Shuttling between Harvard University in the US and the NITI Aayog office in Delhi, Tarun Khanna is a busy man. The brain behind the Expert Committee on Innovation and entrepreneurship, Khanna's recommendations might possibly form the blueprint of Prime Minister Narendra Modi's much-awaited 'Start-up India Policy'. He tells Sanjeeb Mukherjee and Karan Choudhury that a lot of regulatory and taxation issues need to be resolved to make the upcoming policy a success. Excerpts:
Your report infers there are a lot of rules, regulations and laws that make encouraging Entrepreneurship a cumbersome process in India. Do you think there are any measures that can be taken immediately? What should be the way forward?
The point of having a pyramid structure is that it helps distinguish between things that would take a long time to change, such as cultural and mindset change. On the other end of the pyramid are immediate action items.
We need to tap into the enthusiasm for start-up incubators, but I do not think it is bringing out results it is capable of producing. We can be 10 times or even 100 times more efficient at using the incubators to generate new ideas. There are a number of rules, regulations and laws that need to be strengthened. For instance, laws and practices around intellectual property.
Do you think multiple levels of taxation discourage new ideas and start-ups?
There are many issues with taxation and one thing we need to be careful about is at this moment, incentives are quite right for domestic investors to put money in innovations happening inside the country. Often, it appears domestic investors are better off investing outside the country and foreign investors are more comfortable investing in India. This results in all sorts of situations where people are starting companies in India and then taking them outside to Mauritius, Cayman Islands, Singapore or Dubai. It has to do with the structure of regulations we need to look at again.
Is the present atmosphere in the country not conducive for business? With a new government in place, have things started to change?
I'm optimistic the present attitude, particularly among the youth is positive. There has been a demographic change as a lot of young people are coming out with innovative ideas and there are many success stories people can look at from sectors such as information technology, media, life sciences, financial sector and success stories globally.
The new administration has brought in a certain level of energy in making the private sector a partner and in creating enterprise.
Is there a need for a start-up policy? Do you think your recommendations would be incorporated in the PM's Start-up India Policy?
Yes, there is a need for a policy as we need some clarity on the roles different sectors of the society can play in the start-up ecosystem. Whether the recommendations would be incorporated or not in the start-up policy is something that Arvind Panagariya (vice-chairman of Niti Aayog) and others would be reflecting on. The Expert Committee was given the task of making certain recommendations and we have done that.
You talked about Singapore and Cayman Islands as the preferred destinations for Indian start-ups as the environment in the country is not conducive to do business. Do you think these business models are good for India?
I'm sure there are few things that Singapore does that are good for us. In the report what we have tried to do is that, as part of the deliberations committee, we have put in place a mechanism where people could accumulate insights from variety of other countries, which included Singapore, Chile and Colombia , among others. We can learn from them as well; there is no point in reinventing the wheel.