Indigenous innovation, better policies: How the industry reacted to PM Modi’s Startup India

After announcing the ‘Startup India, Stand Up’ initiative to boost startups in India, PM Narendra Modi has set the ball rolling with the Startup action plan. He released a 30-page action plan that makes the journey smoother for startups and helps them grow.

The industry has welcomed the initiative and hopes to see much more indigenous innovation in the days to come. Here’s a look at what some insiders have to say.

Shaifali Agarwal Holani,Founder and CEO,EasyFix – a labour development and construction focused company feels that India has sharpest brains and this initiative will give a platform to many enthusiastic but under confident talents to come out of their ordeal. “Encouraging privatisation will speed the pace at which India is developing and we will become a developed country soon,” says Holani.

Rajiv Srivatsa, Founder, Chief Operating Officer, Urban Ladder seconds this sentiment of encouragement. “It is encouraging to see the kind of attention the startup community is getting from the central government. It re-instills faith in the path many of us (entrepreneurs) have chosen. I’m confident the government will play a significant role to support the ecosystem, and help us build truly world class ‘Made in India’ companies. With introduction of self certification compliance and easier patent laws, entrepreneurs will be able to spend more mind-space on innovation. The move to make exits simpler is also encouraging and will encourage more risk taking and hence, disruption.”

Mohit Mittal, founder and CEO of Voodoo welcomes the move by PM Modi to open 7 research parks in different IITs with a 100 crore backing each. “Exposure to a facility like the research park facilitated many a budding entrepreneurs and friends with funding and guidance. Scaling it to seven other institutes would definitely help the budding startup enthusiasts right from their first day in college, and that’s really paramount to their future success. One has to start early and fail early to really learn the intricacies of scaling a company, college students should welcome this move with open arms,” Mittal says. He started up his first company while studying at IIT Madras.

Talking about the government’s emphasis on making healthcare affordable via technology, Saurabh Arora, CEO, Lybrate, the online doctor consultation platform, says, “The Startup Action Plan unveiled by Prime Minister Narendra Modi is very encouraging, dynamic and invigorating. Measures like single point contact, patent protection, creation of funds of funds and on top of all tax incentives will provide a huge boost to the entire startup ecosystem and propel startups to the next level. The government is very supportive and believes in the tremendous potential of entrepreneurial ventures and how immensely they can contribute to the socio-economic growth of the country. The steps announced will further spur entrepreneurial mindset in India. The government has set the ball rolling for startups to excel and let them solve real problems facing the people of the country.”

Bureaucratic bottlenecks often hamper the growth of startups and the change in policies, relaxation of tax and compliance norms also has been received positively. “Patent fee reduction of 80 percent will be huge for IP based startups who can not only protect their intellectual property , but patents once registered add to tangible valuation increase,” says Swati Gupta, CEO and founder of Industrybuying.com. She adds that no inspections for three years will reduce the regulatory burden related to VAT set up in new states, warehouse procedures , new factory set ups and much more physical infrastructure related start ups.”

Also talking about tax and ‘License Raj’, Dinesh Goel, Co-Founder & CEO, AasaanJobs-a recruitment portal for entry level and blue collar jobs says, “The salient points of the Startup India initiative announced by PM Narendra Modi – tax exemption for incubators and startups, IPR protection, patent fee reduction, setting up of research parks across IITs and IISC and a corpus of Rs. 10,000 crore to be utilised for startups – all look quite promising in terms of attracting the best talent from far and wide to help India reach its potential.

Other measures such as the exemption from capital gains tax when investing one’s own wealth in a startup will ensure that many jobs are created in every level and human resource and talent acquisition will no longer be a bottleneck. Apart from this, no inspection for the first 3 years and self-certification for statutory compliance will enable startups to hire in bulk and scale up their operations, creating a cascading effect as far as job creation is concerned.” He feels the true test of the government will now lie in how the policies are unfurled in the future to cut down red tape and ‘escape the License Raj’, as pointed out by Jaitley in his speech.

Tax and compliance seems to be the industry favourite point to talk about. Amit Ramani, CEO, Awfis Space Solutions says, “India’s start-up ecosystem and its players have been evolving at a phenomenal pace in the recent years. The Government through the Start-up India campaign has chalked out ambitious some guidelines in a bid to propel start-up activity and innovation in the world’s fastest growing economy. Reforms on the income tax exemption for three years, capital gains tax waver, and a Rs 10,000 crore start-up fund will play a pivotal role in further fuelling the country’s start-up activity. In addition to this, push for practices such as the single day registration, will definitely have a positive impact on the start-up ecosystem and reduce compliances and clearances.”

“The initiative launched by PM Modi today will surely set an enabling and conducive environment for startups in India. We are overwhelmed to have such support from the Government which will certainly make a big boom in the Indian startup ecosystem to fuel the economy and create new age jobs. The policies announced today at the program, open doors for massive opportunities, boost further investments and innovations. We look forward to implementation of Tax framework for startups and reduced regulations,” says Prafulla Mathur, Founder and CEO, WudStay also hoping for smoother operations in the future.

The backbone for startups – faster, reliable and ubiquitous mobile connectivity is also being talked about with this update. “It is great to see the nation finally giving the much needed attention to the startup space. Government should make the necessary changes in the company laws to make incorporating startups, fund raising, issuing sweat equity etc. much easier so that entrepreneurs can focus on running the business than spending time with consultants and lawyers. Reliable, fast Internet and ubiquitous mobile connectivity are the basic necessity for our startups to build compelling value propositions for the global audience. It is imperative that government helps & enforces telecom operators and ISPs to provide quality services,” feels Sony Joy, Founder and CEO of Chillr, a mobile app for peer-to-peer and peer-to-merchant payment to anyone in the phone book.

Joy believes that giving incentive to citizens for using digital means of reaching out to government departments and making payments digitally can go a long way in reducing corruption and increasing the efficiency of the economy. Many advanced countries have in the past offered such discounts to boost digital payments at retailers and these measures have helped them earn great economic dividends later on.

Talking about expectations from the initiative, Sairee Chahal, founder of SHEROES.in says that she feels that the younger generation will be inspired and motivated to move from being job seekers to become job creators. She anticipates a change in entrepreneurial policies which were drafted mainly for SME kind of organisations and catered to the manufacturing sector. “Today’s startups work with tech mainly focusing upon product and service kind of offerings. They require different kind of resources and have much lower input investments.” Chahal hopes that more women entrepreneurs take benefit of the initiative.

Prashant Rai, Founder and CEO, OneTimeJobs voices his opinion about the Startup India initiative being more than just about IT or the digital world. “The Start-up India initiative is not just about the IT or digital world, but an effort to assist people starting new business ventures, especially those involved in innovation. Although government is helping the startups in raising funds and help them grow on a wider scale, we would request the government on reducing the taxes on service industries. We would need government’s support like the one on Smart City initiative. GST implementation is also a good way out considering the current scenario in business. Government should also help in making the internet connection available to all including the lower middle class and others so that people actively use apps for accessing startups’ services and connection with the real world.