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8 Things That India Needs For A True Start-up Culture

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8 Things That India Needs For A True Start-up Culture


Prime Minister Narendra Modi, in his speech on Independence Day, called for “Start-Up India, Stand-Up India”. Who should drive start-ups – the government or the private sector?

 

Modi emphasised on entrepreneurship and job creation, announcing incentives for companies that generate employment besides launching a new campaign ‘Start up India, Stand up India’ to promote bank financing for start-ups by the underprivileged.

 

Each of the 125,000 bank branches in India should give loans to Dalits, women, and tribals, so that the country could, in no time, have at least 125000 start-ups by women and Dalits, Modi said.

 

Can India become a start-up nation? On #IndiaHangOut, Rajeev ChandrashekarMember of Parliament and Technology Entrepreneur, Mahesh Murthy, the Founding Partner of Seedfund, Sharad Sharma, the Co-founder & CEO of BrandSigma Inc. and Harish Bijoor, the CEO of Harish Bijoor Consults Inc. discuss the potential and future of start-ups in the country.

 

They list out the dire needs and opportunities that our country should address to develop a true start-up culture:

 

1. Government in the role of a facilitator.

 

The government needs to step out of the way of start-ups.  It needs to needs to facilitate a start-up environment but should not get into the entrepreneurial space.

 

2. Open collateral-funding.

 

The government needs to allow banks to write loans to small businesses without collateral. These banks should be allowed to invest in start-ups, regardless of caste and creed.

 

3. Leave equity-based funding to private sectors.

 

Equity-based funding, where investors are allowed to buy into the fund, should be left to venture capitalists.

 

4. Get rid of the inspector raj.

 

The government needs to find a way to create a climate where there is an ease of business.

 

5. Promote innovation-led entrepreneurship.

 

India ranks 86th in world ranking for innovation and we have steadily been dropping down the rankings for the last few years. For the country to become an open market, entrepreneurship needs to shift from copy-and-paste to innovation-led. The government needs to create an innovation ecosystem.

 

6. Allow start-ups to sell to the government.

 

New enterprises should be allowed to bid for government contracts and for this to happen, the government needs to relax its norms for bidding processes.

 

7. Government in the role of a market-maker.

 

The government needs to adopt the model of challenge grants. Under this model, the government issues challenge grants and picks the most innovative company and innovators can become rich on the back of the government. This model has been tried out successfully in the US and Europe.

 

8. Create public goods for private wealth creation.

 

The government needs to invest in public goods as they are the sources for innovation.

 

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1 Comments
  • hemenparekh

    A NEW ECONOMIC
    ORDER ?

    You may also call it , ” Start
    Up Act – 2015 ”

    # Objectives of
    the Act

    Every
    year , to create 5 million Start Ups ,
    each employing 2 persons , for a total of 10 million new jobs per year

    # Methodology

    * Instead of Companies Act – 1956 , these Start
    Ups will be governed by the Start Up Act – 2015

    * A Start Up can be launched by any Indian
    citizen under the age of 30 ( covering roughly 65 % of our population )

    * A Start Up will need to register online on
    the web site of the Income Tax Department and obtain a unique ” Start
    Up Number ”

    * Although all Start Ups will need to file
    annual Income Tax returns ( with full disclosure of income / expenses / profits
    / sources of funds etc ) , it will not be required to pay any Corporate
    Income Tax for the first 10 years of its existence

    * A Start Up will be free to raise funds from any source (
    Individuals / Companies / PE funds / VCs / Angel Investors / Religious Trusts
    etc )

    * 100 %
    FDI will be permitted in Start Ups

    * A Start Up can receive loans or equity and be
    able to accept fixed deposits . It can also give loans to individuals or other
    Start Ups or invest in other Start Ups by way of equity

    * There will be no restrictions on what interest (
    on loans / FDs ) that a Start Up may pay nor any restrictions on dividends
    it may declare

    The
    dividends declared by Start Ups will not attract any Income Tax

    * As far as the persons / companies etc
    providing funds to Start Ups ( by way of loans or equity ) is concerned , no
    questions will be asked re their source of funds

    # What will
    happen ?

    * Billions of rupees worth Black Money will
    flow into these Start Ups – money which is currently lying unutilized or locked
    up in unproductive assets

    * If Jan Dhan Yojana could create 200 million
    bank accounts in 20 months , Start Up Act – 2015 ,
    will create 200 million Start Ups in next 10 months !

    All that
    led to this World record was , someone suggesting the unthinkable :

    ” Let us enable poor people to open bank accounts
    with ZERO bank balance ”

    ” Start Up Act- 2015
    “, will unleash a similar ” Start Up Tsunami ” !

    * Within 3 months , thousands of Venture
    Capital Funds will be born , exclusively for funding of Start Ups ( You know
    who will set up these VCs ! )

    * With NO Income Tax to be paid , Start Ups
    will conduct all transactions through cheques ( receipts / payments )

    * GST
    collections will go up

    * Domestic Savings Rate
    will go up

    * Since millions of ( Black Money holding )
    individuals / businesses will come forward to fund these Start Ups , lending
    pressure on banks will go down

    * Who knows , Start Ups may get into the
    business of Assets Reconstruction and relieve banks of NPAs !

    * With locally / domestically stashed Black
    Money flowing into the economy , our dependence on FDI will go down

    * Corruption will decline drastically

    # Why the
    need for Start Up Act
    ?

    It is simple

    In the past 300 years , we have had different systems
    of Economic Development , viz:

    Communist / Socialist
    / Capitalist

    There were periods when each worked well – depending
    upon the geography and the technological environment prevailing during those
    periods

    Today, Internet and mobile apps are pushing the World
    towards an E – Commerce economy , which covers entire World seamlessly

    Tomorrow , Internet of Things ( IoT ) , will tell us
    what we need to do and when ! Our lives will be dictated by devices !

    That will demand a brand NEW SYSTEM of economic
    development which transcends national boundaries

    Old rules / regulations / laws will not help us find
    jobs for 12 million youths entering India’s work force each year

    An ocean-going ” Ship ” , cannot traverse
    galactic distances of Space

    Following in the footsteps of Albert Einstein / Stephen
    Hawking , we need to

    ” Bend the
    Space ”

    And travel through the Worm-holes !

    Using the hologram of the ” Start Up Act – 2015
    ” , we must project our economy into :


    Distributist Economy “,

    which goes beyond the ” Communist / Socialist / Capitalist
    ” economies !

    That is the ONLY WAY to create a ,

    ” New Economic
    Order / The Start Up Economic
    Order ”

    Last – but not the least :

    No politician will oppose the unanimous passing of the
    ” Start
    Up Act – 2015 ” , in Lok Sabha or Rajya Sabha

    You know why !

    ————————————————————————————-

    hemen parekh

    13 Sept 2015

    B2BmessageBlaster

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