5 concerns Modi's Start Up India must address
The government is talking about minimal interference and providing freedom to young CEOs and their teams but we need to understand the the real takeaways from the policy booklet being handed over to thousands.
The event Start Up India, with Prime Minister Narendra Modi himself setting the tone for the day-long programme, saw various media houses trying hard to understand expectations of the policy to be unveiled from its ultimate benefactors. As I reread the policies, I am delighted about the hand-holding and care our government has shown. But let us take a closer look at a few important points.
Start-ups addressing or aiding government work. Can they?
Like any process, even government plans can be benefitted by the Public-private partnership (PPP) model. There are start-ups in India struggling to understand the process by which they can help the government because of its bureaucratic challenges.
The policy spoke about forming a panel of specialists for patent application, which is a good step. What remains to be seen is whether there are any base level points of contact from the ministry which would take such ideas seriously? Again, will these aid in the step-by-step process of achieving the same in order to avoid the levels of bureaucratic rules and regulations?
Getting an appointment with ministry officials or even getting to talk to them is extremely difficult compared to what is present in many countries. So, it would have been great to have such a team who would help the founders get the right contact and the desired opportunity, free from bias of any personal political contact.
Clearly outlined definition of start-up. Who makes the cut?
By definition in the new policy document, a start-up is required to be driven by technology or new intellectual property (IP) , and be recommended by an incubator. This presents a challenge to new business that are not driven by technology or with IP.
Can all business be driven by technology? Let me rephrase: Is a chain of mini-clinics, mini-hospital, or a similar start-up, which is actually solving rural health or education, not doing great things beneficial for the country?
Are we not missing out on important businesses that would get positive revenue from the start, create jobs and actually solve issues in India? If there are modifications that could be brought to make these models fall under a start-up, are there panels looking at re-applicants?
Easier registration and tax filing
Our government should focus on easing the process of company registration, moving away from the old school way of manual registration and approval from the board.
Currently, it is nearly impossible to get things done without making infinite calls to the CA. Can we do it ourselves now with ease? Also, there would be very few start-ups who would make a profit in their initial years. Therefore, the tax breaks announced for the first three years may not be very helpful to most young firms.
Funding or revenue. Which is important?
There were days when relatively less educated people would invest small amounts from their family's saving to start their business. The only motive was profit with the age-old equation of revenue vs cost and due consideration of the risks involved. However, this open tap of funding sometimes blinds entrepreneurs from evaluating scenarios before taking the plunge.
Less revenue and lesser chances of breaking even remains an issue to be solved in urgency but the reason for any business to grow and excel is the creation of demand that it would fulfil. Then, is it a wise idea to pump in more money in a country where there are other serious issues to be solved rather than giving them help in understanding and doing business and an ethical way of practicing it.
Security, quality and other control measures
Among the rising number of start-ups in cab services and the confusing state of carpooling services, a girl ordering a cab in the wee hours of the morning is as worried as she would have been five years ago.
There are a number of food joints with home delivery, customised chef cooked food services, tiffin services, cosmetic companies bagging famous magazine front pages, industries and factories in the queue of raising funds. But in the race to get smarter, why does India forget every time that quality and security are equally important?
I wished to see stricter rules in the policy in our developing country because the money spent on this by the customers is as important as the money raised by the start-ups.