They also tend to enjoy normal profits in the long run. However the main disadvantage of this kind of market structure is that the sellers do not have sufficient funds to invest highly as they make just enough profits to maintain themselves in business. Firms do no therefore invest more in designing their products better to attract more customers.
Challenges of Entrepreneurship Development in Manipur
With the emergence of globalization, the need for entrepreneurship development has been recognized especially by the less developed countries. An attempt was made by Dr. Singha and Dr. Singha, to underline the importance of entrepreneurship development in an economy, especially in Manipur. Despite of its importance, the sector cannot be flourished in the State. How the business activities are disturbed in the state and the factors affecting it, are also analyzed in the paper. The paper further tries to project the role of rail transport in developing entrepreneurial activities in the State.
Introduction With the emergence of globalization, the need for economic integration has been realized by the international communities and lately by the Less Developed Countries (LDCs). Most of the countries both developed and less developed, have reoriented their development strategies to improve their growth performance by integrating their economies with the world economy (Singh 2008). To make India’s vision 2020 a reality, the country needs to widen further the market for domestic businesses as well as import must needed capital equipment and technical know-how through economic cooperation (Singha and Patikar 2008).
In this context, India tries to integrate its economy with world’s largest market and economic bloc, ASEAN and its neighboring nations and Look East Policy is the first step in this process. India’s eastern most tiny State, Manipur is the most convenient road1 in this regard. This opportunity compels the State to develop entrepreneurial activities to become a winner in the integration process. Here the question that arises is, – do we want the State to participate or to make only as a corridor in the process. Winners in the global competition are the ones who manage to build up robust entrepreneurial and knowledge-based societies.
With the help of secondary data, the present paper is the modest attempt to highlight the importance of entrepreneurship development in an economy, especially in Manipur. Entrepreneurship is governed by four dominant forces such as: (1) The Socio-Sphere System, (2) The Support System, (3) The Resource System, and (4) Self-Sphere System. These four systems are inter-linked, constantly interacting and adjusting with each other. Assuming qualities and quantities of the remaining factors remain satisfied the present paper deals with the Second factor, i.e. Supporting System in the entrepreneurship development. To narrow down our analysis, the paper concentrates more on transport system in entrepreneurship development2. The paper further tries to project the role of rail transport (not yet materialized) in developing entrepreneurial activities in the State.
Entrepreneur and Entrepreneurship Before we proceed to the need and importance of entrepreneurship development, it is imperative to make a distinction between entrepreneur and entrepreneurship. Joseph Schumpeter, who was perhaps, the first to recognize the importance of the entrepreneur in economic development, and said that “Entrepreneurship is essentially a creative activity”, entrepreneurs have been described as the makers of new worlds (Czarniawaka and Wolff 1991), who are the instrumental in the conception of the idea of an enterprise and its implementation (Kets 1996), innovators and catalysts of change who continuously do things, that have not been done before and who do not fit established patterns (Schumpeter 1965). Entrepreneurship is the subject dealing with entrepreneurs and entrepreneurial activities. It is the science and practice of entrepreneur, entrepreneurship education, entrepreneurial activities and development of entrepreneurial skills. Entrepreneurship is regarded today as a field of study. The knowledge of entrepreneurship can be acquired and entrepreneurial skills can be developed. It is to be learned in combination of theory and practice.
An entrepreneur is a person who is willing to do any kind of work, initiates the same and does it in a creative manner with honesty and diligence, who organizes and takes calculative risk, who is determined and consistent in effort and does not get de-motivated through failure rather keeps his eyes and ears open for searching opportunities. He/She is dynamic in nature and is guided by achievement motivation. In other words, an entrepreneur is a person who is skilled at identifying new products or new methods of production, setting up operations to provide new products, marketing the products and arranging the financing of the operations. Entrepreneur has become a burning topic now-a-days all over the globe and serious area of study and research. At present, developing countries give much emphasis to entrepreneurship for economic and industrial development. Entrepreneurs are individuals who recognize, opportunities where others see chaos, confusion and contradiction (Kuratko and Hodgetts 1998).
