By Dr Susmita Priyadarshini
In its latest move to make India the largest Startup hub in the world, the Centre unveiled the Startup Action Plan on January 16th. Some state Governments have already taken initiatives to create a congenial environment in the state for Startup. States like Kartaka and Rajasthan have already launched a Startup venture fund. The Indian Startup universe includes companies that are conducting some wonderful works which the economy really needs. For example, it includes companies that make solar powered micro cold storage system for farmers, develop products for restoring damaged teeth, develop organic fertiliser substitutes and conduct educatiol workshops for school children on making gadgets etc. By providing tax holiday for 3 years, exemption of capital gains tax for venture capital investment, 80% reduction in patent fee, creating credit guarantee fund for Startup the Centre is becoming the facilitator of Startup in the true sense of the term. This bears significance as encouraging Startup is very essential for a country like ours where unemployment increases along with population. It is hoped that after the New Economic Policy of 1991, it is the next big policy change that will transform the economy. A generation of tech savvy youngsters who dared to venture into partnership instead of opting for a comfortable life in MNCs has brought the country to the fore. If the 29 states of the country dare to dream then it will be able to completely change the picture of the country. Economic development of the state is not the result of the forces outside the system of the state. Some ground breaking reforms started from the states. Even MGNREGA has its origin in Maharashtra’s Employment Guarantee Scheme .So, it will be wrong to say that the states lack the capacity to think for their people. States have already developed a habit of blaming the Centre for everything going wrong in the state. But those responsible for wrong implementation of the policies are never blamed. It is true that the Centre has encroached upon state subjects. Take the example of health and education. Several flagship programmes are running on these two sectors. If after so many years of experience states have failed to build the trust, then it is states’ failure. Unfortutely despite so many years of huge public expenditure in these two sectors, our rank in HDI is not good. Similarly, it is not necessary that the Centre always takes the right decision. When around half of India does not have access to schools, the Centre is thinking about free basics programme through Facebook. Nobel Laureate Amartya Sen has already called it a mistake on the part of the Government. When talking about development we often forget that it does not mean increase in investment; it means increase in human capacity for which education and health are a must. Though our PM is ready to embrace everybody for the sake of development, yet it is impossible to make education and health universal through private sector. The grand success of the smart phone and connectivity cannot solve the problems of the poor. Despite commendable progress in IT, our progress in crucial problems like quality job creation, increasing crop yield, making cheap clean energy available insignificant. In order to feed the people of the country irrespective of whether they are in IT or Startup Sector, agricultural development is a must and agriculture is a state subject. The very establishment of NITI Ayog has proved that the states need not have to go to the Centre or the Planning Commission with its begging bowl. It is good that the Centre is following a policy to empower the states for which it has readily agreed to the recommendations of the Fourteenth Fince Commission. Despite having political differences, the Centre is ready to clear all the issues expeditiously.
It has been understood well by all that our present Government at the Centre is ready to do everything to lure investors to the country. But what matters most to the companies is the prevailing condition in the state where they run their business. Kartaka’s CM S M Krish and Andhra Pradesh’s CM Chandrababu idu showed the Startup-like spirit long ago in the 90s. Despite this even today Growth in India is mostly driven by a few states. So there is a need to promote growth in the Eastern and North Eastern states. For this states must take the initiative; everything cannot be left to the PM. State governments should be quick in decision making, which they are not. For example, after doing TFA in goods at WTO, India is intending to take TFA in services at the WTO. If it happens then visa free travel for foreign tourists will be a boon for the North East region along with other parts of the country. But till date the Government of Assam has failed to update the Tourism Policy of the state on the line of responsible tourism to take advantage of the rich cultural heritage and the tural environment. In these 15 years Assam has become a state of Festivals, where everything from Bihu to Flood is a festival. So, Assam will fail to take the advantage of future trade which will certainly happen in services. In recent years, voters have rewarded those states that have delivered jobs and development and ousted those that failed. Therefore the states that have developed a reputation as investment-laggard are compelled to follow the others. The Indian states have a lot to learn from these startups.
A good many number of startups in India have entered the industry either unearthing an entirely new market or through discovering gaps in existing product and market lines. Similarly states can find out the gaps in the existing system or the policies and bring some revolutiory changes to the economy of the state.
While the Centre is taking care of the Startup, the Government of Tamil du can think seriously to solve the problems of dyers of textile hub of Tirupur who have been suffering from economic meltdown due to compliance with pollution norms since 2009. Similarly, the Government of Assam can think seriously about Saulkuchi that has already lost the chance of transforming itself into an export village. Change cannot come from outside. Neither the Centre nor the foreign investors alone can change the condition of the state; it should come from within the states. Just as the younger generation is transforming themselves from workers to employers and entrepreneurs, the states should gear up to change themselves from policy makers to performers and they should be the risk-takers like the Startup. For the states, the Team India spirit is enough to work as an incubator or accelerator. After all, strong states mean a strong tion. Let the states be the facilitators of the growth of the country.
Dr. Susmita Priyadarshini is an Assistant Professor of Economics at the DCB Girls’ College, Jorhat and can be reached onnPh.9957004225