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Prarambh: Opportunity for Startups (15 January 2021)

Prarambh: Opportunity for Startups (15 January 2021)

Context:

Prarambh- The Startup India International Summit began on Friday. It comes as a follow-up of the announcement made by Prime Minister Modi at fourth BIMSTEC Summit held in Kathmandu in August 2018, wherein India committed to host the BIMSTEC Startup Conclave. Prime Minister Modi will address the global summit on Saturday.

Background:

Startup India initiative was launched to promote and support the startup in India by providing bank finances.

The three main pillars of the startup India scheme are as follows:

  1. To provide funding support and incentives to the startup in the country
  2. To provide industry Academy partnership
  3. Simplification and handholding

Summary of the Debate

About the summit:

  • All the members of the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) countries participated in the events.
  • It is organised by the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry.
  • The two-day summit marks the fifth anniversary of the Startup India initiative, launched by the prime minister on January 16, 2016.
  • Over 25 countries and more than 200 global speakers participated in the summit.
  • It is the largest startup confluence organised by the government since the launch of the Startup India initiative.

Significance of the summit:

  • The purpose of this summit is a fulfillment of a commitment that the honorable PM had made in the sumPM announces Startup India Seed Fund Scheme of Rs 1000 cr for startupsmit in 2018 among the BIMSTEC countries for hosting the BIMSTEC conclave.
  • The Prarambh Summit is focussing on how the best practices can be brought in the BIMSTEC countries and what they are doing in the incubation innovation system and how BIMSTEC countries can collaborate together more effectively to address the not only challenges that these countries face but also to leverage the benefits of technology, advancing fast available, affordable and accessible technology for the benefit of innovation and communication between countries and for extending cooperation.
  • It has played a very important role in cultivating and growing the ecosystem of innovation and entrepreneurship across the length and breadth of India including many other organizations like Atal Innovation Mission, Department of Science & Technology (DST) and Department of Biotechnology (DBT).
  • This particular summit brings all of them together to the fore, to be able to deliberate and contemplate on how we can grow up as startup nations across in this region and be able to address the demand and opportunities that it presents.
  • It provides a great platform for a continued dialogue between BIMSTEC countries to be able to see how we can address collective demand.
  • It is also an opportunity to showcase great startups and innovation, frugal innovations which have come up not only in Indian landscape but in other countries and for being able to attract domestic and global capital through access to what is happening in the startup ecosystem.

Indian Startup Ecosystem:

  • Today, India has 55,000 startups and more than 34 unicorns which have come up and each of these unicorns have added jobs tremendously both directly and indirectly.
  • India is the third largest startup ecosystem in the world. It has close to 42, 000 to 43, 000 startups registered till date.
  • We have close to around 20 varieties startups today and these are of different sectors.
  • Five years ago, India was at the position of 81 in the Global Innovation Index, today India is on 48.
  • Organizations like Flipkart or OLA have added tremendous number of jobs in the economy.
  • Technology driven startups or Agri-domain or biotech domain startups have also prospered in a very big way.
  • There is a tremendous focus on diversity of geography in stimulating innovation and diversity of gender in stimulating innovation.
  • The ecosystem which is now provided by the government, they have become the voice of the beneficiaries to be able to get reflected in to quality.

Efforts undertaken by the government to promote startups in the last 5 years:

  • Stand-up India policy: To ensure the grassroot innovations and entrepreneur level is getting stimulated.
  • Atal Innovation Mission: It was launched by the PM under NITI Aayog. It is India's flagship initiative to promote a culture of innovation and entrepreneurship in the country.
  • Community Innovation Centers: Setup to serve the interests of rural India, Tier-2, Tier-3 cities and to ensure that community driven innovation and job creation happens, because we have 600-1000 plus villages, 715 districts and 115 are aspirational districts.
  • Funds: Government provides more than 1.3 billion funds to encourage the startup community and to be able to provide funding capability to the startup community.
  • School level: Thousands of collateral tinkering labs have been launched so that these become dedicated innovation workspace in schools between grade 6 to grade 12 to nurture a problem-solving innovative mindset in our young students.
  • Universities: In universities, we are having world class incubators being set up by a number of institutions like innovation mission or DST, DBT and so on. Today we have more than 400 incubators in India.
  • Atal New India Challenge and ARISE challenges: Government is launching number of challenges with various ministries like Atal New India Challenge and ARISE (Applied Research and Innovation for small enterprise) challenges and these challenges are meant for addressing Make-in -India innovations in the startup community or in the MSME community.

