Indian PM to announce action plan for startups
India is ranked third globally after the US and UK in launching startups, but is unmatched as far as their survival rate is concerned, which is hardly around 10 percent.
Despite the tall talk of connecting academia to the industry by the Indian government for years, tough regulations and lack of accessibility to market are among the major reasons cited for the high mortality rate of the startups in the country.
Prime Minister Narendra Modi is keen to make India the startup capital of the world and addressing people through the "Man ki Baat" (speaking from the heart) programme over the radio on December 27, he announced that he would unveil the "Startup India, Stand up India" action plan in the presence of experts and entrepreneurs in Delhi on January 16.
Modi said that the action plan would provide a big opportunity for the youth and it will not be limited to urban areas and information technology. It should cover other sectors like manufacturing, service, and agriculture across the country, he said.
The prime minister's remarks come at a time when entrepreneurs are grappling with operational issues and they want the government to redress their grievances.
Eko Financial Services co-founder & CEO Abhishek Sinha, who is among the few entrepreneurs invited by the prime minister to attend the January 16 programme, said that it was high time the government acknowledged the role and impact of technology/IP based startups in the country. "The startups need more encouragement as they positively impact the overall economy and generate more jobs in the country," Sinha said.
According to him, entrepreneurs were facing many "avoidable challenges" including that of raising capital, and if a business-friendly tax structure was introduced, it would ensure product delivery at low cost to the end consumer. The new corporate law was also discouraging the entrepreneurs from even getting access to small capital through personal loans.
"To curb wrong practices and check fly-by-night operators, the government has been enforcing complex regulations but these laws are impeding the progress of sincere entrepreneurs," Sinha added.
Technopreneur and co-founder & CEO of Chennai-based Uniphore Software Systems Umesh Sachdev is excited at the involvement of the prime minister in the startup ecosystem, which witnessed exponential growth in the last few years.
He said that the government needs to play a pivotal role in various dimensions of the startup ecosystem and the main focus should revolve around the three Ps -- Promotion, Policy and Pravasi (non-resident) Indians.
"The government should support the startups by promoting them across the world so that they become global. The prime minister should also come up with startup-friendly policies to nurture their growth and remove all obstacles and the government should incentivise NRIs to invest in the country so that they create better career opportunities for the young," Sachdev added.
Prafulla Mathur, founder and CEO of WudStay, a startup in the hospitality industry, said that though the ecosystem has been a strong enabler for India's economic growth on two fronts -- in generating employment as well as attracting global investments -- its growth has been stunted in view of multiple challenges from a policy standpoint.
For startups like WudStay that attract foreign funding, the process of getting approvals from the Reserve Bank of India, India's central bank, is long and tedious. Generally, startups are low on human resource and having to invest time and effort on these processes, the cost on companies is very high, he said.
Mathur is also of the view that the current tax regulations need to be modified as low taxation would help startups create greater value for customers and also generate higher employment.