“Achche din aane wale hain” was the refrain that was heard throughout the campaign that led to the BJP’s landslide victory in the recent union elections. In an echo of their promise of ‘good’ days, for the masses, the Union Budget of 2014-15, has lived up to the expectations of at least one community, the start-ups and entrepreneurs of this great land.Over the past decade or so there has been a surge of entrepreneurial activity across the country, on the back of several positive steps to encourage the movement from the government. This year’s budget, took an even greater stride in this direction, when Finance Minister, Arun Jaitley announced the formation of a Rs. 10,000 crore (USD 1.7 Billion) fund to back entrepreneurs and start-ups across the country.
“This will place India right after Silicon Valley and ahead of China in terms of early-stage capital,” said Sateesh Andra, a managing partner at Venture East Tenet Fund, an early stage investor in Little Eye Labs, that was acquired by Facebook earlier this year.
According to sources, this step has buoyed the expectations and hopes of young entrepreneurs pan-India. Considering that this is going to be the largest ever government initiative to form the biggest pool of rupee capital in India and among the largest venture funds in the country. Only Sequoia Capital, that handles close to Rs. 12,000 crores has more money than the proposed national venture capital fund.
“Of course, this is a positive step for entrepreneurs, it is almost like validation of the efforts of the entrepreneurial community and a huge fillip in bringing us into the centre of the national economic discourse,” says Rahul Mahtani, the owner-operator of an online gaming company.
In a country where nearly 2 start-ups are launched every single day, this comes as a huge step of recognition and encouragement for people who are looking to branch out on their own. The move opens up possibilities for local financial institutions to participate in the surge of entrepreneurial activities across the country. This year, funding for early stage companies rose nearly 40% with Rs 3,630 crore invested so far. But over 90% of such venture capital comes from foreign funds.
Other significant steps proposed by the Finance Ministry include the setting up of an “entrepreneur-friendly legal bankruptcy framework” that will allow failed startups to down shutters with ease. Promoting and encouraging entrepreneurship on a national level seems to be the mantra of new finance minister Arun Jaitley, who also announced the setting up of a network of incubators and accelerators across districts and a Rs 200-crore fund for Dalit entrepreneurs, which will be managed by IFCI.
While the impact of the proposed national venture capital fund remains to be seen. For the time being, it seems like it is the best possible time to be an entrepreneur in India.