Speaking at the launch event of the ‘Start-Up India’ initiative at the Vigyan Bhawan in New Delhi, Finance Minister Arun Jaitley said the programme is a landmark “campaign” because it will be the final break for businesses from the conventional license raj of India.
Mr Jaitley today announcing a few steps aimed at giving a bog boost to the entrepreneurial spirit in the country said the ‘Start-Up India’ initiative is aimed at encouraging entrepreneurship by giving them freedom from the government. “It is a final break from the conventional Licence Raj of India,” he said.
Elaborating on the point Jaitley said though India broke away from the shackles of Licence Raj – an era when the government wielded tight control over the economy in 1991 with the economic liberalisation, the government continued to exercise control over many key areas. This throttled the startups and entrepreneur spirit in the country.
“We ostensibly broke away with it (Licence Raj) in 1991. But the break was only partial, because who would be funded, there was an invisible role of the state, control over land permissions, foreign investment proposals, and environmental clearances,” he said. “And unless the political nods came, to venture into newer areas which involved a lot of capital, an entrepreneur was reluctant.”
Our effort over the last few years, has been to restrict the role of the state, essentially as a facilitator or in policy domain. When PM Modi was voted to power in 2014, if I look back at the changes and the direction of the changes in which we have moved in, I think some of them are extremely significant. I find that the traffic of industry visiting North block has almost ended. There are no files of FIPB clearances which are pending.
Mr Jaitley, in a lighter note, also noted the difference about the event. “I must confess that we normally see a large number of formal launches in this plenary hall of Vigyan Bhawan. But this one is with a difference. Because it is probably the first time I see a large potential entrepreneurs here most of whom I am not familiar with. Otherwise, at these formal launches we always have the usual ‘suspects and that itself is indicative of the break that Start-Up India is going to make.”
Jaitley noted that the ‘Start-Up India’ has been the brainchild of PM Modi. Last year in the budget, I had even suggested a start-up fund for helping the creation of start-ups. Needless to say, both the banking system and the government would make the resources available.
“This programme will help create jobs in the country at a time when the conventional private sector is facing several challenges. The government has limited potential to create jobs within the governmental system. The private sector’s own expansion itself has thrown up challenges because they have overstretched themselves,” he said, referring to corporate India’s very high debt levels.
Mr Jaitley also announced that the government will in the next Budget scrap the tax on seed funding by ange investors, which has been identified as a major impediment for entrepreneurs to get domestic funds.
We have already worked upon an entrepreneur-friendly taxation regime; there are some steps that can be taken by notifications, which would be taken forth will. Others require a legislative provision, which can only come as a part of the finance bill when the next budget is presented, in order to create a friendly taxation regime for start-ups, Jaitley said.