|Shri Atul Chaturvedi, Additional Secretary, Department of Industrial Policy and Promotion|
|Shri Anil Agarwal , Joint Secretary, Department of Industrial Policy and Promotion|
|Shri Saurabh Srivastava , Co Founder and Former Chairman of NASSCOM|
|Ms. Shradha Sharma , Founder, CEO and Chief Editor of YourStory|
Record of Discussion
Subject: "India's Startup Phenomena: A Revolution in making"
Date : 7th August, 2018
Venue: BPST Main Lecture Hall, Parliament Library Building, New Delhi
At the outset, Shri Rahul Dev, Honorary Advisor, SRI welcomed the members of Parliament and the experts to the workshop on ‘India's Startup Phenomena: A Revolution in making’ held under the auspices of Speaker's Research Initiative on 07th August 2018. Referring to startups as ‘नवोद्यम’ (Navodyam) in Hindi, he defined it as the 'world of young entrepreneurs and their aspirations'.
Shri Atul Chaturvedi, AS, DIPP, through a Power Point Presentation, briefed the members of Parliament about the definition, recognition procedure, funding and benefits for startups launched by the Indian Prime Minister on 16th January 2016. The eligibility criteria laid down by DIPP ensured that any startup must be registered as a private company, limited liability partnership (LLP) or partnership firm, not more than 7 years should have elapsed since incorporation of the business entity (10 yrs for biotech), its turnover for any of the financial years should not have exceeded ₹ 25 Cr and it must have been working towards developing new or improving existing product/service.
The process of recognition as a ‘Startup’ is carried out through an online application. Entities are required to submit the online applications along with IP and other details such as founder and team, business model etc. Startup India Team evaluates proposals and takes action within 24 - 48 hrs. If suitable, then application is approved and in case where it is not suitable, then second chance is given to reapply.
Presently, 11,634 startups are recognized with the Government of India. On an average, 12 jobs have been created per startup. Approximately, 1, 06,618 jobs were reported by 9,091 startups. To provide further, the Government has simplified various processes such as fast track examination for grant of patent, income tax exemption, self certification and faster exit within 90 days. The Government has also created ₹ 10,000/- crores corpus for startups to be provided by March 2025.
The Government has provided following benefits for startups:
Shri Atul Chaturvedi further apprised about the following schemes/programmes being run by the Government for capacity building of startups:
The Government was also supporting Indian startups looking to expand to other countries. Further, under the State Starup Initiatives, 18 States have framed Startup policies providing framework of 7 areas of intervention and 38 action points. Under Startup India Yatra, the Government has launched offline initiative to promote and support grass root innovation coming from Tier 2 and 3 cities.
Following the presentation made by Shri Atul Chaturvedi, Shri Saurav Shrivastva, Co-Founder & Former Chairman, NASSCOM, Chairperson Emeritus, TIE, Delhi NCR and Founder, Angel Network discussed the startup initiatives. Giving a historical perspective, he said that India had always been entrepreneurial which contributed 25% of global GDP in the year 1700, same as China and Europe. However, colonization and subsequent licence permit quota raj brought India down. India progressed since liberalization in 1991 which resulted in 10 fold growth in its GDP from USD 2.7 billion to USD 2.6 trillion. India’s imports grew 19 fold from USD 24 billion to USD 460 billion, exports grew 17 fold from USD 18 billion to USD 303 billion and Forex reserves grew 70 fold from USD 6 billion to USD 425 billion.
He further said that India was poised for global leadership; however there were following challenges:
However, he added that along with the aforementioned challenges, there were also opportunities. He presented the following opportunities:
Emphasizing upon converting challenges into opportunities, he said that globally, innovative startups were the real engine for creating employment and economic growth. According to Kaufman report: US data between 1977–2005, except for 7 years, all net new jobs were created by startups. USA, Israel and other countries have transformed their economies by creating a vibrant entrepreneurial ecosystem. He underlined that India could also do the same and software industry had shown the way. Jumping from USD 50 million to over USD 160 billion in 25 years, India’s software industry was targeting USD 350 billion by 2025. In addition to providing 25% Forex earnings, it was the largest employer in organized sector and 5 of top 10 IT service companies globally were from India.
According to him, along with jobs, startups created innovative solutions that benefitted society and generated economic growth. India had world class entrepreneurs who saw its large population and their unmet needs as an opportunity. Innovative solutions leveraging technology could address challenges in healthcare, education, agriculture and related sectors. Further, Government focus on creating and enabling environment for startups had unleashed the power of entrepreneurship in India.
