 "Veenu Gupta")
To strengthen the environment for start-up systems, the government of Rajasthan unveiled a policy in this regard on Friday. Veenu Gupta, the administration's principal secretary for industries, and managing director of the state investment promotion entity, Riico, talks to Ranju Sarkar on the thinking behind the policy. Edited excerpts:
Why are you pushing for start-ups? Is it to create jobs?
Largely for jobs. The chief minister has announced she wants to create jobs for 1.5 million youths in the next five years. These can't be all government jobs. You need manufacturing units to generate jobs but also need to motivate people to become entrepreneurs. And, that entrepreneurial spirit is present in Rajasthan. To give a boost to that spirit, which will lead to the generation of jobs, we thought of promoting a start-up culture in the state. Riico got into collaboration with the Centre for Innovation, Incubation & Entrepreneurship of the Indian Institute of Management (IIM), Ahmedabad, and we started this incubation centre two years earlier. So far, they have incubated about 40 start-ups. Having gained some experience, we felt the time was ripe for a start-up policy, and then go to the next level. Therefore, we have come up with this policy and set targets for ourselves: Have 50 incubators in the next five years, promote at least 500 start-ups.
Why did you launch it now?
We are ready to take it to the next level. There's so much buzz about start-ups: The Prime Minister recently visited Silicon Valley, and we have seen successes here. Car Dekho.com, a start-up which came up in Jaipur, started by two brothers, is the biggest car portal in India. And, they are employing about 1,000 people. We have seen that there's huge potential here and it is necessary to give a push.
Right now, whatever is happening is more or less Jaipur-centric. But, there are cities, and other institutions, which can take up these activities. We have an IIT, an IIM; we have several other engineering colleges where these activities could be promoted. We are trying to create a culture and an eco-system where these activities can cut across sectors and can be spread to other parts of the state.
What are the objectives?
We want to create at least 50 incubators in the state, 500 start-ups, and try and mobilise at least Rs 500 crore of funding through angel investors, venture capital funds (in the next five years).
Are these targets realistic? In the entire country, we have about 50 incubators or so.
We do have institutions. We have done our homework. We have at least 15-20 good engineering colleges in the state: We have the LN Mittal Institute, Manipal University, Amity University, NIIT University, IIM-Udaipur, IIT-Jodhpur, BITS-Pilani, and MNIT. So, there are institutions where these activities can happen. So far, there was no support from the government. Under this policy, we are saying we will provide a support of Rs 50 lakh each to the qualifying institutions for setting up these incubation centres.
Has there been some thinking in terms of how these targets would be achieved?
Yes, of course. Why Rs 500 crore (of capital we are targeting) and why not some other figure? Some of the organisations we consulted thought we were being conservative and targeting much less. We have kept a provision in the policy that it will be reviewed every year. It's a very dynamic area; a lot of changes will take place.
What are the highlights of the policy from a start-up perspective?
It addresses the need of start-ups at different levels - starting from students to the idea stage, to the commercialisation stage and, finally, the funding stage. For instance, if a student wants to take a year off in college and do a start-up, that facility would be provided.
For the early stage start-ups working with an incubator, we will provide Rs 10,000 a month for a year as sustenance allowance. This is being done by incubators like Villgro, which is following this policy. The next stage of funding is when they go for prototyping or commercialisation. At that stage, we have said we will provide a matching grant of Rs 25 lakh if they are able to raise resources from any other source. Similarly, we will provide a grant of Rs 50 lakh to good institutions to set up incubators.
If you meet these targets in five years, where will it put Rajasthan?
The biggest advantage the state will have is that the culture of innovation will take root. More and more people will try to find solutions to problems. As you would have, they are addressing unmet needs -- be that getting a plumber or getting delivery of food from a place which doesn't deliver.
