Impetus For Start-Ups: MAKE INDIA WORLD HUB…

Sarkaritel
By Sarkaritel March 2, 2016 09:57

Impetus For Start-Ups: MAKE INDIA WORLD HUB…


Impetus For Start-Ups

MAKE INDIA WORLD HUB

By Dhurjati Mukherjee

Prime Minister Modi’s announcement of creating an Rs 10,000 crores corpus to incubate start-ups in the country indeed is a judicious decision. As entrepreneurs who use their own funds will now be able to claim capital gains tax exemption if they reinvest their profits in new capital assets  —- a facility which is currently extended to newly formed micro, small and medium enterprises (MSMEs).

Undeniably, there is need to encourage more start-ups, which have already increased from 501 in 2010 to over 4500 last year. In fact, this rising trend would be maintained in the coming years.

Besides, most of these are in the field of technology and e-commerce which are depended on human talent rather than machinery. But some units are also there in areas like housing, car rentals, careers etc.

Pertinently, Modi recently dispelled the notion that start-ups were only confined to only IT but were in diversified fields opening immense opportunities in his monthly Monthly ki Baatprogramme. Underscored by many units coming up in different parts of the country by knowledgeable and qualified youths.

Moreover, he elucidated a 19-point action plan whereby the Government would only play a facilitating role and not burden entrepreneurs with complicated compliance requirements to ensure emphasis on innovation and development.

Also, the help would be extended to start-ups which are driven by technology or intellectual property. Although the plan was announced, some of the measures are expected to be implemented after the Budget is passed by Parliament.

Notably, some of the most points are: setting up 7 new research parks in six IITs and IISc with an initial investment of Rs 100 crores each and putting in place 35 new incubators in institutions with funding support of 40 per cent from the Central Government, 40 per cent from respective States and 20 per cent from the private sector.  Currently Indian entrepreneurs depend on overseas investors for around 80 per cent of funding which has been a major area of concern.

Besides, the action plan announced funding support for innovation driven enterprises with an initial corpus of Rs 2500 crores and a total corpus of Rs 10,000 crores over a four-year period. Additionally, a credit guarantee fund is also part of the plan with a budgetary corpus of Rs 500 corpus per annum for the next four years.

Undoubtedly, this financial support would go a long way in meeting some of the funding requirements of these units. Further, they would also benefit from the Atal Innovation Mission which was set up with a corpus of Rs 150 crores with the aim of helping struggling innovators secure financial and market support for their skills and ideas.

Recall, April last the Niti Aayog had set up a 15-experts committee comprising people from Government, academia and industry to develop the contours of the programme and establish its terms and conditions. The committee’s report proposed setting up of an initiative mechanism that would yield immediate results.

There is no gainsaying that start-ups would be the answer to today’s ‘Make in India’ initiative. There is reason to believe that such units would emerge as an alternative growth engine especially at a challenging time for the global economy. Finance Minister Jaitley asserted that the NDA Government was pursuing a policy wherein more freedom was being given to companies and the whole process of doing business simplified.

Further, if banks came forward to help techno-savvy entrepreneurs and provide them funds, more units would come up. Meanwhile, each bank branch would adopt a SC/ST entrepreneur along-with creating a women fund to help set up their establishments. This could help in entrepreneurship development and cultivate indigenous talent and skill steadily.

According to Practo’s founder-CEO Shanshank, “the relaxation of financial and labour norms is a great step towards making things simpler for young start-ups so they could focus on innovation without getting entangled in some of these norms that are more applicable to larger entities”.

An example, the Atal Innovation Mission would foster innovation at a grass root level among students in schools and colleges which would in turn encourage more youngsters to enter the field of entrepreneurship help innovate and create some ground breaking products.

Importantly, India is already a leading start-up hub and new entrepreneurs believe that with the right support from the Government, the country could rapidly become “the innovation hub of the world”.

Another entrepreneur pointed out that the Government needed to play a pivotal role in various dimensions of the start-up ecosystem, and the main focus should revolve around the 3P’s (Promotion, Policy and Pravasi Indians (NRI)).

The Government should also help provide a voice to start-ups by promoting them across the world which would help them emerge internationally. Two, create start-up friendly policies which would help nurture their growth by preventing hurdles like red tapism etc.

Significantly, the promise shown by start-ups reveals that even if one of five units is successful the value added would be huge and make up for losses of other units. As it stands, the Department of Science and Technology which has provided Rs 100 crores since the 80s at the rate of Rs 3 crores per annum is obviously insufficient.

The Niti Aayog’s expert committee suggested recently that the Government increase this to Rs 200 crores per annum. This would not only boost innovation through enhanced research and development, pave the way for success of start-ups but also encourage setting up of more units.

In sum, India has a big market which foreigners are trying to intrude. Instead of allowing outside entities, opportunities have to be seized by Indian entrepreneurs, preferably first generation ones who are technologically equipped. They could achieve miracles if their skill, talent and innovation are properly explored. Likewise the emphasis on digitalization is unleashing more human potential and creativity than ever before.

Clearly, innovation is the key to success and the Atal Mission needs a  road map to ensure success of start-ups if the country has to progress at a faster rate. Certainly, if the Government along-with academic institutions promotes research and innovation, the proliferation of technologically equipped units including start-ups would generate employment whereby our large skilled force would be gainfully engaged. —– INFA

(Copyright, India News and  Feature Alliance)

Sarkaritel
By Sarkaritel March 2, 2016 09:57