A research finding by the scholars (e.g. Kabra and Singha 2008) reveals that collectively, entrepreneurship is governed by four dominant forces such as: (1) The Socio-Sphere System, (2) The Support System, (3) The Resource System, and (4) Self-Sphere System. These four systems are inter-linked, constantly interacting and adjusting with each other. Any attempt to effect change in one system neglecting the other is bound to fail and distorts the very objective of promoting entrepreneurship. Entrepreneurship is a phenomena preformed by an entrepreneur that is a person who starts, operates, organizes and manages a business venture (undertaking) assuming the risk in anticipation of profit. In this process, an entrepreneur need to posses: ability to recognize avenues and opportunities, technical ability, motivation, creativity and originality in generating new business ideas in the form of new products or services, new markets, new methods, new organizations, and new mix of inputs, critical thinking, knowledge about products and markets, analytical ability from new perspectives, communication skills, high dedication for long hours working with less stress, marshalling and commitment towards resources and aptitude for human relations. In the similar finding by other scholars (like, Singha and Singha 2008) also that, the successful new business ventures and economic development do not just happen. They are the result of the combination of right environment, planning, effort, and innovation, which this right mix can only be achievable by the entrepreneurs
Need for Entrepreneurship Development The entrepreneurs give more to the world far more than they take from it by injecting new energy, new products, and especially new ideas into the environment. There is growing evidence that entrepreneurs play an important role in business and economic growth. Entrepreneurship also provides more satisfying employment opportunities to people who had unsatisfactory jobs before, and thereby increasing efficiency and hence economic prosperity (Salehi and Valizadeh 2007). Manipur is known for its unexploited natural and human resources which are the basic factors of economic development. So, the energetic entrepreneurs are necessary if we want to harness the available resources properly. With the emergence of ‘Look East Policy’ and it emanates as globalization, trade and commerce has become an important tool in linking this region with the South East Asian countries. It is apparent that the State as a whole needs a big push or a kick starts to launch the economy on the development path. Look-East Policy provides an opportunity to overcome the problem of distance from big markets. But, it (trade and commerce) is greatly hampered by infrastructure, especially road transport in the region. Economic development of a region is quite illusive goal without developing trade and commerce in the region.
The need for entrepreneurship in the State is basically two fold: one, generating income and employment, and two, it helps greatly in solving insurgency problem in the State. The problem of unemployment can not be tackled by creating more jobs in the public sector and other various government departments; there must be development of micro, small and medium entrepreneurship for self employment and expansion of job opportunities. For this, the educated youth of the region must be trained and involved in entrepreneurship oriented vocations. Thus, entrepreneurship development usually implies the development of trade and industry, small scale industries and it has a significant role in the economic development of the backward region like Manipur. Its development basically depends on two components; first, the availability of resources and physical infrastructure, and two the congenial environment of the region to utilize the former effectively and economically. In nutshell, in Look East Era, the development of Manipur basically depends mainly on the entrepreneurial activities and that depends primarily on the surface transport system.
Challenges to Entrepreneurship Development Despite having rich natural resources, opportunities given by the Look East Policy and the market liberalization, the State is impeded and trapped in the cobweb of poverty due to lack of proper transport facilities. Trade and business cannot be headed toward right direction in the region as it was supposed to be. Surface transport system, particularly the road especially National Highways and rail transports are the most important means for the development of trade and commerce in any region. The role of National Highways, if not rail, is very significant in the aftermath of Look East Policy initiative in the State, because it needs trade across the state. In this context, Manipur depends only on the road transport system3 and its condition is deplorable, which will be discussed in detail in the following section of this paper.
Manipur is connected with the rest of the country (other than by air) by two National Highway. NH-39 links Imphal (capital city) with railhead at Dimapur in Nagaland, 215 km. to the north and NH-53 links Imphal with Jiribam, a town bordering Assam, 225 km. in the south-west, and practically this NH 53 is used as an alternative road to NH 39, when it cripples4. As per record maintained by Public Works Department (PWD), Manipur, the total length of road in the state in 2001 is approximately 7, 182.80 kms. Primarily NH 39 is used a life line of the State and is the most problematic one in the State.
