#BQDebates: Can Rahul Gandhi’s Plan Be A Game Changer For Startups?
Can Rahul Gandhi’s plan help boost entrepreneurship in India? Here’s what venture capitalists have to say.
Congress President Rahul Gandhi promised a host of incentives for startups if his party is voted to power in the general election.
- Some of the measures promised include:
- No permissions needed for the first three years of any new business.
- Goodbye angel tax.
- Incentives and tax credits based on how many jobs startups create.
- Easy bank credit.
But is it really feasible? How effective will it be for startups? BloombergQuint speaks to venture capitalists to get their views.
Government Should Make It Easy For Businesses To Fail
- Sandeep Murthy, Partner, Lightbox Venture Capital
Young companies need space to experiment, to nurture ideas and bloom. This is something that cuts through political rhetoric; it’s a message that needs to reflect in both words and actions, starting right at the top and going all the way down.
Any government that comes into power has to make it easy to run business, and just as easy for businesses to fail.
Policies have to be centred around the contingency that tomorrow, if forces leave me in a position that I need to shut down my company, that process has to be as quick and painless as possible.
Fundamentally, I would push back and say ‘less government the better’ for young startups. You can’t impose the same rules on an infant as you would an adult. The way you regulate established companies at the scale of say, Reliance Industries Ltd., has to be very different from how you work with startups.
It’s clear that every political party recognises how much startups contribute to the economy at all levels—from wealth creation to more jobs, all through products designed to serve Indians better by making their lives easier.
It’s encouraging to see that the intent is definitely there. We want to see that same intent trickles down to the people on the ground who actually enforce the policies.
We’ve observed first-hand that tax incentives and government initiatives don’t always align. For instance, with angel tax, entrepreneurs faced a lot of harassment from collectors, particularly when they had managed to scale, and earn high valuations, against the odds. Instead of supporting budding founders, the message this sends is demotivating and restrictive.
And if other countries are any indication, it’s by loosening the reins, taking cues from the private sector and doing what is necessary to help it flourish.
Startups Don’t Need Freebies
- Anirudh Damani, Managing Partner, Artha Venture Fund
I would want to look at the finer details of the incentives. Giving anybody a free hand without any checks and balances is not to be celebrated. One needs to be careful of this. Once the misusing of that starts, then it will have ramifications on the entire industry.
Startups don’t need freebies. Startups want better co-ordination with the bureaucracy with regards to working of the startups.
Entrepreneurship Issues Should Not Just Be An Election Manifesto
- Abey Zachariah, Co-Founder & CEO, Goodbox
It is important to look at the finer details of how these things will be implemented. Having said that, we expect political parties to take up startup or entrepreneurship issues irrespective of whether they are in power or not, and it shouldn’t be just election manifesto.
Need Of The Hour Is Lesser Regulations, Not More Claims
- Utsav Somani, Partner, AngelList India
These are very interesting claims. If there is even a hint of genuineness in them—it can be a big booster to the groundwork laid by the Startup India initiative kickstarted by the prime minister.
The need of the hour is lesser regulations and not more claims.
The startup world revolves on hope and is fuelled by the dreams of fearless entrepreneurs. I am certain that they will work around any difficulties that arise and come out stronger, better equipped after dealing with the red-tape regulations.
Need More Details To Assess Impact Of Such Statements
- Sunil K Goyal, Managing Director, YourNest
The major issue of angel tax has significantly been taken care of. As far as other incentives are concerned, more details need to be provided to assess its impact.
If there is a plan in place to extend the credit line to startups for TDS (tax deducted at source) and GST liability until the time the ventures get the payment from the customers, it will be a mega relief for the startups.
Glad Startups At Centre Stage In An Election Year
- Padmaja Ruparel, Co-Founder, Indian Angel Network
I'm glad that the startups are at the centre stage in an election year, and the demon of angel tax has been laid to rest by the present government.
Heartwarming To See ‘Real Issues’ Being Addressed
- K Ganesh, Serial Entrepreneur & Promoter, Growth Story
These are real issues that need to be addressed. The fact that both the parties are talking about the startup ecosystem or entrepreneurship is extremely heartwarming. From the vote perspective, it’s not a big vote bank as well, but it will lead to job creation that will only happen in the startup sector, as employment is decreasing in the traditional sectors.