If there was any need to make people aware that India has changed and is changing rapidly, it was reflected at Saturday’s New Delhi meeting where Prime Minister Narendra Modi unveiled the action-oriented “Start-Up India” action plan. The country has been changing in the past five to seven years, but governments and the bureaucracy, particularly in the states, failed to realise this and eliminate archaic laws and cumbersome practices that made doing business in India unduly irritating.
Innovative young entrepreneurs, hungry to grow and contribute to the nation’s growth and grab opportunities that new economy startups offer, didn’t, however, wait for the government. Many young men and women around 30 or 40 left cushy jobs overseas and returned home to create a quiet revolution of startups, from robotics to transport, helping small/medium entrepreneurs and traders take advantage of their innovative platforms. India today has the second biggest Silicon Valley-type startup hub in the world in Bengaluru, and the third largest number of startups, after the US and China. A boost came with the Modi government’s efforts to enhance the ease of doing business. Now the package of tax concessions on capital gains, no “inspector raj” for three years (but why should there be “inspector raj” at all?), slashing patent costs (though not at par with Singapore or the US), a startup fund and credit guarantee fund and an assurance that the government will act as a facilitator are welcome.
But as some entrepreneurs say, there’s a long way to go before startups have the friendly growth climate needed to take them to the next phase. For instance, why should it take to a month or more to set up a company when other countries can do it in an hour? The young can’t wait. The “who’s who” of the startup world have clearly spelt out what must still be done: the bureaucracy in particular will be well advised to heed them as they can become the five top job creators in the next five years.
The key priorities are better telecom infrastructure like mobile broadband as connectivity is too slow; quickening the pace of skill development with out-of-the-box thinking and incentives; ease of funding; rationalising regulations and processes in states, where each has its own regulations and processses that deter startups; encourage the entry of women and weaker sections, among others. One of the women CEOs noted that Mr Modi has “helped them to stand up and dream”. The proof of the pudding is in the eating, so the days ahead will show if this exciting package truly becomes reality on the ground and the bureaucracy lets go of its immense discretionary powers that make business a nightmare.