Challenges faced by Indian startups:

  • Various startups have been engaging with the government on a range of issues, these range right from founder driven issue to even operational issue.
  • A number of regulatory changes by government and RBI is a challenge for various startups.
  • Section 194 (O) of Direct Tax Regulations, which came last year and creates huge amount of administrative costs for the stratups.
  • GST and its applicability have major impact on some startups.
  • India has conventionally had only 13 percent women entreprenuers.
  • A lot of the startup founders are first time founders and building their businesses and they are very busy with that. So, they don’t get time to make right representations to the government. The needs of the startups are largely get lost in sometime in all the noise and business of building a business form ground up.

Way Forward:

  • There is a certain need for regulatory certainty which certainly needs to be imbibed in.
  • There needs to be consistency of applicability of regulations by states because at the end of the day, the central government prescribes and creates a policy for the nation but, it can be interpreted different by different states.
  • There are some innovative requirements to unlock certain sectors.
  • It is important to have a Centre-State consistency of applicability of laws because what is banned in one state is legal in another state.
  • The collaboration with corporates and with public sector and private sector is very important because they are very strong stakeholders in the system.
  • There is an urgent need that the benefit of innovation and the startup community reaches across to the rural India coupled with the jam trinity that the government has introduced like Digital initiative where there are more than a billion bank accounts today, billion unique ids through the Aadhar and billion mobile phones. All of these can come together to provide tremendous amount of solutions to fulfill a pent-up demand and the challenges that India has.

Conclusion:

  • Government is very sensitive to what is needed to support the ecosystem and there have been several initiatives in the last couple of years to interact not only with the corporate community but we had called champions of change which was ready to see what is required, what are the new regulations, what are the new policies, what are some enabling factors for ease of business and ease of startup operation. These are all being done at the NITI Aayog which is the policy think tank and these are being implemented as policies and many of them have found reflection in the last couple of years.
  • The covid-19 crisis brought that fact of very vividly that unless there is a tremendous collaboration between industry, academia, government and the startup community, India will not be able to succeed together as a nation.

Important points made by the Guests

R. Ramanan, Mission Director, Atal Innovation Mission, Niti Aayog  

  • It is one of the largest startup global summit being organized by startup India since its inception. startup India began in January 2016.
  • All the BIMSTEC countries are dependent upon the growth of innovation and entrepreneurship and startups in their respective countries and to be able to collaborate with each other, to be able to find the opportunities between the countries as well as across the global landscape.
  • Covid-19 has been unprecedented in terms of its impact and the need for innovation and entrepreneurship has never been felt more than at this point in time.
  • Covid-19 was also a watershed moment in history of India where startups rose splendidly to the occasion.
  • During such a pandemic year we have had growth of 11 unicorns from India, we had more than 1500 startups offering preventive assistive and some curative solutions for addressing covid-19 as well as problems in a post covid-19 world.
  • The honorable PM in Aatmnirbhar Bharat talked about 5 pillars which are common for all the countries:
  1. The pillar of demographic dividend
  2. The pillar of infrastructure
  3. The pillar of demand
  4. The pillar of socio-economic progress
  5. The pillar of technology and systems   

Ashneer Grover, Co-Founder & CEO, BharatPe  

  • We just need acknowledgement for all that we are doing towards building the nation as well. We need acknowledgement that it is a sector which is pledging, fledgling and would need support for the next 10 to 15 years.
  • Government can create the rules and regulations and policies which will help promote startups much more than what has been done so far.
  • The whole legislative and the whole judiciary would have to start rethinking about the laws and everything with respect to the new economy and with respect to the startups.

Rameesh Kailasam, CEO, IndiaTech.Org

  • India had the first ride when the IT and the BPO sector and the IT enabled services took off which triggered the massive employment generation in new age economy.
  • Post that this has been the next big wave that India has been able to ride on and the main reason for that is, the thrust that the government gave towards recognizing the fact that startups need to be encouraged because that is a limit to which traditional old age economy would have created livelihoods and employment.
  • We have 15 to 20 lakh children passing out from the schools and colleges and it was necessary that this wave was critical to be nurtured not only to creates livelihoods but also for India to step into the new age economy.
  • Today, we have 29 states and UTs who have a state startup policy which kind of helps this whole hand holding aspect both with the Centre and the state looking at it.
  • Further relook has to be done at ability of startups to raise money listing in India, wealth creation in India.

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