With BJP set to increase its tally in Karnataka, is startup capital of India staring at political instability?

Startup capital of India Bengaluru will mostly likely witness a political slugfest, with the current Janata Dal and Congress-led coalition government in Karnataka hanging in delicate balance after early trends of the General Election results indicated 24 seats for the BJP.

As per the latest trends, the BJP is leading in 24 out of the 28 Parliamentary constituencies with the rest by Janata Dal (Secular) and Congress. The state is ruled by the Janata Dal (Secular) and Congress, and though these results will not have a direct impact on the government in the State, it is likely to have a bearing on the current coalition partnership.

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The startups based in Bengaluru are probably not directly dependent on the government for their growth but always seek for a proactive engagement which can broaden the scope of the ecosystem. 

Queried whether startups will be impacted due to political instability in Karnataka, V Balakrishnan, chairman, Exfinity Ventures, says, “Definitely. It will have a bearing. Some of the regulations concerning the startups are getting stuck at the government level.” He cited the example of rules governing the bike taxis segment where there is no clarity as yet.

Bengaluru is already home to some of the leading lights of the new economy which includes startups like Ola, Swiggy, and Flipkart, to name a few and attracts investments worth billions of dollars from across the globe.

The Karnataka government is led by Chief Minister H D Kumaraswamy from the Janata Dal (Secular) through a coalition with the Congress, but their majority in the Assembly hangs in balance with a slight lead of 10 members. BJP, which is the main Opposition in Karnataka, can now smell an opportunity to get back into power in the state once again.

It has been an uneasy relationship between the coalition partners since the state government was formed in May last year.  This does not bode well for the corporates and startups based out of Bengaluru.

The previous Congress government had the proactive IT minister Priyank Kharge who championed the issues on behalf of the startups. Now, in the changed scenario, which might witness some political realignment, it may lead to uncertain times.

This may also send conflicting signals to the global investor community who seek stability and continuity in policies. It is no doubt that a proactive government is a welcome sign for investments to flow in.

However, startups in India have thrived despite changes in the government and hopefully it will not be any different this time too.

Also read: Back in the driver's seat: two days on, Karnataka lifts the six-month ban on Ola