“No doubt the Startup India Action Plan has provided various important exemptions and incentives to startups. However, the key question is this -Whether the Action Plan adequately addresses the irritants that make the Indian startup ecosystem unattractive? In our view, the answer is no,“ said the blog post. For creating a vibrant startup ecosystem, it is imperative that the investments from foreign sources are made easier.
A senior official of the industry said that while the is sue of convertible notes is a pressing one, there has been little respite on M&As, since there is no clarity on taxation of money kept in escrow accounts. “The reforms are stuck due to some archaic laws and till the time they don’t evolve the framework, everything they will do is a band-aid fix which may open loopholes for someone else,“ said the person who did not wish to be identified hinting at legislations such as FEMA (Foreign Exchange and Management Act), 1999.
The department of industrial policy and promotion was also keen to have universities offer a minor in entrepreneurship to their students. The proposal is yet to get a go-ahead from the ministry of HR development, said a source. In the blog, iSPIRT said that of the thirty four issues, ten each came under the Revenue Department and the RBI, nine came under the MCA, and the remaining came under multiple departments such as the DEA, DIPP, RBI, MCA, and Sebi.
Time for Consolidation
Now that the government has conducted the big bang meet and announced a package for startups, what lies ahead for aspiring entrepreneurs? The big unicorns need to consolidate, drive efficiencies and be ready for a shake-out. Opportunities are, no doubt, opening up for new ones in the domestic market, with open technology, growing smartphones and easier capital.Newer startups would do well to learn from leaders in India and abroad as they get ready to disrupt more areas. The government would do well to address shortfalls in infrastructure.