 "Nasscom pushes for a National Entrepreneurship Mission")
In order to set up a conducive eco-system for start-ups to grow in the country, the IT industry body Nasscom wants the government to create a National Entrepreneurship Mission. As part of its pre-budget recommendations, the industry body has asked the government to have a holistic approach towards nurturing innovation in the technology sector by setting up a mission mode project.
The idea is to have a one-stop-shop kind of a set-up so that technology start-ups find it easy to operate in the country, said R Chandrasekhar, president of Nasscom.There are 200 companies which contribute 80% of the industry's revenues, but another 15,000 that account for the rest 20%. "A significant portion of the 15,000 are highly entrepreneurial and hold the key to the future," said Chandrasekhar who was a former secretary in the Department of Telecom as well as in the Department of Electronics and IT.
He added, these are the set of companies that need the right push from the government. The government has in the past initiated several projects to push innovation, including several by the Department of Electronics and Information Technology. However, most of them are scattered. "There are many sops which are being offered currently by various departments, but there is no one place where you can get access to all the information," said Sangeeta Gupta, senior vice president of Nasscom. What is also required is creating the right regime for taxation, patent registration, funding and market access.
Chandrasekhar said that unless the government steps in quickly to address these issues, the country could lose out on a major opportunity. "The warning signs are already there as we are seeing some companies registering are outside and even filing their patents abroad, because it is easy to do so," he added.
The regulatory regime has to be simplified as currently the compliance requirements for large companies and smaller ones are the same. Technology firms also face difficulties in getting the funding as they have very little collateral to offer to the banks. Moreover, several taxation issues need to be addressed as the government levies a 30% tax on angel investors which fund start-ups. "It is a great disincentive for the industry," argued Chandrasekhar.
Aspart of the National Electronics Policy, the Department of Electronics and IT has launched a slew of policies which incentivise local manufacturing of electronics and include several measures that also provide a push to entrepreneurship. While the department provides sops to companies with a capital investment as little as Rs. 1 crore, it has also launched an electronic development fund.
An incubation centre has also been recently approved that will be anchored by the Software Technology Parks of India (STPI). The previous government also formed a Rs 500 crore India Inclusive Innovation Fund under the National Innovation Council and the ministry of micro, small and medium enterprises.
"Nasscom has set a target of achieving revenues of $300 billion by 2020, we believe almost one-third or more of that target will be met by the15,000 small companies if provided the right push," said Chandrasekhar.