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Entrepreneurs Welcome Modi's $1.5 Billion Fund To Support Startups
Modi's high-profile event on Saturday in New Delhi was attended by hundreds of investors and entrepreneurs
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Prime Minister Narendra Modi's initiatives to support the country's start-ups, including a Rs 10,000 crore ($1.5 billion) fund and a string of tax breaks for both the companies and their investors, have won praise from the business community.
The government is seeking to encourage more cutting edge technology and other start-ups - supporting new businesses in a country which badly needs to accelerate a still sluggish economic recovery and create millions of jobs as the workforce expands.
India already has a handful of new generation success stories. Modi's high-profile event on Saturday in New Delhi was attended by hundreds of investors and entrepreneurs, including the founder of taxi-hailing app Uber, Travis Kalanick.
Online companies such as e-commerce marketplaces Flipkart and Snapdeal, along with ride-sharing company Ola, have highlighted the potential for home-grown technology successes in a country best known for capitalising on cheap engineering talent as the world's back office.
Ola founder and CEO Bhavish Aggarwal said, "Historically we as a country have not invested in infrastructure and skill development. The challenge before us as a company and as an industry is to develop skills and enable people get gainful employment."
Snapdeal founder Kunal Bahl said, "The biggest challenge most startups face is to get really high quality team members who will stick it out when times are tough and stay with you when times get better when you need depth in your management."
The push by Modi's government is the first time Indian policymakers have announced a set of policies directly aimed at promoting start-ups and entrepreneurship.
Modi said on Saturday start-up companies would benefit from cheaper and faster patent applications, enjoying 80 percent rebates on the cost of patents. A mobile app would allow companies to be set up within a day, he promised.
Moreover, they will be exempt from income tax for the first three years in which they make a profit. Their investors could also benefit: recognised funds of funds could see exemptions from capital gains tax, Modi said.
Reactions welcoming the government's announcements were received from entrepreneurs in various sectors.
Rohan Bhargava, co-founder of CashKaro.com: "The direction of the plan shows that the Government understands the challenges of a startup. This is shown in the fact that they have addressed taxation, recognised the need for mentorship through the Startup India hub and created mechanisms for providing funding."
Shashank ND, founder and CEO of Practo: "I am happy to see the government engage with the community and to really look into the issues that are hindering the ecosystem from growing even faster than it is. With the Start Up Action plan, we will see more young entrepreneurs take the risk of starting their own venture and building innovative solutions to solve meaningful problems for Indian as well as for the global audience. I think the Insolvency and Bankruptcy Bill that will allow startups to exit faster, within 90 days is a great step towards encouraging more people to take the plunge of starting a new venture, without the fear of failure."
Sujayath Ali, CEO and co-founder of Voonik: "It's a great start by our PM. It's exciting to see that our Government is looking to remove obstacles and facilitate startup ecosystem. No inspections, ease of shutting down, and no capital gains are significant. Still looking for clarifications on items such as removal of angel tax, what constitutes e-commerce vs marketplace and forex reporting."
Manoj Agarwal, co-founder of Giftxoxo: "Startup India is a great initiative. Brings all stakeholders under a single platform. It would be good to have such regular events and bring the key points of discussions into real execution."
Debadutta Upadhaya, co-founder, Timesaverz: "This is a encouraging initiative to take India's startup ecosystem to the a next level. A business friendly tax environment for would be promising for creating an organised market from a highly unorganized market."
Raghav Chandra, co-founder, Urbanclap: "This initiative of PM Modi is the right step in making the environment friendlier for entrepreneurs and thus encouraging them to start up. We will wait for the fine print to understand exactly what the next steps will be. However, I can only say that outcome will be in the positive direction and we are very excited!"
Shaifali Agarwal Holani, founder and CEO of EasyFix: "What an initiative and a great day for India. Most populated India has sharpest brains of all times and this initiative will give a platform to many enthusiastic but under confident talents to come out of their ordeal. Encouraging privatisation will speed the pace at which India is developing and we will become a developed country soon."
Dinesh Agarwal, founder and CEO of IndiaMart.com: "With the roadmap in place, I believe that the MSMEs (micro, small and medium enterprises) will be the major beneficiaries apart from new-age tech companies."
Prashant Rai, founder and CEO of OneTimeJobs.com: "We truly appreciate all the initiatives that the government will be taking to support startups. On these initiatives, Government will be as successful as it was with the 100 smart cities concept."
Radhika Aggarwal, co-founder and CBO, Shopclues: "The government has acted like a disruptive start up. The policies around cleaning the license raj will be a huge booster for Startup community while both setting up and dissolving a company. Other initiatives such as tax benefits, easy IPR regulations, and government academia will go a long way in making India's start up ecosystem super successful."
Akshay Verma, co-founder and director, Fitpass: "Startup India has provided strong encouragement and respectability to first generation entrepreneurs apart from smoothening processes. If the promises made are fulfilled timely, there is no doubt that India will be the global hotspot for job creators and problem solvers."
Sandeep Aggarwal, founder and CEO of Droom: "The Startup Standup India mission is focused towards the rich demographic dividend of India also comprising of the entrepreneurs in Consumer Internet and E-Commerce. The mission is deemed to make substantial progress in infrastructure and policy framework, leading to improvement in entrepreneur and investors' confidence."
Ranjit Punja, CEO and co-founder, CreditMantri: "As a Fintech start-up, it is heartening to learn that the Prime Minister has announced an inter-ministerial body to provide innovative start-ups with the much needed support to scale rapidly. Great ideas, coupled with superior execution and facilitated by favourable regulation, adequate financing and now government support will definitely rapidly create employment and can accelerate economic growth in the country."
Neeraj Jain, CEO and co-founder, Zopper: "The expectation is to expedite policy execution. There have been many initiatives in past too but hardly any execution. The govt should put an execution plan in place along with the policy. Also, the overall idea should be to simplify things for entrepreneurs."
Manavjeet Singh, founder and CEO, Rubique.com: "In the dynamic market scenario like today where it takes few days to replicate an idea, the decision to guide & make the patent process faster is definitely going to be game changer not just in India but worldwide. Overall a positive & encouraging move by the government to help flourish the startup ecosystem in India with these and many other initiatives."
Shamit Khemka, Regional Director, Entrepreneurs Organisation, South Asia: "This is the first government to recognise the startup space in India in such a big and official manner. We thank and congratulate the government and the prime minister on this initiative. What Mr Modi rightly pointed was that entrepreneurs are scared of government interference, which will Change as there will be less interference and more support."