Coming to the point, it is a matter of deep concern that despite bandh/blockade being declared as unconstitutional and illegal by the Supreme Court in 1997 and it is also supported by various High Courts including Gauhati High Court; the State continues to suffer from this syndrome. Manipur government has decided to crack down on imposition of bandhs, strikes and economic blockades5 by various organizations. It is a sort of human right violation in the real sense. Still, Manipur has become the highest victim of bandhs in the country. Bandhs affect directly trade and commerce, daily wage earners and business establishments, and indirectly the development of the region in the long run.
A total amount of Rs. 1319.96 crore has been lost in Manipur between April 1, 2004 and January 31, 2007 due to Bandhs and Blockades. The Directorate of Information and Public Relation (DIPR), Government of Manipur, has revealed that Bandhs and Blockades called by All Naga Students’ Association of Manipur (ANSAM) and Kuki Students’ Organization (KSO) alone on the two National Highways6 had resulted in the highest loss of money summing up to Rs. 144.10 crore during the period (refer Table 2).
Table 1 : No. of Bandhs and Blockades in Manipur Year State-wide National Highway* 2004-05
Total 110 234 Source: The Morung Express 20/08/08, Dimapur and Nagaland Post 20/08/07, Dimapur
* National Highway 39 Imphal -Dimapur road and NH 53 Silchar – Imphal road
According to the Directorate Statistics and Economics, Government of Manipur, in 2004-05, the statewide bandhs led to a loss of Rs. 22 per head per day totaling to a lost of Rs. 5.34 crores per day. The National Highway blockades led to a lost of Rs. 9 per head per day totaling to a loss of Rs. 2.32 crores per day. In 2005-06, the statewide bandh led to a loss of Rs. 24 per head per day totaling to a lost of Rs. 6.13 crores per day and loss of Rs. 11 per head per day totaling to Rs. 2.67 crores per day for National Highway blockade. An estimate of loss calculated by the Government of Manipur, due to the bandh called by various organizations in the state during April 1, 2004 to January 31, 2007 is given below (table 2). There were a total of 110 days state wide bandh and 234 days of economic blockade in the NHs during the three years from April 2004 to January 2007 in the State.
Table 2 : Amount loss due to the Bandhs called by various Organizations: (From1/4/2004- 31/1/2007)
Amount (Rs. in Crore)
Organization Affected Area 144.10
Imphal and adjoining valley areas
ADC Demand Committee
Jiri District Demand Committee, MSF, AMSU, DESAM
Jiribum, Imphal and adjoining valley areas
Sadar Hill District Committee
Zeliangrong Students’ Union, IT Road Development Committee
APUNBA LUP and MAFYF
Jiribum, Imphal and adjoining valley areas
Source: The Morung Express, Dimapur 20/08/08 pp. 5
The economic losses due to bandh only in the National Highways were Rs. 246 croes in 2004-05. It increases to 553.23 crores in 2005-06, and it decreases marginally to Rs. 520.73 crores in 2006-07 in the state (see Table 3). On the part of border trade, Moreh (in Manipur) on Indian side and Tamu in Myanmar’s side is the only land custom station (LCS) of India with Myanmar. An official estimate of daily business turnover of this LCS is around 2 crores, and it is much higher in the informal trade. Moreh trade point is result of the signing of Indo-Myanmar Trade on January 1994, and which was operationalised in April 1995. Only 22 items have been allowed as exchangeable by the residents across the border. Total volume of trade transaction through Moreh in 2006 was approximately Rs. 62 crores, but the informal trade was around Rs. 2000 crores. So, the economic loss in a day’s bandh cost approximately Rs. 6 crores only in Moreh.
Table 3 : Economic Losses in Manipur due to Bandhs in National Highways (NH 39 and NH 53) Year Amount (in Crore)
Per Capita/Day (in Rs.)
Source: Nagaland Post, Dimapur 20/08/07
The statistics given above shows the difficulties and the economic losses incurred in the State due to the poor and inefficient road transport system. Entrepreneurial activities are badly impeded by this poor transport system in the State. In this regard, State should take some feasible solution to improve trade and commerce in the State, especially trans-border trade. So, when we look at alternative or complementary to the road transport, development of rail road has become need of the hour.
