One Year Of Narendra Modi Government: Has the PM done enough for entrepreneurs?

If there was one group looking forward to Narendra Modi’s leadership, it was the entrepreneurs. People who believed dhandha would get rolling, owners who felt processes would streamline, paperwork would reduce and startups that thought the government’s digital understanding would make it a facilitator of new age ideas. Adding to that thought-muscle was the 'Make In India' push in an effort to promote an industry that builds and grows in the country. Twelve months ago, these notions pumped up people, got them to roll up their sleeves and put new ideas to work. After one year of the government’s tenure, this community of entrepreneurs – both small and large – are probably pleased with the government’s intent, encouraged by some small steps, but disappointed in its speed of execution. One can argue that the expectations were palpable given how slow and sluggish things had become. But at this moment, entrepreneurs share some of the dismay of large business houses, without the latter’s luxury of establishment and experience. 

'We want to create job-creators': These were powerful words from the PM. India indeed needs to go back to creating a new generation of entrepreneurs besides the big names (Ambanis, Adanis, Hiranandanis) we know. How is the government turning this into a reality? Intent is widely talked about, but some action on the ground is yet awaited. For job creation, young businesses must scale up and that’s where the government needs to aide with simpler laws, less taxation and more clarity.

Beyond the degrees: The government has talked about focusing on skills, not degrees. It’s a good line to tow but the success of it lies in how quickly businesses can be set up and jobs can be generated. A restauranteur would tell you it takes seven-figure ‘speed money’ to get licenses. A startup-preneur would share that you are forced to hire agents to get tax certifications. 

Entrepreneurship fund: The 10,000 crore start-up fund remains elusive. What happened to it and which companies have benefitted? Sources say little has moved and no word or announcement from the government is making the situation dense around this otherwise attractive proposition. Today, India’s startups are funded by private investors or individuals but this government funding opportunity could be instrumental as a new avenue. 

Ease of doing business: Taxation in India can sap entrepreneurs already strapped for investment funds. There is a tax on everything. A tax on sponsorship money, a tax on events, a tax on all that is left after paying other taxes. Earlier, online advertising didn’t attract a service tax, but now that does too. Additionally, the government has not crystalised plans to sort out ‘Angel tax.’ Angel funds recognised by SEBI are exempt from this tax under the alternative investment fund category. However, the criteria to qualify as an angel fund are stringent. A start-up raising money from angel investors has to pay 33 percent of it as tax.

- There is some respite as the government is considering the use of one single form for incorporation of a company. While the form is a step forward, it’s the list of departments that need to hasten the process. For this reason perhaps India’s biggest startup Flipkart registered in Singapore? Perhaps this government needs to take cognizance of the fact that our tax laws and systems are more conducive to delays than decisions. In India, setting up a company takes anywhere from a month onwards, while you will hear success stories about companies being set up in hours, not days in some countries. Because of the current tax regime, startups are being compelled to incorporate overseas

- In the PM’s words, ‘sell anywhere but manufacture here.’ The 'Make in India' concept needs to go beyond big industry, big factory setups and note the good work being done by young entrepreneurs. Perhaps some attention to make in India digital companies, e-commerce firms and social sector and content set ups will be a boost to the start-up industry. 

There is no debate about the fact that new entrepreneurs make an economy robust. For India, the blow-hot, blow-cold relationship with foreign investors can find a befitting antidote in a solid base of entrepreneurs. These may well be the new wave of firms driven by ‘domestic consumption.’ Startups create jobs, build intellectual property and facilitate foreign direct investment by attracting venture capital. 

I remember one of the PM’s impressionable quotes where he said, "I am not the pradhan mantri, I am the pradhan sevak. If you work 12 hours, I will work 13". This was inspirational and resonated with entrepreneurs who end being founders and office boys of their new businesses. If the PM acts upon some of his intended schemes and his team updates entrepreneurs regularly of the efforts, we probably would have more than just a few new entrepreneurial giants.