Startup India’s real start to come in the way it can access funds

As Prime Minister Narendra Modi has set the ball rolling with the announcement of his 19-point Startup action plan amid much fanfare, the move aimed at boosting employment generation and wealth creation has generated huge enthusiasm and been largely welcomed by the industry.

As India waits to see much more indigenous innovation in the days to come, here are key VCs, investors and startups reflecting on the various provisions of the Startup Action plan, and how they feel it will impact the startup industry in the recent future. Take a look:

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Vinod Murali, Managing Director, Innoven Capital:

The Government already has a credit guarantee scheme under CGTMSE which has been operational but start-ups have struggled to get through the due process with different PSU banks to avail funds. The key here is to improve credit delivery and educate banks well enough to support the Prime Minister’s vision. Start-ups require capital for growth which can be in the form of debt or equity and it is important to find appropriate partners who understand their lifecycle and aspirations.

Saurabh Shrivastava, Chairman, Indian Angel Network

“Specific to the PM's announcements, the 3 year window for self certification will free startups from the rent seeking inspector raj and is very welcome as is the 3 month window for closing down a startup, which would be great if it applied to all companies. The tax break is welcome though most startups take longer to be profitable. Most of all, his signal for change and recognition of the critical role that startups can play in employment creation, economic growth and solving India's challenges through innovation was fantastic. That will now percolate through all levels of politics and bureaucracy and will be a game changer for India.”

Archit Gupta, CEO & Founder, ClearTax.in:

The government has shown good intent to keep the start-up eco system buoyant and be an enabler in the process. Some of the moves are very positive if implemented, especially around reduced compliance. It is hoped in due course all the announcements shall be delivered. As announced, mobile app shall be launched on 1st April.

The ease of opening a start-up has been simplified, can be done through a mobile app and will take a day. A shorter form shall be applicable. Earlier setting up a company required various registrations will all requiring the same set of documents, address proof, PAN, TAN etc. This will help start-ups focus on their work and avoid unnecessary delays.

Self-certification to laws such as payment of gratuity act, labour laws, employees’ provident fund act, the ESI act etc. No need for obtaining physical certificates for compliance with these laws. In case of the labour laws, no inspections will be conducted for a period of 3 years.The government is moving towards digital compliance which is necessary to support growth.Given ClearTax is more than 3 years old, not many of the compliance steps are applicable to us right now. But we are sure to benefit from other proposals, such as setting up of a ‘Start up India hub’ and relaxed capital gains tax norms. We look forward to further details in the upcoming budget.

Shashank ND, Founder & CEO, Practo

“With the Start Up Action plan, we will see more young entrepreneurs take the risk of starting their own venture and building innovative solutions to solve meaningful problems for Indian as well as for the global audience. I think the Insolvency and Bankruptcy Bill that will allow startups to exit faster, within 90 days is a great step towards encouraging more people to take the plunge of starting a new venture, without the fear of failure. We at Practo believe that acquisitions are a great way to grow together and move faster, and with this bill, we hope to see more startups collaborate and solve the problems faster, with a solution that is scalable for a larger audience.

The relaxation of the financial and labour norms is also a great step towards making things simpler for young startups so they can focus on innovation without getting entangled in some of these norms that are more applicable to larger entities. I am extremely excited about the Atal Innovation Mission, this will help foster innovation at a grass root level among students in schools and colleges, which will in turn encourage more youngsters to enter the field of entrepreneurship and innovate and create some ground breaking products that will be used by people around the world. India is already a leading startup hub and I am convinced that with the right support from the government, it can rapidly become the innovation hub of the world.”

Anurag Avula, CEO and Founder, Shopmatic:

The easing of the financial and labour norms is a fantastic initiative. It encourages new entrepreneurs and start-ups to focus on innovation without having to struggle with additional taxes etc. With progressive initiatives by the Government, India is bound to succeed in its mission to be leading the charge in being the Start Up Capital of the world. Shopmatic started with the intent of helping anyone sell online. Any progressive initiative that benefits business growth for our merchants and individual entrepreneurs, is a step in a positive direction.

Ajith Karimpana, CEO & Founder, Furlenco:

Income tax exemption for three years is sufficiently interesting. Most of the new age startups which are on the growth path will seldom be able to generate profits in the first three years. Startups like other companies would certainly benefit more with the GST since that has a larger impact on the bottomline and cashflow companies.

Companies are setting up head offices in Singapore for multitude of reasons and one of the primary reasons is India public market regulations. SEBI regulation easing and GST would have more impact on bringing back startups to India. Furlenco is registered in India. We have high hopes on the government easing rules and we will try our best not to go out of the country. The startup action plan looks promising. Now we need to wait and see how it is executed.

Ashutosh Pande, Founder & Chief Innovation officer, PaySe

“The recent announcements made by the Prime Minister on the Startup India, Standup India initiative highlights Government’s focus on fostering innovation in the country. The start-up India action plan works on the lines of entrepreneurial spirit, making it fast paced with the introduction of Mobile Apps for registration of the Start-up, lesser number of days to file patents and lower fee for acquiring patents. Since Intellectual Property is the asset of a start-up we hope to see a forum, possibly a special fast track court, for efficient disposal of IP infringement case. Financial Inclusion has been highlighted as an area ripe for innovation. Our patent pending and disruptive technology PaySe™ delivers digital cash; it is cash without the paper just as digital music is music without the CD. PaySe™ takes DBT funds digitally to the hands of the recipient as opposed to their bank account. This enables banks and MFI’s to deliver daily loan (as less as a 100 rupee) to those less fortunate. With the start-up India action plan, the Government has tried to bring favourable policies for start-ups, promising a conducive environments for entrepreneurs.”

(Image credits: BCCL)