Rail head in development of trade Railway being a principal mode of transportation plays a significant role in development of economic, trade and industry in the country. It contributes to freight as well as passenger transportation. For the development of entrepreneurs and entrepreneurial activities, the importance of rail head is very significant. Having trade across the State without this mode of transportation will be like a soldier in the battle field without weapon.
In Manipur, the long cherished dream of railway line is now nearer to reality. The foundation stone of the railway line from Jiribam7 (bordering town of Assam) to Tupul (near Imphal) in the first phase was laid by Prime Minister, Dr. Manmohan Singh in November 2004. To be constructed under the Prime Minister’s package has been announced as a National Project. It is targeted to be completed by 2010. The same line will be extended from Tupul to Moreh (Manipur’s border town with Myanmar) via Imphal in the second phase of the project. It is the first step of the India government to look toward the east, Look East Policy (Singha 2005). If it materializes, the State will be one of the most developed states in the country. The State will be the gateway or transit point of Indo-ASEAN trade corridor. With the materialization of railway in the State, the village or rural economy can be expanded and developed in to a new height. Manipuri handloom and handicrafts are being used widely by the communities in Assam, Tripura, Bangladesh and other States in the country. Oranges of Tamenglong8 can be made available to other parts of the country. The State’s unexplored tourism potentials can be opened to the world with the realization of railway line in the State9.
Coming to the trans-border trade, the State serves as a gateway to the Indo-ASEAN trade. It is also important to note that almost all the commodities coming from ASEAN and other neighboring nations are coming through this State. The people of this bloc prefer to have trade through this region, particularly Manipur because of its historical, social, cultural, and racial and some other factors. This only can be materialized by developing rail head in the State, apart from favorable law and order condition in the region. There is hardly any family in the region (North Eastern Region) and some other neighboring states in the country without the products of ASEAN and its neighboring nations. It is catered by the NH 39 and partially by the NH 53. Still entrepreneurial activities cannot be accelerated due to poor transportation system. In this regard, rail transport can help as a catalyst in the process.
As a policy implication, rail head reaching Imphal should be a broad gauge and Imphal-Delhi and other major cities should be connected from Imphal directly. It should be a daily service from the Imphal and connecting Silchar, Lamding, Guwahati and other cities of the country. It will be a longest and main line in the country and beneficial for other states too. On this main line, other lines can also join, like Aizwal to Silchar, Agartala to Badarpur, Meghalya to NC Hills (Haflong), and that can pass through Guwahati, etc. Now, question that arises in front of us is, whether it can be materialized or not? According to the original plan, Jiribal-Tupul line was being targeted to be completed by 2010. But very recently, it has been noticed that the original survey alignment was in the first phase needs to be changed. This gives us some apprehension in materializing the dream. Even Diphu (Assam)- Karong (Manipur) railway project had been cancelled. We have to wait and watch for our dream.
Notes: Manipur borders with Myanmar, one of the ASEAN members through the aged old Indo-Myanmar road (Moreh-Tamu)
Here in this present paper, entrepreneurship development is considered as trade and commerce. The term will interchangeably be used throughout the paper.
In-spite of Imphal being the second largest airport in North Eastern Region, surface transport system, including rail and road occupies the prime factor for the development of entrepreneurship or entrepreneurial activities.
Very often NH 39 is disturbed by tribal communities and it becomes very convenient for them. It is one of the biggest headaches of the State. NH 53 is used as an alternative to NH 39
State (Manipur) cabinet meeting on 18 August 2007 has decided to crack down the organization who calls on Bandh/blockade in the State.
Manipur incurs heavy loss due to Bandh/Blockade only. Despite of facing blockade/bandh in different parts the State, the present paper deals with two National Highway. Because, blockades on the Highways affect badly trading across the State
Silchar to Jiribam Narrow Gauge railway line (approximately 45 km.) is complete but not yet fully made operationalised.
Tamenglong is the most backward district in the State. The district is famous for orange and the villagers face marketing problem of their orange due to poor transportation.
Tourism and other trading activities in Manipur cannot be flourished and catered by the NHs. For the travelers, traveling in these NHs is very uncertain and the condition of the road is also very deplorable.