Only 10% of start-ups will be successful: Mohandas Pai

Adds that about 25% will stay afloat and the rest will fail

Even as the start-up system is thriving in the country, former Infosys’ director T V Mohandas Pai believes only 10 per cent of the new-age companies would be successful, while a majority would fail.

Still, start-ups are set to emerge as a major job creator in the country if government evolves an enabling policy environment for the budding firms, says Pai. About 10 per cent of the start-ups would do very well, about 25 per cent would stay afloat, and the rest would fail, said Pai.

If Prime Minister Narendra Modi’s Digital India initiative takes wings, the start-up system will thrive with about 100,000 new-age firms in next 10 years, employing 3.5 million people and targeting a value of $500 billion, he said. “Digital India is the biggest experiment that will transform India if Modi gets it right,” said Pai.

“For that, most Indians should be connected with wireless devices... If this happens, it will transform the country in the next 15 years,” he said. Currently, India has 18,000 start-ups, valued at $75 billion, employing 300,000 people.

“Once a start-up fails, it remains in limbo, as the bankruptcy code is still underdeveloped. We can't kill companies. It takes a long time," he warned. He also urged the government to come up with a detailed policy.

“We are working with various state governments, including Rajasthan, Karnataka and West Bengal, that are unveiling their own start-up policies,” he said. Pai is optimistic about “start-up value — not valuations”.