Ever since the Centre launched the Fund of Funds for Startups (FFS) with a corpus of $1.5 Bn (INR 10K Cr) in January 2016, the DIPP (Department of Industrial Policy and Promotion) has been aiming to disburse the amount to startups latest by 2025. However, the funding disbursal has actually been coming down with every passing year.
So far, overall 128 startups have received a total funding of around $87.8 Mn (INR 600.5 Cr). However, instead of accelerating the fund disbursal, the DIPP’s allocation to SIDBI from the Funds of Funds for Startups came down to $14.6 Mn (INR 100 Cr) in FY17 from $73.1 Mn (INR 500 Cr) in the previous fiscal.
The number of startup beneficiaries under the Fund of Funds Scheme also came down to 58 in 2017-18 from 62 in the previous fiscal, said minister of state for commerce and industry C R Chaudhary in a written reply to the Rajya Sabha.
But where central schemes have slowed down in certain areas, Indian states have been furthering the Centre’s Startup India mission. They have been working hard to grow and promote their respective startup ecosystems with a view to climbing up the ladder of the state startup ranking framework defined by the Department of Industrial Policy and Promotion (DIPP).
Even as the country eagerly awaits the startup ranking results, the DIPP, along with the World Bank, recently released the Ease of Doing Business Index. Andhra Pradesh emerged as the winner, Gujarat, which once scored the top rank in 2015, has gone down to the 5th position.
Let’s take a look at the policy developments last month!
Andhra Tops DIPP’s Ease Of Doing Business Index, Delhi Falls To 23rd Rank
Andhra Pradesh scored the top position in the DIPP and World Bank’s jointly released Ease of Doing Business Index for states, leaving behind industry focussed states such as Gujarat, Maharashtra, Tamil Nadu, and Karnataka.
The next two spots for ease of doing business were grabbed by Telangana and Haryana respectively. It must be noted that Telangana dropped to the second spot after topping the ranking last year.
The rankings are in accordance with the third edition of the DIPP’s Business Reforms Action Plan (BRAP 2017). The final rankings were arrived at after combining “reform evidence score” and “feedback score”.
Retail, Telecom To Be Included In Ranking: DIPP
The DIPP also plans to include categories such as retail, telecom, and petroleum in the ease of doing a business ranking of states from next year. Once these sectors are included in the ranking, reforms carried out by states and Union territories will be taken on board by the DIPP and the World Bank.
“We are planning to add some more categories like last time we added tourism and health. I would like to include the retail sector because there is a lot to work in this. We have to take a call on this,” DIPP secretary Ramesh Abhishek said.
Based on the latest rankings, the ease-of-doing-business scorecard is divided into four parts: Top Achievers (above 95%, 9 states), Achievers (90-95%, 6 states), Fast Movers (80-90%, 3 states) and Aspires (Below 80%, 18 states).
Goa IT Policy Aims To Create 10K Jobs For Locals
With the aim of boosting the development of Goa using innovation and technology, chief minister Manohar Parrikar, along with Union minister for electronics and IT and law and justice Ravi Shankar Prasad, launched Goa IT Policy 2018 with the aim of creating 10K jobs.
With the new IT policy 2018, which will replace the state’s IT policy 2015, the Goa government plans to attract at least five large multinational IT companies and help create 8,000–10,000 jobs for locals.
The Goa IT policy 2018 focuses on infrastructure development, fiscal incentives, governance, and human resource development. The revised policy aims to remove bureaucratic hurdles by ushering in government reforms.
Under the Employee Subsidy Scheme, the state will also provide $36,573 and $73,147 of subsidies to MSMEs for hiring 60% or more Goans.
Beneficiaries of Goa IT Policy and Goa Startup policy will not be a part of the Employee Subsidy Scheme.
Gujarat Govt Provides $3.2 Mn Financial Aid To 175 Startups
Supporting the Centre’s Startup India movement, Gujarat government claims to have provided 175 startups with financial assistance worth $3.2 Mn (INR 22 Cr) over two years.
In the Electronic & IT/ITES Startup Policy (2016-21), the state government had set a target to facilitate the establishment of about 2,000 startup firms during the five-year period.
Gujarat stood third after Karnataka and Delhi in nurturing startups, as per DIPP.
