Startups are firmly ensconced in the Indian ethos, and are poised to make a major impact on India’s economy. If India needs to become a 5 trillion economy in the future, startups can contribute to a major part of this success. This is not fanciful thinking. Microsoft, Google and Amazon together alone are almost a trillion dollars. If we get our startup industry on track, we will not only achieve the 5 trillion mark in a few years but exceed it. The Government of India has already made tremendous progress and improved the startup ecosphere by leaps and bounds. In fact the encouragement, benefits and other efforts from the Central Government and State Governments on behalf of startups have been nothing short of Herculean. It is hard to imagine that Governments can be so proactive with regards to startups, but that has been in case from the central government to a myriad of state governments. These efforts have paid off and made India one of the largest startup hubs in the world after the United States.
But Alas! The efforts though commendable, are just not enough. We desperately need out of the box thinking in the new budget for startups. The problem with the present initiatives are though they are all done with excellent intentions, they have not been able to prevent over 95% of startups failing. Tax benefits are no use to startups who don’t make much money and startup funds shortlist criteria are too stringent to take advantage of. The enormous numbers of mails that startups get today from agencies affiliated to Startupindia and NASSCOM 10,000 are wonderful, but they target a few industries like Fintech, Electric mobility, the environment and smart cities. These are good to have sectors, but we are losing out on the must-haves sectors! The must haves are the 90% of the startups who are doing good work in different areas which are not as fashionable, but as important to India’s economy. Uber is a great product, but where would Uber be without the cab drivers who are a vital part of their success. Flipkart is another great product, but where would they be without the huge number of small shops who stock and supply a lot of their products. Uber and Flipkart are good to have products, but the drivers and shops are must-haves. If the shops close down and if Uber drivers move into another profession, these products will die.
It is the same case with the 90% of startups failing who are in the must-have group. They are the bedrock of the startup exosphere, and if they start failing it is not a good portent for the future. Budget 2019 can help alleviate this. Obviously, a large number of startups will fail. We just cannot afford 90% of them to fail. If the right moves in the budget are able to save 25% of these startups, it is a huge plus for the country. So, what can the budget do? It can take a leaf out of the agriculture sector and farmer loans and provide soft loans to startups at 2% or lower. To prevent misuse of funds, startupindia can be a good platform to disabuse funds and they have over 11,000 startups who have been shortlisted. One more leaf we can take out of the the US economy is the example of a few years ago the the US threatened to levy a tax on US companies who outsourced to India and regions outside the US. We can adapt this by offering large Indian and Indian based companies a tax benefit if they do business with startups recognised under the startupindia scheme. This would be a win-win situation for both. These are just 2 simple but powerful initiatives that we can suggest to help the startup industry. It will definitely reduce the closure of startups. Today it has been statistically proved that startups are creating more jobs than any other industry. If the budget recognises this, it can dramatically alter the very fundamentals of the Indian economy with the startups acting as an engine to deliver growth. Lets hope it is so
Dr. Joseph Rasquinha, is a Ph.D. in economics from the School of Management, St. Andrews University, ranked the best business school in the UK in 2018. He has run 2 startups, one a NASSCOM 10,000 company and the other a Startupindia company and is very familiar with the trials and tribulations of the sector.
- By Dr. Joesph Rasquinha
About Dr. Joseph Rasquinha
Joseph Rasquinha is the CEO and Co-Founder of Blueleaf Cyberspace. His company offers SaaS (Software as a Service) products which are a combination of different Apps and a powerful entreprise system and have multiple clients in B2B industries from retail, real estate, financial services, hospitality, aviation, and education.
Dr.Joseph had a degree in Economics. He then went to St. Andrews and completed a Post Graduate Diploma in Management and a Ph.D in Economics by the age of 26. By 28, he had editied 2 books, written multiple articles, and did a 2 years stint as a lecturer at St. Andrews School of Management, ranked the best management school in UK in 2018. From 28-35, he worked for a 100-million-dollar German trading firm in China, Singapore and India. At 35, he became an entrepreneur and in the last 15 years has been created in over 7 companies and 15 products, some of which failed, some of which did well and were sold, and some of which were acquired. He has also published over 40 articles in various mediums and mentors entrepreneurs and students in a number of various non-profit associations.
Dr. Joseph has worked extensively across the HR domain. Another startup he co-founded. “Truemen Management Consultants” was the 1st consultancy firm in the world to get a SIX-SIGMA certification in recruitment. They are also the “world’s youngest HR company” to receive an ISO 9001:2000 certification, having achieved it in just 19 months since incorporation from TUV.
Dr. Joseph has also written 2 books in Health Economics published by John Wiley & Sons
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