Do­ers and Dream­ers

In­dian en­tre­pre­neur­ial ven­tures have the po­ten­tial to drive the coun­try’s econ­omy to new heights.

Southasia - - CONTENTS - By Mahrukh Fa­rooq The writer is an as­sis­tant edi­tor at Slo­gan and has an in­ter­est in ad­ver­tis­ing, me­dia and public re­la­tions.

Asa re­sult of lib­er­al­i­sa­tion con­ducted on be­half of the gov­ern­ment be­tween the late 1990s and early 2000s, In­dia’s eco­nomic growth in­creased rapidly to a whop­ping 7.4% in 2011. Although the GDP growth of the coun­try has slipped to a lit­tle be­low 5% as of 2014, there are still many in­di­ca­tions that In­dia is do­ing much bet­ter than its coun­ter­parts - its cur­rent ac­count deficit has de­creased with the last quar­ter see­ing the low­est deficit in 5 years. Thanks to im­proved ex­ports and lower gold im­ports, in­fla­tion has de­clined to the low­est point it has ever been in 4 years. The In­dian ru­pee has sta­bi­lized and cor­po­rate earn­ings seem to be im­prov­ing. Much of th­ese de­vel­op­ments can be cred­ited to In­dia’s grow­ing base of en­trepreneurs and in­no­va­tors whose cre­ative ideas have be­come thriv­ing busi­ness en­ter­prises.

Ac­cord­ing to a re­port ti­tled, ‘En­trepreneur­ship in In­dia’, which was de­vel­oped by the Na­tional Knowl­edge Com­mis­sion (NKC) in 2008, the to­tal num­ber of en­tre­pre­neur­ial ven­tures had grown sub­stan­tially. This had thereby con­trib­uted to the wealth of the econ­omy as well as pro­vided greater sources of em­ploy­ment to the In­dian work­force. Much has taken place since then with many bud­ding en­trepreneurs putting their in­no­va­tive ideas to the test and com­ing up with com­pet­i­tive busi­nesses of­fer­ing cut­ting-edge so­lu­tions. To put things in per­spec­tive, less than 1% of star­tups were founded by stu­dents who had just grad­u­ated from col­lege; to­day, nearly 7 years later, that fig­ure has jumped to 3%.

The trend, there­fore, is ev­i­dent; with over 3,100 star­tups cur­rently in op­er­a­tion, the com­ing few years are to be seen, as quoted by some ex­perts, as the ‘golden era’ of In­dian en­trepreneur­ship. Ac­cord­ing to the Fi­nance Min­istry’s Eco­nomic Sur­vey

for 2014-2015, tech star­tups in In­dia are to wit­ness a max­i­mum growth with rev­enues from soft­ware prod­ucts and ser­vices for 2015-2016 grow­ing at a rate of 12%-14%. Other pro­jec­tions in­clude the steady migration from tra­di­tional re­tail to mod­ern re­tail (i.e. on­line busi­ness), though the lat­ter still only ac­counts for 8% of the to­tal mar­ket. In ad­di­tion, it is ex­pected that In­dia’s e-com­merce mar­ket is ex­pected to grow by more than 50% in the next 5 years.

In re­sponse to th­ese ma­jor de­vel­op­ments, the gov­ern­ment is mak­ing dras­tic changes to its poli­cies di­rected to­wards startup and small and medium en­ter­prises ( SMEs) in or­der to en­sure a strong frame­work within which th­ese busi­nesses can op­er­ate. Sin­gle win­dow clear­ances, tax benefits and sub­si­dized re­sources are some of the in­cen­tives that are be­ing of­fered. One ma­jor in­cen­tive is the al­lot­ment of Rs. 1,000 crore to the en­tre­pre­neur­ial sec­tor as part of the coun­try’s Union Bud­get 2015 which was pre­sented by the Fi­nance Min­is­ter Arun Jait­ley in the Lok Sabha. The funds, in ques­tion, will be kept aside for the set­ting up of a mech­a­nism for Self-Em­ploy­ment and Tal­ent Uti­liza­tion (SETU). This sys­tem will be a Techno-Fi­nan­cial, In­cu­ba­tion and Fa­cil­i­ta­tion Pro­gramme that sup­ports all as­pects of startup busi­nesses and other selfem­ploy­ment ac­tiv­i­ties, par­tic­u­larly in tech­nol­ogy-driven ar­eas. Ac­cord­ing to Arun Jait­ley, is­sues re­lated to rais­ing ven­ture cap­i­tal, in­cu­ba­tion fa­cil­i­ties and the ease of do­ing busi­ness need to be ad­dressed im­me­di­ately in or­der to en­sure the cre­ation of jobs as well as the steady flow of in­come.

