In a session titled ‘Start Up Nation’ at the India Economic Summit, jointly organised by the Confederation of Indian Industry and the World Economic Forum, Mahesh Murthy, entrepreneur and founder of Seedfund, said: “The largest potential LP (limited partner) in India is LIC (Life Insurance Corporation of India). LIC invests only in stock markets. Even a one per cent allocation of LIC could be more than what the government plans to invest.” Srivatsan Rajan, chairman, Bain & Co India, also felt that regulations by the Insurance Regulatory and Development authority of India and the Pension Fund Regulatory and Development Authority were restricting investments in start-ups. “We have large pools of domestic capital, which lie in insurance and pension funds. We need to find ways to open these up,” said Rajan.
These suggestions came after Paytm founder Vijay Shekhar Sharma made a passionate call to build domestic pools of capital that can support Indian start-ups to take on international competition. Ramesh Abhishek, secretary, department of industrial policy & promotion, said: “I agree that LIC and pension funds must step in. That must be leveraged. I am making a note of it.”
Abhishek added that the government was taking various steps to improve the ecosystem for start-ups in the country. The department has written to about 100 companies to set up incubators that will help start-ups as part of their corporate social responsibility activities.
“We need start-ups in spaces where there are social causes, in areas such as agriculture and agriculture marketing,” Abhishek added. On the Rs 10,000-crore Fund of Funds, the secretary said it would mobilise about Rs 50,000 crore private investments in start-ups over a period of time. Small Industries Development Bank of India is implementing the Fund of Funds. “We want to fast-track implementation. The processes are rather slow,” he added.
Rajan said the country was still in the beginning of the start-up game. “We can’t sit up thinking we’ve already won it. Start-ups can exist beyond the online space. Manufacturing, agriculture and high tech – the narrative has to be broader than just online businesses,” Rajan said.
OYO Rooms founder Ritesh Agarwal said: “Most laws are written by people who do not know what is going on. It is our responsibility as entrepreneurs to reach out to the lawmakers and explain (to) them our problems.” In response, Abhishek underlined various efforts being taken by the government to sensitise state governments, local police and administrators, who are often unable to understand start-ups and end up as irritants. “We have all the hangovers. Only some have been done away with. We need to do a lot more,” he added.
On e-pharmacy firms, Abhishek felt they were not flouting any law, contrary to the police’s claims. “Police inspectors are not trained in such matters. Now, we are trying to take up this matter with states and make sure it does not happen.”
Citing an example, Abhishek said the number of taxis in one city had been capped at 32,000 because of “some vested interest” as one can cap the prices through this. “So, we need to free up all these things. Our laws and regulations are completely out of sync in most cases. With these new technologies and innovations coming in, we need to change that and we are working with regulators,” he added.