Three Years Of Modi Govt: Picking The Right Blocks
India’s startup ecosystem needs to quickly fix the last mile glitches to win the game
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It is impossible for major technology companies to ignore Israel and most haven’t; almost half of the world’s top technology companies have bought startups or opened research and development centres in Israel,” write authors Dan Senor and Saul Singer in their 2009 book Start-up Nation: The Story of Israel’s Economic Miracle. With several initiatives such as ‘Startup India’ and ‘Make In India’, and with some efforts to iron out policy and taxation glitches, India too will be on its path to becoming one of the top nations full of flourishing startups.
Ever since the Narendra Modi government took charge in 2014, almost every sector including startups, has witnessed growth. Naveen Surya, MD, ItzCash and Chairman of Payment Council of India, commends Modi’s pledge to make India digital, bringing a momentum in the entire payment ecosystem. “Digital India has created inroads to payment companies, which lead to a behavioural change in the society,” says Surya.
Mayank Bhangadia, CEO and co-founder of the fashion search engine Roposo, says, “The Digital India campaign got the power to actually position itself on the world economic map.”
Rajat Tandon, president of The India Private Equity and Venture Capital Association (IVCA) and former director of Nasscom’s 10,000 startups also gives full marks to Modi’s impetus to the startup sector. “Ever since his first speech in Silicon Valley in 2015, where he announced Startup India action plan, India has seen a powerful wave of entrepreneurship,” says Tandon. A capital of $19 billion investment also makes India the 3rd largest startup ecosystem. This also allows startups to access DIPP’s ‘Fund of Funds’ deployed by SIDBI and setting up of incubation labs under Niti Aayog, adds Tandon.
Sure, entrepreneurs are showering praises on the government. However, the Opposition and a section of the industry says that a lot has to be achieved, particularly in taxation policies and provisions for facilitating global capital.
Still, most would like to make use of any incentive that is trickling in to help entrepreneurs. “Things have also improved in the commercial real estate sector because of Real Estate Investment Trust (REIT),” says Neetish Sarda, founder and CEO of Smartworks, a Delhi firm that offers workspace solutions.
“On the other hand, out of the 1,425 companies that sought certification under the Startup India initiative, only 522 have been approved. Clearly there is enough room for improvement,” points out Sarda.
Sandeep Aggarwal, founder and CEO of used-car marketplace Droom, says that the layers and policies can delay the revolution. “Nebulous policy framework and positive bias towards the large global Internet giants is a point of concern,” says Aggarwal.
Anirudh Rastogi, managing partner with the law firm TRA says, “Dedicated departments like Startup India have facilitated interactions for impactful businesses with the relevant agencies of the government.”
While the government has laid emphasis on digitisation and technology for the past three years, Shalini Yadav, state observer for Aam Aadmi Party (AAP), says, this is a case of ‘maximum government, minimum governance’. “Schemes of Congress governments have been repackaged under new names like Swachh Bharat and served to fool the public as new initiatives. Those too have not seen honest implementation,” says Yadav. “So far, the government has been preoccupied with winning elections rather than governance.”
IVCA’s Tandon, however, argues that it is too early to count the misses. “The definition of startups, taxation, compliance and regulatory system, mushrooming of ‘me too’ startups and lack of product development talent needs to be looked at.”
Recalling the unprecedented enthusiasm of Startup India, Rohan Bhargava, co-founder of CashKaro, says, “Under Modi, development is back as the key objective. The ship is in the right direction.”
Not all agree. Congress-led Karnataka government is quick to point out that the state is far ahead of Modi’s initiative. Karnataka’s IT-BT and tourism minister Priyank M. Kharge says, “We have registered 2,500 companies and rolled out Rs 20 -30 crore as compared to 800 companies by Startup India.” The minister who waxes eloquent about the state’s popularity among the top IT firms, says, “We are bringing development by making people skill ready. Modi government is working on three R’s: renaming, repackaging and relaunching.”
While industry experts want the government to focus on ‘Digital India’ and push the ‘Make in India’ platform, they also want flat tax slabs and clear bankruptcy norms. “It is a fact that 90 per cent of startups fail. But even today we don’t have a clear and easy bankruptcy process. We want startups to succeed but the infrastructure is missing,” says CashKaro’s Bhargava. “For 2019 elections, eradication of corruption, and better infrastructure is desperately needed,” he says.
With inputs from Sujata Sangwan and Regina D. Mihindukulasuriya