It is being speculated that there are about 35 incubators in Gujarat against a target of 50 set under the 2016 policy. Apart from incentives offered under this policy, the state also has a Gujarat Startup/Innovation Scheme 2015 and Student Startup and Innovation Policy 2017.
In March 2018, Gujarat University launched its Startup and Innovation policy. The policy envisions the University as a hub of global standards for creating, nurturing and supporting innovative businesses across a variety of sectors.
Niti Aayog Proposes Blueprint For National Health Stack
The central government think tank, Niti Aayog, has unveiled the blueprint of the National Health Stack (NHS), a shared digital healthcare infrastructure. The blueprint is in line with the implementation of the Centre’s flagship scheme Ayushman Bharat and other public healthcare programmes in the country.
Ayushman Bharat aims to provide a medical coverage of $7,315 (INR 5 Lakh) annually per family and benefit more than 10 crore poor families in India. The Aayog has invited comments from all stakeholders on the consultation paper. The stakeholders can send in their comments by August 1, 2018.
According to a consultation paper entitled ‘National Health Stack Strategy an Approach’, the National Health Stack will facilitate the collection of comprehensive healthcare data across the country.
This will enable policymakers to further build their projections around upcoming outcomes, experiment with new services, as well as fill the existing gaps in the Indian healthcare industry.
The National Health Stack will provide foundational components that will be required for Ayushman Bharat and other health programmes in India.
The components include national health electronic registries, a coverage and claims platform, a federated personal health records framework, and a national health analytics platform, among others.
Ecommerce Policy To Promote Swadeshi Startups, RuPay
The central government aims to boost domestic startups through the recently submitted draft ecommerce policy, according to reports. Strengthening RuPay against Visa and Mastercard, the 19-page document circulated by the government explicitly talks about “boosting the domestic digital economy to find its rightful place with dominant and potentially non-competitive global players.”
Despite having been funded by global players at large, leading Indian startuppers such Sachin Bansal and Binny Bansal (of Flipkart), Bhavish Agrawal (Ola), and others have been asking the government to amend the Companies Act so that founders can retain control over their companies even if they have small stakes in them.
The policy also proposes a special plan that mandates ecommerce players to offer RuPay along with Visa and Mastercard in their payment options in online transactions. It also suggests the allocation of resources to improve the branding of RuPay with a view to change the perception that it’s a “poor man’s card.”
According to a TOI report, the draft policy has also proposed that global e-commerce platforms comply with Indian rules, a move that will impact purchases made by consumers from sites such as Alibaba. These sites will have to adhere to current procedures for payment systems, such as two-factor authentication, which are applicable to domestic companies.
Rajasthan Govt’s RajMegh To Offer Free Cloud Services To Startups
The Rajasthan government, which recently concluded the Rajasthan Digifest, has now announced that it will be extending cloud services to startups for free, and at a cheaper price to other state governments, PSUs and corporations under its RajMegh programme.
The Rajasthan government has launched its very own brand of IT infrastructure services, including cloud storage and data centre services, called RajMegh.
RajMegh leverages the Jaipur-based Tier IV Bhamashah State Data Centre, the first and only Tier IV data centre with uptime certification in the country, to provide these services.
The Tier IV data centre is designed to host mission-critical servers and computer systems, with fully redundant subsystems (cooling, power, network links, storage etc) and compartmentalised security zones controlled by biometric access controls methods.
Startups registered under the state’s iStart programme will be able to access RajMegh services for free. About 750 startups are registered under the iStart programme, of which over 100 are being incubated at present.
RajMegh’s infrastructure and services are not limited to startups. The Rajasthan government is extending the benefits of the Bhamashah State Data Centre to the entire country — other Indian state governments and their departments, all public sector undertakings (PSUs), financial services corporations, as well as other private companies.
Meanwhile, Madhya Pradesh government is organising a Startup yatra to improve awareness and encourage youth for entrepreneurship and innovation. Aimed to impact over 3000 entrepreneurs across the 13 cities of the state, the Madhya Pradesh edition will be travelling to thirteen cities and will conclude at a grand finale to be hosted at Indore.
While 11 states are yet to roll out their startup policies, most Indian states have taken a host of policy initiatives to leverage and facilitate their respective startup ecosystems. But these initiatives can’t really help bridge the infrastructural gap in Indian states.
Even as governments focus on growing their startup ecosystems, they should look at building a solid infrastructure — an essential building block for any industry.