Entrepreneurship Versus Rentrepreneurship in Contemporary India: an Assessment of Welfare Losses From Rent-seeking
Year: 2025
Type: article
Abstract: The entrepreneurship involves innovation, risk-taking, and value creation, whereas rentrepreneur concept refers to wealth accumulation through political privilege. This paper examines the proportion of entrepreneurial resources diverted toward unproductive rent-seeking activities versus value-creating productive activities in contemporary India. The analysis demonstrates that a substantial portion of Indian "entrepreneurs" function as "rentrepreneurs" who generate wealth through political connections and regulatory manipulation rather than innovation and value creation. Using 2024-2025 data, the study quantifies welfare losses from rent-seeking through multiple indicators such as billionaire wealth concentration (33.81% of GDP), minimal R&D investment (0.64% of GDP), public sector banking non-performing assets, and regulatory capture mechanisms. The analysis reveals systematic resource diversion toward politically-connected rent extraction rather than innovation-driven value creation. Findings indicate that India's post-liberalization economy has not reduced rent-seeking but rather facilitated enhanced state capture through crony capitalism. The paper calculates welfare losses ranging from 7-14% of GDP annually, comparable to Krueger's 1964 estimates for India, suggesting persistent structural rent-seeking despite three decades of economic reforms.
Authors: Pardeep Kumar, Dr. Rajeev Sharma
Language: English
Subfield: Sociology and Political Science
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7106217814
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