Today incidents of farmers' suicides are hogging the front pages of newspapers and prime time of news channels. The government is rolling the red carpet to solve their problems...and why not? However without a insolvency & bankruptcy regime in India there is a rise in cases of suicides of businessmen mainly from the micro, small and medium enterprise (MSME) sector.

Now the question is: Is the government doing enough? The fact that there is no way a businessman or an entrepreneur can exit declaring insolvency & bankruptcy in India however doesn't speak too highly of the initiatives taken by the authorities in this regard.  

From the pages of corporate history the issue of "Entrepreneurial Suicide" is always one of the biggest challenge to MSMEs in India.

While speaking to SME Times on the sidelines of his presentation on 'Insolvency & Bankruptcy: Status' on MSMEs, Dr. Laveesh Bhandari, economist, Indicus Analytics said that every second or third day there is a case of suicide of a MSME owner in India due to insolvency & bankruptcy of his enterprise.

Speaking on the same occasion renowned economist, Prof. Bibek Debroy said, "Whenever we talk about reforms, we focus on small things like exit policy of large corporate or farmers suicide in India. How many farmers commit suicide every year? Depending on the year, about 12,000. How many people commit suicide in India every year? About 1,00,000 and about 20,000 of them are small entrepreneurs."

It is quite surprising that it is easy to get the suicidal rate of farmers, army, females and teenagers, but it is very difficult to get the suicidal rate in the corporate world related to bankruptcy. Experts cite unemployment, bankruptcy and other economic problems as major reasons for these deaths.

As per the World Health Organization (WHO), in 1991, the Indian suicide rate was 9.2 per 100,000 per year. In the last two decades, the suicide rate has increased from 6.4 in 1982 to 10.5 in 2002. The number of Indians committing suicide each year rose from around 96,000 in 1997 to roughly 1.14 lakh in 2005.

The fact that 71% of suicides in India are by persons below the age of 44 years imposes a huge social, emotional and economic burden on our society.

There are lots of media reports of businessmen suicides due to insolvency or financial problem in their business.

Recently a newspaper reports that a body of a 40-year-old businessman was found hanging from a tree at New Usmanpur in New Delhi last year. Police found that he was earlier into the business of sugar. The police suspect that he committed suicide because of a financial crisis.

According to a newspaper, a businessman allegedly committed suicide after poisoning his teenaged son and daughter at his West Patel Nagar residence in West Delhi few years back. His wife revealed that he had lost his hearing ability after undergoing an operation for brain tumour two years ago. Due to the hearing loss, he was unable to manage his business properly and incurred financial losses. His sister told the police that about two months ago, he had hinted that he would end his life along with his children, as his wife would not be able to take care of them properly without him.

Recently, there was an incident where a businessman in the US Ronald "Bo" Ward, committed suicide at council meeting. Ward was hoping the members would vote yes to rezoning his property so he could secure a loan to offset his debt.

At last month's meeting Ward is quoted as saying "If this doesn't go through, I lose my home, I lose my business, I lose everything I got." Ward stood telling the Mayor "Johnny (Piper), I know I can't speak...Y'all have put me under."

Ward then pulled out a silver handgun, put it into his mouth and stated: "I'm out of here" while pulling the trigger; people in attendance screamed in disbelief...there are many more other such cases...but?

Considering the volatile market situation in India, businessmen particularly in the MSME sector are walking a tight financial rope. Amidst uncertainties, entrepreneurs need government help in exiting a business when its no longer financially viable or at least after he has spent his last paisa to keep it running. Having said that entrepreneurs need to be mentally strong and should see the pros and cons before taking risks in the corporate world. It's better to be careful than be sorry later, experts say. 

"Entrepreneurship simply defined is the art of taking risk, and if someone is not capable take risks then he simply can't make a good entrepreneur," said Prof. Debroy.

He further said that it is due to our education system and the entire Indian education system is based on "not to take risk. So we have a mindset of not taking risk, not taking risk is ingrained in our mind, ingrained in our genes since the day when we are born."

"You have to take risk to survive and you have to take risk to earn a livelihood so taking risk drives to own an entrepreneur. And for an entrepreneur we always talk about the free entry, but we rarely talk about the free exit and when we talk about free exit we didn't find the way of exit in corporate word," said Prof. Debroy.

The question arises that do we have a satisfactory exit system? And as we don't have so, the risk taker or the entrepreneur will lead to insolvency and bankruptcy, which drives him to commit suicide.

Along with the case of insolvency and bankruptcy few other points came out during the discussion, which needs to be considered. They are need of a proper and single point of exit in case of corporate failure, provision of second chance in case of insolvency and bankruptcy, need to reform in the judicial system of corporate exit, rivalry issue, harassment by money-lenders, and the most importantly, need to change the mindset of the borrower.

Some of the dominant economic factors that have contributed to the current suicide crisis include large-scale bankruptcies, increased unemployment, a sluggish business climate, accumulated debts, lower incomes, inadequate bankruptcy laws, prolonged economic stagnation, an unregulated financial loan market and corporate restructuring.