Terming India the New Startup Nation, he stated that India was the fastest growing startup hub globally with 26,000 startups driven by large, high growth markets across several sectors –internet/mobile, IT, education, healthcare, agriculture, cleantech, logistics, fintech, media/entertainment, biotech/pharma; lure of world class products at Indian price; increasing availability of risk capital across all stages; Government funds for startups; world class entrepreneurs with global ambitions but middle class values on cost; large, young talent pool at affordable costs; Government focus on creating enabling environment; successful role models and CXOs/Senior Execs/NRIs joining startups or starting ventures in India. He said that India hosted the youngest entrepreneurs in the world with 72% of founders who were below 35 years and there was 50 % growth of female entrepreneurs.
According to him, India was becoming the New Entrepreneurship Hub because of the following trends:
He further said that India was at an inflection point and the best was yet to come. He envisaged that India could assume the role of global leadership for following reasons;
Continuing the discussion on the subject, Smt. Shradha Sharma, founder and CEO, YourStory Media began by sharing her personal experience from her being a media person to a young entrepreneur. She said that startup meant use of technology in day-to-day things or activities. Giving examples of startups such as Bigbasket, Myntra, Flipcart, Amazon, she said that these companies were not dealing in new things but provided platforms to do day-to-day things online. Further, she gave examples of a number of Indian startups in medical field which were providing cost effective medical services for liver transplant, early detection of breast cancer, eye care etc.
She emphasized that technology was the key focus for global and local companies banking on growth. From a controlled economy in the 1990s, India became a global knowledge hub and destination, attracting talent and encouraging innovation. Innovations spurred startups and funding led to their strong valuations. She added that startups had become part of mainstream business, creating not just new products and solutions but also jobs.
She said that investors were pouring big money into Indian startups. Over USD 40 billion were invested between 2014 and 2018. Citing examples of 14 startups in the ‘Unicorn’ club with over USD 1 billion in valuation, she spoke about the success stories of the founders of Paytm, OYO and many other startups.
The question-answer session of the experts with the Members of Parliament commenced with a statement from a Member who said that foreign direct investment was more common in India than startups. However, success stories of many new entrepreneurs were encouraging and India’s future generation should know the stories of such successful entrepreneurs. To this, Shri Saurabh Srivastva added, today Indian entrepreneurs have confidence as well as global ambitions. Today’s startups do not want to be called merely India's biggest startup but are in the line of global leadership.
A Member of Parliament stressed upon the need for spreading awareness and motivating people about startups in small towns like Meerut. Shri Rahul Dev, Honorary Advisor, SRI also emphasized that the startup revolution should spread all over the country.
Smt. Shradha Sharma acknowledged that exposure was very important and successful entrepreneurs should motivate energetic youth of small towns.
An Hon’ble Member presented two dimensions of the subject- first, how to facilitate creation of startups in each parliamentary constituency and second, how the solutions being offered by promising innovative startups in the field of agriculture, low-cost healthcare and related sectors could be used at the ground level. He further added that technology based startups providing technological solutions could work from anywhere in the world. However, region-specific startups could also be created. Any region had certain advantages or certain issues which they would like to solve. For example, Chhattisgarh was bestowed with medicinal plants and biodiversity. He suggested that based on region-specific issues and advantages, theme-based startups could be created which would be beneficial to States.
Agreeing to this, a Member of Parliament stressed the importance of mental preparedness to create and run startups. Giving an example of his native State, he said that people in Assam would be more interested in investing money in business like hotels and restaurants etc. rather than startups. He further added that for creating region-based startups, investment along with productivity would be important and new generation had to come forward for this.
Commenting on the same, Smt. Shradha Sharma reiterated that there was a need for exposure and change in mentality. People should know the success stories of others, particularly of those who belonged to these States. They could organize some exposure programmes and impart training to others in their native States. Shri Rahul Dev opined that States should initiate such activities and call such startups to their states for training and exposure programmes.
Calling startups an interesting phenomenon, a Member of Parliament pointed out the success of many women Self- Help Groups (SHGs) which showed entrepreneurship skill among Indian women. He said that although, at micro levels, these SHGs were not startups, they could be as successful as startups if provided with technical, managerial and financial assistance.
Continuing the discussion, Shri Rahul Dev stressed upon the need to motivate people in their regional languages about startups. Replying to this, Smt. Shradha Sharma said that they had started Chhattisgarh growth story, among many others in Hindi. Shri Atul Chaturvedi added that there were seven Indian languages in which learning programme was given.
The workshop concluded with a vote of thanks to the members of Parliament and the experts.