Startup India: How far we have come
Prime Minister’s Startup India campaign celebrated its 2ndanniversary on 16th January. The initiative was launched two years back in order to provide a new dimension to doing business in India by simultaneously encouraging entrepreneurship and fostering innovation. It couldn’t have been launched at a better time given the current situation of Indian economy. Onone hand, India sits on a demographic gold mine where it could add about 2 percentage points per annum to its per capita GDP growth; but on the other hand, the dismal employment situation in the countrymight prevent the nation from yielding the benefits of the ‘demographic dividend’. In such a scenario, Startup India,was launched with a vision to ensure sustainable economic growth along with accelerating employment opportunities.
The government envisioned makingstartups a serious growth engine for the economy where they announced various benefits and incentives for startups such as a corpus of INR 10, 000 crores Fund of Funds (FFS), tax benefits, setting up of Research Parks and the largest business incubator in Lucknow. In order to provide easier access to funding, BSE launched the ‘Hi-Tech Startup and Other New Business Platform’ in 2016 which is a startup listing platform. Although, India has become the third largest country with startups, marginally behind the U.S. and U.K., the potential for this sector has not been fully realised. A number of loopholes still impede successful implementation of the above reforms and policies which, in turn, lead to a ‘startup un-friendly environment’. For example, as on 6th October 2017, only 5 companies established post-2006 have been listed on stock exchanges. Similarly, disbursement of FFS has been inconsequential along with insufficient tax exemptions and inadequate incubators to support the startups. Around 80% of the respondents in a recent survey of startupssaid that they haven’t benefitted f...