Recently, while delivering the YB Chavan Memorial Lecture at Mantralaya on Monday, Reserve Bank Governor Raghuram Rajan advocated that job creation is the prime need for the society. And steps should be taken to encourage the startup culture in country, thereby easing business environment for startups, lighter regulations for small firms and better social security.
Here is a quick snapshot of his view points:
Opening of new small banks: As disclosed by the Governor, RBI is planning to open 18 new banks in form of payments banks and small banks.
As small finance banks become operational, following the central bank’s decision to issue 10 such licences, access to funds for startups would become easier, Rajan said. Punjab-based Capital Local Area Bank became the first small finance bank to begin operations this Sunday. The others are expected to launch later this year or early next year.
Also, RBI would be easing out regulations by issuing master circulars aggregating scattered rules, and removing old regulations which have become redundant but still in the statute..
Easing Startup Regulations: He stressed upon building cheap and quick exit policy, along with upgrading the vocational courses to meet the demands of current scenario. The bankruptcy code, once passed and implemented, would address this issue, he said.
“We need to expand people skills in India. Dalit entrepreneurs that I have met have not come from the IITs or the IIMs but through vocational training courses. Things like electrical and welding works are not easy to do, especially with modern machinery.”