As far as In­dia’s en­trepreneurs are con­cerned, this pol­icy could not have come at a bet­ter time. Cur­rently, there is an ab­sence of ad­e­quate fund­ing cen­ters for bud­ding en­trepreneurs, re­sult­ing in a void for ap­pro­pri­ate cap­i­tal for busi­nesses. Ac­cord­ing to the NKC re­port in 2008, nearly 63% of en­trepreneurs were self-fi­nanced, whereas other sources of funds pre­sented were in the form of banks, ven­ture cap­i­tal (VC), an­gel in­vestors and state fi­nance cor­po­ra­tions. Amongst the en­trepreneurs who turned to banks for funds, 61% did re­ceive the re­quired fi­nances. Yet, the pre­vail­ing per­cep­tion re­gard­ing the ease with which in­di­vid­u­als can ac­quire funds at the in­tro­duc­tory stage is far from pos­i­tive. “By the time a great idea gets ap­proval and the funds ar­rive, the peo­ple be­hind the ideas move on to ac­cept high-pack­age jobs in multi­na­tional com­pa­nies, now this big boost from the gov­ern­ment will help the bud­ding en­trepreneurs in mak­ing big” said Mr. Ab­hishek Sri­vas­tava, SED’s Na­tional Head for Brand and Mar­ket­ing Com­mu­ni­ca­tion. SED (Stu­dent En­trepreneur­ship Devel­op­ment) is a non-profit or­gan­i­sa­tion formed in Fe­bru­ary 2014 that gives as­pir­ing en­trepreneurs a plat­form through which they can present their busi­ness plans to a panel of lead­ing busi­ness and cor­po­rate ex­perts, who can then guide them and pro­vide them with funds when­ever nec­es­sary. “The num­ber of en­trepreneurs set­ting up shop each year has tripled com­pared to 2008. But there is a long way to go to de­velop an en­tre­pre­neur­ial mind­set among stu­dents and their par­ents,” added Mr. Ab­hishek.

Re­gard­less of whether the mind­set ex­ists or not, the de­sire to ‘make it big’ by com­ing up with the ‘next big thing’ is pretty strong. This is ev­i­dent by the trend set by Sachin Bansal and Binny Bansal, two grad­u­ates of IIT who left high pay­ing jobs at Ama­zon. com to come with their very own e-com­merce plat­form called Flip­kart in 2007. Ini­tially a book-sell­ing web­site, the com­pany even­tu­ally grew to ac­quire mul­ti­ple plat­forms, in­clud­ing Myn­tra, WeRead, Chak­pak. com, Let­ and Mime360. Cur­rently, Flip­kart owns as­sets worth $12 bil­lion and em­ploys more than 16,000 peo­ple.

With so many ex­am­ples for as­pir­ing en­trepreneurs to seek in­spi­ra­tion from, it is no won­der that an in­creas­ing num­ber of young In­dian peo­ple are tak­ing the leap and start­ing their own busi­nesses. Af­ter all, what is re­quired is the ini­tia­tive as Nolan Bush­nell elo­quently puts it, “The crit­i­cal in­gre­di­ent is get­ting off your butt and do­ing some­thing. It’s as sim­ple as that. A lot of peo­ple have ideas, but there are few who de­cide to do some­thing about them now. Not to­mor­row. Not next week. But to­day. The true en­tre­pre­neur is a doer, not a dreamer.”

Amongst the en­trepreneurs who turned to banks for funds, 61% did re­ceive the re­quired fi­nances.

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