INDIA: Â In order to boost startups, the government would consider a slew of policies that could, among other things, enable pension funds as well as insurance firms such as LIC to invest in start-ups, according to Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek.
“LIC and pension funds must step in (in the start-up segment). Employees’ Provident Fund Organisation had recently taken steps to increase their exposure in stock markets. So definitely their money needs to be leveraged (for start-ups),” Abhishek said at the World Economic Forum’s India Economic Summit 2016.
Mr. Abhishek, who is in charge of DIPP, the nodal Central government department for start-ups and its related policy ‘Start-up India’, said he has personally written to over 100 corporates to utilize their Corporate Social Responsibility funds for start-ups and incubators. He said the government has already set up a Rs 10,000 crore Fund Of Funds, which will in four years help mobilize private investments worth around Rs 50,000 crore for investments into start-ups.
Mr. Abhishek was responding to a grievance put forward by Seedfund India Managing Partner Mahesh Murthy that large insurance firms such as LIC invests mainly in stock markets and in big companies that are in sectors such as cigarettes but not in start-ups. Srivatsan Rajan, chairman, Bain & Company India, said though insurance and pension companies have a large pool of funds, it has so far been very difficult for start-ups to access that resource due to complicated government regulations. “We need to find a way to open it (pension & insurance funds) up for start-ups,” he added
Vijay Shekhar Sharma, founder and chief executive officer (CEO), Paytm India, said large Indian companies and investors have not been aggressive and proactive enough regarding funding India-based start-ups. Ritesh Agarwal, founder and CEO, OYO Rooms, India, said it was the responsibility of start-ups to proactively inform lawmakers and government officials regarding the need for reforms in laws to ensure that they are in sync with the latest developments in the start-up sector.
Mr. Abhishek said the Centre has been trying to sensitize states on the need for supporting start-ups and incubators through their respective policies. Besides, the commerce & industry ministry has asked all the other ministries to annually make public their overall goods and services requirements and procure from start-ups as well. He asked start-ups to focus on solving problems in agriculture and manufacturing sectors and help create employment in those areas in addition to their focus on services sectors.
On complaints that online companies are being harassed by regulators and inspectors, Abhishek said the DIPP has taken up such issues with the concerned authorities. Several such incidents are happening as the law and law-enforcement agencies have not kept up pace with the emerging digital businesses, he said.
The DIPP has taken up with several state governments complaints regarding local inspectors harassing e-pharmacy companies for selling medicines online even with doctors’ prescription, Mr. Abhishek said. Similarly, the ceiling on the number of taxi cars in certain cities have been troubling online taxi cab aggregating firms, he said, adding that such artificial restrictions need to be done away with to help start-ups in the segment flourish. “There should not be any regulations that will choke the start-up ecosystem,” Mr. Abhishek said.
