IN WONDERLAND OF START-UPS
NDA
government will hold a one day meeting on 23 July , to review the progress made
by various States on encouraging Start Ups and to exchange notes on best
practices being followed
This
comes on the heels of an interview given by Shri Kris Gopalkrishnan ( ex -
Infosys ) , where he gave out following statistics on the Start Up scenario ,
world-wide :
*
Successful in achieving some kind of scale : 10 %
*
Likely to survive ( struggling to exist )
: 20 %
*
Likely to fail and wind
up
: 70 %
Read
this in the background of the following news appearing in DNA ( 21 July , 2016
) :
#
For availing 3 year tax benefits , no of Start Ups which applied to DIPP till
July 18, 2016............ 728
#
Out of these, applicants who furnished the required documents and got
recognized as Start Up.... 180
#
Out of these, number which met the condition of being incorporated after 01
April 2016............... 16
#
Out of these 16 , no of applicants who furnished all the required documents for
tax exemption........ 3
#
Out of these three , NEW business found eligible for tax
exemption...............................................
1
No
surprise here , if you read the above in the background of my 6 month old
following blog :
------------------------------------------------------------------------------------------------------------------------------
Wednesday, 20 January
2016
No doubt , you have read the definition
of a Start Up in the Start Up Action Plan document
I have tried to envisage
below, how that might look on that Mobile App for Registration :
* Is yours a Private
Ltd Co / LLP / Partnership ?........................................... Yes
/ No
* Is your Company
more than 5 years old
?....................................................Yes / No
* Is your Start
Up formed by splitting an existing business ?............................ Yes
/ No
* In last 5 yrs, has
your turnover exceeded Rs 25 Crores ?.............................
Yes / No
* Is your product
/ service " DIFFERENTIATED " ?..........................................
Yes / No
* Is your product
/ service " COMMERCIAL " ?...............................................
Yes / No
* Is your product /
service " INNOVATIVE "
?................................................ Yes / No
* Is your product /
service driven by ,
" TECHNOLOGY
/ INTELLECTUAL PROPERTY " ? ............................................Yes
/ No
* Is your
product/service ,
" NEW /
SIGNIFICANTLY IMPROVED " version " ?....................
...................... Yes / No
* Does your product /
service add " VALUE " to customers ?................................ Yes
/ No
* Does your product /
service add " VALUE " to " WORKFLOW
" ?......................... Yes / No
* Have you got CERTIFICATION
from Inter-Ministerial Board ?............................ Yes / No
* Have you got RECOMMENDATION
from Incubator in Post Grad Indian College ?.......Yes /
No
MY
TAKE :
# Each year 12 million
persons join India's work force
# Of these , 3.5
million are Graduates
# Rest ( 8.5 million )
are 10th / 12th Standard pass or less
# No
more than 1,000 persons will fulfill above mentioned " Eligibility Criteria " for Start Up
# There will be endless
debates on the correct meaning of words in CAPITAL
letters above !
WHY
SUCH STRINGENT " ELIGIBILITY CRITERIA "
?
# At Rs 2.5 cr loan per
Start Up, Govt Fund of Rs 2500 Cr can
help only 1,000 Start Ups !
# Any relaxation in
" eligibility criteria " , may result in MILLIONs of persons queue-up
!
WHAT
IS THE IMPLICATION ?
# Funds are just
insufficient to help 12 million persons to become " Self Employed "
MY
SUGGESTION :
In India , we are talking of
getting " Unemployed " to launch " Start Ups "
Anywhere between 100 million
to 400 million " Unemployed " for whom neither Public Sector nor
Private Sector , is in any position to create jobs
We want them to become "
Self Employed " - what Shri Narendra Modi described in USA , as our "
PERSONAL SECTOR "
They are unlikely to launch
technology driven , Web-based businesses , even if their businesses require
them to have a Smart phone , on which , their customers can reach them
They aspire to become ( list
can run into 200 trades ! ) :
* Street-side
Vendors ( Vegetables / Shoes / Purses / Fruits / Trinkets )
* Craftsmen
( Plumber / Electrician / Carpenter / Repairer )
* Dhobi
/ Barber / Pan Beedi shop-owner / Tailor / Mochi
* Doodh-wala
/ Ruddi Paper-wala / Gajra-wala / Delivery Boy
* Cook /
Maid / Courier / Tuition Teacher / Beautician / Taxi Driver
* Home-cooked
Tiffin Service / Car wash / Gardening ......
How can we help millions of
JOBLESS to set up such MICRO
- BUSINESSES ?
By Government ( Central /
State / Municipal ) getting out of their way !
HOW ?
* No licenses / permits
/ approvals / conditions / criteria
* Simple online
registration on proposed Web site of DIPP for Start Ups
* No
personal Income tax for individuals
* No
Corporate Income tax for Start Ups for 10 years ( no chance of profit in first
3 years )
* Amnesty
Scheme for enabling Rs 10 million*crores of BLACK
MONEY to flow into such
Self
Employment
It is still not too late for
our Policy Makers will think " Out of Box " and implement :
Anything less just won't make
much of a difference !
-------------------------------------------------------------------------------------------------------------------------------
Incidentally
, during April-June 2016, some 108 Start Ups got $ 401 million from VC funds( excluding 3 big
deals )
(
ave of $ 3.7 milion = Approx Rs 25 Crore = Rs
2500 lakhs , each )
Consider
this in light of the fact that none of the " Self Employed " I mentioned
above , would need more than Rs 1 Lakh each , to get into " Self
Employment " on a footpath near you ! ( Fixed Capital + Working Capital )
That
means , money given by VC to just ONE start
up could have created 2500 " Self
Employed " jobs !
But
here is the real eye-opener , as far as these Self
Employed is concerned !
*
Successful in achieving some kind of
scale
: 0 %
*
Likely to survive (and feeding a family of 4
) : 100 %
*
Likely to fail and wind
up
: 0 %
--------------------------------------------------------------------------------------------------------------------------------
22
July 2016
www.hemenparekh.in / blogs
hemen
parekh
Marol
, Mumbai , India
(
M ) +91 - 98,67,55,08,08
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