In a few hours, the fate of the next government of the world’s largest democracy will be decided. The 2019 General Elections of India saw 600 million votes cast, out of the 900 million eligible voters.
As the 17th Lok Sabha is formed, so will the fate of the country for the next five years - all aspects of it. In the last five years, our fast-growing startup ecosystem has seen several highs and lows. Last year alone, we added eight unicorns. And in the first five months of this year, we already have three new members in the unicorn club.
That’s not all. As of last year, India also moved up 23 ranks in ease of doing business. But, even as the ecosystem is thriving and growing, stakeholders believe we can do more.
So, while we wait to see who our Prime Minister will be, here are a few expectations the Indian startup ecosystem has for the next five years.
Bring in regulation and policy clarity
Nikhil Sikri, Co-founder and CEO of Zolostays, a Bengaluru-based co-living startup, says,
“Regulations and policies need to be in sync with the rate at which the industry is growing. Technology companies need clarity in terms of what is right and what policy holds. The boundaries between sectors are blurring, and we need different rules to play around with.”
Adding to this, Sameer Maheshwari, Co-founder and CEO of Healthkart, a Gurugram-based omnichannel healthtech startup, says that with the growing visibility of startups in India, there needs to be a consistency in the policy framework.
“When you are dealing with tech companies, there needs to be a certain balance, predictability, and clarity in terms of policies,” says Sameer.
Shashank Kumar, Co-founder of agritech startup DeHaat, explains that whatever policy call the government takes will need to have a synergy between the State governments and the Centre to execute it.
He adds, “There is a need for right coordination, irrespective of who comes to power.”
Kanika Subbiah, Co-founder and CEO, The Wedding Wishlist, an online wedding registry startup in Chennai, point out that the amount of paperwork needed to start up in India is still high.
Nikhil agrees. He explains that during his latest funding round, the paperwork and compliances delayed the process by close to 50 days. While this is lesser than what it used to be, the amount of compliance details and paperwork required can nevertheless be reduced further.
“While a lot of policies and processes have helped startups, we need to be able to reduce these paperwork, licenses, and compliance issues as well. Like Singapore, India needs to be able to digitise everything,” says Kanika.
Sanjay Anandaram, investor and startup mentor, adds that the government is yet to work on the promise of a startup being able to set up a company in 30 minutes. “All these will help tremendously in the ease of doing business,” he says.
He believes increased automation can reduce friction and delays. With new-age tech companies born out of India, it is even more important to be able to digitise compliances and make them simpler.
Ease of investing
Sanjay explains that while the government has taken steps to address the dreaded issue of Angel Tax, it still needs to be completely removed from the books.
“We also need means for a domestic pool of capital pumped into Indian funds. Today, 90 percent of the money that VC funds get is from foreign sources of capital. The government needs to find ways and means to encourage family offices to invest in funds,” he says.
Anup Jain, Managing Partner, Orios Ventures, adds that while the government has moved the needle in terms of ease of doing business, it is now time to do so in terms of ease of investing for both foreign and domestic investors.
“If you look at capital gains option, it is mostly in the favour of listed companies. Investors take greater risks, so there need to be rewards, enabling long-term gains for both listed and non-listed companies,” he says.
According to Anup, the government also needs to create a forum where foreign funds can easily invest in Indian funds with less hassles and paperwork.
“The Indian government should now encourage our startups to take on the world. The foreign trade commissions can work as an active partner to promote startups in different parts of the globe. India is no longer the BPO for the world and it is time we take steps in that direction,” signs off Anup.